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Which Way Wednesday – How Low Can We Go?

INDU DAILYWhat a fun market to play!  

Yesterday, in our Live Member Chat Room (you can subscribe here), at 11:13, in anticipation of a wierd day, I put up a bullish and a bearish trade idea for our Members.  The cool thing is, both sides won!  Our two trade ideas (which we went over in our Live Webcast at 1pm) were:

If you want to play for an AAPL pop this afternoon, the QQQ weekly $100 calls are just .40 and QQQ topped out at $100.33 yesterday.  Figure AAPL pops 2.5% and that pops the Nas and QQQ 0.5% so $100.50 + premium could be good for 50% if AAPL gets a good reaction – if not, it's probably going to lose less than a direct play on AAPL would. 

TZA/Sn0 – Well TZA is only at $14.50 so the spread is half in the money at net $1.25 so it still has good upside if you add to it but I'd rather get the Jan $15/20 bull call spread at $1 as that gives you more time and more upside – if your TZA hedge goes in the money.  That way, you can take $2 off the table on the Oct spread and know you still have plenty of upside if TZA keeps going up on you and also less downside exposure if it flips the other way.  

When our 1pm Webinar started (at the same time Apple's conference started), the QQQ calls were just 0.42 and still playable and, as you can see on the chart, we even had a dip down to 0.30 briefly but that line held and we then jumped 100% back to 0.60 and then on to 0.72 before dropping back to 0.60, where we took our expected 50% gains and ran.  

If you missed our Webcast yesterday, you should check out the replay because we discussed WHY we made that particular pick and HOW we selected it – very educational!  That's because, at Philstockworld, our goal is to TEACH you to be a great trader – not just give you great trades.  

RUT WEEKLYAs to TZA, the Russell plunged from 1,175 to 1,155 – good for $2,000 per contract on the Futures shorts (/TF) and TZA shot up to $14.74 and the spread is up to $1.08 – up 8% on a 1.7% dip in the Russell – that's 4:1 leverage on your portfolio protection – good stuff!  Of course we like to pair our hedges with short put sales on stocks we REALLY want to own if they get cheaper and today that's going to be:

GTAT, who took a dive on a huge disappointment that their Sapphire Glass was NOT being used in the new iPhones.  While it is on the iWatch, the surface area of the watches are less than 20% of the Phones, so relatively small chance of big sales for GTAT.  Still, it's a nice little company with a good product and, at about $14 this morning, we should be able to sell the 2016 $10 puts for $2.25 for a net $7.75 entry and that, then pays for 2x the TZA spreads.

CCJ is down with the Materials sector but Japan is beginning to restart their nuclear reactors (shut down since Fukushima, 3 years ago) and that should kick-start demand for Uranium again.  CCJ has been making money (p/e 20) even at these low prices and a boost in demand and a rise in Uranium Prices will be all profits for CCJ.   So I really like selling the 2016 $17 puts for $1.90 for a net $15.10 entry and, like GTAT, that pays for a couple of hedges.  As a trade on CCJ, though, you can add the 2016 $17/22 bull call spread at $2.10 for a net 0.20 entry on the $5 spread that's $1.69 (745%) in the money to start. 

We already had some fun this morning going long on the Futuers in our Live Member Chat Room, choosing /YM (Dow Futures) at 17,000 and /TF (Russell Futures) at 1,155 but we took the money and ran at 17,050 (up $250 per contract) and 1,159 (up $400 per contract) and flipped short on /NKD (Nikkei Futures) at 15,820 as we thought the run-up was a bit fake looking and, more importantly, because Treasury has $21Bn worth of 10-year notes to sell today (1pm) and $13Bn worth of 30-year notes to sell tomorrow.  

A little market fear really helps to drive retailers back to cash and help move those bonds and the Fed still wants to keep those long-term rates as low as possible so, when long bonds go on sale, you'll often see a market pullback ahead of the auctions.  Manipulated?  Of course it is (see Monday's post).  And they'd better manipulate things because Mortgage Applications plunged 7.2% this week to the lowest level since December of 2000.  

Lack of a true housing recovery has long been one of my main reasons for remaining skeptical of this rally – these numbers are as low as they were when the market was crashing in 2000 – the year the Nasdaq fell from 5,000 in late March to 2,500 that December (-50%) and on to 1,200 in Oct of 2002 – THAT'S the level of mortgage applications we have now along with our once-again overpriced Nasdaq.  

Maybe this time will be different – MAYBE.  

But, if not – try the hedges!  


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  1. Dilbert – by Scott Adams :-)

  2. Good one Diamond!

    The Official Dilbert Website featuring Scott Adams Dilbert strips, animations and more

  3. Oil Lines

    R3 – 95.15
    R2 – 94.54
    R1 – 93.72
    PP – 93.12
    S1 – 92.30
    S2 – 91.70
    S3 – 90.88

    Updated 9:19 AM: Just updated the numbers as calculations were wrong.

  4. "September 10, 2014 12:07 pm
    Majority in China expect war with Japan
    By Demetri Sevastopulo in Hong Kong" FT

    Nice.  Uninhabited rocks, first surveyed and claimed by the Japanese, Chinese ignored the "islands.". Until oil was discovered beneath them in 1971 – now they are being whipped into a war frenzy.  Not helpful, as both countries sink beneath their debt loads.

  5. Find it laughable that Pacific Crest downgrades Apple which just unveils a huge potentially new revenue stream in iPay for the future for them along with the best phone they've had in years and we can even discount the watch entirely.  Apple is trading now at an astronomic 14x p/e 2015 earnings.  Can see the reason for the downgrade from a conservative firm, but wait

    Pacific Crest has a buy on NFLX with a 530 PT, a company whose costs for content increase every year and profit margin is miniscule.  Apple on the other hand has an incredible profit margin.  NFLX will be trading at 69.5 p/e of 2015 earnings right now, not at their PT in an industry that trades at 1/5 of that.

    And they have a $316 PT on TSLA, do I even have to get into how ridiculous that is?  Wish CNBC would start embarrassing firms and pointing this bs out.

  6. bottom line is I'm a buyer of AAPL on a dip

  7. This is just unreal in the face of the possible outcome:

    A week ago, Doctors Without Borders said that "World leaders are failing to address the worst ever Ebola epidemic." This week, House Republicans are saying "let us show you what failing looks like!" The Obama administration is asking for $88 million in funding to fight Ebola, but:

    According to a source familiar with the negotiations, House Appropriations Committee Chairman Hal Rogers (R-Ky.) agreed as of Tuesday morning to spend a total of $40 million to fight the epidemic in the 2015 spending bill.

    And look at the new numbers:

    Time to nickel and dime on prevention! We spend more than that on each F-35 we buy!

  8. CCJ- Phil, due diligence re: nuclear/Japan- can you cite source(s)?

  9. Good stock to look for in Uranium field is URG.  Blackrock owns over 50% of it.

  10. stjeanluc – FWIW: The CVR (Connors VIX Reversal) Signal just gave an early indication to fade this pullback. 

  11. Thanks Diamond. My VIX PPO just hit the 0 line which has been a warning before of a dip. But 30% of the time there is a quick reversal.

  12. Good morning! 

    For the first time since records began, single people account for more than half of US adults. But what does this mean for the economy?

    LOL Diamond.  

    China/ZZ – Well a good war is a nice way to boost the economy (and get rid of all those surplus males).  

    Elmore Leonard has written 45 books, and some have been turned into movies or TV shows.

    CNBC/Rustle – You're kidding, right?  CNBC start being the voice of reason?  They EMPLOY these fund managers to come on their air and spout this BS.  In fact, this should be disturbing to all – Tony Scaramucci, of SkyBridge Capital, is leaving CNBC for Fox, who bought "Wall Street Week" from PBS (for the credibility and audience).  Bad enough a tool like Murdoch gets to run these things but now Fox gives the Fund managers control of the shows:

    The hedge-fund mogul’s contract with FBN doesn’t specifically include Wall Street Week, but does give Scaramucci “great flexibility for programming,” the source said.

    WTF?  Fund managers dictate programming?  We are so doomed.  

    Republicans/StJ – That's just bat-shit crazy.  They can't find $48M?  How about fire one less missile a week?  THOUSANDS of people are dying and, if this thing becomes more contagious those numbers will stack up fast.  Amazing on the anniversary of 9/11, having spent TRILLIONS of dollars to fight terrorism, they can't find Millions to fight disease.

    Japan/Pstas – Oops, forgot the link – it was from news earlier this morning (yesterday's post).  

    URG/Rustle – I think CCJ is a better deal.  Also, no options on URG (penny stock).  

    Dips/Diamon, StJ – See how well-trained they have you.  BTFD!  

  13. stjeanluc – The $NYMO also closed too low below its BB …

  14. Good Morning!

  15. Phil – TA is used in this field, it is wise to at least look at it.

  16. BTFD / Phil – Training or observation? It had worked for 3 years now. I am quite certain we will hit the big one eventually, but I guess you go with what works holding your nose and the finger on the trigger!

  17. Ebola / Phil – Speaking of training. I guess once you have been trained to oppose anything the administration proposes, it doesn't matter what the money is for. I wonder if they would fight a budget to blow up an asteroid on its way to earth if Obama proposed it. Add to that a decidedly anti-science bias and you have the recipe for a possible grand scale disaster. Idiots!

  18. ….and I suppose if all the victims of ebola had blue eyes and blond hair, that we would not pay the additional $$$ and thensome….just sayin…..

  19. Phil

    good tightrope act yesterday!


    Do you believe in the company in that…can they innovate in the changing fast food environment?

    if so, what play here with the stock down to $90.66 from more than a $100… I know you like it at $85, but I don't know if we get there.?

  20. Phil- Speaking of buying dips, is this an opportunity for GTAT and LQMT or are these guys not going anywhere but down? Could GTAT still become an Iphone component supplier and if not, is the watch enough to make them investment worthy? I am hoping that the watch will evolve into more than what we are seeing at the start as technology gains are made. Particularly in the health area if they can develop skin sensors that will measure blood sugar or that type of idea. Not sure where LQMT fits in the whole scheme with Apple, but obviously people were disappointed yesterday.

  21. Internet companies battle for net neutrality • 9:25 AM

    Clark Schultz, SA News Editor

    A number of Internet companies are staging an organized protest against the FCC's net neutrality proposal today.

    Though Twitter (NYSE:TWTR), Netflix (NASDAQ:NFLX), Mozilla, and Reddit aren't actually slowing down their websites, they are drawing attention to the current and suggested policies of broadband providers (CHTRCVCTWCCMCSAVZ) with loading icons dedicated to the cause of an open Internet.

    The proposed "fast-lane" premium pipeline for content providers would mark the end of Internet freedom, according to the group.

  22. phil, XRT and FXI plays turning green.

  23. So cynical 1020! 

  24. DJ Netflix Started at Buy by Canaccord Genuity >NFLX 

    Sep 10, 2014 09:19:00 (ET

  25. The answer to the question "Can people really be that stupid?" is always yes.

  26. FTR – something up with them beyond just dividend? just had all my covered FTR called away from multiple accounts/brokers…  

  27. GTAT/Phil- I know you mentioned them already in your morning post, but I am wondering if you think they still have an opportunity to really be an important supplier to Apple or anyone else and become more than just a nice little company.

  28. Phil,

    What are your thoughts on shorting HD at this level.  The recent run up seemed illogical given the rising interest rates dampening what little demand there was for housing.  Also moving out of the DIY project season.  Couple that with a market correction (wishful thinking) and shares might just go down a little, no?

