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Monday Market Target – S&P 2,000 or BUST!

SPY 5 MINUTEAs usual on Friday, more volume = more selling

Still, there's no reason to expect volume to come back and that means the markets can go back to drifting higher when the bars are lower and that can get us all the way to S&P 2,000, but over that line is going to be a tough trick

Our weekend reading from our Member Chat Room produced the usual litany of woes with the usual suspects:  

ISIS, Putin, China, Gaza, Ebola and Draghi causing the usual damage aided by newcomers like an earthquake in San Francisco, a volcano in Iceland, a nuclear scare in Belgium - but none are as scary as French President and Austerity Radical, Francois Holland, dissolving his Government because they disagreed with him.  

Screen Shot 2014 08 22 at 2.32.24 PMIn interviews with the French press and speeches at a Socialist gathering Sunday, Economy Minister Arnaud Montebourg and Education Minister Benoît Hamon said forcibly reducing budget deficits as the economy wilts is driving up unemployment, fueling political extremism and risks tipping the economy into recession.  "The priority must be exiting crisis and the dogmatic reduction of deficits should come second," Mr. Montebourg said in an interview with Le Monde.

The criticism came at a difficult moment for the French president, who said earlier this week he will push ahead with a three-year plan to cut public spending to fund tax cuts for business even as the economy stagnates – so he fired them all!  As in the US, Businesses continued cutting investment in the second quarter despite receiving the first payouts from labor-tax reductions.

"Promising to get the economy going again, on the path to growth and full employment, hasn't worked. Honesty obliges us to acknowledge this," Mr. Montebourg said in a speech to supporters. "The role of the economy minister and any statesman in his place is to confront the truth—even it is cruel—and propose alternative solutions," he added.

8-22-2014 5-24-48 PM Yellen

The government must use more of the gains from public-spending cuts to reduce taxes on households, instead of focusing mainly on reducing deficits and bringing down business taxes, Mr. Montebourg and Mr. Hamon said.

As in the US, that kind of honesty can get you fired – or at least vilified by Conservatives and the MSM and the Fed is staying the course no matter how much suffering they are causing – that was made very clear last week in Jackson Hole.  As noted in a excellent article on Yellen and the Fed by Raul Meijer of Automatic Earth: "If you’re a girl and you’re old and you’re grey and you’re the size of a hobbit, who’s going to get angry at you?"

SPX WEEKLYWhile we fully expect the manipulating class to get the S&P to at least touch that 2,000 line this week, we are actually positioning SHORTER in our virtual portfolios.  Our Long-Term Portfolio finished the week at $606,845 and the Short-Term Portfolio hit $136,144 for a total of $743,000(ish) and that was up $16K for the week (+2.2% and 23.8% for the year) and we plowed a good deal of those gains into aggressive downside protection.  

Should the markets break over 2,000, etc (and 11,000 on NYSE still needs to confirm), then we're going to be in a nice, protected position to add more long plays into our LTP but, for now, we'll watch and wait PATIENTLY – especially with a GDP report on Thursday and PMI and Housing Data earlier in the week.  

Europe vs Great DepressionIgnoring Asia, which I contend is a hidden disaster, Europe is an obvious disaster and not just because France has joined the ranks of the Corporate-sponsored Governments this weekend.  As noted by Matt O'Brien in the Washington Post last week:

 It's time to call the eurozone what it really is: one of the biggest catastrophes in economic history.

It's a policy-induced disaster. Too much fiscal austerity and too little monetary stimulus have crippled growth like almost never before. Europe is doing worse than Japan during its "lost decade," worse than the sterling bloc during the Great Depression, and barely better than the gold bloc then—though even that silver lining isn't much of one. That's because, at this rate, it'll only be another year until the eurozone is well behind the gold bloc, too.

As made obvious by Hollande this weekend, those policies are not likely to change and I believe the Global Economy is simply too inter-connected for us to shrug this one off and keep climbing.  Remember Greece only a few years ago?  Anyone?  Beuller???  

It's those same Voodoo Economics that are being championed by Conservatives on both sides of the pond and our "leaders" are dancing to the tune that is paid for by the top 1% who, as yet, haven't had much of an urge to trickle on the bottom 99%.  In fact, things are getting bad enough in Germany that Business Confidence has unexpectedly fallen from 108 to 106.3 in August.  "The German economy continues to lose steam," says Ifo chief Hans-Werner Sinn, noting the declines were fairly widespread across sectors.

"Widespraead declines" and the Euro is at the year's low – happy Monday to you!  


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  1. Oil Lines

    R3 – 95.08
    R2 – 94.56
    R1 – 93.96
    PP – 93.44
    S1 – 92.84
    S2 – 92.32
    S3 – 91.72

  2. Draghi's failed analysis:

    Screen Shot 2014 08 22 at 2.32.24 PM

    Near-term austerity isn't necessary in countries where the central bank is a fiscal backstop. That backstop was missing in the eurozone up until summer of 2012, and consequently bond yields surged. The years spent trying to ease the fiscal strain via austerity were a waste, and ultimately an economic catastrophe.

    Now it may be true that politically speaking, Draghi might never have had the ability to put in place the backstop if there hadn't been austerity. The Germans might have cried bloody murder if Draghi had said "whatever it takes" before countries like Italy and Greece put themselves in fiscal handcuffs (though much of Germany cried bloody murder anyway). But even if this is true from a political perspective, Draghi is still wrong when he says that austerity was necessary to appease investors.

    Earlier this week, MIT professor and Nobel Laureate Peter Diamond said that historians are going to "tar and feather" Europe's central bankers for the ongoing disaster that is the eurozone economy. This is why. Austerity wasn't necessary. Yes, there were problems in the eurozone, but they had to do with the unsound currency structure. Draghi is still denying that there was massive self-inflicted harm for no reason at all.

  3. 12 charts to start the week:

    Danger from China is the theme!

  4. Phil / SQQQ

    been watching the snail dance with muted anticipation. I would like to cash my SQQQs and use the profits for new protection. 

    What would you recommend going into the new year ? I still own jan15 TNA put spreads.  

  5. France / Phil – As we have been discussing before, the problem for France and other countries in Europe has been the budget straight jacket that the ECB and Germany have imposed on everybody (see my post above).

    As far as the ministers are concerned, there will be a new team tomorrow and knowing French politics, 90% of the team will be the same as the ones that got fired over the weekend! They will be shuffled to different posts, but the names will be the same.

    Also, the French president has one more "nuclear" option – he can dissolve the National Assembly and call for new legislative elections! It would be like Obama firing Congress and calling for new elections. It's actually risky and usually backfires in France with the opposition winning the elections. That leads to government of co-habitation where the prime ministers is part of the opposition. On the other hand, it usually works for the president in the long run because he can blame the opposition for the mess during the presidential elections 2 years from now since they will hold power. It has been the case twice over the last 20 years! Could be fun there!

  6. Good Morning!

  7. Good morning!

    Watch and wait day, of course but I do love taking a poke short on those Futures in anticipation of a rejection at 2,000.  

    PMIs will be very confusing if they are down.  Dallas Fed may be down as oil prices dropped and Builder Confidence SHOULD lead to good housing number and better Consumer Confidence  so generally good news should take us to the GDP.  Don't forget we're closed on Monday (Labor Day) and long weekends are always a risk.  

    Holiday weekends are also good times to pump up oil and gas prices to maximize the consumer prices over the weekend.  Oil is actually falling to $93.35 this morning and gasoline $2.74 so we're not looking to save them – just curious to see if there's a bullish position we can take if they find a floor – maybe not until Weds, after inventories.  

    TLT 117.50 – someone is moving to cash!  

    Draghi/StJ – Yet another GS-trained con-man at the helm of a Global Power. 

    China danger/StJ – Not so hidden, actually:

  8. France / StJ.


    France has a slightly different problem that Spain, Italy and Portugal , but having France as the most rational country in Europe…perhaps in the World,  what happens there matters everywhere.

    France has a very good rate of diversification of investments by regions, good start-ups rate. etc….even a lower than average fraud on the social system that´s ( in my opinion), the main problem in Italy or Spain,.

    Holland is the bravest President in France in long time, extreme right is pushing him in the right direction ( in economy) and Mr Valls is by far the best possible solution for the  " prochain future" in France. 

  9. Phil

    I have the AAPL 2016 85.71/107.14 BCS. I planned to lightened up around $103, but after seeing your advice to pstas/BRK.B I am now wondering whether or not it's better to roll up the 85's or just take half off the table. I still want a position in AAPL, but feel, at these prices, I need to reduce my exposure some. TIA.

  10. Major Economic Reports:

    7:30 am CT – Chicago Fed National Activity Index

    8:45 am CT– PMI Services Flash

    9:00 am CT – New Home Sales

    9:00 am CT – Dallas Fed Mfg. Survey


    Notable Earnings:    

    Monday – 8/25:

    Before Market:  QIHU

    After Market:  RENN, SNOW


    Tuesday – 8/26:

    Before Market:  BBY, BMO, DSW, MOV, TSL

    After Market:  ADI, BOBE, SWHC, SLH, TIVO

  11. ITMN…..BOOOOOOOMMMMMM!!!!!  Good morning!

  12. FU TSLA!!!!

  13. Oops, sorry, shorts were (from morning comments):

    Huge pump in the Futures at 2am and CME is down (open at 9am they say) so all sorts of shenanigans this morning.

    /YM topped at 17,072, now 17,037 (17,050 is shorting line), /ES topped at 1,997 (would have been S&P 2,000), now 1,993 (1,995 is shorting line), /NQ topped out at 4,077, now 4,070 (4,075 is the shorting line), /TF topped out at 1,169, now 1,165 (1,165 is the shorting line).

    So, strategically, we could watch the RUT to cross and short that (assuming the others stay under) or wait for the RUT to confirm while looking to catch the Nas failing the 4,070 line.  Either way, I'd want to see both of those under before risking a down bet.  We're so close to 2,000 – it's very likely someone will try to force it.

    Nothing blew up over the weekend (other than earthquake in Nappa) so that's good news.  Oil is $93.79 and I'm going to have trouble believing the economy is recovering until it's over $94.50.  Gold is $1,279 and you know we like /YG long over that $1,280 line but $1,285 is where we get more comfortable.  Silver is $19.335, copper $3.20 is the strongest of the 3 at the moment so watch that line to hold before betting metals up.  Nat gas is plowing up to $3.92 as the Ukraine doesn't improve but $4 will be a tough sell.  Gasoline $2.745 was rejected at $2.7575 last week so we'll see how that goes.  

    The Dollar is at 82.55, down from a high of 82.70 but not much effect there.  /NKD is at 15,600 and you KNOW we like that line for shorting but they did test 15,650 earlier this morning, so be careful.  $1.32 buys you a Euro (which Draghi is turning into toilet paper), $1.659 for a Pound and 104 Yen buys you a Dollar.  Don't forget, Japan wants a strong Euro too, so not too happy about sub $1.32, which is why I like /NKD shorts today. 

    SQQQ/Wombat – Of course the SQQQ is a bet against AAPL to some extent but, longer-term, there is some advantage to going short TQQQ (because of the decay) and I like the Jan $87.50/75 bear put spread at $4.75 in the $12.50 spread as TQQQ is up at $88.27 and decay alone will put you a buck or two in the money if the Nas flatlines at 4,550.  

    Anything below 4,500 (1%) is a 3% drop on TQQQ to $85 and that's $2.50 in the money already and another 1% to 4,450 is $82 and 4,400 is $79, etc – so, a few % drop in the Nasdaq can give you up to a 163% gain on TQQQ and that's nice leverage and the whole thing can be offset with short AAPL 2016 $80 puts at $4.15 or maybe BRCM 2016 $32 puts at $2. 

