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Deja Thursday – The Coalition of the Willing is Back in Business!

We're back in business baby!  

It's been 12 years since GW Bush first assembled the "Coalition of the Willing" in November of 2002 (a full year after we were attacked by 15 Saudi hijackers), to go after Osama Bin Laden, (who was hiding in Afghanistan) by attacking Iraq.  Interestingly, Bush only stole that phrase from Bill Clinton (what, you thought Bush had an original thought?), who first mentioned it in a 1994 interview

Now, in 2014, we're ready to go back to war – in Iraq (did we ever really leave?) – with another coalition of the willing staring most of the same players but this time, we have Germany on our side – so you know we're serious.  According to the WSJ, they've already spotted a training camp for Syrian rebels in Saudi Arabia and – oops, wait – that's being run by us – WE'RE arming and training Syrian rebels – what can go wrong?

ShiftingGround

Well, as they say, politics make strange Bedouin fellows and I guess we'll ignore the fact that the current ISIS rebels were the same people we armed and trained to fight Saddam 12 years ago.  While we're training and arming Syrians in Saudi Arabia, we'll be bombing their country as well.  Again, this is pretty much how we handled Iraq but hey – at least we're consistent!  

At PSW, we're consistent too.  While we love war as much as any other red-blooded Americans, we question this one as well – even when there's a Democrat in charge.  It's funny because, just the other day, I suggested that Congress, rather than rejecting the call for $40M to help combat Eblola (as they just did), could have scraped together that money by simply firing one less $1M Tomahawk missile each week.  I was wrong, and I apologize – it turns out they cost $1.41M each.  

This is, of course, great news for RTN, whose stock has already run up 13% in the past 30 days as the fear of peace flushes out of the stock price.  If you want to bet on this war not ending quickly, we have thousands of additional $1.4M missiles to fire and RTN usually sells about $23Bn worth of goodies each year but it's a way better gig than HPQ because, when HPQ sells you a printer, you don't hurl it at your enemies and blow it up!  

Obama promises a "steady, relentless effort" and that means steady, relentless profits for RTN and we can cash in on this one by selling the 2016 $80 puts for $3.25 and buying the 2016 $100/115 bull call spread for $5.20 for net $1.95 on the $15 spread (669% upside potential).  Isn't war great?!?    

War profiteering is, of course, as American as Haliburtun selling apple pies to our troops for $5 a slice and we'll be looking over the usual list of suspects but the real winners and losers will be determined in November, when companies like HAL (who donate 95% to Republicans) will be rewared or punished – depending on who's in power come January. 

I like RTN because we love our long-range weapons and GE usually does well, no matter who wins.  We'll look at some of the other players but mainly, we're still concerned about a market pullback and yesterday we doubled down on shorting the Dow with the DXD October $25 calls at 0.50 to hedge our portfolio against a breakdown below 17,000 that seems kind of inevitable to us.

It's a real shame that, on the 13th anniversary of the September 11th attacks, we are once again preparing for war in the Middle East.  ISIS is exactly the kind of enemy we were worried about in 2001 – an enemy without a country yet we are fighting them the same way we always do.  Why don't we just curtail arms sales so they run out of weapons, rather than send more over and train new people to use them?  

Why indeed? 

 


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  1. Oil Lines

    R3 – 94.60
    R2 – 93.80
    R1 – 92.80
    PP – 92
    S1 – 91
    S2 – 90.20
    S3 – 89.20

    $85 oil is looking more probable now!


  2. It seems to be a tech world at the top of the S&P500:

    http://www.bespokeinvest.com/thinkbig/2014/9/10/apple-aapl-back-above-the-600-billion-mark-two-tech-stocks-c.html

    Maybe $85 oil relegates XOM to 4th place.