  29. Good morning everyone! 

    The webinar replay is now up on our YouTube channel!

    09-09-14 PSW Trading Webinar:

  30. TA/Diamond – What makes you think I don't look at at.  There's a reason I wrote Monday's post and a reason I cashed in short puts on Friday and a reason I flipped the STP more bearish on Tuesday by buying back the short SQQQ calls – I AM looking at the TA – I'm just not fooled by it.  

    • Dow +0.01% to 17,015.10. S&P +0.04% to 1,989.20. Nasdaq +0.04% to 4,553.97.
    • Treasurys: 30-year -0.36%. 10-yr -0.18%. 5-yr -0.1%.
    • Commodities: Crude -0.49% to $92.30. Gold +0.08% to $1,249.50.
    • Currencies: Euro -0.49% vs. dollar. Yen -0.51%. Pound -0.36%.

    Cameron warns Scotland ahead of independence vote

    • Although largely keeping out of the public debate until now, Prime Minister David Cameron beseeched Scots this morning to shun independence.
    • "We do not want this family of nations to be ripped apart," says Cameron, but "if the U.K. breaks apart, it breaks apart forever."
    • Several recent polls have shown an increase in support for independence ahead of next week's vote, spooking financial markets and raising the largest challenge to the U.K. since Irish independence almost a century ago.
    • Pound ETFs: FXBGBB

    IceCap Asset Management On Europe: "If You Exclude All The Debt, There's No Debt Problem"

    Hong Kong corrects over China stimulus worry

    • There’s already a lot of money in the pool, and we can’t rely on monetary stimulus to spur economic growth,” said China Premier Li Keqiang overnight after the M2 money supply rose 12.8% in August, down from 13.5% in July. His comments, says one money manager, suggests the economy isn't in good shape, but that the government will be focusing on reform rather than short-term boosts.
    • The Hang Seng closed lower by 1.9%, while the Hang Seng China Index (H-Shares) dove 2.6%. The Shanghai Composite fell 0.4%. Prior to last night, the H-Shares had rallied 21% since mid-March.

    PBOC Adrift Without Policy Anchor Amid Credit Slump

    China Stocks Fall Most in Two Weeks as Money-Supply Growth Slows

    Golden age for foreign companies in China 'is over'Foreign investment in China plummets as companies' double-digit growth becomes a thing of the past.


    Banks to Pay Price for Choice to Be Big, Fed’s Tarullo SaysThe biggest U.S. banks must decide whether to voluntarily reduce their size and complexity or face capital charges that are some of the toughest in the world, the Federal Reserve’s top financial-regulation official said today.

    • "It's almost comical" that experts continue to forecast rising rates, says Jeff Gundlach. The downgrade of GDP forecasts has now become an annual event, yet "hope springs eternal" that 3% growth is just around the corner.
    • Look no further than housing, says Gundlach, for what's holding the economy back. There's a secular trend at play as demographics continue to force a shift away from home ownership, and the cyclical action of rising home prices will just accelerate this.
    • Earlier, the MBA reported mortgage application volume fell 7.2% last week, bringing the MBA index to its lowest level since December 2000. Refinance volume fell 11% to its lowest level since Nov. 2008, and purchase volume fell 3% on the week, and 12% from a year ago.
    • The purchase print is especially troubling, says Diana Olick, as all-cash institutional buyers are moving out of the market, leaving mortgage-dependent buyers to pick up the slack.
    • The 10-year Treasury yield is higher by two basis points to 2.53%.
    • AMTD average client trades per day of 381K fell 6% from July and were roughly flat from a year ago.
    • Total client assets of $665.5B gained 3% from July and 24% from a year ago.
    • Average spread-based balances of $93.6B rose 2% from July, 6% Y/Y, and average fee-based balances of $143.5B flat from July and up 17% Y/Y.
    • Source: Press Release

    Small Business Ownership In America Is At An All-Time Low

    SunEdison California solar project gets $145M in financing from Google

    • SunEdison (NYSE:SUNE) +3.1% premarket after Google agrees to provide $145M in equity financing for the Regulus solar power plant to be built in Kern County, Calif.
    • The Regulus plant will begin operations later this year, and will supply power to Southern California Edison through a 20-year power purchase agreement.
    • The 737-acre 82 MW DC solar PV power plant is in construction, and will be comprised of ~248K SUNE mono-crystalline solar PV modules; once operational, Regulus is expected to produce enough energy to power 10K-plus homes.
    • GOOG has signed agreements to fund more than $1.5B in renewable energy investments across three continents.

    AngloGold shares sink after revealing plan to spin off international assets

    • AngloGold Ashanti (NYSE:AU) -10.4% premarket after announcing plans to spin off its international mining operations into a new entity listed in London and to raise $2.1B in capital.
    • AU will retain a 65% stake in the new company, which will have 14 gold mines in the Americas, Africa and Australia that last year generated ~$4B in revenue.
    • The new company, which would be based in the U.K., would seek to list its shares on the London Stock Exchange and to have secondary listings in Johannesburg and New York.
    • AU says the separation would simplify the structure of its businesses, allow their management teams to be more economically competitive, and also allow the companies to be more appropriately valued by investors.
    • The move follows BHP's recent decision to split some of its less profitable assets into a new Australian-listed company; Gold Fields also split its South African assets into a new company, Sibanye Gold, in 2013.
    • Cliffs Natural Resources (NYSE:CLF) says it will amend its revolving credit facility to allow it to proceed with the previously announced $200M share repurchase program.
    • Among other changes, the amended terms reduce the size of the existing unsecured revolving credit facility to $1.25B.
    • CLF +1.1% premarket.
    • U.S. Silica (NYSE:SLCA) +5.5% premarket after raising guidance for FY 2014 adjusted EBITDA to $230M-$240M from an earlier outlook of $215M-$225M, based on the strength of the markets for both of its operating segments.
    • SLCA also reiterates full-year capex guidance of $95M-$105M and an effective tax rate of ~27%.

    Private Equity’s Quest for Mines Foundering as Commodities Slide. The push by private equity funds to acquire mining assets is slowing as investors struggle to land major deals while commodity prices slide. The funds have raised $1.1 billion for investments in mining and metals this year, compared with about $8.8 billion in 2013, according to data compiled by Bloomberg.

    • Boeing (NYSE:BA), Elon Musk's SpaceX and Sierra Nevada are competing for more than $3B in funding under NASA's "space taxi" contract.
    • The program is designed to end U.S. reliance on Russian rockets for shuttling astronauts to and from the International Space Station, following the space shuttle program being retired three years ago.
    • The three have all previously received NASA funding, increasing the possibility of a joint award.
    • Boeing’s proposed CST-100 capsule received $480M in 2012, compared with $400M for SpaceX’s Dragon V2 capsule and $219.5M for Sierra Nevada’s orbiter.

    Nevada lawmakers to discuss Tesla tax break today

    • Nevada lawmakers are heading to Carson City today to convene a special legislative session to discuss an up to $1.3B tax break package aimed at cementing Tesla's (NASDAQ:TSLA) $5B battery plant deal.
    • Tesla CEO Elon Musk previously said that Nevada's offer to Tesla "was not the biggest incentive package" but the state was picked because it "can do things quickly" and "get things done".

    Chipotle bulls recharge while bears take their lumps

    • Oppenheimer raises its price target on Chipotle (NYSE:CMG) to $775 from $700.
    • The investment firm has CMG slotted with an Outperform rating.
    • Looking for a Chipotle bear? DoubleLine Capital's Jeffrey Gundlach admits candidly to being wrong about the prolonged rally in Chipotle, although he still calls the stock "horribly, horribly overvalued" looking ahead.

    Home Depot may be investigated by FTC; sued by customer

    • Along with five states that have launched a probe into the data breach at Home Depot (NYSE:HD), two senators have now asked the Federal Trade Commission to investigate.
    • Home Depot has yet to say what exactly was stolen, although experts estimate that the breach affected over 40M payment cards.
    • Meanwhile, the first lawsuit from a customer has surfaced over the cyberattack, sueing the home improvement retailer for failing to properly safeguard customer data.
    • Lands' End (NASDAQ:LE): Q2 EPS of $0.37 beats by $0.20.
    • Revenue of $347.2M (+5.4% Y/Y) beats by $14.14M.
    • Press Release

    Manchester United misses by £1.85, beats on revenue

    • Manchester United (NYSE:MANU): FQ4 EPS of -£3.85 misses by £1.85.
    • Revenue of £96.3M (+13.2% Y/Y) beats by £3.8M.
    • Press Release

    GTAT continues to tumble as downgrades roll in

    • Apple's not including sapphire display technology in either of the new iPhone 6 models, but having it for the Watch "is disappointing from both a timing and volume perspective for GTAT," says Goldman analyst Brian Lee, downgrading the stock to a Neutral, with price target cut to $14 from $20.
    • Removing 20M iPhone units from his model and replacing with 10M watches brings estimated 2014 revenues down to $497M from $634M, and EPS to $0.09 from $0.12.
    • Piper Jaffray downgrades to Neutral, with price target cut to $16 from $23.
    • Shares -10.9% premarket after yesterday's 12.9% slide.
    • Previously: Apple event kicked off, iPhone 6 introduced

    Mobileye lower after downgrade

    • The party for Mobileye (NYSE:MBLY) is on hold for the moment as Deutsche pulls its Buy rating, citing valuation following the big post-IPO rally. The $53 price target remains.
    • Shares -3.2% premarket

    Alibaba's IPO covered in two days

    • Within just two days of its launch, Alibaba (Pending:BABA) has collected enough orders for its IPO to cover the entire deal, although there still is no indication to where most of the demand is within its $60-$66 per share price range.
    • At the top end of expectations, Alibaba would raise $21.1B as the largest ever tech IPO, smashing Facebook's $16B listing in 2012.

    Twitter boosted by UBS upgrade

    • Channel checks show Twitter (NYSE:TWTR) is getting positive momentum with its objective-based (pay for performance) campaigns, says analyst Eric Sheridan. boosting the stock to a Buy with price target lifted to $65 from $50.
    • Further, the launch of Promoted Video ads, the "Buy Now" button, the international self-serve ad rollout, and the addition of TapCommerce to Twitter's ad tech stack all put Twitter in a good spot in key secular growth areas within digital advertising.
    • Shares +3% premarket

    Big August for Amazon says ChannelAdvisor; eBay sluggish

    • Same Store Sales for Amazon (NASDAQ:AMZN) rose 45.1% in August, up from 40.4% in July, and continuing a trend of increasing the Y/Y growth rate every month in 2014.
    • Continuing to lose share, eBay (NASDAQ:EBAY) SSS rose just 5.9% in August, down from 9.7% in July, and the weakest result for the company since February 2011. Looking further into the detail, eBay auctions fell 11% Y/Y, eBay fixed price rose 6.8% (down from 12.8% in July), and eBay Motors rose 8.4%.
    • Full report
    • AMZN +1.7%, EBAY -2.7% premarket
    • Previously: eBay downgraded over Apple Pay

    eBay downgraded over Apple Pay

    • "While unlikely to impact eBay's (NASDAQ:EBAY) business over the next 6-12 months, we believe the unknown competitive threat of Apple Pay will further weigh on eBay's multiple over the next 3-6 months as Apple Pay has the potential to disrupt the competitive mobile payments market," says Piper's Gene Munster, pulling his Overweight rating and cutting the price target to $55 from $63.
    • "We believe a lower multiple on eBAY is deserved given the change to the competitive market, even though over the next 6-12 months fundamentals on the core PayPal business remain intact."
    • Shares -0.9% premarket after yesterday's 2.8% decline.