  14. France / advill – That's true, there is a lot less social fraud in France than in Spain, Italy and Greece for example. Although still there and I have some first hand stories for another day. On the other hand, I don't know about Hollande being brave – he finds himself in the same position that Sarkozy did. Some big changes are needed in France and no one has the cojones to do anything about it. Lots of big talk and then the people take to the streets and nothing happens! That happens with Juppe in the 90's, then we had Chirac who didn't care, then Sarkozy came in full of energy and petered out and now Hollande! It's an un-winnable situation – too many special interests to fight. I could go on, but don't want to bore members with details about French politics! Thanks for your input though…

  15. Great // Thanks Phil. 

  16. Phil:

    One of the things that scares me in this market is the numerous examples of countries questioning the US way of doing things. Some of the larger countries seem perfectly willing to poke a stick in our eye without worry about repercussions (China, Russia). I just read another story where CHINA may create its own OS.

    Is it possible for a country like China to just move away from any influence of the west and fly on its own regardless of the consequence to its populus? Do they really need the rest of the world on its terms to survive, or can they change the paradigm to something much more favorable to their goals? Your thoughts.

  17. On the SPX… Today we are 1998 Cal-Days from the 666 March,6,2009 Low & 3 x 666 = 1998 (Gann360)


    Switzerland's Roche Holding on Sunday extended a summer of dealmaking with an agreement to buy InterMune  (ITMN_) for $8.3 billion to expand its treatments for respiratory ailments.

    Roche, of Basel, would pay $74 per InterMune share, a 38% bonus to the target's Friday close. The price is also a 64% bump to the stock's close Aug. 12, the day before rumors of a strategic review at the target surfaced.

    Acquisitive Roche is hoping to cash in on the pending U.S. approval of InterMune's pirfenidone treatment for idiopathic pulmonary fibrosis, or IPF. Patients with IPF gradually lose the ability to breath as fibers fill up their lungs.

  18. The ITMN Jan15 45/50 BCS with the $35P sale = $0.25.  Now.  $4.95.  That just paid for a PSW membership if one bought 10.

  19. dclark China

    They can wave their sword but they are more dependent than most. They have all the rare earths but lack almost everything else and then their economy depends on exports because most of their people are poor.

  20. shadow:

    Don't forget they have stockpiled an incredible amount of natural resources and their our us less than favorable countries (to us) that can supply them of the basic resources they need. In addition, their government perhaps has even less care about their people than we do!

  21. ~~revtodd64
    August 25th, 2014 at 9:51 am | Permalink Tweet thisIgnore this user 
    DGLY – They make the "on officer" cameras.  Thoughts? 

    First I have a dim view of officers. One of the first places in the country was Teton County Idaho with it's ????? pensioned NYC sheriff. It has been a flop. They do not hold steady like the cameras in cruisers and were found to add little. The bad cops are going to have them off or recordings will fail a critical times. They could be a good thing for street beat and domestic resident calls by those are no a problem. IMO they will not add significant evidence to the current audio and stationary cameras.

  22. dc China

    I didn't mention their stockpiles because they show there lack of resources and yes I had that in mind. The big issue is they have not changed to a consumer economy. On the other hand it would cause inconvenience to TSLA Giga factory idea etc. and raise prices here but the US and Europe could continue without them and I doubt they can function without us. 

  23. Phil/TQQQ

    I have the Sept 86/80 bear put spread on for 2.03, the 86's are 2.05 this morning. Usually, we'd consider a roll but I'm inclined to wait a bit longer and see what this week brings. What are your thoughts, go ahead and roll them out, or give it a few days to see where we really settle? 

  24. CNBC should have all their broadcasters shake pom poms today as they are cheering the market on.

    And Michele Caruso Cabrera with her accurate reporting today talked about how a burrito from CMG is 7x the price of a big mac.  I don't think CMG got to the $25 burrito yet.  And the scary thing is she wasn't being sarcastic.

  25. shadow

    Maybe not completely without us, but the thing I worry about is the feeling that we may need them more than they need us.  Many of our corporations are becoming very dependant on China to produce the revenue and earnings necessary to sustain their current growth and stock prices.  If China decides they don't want Google, Microsoft, Apple, MCD's, and a host of others it could put a real damper on our economy.

  26. dclark

    Oh yes it will hurt international corporations, they deserve that, and I said prices will rise. I fall back on what comes out of China that no one else has, rare earths. They are not totally necessary to function, a few less batteries, windmills slow down expansion while we make lots of better things like solar cells, the actual computer chips and memory. I believe it would be the best thing to happen to America, jobs would come back and the ramp up would be extremely fast. Maybe fix the income gap!!!!!!!!

  27. All that needs to happen is even the playing field with high tariffs. 

  28. Some good facts from the job market, for a change:

    The Labor Department said that employers posted nearly 4.7 million job openings in June--the highest number of unfilled jobs since 2001.
    -Bureau of Labor Statistics, August 12, 2014

    In the fourth quarter of 2013, nine of the ten fastest growing U.S. states were controlled by Republican governors. Six of the ten worst performing states, on the other hand, were run by Democrats., August 20, 2014

  29. Phil any thoughts on QQQ, it looks over extended.

  30. Qihu on a freefall.

  31. Phil / BKW & THI – Any thoughts or plays on the potential merger of Burger King and Tim Horton's? Both companies up around 20 percent on the announcement of talks. If nothing else, another example of inversion tactics by corporations. 

  32. Busy times on Tesla Motors factory floor • 11:22 AM

    Global Equities Research walks away from a factory tour at Tesla Motors (TSLA +2%) duly impressed.

    Analysts with the firm note the beehive of activity at the facility, including European and Asian supplies working closely with Tesla engineers.

    Supplier issues have been highlighted as a potential drag on the automaker by some Tesla skeptics.

    A run to $385 a share over the next 12-18 months is possible, reasons Global Equities.

  33. FU global equities research!!!!!

  34. jabo TSLA @ $385? Did Morgan Stanly hire Global Equities to tour the factory? P/E 1,000 on deck.

  35. France/Advill – The right direction?  The point is (as agreed by more Economists than Climate Change now) that Austerity has been a miserable failure and Hollande's own people are standing up to him at this point. 

    AAPL/DC – Sure, your spread is about $21.50 and now $11 with a possible $10 upside at $107 but the $95.71/105 bull call spread is $4.25 and has a $5.75 of upside at $105 so 2x of those is better than 1x of the others (obviously) so that move would be a no-brainer.  You can play with various positions and see what you think is the best combo but I'd be happy with 1x of those and getting 50% of what you could have gotten had you stood pat, but freeing up 60% of your cash for something else.  That way, if AAPL does take a dip you consider unwarranted, you can always use some of your cash to roll the calls down cheaply and widen the spread.  At the moment, it costs $3.15 to roll down to the $90s, if it goes to $2, that's going to be a good deal and then you'd have a $15 spread at net $6.25 with $8.75 of upside.  Don't forget, you can always add 2017 $100/120 spreads when the time comes if you end up regretting being too cautious!  

    ITMN/Pharm – Great call, great timing on 8/11 too!  

    France/StJ – Boring?  French politics is the kind of stuff we write hit musicals about:

    Of course, that one is about the one time the French actually did something about it, this time around, not likely to be as catchy:

    Do you see the people vote? 

    They are off to the polls again.

    It's how we pacify the people 

    Who will be fooled again and again

    When the choices that they face 

    Are two evils more or less  

    Then you know the one percent have already won!  

    China/Advill – Wow, are you kidding?  WE coerced our top browser makers to make holes in their software so our NSA could spy on anyone who used them AT WILL.  What would you be saying if China or Russia did that to us?  Can you really not see the other side of this?  Of course China (and any other self-respecting country that can) will want to have their citizens using software they can trust – not to mention for their own Government systems.  The damage to US credibility over the long haul by this insane overreach of Government authority stemming from the "Patriot Act" is causing immense long-term damage to America around the World.  Trust and credibility we built up over 100 years has been completely destroyed and good luck winning it back now.  

    Do you know why we gave up the "moral high ground"?  Because there are people in this country (and I won't point fingers) who think they have the moral high ground as some God-given right, rather than something that has to be earned through a consistent process of moral actions.  Even when we do something as immoral as spying on our own citizens, still there are people defending the Government's actions – as if individual rights are just something that's up for debate 240 years after the Constitution was written.

    And when those same people wrap themselves in that same Constitution and claim to be protecting it, but only when it suits them – then America becomes a joke in the eyes of the World's citizens and a dangerous wildcard in the eyes of the World's leaders.  

    DGLY/Rev – While interesting, they are small and risky and make no money while TASR is big and profitable in the same space.  I agree there could be room for both and, had you asked at $3 two weeks ago, I would have said they sound great but, at $11.32 today with no options, I would MUCH rather take the same $11,320 you could put into 1,000 shares of DGLY and sell 8 TASR 2016 $13 puts for $1.75 ($1,400) and buy 20 2016 $15/20 bull call spreads at $2 ($4,000) for net $2,600 which makes $7,400 if TASR moves up just 25% with the downside of owning 800 shares at net $16.25 (the current price) or $13,000.  And, of course, you can roll the short puts to improve that.  With DGLY, you need a 70% move up to get to $7,400 and the real question is – which would you rather hold on to if they drop 50%?  

    While it's always a good idea to look at who else is in a hot space (other than the obvious leader) it's also important, when you find them, to make sure they are actually a relative bargain to that leader.  

    Rare Earths/Shadow – Keep in mind rare earths are not actually rare.  They are everywhere on the planet but only in very trace amounts.  It's the willingness of China to tear up thousands of square miles in strip mines to get at them (not to mention the horrific pollution the process causes) and process them that makes them a "leader" in that sector – nothing to do with scarcity at all.  China's fear in restricting rare earths is that some other country will decide it's a good way to make a living and let the miners loose, which would then destroy China's near-monopoly on them.  

    TQQQ/Jeff – Given that time is not on your side in Sept and given that the Nas is not weak-looking at all, I'd salvage the $2 from the Sept $86 puts and pick up the Jan $75 puts at $4.40.  If the Nas stays up and the Sept short $80s expire worthless, you can then sell lower Jan puts and use that money to roll higher.  If the Nas goes down, you can roll the Sept $80 puts (0.75) to Jan $55 puts at the moment, so no worries there.

    CNBC/Rustle – The usual clueless nonsense.  Not a fact-checker to be found.  

  36. German DAX +1.8%

    French CAC +2.1%

    Italy MIB +2.1%

    Spain IBEX +1.7%

  37. Phil rare earths

    Yes they are not rare and we had a mine in the Sierras that was tried to reopen. China is the only one selling them and that is my biggest point that country has to sell to others. In particular they have threatened to cut sales but never do. Back to my point of all the world the US may be the only place that could go it alone. With temporary disruptions of some products and corporations taking a quick hit. We have enough food, maybe you can't get tomatoes 365 days per year, people lived with that in the past, we have enough energy, raw materials, and thousands of mothballed factories. We just need to say FU world and the international corporations, almost instantly no unemployment, and the federal budget balances. 

  38. Steel stocks strong. i.e.,  X, AKS, NUE, etc.

    Nice turnaround in CLF.

    QUIK – Showing some life today

  39. FU CREE.  POS

  40. Phil

    good morning.

    the financial media is really spinning S&P over 2000

    Looks like it's gonna stay above 2000 now, if you just go by the 'feel of things'

  41. Phil   The WEN trade…Jan 2016  10put was made 5/13/14

  42. Phil, I am short the 2016 WFM $50 Puts from an old trade.  No premium left in it but it seems to have found a floor.  How would you suggest I reposition as an alternative to just waiting for them to hit $50 again?