  3. Phil re: oil spreads from yesterday's post, I know what you mean; I'm not sure I want to trade the spreads per se, but they can be an interesting snapshot of the oil market, for example, if the 1 year spread has decreased from $8 to $1 in the last 2 months, this suggests that supplies are ample; if the market flips into contango (the long dated futures contracts are priced higher than the front month), this is another way of saying there is a supply glut in the current (spot) market.  So all of that suggests bearish momentum, if you short the front month contract today you have all of that wind behind you.  So as a way of better understanding the oil market, I've been studying this, trying to learn about contango and backwardation, roll yield; I think the spreads that people have been playing here (I also have played a little) have been dependent on the market being in backwardation, and longs rolling forward at close to expiration benefit from the roll yield (they buy next month at cheaper than front month), however if we go into contango that equation will change, many longs will exit the market, and also the oil ETFs will underperform spot pricing depending on how they're structured, etc.

    At any rate, interesting stuff, but I'm doing more watching than playing yet, I had the inclination to play long the upcoming month's spread (Nov – Dec) figuring the oil crooks would blow out the spread once Nov becomes front month, but if we go into contango I could get burned quickly, will just stay on the sidelines for the time being :)   But, shorting front month /CL probably has momentum behind it I guess is what I am saying..


  4. Ref Amazon. I just read an article about their use of use homeless seniors working 10 hour shifts in their distribution centers. It’s called the “Camperworks” program. Pretty sad.


  5. Phil,

    A gentle reminder re DBA 25/29 BCS + 24P at net $0.80 Debit. Same trade at lower Debit or would you adjust the BCS/Put combo. Thank you


  6. jasu re: DBA, there is a USDA ag report coming out today at noon, might be that grains will hit yearly lows in wake of that report due to record harvest, but after that it'll become more demand driven going later into the fall.  So might get better entries / adjustments on ag after the report comes out..


  7. Good Morning!


  8. pwright72, 

    Thanks for the info on dba….might be prudent to wait and see how this shakes out….


  9. Phil – The phrase that pays…. "Why Indeed" 

    :(


  10. Today I will be writing calls on GPRO, think I've been patient enough.  Looking at 75's for next week, worst case I'll roll them if it gets there.  The top has to be close.  Reminds me exactly when twitter did the same thing and went to low 70's in about the same time frame and about the same amount of time after IPO.


  11. MSNBC is re-playing the morning of 9-11, including comments from W at Booker elementary…ridiculous……


  12. good timing on gpro


  13. sunilram// do you have link?


  14. Good morning! 

    My business partner, Lloyd Glick’s son Jeremy was one of the people who rushed the cockpit on flight 93.  Doug, who does the programming for Stock World Weekly is married to Jeremy’s sister (Lloyd’s daughter) – that’s how close we all are to these events in NY/NJ…
     
    Jeremy’s daughter Emerson (named after Ralph Waldo) was born that June – she never got to know her father, who was awarded the Medal of Heroism, but he will be remembered by his large family (5 siblings) and many, many friends as a great guy who went out a hero, although that’s small consolation to Emerson and Lyzbeth, who has to raise her alone.
     
    Tina worked at 7 World Trade Center (which also collapsed) but was on maternity leave at the time, we lost many friends and colleagues that day.  When Tina and I lived in Jersey City, we would meet after work at least once a week at Windows on the World, on top of the Trade Center, which had a great bar and a fabulous view and the most beautiful bathrooms I’ve ever seen (funny what you remember).
     
    When you rode the elevator up you could feel the woosh of air as they pressed you to the floor and, when they went back down, you felt the floor dropping away from you as they fell at an incredible rate and dropped you off in a magnificent glass lobby the size of whole block, with international flags and every possible airline agent at desks going around it that just gave you a feeling of all the wonders man could achieve working together. 
     
    We saw the Red Hot Chili Peppers play a concert on the roof of one of the towers about a year before they went down and I’ve been to several great weddings and Bar Mitzvohs in the top floor catering halls but what I loved most about the World Trade Center was that, on the restaurant level, they had a glass floor that extended out past the rest of the building so you could see the street 100 floors below you.  Madeline used to crawl on that floor and got very excited when a helicopter would pass below us (which was about the coolest thing ever). 
     
    That’s what New York lost that day – not just the people (and for each one of those 3,000 bells there’s a tragedy just like Jeremy’s that touches just as many people) but those buildings were the hub of the city – they connected NY and NJ together (the path subways stopped right under the building and you walked up and out through the lobby) and I guess, just like the people we lost, you never really appreciate what you have until it’s gone.  
     