    Analysis: Apple Pay to benefit Visa and MasterCard

    • Though Visa (NYSE:V) and MasterCard (NYSE:MA) are likely to only see a "modest" revenue boost as a result of their partnership with Apple's new payment system, the new service is an excellent defensive play against getting shut out of mobile payments, reasons Philip Van Doorn.
    • Analysts think that if Apple Pay is successful it could reduce the odds of eBay or the Merchant Customer Exchange coming up with a truly disruptive payments system outside of the U.S. card network.

    More on Microsoft's pursuit of Minecraft

    • The $2B price tag that Microsoft (NASDAQ:MSFT) is reportedly willing to swallow forMinecraft maker Mojang is on par with other large video games deals, although not all have panned out.
    • Analyst take: Cowen calls Minecraft one of the great gaming success stories of the last ten years, while some tech analysts warn the franchise has lost some momentum and could be hard to recharge.
    • Sources have indicated that Microsoft will use overseas cash to pay for the acquisition to lighten its tax obligation.
    • MSFT +0.5% premarket

    Apple analyst buzz mostly positive, Pac Crest sees lack of new profit drivers

    • Apple (NASDAQ:AAPL) shares tilt slightly lower premarket, -0.4%, as analysts begin to weigh in on yesterday's new product launches (IIIIII).
    • Goldman Sachs reiterates its Buy rating and raises its price target to $115 from $107, saying the launch met high expectations; the firm sees the larger-screen iPhones as an important driver of improved growth in the segment, with Apple Pay and Apple Watch serving as key platform enhancements and further sources of stickiness for iOS.
    • Mizuho maintains its Buy rating and lifts its target to $110 from $105; it expects Apple Pay to gain some traction, but notes there are multiple new technologies trying to penetrate the market and it remains to be seen how successful each of will be (
    • Pacific Crest, however, downgrades shares to Sector Perform from Outperform with an unchanged $100 target, saying the new products lack profit drivers; the downgrade is not a complete surprise, as the firm warned about a potential cut last week.
    • Swatch (OTCPK:SWGAY) appears to be the watch seller most at risk at seeing the Apple Watch take some of its market share.
    • The company is not highly diversified with 90% of its revenue tied to watches.
    • 23% of Swatch's revenue is on the lower end of the luxury watch market where the Apple Watch could have an impact if it becomes more than a fad.
    • SWGAY -1.2% in London trading.
    • A number of Internet companies are staging an organized protest against the FCC's net neutrality proposal today.
    • Though Twitter (NYSE:TWTR), Netflix (NASDAQ:NFLX), Mozilla, and Reddit aren't actually slowing down their websites, they are drawing attention to the current and suggested policies of broadband providers (CHTRCVCTWCCMCSAVZ) with loading icons dedicated to the cause of an open Internet.
    • The proposed "fast-lane" premium pipeline for content providers would mark the end of Internet freedom, according to the group.

    Ebola Outbreak Doubles In 3 Weeks, WHO Warns "Conventional Means Of Control Not Working"

  31. Good Am! Pouring here since last evening & 45 degrees! The pond in the front yard is back-waterfront property at the farm. Haven't been to the lake house yet which is on Lake Superior but we have very little beach left there since the water is so high. Tropical weather up north, but no temps to match. Very strange weather all year. Only grateful its not snow yet!

  32. stjean/cynical   Sometimes, the TRUTH looks that way…… :(

  33. Ebola/1020 – nothing new. it's all part of U of Texas Professor Pianka's plan…

    "He recommended airborne Ebola as an ideal killing virus," Mims said. "He showed slides of the Four Horsemen of the apocalypse and human skulls. He joked about requiring universal sterilization. It reminded me of a futuristic science fiction movie with a crazed scientist planning the death of humanity."

  34. Dips/StJ – Yes and, unfortunately, it means you have to slap people pretty hard to break them of that habit before they end up squandering 3 years worth of profits as the market finally pulls back.  On the idiot front, I agree 100%, if Obama came out in favor of toilet paper, sales would plunge in the Red States.  

    Ebola/1020 – Come on 1020, you know in this enlightened age, that the US only discriminates based on one factor – MONEY!  

    Let me know when rich people start getting Ebola – then we'll care.  

    MCD/Maya – I'd say they are going through a rough transition and also, we lost interest in them when they hit $100 as it was too much anyway.  MCD is the type of business that should have a 15 or lower p/e, not 20 and not even 17.   Around $85 they begin to get attractive again but hopefully they fall to $80.

    GTAT/Craigs – See above post.   Down to $13.25 now and the 2016 $10 puts say $2.20 but should be higher so I'm not in a hurry.  Maybe they go lower but, if not, then we can sell the $12 puts.  

    LQMT/Craigs – Now 0.18, which is where I like them but I'd rather see how low they can go since they are so thinly traded and a lot of people bought in anticipation of AAPL using them in the new phones or at least the watch.  Now we'll see how many people bail but, with very thin trading – it could be a while.  

  35. Phil – If we do not have a patriotic rally tomorrow (9/11), it will be proof that our market is controlled by godless communist.  Hey, I think I am getting the hang of this FA thingy! ;-)

  36. Phil re: GTAT, what do you think the Apple Watch will do to revenues?  I think they are projecting $6-700 million this year, but not sure if the watch was included in those projections.  If it's enough to flip them into profitability, with potential for growth into other applications, it's still a pretty good looking long.  But I don't have a bead on how these things factor into the overall revenue and profitability picture.  Also I notice 2013 revenues were only about $300 million, whereas 2011-12 was more like $8-900 million, does anybody know what drove that / did they lose some sales during the 2013 year? 


  37. Phil/ebola  So if these Africans had money, while being black, would change everything?……

  38. Pwright- here is the answer to your question re:GTAT

    Removing 20M iPhone units from his model and replacing with 10M watches brings estimated 2014 revenues down to $497M from $634M, and EPS to $0.09 from $0.12.

  39. Job Openings, Hires At Highest Levels In Years.

    The AP (9/10) reports that in “signs the job market is slowly healing,” the number of job openings has “remained near the highest level in 13 years in July,” according to the Labor Department. The department also noted that companies hired workers at “the fastest pace in nearly seven years” during the same month. The number of jobs available in July “ticked down 2,000 to 4.673 million” due to a decline in government job openings, while businesses advertised more jobs in July than in June. Total hiring “jumped 81,000 to 4.87 million, the highest level” since the recession began in 2007, meaning “companies are more likely to fill their open jobs.” The numbers indicate “the job market is making progress” despite last week’s report.

  40. thanks craig re: GTAT

  41. NKD/Phil- I seem to recall you mentioning somewhere this morning a catalyst for the expected drop in NKD that you thought was coming some time today. but I can't find it now, so what was it if there was indeed some announcement or information release you mentioned?  Small drop so far, but is there more to come maybe on whatever it is I thought I saw?

  42. TSLA back to $275.  would love to see $265 again soon.

  43. Wouldn't be surprised to see a selloff this afternoon amid concerns about terrorist attacks tomorrow on the anniversary of 9/11.  Missing planes, ISIS threats, etc.

  44. i was thinking the same thing albo

  45. XRT/Lunar – Both have a lot more to go (hopefully).  

    FTR/Scott – Strange as they are down today too. 

    Insider Trading Alert – JNS, EL And FTR Traded By Insiders

    GTAT/Craigs – If not AAPL, then one of the other phone companies who make 10x more phones than AAPL does.  That's why this sell-off is already overdone on them.  I think the reason the new iPhones aren't using Sapphire is simply a matter of supply and cost.  Both should be fixed at GTAT's new plant comes on line next year so the impatient money is fleeing and that's a buying opportunity for us patient types.  

    HD/Sibe – Very solid company, hurricanes and a cold winter mean they should have good numbers going forward too.  While I certainly wouldn't be surprised to see them pull back 5 (50 dma)-10 (200 dma)% – I'd be more inclined to look for a bullish entry than to short them. 

    Meteorologists Predict Record Shattering Snowfalls Coming Soon; Bread & Milk Prices Expected To Soar

    Webinar – Thanks Greg.

    Michigan/Pirate – Map above says you will be walloped by snow this winter.  

    Ebola/Scott – Charming.  

    FA/Diamond – By George I think you've got it!  

    GTAT/Pwright – Not a big deal as screen size is small, maybe 10% bump but, again, AAPL is not the only customer out there – they will do fine.  I think there were expectations of some AAPL contract so earnings may get adjusted down but not 30% down!   I believe (but not sure) that the reason for the drop in revenues this year was that AAPL gave them $500M (in the form of a pre-payment – see 2013 Annual Report) to build a new plant and locked up an exclusive deal for Sapphire in home electronics.  

    Ebola/1020 – Actually yes because no company has an interest in curing a disease when the patients can't afford the cure.  It's hard enough to get things done in this country or Europe, where we have health plans – impossible in Africa.  

    Jobs/QC – But, at this point, the quality of the jobs is now an issue.  People working isn't the point – people making enough money to spend and save is.  

    /NKD/Craigs – It was just a good lagger to the rest of the indexes on the way down and the euro wasn't likely to hold $1.295 and the Dollar wasn't likely to get over 84.5 so that meant down was easier than up for the Nikkei from 15,820.  We got a nice 40-point dip ($200 per contract) and the stop is now 15,800.  

    Sell-off/Albo – Last few 9/11s, we've had relief rallies when nothing happened.  

  46. Phil – That's the scenario that I think might happen.  Down today, up tomorrow if nothing happens.

  47. Phil re: GTAT, many thanks.  This selloff has motivated me to look more carefully into GTAT, it's actually a pretty cool company with its hands in a lot of interesting pots. 

  48. looks like it's going to fail 13 though

  49. it's OK, when it's put to me, I'll reserve a spot right next to the MXWL which should be coming to me around March :)

  50. Other news!

    ~Summary of Weekly Petroleum Data for the Week Ending September 5, 2014
    U.S. crude oil refinery inputs averaged over 16.3 million barrels per day during the week ending September 5, 2014, 96,000 barrels per day less than the previous week’s average. Refineries operated at 93.9% of their operable capacity last week. Gasoline production decreased last week, averaging about 9.0 million barrels per day. Distillate fuel production increased last week, averaging 5.1 million barrels per day.
    U.S. crude oil imports averaged over 7.6 million barrels per day last week, down by 54,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged 7.6 million barrels per day, 6.8% below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 324,000 barrels per day. Distillate fuel imports averaged 87,000 barrels per day last week.

  51. Talk about market manipulation.  This was posted on Briefing Trader re: the buy program that hit the market at 10:38 AM. 


    "I simply cannot believe that type of order flow can provide a genuine shift in direction when it was so obviously coming from a single source and was not in the equity shares themselves."

  52. craigsa620 / GTAT

    I don’t understand that math… Since the surface area of a watch is between 1/3th and 1/4th of the surface area of a phone and you are selling 1/2 the number of watches (10M) that would give me between 1/6th and 1/8th the revenues from $634M to 106M-79M AND if the watch flops… Scary!!

    NOTE: I couldn’t find the exact dimensions of the watches (WxH). I just found that there are two sizes: 38mm (1.48") and 42mm  (1.64") and I’m considering that as the diagonal of the screen and comparing it to the diagonal of the iPhone's screens (4.7” and 5.5”). I also know that the diagonal IS NOT equivalent to surface area. Just back of the napkin numbers.