  43. Bad news for the 1%, $4 billion loss in America's most expensive wine! Let them drink beer.

  44. WFM – My basis is $4.12, so I'd just like to get even at this point.

  45. 490union 

    WEN we looked at this the other day I traded the same 6/10 and 6/11. We could not find it the other day but still looking OK Hope they come up to the rest of the play

  46. Phil/Pleasant Pain: I was counting my 2016 chickens at the weekend, which is always a dangerous thing to do. To cut a long story short, my strategy of short term short Jan 2015 calls to provide insurance on 2016 BCS is half working well. As the Jan 2016 BCS all go nicely ITM, my Jan 2015 also go deeper ITM and now start causing me margin pain. In the last few months I have been layering on additional BCS and this has worked well, but obviously I am in a short term margin crunch and I would like to get out of it in the most ‘sensible’ way possible – hence the question. A case in point, the PCLN Jan 2015 short 1310 call (which is extremely profitable: sold for $137, now $68) uses $310k of margin. I would benefit from liberating that. I haven’t made the calculation, but if I roll that call to the Jan 16 $500 call it gives me a credit of $22k. I could then layer on the Jan 16 400/500 for a cost of $33k – making net $11k cost. I have similar challenges with AAPL, AMGN & GS – there is about 20% of premium left in the 2015 short calls, and I do recognise they will extremely useful when the market resumes normal transmission – so I am taking it step by step. Is that a dumb move?, if so, are there other margin reducing strategies I could implement?

  47. Phil,

    Wow look at that slide since 12:05?

  48. 2000 looked like the wall on the futures – came with 0.25 of getting there!

  49. Europe/Kustomz – Why not, Draghi just promised to double down on the free money and the people who objected to the status quo in France were fired.  Everything is coming up roses for the investing class in Europe.  

    Tarrifs/Shadow – Did you not watch that video in today's post?  Tariffs don't work either – just lead to very damaging trade wars.  The real imbalance is taxes and, very simply, if we had a 20% VAT in the US then the cost of selling into our consumer base (the best in the World) would be 20% – very simple.   It would be the same for US or foreign corporation and it would generate $3.4Bn in tax revenues on our $17Tn GDP and, since we only collect $2.5Tn now with an $800Bn deficit, we could eliminate all other forms of taxes – even entitlements.  That would be a nice economic booster right there and US citizens (the ones that pay taxes) would have 30% more money to spend and, when they spend that money – more taxes get paid!  

    It only needs to be 20% because it accomplishes a lot in terms of stopping Corporations from evading taxes though that, unfortunately, is why it will never happen in this country.  

    Home sales/Shadow – That's terrible news – BUYBUYBUY!!! cheeky

    • July New Home Sales: -2.4% to 412K vs. 430K expected, 422K prior (revised from 406K).
    • Median sales price $269,800.
    • July new home sales at a seasonally-adjusted annualized rate of 412K were 2.4% lower than the revised June number of 422K, and 12.3% above the year ago's 367K. July's pace is the slowest in four months.
    • Sharp eyes might be able to detect a slight downtick in the homebuilder ETFs, ITB and XHB, but both remain higher by about 0.35% on the session.
    • Full report

    States/Prof – Nice headline, but:

    Many of the slowest growing states such as Massachusetts and New York, by contrast, are older and more settled. They are also wealthier than the national average, however, and have higher percentages of residents with college degrees.

    Other explanations for the disparity in growth include the level of taxes and regulations. Taxes in the South are lower, there are fewer unions and states in the region are more lightly regulated. So businesses have been keen to set up shop.

    And, of course, polls are skewed and Politifact found (very well-researched) that 9 of the 10 poorest states are actually Republican and it turns out much of their growth is that Government Welfare that the taker states like to complain about.  So what you are actually seeing is the effect of a tax increase and the closing of tax loopholes – DEMOCRATIC PRINCIPLES that the Red States fought tooth and nail against – redistributing some of the wealth from the rich states to the poor states – AS WAS INTENDED.  

    If anyone is interested, very good Census Document on the Supplemental Poverty Measure, which cleans up all the nonsense of these one-sided surveys by taking into account things like cost of housing and availability of food stamps when determining the true poverty measures in each state.  Just one of those measures Obama put in place to try to make Government more transparent and information more useful (but only for those that care enough to find it, unfortunately)

    QQQQ/Abseth – I've been thinking that all month.  We already have several plays on them and TQQQ above – I still like it but it doesn't like us!  

    BKW/Pfeh – $10Bn for THI?  They were  $5Bn last year, what have the done to earn another $5Bn in value?  I guess it's all about the tax inversion for BKW but they will get such backlash for this that I doubt it will go through so I'd lean towards shorting THI initially but BKW popped 20% today as well so, couple that with the overpaying and the fact the deal is likely to fail and that means we can sell 5 BKW Jan $30 calls for $3.25 ($1,625) and buy 4 April $30/34 bull call spreads for $2 ($800) for an $800 credit per set.  BKW is at $32.50 now, up from $27 yesterday so it would take another $5 pop before you get in real trouble on the trade.  

    TSLA $385/Jabob – ROFL, it never ends, does it?  These are all by "Global Equities."   Now, I don't want to say Global Equities is a fake research company but I will say that, using their web site, I have a very hard time proving that they are not or that their web-site isn't a quickly cobbled together front to legitimize a fake firm or a firm that exists solely to pump up or assassinate stocks for a fee.


    Global Equities Research: 'Demand Exceeding Production …

    Tesla patents hint at 400 mile hybrid Lithium-ion/Metal-air …

    UPDATE: Global Equities Research Raises PT on Tesla …

    UPDATE: Global Equities Research Initiates Tesla Motors at …

    That last one was from last year, where they had an Overweight rating and a $150 target.   Here's Trip's classic call on AAPL last year from an article in Fortune titled "How Wrong-Headed Can One AAPL Analyst Be?"  Hubba, hubba, hubba – who should you trust???

  50. SAN up and coming,  Having a yield of 6.4 Buy the stock at 9.01 and sell the Jan16  10 straddle for 2.45 sell  1/2 Sep 10c for .10 sleepy income.

  51. SAN sorry stock is 9.90 not 9.01 

  52. My tweet of the day:

    God @TheTweetOfGod  ·  Aug 16
    Celebrity dumping an ice bucket on himself to raise money? Cute. Humanity dumping an ice cap on itself to raise sea levels? HILARIOUS.

  53. I love God's sense of humor….. ;)

  54. Phil

    My posts were responding to dclark, you missed the big picture, the suggestion by dc was China might cut us off and my argument was they can't do that. I did not say or imply going alone was any more than possible for us with explanation of how, it could turn out good, and China would fail and why in a very big way.

  55. Everybody is happy – we printed 2000 today. Now move along…

  56. Tariffs cause trade wars. Places like China will loose more than us. Taxes will fix more but I say taxes will not fix America alone, free trade must become fair trade or wealth will continue to a top not seen for over a thousand years.

  57. I did buy/write on SQQQ at about 36, selling the Oct 2014 SQQQ 36 calls;  to hedge Apples eager ascent. 

    They seem to be moving roughly opposite, it's right about 35.90 right  now. 

    I see about $200 in time value in the SQQQ Oct 2014 calls, I wonder if this is a good hedge.

    Maybe selling naked puts on SQQQ would be more efficient to hedge the possibility of big stock drop? 

  58. Phil / TQQQ  -  walking through the trade

    I also have the 5xSept 86/80 bear put spread at a net cost of 2.16.

    What you suggest we do is:

    - Close the long Sept 86P for $4, Open the Jan15 75P for $4.50

    - Leave the Sept short 80P to expire worthless as QQQ looks headed higher

    - IF the Sept 80P expires worthless, then sell a lower put, say the Jan15 70P's.  Creating another bear put spread. Then close out the Jan15 75P we bought and use the proceeds from the 70P to roll those higher, to maybe the 80P.  Now we'be have a 70/80 bear put spread.

    - IF the QQQ goes lower, close out the short 80P and sell a 55P, creating a 55/75 bear put spread.

    Did I get that right?  

  59. STJ 2000

    I am with Phil, I suspect you also, this is not a breakout!

  60. ahh, shoot.  I have the Oct TQQQ's, so those prices might be off.  

    Don't trade while tired man.

  61. MS/Shadow – Good call, they are listed as one of Global Equities' Commission Sharing Agreement partners.  

    I'm sorry to be cynical guys but this is like poking holes in "wise guy" jobs in NJ – everyone knows it's a scam, there's really no reason to point it out.  Unfortunately, in the markets, there are just as many scams and not everyone is aware of them.

    Going it alone/Shadow – Good luck with that plan.  I think, at this point, we're stuck with the World and the World is stuck with us.  

    CLF/Albo – very nice move today.  Just a matter of patience sometimes.  

    S&P/Maya – 1,997.50 now, closed at 1,988.40 on Friday so impressive, but it ain't 2,000 and, even if they hit 2,000 – how can you make a statement like "Looks like it's gonna stay above 2,000" after observing it for 4 hours above it after 400,000 hours below it?  Of course the media is pumping it, that's what their sponsors and Corporate Masters pay them to do.  This is how they get you to take your cash and buy stocks that are already pumped up to record levels – they need you to hold that bag!  

    WEN/490 – Thanks, not sure what happened to it then, did we close it out?  This far down the line, I'm disinclined to jam it in if we did miss it.  

    WFM/Jet – Well $50 is a lot vs current $38.  You effectively own the stock at net whatever (I'll guess $46) so I'd rather roll the $50 puts ($13) to 2x the $35 puts $3.10 and take the net $6.80 loss – less the $4 you probably collected, it's down just $2.80 and you can pick up the $35/42 bull call spread at $3.20 to be more bullish and those will can make you back all your losses and more if things work out in the end.  Worst case is you are re-assigned at net $36.90 on 2x which, coming off net $46 on 1x means you are committing to another 1x at an effective $33.20 (because $39.60 x 2 – $46 = $33.20).

    Wine/Shadow – Now that is tragic but I'm a little more concerned with this little reminder that a major US city which is home to most of our high-tech growth companies is sitting on a major fault line with Global Warming accelerating all kinds of planetary disturbances.  

    Even/Jet – Then I'd do a 1x roll to the $37 puts ($4) for a net of $13-4.12-4 = $4.88 loss and just find something else to play if you have no enthusiasm for them.  When 2017 comes out, you can see if you feel like increasing your bet when and if you roll the short 2016 puts out in time but, otherwise, you can find something you are more enthusiastic about.  We don't have to beat any specific stock – just try to win more than we lose.  

    Futures shorts working out nicely again, Dow (/YM) is the laggard now at 17,050 with /ES 1,993, /NQ 4,059 and /TF right on 1,160, so either Dow or RUT make good shorts below their line – using the other to confirm!  

  62. Phil--Global Equties research… looked at their website.. They don't even have a phone number.. Amazing.

  63. Phil/states – without the great GOP state of Texas's job growth since the recession, national job growth numbers would be NEGATIVE.  That's right, the rest of the states had a NET JOB LOSS.  Also, the jobs surge in North Dakota, due mainly to oil production from the Bakken shale… wait for it… Republican governor.  Texas has no state income tax, a part-time government and is a right-to-work state… Republicans are the party of liberty and opportunity… don't forget, Abraham Lincoln was Republican, and Democrats wanted to keep slavery.  

  64. Phil

    Can you provide examples where the VAT has worked, or has not?   The debate continues whether the problems are the result of irresponsible government spending or not enough taxes being collected.  I am not deciding which.  But I like your VAT tax idea. On the other hand, I think a lot of people ( right or wrong) don't trust that any government with more money will spend it appropriately. Unfortunately, I don't think you can have one without the other in our political system ( higher taxes/faith in government).