    So say a prayer for them all on this sad anniversary but, more importantly, take a little time to appreciate what you have in your own life – call some old friends, tell your sister you love her, that sort of thing because it’s those connections that make us who we are and it’s too late to make up for it when they are gone.
     
    Both memories and regrets last forever – let’s make the memories while we can. 

  15. Well said.  Touching.


  16. Advill/bear put spreads-Phil does use them Oct XRT 93/88 is one, buying the 93 and selling the 88's


  17. Damn.  A very well painted picture.  I never got to see the WTC in real life, my first trip to NYC wasn't til 5 or 6 years after they fell.  I wish I had gotten the chance prior to this tragedy.


  18. Chin up Phil – call your sister and have a good day.

    Randy


  19. SPY 5 MINUTE

    Not surprising but Sean Hannity exposed as an ethics violator, promoting PACs he has a financial interest in on his show without disclosing the connection.  Even worse, Fox lawyers defend him.

    Opening down about half a point – not bad – just erasing yesterday's BS rally – same pattern as usual.   As I said earlier this morning – what matters is how the lows hold up. 

    Oil hit $90.50 but back to $91 now, will be tragic if they fail $90 but not likely into weekend.  

    Oil/Pwright – Those are all factors but they are also merely indications of expectations of the average trader, don't read too much into it.  We make our best money betting against the trend but, unfortunately, you can't come up with little crib notes for Fundamentals – so hardly anyone is interested in doing the homework that we do here at PSW.  Right now, I'm waiting for a bottom to go long – I'd like to see $85 but I'm also going to wait patiently to see where a new channel forms rather than jump in and guess.  As our first stab on being bullish on oil, we picked RIG – so far, so bad on that one!   If that's not working – why would I want to play oil at all?  

    Camperworks/Sunilram – Interesting as they've already taken down the links.  

    DBA/Jasu – I think $24 is a good floor but I'd rather collect $1.30 by selling the 2016 $25 puts and spend $2.60 on the $23/28 bull call spread for net $1.30 on the $5 spread because that extra .50 puts you $2.65 in the money and, realistically, if DBA is below $24, you'll be able to roll to 2017 $23s anyway (the Sept $27s are $1.30 now).  Doing the spread in the money like that actually lowers your break-even from $25.80 to $24.65 (because of the $23 calls) and means DBA has to climb 10% less to give you a full pay-off.  

    Wow, already we're popping right back up!   This market is simply unshortable!  

    • Dow -0.49% to 16,985.50. S&P -0.42% to 1,987.40. Nasdaq -0.39% to 4,568.52.
    • Treasurys: 30-year +0.28%. 10-yr +0.18%. 5-yr +0.14%.
    • Commodities: Crude -0.69% to $91.04. Gold -0.11% to $1,243.90.
    • Currencies: Euro -0.69% vs. dollar. Yen -1.76%. Pound +0.28%.

  20. Texas/Brill – Good riddance!  

    DBA/Pwright – Good point, waiting for the report is a good idea.  

    GPRO/Rustle – Good luck with that, I have my plate full with NFLX, TSLA (who are popping again) and GMCR.  

    Commentary/1020 – One guy who never got credit for commentary on 9/11 was Howard Stern.  He stayed on the air until after noon (usually 10 am) and they were getting news live, just like everyone else but the discussions around it and the phone calls that came in from all around with witnesses and commentary made for an amazing show that day.  If you want someone to change their mind about Howard Stern, have them listen to this.  

    WTC/Ricbah – I think the shame is that we lost the innocent fun of it.  Even if the rebuit it – it's never going to be the same enjoying a building like that – they always remind you of tragedy/danger now.


  21. Albo – FNSR….


  22. LULU Looking good :)


  23. STJ – Catching some love on the JDSU announcement.


  24. What is going on with /SI?


  25. For any James Bond fans, Richard Kiel (Jaws) died, age 74.


  26. I saw some interviews with seniors who live in RV's and travel around the country. They loved their Amazon jobs, citing long hours with good pay, exercise, and the ability to make living/travelling money for a few weeks, then take a break and move on. Kind of a subculture, like liveaboards (which I once was). Some do it by choice, some get stuck as they run out of money.