  53. Those oil inventories were no help at all, oil now $91.47!  

    EIA Petroleum Inventories:

    • Crude -1M barrels vs. -1.1M expected, -0.9M last week.
    • Gasoline +2.4M barrels vs. -0.2M expected, -2.3M last week.
    • Distillates +4.1M barrels vs. +0.6M expected, +0.6M last week.
    • Futures -0.89% to $91.92
    • OPEC's latest monthly report adds to the bearish outlook for crude oil prices, as it cuts forecasts for the amount of crude it will need to supply as surging North American shale output reduces reliance on its supplies.
    • OPEC now expects it will need to pump an average of 29.2M bbl/day of crude next year, 200K bbl/day less than it forecast just a month ago.
    • OPEC could respond by restricting oil supply to keep prices up in the face of weakened demand, but there's no sign of that happening; output actually rose by 231K bbl/day in August, thanks in part to the reopening of some Libyan oil fields.

  54. AAPL is at Friday’s Max Pain level, therefore (in theory) the play (up or down) would be reversion back to this line.

  55. albo

    I caught that same buy @ 10:38. It was a dive save. Posted same yesterday including liquidity is totally gone, when will the market intervention stop? That is going to be a really bad day.

  56. Excerpt from Barrons on RIG.  Weak oil prices not helping the drillers.

    "Transocean  shares have sunk in the past year, as leasing rates for the company's offshore oil rigs have fallen in an oversupplied market. But the gloomy industry backdrop has overshadowed some recent positive news. If the cycle improves in the next year, shares could bounce back from depressed levels not seen since a Transocean (ticker: RIG) rig operated by  BP  (BP) exploded in the Gulf of Mexico in 2010."

    "The long-term fundamentals—where we get our oil over the next 10 years—are very positive for Transocean," says Jerry Furciniti, a portfolio manager at QCI Asset Management.

  57. You're welcome Pwright.  People have no patience for companies doing R&D unless it's biotech but techtech can also give you fantastic returns when they come up with something innovative – and you don't need to wait for an FDA study to start selling either!  

    GTAT/Akad – I don't think anyone was seriously "counting" on the iPhone.  The iWatch, by itself is quite a big win for them and let's just try to assume AAPL isn't stupid and didn't give them $500M in pre-orders only to shut them out of the vendor supply chain.  $500M is almost 2 years of GTAT sales and their margins now are negative $80M on $300M so figure AAPL will order at least $250M (probably more like $1Bn) at 10% and suddenly GTAT is in the green.  With a $1.8Bn valuation, they need to get to $90M for a 20 p/e and, since 20 is a cheap forward p/e in this space, a 30 p/e is fine so, if they can make $60M next year – all will be well at $13.  There are 137M shares so that's .22 per share they need to earn in 2015 and the current projection is for 0.80 ($109M).  Let's assume that was wildly optimistic and they'll only earn 0.40 ($55M) – that gives them a 2015 p/e of 32.

    So, I think $13 is a great spot to enter GTAT.  We already have some in our LTP, where we sold 10 2016 $15 puts for $4.80 and bought 20 2016 $12/20 bull call spreads on 7/15 (last time they dropped this low).   The 2016 $15 puts are now $5.20 so let's sell 10 more of those in the LTP

    In the Income Portfolio, let's sell 20 of those 2016 $15 puts for $5.20 and sell 20 of the 2016 $12 calls for $4.15 and buy 2,000 shares of the stock for $13.05 for net $3.70/9.35.  So we're committing to own 4,000 shares of GTAT at net $9.35 ($37,400), which means our max margin (non-PM) would be $18,700 and our potential profit if called away at $12 (and over $15 too) is 2,000 x $8.30 = $16,600 so this trade returns 89% on POTENTIAL margin while the actual margin is only about $11K.  

    RIG/Albo – Just in the bad end of the cycle.  That's why they call them cyclicals and that's why people who buy cyclicals with p/es over 20 are nuts.  

    AAPL/Scott – Hey, Colbert likes them:


  58. scottmi – From the comments: 

    “Jason Perlow works for Microsoft on their cloud initiative. That's all you really need to know to understand why he writes what he writes these days.”

    “Whoa If that's true about Perlow working with MS, this article belongs in the dumpster. We already have plenty of MS employees posting. We don't need them writing the articles as well.”

  59. Phil/XLE

    Where do you see this heading with oil lower now?

  60. Gold is best – the combined jewellery box & charger you get with the Apple Watch Edition

  61. Why Apple’s Live Stream Was So Bad During The iPhone 6 Launch

  62. Birds – I don't  know about climate change wiping them out, but GOOG is working on it with their new SUNE Regulus project..

  63. Apple Watch Update: More Details and Hands-On Impressions

  64. GTAT, Income Portfolio/Phil:  We already have 2016 $12 GTAT puts sold for $3.20 in the Income Portfolio.  Maybe roll to 20 $15 Puts and buy the covered call position?

  65. Alan Greenspan’s Nine Reasons “Why The Economy Stinks”

  66. House GOP: Destroying “big government” is more important than clean water for Americans

  67. Fox Vs. Reality: BP Is To Blame For Gulf Oil Spill

  68. Phil – Any LULU earnings play?

    What to watch for in Lululemon’s earnings – MarketWatch

    Earnings Whisper Number for LULU – Earnings Whispers

  69. ~~AAPL (100.12 +2.17%): Bloomberg reporting that co will receive fees from banks for Apple Pay; target raised to $116 from $110 at Barclays

  70. Dearest Phil// I have  2x 2016 RIG 40/50 call spread, bought at 6.04/2.54, now 2.36/.74. Sold 1x 2016 35 put 3.81. Thinking could buy back the 50's (or keep them), roll the 40's to 35's and double down, then sell another put or wait and sell 2017 put when available. Or should I wait for 2017's so  I can roll the long calls down AND out? Thank you for helping me think through this, I am obviously a little unsure of how to proceed:)  

  71. XLE/Jeff – If oil STAYS down here, then the XLE components will begin re-pricing for lower oil.  As it stands so far, they simply don't believe the damage will last (see article on oil bets above).  

    Even though oil is now 10% lower than it was in May, XLE simply can't believe it – yet. 

    Corporate Tax/Shadow – It's a complete fallacy.  Our published rates are higher but most companies don't pay those.  If we actually collected Ireland's 15% rate, it would be much more than we collect now.  The one thing we do that's bad is tax foreign earnings at US rates – that makes companies like BKW, who have a lot of foreign earnings, look to leave.  It's not the rate though, that's a fantasy of the GOP. 

    Birds/Scott – I had a chart a while ago that showed number of birds killed by wind and solar vs number killed by coal and it was like 1,000 to 1 worse for coal.  

    GTAT/Income Portfolio, Kinki – Nice catch, thanks.  Since we already have 10 short GTAT 2016 $12 puts (about even at $3.30)in the Income Portfolio, we'll roll those to the $15 puts as part of the new spread

    LULU/Diamond – They are likely to earn less than last year.  The question is, how much less?   We have them in the Income Portfolio with 5 short 2016 $35 puts at $6 and 5 of the long $35/50 bull call spreads at $5 and those are about the same price now so no change on how I'd play it.  They are underpriced but I don't see any immediate catalyst for a turnaround so I'd rather have this play, with an $8,000 upside potential vs maybe owning 500 shares at $35 ($17,500) which I'm happy to DD if they go lower, than gambling on the short-term outcome of a single earnings report.  Margin on the short puts is just $2,500 anyway, so it's not like you are not getting a fantastic payback if things go well. 

  72. AAPL

    Closed all my GTAT, sold 1/2 my LQMT (leaving the other half free), kept my AAPL spreads with no open puts & rolled down my SQQQ calls all on Monday mornings initial market pop. I guess I really have been learning something here.

    I do find it confusing that AAPL is getting no love when I am reading countless articles about how their new products and services will take revenue from multiple competitors. I will be adding positions in all 3 companies mentioned above when the dust settles.


  73. Payroll estimates in for Tesla's gigafactory • 12:58 PM

    Clark Schultz, SA News Editor

    Tesla Motors (TSLA +0.3%) will spend as much as $370M a year in payroll by 2018 at its Nevada gigafactory, according to estimates from a study by the governor's office.

    The forecast is based on Tesla having 6.5K direct jobs in the state and 16.2 indirect jobs.

  74. Fading the pullback seems to be a winner!

  75. RIG/Griffin – Now it's a waiting game.  RIG is at $37.33 so it's not ridiculous to think they'll get over $40 and, so far, the short $35 puts (now $5) are easy to roll next year and still net less than you sold them for if they expire here – so those you can ignore.  When you have a bull spread, you want to take action BEFORE the price of the call you own falls below the net of the spread ($3.50 in this case) but $2.36 not catastrophic so you want to rescue that money by putting it into something better.  I see +$2 to roll to the $35s and that seems like a no-brainer as you go $2.33 in the money for $2 – so you are buying intrinsic value for a discount and moving your strike down $5 – a very good deal.  I'd buy back the $50 calls (0.65) and, if RIG goes lower, you can sell those $40s for $2 and spend another $2 to roll your $35s to the $30s or, if RIG goes higher, you can hopefully get $2.70 for the $45s (now $1.20 with a .22 delta so a $5+ move up to $42.50 required) and then you would have rolled the spread down $5 for no net money.  

    Since you netted into the trade for a .30 credit, spending $2 to roll and .65 to buy back the caller means you are now in the 2016 $35s for net $2.35 and they are $4.40 so no worries at all.  

    AAPL/RJ – Actually back to $101 already – can't keep a great stock down for long. 

    TSLA/Jabob – But TSLA only makes -$75M a year now – how exactly will they afford this? 

    Fading/Diamond – I suppose if you count your wins on the 5-minute chart, then sure – go get 'em tiger.  

    AAPL 3% gain is giving the markets a nice 0.25% boost.  We'll have to see what sticks.  

    17,066, 1,994.5, 4,092 and 1,165 with /NKD at 15,855 so we can reload short below /NKD 15,850 as the Dollar just failed 84.50 and we want the indexes going down to confirm.  /TF also shortable below 1,165 with tight stops.  

  76. Phil – No different than day trading futures, right? ;-)

  77. AAPL.  that's it? that was the consolidation at 97.50?

  78. Actually, Diamond, my day-trading calls have been just fine – you are confusing my short and long-range outlooks.  Here's a quick recap:

    So you can get all excited because now we're up 40 points from your bullish call and I guess that, technically, although I did say to set stops on my bearish plays (40 points below your bullish call) I guess I didn't specify that we could re-use the lines we went bullish on at 5:38 this morning, even though nothing had changed and those were the same lines we just took bear profits on:

    September 10th, 2014 at 5:38 am | (Unlocked) | Permalink

    Futures off a bit but bouncing off 17,000, 1,987.5, 4,060 and ,1,155 so far.  /YM is a good long at 17,000 and /TF at 1,155 with tight stops below and as long as the other hold.  

    There's a difference between my trying to make intra-day calls for people who are playing the Futures and making macro calls, which is what I was discussing with you and StJ.  I would hate for people to think a 50-point pullback from the the Dow's all-time high is a "dip" that they should be committing money to so, when you make a comment like that – I'm going to come out very strongly on the other side.


    Feel free to explain all your TA BS using this chart and make your case for buying crap at these ridiculous market prices against this weak economic backdrop – I promise not to laugh…. much.