  65. CIM/Phil- I sold the Jan 2015 puts back in June for .30 and am up 33% if I buy them back at .20 or even better today. I feel like I should unwind this for the nice gain in less than 2 months, especially since this one ties up a load of margin. What do you think? 

  66. craigsa620 

    CIM For my two cents I have started to trade this stock since I think Phil recommended it in Feb13.

    Selling puts is just one way to obtain the stock for a discount which has a yield over 11% I hold quite some stock, puts and calls and doing very well, always buying more stock on a dip. So paying back premium even if you made a profit would not be my way to go. Holding the stock as such, my account does not show any margin on my trades. 

  67. Something to think about …

    Jon "DRJ" Najarian: “If AAPL announces a supply constraint for the iPhone 6, then Wall Street will punish the stock as much [the same] as if they brought out a crappy product."

    Note: He is not saying AAPL will announce this, he is just saying what Wall Street’s reaction would be if that were to happen.

  68. ChinaOS/dclark:  So now they want to force everyone in China to use their government-approved OS — which I am sure is going to be problem-free and easy-to-use because we know everything "Made in China" is just sooooo great.  Of course, its also going to need government-approved software and applications that won't circumvent China-implemented security measures (or else whats the point?)  Just another thing that will be sure to win over the hearts and minds of its citizens.

    In fact they can go ahead and call it the "Technological Revolution".  It'll be great! ROFLMAOTSETONG! :D


    My opinion is its all just a bunch of nationalistic B.S. and they are going to waste a lot of money on it and abandon it eventually.

  69. Isolated storm cells from TS Cristobal hitting Miami:

    Go to Wundermap.

  70. Politically, I'm all for the New Isolationism on the part of the U.S.   Oil/energy was the U.S. Achilles Heel, I say let's take care of the 900 Million in the Western Hemiphere and let the 6.3 Billion in the Eastern Hemisphere have at it.

  71. TSLA-the real tesla story lately is that it looks like they had some issues with the new line.  Several deliveries have been pushed back two to three weeks. It might impact their Q3 numbers.  Funny how this is not picked up by the media

  72. Yodi- I didn't understand fully waht you are saying. I am reinvesting the dividends which yielded and additional 140 shares the last quarter, and the margin hit on stock purchase is less than on the put sale for me with TDAmeritrade. this must be one of those securities which they have special margin requirements for. What is your advice for me? I like the stock, but am thinking that I should buy back the puts and bank the 33% gain on that in under two months releasing some margin for me to use elsewhere. I will still own shares of the stock, and if you have a strategy for me other than selling puts please share it. Can you be more specific about the puts and calls you are trading here? Thanks.

  73. How about that Perry guy?

  74. North Dakota breaking flaring laws!

  75. Buy Wyoming has no income tax while Montana has no sales tax. Which would be better for me and the bottom 90%?

  76. Phil silicon valley is why I posted natural disaster would bring the country down the day before, Saturday, the earthquake. And yesterday I posted we are not even close to prepared.

    Go alone? Better make that clear to Dclark that China can't do it. That was my point. 

  77. Zero – It's not predicted to hit FL at all, just move out to sea.  We are going to get some nice surf though, which will be a blast!

  78. Isolation/Zeroxzero:  There also seems there is an upshot to keeping Afghanistan liberated and on our side.  The U.S. Geological Survey estimates at least 1 Million metric-tons of rare earths resources underneath Afghanistan.  Yet another bow in the quiver for "going it alone" without China.  The more China tries to exert its influence by controlling rare earth supplies and prices, the more incentive there is for countries to find alternatives and restart old shuttered mines in countries like India, Brazil and South Africa.    Japan has turned towards "deep sea exploration"  for rare earths.

  79. Kink zero FU China

    Best thing we could ever do! Those rare earths are not rare, large deposit of the rarest east of Yellowstone Park.

  80. craigsa620 

    CIM I do not see any increase in margin requirements. I do hold puts and calls sold in Jun14  2.3 and 2.8 puts for .40 and .55 cents and they looking good at .10 and .05 now. I could not recommend entering any trades at present as they pay very little on puts and calls.  You need to wait for a dip to buy more stock, as well until the jan16 options come out. I am not sure which puts you sold but I would not cash them in now. Obviously if you pressed for margin this is an other matter. 

  81. Steps/Winston – No, moving in and out of each position WHEN APPROPRIATE AND PROFITABLE, rather than trying to force the issue.  As to things like PCLN – don't forget there's always the option of letting go and moving on.  If it's a margin hog and you've had your fun, whey set up a brand-new trade – especially if the new set-up is not as obvious as the original was.  We had that problem with AAPL as a lot of people made huge money on AAPL from $450 to $700 but now we're at $700 ($100), which is where we'd predicted we'd be at $450.  So just because we were gung-ho bullish on AAPL at $450, doesn't mean we should now play them from $700-950 ($100-$135) - it's not the same thing at all!

    So, with PCLN, I don't know what your bull spread is but, assuming it's well in the money with PCLN at $1,275 and it's going to make you 30% if you leave it alone, then you just pay your $68 to kill the short caller and, if you REALLY want to, you can try to recoup 1/2 of it ($34) by selling Jan $1,450 calls for $22 and Jan $1,100 puts for $16.60 for $38.60 of your $68 back with a very wide spread.  It's leaned towards the short calls because you are already covered long with your spread and, if PCLN drops a lot, you can roll the short puts to 2016, where the $760 calls are $12.  If you are worried about PCLN going below $760 – why the hell do you have any money in it at all???

    Slide/Jasu – Just some guy deciding to cash out on the way to lunch.

    SAN/Yodi – I'm still not all that comfortable with Spain but, then again, with all that Draghi money – how can they lose?  

    Good tweet, StJ. 

    China/Shadow – Sorry, missed the gist of that. 

    China/StJ – Just another one of those things we're ignoring.  

    SQQQ/Sn0 – Well, if you sell naked puts and the Nas pops, you will end up owning a LOT of SQQQ – is that what you want?   I mentioned TQQQ above and for SQQQ I'd go for the Oct $35/39 bull call spread at $1.20 with SQQQ at $35.87 so you are mostly in the money with $2.80 upside (233%) if SQQQ goes up 9%, which would be a 3% drop in the Nas.  That's a good play by itself but then you can hedge it with something you REALLY want to own if the Nas does drop 20% – like those BRCM 2016 $32 puts I mentioned earlier at $2 – let's say you sold 5 of them and raised $1,000 cash and then you bought 20 of the spreads for $2,400.  That puts you in $8,000 worth of the spreads for net $1,400, pretty good protection against a small Nas drop and, long-term, you might get to own 500 shares of BRCM for $16,000.  

    TQQQ/Burr – All good except don't forget, you don't have to sell a "lower" put as you are going to be rolling up the Jan $75 put anyway.  So maybe you'll end up selling the Jan $75 puts for $3 and you will roll to the $85 puts at $6 (now $8), which would be net even for you on the roll and you'd have the same basis but now with the $85/75 bear put spread.  It could be $90/100 – whatever works best….   Same goes for the other roll – just examples, when/if it happens, we'll have to look to see what works best at the time.  

    Global/Jabob – That's what I was saying.  So many of these firms are a joke and the way the media works these days (sloppy), a front is good enough to get you on TV and add legitimacy to any wild crap you want to spout. 

    VAT/DC – I don't know how to quantify "working".  It hasn't, to my knowledge, been implemented the way I want to – in lieu of paying taxes.  I want a simple 20% tax on all goods and services, essentially, on the GDP.  No exception whatsoever but then I would credit people earning under $30,000 (50% of the people) $1,500 as some kind of VAT credit.  That would be about 100M x $1,500 = $150Bn to help poor people pay for groceries, gas etc.  The rest would just be a no-loophole tax on everything – think how much we'd save on accountants and tax lawyers alone!  It would be implemented just like sales tax – you buy something, you pay your VAT – end of story.  Here's the Wiki on it for background.   The best part would be, when BKW wants to buy THI, they'd have to pony up $1.6Bn on top of the $8Bn purchase price and then, when they pretend to be a Canadian Corporation – we'd still collect all the same money from everything they buy or sell in the US.  The only way to avoid a proper VAT, is don't do business in that country and, as you can see from the Wiki charts, most countries have one anyway (Canada is 5%, in fact).  

    CIM/Craigs – Of course if you don't feel the margin is worthwhile, get out but there are fees and if your plan was to own CIM for net $2.70 or get .30 paid for not owning them (10% on the stock or much more on margin).  Don't forget, if you do own them, you get 0.08 each quarter so getting .20 for 4 more months is much better than the dividend would be if you owned the stock. 

    And what Yodi said!  

    AAPL/Diamond – Well, duh!  Can I go on TV and say "If TSLA announces a supply constraint on the Model X, then Wall street will punish the stock as if they bought out a crappy car."?  Quick call a publicist – tell Barron's to hold the cover!!   Yikes, it must be a slow news day…

    TSLA/Cturb – Ah ha!  Just as I predicted only one comment ago!  AMAZING!!!  

    Dallas Fed/Shadow – Hey, don't start using facts in a discussion about how great things would be if Republicans ruled the Earth - it's not fair – you stupid liberals have all the facts on your side so keep them to yourself please and find some other way to have a discussion.  cheeky

    The latest survey from the Dallas Fed is in contrast to other regional surveys. Manufacturing in Texas in August is growing but at a slower pace.

    Texas factory activity increased again in August, although at a slower pace than in recent months. The production index, a key measure of state manufacturing conditions, fell from 19.1 to 6.8, indicating output growth decelerated from July.

    Other measures of current manufacturing activity also reflected notably slower growth in August. The new orders index fell 11 points to 2.2 after surging in July. The capacity utilization index also posted a sharp decline, moving down from 18 to 3.6. The shipments index experienced the largest fall, from 22.8 to 6.4, reaching its lowest reading in eight months.

    Perceptions of broader business conditions were less optimistic this month. The general business activity index remained positive but fell to a five-month low of 7.1. The company outlook fell from 11.3 to 1.5, due to a smaller share of firms noting an improved outlook in August than in July.

    Anyway, not like we didn't see this one coming:

    Dallas Fed may be down as oil prices dropped

    Taxes/Shadow – Depends what you make vs what you spend.  I find most states work out about the same when all is said and done – otherwise there'd be a lot more migration to take advantage in certain states.   

    Nice re-entry to take advantage of on our Futures shorts.  17,055, 1,995, 4,065 and 1,162.  /NKD 15,685.

    Rare Earth/Kinki – China only has about what their land mass indicates they should have.  It's their willingness to extract it that makes them special:

    Until 1948, most of the world's rare earths were sourced from placer sand deposits in India and Brazil.[14] Through the 1950s, South Africa took the status as the world's rare earth source, after large veins of rare earth bearing monazite were discovered there.[14] Through the 1960s until the 1980s, the Mountain Pass rare earth mine in California was the leading producer. Today, the Indian and South African deposits still produce some rare earth concentrates, but they are dwarfed by the scale of Chinese production. In 2010, China produced over 95% of the world's rare earth supply, mostly in Inner Mongolia,[3][15] while it had only 37% ofproven reserves;[16] the latter number has been reported to be only 23% in 2012.[17] All of the world's heavy rare earths (such as dysprosium) come from Chinese rare earth sources such as the polymetallic Bayan Obo deposit.[15][18] In 2010, the United States Geological Survey (USGS) released a study which found that the United States had 13 million metric tons of rare earth elements.[19]

    New demand has recently strained supply, and there is growing concern that the world may soon face a shortage of the rare earths.[20] In several years from 2009 worldwide demand for rare earth elements is expected to exceed supply by 40,000 tonnes annually unless major new sources are developed.[21]

    So it's good to know we can strip mine the crap out of our country and get a 300-year (Global) supply of Rare Earths but I'm pretty sure that in the next 100 years or less, you will get your Rare Earth's out of an molecular-level 3D printer.