  27. LULU/Wilsons – Rockin' after outlook puts fear to rest:

    [$$] Lululemon Raises Earnings Outlook

    September 10th, 2014 at 1:02 pm | (Unlocked) | Permalink

    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. 

    That spread is now half in the money at $45 and already the $35 puts are $3 and the $35/50 spread is $7.50 so net $4.50 from the $1 credit is $5.50 profit in one day.  You don't need to make aggressive (and risky) short-term play to make great money off earnings moves!  

    Silver/Sun – China numbers are bad and getting worse so no demand story for metals, precious or otherwise.  Still, I like buying Silver at $18.50 A LOT but the futures are scary, SLW is good substitute and we already have it in one of our portfolios.  At the moment I like the 2016 $20/27 bull call spread at $3, selling the $20 puts for $1.95 for net $1.05 on the $7 spread that's $3.39 in the money.  

    Jaws/Rustle – Amazing he lived that long, he was over 7 feet tall – people that big don't usually live a long time.  

    AMZN/Griffin – It's a shame when they offer flex-time jobs and it's taken out of context.  


  28. LOL – so much for that inexplicable rally – fading fast.  


  29. Jaws/Phil

    And he definitely had a pituatary glandular problem which is even rarer.  There was definitely gigantism there.


  30. Phil/Silver

    SLV Vs SLW – advantage of one over the other?

    Thanks as always


  31. Silver

    I tried to inform last year that there is actually 10s if not 100s of times silver around than so called on the books. Weakness could go on for a long time and any pick up in price will only be followed with a flood of stock, it is not used for much at these prices.


  32. We were one of the lucky ones as one of our sons lived in Brooklyn Heights & when I heard the news while at a rotary club breakfast I knew he would be on his way to work at Rock Center. He would be on the subway, or on his motorcycle heading into the city. As it was he was on the Brooklyn Bridge with his girlfriend on the back & saw the 2nd plane hit. Of course, there was no cell, or communication so I watched the horror on tv & waited. He said the traffic just stopped & it was so quiet on the bridge-everyone was in shock. Once they got home they watched everything from the promenade from across the river. He said the jets were flying over & everyone was in terror of what was coming next. There was no way to get him out of the city as all bridges & everything was shut down. Everyone was afraid to drink the water, grocery stores were empty-panic mode set in. When I finally got through to him on the cell, he was sobbing. "All those people had just got to work." He said it over & over. I tried to calm him down, but he was so devastated. It turned out that you could leave the city through Newark, but no one could get in. How do you leave on a motorcycle with a girlfriend, 2 cats & an English bulldog? Finally they rented a car & left to go to our place in Canada; a miracle in itself. Everyone who was touched by the loss of so many & the twin towers, which was magnificent, will ever forget what they were doing, where they were when it happened. Just like when JFK was shot; unbelievable shock & dismay. Beautifully said Phil; always tell those you love that you love them every chance you get; never leave the house without telling your loved ones the same-a very wise lady told me that years ago & I've never forgot her words. You never know what life has in store for you. It maybe the last words they hear.


  33. Thank you pirate and Phil. Beautifully said.


  34. A number of banks looking strong today – BAC, C, WFC, etc.



  35. CLR/Phil – "America's Oil Champion" just did a 2:1 split. Production up 10% over last year to 167K bbl/day noted in last 8-k.   Too small yet or a good boring growth company to sock away?


  36. Wow, and all recovered again.  

    SLV/Pat – Both are good proxies. If you compare the two, SLW tends to outperform, so I lean towards that (and you should always do these comparisons when looking at ETFs, etc.):

    Well said Pirate.  

    Robinson/Rustle – That's just strange.  I think it's a good question. 

    CLR/Scott – Nice but unexciting.  I think I'd want to see them closer to the 200 dma @ $67.50 than under the 50 dma ($75).  