  79. AAPL/Lunar – I'm happy we got the test at all but, in considering whether on not to stop out our short AAPL calls – I decided not as I'm still mostly worried about overall market weakness pulling it down.  

    Speaking of being bearish – The DXD Oct $25s in the STP can be bought for 0.50 so let's get 100 more for $5,000.  The STP just hit 38%, so up $2,000 since yesterday so we can afford to buy more protection but our goal is to sell the 100 right back at 0.85 (our new average) if we get a dip.  

  80. Phil – I was in no way being critical of you, I was just joshing. Chill …

  81. Spreads/Phil - "When you have a bull spread, you want to take action BEFORE the price of the call you own falls below the net of the spread…" I presume this works for debit put spreads as well. Is this only the case for vertical spreads with same expiration or would you apply this to diagonal spreads as well, with the short call (or put) in some month in front of the long call (or put)?  And my example:  I have a TQQQ put spread, long Oct 86 puts @ 5.53 and short the Sept 82 puts @ 2.20 for a net 3.33 entry. The Oct 86 is now down, probably under 3.30 (big spread on illiquid bids). I could roll the Sept 82 to Oct 82 for $1.30 or better so net takes me down to ~ $2.00 or less. In that case, my Long Oct 86 is still considered ok? Or roll it all up for a fresh hedge, say an Oct +89/-84 put spread which would put $1 or more back in my pocket and move from a 4 dollar spread to 5 dollar..

  82. Hi Phil DXD Do we do anything with the short Oct 27c now .20 cents form .86 cents where I sold it TIA

  83. iWatch / Shadow – Not surprising when you consider all the other smart watches! You can't cram a huge battery in these small devices. That's one reason you can't use them to make calls. The size of the batteries (about 300mAh) is about 15% of a phone battery.

  84. Yes Diamond but there are other people who are here looking for market direction and it's not funny for them when you "humorously" give confusing messages.  I usually don't mind but we're reaching a market inflection point and we all need to be on our toes.

    Spreads/Scott – Sure any vertical spread.  Diagonals are different (see Butterflies) because you can't really adjust the long calls or puts.  This really applies to bull call spreads that CAN be rolled.  With TQQQ on that set-up though, since you do have time, you may want to consider investing in more insurance and rolling the $86 puts ($3.60, I'd say) to the Jan $ 93/86 bear put spread at about $3.  That would leave you with the $7 spread that's $4 in the money against the short Sep $82 puts for net $3(ish) overall and you could put a stop on the $82 puts (.45) at .75 because the delta is .13 so that won't trigger unless TQQQ is under $87 and you really won't care about paying .75 when your $7 spread is $6+ in the money.

    DXD/Yodi – We bought back the short calls.  Makes it easier to take advantage of a spike (not that we've had one yet, but – if it ever comes).  

    iWatch/Shadow – That's another thing, I'm not buying any new devices until I get some wireless charging.  Or, maybe we can get it from our bodies:

    According to the Center for Space Power and Advanced Electronics, a NASA commercial center in Alabama, the human body is on average 15% fat, capable of producing 11,000 watt hours. When the average Joe eats his daily bread, he takes in 3,300 watt hours. The charge rate is about 7kW if the waiter starts pushing you out the door after a half hour lunch, according to the Center. "Clearly the amount of energy consumed by an individual is sufficient to provide power for electronic devices if a suitable method can be found to convert a small fraction of that energy to electricity," the Center concludes in a report on the subject. Broken into usable terms, waiting to be harvested are 81 watts from a sleeping person, 128 from a soldier standing at ease, 163 from a walking person, 407 from a briskly walking person, 1,048 from a long-distance runner, and 1,630 from a sprinter, according to the center.

    Watch/StJ – Also, I'm sure you have to have bluetooth on on your iPhone – that's another battery-waster.  

  85. Thanks Phil I must have missed that one. DXD

  86. Phil / GTAT buy write. Instead of shorting the $15 puts and $12 calls, why not short the $15 calls and $12 puts. Option requirement is less, profit is more and break-even is less. I think….?

  87. Phil charging

    With average skin temp of 85 to 90 about as likely as a sensor detecting blood sugar or blood pressure. One needs blood and the other a restricting device. Heart rate is important especially when it stops.

  88. Phil –  (no problem)

  89. Notice how we're still testing yesterday's bounce lines (and we went over all this in the Webinar for you 5% Rule fans):

    September 9th, 2014 at 10:16 am | (Unlocked) | Permalink

    Bounce lines are /YM 17,020 and 040, /ES 1,993 and 996, /NQ 4,080 and 085 and /TF 1,163 and 166 

    As it's day 2, it's strong bounces or bust – weak bounces not good enough!

    DXD/Yodi – Yes, it gets to the point where the short puts will only hinder you in taking advantage of a nice dip in the Dow.  

    GTAT/Income Portfolio, Ceegee – Very valid and closer to what we discussed yesterday.  Net looks like $12.83 – $3 – $3.30 = $6.53/9.26 so, if called away at $15, you make $8.47 at $15 vs $8.30 the other way and 0.09 better on the downside.  Not sure what it was earlier when I made the call but, at the moment, that's a better combo.  

    Jersey/Shadow – We just got our credit rating downgraded too.  People just don't understand the true cost of putting in these corrupt bastards.  


    Phil, you have friends without any power but the right idea.

  91. Christie / Phil – And some people want him in the White House. That would be a scandal a week with that much power! I am glad I didn't fall for his schtick ;-)


    Stop the Koch brothers and this, legal or not legal? 

  93. GPRO less than $32 away from my $100 short price, though if it actually moves up a bit more, I'm jumping in.  It's an 82 RSI now and been overbought for awhile.  Looking at the calls @ 75 for next week

  94. AAPL/Phil- prior to the last earnings I decided to lighten up on shares of AAPL owned and get into a spread in order to lighten my margin risk at the time. I bought the 85.71/100 Jan'15 BCS for $7.75 and it is now approx. $9.90. I don't remember exactly, but I think I meant to buy the Jan'16 spread at the time and actually made a mistake when I placed the trade. My question is should I roll to a longer spread at some point, or leave it alone? I still am not really sure how time decay plays into these investments and could use a quick primer on how to maximize my potential profit on this trade if I am bullish on AAPL. If I believe that the share price will rise between now and January and again out to Jan 2016 how should I handle this? Thanks for any help you can give me in understanding this concept.

  95. iWatch / Phil – And the stories about being a first generation products are true, but until we get better battery technology, I don't know how they can make that watch thinner like they did for the phones for example. Yes, phones are thinner, but they are also larger (going from 3.5" to 4.7") which makes larger battery possible. Don't know that you want a 50% bigger watch. 

  96. Phil/ PGN – I own Noble and got shares of Paragon in the spinoff.  Stock has declined steadily since then.  Looks interesting.  they plan to pay a dividend starting in 4Q.  39 drillships and all are old – over 30 years but well maintained.  4 are deepwater and rest are jackups.  people are worried about oversupply but the industry situation is perhaps not as bad as it looks – of the 138 jackups due to be built, 43 are due to be occupied.  the other 95, 20 are not under construction yet and about 50 being built in China with suspect quality and not under contract.   2 of the deepwater rigs come up for contract renewal next year and may not get renewed.  EBITDA is fairly well diversified between North Sea, Mexico, Brazil and Middle East.  what do you think?

  97. Sometimes corruption is punished but never ask why on this one. Answer you may not like Christy is safe.

  98. GPRO, ANET, and FEYE all looking good today so far.  AMBA not following suit.

  99. Corruption is nothing new for N.J.  Guessing at least a few, if not the majority were Democrats.  I'm just saying. :-)

  100. hmmmmm    Take that STJ. ;-)

    Clarence Ray Nagin, Jr., also known as C. Ray Nagin (born June 11, 1956), is an inmate at the Federal Correctional Institution, Texarkana. He was formerly a management consultant and the 60th mayor of New Orleans, Louisiana, from 2002 to 2010. He is a member of the Democratic Party.


    ~~U.S. District Judge James Teilborg acknowledged in a ruling last week that disbanding the police unit could decrease discrimination in the twin communities of Colorado City, Arizona, and Hildale, Utah. But, Teilborg said removing their authority and handing power over to county sheriffs would burden the twin cities and the states "with a layer of bureaucracy extending into potential perpetuity."

    Arizona prosecutors filed court documents earlier this summer arguing the agency is the splinter religious group's de-facto law enforcement arm. They presented new evidence from the then-police chief who said officers are influenced by sect leaders and discriminate against nonmembers of the religious group.

  102. craigs

    If you have the buying power, there's no real reason to dump the spread you have if you foresee a further rise in the stock.  Add 2016 spreads to your position if you're looking to capture more upside since there is more premium in the higher strike calls at 2016 versus the premium in 2015 calls.  Maybe 2016 $95.71C @ 14.25 with short $120C @ $5.90.  Nets you in at 104.06 which is only a dollar in premium at the current share price.  Alternative is the $85.71C if you want to spend $6 for $10 in intrinsic value and drop your entry to net $99.76; negative net premium.

    Then again, you can also buy 2 of the $95.71/120 for an extra $200 which gives you a hell of a lot more profit at $120 which begs the question, "just how bullish are you?"

  103. *Note: I am very tired today so double check my numbers!

  104. So now ask; How stupid is the country? Does anyone care about the corruption?

  105. As compared to what country, and in which golden age?

  106. Right now don't care about other countries.

  107. craigsa620 

    AAPL Jan 15 85.71/100 let me tray my way of thinking on that one as well. By selling the 100c you caped the max profit to 14.29 – the 7.75 you paid for the spread = 6.54 That is if the stock stay at or over 100$ in Jan 15. At present you have only gained a net of 2.65 of the max of 6.54.

    I would leave as is and if you bullish on the stock you better enter a new BCS

  108. YHOO/Phil – if alibaba is a bust in some way.. just doesn't hold up, say, IPO day (who wants to buy/trust a Chinese company?) how big a hit could that make to YHOO?

  109. ~~From the WSJ : GMCR

    Starbucks to Sell Single-Origin Coffees in Supermarkets

    Seattle Coffee Maker to Launch New Line This Month

  110. Electric bodies: |"According to the Center for Space Power and Advanced Electronics, a NASA commercial center in Alabama, the human body is on average 15% fat…"    That average would include Sub-Saharan Africa, presumably.  In the U.S.A., the average body fat is about 22% for men, and about 32% for women.  You would think that a NASA Commercial Center in Alabama would know that, given that Alabama’s average body fat percentage, both sexes averaged, falls between 30-35% — only neighboring Mississippi is higher. 

  111. Disc: Long Mississippi energy.

  112. Yodi and JPH- Thanks guys for your comments. I do already own the Jan'16 80/100 spread as well, so I guess I have things pretty well covered.  

  113. Constitution/Shadow – If they don't do something soon, the only choice for the left to make will be to change countries.  

    Abortion/Shadow – Wait, I'm confused, aren't we supposed to be STOPPING the Government from making our health decisions for us?  

    GPRO/Rustle – Wait until they announce their Giga Lens Factory.  

    AAPL/Craigs – Well it's a $14.29 spread and it's at the money so you make 40% by leaving it alone.  What is it you want to risk by moving it around rather than just waiting 4 months for 40%?  As I said the other day, with vertical spreads, you won't make more than about 60% of goal until the last few weeks so, if you are not inclined to wait – then cash it and find a new trade but it seems like a pretty easy 40% to be walking away from and, if you intended to be impatient, why the Hell didn't you stop out on the drop from $105?