  82. Phil- I was about to ask if you were liking a short of the indices for the end of day swoon when you just answered. Do you have a favorite among them for today?

  83. And, by the way guys, if you want to "get" China, then the smartest thing to do is encourage them to mine the crap out of their Rare Earths while we keep ours in the ground.  That way, down the road, they'll depend on us for their high-tech base materials.  

    Favorite/Craigs – I play the RUT when I'm sure and the Dow when I'm not because the RUT can really kill you when you're wrong.  With the Dow, if I enter at 17,049 and then it pops to 17,055, I'm only out $30 and I probably DD to raise my basis to 17,052 and then I'll add 2 more at 17,075 (down $280 on the first 2) and I'd be willing to add 4 more at 17,100 (down $780 at that point).  If I did that with /TF – I'd be down double that much.  

    Of course those numbers are based on the assumption that /ES gets rejected at 2,000 again and then – ALL FALL DOWN (my kids used to love that!) with an 8 x 50-point drop (back to 17,050) and that's +$2,000 and we get to do it all over again.  

  84. Phil / Texas / taxes

    Innovation will surprise us…again…

    What do smart phones, social networking and new exciting cures for disease all have in common?

    NOT commonplace 10 years ago

    NOW everyone, rich or poor, have access to them

    NOT invented by government, but rather American innovators, people you like to criticize as the top 1%

    NOW is the time to identify and discuss how to profit from the upcoming innovations for the next 10 years, instead of arguing unnecessarily about politics…


    Pretty please?

    Pretty please with a cherry on top? :)

  85. Phil/S&P

    no, I am not buying here…more like selling premium here.

    what I meant was that the media was spinning it as if it was a done deal at 2000.

  86. Anyone know how to invest into the medical side of 3D printing?  It's going to grow and grow.  Even now they are doing amazing things:

    I wouldn't mind placing a few coins on some names.  I'm not a believer in the "hacker" at home 3d machines, but I do believe that one day we will have the replicator in a way….  

  87. Phil-my only problem with shorting futures is that I feel like I did when I would bet against my home team back when I was into that. I know it isn't the same and you are simply trying to make money on a momentary move, but when I start rooting for indices to fall I feel like I'm betting against my other holdings. This is stupid and emotional which is what keeps most retail traders from taking advantage of this type of opportunity and i thank you for encouraging us to make money in spite of our feelings and emotions. This is what it means to be the house and not get caught up in trading on emotions.

  88. Burrben / 3D Printing

    The company that will ultimately reap the profits of 3D printing will be HP because they will buy whoever creates it.  As far as who the company that will initially develop it?  No idea.

  89. Phil – DrJ was not on TV, he was speaking with investors and answering a direct question regarding AAPL. Not everyone understands the price action of AAPL nor Wall Street’s over-reaction reaction to AAPL news events. 

    Jon Najarian has made clear he is not in AAPL at all (right now), and I would think that, of all people, you would at least respect his opinions regarding what big traders do. His intentions were to make sure people were at least tempering their AAPL giddiness going into the iPhone 6 announcement considering the big run it has already had prior to it.

    I thought posting that might help … but I could be wrong. 

  90. Surprise/Prof - Smart phones and social networking (and I'm not saying that is a good thing at all!) are both dependent on Al Gore's Internet.  Cures for diseases have Government grants and incentives all over them – more so now than ever before as Obamacare has increased the potential customer base by 15%.

    GPS – Government (DOD),  Internet - Government (DOD), Baby Formula – Government (Nasa), Google – Government (NSF funded Digital Library which Brin (an NSF Fellow at Stanford on GOVERNMENT scholarship) then created a ranking algorithm with Page and formed a company to monetize it), Bar Codes – Government (NSF), Tires (modern ones) – Government (Nasa), Microchips – Government (DOD funded FCS and TXN), Touch Screens – Government (NSF and CIA at University of Delaware), Vaccines – Government (NIH these days), Wind Energy – Government (DOD), Aerodynamic Cars and Trucks – Government (Nasa), Fire-Resistant Clothing – Government (Nasa),  Interstate Highways – Government, Railroads – Government…  you'd be quite sad living in your freakin' cave without the Government – but I bet you'd have the biggest pile of rocks in the cave!  

    How can you not see these things?  Do you purposely not see them or is there some kind of massive blind spot that prevents you from seeing anything good in Government?  And, especially these days, the idea of a single innovator changing the world is a myth – science is very much a cooperative team effort and this ridiculous focus on individual accomplishment is one of the things that puts kids off becoming scientists and engineers that our society badly needs to function.   

    And we do discuss how to profit from these trend – if people stop interrupting with politically slanted nonsense that has nothing to do with what we're discussing!  

    Media/Maya – Just a warning. 

    3D/Burr – I think it's way too soon to start betting on these things but – GE, ADSK (they make the software for whoever wins), HPQ are the ways I think 3D printing will go.  I went to the Maker store in Boston a few weeks ago, you need to go before you shove money into these things – soooooooooooooooo tedious.  Years away from real commercialization.  

    And what JPH said.  

    Emotions/Craigs – Very true.  I'm already going to make money if the market goes up so why do I need to bet more up?  On the way up, I can make money on the dips while protecting my bullish positions – that's how I look at it.  It's like fighting a war and trying not to get anyone killed – that's unrealistic and you will lose.  If you are well-balanced, some positions will work and some will not but (and this is hard for some to grasp) it's a TEAM effort with a combined goal of moving the ball forward to the end zone.  

    AAPL/Diamond – I was just kidding man.  It was a general statement that could have applied to anything is my point.  I just did a seminar with Pete this year – I do like those guys.  I'm sure in context it was much more helpful…

  91. Burrben 3D

    It is already use t make frames that tissue is grown on, of course that is limited by cost that few can bear. Al it takes is software after the docs make the design.

  92. Burrben / 3D bioprinting:

    ONVO is probably the leader at this point.  IMHO it is very speculative, and fundamentally you should wait for real earnings to materialize, while technically using proper buy point discipline…

  93. Shadow / taxes:  Phi'ls correct, taken across all income levels.  But there can be low income exemptions [e.g. for prescriptions and food for home consumption] that change your overall effective rate, individual counties have the right to add extra income taxes [in Wyoming, e.g.], there are gasoline, diesel, cigarette sales taxes — the "best" state depends very much on your individualized income and consumption profile, it seems. So you are the only one that can come up with the right answer.

  94. Burr- I started watching Grey's Anatomy with my daughter and they made 3D printing a huge part of the plot lines this year using it to create body part replacements. Usually when you see something like that in these medical dramas, it is pulled from real life literature so it is on the horizon I guess. Watch the reruns and see what name is on the equipment. I am sure the company paid for some product placement exposure. I am kidding of course, but not about the part where it was prominently featured as a cure of the future for all kinds of problems, from pediatric heart issues to liver disease pancreatic disease. 

  95. Grey's/Craigs – So it's like a science-fiction show now? 

  96. "Life" is sort of like a science fiction show, wherein the plot is never disclosed.

  97. This, however, is very cool – 3D holographic organ images.  

  98. Phil,

    think about how many more of your great trades you could come up with if you dispensed with answering the prof's  rants. He is a waste of your time….let's move on to trading and investing. 


  99. zero and the professor

    I have advocated a VAT and or higher taxes esp. on corporations but you both have no clue on the real medical care especially prescriptions. Every single one of those new meds are excluded from coverage formularies. Obama Care, Medicare part D, Medicaid, and most insurance of any kind. I was turned down on 2 just this year so I am not blowing BS.Of an prealt cost $3,200 per month because it is surgically implanted $$$$ 80% covered. Stoped me in my tracks so kind of a third. General help for the poor is if at all below third world levels, many states WY included refuse Medicaid expansion so people between poverty and 400% of poverty don't qualify for Medicaid or ACA subsidies. Over 55 and all Medicaid is taken back from your estate while the Walton's avoid all taxes for their kids. The media has you brainwashed, all is fine if your filthy rich. Please don't insult me on this again, you don't know what you don't know. I could go on for pages and you professor would never smarten up!

  100. Kinki

    Thanks for your opinions on China.  I know it sounds ridiculous (CHINA OS), but I guess my real worry is to what lengths their "carnival" government will go to and put their people through to prove that their form of government is better than ours. And as things get worse (current reads on China), can't we expect their leaders to react more desperately to maintain the guise of strength and control?  Regardless, it could put a temporary ceiling on revenue projections coming from China for many US corporations.  

  101. Phil:  I have a RIG Jan 15 40/50 BCS purchased at $3.48, now worth $1.00.  I also have a Jan 16 Rig 35/45 BCS purchased at $4.04, now worth $3.28.  I have Jan 16 35 short puts at $3.80, now $4.9 and Jan 16 40 short puts at $6.38, now $8.10.  RIG hit a 52 week low today.  How would you adjust the Jan 15 BCS?Would you make any adjustments on the Puts?  Do you feel that now is the time to sell more Puts?  Generally, what is your thinking on RIG?  Seems like these levels may be an opportunity, or would you wait to see how RIG bottoms?  Thank you.

  102. JUst for the record just closed TQQQ/AAPL  for 4.60/4.20 cost of .40 cents

  103. One more pile of crap, what good is a tax deduction when you don't make enough to owe any? Just die you lazy SOBs.


    90% no quake insurance, I don't have any, last quake 6 miles 3.2. Why? quadruples homeowners insurance. Why nobody has it, rates high which is self defeating while the fed backs flooding for the wealthy living too close to water. Even then most of them don't buy it either. How about every disaster insurance somehow screws most of the people. Could be a reason?

  105. Phil/Slow um Easy: Thanks – message received loud and clear. They sure were margin enhancing moves. 

  106. Phil

    Gotta love the chart of HPQ.  Too high in the channel for now, but I would look at it again around 35-36.  Still some very nice premiums on 2016 puts and calls.  

    Thank you for the earlier advice on AAPL.  I lightened up significantly.  I still love the company, but after the last time I "loved" the company (2 years ago), there comes a time when you must move on to something else.

  107. Phil – ok never mind then, if you can't get off of politics. 

    No more arguments here.  Best wishes for your future.

  108. SPY daily candle is not too encouraging …

  109. FWIT my JRW indicators are pointing to IWM opens lower.

  110. I agree, RMS, he's back on my ignore list after changing his name to circumvent.  None of us have time for that nonsense.

    Speaking of things I should be doing:  STP holding $132K and the LTP is showing $607K for $739K, down $4K since Friday.  Of course we tilted more bearish so of course this will happen on another up day so tomorrow, if still going up, we'll have to take a serious look at the Buy List, looking for plays to add.  

    Come on, we've got to push this puppy to 2,000 into the close!  

    RIG/John – Sounds like you are pretty invested, I'd wait and be sure this re-test of $37 holds.  RIG is at $37.50 and what I would do – especially if I had more money to commit, is roll the Jan $40s ($1.10) to the 2016 $35s ($5.80) which is net $4.70 to buy $5 in position (intrinsic) and a year to get there.  Then you could take your short 2015 $50s (.10) and the short 2016 $45s ($1.40) and roll those to the same number of Nov $39 calls ($1.12) with a stop on 1/2 at $1.50.  The short puts are not only lower than the stock but, believe it or not, 2017s will print one day and you can currently roll the 2016 $40 puts ($4.40) to the 2016 $33 puts ($3.80) for .60 so, if you can roll down $7 for 0.60 each year – in 4 more years, for $2.40, you will be down to the 2021 $5s and you still have the original $5 you collected so your net would be about $2.50.  If you don't REALLY want to own RIG for $2.50 long-term – I would STRONGLY suggest you get out now at $37.50!  

    A short-term vs long-term view is a huge wall that separates traders from investors.  If you want to be a long-term investor, you have to lean to think and plan long-term!  

    TQQQ/Yodi – Nice that it didn't cost much but I would have cashed AAPL and pressed TQQQ. 

    Quake insurance/Shadow – I think the main problem with quake insurance is that, if there is actually a major quake, most of those companies will go bust.

    Margin enhancements/Winston – Well the big trick is to gain the confidence that we'll always be able to find another trade.  Once you embrace that concept, letting go of a good trade is more like an opportunity to buy a new one than letting go of something good.  

    1,998 – FAIL!  That was a bit disappointing.  

  111. HPQ funny still holding the Jan15 30 straddle recommended by Phil 8/7/13 and still showing a good profit possible should have closed it earlier but still a lone ranger 

  112. AAPL/DC – Right you are on that!  

    SPY/Diamond – Volume too low to be meaningful.  Tomorrow is key.  SPY at 200!   I think volume may have been in the 50s again….

    Indicators/Shadow – I'm still liking those Futures shorts if we cross:  17,050, 1,995, 4,065, 1,160 and /NKD stubbornly back to 15,600 with Dollar 82.58 and oil $93.42. 

    HPQ/Yodi – Too far back for my memory.  I do, however, remember having a big argument in Vegas about why I didn't think HPQ was "over" back in Nov 2012, when they were in the low teens.  Funny thing is they had come down from about $30 then too – crazy how a company that big and that well-known can have so many investors who don't understand what it's worth.  

  113. Couldn't get a decent fill on my last shot at TQQQ [of which I already have a decent position] but I managed to short some TSLA before the close, I'm at least 6 for 8 on my Tesla put sales, although I put it on "Ignore" since it broke above $220 or so.  


    Shadow:  lighten up.  I only wrote about "consumption" taxes, not income taxes.  In case no one has mentioned it to you, you pay taxes on items that you BUY, so -- unless you buy nothing — zero, nada, rien, no food, only water, no clothes  -- not a nail to fix a hole in your roof — you pay taxes.  When you start attacking members for well-meaning comments that have nothing to do with us making money, it's time to take a step back. 

  114. Phil 

    Is it a bad thing that I am up 95% for the year and over 40% in cash?  Thank you and all other members for their contributions to my success. This site is fantastic even with the occasional political banter.

  115. Phil

    When you have the time, can you give me a brief value analysis on HPQ.  

  116. Phil: I have to admit that the last few days on the board has reminded me of the GEL1 days with lots of time and psych energy wasted.  Makes me a little irritable, and I have had prof (essional) on ignore since one of the first spewings. 

    Yes, it's about investing and learning and for the life of me, I don't know how someone would even have time to write rants.  I work hard just to keep up.

  117. Take a look at Mtd-read or heard some thing about them doing the body parts. I know they are into hips, but there is a company that is doing heart valves & this might be the one.

    Shadow-I know how frustrating it must be for you, BUT your state sounds Draconian & very backward. I was  going to get a RX for Lidocaine patches because of my back & joint problems to keep me out of spasms & I have to buy a whole BOX of 300 now instead of the 10 I usually get & refill if needed. That was almost $400.  And two EPI pens were $362 bucks! I was totally thunderstruck & decided I would take my chances with the bites & keep using Benadryl & try to find the patches from Canada. Could I afford to pay for them? Yes, but that is not the point. What the heck is going on with these drug company's? And they were generic which I didn't want. My thyroid medication was always $5.00 a month, now double. But there is no inflation=what a freaking joke!

  118. dc: You make us proud.

  119. RIG/Phil- I had some trouble figuring if any of those moves would help me with my RIG position. I am holding the Jan '16 40/50 BCS which cost me $3.50 whenever I got in and is now worth $1.83 or thereabouts. Also sold Jan '16 $40 puts for $5.50 now around $8.10 I have plenty of time for it to recover, but is there anything I can or should do to enhance my position? Having been cashy and cautious I have some dry powder to work with if needed. I have liked RIG a lot over the years, making a lot of money riding them in the mid 2000's as they kept rising on an almost daily basis for 3 or 4 years, and I have no doubt they will eventually recover this time, so I am not nervous about jumping in deeper. 

  120. Phil:  Thank you for your comments on RIG.  I will roll the BCSs down per your suggestion and am not too worried about the short puts, which I will roll down when I can.  The thing is that I see value here.  We haven't seen these levels on RIG since the financial crisis.  The stock currently yields 7.9%; earnings are $4.07, though it is true that they are projected to drop to $3.44 next year in face of declining day-rates and rig utilisation. It sounds like you are waiting for evidence that the knife has stopped falling before you would consider a buy/write.  Or have you soured on the fundamentals?  I neglected to mention that I have a small stock position at $39 (uncovered by callers), which I would like to average down on.  Am I nuts to think RIG is tempting?  For what it is worth S&P still has a $50 price target on RIG.

  121. zeroxzero

    You have forgotten that yesterday you said in America there are always ways to get medical help. That is totally wrong (SOMETIMES for some people under certain circumstances) I was not insulting any more than you thinking I don't know I can't afford my property taxes or why I said moving to Montana to get out of sales tax. And this is to correct what Phil said property taxes are lower in Montana and no income tax in Wyoming does no good like deducting medical expenses from income tax owed. Professional is not worth the typing effort. I like you and made a mistake once, apologized, but you made incorrect statements that indicated I could get medical help if I tried harder. That will not help with contributions. I said yesterday, when you start living here again you will see it differently, but today you made the drug statement even more untrue. Have you any idea how desperate I am to get that surgery? Sorry and I could have responded to a number of hits that helped stop contributions, but like asking for help I only did it after 6 weeks of $0. Think about waiting over 4 months and way off. Just tell me the way and I will do anything to end this nightmare.

  122. Big Boys taking some profits …

    Money Flows: Selling on Strength –

    BLOCK TRADES: Money Flow (millions of US dollars)

    GILD = -$335.54 

    AAPL = -$229.20

  123. diamond

    Today I never looked at money flow or big blocks, but some volume at the close. I believe my JRW indicators are solid. IWM RUT /TF opens down or at least goes down after the open. That is the same indicators ever since Thursdays close down on Tuesday. Friday was way weaker and lower volume than expected.

  124. Diamond or anyone- This chart of Money Flows looks fascinating, but I have no clue how to use it. Can someone explain what it means and how it would have an affect on strategy? As a layman it seems to be saying that big money is moving out of GILD and AAPL but both were up today with GILD up almost all day and increasing steadily with virtually no drops, so how does that translate? Does this chart have use as a predictor of things to come, or is it just more meaningless stats that end up telling us nothing in this fickle market.

  125. Shadow:  If I am misguided in my understanding of the U.S. medical system, my regrets, but my comments were well-meaning, not intended to be demeaning.  

  126. Hey Shadow, or anyone else, can you remind me what JRW's moving average crossovers were on the charts?  I had to recreate some charts the other day, and have set them to the 8 ema and the 20 ema on the 3 minute chart; but for some reason that doesn't sound right to me and I can't find JRW's link.


  127. Low volume, fake, based on free money – sure! But still some impressive moves. New highs for Nasdaq, new highs for S&P. Bears getting killed out there…

  128. shadowfax – What S/R lines are you currently using on IWM?  Thanks!

  129. zero

    Like I said you will learn fairly soon with your bunch of kids I hope it is later rather than sooner. Be sure to check your insurance limitations. My mom and dad have the super duper federal plan and it screws them on medications while everything else is a $100 yearly maximum. My dad is now in a home and my sister and I will now share $2,000 when they die, house everything, gone. I refuse to ask any more but I have to negate any misleading statement because it only takes one word to stop anything in America, no second chances. I seriously refused to cooperate on this fund idea for at least 6 months because of pride. Only after falling back and thinking I can't live like this did I final admit I was out of answers. Hope it works!

  130. craigsa620 – It is just another tool/indicator. Net over “300” (up or down) is more significant for block trades at the end of the day. For instance, today it shows a desire for some big money to move some of their GILD risk to “others.” Bag holders? … maybe, or maybe not.

  131. The big one right now is support at 115.5, dipped below for a few today. Only bumped confluence at 116.4, TLT up confirms that solidly failed, forming a downward channel since yesterday. Open below 115 would be bad like really negative, draw the 2 day trend line channel for when I would post if it stay out more than 20 minutes, also the 50 minute SMA . EMA was JRW's confirmation for day trading. When he and I both day traded I bailed as soon as I saw 2 big blocks about 10 to 14,000 shares, waiting was always too late, and next he would post out. He moved the market with balls of steel.

  132. Phil / INTC – Phil, i wanted to thank you again for helping me protect future stock allocations at work - finally, i feel like i am owning my own destiny with stocks vs. letting the market dictate what you get… I liked your advise and have sold Jan2016call and bought Apr2015put – this way, the stock that will be allocated to me in 2015 is protected… the 75% of stocks that vest in 2016,17,18 – i don't want to cap their potential right now – what do you think? should i also cover these with a similar play or are they too far out to worry about…? concern is i will have to keep tweaking them often and may lose money in the process? – thanks again.   

  133. diamond

    Too bad JRW never came back. I seriously was up 90% of the time just following his moves, not his post they were usually to late. My first mistake was trying to take care of my parents doing that, it wasn't enough ended up having to go home down a bunch and needing immediate medical help so then it was spend and spend. Last blast was deciding with a lucky win I could pay for Arlyn's surgeries and we both end maxed in debt, she was only $70,000. Could be OK but we both need to go east for more. Bottom line when JRW stopped my system of follow didn't work the same, the pattern was gone and that is what really pisses me off most, someone who can trade millions per day causes his own profits. No all there is left is BOTS doing HFT skimming. I never had enough to trade Phil's way although I tried and learned a lot.

  134. shadowfax – Yeah, I definitely miss JRW III, and some people made a lot of money while he was here!

  135. Another good tweet from God…

    God @TheTweetOfGod 
    You can succeed if you work hard, say people who succeeded by getting lucky.

  136. Thanks Shadow, and Deano.  Somewhere I picked up that there was supposed to be a confirming 2nd complete candle across the EMA but I'm not seeing that in my quick skim of the JRW notes.  Of course, all we need to know nowadays is to buy at the 10am (7am pst) low, and set a trailing stop (somehow this is phenomenally easier said than done).  Also, I haven't been using RSI, but I've started keeping a chart of TICKs up on the screen as well.

  137. Frank Zappa Lost Interview: Hendrix, UFOs & Sex

  138. What I'm thinking is that JRW adapted this strategy from a futures strategy that he learned somewhere, and I'm just wondering if anyone has come across one that seems very similar to JRW's.  That would help fill in the blanks, because it's clear from his comments that JRW wasn't giving out all the recipe ingredients to his secret sauce.  He kept talking about proprietary software.   The other thing that has changed since JRW dropped out is that volatility and ATR's are a fraction of what they were back in 2010-2011, making any trend hard to follow.

  139. Frank Zappa – Complete "Lost Interview" 1991

    Parts: 1,  2,  3,  4,  5,  6,  7.

  140. Bad, bad thing/DC – Very nice, especially the 40% cash. 

    HPQ/DC – First of all, they are only valued at $70Bn ($37.15) but they are making just under $6Bn this year and probably $7 next, bringing their forward p/e down to 10.  They have been undervalued for years because people give them no credit for being able to adapt to a changing market, even though they started as a calculator company and moved on to dominate the printing World and then pivoted into desktops, then laptops.  

    Rather than chase phones and tablets, they took a look at IBM's service business and decided that was the way to go and they were very, very right.  Despite paying a 2% dividend, HPQ is still dropping 10% to the bottom line – in cash!  