    And what JPH and Yodi said!  Many ways to play.  

    Watch/StJ – I think it's simply not ready for prime-time but, since everyone else is rushing it, they are too.  If the watch is merely a screen and a blue-tooth chip that slaves to the phone, then maybe it doesn't need much power.

    PGN/Terra – Hard to say without study.  I have no idea what the cash position, contract position etc of PGN is.  Apparently, people seem to think PGN got a raw deal compared to NBL as they are down 60% since the spin-off but that doesn't automatically make them a good deal – they could be just a big lump of bad assets and bad contracts that NBL was thrilled to dump.  If you remind me on the weekend, I'll check it out but also you have the massive headwind of low oil prices as well.  There are plenty of places where production will simply shut down if oil goes below $90 for long and that's going to idle a lot of rigs.  

    Submitted on 2014/07/31 at 6:59 am

    NBL/Ricbah – With oil falling so hard, I wouldn't mess around with energy stocks since they are not priced for lower oil (see gold miners for how low prices kill them over time)

    Democrats/Albo – Well, it's a Dem state (usually):  Hague is a Depression-era Dem, Williams and Thompson were Dems, we can assume Errichetti was too.  Van Pelt and co were GOPs and there were 46 of those guys – and that was recently!  Kenny was a Dem 100 years ago, Lynch Dem, Addonizio Dem – and anyone who is the mayor of either Newark, Camden or Jersey City should just be locked up when elected to save time.  

    Anyway, when you are going back 150 years to make a list, party distinctions get kind of fuzzy.  Dem scandals usually involve women, Republican scandals usually involve money and/or young boys.  surprise

    Judge/Shadow – And what religion is he?  Stuff like that should go straight to the Supreme Court (not that I'd expect those idiots to give an impartial ruling, but precedent-wise).  

    YHOO/Scott – What do you mean by "bust"?  Down 50% on their IPO?  That's amazingly unlikely but it would still mean YHOO gets $20Bn or so, so what do you think, down 10%, 20% – how much of YHOO's $40Bn market cap do we shave if they get $20Bn in stock instead of $40Bn?  And, even if YHOO did fall more than 20% on that kind of news – would you sell it or buy it when the company is valued at $30Bn with $1.5Bn in profits (p/e 20) and $20Bn in marketable securities?  

    Fat/ZZ – Maybe they were talking about 7Bn humans, not just bloated Americans (and, if so, why would they even discuss running?).  Or maybe there were talking about astronauts, since I assume they were studying it for mission purposes and not a bar bet.  

  114. 2/3 of today's volume came in an hour. the next 2+ hours 1/3 took us solid green. I recall AAPL at 20mil shares about an hour now 25mil. Still waiting for local fuel price to go down at least 10% like everywhere else.

  115. albo
    September 10th, 2014 at 10:35 am | Permalink Tweet thisIgnore this user 
    Wouldn't be surprised to see a selloff this afternoon amid concerns about terrorist attacks tomorrow on the anniversary of 9/11.  Missing planes, ISIS threats, etc.

    WRONG !    I continue to underestimate the complacency in this market.

  116. Some selling into the close but not too heavy.  Volume looking weak but we're green so who cares, right?  

    VIX back under 13, no one worried about 9/11 here.  

    Complacency/Albo – Insane levels of complacency if you ask me.  If something blows up, anywhere in the World overnight, we could open down 10%.  Of course, these days, the markets go up on days airlines get shot down by missiles so maybe a dirty bomb or an anthrax attack would be just what the market needs to make new all-time highs…

  117. albo

    ~~WRONG !    I continue to underestimate the complacency in this market.

    That is why I put up all of today's corruption stories on yahoo news. It's a billionaire's fantasy land and reality for some is medical care and dignity is not for you. 

  118. Looks like only /ES and /TF are missing their strong bounce lines and not by much so – not bearish today, though S&P below 2,000 is still weak.  

    Nothing to do but wait and see what tomorrow may bring.  

    Greenspan coming on CNBC and Obama sends us to war against ISIS later too!  

  119. Another war.  Yeah, that's the ticket !

  120. Phil

    Planes going down? Aids research, can't have that so it is the new cleansing of the world's unneeded bet the GOP hates bringing back American doctors that got sick in Africa.  My God that money could go to the Koch brothers and do some good.

  121.  From Briefing Trader:

    FNMA/FMCC Thoughts

    "Recent weakness in GSEs is apparently being triggered by a liquidity coverage rule for large banks that does not explicitly mention Fannie and Freddie securities as qualifying. The concern is that if the rules were to take effect, it could raise borrowing costs for the GSEs due to lower demand for their debt securities."

    A lot of so-called "smart money" in Fannie and Freddie.  Might be worth taking a look at, esp. below $3.

  122. Phil- Since I have been onboard less than a year, I haven't been able to see that last few weeks of a spread play out just yet. So I wasn't sure if spreads lost value as expiration approaches or gained value and now I know. I thought that I did understand and as it turns out I did, but someone tried to convince me that as spreads age they lose value, so I needed to ask. Thanks for the clarification.

  123. Re: /CL, I've been looking at the longer-dated calendar spreads, it's pretty amazing, for example the /clz4-/clz5 spread went from $8-9 in June to $1 today.  shorting that spread could have made $7 over 2 months ($7K per contract).  not sure how to actually play those yet, but it gives an interesting picture of the overall oil market.  shows how bearish oil has been through the summer.  I understand Barclays is suggesting WTI could go into contango in the fall, as Brent has already done; looking at that chart I'd believe it.  I'm wondering if you could use these charts in tandem with some of Phil's shorter-term /CL trades in order to build conviction behind a position.

  124. Al Jazeera:  "Obama to outline plan against Islamic State, eyes strikes in Syria


    By the time Obama bombs IS positions they will all be partying in the tunnels of Tora Bora with their Taliban cousins.   But I'm sure they are as confused as hell by now.  "All warfare is based on deception. Hence, when we are able to attack, we must seem unable; when using our forces, we must appear inactive; when we are near, we must make the enemy believe we are far away; when far away, we must make him believe we are near."  Sun Tzu (c. 6th century BCE)

  125. craigsa620

    Spreads neither necessarily gain or lose value over time.  What does happen is, when the options expire, the premium reduces to zero and you are left with only the difference in your strikes (assuming a vertical spread).

    Intrinsic value is the difference between the strike and the current value.  Extrinsic value is the premium on the option

    Ex: Current value=$10, strike=$9, cost of option=$2; Intrinsic value=$10-$9=$1.  Premium=extrinsic value=$10+$2-$9=$1

    With all the different types of spreads you can do, you never want to ASSUME your spread will gain value over time.


  127. msft paid nfl $400m for them to use their tablets…and announcers keep calling them ipads..hahaha


  129. JPH- Your example, for me is like reading a foreign language. It makes absolutely no sense as I read it, Just look at the last piece where $10+$2-$9= $1 I look at this and think your math is bad, since it actually equals $3, but I am sure you meant something I am missing, but many times this happens. Someone explains and it is not complete enough for the student to understand.

  130. craigsa620

    Ha.  I said I'm tired!

    "Ex: Current value=$10, strike=$9, cost of option=$2; Intrinsic value=$10-$9=$1.  Premium=extrinsic value=$10+$2-$9=$1"

    That was supposed to read:

    Premium=extrinsic value={cost of option-intrinsic value}=$2-$1.

    I started to write things one way and then wrote them another…  The other way to calculate premium (which I sort of started to do originally but wrote the numbers all screwy even though the answer was "right"):

    Strike+Cost of Option-Current Value=Extrinsic Value=Premium

    what I wrote was:

    Current Value+Cost of Option-Strike which is NOT extrinsic value.  In essence, I swapped the current value and strike in my original equation.  Sorry about that!

  131. Career / general life advice….

    Not exactly on topic of the usual philstockworld chatter but I figured I would post because, between Phil and all the other members of this site, there seems to be a great wealth of knowledge (on investing, as well as life in general and everything else). 

    I don't really have a specific question but will just outline my situation and be thankful for any input. 

    A little background: Im 25, got an undergraduate degree in Economics in Montreal, and then went abroad to Glasgow Scotland for a year and got a masters degree in Real Estate. I really enjoyed both experiences.

    I do feel as though I learned during my time at school, but nothing really concrete if that makes sense. I.e. i did not get an engineering degree which i could immediately apply to a real world career or something along those lines. Luckily my parents were finacially supporting of my education and as a result i haven't been crippled by student debt! I have since taken the CFA course and passed level 1 but not yet enrolled for level 2. 

    Anyway to get more to the point. I have been working at one of the "big 5" banks in Canada (Toronto). It is an entry level job in the financial planning area. I mostly do administrative work, file expense reports, do some data entry with excel, generate some reports in excel, and generally whatever else the directors need me to do. I'm coming up on one year and have my year end review this month. 

    Now, the issue is I have no idea what I want to do as a career! Ideally I would like to get out of this administrative role and do something that i find at least partially interesting. I am interested in the market and reading through Phil's posts and all the subsequent comments when I get a chance is a highlight of my day, and I have been investing a small account of 25k (poker money I saved up while at university) following some of Phil's trade ideas and have been really enjoying it. 

    If anyone has any input on Jobs / career paths it would be much appreciated. Should i try to stay within the bank? what roles might someone who enjoys what goes on here at philstockworld find interesting (research analyst? capital markets? should I stay within the financial planning area?). Should I look for opportunities at smaller firms? Is there certain areas people have worked in that they would really recommend or not?

    Even when phil mentioned the smoothie food truck idea I pondered that as an option as I do love smoothies and getting away from the corporate grind does seem appealing, although I am sure it has its own set of drawbacks. 

    Anyway, I know no-one can give me an exact answer of "do this" as it is ultimately up to me, but i figured it would be silly not to tap this well of knowledge and experience. 

    Sorry for the longwinded post.

    Any input is greatly appreciated!

  132. Crs1010:  It’s a tough question, one which anyone would hesitate to answer.  Every one of us faced different circumstances, I suspect, and no one wants to steer you wrong.  The research you have likely done will show that technical areas are generally more promising and lucrative these days than “humanities”-based jobs: lawyers, accountants, middle-level managers, sales execs, and the like.  But one either has the talent for technically-based stuff, or one doesn’t, and you already know what’s out there, because you’ve done the research on various professional trajectories and their associated salary ranges.    


    The only comment I could make that could have any conceivable value is the importance of knowing your risk tolerance and your general appetite for uncertainty.  I was both a Wall St. lawyer and, later, investment banker, but quit each because I decided that getting along, going along and moving up the ladder in a predictable manner was not for me.  But I have – still have – good friends who were very happy to have a steady career path, to marry, to enjoy a family, a stable home, and the company of friends, and in many ways I envied and still envy them.  Know thyself.  I spent over 40 years as a bachelor, living on airplanes, crossing oceans, locked in all-or-nothing corporate warfare in a half dozen countries, knowing that the outcome would be quite digital.  It wasn’t fun, but I felt the need to explore certain limits, and it was, ultimately, fulfilling, although my friends tended to feel sorry for me.


    There are many paths to happiness; feel your way along, and be your own guide.   Money doesn’t buy it.  Positions don’t confer it.  “Life is just once”, as my Japanese colleagues were fond of saying.  Be kind; most people you meet will never have had your opportunities. There is no wrong path, as long as you select it yourself.  Bon voyage.

  133. Reader Comment from FT:  " …profits as a ratio of GDP have been going up for three decades, not just under ZIRP. Further, as long as public sector spending and democracy is increasingly captured by the ultra wealthy, your model of rising wages and the "arc of the universe tending towards justice" will fail. The rule of law, if not ever markets, must exist to maintain equality of treatment if not outcomes. And thus far, that has gone in reverse globally for the past three to four decades, including tax breaks fro interest, credit holders over creditors, money equalling speech, and lack of political representation in nearly all non-western markets, from which most demand and raw goods come from. The arc of justice is not a smooth curve, but rather a radical break. Revolutions happens suddenly, and violently when the majority of the people lose their confidence in the state. Militarization of public space, privatization of public assets, wealth capture as extraction without consequence, and the loss of freedom always precedes mob justice and ugly violent revolution, throughout the history of the modern world. Currently their is a low boil under both the West and the East, with the middle in flames."

  134. crs101010 – What ZZ said. And FWIW, you are clearly young and inexperienced in life – do not take what you read here, as valuable as it is, and try and make a career of it at this point in your life. You need to get out of your current position in TO and "get your hands dirty." In other words, get some life experience. What that is is up to you – nobody can tell you. When you have done that you can come back here and "play."

    Stu – a fellow Canuck

  135. zz

    props on your last paragraph re happiness………………..well done…

  136. From Bloomberg, Sep 10, 2014, 10:28:05 PM

    An employee arranges bottles of milk in the dairy section of a supermarket in Sydney, Australia. A jump in part-time positions swelled Australian employment by more than eight times the 15,000 increase predicted by economists. Photographer: Ian Waldie/Bloomberg

    Asian stocks fluctuated and the yen
    climbed for the first time in four days as China reported
    slower-than-estimated inflation. Australia’s dollar surged and
    bond yields climbed after a record jump in employment, while
    wheat extended declines.

    To read the entire article, go to

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  137. From Bloomberg, Sep 10, 2014, 10:09:19 PM

    Pedestrians walk past a clothing store in Tokyo, Japan. Prime Minister Shinzo Abe is set to decide by the end of the year whether to raise the levy by another two percentage points to 10 percent. Photographer: Tomohiro Ohsumi/Bloomberg

    Japan should proceed with another
    increase in the sales tax as planned to signal it’s serious about
    reining in the world’s biggest debt burden, an adviser to central
    bank governor Haruhiko Kuroda said.

    To read the entire article, go to

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  138. From Bloomberg, Sep 10, 2014, 7:01:00 PM

    Ian Cheshire, Chief Executive Officer of Kingfisher Plc. Photographer: Simon Dawson/Bloomberg

    Some of Britain’s best-known
    companies, including BP Plc (BP/), Standard Life Plc and Kingfisher
    Plc (KGF)
    , made their strongest intervention yet in the battle against
    Scottish independence, lending support to the efforts of Prime
    Minister David Cameron to save the union.

    To read the entire article, go to

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  139. From Bloomberg, Sep 10, 2014, 5:00:01 PM

    Ukrainian servicemen patrol on their armored personnel carrier in Avdeevka, 5 kilometres north of Donetsk, on Sept. 8, 2014. Photographer: Anatolii Stepanov/AFP/Getty Images

    European Union nations are
    struggling to agree on a trigger for extra sanctions against
    Russia over its encroachment in Ukraine as a cease-fire and
    troop withdrawal bolster the case for holding off.

    To read the entire article, go to

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  140. From Bloomberg, Sep 10, 2014, 5:14:30 PM

    Sept. 10 (Bloomberg) — A U.S. House Homeland Security subcommittee hears testimony on border security and the outlook for threats to the U.S. from foreign fighters participating in the Syrian conflict.
    Troy Miller, acting assistant commissioner for the U.S. Department of Homeland Security’s Office of Intelligence and Investigative Liaison, U.S. Customs and Border Protection. John Wagner, assistant Commissioner of the Customs and Border Protection’s Office of Field Operations, Jennifer Lasley, deputy undersecretary for analysis at the DHS’s Office of Intelligence and Analysis, and Hillary Batjer Johnson, acting deputy coordinator for homeland security and multilateral affairs at the Bureau of Counterterrorism, testify. (Source: Bloomberg)

    Islamic State extremists have discussed infiltrating the U.S. through its southern border with Mexico, a U.S. official said.

    To read the entire article, go to

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  141. From Bloomberg, Sep 10, 2014, 10:13:37 PM

    A couple looks at residential buildings from the Bund area of Shanghai, China. To stem the downturn, 37 of the 46 Chinese cities have relaxed or scrapped restrictions on the number of apartments one can buy as of Sept. 3, while the nation’s biggest lenders have cut interest rates on first mortgages in Beijing and Shanghai. Photographer: Tomohiro Ohsumi/Bloomberg

    With just 11,000 yuan ($1,796), 50-year-old Deng Bangfu made his first property investment in
    China, flipping it in just two months for a profit even as the
    nation’s home prices fall.

    To read the entire article, go to

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  142. From Bloomberg, Sep 10, 2014, 10:19:01 PM

    Sept. 1 (Bloomberg) — Jing Ulrich, vice chairman of Asia Pacific at JPMorgan Chase & Co., talks about the plan exchange link between Hong Kong and Shanghai.
    Brokerages in both cities said the first full trial of the link went smoothly, supporting plans to go live in October with a program giving foreigners unprecedented access to mainland stocks. Ulrich speaks with Rishaad Salamat on Bloomberg Television’s “Asia Edge.” (Source: Bloomberg)

    Jiang Siqiang has a whole list of
    reasons he’s not interested in shifting any of his money from
    mainland China’s equity markets into Hong Kong.

    To read the entire article, go to

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  143. From Bloomberg, Sep 10, 2014, 10:36:43 PM

    A shopper purchases vegetables at a market in Shanghai, China. Analysts’ estimates for August consumer inflation ranged from 2 percent to 2.7 percent, and the government has a target for the year of about 3.5 percent. Photographer: Tomohiro Ohsumi/Bloomberg

    China’s consumer inflation eased to a four-month low in August while factory-gate prices extended their decline to 30 months, adding room for government stimulus to support the economy amid a property slump.

    To read the entire article, go to

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  144. From Bloomberg, Sep 10, 2014, 8:41:57 PM

    “Yes” and “No” voters demonstrate on Rutherglen main street in Glasgow, Scotland, on September 10, 2014. Photographer: Mark Runnacles/Getty Images

    Scottish nationalist leader Alex Salmond’s bid for independence lost ground in an opinion poll a
    week before a referendum that could lead to the breakup of the
    U.K. after more than three centuries.

    To read the entire article, go to

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  145. From Bloomberg, Sep 10, 2014, 7:34:40 PM

    A display for Activision Blizzard Inc.’s Destiny video game stands at the E3 Electronic Entertainment Expo in Los Angeles. Destiny is one of the industry’s most expensive games ever. Photographer: Dan R. Krauss/Getty Images

    Activision Blizzard Inc. (ATVI), the
    largest U.S. video-game maker, said its highly-anticipated
    shooter title, Destiny, generated $500 million in revenue in its
    first day.

    To read the entire article, go to

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  146. From Bloomberg, Sep 10, 2014, 7:10:47 PM

    Twitter Inc. (TWTR) is tapping debt markets for the first time, with plans to raise as much as $1.5 billion to invest in acquisitions and expansion.

    To read the entire article, go to

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  147. JPH- Thank you for clarifying and letting me know that it was not just me being too thick to get it. Whew, that is a relief.

  148. From Bloomberg, Sep 10, 2014, 4:29:24 PM

    Carson Block, founder of Muddy Waters LLC, speaks during a Bloomberg Television interview in New York, on July 17, 2013. Photographer: Peter Foley/Bloomberg

    Carson Block, who gained fame with
    successful bets against Chinese stocks, said he is turning his
    attention to debt securities in search of opportunities to short
    a bubble in emerging and frontier credit markets.

    To read the entire article, go to

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  149. From Bloomberg, Sep 10, 2014, 7:21:41 PM

    Sept. 10 (Bloomberg) — President Barack Obama speaks about the U.S. leading a “broad coalition” against the Islamic State militant group. (Source: Bloomberg)

    President Barack Obama will tell the public tonight that the U.S. will expand an offensive to destroy Islamic State in Iraq and Syria, using American air power to back local ground forces.

    To read the entire article, go to

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  150. From Bloomberg, Sep 10, 2014, 6:00:07 PM

    Arundhati Bhattacharya runs State Bank of India, the country’s largest lender, and says she will support the government’s effort to bring banking services to many more citizens. Photographer: Bikramjit Bose/Bloomberg Markets

    Lending in India can get political. Take the events of 2008, when Finance Minister Palaniappan Chidambaram instituted a program that ultimately forgave 710 billion rupees ($14.6 billion) in loans to more than 40 million farmers. The Congress Party politician said he was rescuing small farms that suffered from too much debt. Critics objected that the government was pandering to the rural poor ahead of national elections in 2009.

    To read the entire article, go to

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  151. From Bloomberg, Sep 10, 2014, 9:03:47 PM

    Tim Cook, chief executive officer of Apple Inc., unveils Apple Pay during a product announcement in Cupertino, California, on Sept. 9, 2014. Photographer: David Paul Morris/Bloomberg

    Analysts thought they had a pretty good idea about what the mobile payments industry would look like over the next few years. And then Apple came along.

    To read the entire article, go to

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  152. From Bloomberg, Sep 10, 2014, 6:54:25 PM

    A Samsung Galaxy Note Edge smartphone at the IFA Consumer Electronics Show in Berlin, on Sept. 5, 2014. Samsung Electronics Co. unveiled its first smartphone with a display extending down one side as it counts on two new versions of its Galaxy Note devices to help fend off Apple Inc.’s push into large-screen mobiles. Photographer: Krizstian Bocsi/Bloomberg

    Apple learned early on that it doesn’t always pay to be a pioneer. While it largely created the modern personal computer, the company lost out (at least for a few decades) to Microsoft and its hardware partners.

    To read the entire article, go to

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  153. From Bloomberg, Sep 10, 2014, 5:10:51 PM

    Jeffrey Gundlach, Chief Investment Officer and Chief Executive Officer of DoubleLine Capital LP. Photographer: Patrick T. Fallon/Bloomberg

    U.S. government debt fell for a
    fifth day, the longest skid in three months, amid concern
    investors are underestimating when the Federal Reserve will
    raise borrowing costs next year.

    To read the entire article, go to

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  154. From Bloomberg, Sep 10, 2014, 9:04:29 PM

    Premier Li Keqiang pledged to open China more to outside investment and encourage innovation, seeking to counter concerns of a chill after a spate of antitrust probes targeted foreign companies. Photographer: Chris Ratcliffe/Bloomberg

    Chinese Premier Li Keqiang sought to counter perceptions that his government is making it tougher for foreign companies to operate in the nation, pledging a wider opening to outside investment.

    To read the entire article, go to

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  155. From Bloomberg, Sep 10, 2014, 6:23:19 AM

    Qualcomm Inc. had already bought back $2 billion in shares in fiscal 2014. Photographer: Brent Lewin/Bloomberg

    Qualcomm Inc. (QCOM) is working with 90
    partners on devices in China and sees opportunities for growth
    even as the chipmaker grapples with an anti-monopoly probe in
    the world’s largest smartphone market.