    I was going to pick them for tomorrow but, while we're on the subject, though they are not cheap, there are few stocks I would rather own if they got cheaper and we can sell HPQ 2016 $32 puts for $2.40 and that is essentially free money (since we REALLY want to own HPQ at $32) and we can buy the $32/40 bull call spread for $4 for net $1.60, so we basically own them for $33.60 with a possible $6.40 upside (20%) if the stock moves up less than 10% in 16 months.  Nothing wrong with ending up with 1,000 shares of HPQ in the Income Portfolio so we'll do a set of 10 and happy to put money into rolling down the calls if they do have a dip.

    Margin on the put side is just $3.20, by the way so a very efficient way to make a double on margin while we wait to see if we're lucky enough to get to own HPQ for net $33.60 (15% off current price).

    Thanks JBur.  I don't mind once in a while when we have the right mix of people (people who know when to quit and don't take things personally) but once in a while we do get flare-ups.  It's a shame moderate Conservatives (assuming there are some) don't tend to pitch in and tell someone they don't represent the GOP when they say ridiculous, hateful things but I guess that's what's generally wrong with the party in the first place.  When I hang out with Dems in NYC, you would think 1/3 of the table is radical left, 1/3 radical right and a just a few stuck in the middle trying to keep order, yet the farthest right person in the room is a mile left of the people who claim to represent Conservatives and, in absence of other Conservatives objecting – we have to assume they do.

    Still we have nothing on the UK!  

    MDT/Pirate – I've always liked them, they just haven't been on sale in a very long time.  They do fantastic R&D and have a great pipeline of game-changing products to look forward to. 

    RIG/Craigs – The 2016 $40s are still $2.60, not too bad off a $3.50 entry but only if you do something with them.  Your short $50 caller is 0.75 but you can leave him and invest $3.20 in rolling your $40s to the $33s.  That puts you in the $33/50 bull call spread for net $6.70 ($3.50+$3.20) and, since RIG is at $37.50, you are pretty much just $2 out of the money.  Next thing to consider is – do you really think RIG is good for $50 in Jan 2016?  $13 more is 33% and I never like to bet anything will go up 33% so I'd go for 20% and look at the $40s, which we know are $2.60 and that would put $1.85 in pocket and drop your net on the $7 spread to $4.85.  That's a bit conservative but it beats losing, doesn't it?  There are $43s at $1.85 so costs you $1 to widen the spread by $3 but, on the other hand, if you haven't sold puts yet, I'd rather just sell the $28 puts for $1.85 and stay conservative on the bull call spread.  

    As you say, RIG is simply one of those cyclical businesses that analysts fail to grasp and you may wonder why there aren't any old analysts who get it but, with cyclicals, even the best analysts get it wrong sometimes and then they get fired and they never want to work with cyclicals again and then some new junior analyst gets stuck with them and just when those guys think they get it and start prognosticating, the cycle shifts and the new guys all look like idiots.  It's fun to watch as you get old…  wink

    Notice we're in the decline with excess capacity of petroleum and metals, weak pricing power (deflation, falling wages), competitive currency devaluation (Draghi, Yellen, Kuroda) and just this morning we were discussing the merits of tariffs.   We SEE PMIs and Retail Sales in other countries falling into negative territory, we saw our own GDP print -1.6% last Q, we just got a Dallas Fed report showing a lot of slowing in a short period of time – we just don't want to connect the dots! 

    RIG/John – No, I love them long-term but they did just spin off some assets and you never know where panic will take something in the short run AND you have to consider how week the oil demand outlook is – all reasons not to rush into them – at this moment. 

    Money flows/Diamond – Disturbing.  

  141. By the way:


    Bulls want low interest rates, as in ZIRP, forever. That’s unrealistic of course but the Fed is finding it hard to even hint at it near term. As long as sub-par economic data continues to flow bulls will play.

    8-25-2014 7-22-23 PM bad newsBad economic data included: PMI Services Flash dropped to 58.5 vs 62 expected & prior 61; New Home Sales fell to 412K vs 430K exp & prior 422K and the Dallas Fed Mfg Survey was also weak 7.2 vs 13.5 exp & prior 12.7.

    Collectively these issues should be bearish but even Homebuilders ETF (ITB) only fell slightly. And, it’s not all bad since ZIRP allows for more mergers as companies can borrow at cheap rates and buy others. That’s a good thing right? Well perhaps not good for workers as many will be laid-off since that’s the way the game is played. Controversially, high U.S. corporate tax rates are driving companies like Burger King (BKW) will merge with Canadian company Tim Hortons. This will allow BKW to relocate to relocate its headquarters to Canada enjoying lower tax rates. Of course this “inversion” issue is controversial but not many politicians or the media have made the obvious suggestion to lower U.S. corporate tax rates to remain competitive. As it is the U.S. government loses tax revenues. Meanwhile the Obama administration naively suggests these corporations are unpatriotic. It’s laughable.

    Let’s not forget the ECB’s Super Mario once again, like the boy who cried wolf, promises to launch QE and/or utilize “unconventional” tools for stimulus for the eurozone.



    Money Flow/Craigs – If you start off with the assumption that the market is rigged and that stocks can be manipulated higher even as money flows out of them – then it all makes perfect sense.  If that is confusing, here's Jim Cramer to explain how to be a crooked hedge fund manager (and not as an example, by his own experience):

  142. Big Chart – You can't fight the Fed – if they are game on and the indexes are popping 3 of our 5 Must Hold Lines (for two straight days) we MUST be bullish.

    INTC/Nram – I agree with letting them run but in conjunction with vigilance!  If the market starts going down and INTC follows, it would be silly not to get some protection, especially the kind that can make you a bit of money and then be taken off.  Feel free to check with me any time as it moves.  The nice thing about a big market sell-off that takes INTC down to $33 (the 50 dma) is the VIX should pop and you'll have good prices on options you can sell. 

    JRW/Shadow, Diamond – Well, as Shadow says, when you follow a guy trading that big, you can do well just picking up some of his wake!  

    God/StJ – He is wise. 

    Zappa/Diamond – He was cool.  Notice how we don't have any anti-establishment people on TV anymore, other than "Comedy" hosts like Stewart or Oliver?  I'm holding my breath to see if Colbert sells out when he takes over at Late Night.  

    Here's one guy who's still Original Gangster:

  143. Phil- That Cramer piece is unbelievable in that he talks about doing illegal things saying that the SEC isn't going to enforce their rules! Wow, takes some big balls to say all that while being recorded. I am really curious when that was recorded? I have to think it was before he became a superstar and all over CNBC since he keeps talking about using Pisani and other reporters to spread false reports. 

    RIG- I did already sell a bunch of 2016 $40 puts a while back, so I probably don't want to add the $28 puts on top of them. I got a bit confused by your post. I got the roll from $40 long calls to $33, but knowing now that I sold the $40 puts do you suggest I roll the short callers to $40 or $43?

  144. I got this in my email this morning can any one help me to give a good explanation to the writer TIA

    "Yesterday they gave a hero's funeral to a young black boy, who was shot by police for stealing!!!!! Even Obama sent his Gov. officials. If a solder comes home with his legs shot off he is lucky if he gets food stamps. Is this not some how sick?"

  145. Good morning!

    Cramer/Craigs – I think that was roughly 2003, I know Arron, he's a big-shot at Yahoo now and he was pretty young then.  Cramer didn't work for CNBC yet (started 2005) as he's insulting Pisani and talking about using all of them as tools to spread the propaganda.  That was, of course, before he decided it would be more lucrative to help turn the network into nothing but a huge propaganda machine for the 1% agenda.  Bush was in office, so there was no fear of regulators at the time.  

    RIG/Craigs – No, I wouldn't sell more, you'll just do the roll when 2017 comes out.  As to short callers, Since you have $40 puts, I'd go for the more conservative call sale (lower) as you are better off just selling more premium and, like the butterflies, just rolling the losing side when it comes.  

    Explanation/Yodi – Not based on those "facts".  What boy?  What circumstances?  What soldier?  Doesn't actually make sense as, when you are dead, you probably don't qualify for food stamps.  Or do they mean a live soldier?  If so, how do you compare a live soldier to a dead kid?  Is shooting how you punish people for stealing in Germany?  When you execute a minor for stealing, is there some official policy of not showing remorse?  See – I have a lot of questions, tell your friend we need more facts.

    Speaking of facts:  Got our 100-point drop on /NKD, 15,500 on the button.  Of course if 15,500 is holding, that's our old resistance and holding it is a sign of strength, so I'm off the short bandwagon there – it was just 15,600 that was obvious.

    Once again we had a nice dip last night but all fixed now for no particular reason.  As you can see from Dave Fry's SPY chart above, all of yesterday's gains came in the Futures – that's the kind of rally that makes me not believe the charts.  

    We have /YM 17,058, /ES 1,995, /NQ 4,066 and /TF 1,163 and I still like /YM short below 17,050 (same sequence as yesterday) as long as /ES below 1,995, /NQ below 4,065 and /TF below 1,165 but, like yesterday, it's very likely the go for 2,000 again, so just going for quick money.

    Nice movement on /YG – $1,291 before pulling back to $1,288.50, Silver hit $19.53 and now skimming along OVER our $19.50 line – a bullish sign.  Copper down to $3.195, Nat gas rejected at $4, as expected and now $3.927 and gasoline back to $2.75.

    Dollar 82.55, Euro $1.32, Pound $1.657 and 103.85 Yen to the Dollar.

    Asia was down about half a point almost across the board, fading all day and finishing at lows after an up open.  

    Don't Bank on China's Rainy-Day Funds - China's banks are finally making preparations for an increase in bad loans. Investors should question whether enough is being done.

    Japan Maintains Assessment Of Economy - While keeping its overall assessment of the economy, the government said production remained weak in a sign firms were taking longer than expected to overcome the impact of the April sales-tax increase.

    China, Long Foreign Firms' Sweet Spot, Turns Sour

    5 Takeaways From Chinese Property Developers' Earnings

    Malaysia Airlines Faces Big Job Cuts - Malaysia Airlines is likely to cut a quarter of its staff and stop flying to some cities in China and Europe as a part of the embattled flag carrier's revival plan that may be announced later this week, according to people familiar with the proposals.

    Qantas Confronts Tough Choices - As Qantas prepares to report the deepest loss in the airline's history, Chief Executive Alan Joyce faces a painful dilemma. Mr. Joyce is under growing pressure to sell some assets—including the successful frequent-flyer business.

    Here Are 4 Signs Of Trouble In The Brazilian Economy

    Europe is flattish but trending down too – looks like the same program running both markets. 

    Putin to Meet Poroshenko as Ukraine Tensions Escalate

    Russia Plans New Aid Convoy; Ukraine Says Moscow Moved Tanks

    Sanctions Costs: German Exports To Russia Collapse, "Risk 50,000 Jobs"

    Russian Gold Reserves Rise - The central banks of Russia and Kazakhstan continued to boost their gold holdings in July, suggesting emerging markets remain committed to bolstering their reserves of the precious metal despite a pullback in its value.


    People Who Want Scotland To Leave The UK Just Won A Huge Victory

    Israel Destroys Two Gaza High-Rises - Israel bombed two Gaza City high-rises with dozens of homes and shops, collapsing one building and severely damaging the other in a further escalation in seven weeks of cross-border fighting with Hamas.


    The ISIS' Top Line: $2 Million In Daily Revenue From "Oil Sales, Extortion, Taxes And Smuggling"

    Texas Court Scraps Iraqi Oil Order - A Texas court threw out an order to seize one million barrels of oil from Iraqi Kurdistan, potentially opening the way for its delivery to the U.S.


    Boko Haram Just Followed ISIS's Lead In Declaring Itself A Caliphate

    Dollar Rallies Precede Fed Tightening Cycles: Chart of the Day

    How Would the Fed Raise RatesWith banks chock full of excess reserves, the federal-funds rate may prove useless as a tool to drain liquidity

    James Bullard says Fed will need to alter guidanceThe US Federal Reserve will soon need to modify its policy statement as the economy improves and asset purchases end, said St Louis Fed president James Bullard. Mr Bullard said in an interview with the Financial Times that the Fed would have to alter both its declaration of “significant” underutilisation of labour resources and its pledge not to change rates for a “considerable time” after it stops buying assets.

    Even Mainstream Academia Worried About Bubbles

    I hesitate to include this as it sounds like BS, but it's from the Journal:  Warren Buffett to Help Finance Burger King's(BKC) Takeover of Tim HortonsBerkshire Hathaway Expected to Provide About 25% of Deal's Financing. 


    Fairchild Cutting 15% of Workforce -  Fairchild announced plans to shed some older manufacturing operations, moves it said will trigger a 15% reduction in its 9,000-employee global workforce.

  146. sept oil

    sept gold

    sept dollar

    sept stocks

    sept buy dip

    sept home ownership

    sept not purchasing yet

    blog joke 9

  147. Phil, I do not want to make more out of my friends question but we both know what he is talking about as seen on TV By the way this friend happened to be in SA and not in Germany. A solder does not need any food stamps when he is dead!!!! And if you get caught with your hand in the cookie jar in some countries they do not shoot you but cut your hands off. It is obviously to many that the kid got shot by a missundertsanding, His valid question still remains does the stealing deserves a Hero's funeral in the US nothing more nothing less? Just a simple question.

  148. No luck on Futures shorts this morning (never got our signal) but Durable Goods is 8:30 and the headline number should be high (based on BA's deliveries pumping it up) but then maybe a pullback from that pop.

    The housing charts above don't bode well for Case-Shiller but this is the June report, way behind and we were still trending up then.   FHFA (also 9am) is also June.  Consumer Confidence, however, at 10 am is for Aug and that might be good due to gas prices coming down but they didn't come down too much at the pump, so we'll have to wait and see on that one.  Below 90 will be huge disappointment.  

    South Africa has narrowly avoided falling into a recession as the country produced second-quarter growth of 0.6 per cent on a quarter-on-quarter basis, in spite of contractions in mining and manufacturing output.

    The tepid performance follows on from a 0.6 per cent contraction in the first three months of the year, as the ailing economy was battered by a five-month wage strikeby 70,000 platinum miners, reports the FT's Andrew England in Johannesburg.

    That industrial action ended in late June, but the economy was dealt another damaging blow when some 200,000 metal workers and engineers embarked on their own wage strike, which lasted four weeks and affected more than 10,000 firms.

    Statistics South Africa said mining and quarrying industry endured negative growth of 9.4 per cent, while manufacturing output shrank by 2.1 per cent on a quarter-on-quarter basis.

    Government services and the transport, storage and communication industry were the largest contributors to growth, StatsSA said.

    Ukraine shows Russian soldiers detained in East Ukraine. Russia says they entered 'mostly by accident.'

    Net Neutrality Is 'Marxist,' According To a Koch-Backed Astroturf Group

    China may have to change the way rural teenagers are educated and how its schools are funded

    'Breaking Bad' and 'Modern Family' were big winners at the . Here are the highlights:

  149. By the way the other day a German Turk origen was shot in the US just for stealing Beer out of somebodies Garage!!! He was flown to Germany without a great funeral!!

  150. Yodi, I don't know what he's talking about, I didn't see it on TV.  Kids get shot all the time, it's a shame but it happens.  Are you talking about Michael Brown in Ferguson?  They'd damned well better send people to that one to calm things down!  He wasn't shot for stealing, he was walking down the street and randomly stopped, unarmed, and ended up being shot 6 times - the tape of him stealing something was completely disconnected from him being shot.  Also, your definition of "Hero's Funeral" is asinine – there was a tragic shooting and it was simply the last straw for a minority community that has long felt it was under siege by their own, mostly white police force.  It's a huge complex issue, no easy answers, though I'm sure your friend in SA likes to think issues like this are simply black and white and easy to decide:

    Brown was unarmed when he was shot Aug. 9 by officer Darren Wilson, who is white. A grand jury is considering evidence in the case, and a federal investigation is also underway.

    Police have said a scuffle broke out after Wilson told Brown and a friend to move out of the street and onto a sidewalk. Police said Wilson was pushed into his squad car and physically assaulted. Some witnesses have reported seeing Brown's arms in the air – an act of surrender. An autopsy found Brown was shot at least six times.

    A quarter-million has been donated to Brown's family, but legal defense funds for Wilson have raised $388,000

    President Barack Obama sent three White House aides. Others in attendance included the Rev. Jesse Jackson, moviemaker Spike Lee and entertainer Sean Combs, as well as many local and regional civil rights leaders. The Rev. Al Sharpton was also expected to speak.


    Speaking of Turks, Yodi – I hear you guys are burning down Mosques over there.  Vice Chancellor Gabriel visited a mosque.  What's up with that, does he visit every house fire in Germany?  Do you see how ridiculous these kinds of questions are???

  151. The site should be renamed to Phils"Letstalkaboutallthecrapthatwecantchangeinsteadofmakingmoney"world

  152. Not Guilty. Somtimes could be insurance claims as well. 

    Burr can you pronounce that word?

  153. Sorry was only looking through things for some stocks to trade

  154. No Burr, we'll call it "letsstickourheadsinthesandandbecausemakingmoneyistheonlyreasontoexist" world.  Are you seriously saying that I don't have the right, at 6am on my own site, 3.5 hours before the market opens, to discuss what I want?  

    Stocks/Yodi – TASR, lots and lots of TASR!  

  155. Every stock I look at today is just on top of the ladder or even just crumbling they bound to drop sometime. They are just to expensive to trade with but shortening might be also a fools game.

    TASR will look at it thanks

  156. Good name Phil

  157. By the way, before my last train of thought was interrupted.  NFLX should be taking a dip because they got shut out at the Emmys.  Not that it's a big deal, but they were up $20 in anticipation of more good news last night and it didn't come – so people will be disappointed.  

  158. NFLX would be good news Phil I did an experimental trade on the 8/13 when they were 443 sell the 480c and buy  to cover my behind with the 490c all Sept1 thinking they never will jump 40$ in that time but see how one can be mistaken. Proof is never sell any nakeds on these MoMos Always limit any loss!!!

  159. Warren&Burger King/Phil – It might be BS, but Burger King is under the 3G Capital Management (of Brazil) umbrella of businesses. 3G teamed up with Warren in the Heinz buy-out. So there is at least a past partnership there.

  160. Japan government turns more cautious on weak factory output

    The French government and the austerity battle that brought it down

    Denmark raised its forecast for public investment to counter sluggish consumer spending

    For the first time, two major private major banks in Switzerland will release their financial statements. Geneva's Bank Pictet and Lombard Odier will both release their first-half results this week, Reuters said. 

    President of Zimbabwe Robert Mugabe met with Chinese president Xi Jinping in Beijing to discuss much-needed economic aid for the African country. Mugabe is "seeking a £2.4 billion rescue package, according to the Zimbabwe Independent newspaper, which cited unnamed sources," The Telegraph reports. 

    A look at the cash crisis that looms over Afghanistan:

    A European bank cleanup is driving $1.72 trillion of asset sales that could free up capital for lending

    Customers take 79 days on average to research for major purchases, with 80% of research kicking off on the Internet:

    Video: Casino workers in Macau demand better working conditions

    Russian food safety regulator shuts fifth McDonald's restaurant

    .: Italy is now in a triple-dip recession. But it didn’t get there by itself

    BOJ's Kuroda says more needs to be done to boost wages.

    Embedded image permalink

    Bill Black on Bank Fraud: The Wall Street Journal’s Choleric Rant about Cholera and Bank Fraud Epidemics: I wa…

    Analysis: Why We Still Think Hertz Has an Undisclosed SEC Investigation | Probes Reporter, LLC

    Militant offensive threatens to deepen Iraqi divide along ethnic and religious lines

    Embedded image permalink

  161. Phil TASR  right on top as well or are you pulling my leg as an American joke?

  162. NFLX/Yodi – I find them fun to play but very, very dangerous.  Just keeps things interesting.  

    BKW/Brill – I think they want Buffett in to "legitimize" the transaction.  After looking at it, it seems a bit much to call it an "inversion" to go to Canada and it's not clear that they are moving BKW to Canada.  Adding coffee and donuts at Burger King does make sense for breakfast and late nights but MCD has had mixed success with McCafe and WEN already spun off THI (regrettably now) after they tried and failed to integrate them.  

    Ackman owns 10% of BKW, nice pop for him!  

    TASR/Yodi – No, TASR is my stock of the decade and here we are 40% of the way through it and the need for more non-lethal weapons and cameras to record interactions is already becoming obvious.  My premise back in 2010, when I picked it, was that we would have more civil unrest as the wealth gap increases and that laws (and lawsuits) would begin to change to make it a smart decision for police forces to train their officers to go for the Tasers first, guns last.  

    Again, it's a long-term play but I'm very confident it will be a $50 stock by 2020, more than a 10-bagger from our initial entry and good for a triple from here ($16).  

  163. From Robert Reich on Facebook yesterday:

    Whenever you hear economists talk about averages, watch your wallet. In an economy becoming ever more unequal, those at the top bring up the average higher than the typical person experiences. (The basketball star Shaquille O’Neal and I have an average height of 6’ 1”.) So take with a grain of salt the government’s recent announcement that per-person disposable personal income has risen over 4 percent since the recovery began in 2009 (adjusted for inflation). The fact is, median family income (that is, the income of the family smack in the middle) is now lower than it was when the recovery started. Five years ago it was $55,589. Now, adjusted for inflation, it’s $53,891.

  164. TASR sold the Jan16 put 4/10/14 for 3.10 making slowly progress.

    Other trade still workable Buy ABB stk @ 22.90 and sell the Mar15 23/22 c/p strangle for 1.15/.93

    stk yields 3.4%

  165. Where are we heading S&P already up 3.5

  166. DAX up .17%

  167. Jeez, I was making a funny.
    Its your site, dwyw

  168. Comedy is all about timing, Burr…  cool

  169. WLP still can be traded 

    By BCS jan16 @ 11.65 sell jan16 

  170. sorry pressed wrong button sell the jan16 105p for 9.45 for a cost of 2.20 and sell 1/2 Sept 115 for 1.25 

    lower protection to 102.15 looking for a monthly return of 3.3%

  171. Talking about humour, try some of these on (from the recent Edinburgh fringe festival:

    1. "I've decided to sell my Hoover… well, it was just collecting dust." –Tim Vine

    2. "I've written a joke about a fat badger, but I couldn't fit it into my set." –Masai Graham

    3. "Always leave them wanting more, my uncle used to say to me. Which is why he lost his job in disaster relief." – Mark Watson

    4. "I was given some sudoku toilet paper. It didn't work. You could only fill it in with number 1s and number 2s." – Bec Hill

    5. "I wanted to do a show about feminism. But my husband wouldn't let me." – Ria Lina

    6. "Money can't buy you happiness? Well, check this out, I bought myself a Happy Meal." – Paul F Taylor

    7. "Scotland had oil, but it's running out thanks to all that deep frying." –Scott Capurro

    8. "I forgot my inflatable Michael Gove, which is a shame 'cause halfway through he disappears up his own arsehole." – Kevin Day

    9. "I've been married for 10 years, I haven't made a decision for seven." – Jason Cook

    10. "This show is about perception and perspective. But it depends how you look at it." – Felicity Ward