    To read the entire article, go to

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  156. From Bloomberg, Sep 10, 2014, 12:36:29 PM

    Mark Carney, governor of the Bank of England, speaks at the annual meeting of the Trades Union Congress (TUC) in Liverpool, on Tuesday, Sept. 9. Photographer: Simon Dawson/Bloomberg

    Bank of England Governor Mark Carney can’t get away from the housing market.

    To read the entire article, go to

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  157. From Bloomberg, Sep 10, 2014, 10:20:13 AM

    David Beckham is working with Sprint Corp. Chief Executive Officer Marcelo Claure and “American Idol” producer Simon Fuller to bring a Major League Soccer team to Florida. Photographer: Lintao Zhang/Getty Images

    David Beckham says he’s confident
    that he will establish a Major League Soccer team in Miami
    despite several setbacks with trying to find a spot for a
    stadium on the city’s waterfront.

    To read the entire article, go to

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  158. From Bloomberg, Sep 10, 2014, 1:40:35 PM

    A visitor walks through the National September 11 Memorial in New York, U.S., on Sunday, Sept. 7, 2014. Photographer: Ron Antonelli/Bloomberg

    Anthony Gardner had sworn off high
    floors of skyscrapers until his guides on a tour of New York’s 1
    World Trade Center offered to take people to the 83rd story.
    That’s the same floor his brother, Harvey Gardner III, was on 13
    years ago when the first plane hit the site’s North Tower.

    To read the entire article, go to

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  159. From Bloomberg, Sep 10, 2014, 8:45:40 PM

    Pedestrians walk past the Bank of Japan (BOJ) headquarters in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg

    Japan’s investors are paying to
    lend to the government for the first time in at least five
    years, suggesting the central bank is willing to accept
    dysfunctional markets as the price for meeting its price goal.

    To read the entire article, go to

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  160. From Bloomberg, Sep 10, 2014, 2:01:24 PM

    Argentina is tightening its grip on
    the country’s currency market as international reserves decline
    following its second debt default in 13 years.

    To read the entire article, go to

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  161. From Bloomberg, Sep 10, 2014, 6:05:12 PM

    Yes, it can be done. Ask Gina Raimondo.

    With the possible exceptions of Roger Williams and coffee milk, the contributions of the smallest state to the rest of the U.S. often go unheralded. Maybe Gina Raimondo, who won Rhode Island’s Democratic gubernatorial primary yesterday, can change that.

    To read the entire article, go to

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  162. From Bloomberg, Sep 10, 2014, 1:38:52 PM

    Mitch McConnell, in wave form.

    Democrats curse their luck in 2014 — a midterm in a president’s (often) grim sixth year, with most of the competitive races taking place in states won easily by the last Republican presidential candidate. Low presidential approval ratings in states that Democrats need to win — Obama is at around 38 percent in Iowa, a state he won in both 2008 and 2012 — are not leavening the mood.

    To read the entire article, go to

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  163. I saw this story on the BBC News iPad App and thought you should see it:

    Gates Foundation pledges Ebola cash

    The Bill and Melinda Gates Foundation is committing $50m to help step up efforts to tackle Ebola in West Africa.

    Read more:

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  164. I saw this story on the BBC News iPad App and thought you should see it:

    Venezuela’s inflation rises to 63.4%

    Venezuela’s central bank publishes long-awaited figures showing annual inflation has reached a six-year high at 63.4%, the highest in the region.

    Read more:

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  165. I saw this story on the BBC News iPad App and thought you should see it:

    ‘Signs of recovery’ in ozone layer

    The ozone layer around the earth is showing its first sign of thickening after years of steady depletion, a UN team says.

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  166. I saw this story on the BBC News iPad App and thought you should see it:

    Amazon destruction increases again

    New figures show destruction of the Amazon rainforest in Brazil has risen again, with more than almost 6,000 sq km (2,315 sq miles) being cleared.

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  167. I saw this story on the BBC News iPad App and thought you should see it:

    CO2 rises at fastest rate since 1984

    Concentrations of warming gases in the atmosphere reached record levels in 2013, the World Meteorological Organisation says.

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  168. President Obama Tells The Nation How He Will “Degrade, And Ultimately Destroy” ISIS

  169. crs101010/career direction,

    Must agree with 0×0 above re the value of knowing your Self. Alas, the rub is how do you do that before getting too long in the tooth. One tool of especial value is a vocational preference battery of tests (MBTI, Strong Vocational, Kuder,etc). These can be administered via most universities or industrial psychologists. Well worth the time and cost. Provides very specific answers for career choices based on your temperament. MBTI has been field tested since 1920s. The fact that you are asking these questions now is very beneficial. All the best in your search.

  170. 24 Things You Need to Know About the Apple Watch

  171. HOUSE OF THE DAY: Sarah Jessica Parker And Matthew Broderick’s $22 Million Brownstone In Greenwich Village

  172. In B2B e-commerce, Alibaba has solved the one problem Amazon can’t

  173. Microsoft Paid $400 Million For NFL Teams To Use Surface Tablets And A Fox Announcer Called Them iPads

  174. Report: Charles Koch founded anti-environment group to protect big oil industry handouts

  175. SPY 5 MINUTEGood morning!

    Looks like MSFT rebooted my computer for me overnight – so annoying.  

    Futures were down, then back up and now down again – same game as yesterday with same bullish and bearish levels (17,000-17,100, 1,985-2,000, 4,080-4,100 & 1,160-1,170) but I don't think those lows will hold so I'm not into bullish betting at the moment.  

    Oil with a big collapse to 90.63 and falling, gold $1,240, silver $18.70, copper $3.06 (really bad), Nat gas $3.95 and gasoline $2.507.  

    Dollar is even a bit lower 84.27, so don't blame that for the sell-off, Euro $1.292, Pound $1.625 and 107, yes 107 Yen to the Dollar (new low).

    Multiple factors have jolted currency markets to life, especially the prospect that the U.S. might start raising interest rates sooner than expected.

    So, of course, the Nikkei loved it and went up 0.76% and /NKD touched 15,900, back to 15,870 now and I still like them short.  The rest of Asia was down a bit and Europe is off about 0.3% – about the same as we are.  Of course the big news is:


























    We still seem oversold, not because we're near the oversold line (though that matters too) but because we went up 0.4% yesterday and the NYMO barely moved higher.  When we're trending down, then any move up tends to work off the oversold indicator much more quickly (some kind of inverse ratio thing), when a move up in the market gets a very small reaction like that – it kind of indicates that that wasn't enough and we're still oversold.  

    That's the bullish indicator we were discussing yesterday morning (that I said not to get fooled by) and now we'll watch closely to see how it behaves but NYMO is a short-term indicator and NYSI is long-term and that's telling us we're not oversold at all.  The problem is, we're just so used to being uber-bullish, that we forget what a regular market even looks like and we've "broken" some of the indicators (like the VIX) that are meant to give us directional signals.  

  176. Phil,

    DBA 25/29/BCS+24P for net $0.80, you still recommend same trade at $0.65(mid) or will you want to adjust to a new lower BCS+PUT………

    Also, looking to double down on 2016 GTAT 10Puts; have an initial entry of 10 contracts at $10Puts for $2.30 sale from about six weeks ago. …. Thanks as always for your recommendations.

  177. Spreads/Craigs – That's certainly not a rule of thumb.  All options lose value as expiration approaches and that's why we teach you to BE THE HOUSE – Not the Gambler, and SELL premium to others.  When we do a bull call spread, we generally are buying less premium than we're selling and, as you know, my favorite bull call spreads (or bear put spreads) involve taking a bullish call that's in the money and selling a call that's out of the money and that makes the someone who is "convincing" you totally wrong.  

    Of course, that someone is just one of the typical sheeple who don't understand how to use options properly and the spout off all these "truisms" because they read it in a book or any of the million options pundits who teach people the exact opposite of what we do (God bless them because they are the people we sell to!).  

    Spreads/Pwright – I think a lot of people just lost their shirts playing those things a month ago – they're very dangerous and can lose $7,000 as easily as they make it.  Of course the people who lose money would have made it back had they stuck it out but that's one of the issues – it seems like easy money and people get in over their heads and the losses pile up and they bail.  The time to enter these strategies is AFTER they go the wrong way – you can't just blindly play every month or you'll likely end up even at best.  So, if you have the patience to wait for a very wide spread to short it and a very narrow spread to go long and you keep your play to money you can very easily afford to lose – THEN it's fun – but it's not a game you should even consider if losing $2K overnight matters to you. 

    MSFT/Angel – LOL, I liked that one.  

    Life Guidance/Crs – OK, here's how to live your life:  No, just kidding, "you are only an egg" and, if you don't know where that's from – reading would be my suggesting for the next couple of years.  You are just out of college, you have your whole life ahead of you and you seem to be well-off enough to have choices so I strongly recommend traveling first and foremost.  

    As you've noticed, you don't learn crap in college but I bet you learned a lot about life going to Scotland.   Even if you need money and want to stick with the job – just take advantage of the breaks and see the World.  Within the job, try not to get tracked into one path – especially if it doesn't interest you.  Find out what other people in the company do for a living and, if there's a job at the bank you find interesting, find out how to work your way towards that.  

    I love finance, so I think there are dozens of jobs in a big bank that would be interesting to me and, at your age, they give you good experience BUT – ultimately, it's very hard to make a lot of money, or be happy, working for other people.  If the Food Truck thing appeals to you – you may not be a good fit for big business but that certainly doesn't mean go out and waste your parent's money on a food truck – you don't know anything about them.  

    That brings me to my next topic – PARTNERS!  Partners can be great or terrible but, if you have a specialty skill, like finance, then it's very easy to find partners who want to open a food truck and have those skills but don't know crap about accounting, bookeeping or raising funds.  Having expertise like that can be very valuable and you can take a piece of a start-up in exchange for your skills without having to quit your full-time job.  

    Bottom line is – TRY STUFF – you are young and full of energy and, if you are willing to work hard, you'll find there's enough hours in every day for you to try different jobs that interest you at the bank AND find a "hobby" job that interests you outside.  If your hobby job becomes successful and you decide to go at it full time – working 12 hours a day + weekends at one job will seem like a relative vacation and that's what it takes to launch your own business.  The reason 9 out of 10 small businesses fail (aside from people going in undercapitalized, unprepared and having no clue how the business works) is that 9 out of 10 people are not prepared to work 100 hours a week for 2-3 years with no vacations to build up the business to the point where they can comfortably afford to hire a person to take off their workload.  

    So there's a couple of things to think about – there's plenty of people here you can bounce ideas off but READ!!!  There are so many great books on everything – I don't know what you haven't read but go to a library and you'll see for yourself.  Read about things you think you are interested in and don't forget to read for fun as well and read biographies of great people and great civilizations and great wars and great businesses – 2 books a week for a year and you'll have 100 years worth of experience in your head –  a very good start at 26!  

    Big Chart – Going to look a lot uglier this morning!  Watch that 17,000 line on the Dow and 1,990 is the 2.5% line on the S&P and 10,926 is the 50 dma on the NYSE and 1,156 is the 50 dma on the RUT – if they don't hold – we'll be really glad we bought those DXD's yesterday.  

  178. DBA/Jasu – Remind me in new post.  GTAT puts are about the same ($2.30 for the $10 puts) so no rush unless you super-regretted not selling more.  

  179. Phil  / Bear PUTS spreads.


    As far as I remember i had only see BCS never bears, when you discuss them?

  180. GTAT/ Phil

    Is the bull case on GTAT mainly due to alliance with AAPL and Sapphire….do u see any triggers in other products that they have?