  37. Scotland/Phil – any thoughts on hedge/oppty for GBP if the vote is yes? Euro is down a bit. Dollar is already high. Seems Euro would be the easiest place for brits to rotate pounds to if they act on fears of a diminished Pound Sterling. Go long EUR/GBP?


  38. one of the most powerful moments of my life.
    i was in the jungle in Costa Rica, coming into the small town of Playa Negra every few weeks for supplies.There was a small 'market' with blue washed walls and one of a few products and flour. They had a small transistor radio that was a spanish translation of BBC.
    they could tell by my accent i was american, and the señora started yelling at me 'los torres gamelas ! los torres gamelas, fuego con todo, horrible' I had no idea what she was talking about. Twin Towers ? Horrible Fire ? So my American brain took over and I said, "Oh, I remember that film, yes, it was horrible" ironically thinking that they must have come across some VHS of Towering Inferno.
    Just then my Costa Rican friend walked in behind me and the minute she looked at me – my body froze. Something was very very wrong. She translated directly and I simply went into shock. I walked back into the jungle and just sat, for three days, crying and shaking my head.
    The first pictures I saw were at the San Jose Airport a week later – flights were still being stacked and cancelled. People were standing elbow to elbow around the one television in a bar, watching the same CNN clip over and over again.
    A week later when we landed in JFK, the entire plane broke into tears. Men were kissing the carpeted aisle and a strange applause broke out when stewardess voice started to break down.
    In retrospect, its incredible to me that people live with this sort of loss everyday. For Americans, it was an unprecedented wake up call.
    Being so far from family and friends, it cemented an unalienable humanity for me and 'dukkha' ( a buddhist term related to sadness ) of the futility of our race.
    At the same time it makes me notice the absolute beauty in small things. Out of all the confusion the only thing I can say with certainty is that I was never going to be the same.


  39. Phil/Gold,

    Gold hitting new lows here. I know you like your GLL play.

    Thanks on the Silver ETFs


  40. Every week another reason to like IBM:

    http://www.engadget.com/2014/09/11/ibm-ninja-particles-could-stop-superbugs/

    The inspiration for IBM's foray into nanomedicine is twofold: our growing resistance to antibiotics and the incidence of medical-implant rejection by the human body. With this in mind, Hedrick and his team, leveraging IBM's background in semiconductor research, developed synthetic polymers that mimic the immune system. Using a simple charge, these resultant polymers are capable of hunting down and clinging to specific microbes throughout the body. And, once attached, cause those microbes to rupture as if they'd been hit by an explosive shuriken (or ninja star) — hence, the name.

    Of course, anyone who's seen Innerspace knows there's a certain danger to injecting foreign objects into your body. But Hedrick says we have nothing to worry about. The ninja particles won't pass into other parts of the body. They're also proven to have a low toxicity and, best of all, won't engender a new wave of resistant pathogens (read: superbugs). So when will see the practical fruits of IBM's research? Well, Hedrick tells us the company's already in talks with various partners to apply this nanotech to our modern world in anything from medicine to the deodorant we use daily to the detergents we use to wash our clothes and kitchenware. And that future's not too far off, either — Hedrick believes we could begin to see these ninja particle-infused products hit retail within a decade's time.


  41. Hi all, curious if anyone else has been having performance issues with TOS on a MAC.  Starting a couple of weeks ago, the program has been leaking memory and crashing after about 30 minutes.  I'm on my third  technician, and none has been able to fix the problem.  Yesterday, the tech doubled the memory dedicated to TOS from 1 to 2 GBs, and now i have 45 minutes before it leaks and freezes up.  Yesterday the tech muttered something about a patch coming for mac performance issues, but I'm wondering if anyone else has experienced (and fixed) this problem?


  42. Gold – Noticing my mining positions (and GDX) not 'hit' as much as today's drop in gold. Might be finding the floor for them about here, though I can see /GC being driven for a quick test below 1200 by 'the manipulators.'    


  43. rdn4evr,

    i have to say TOS has been crashing on my mac pretty much from the day i installed it.  (by the way, i am talking about the trade architect window that pops open in firefox--it freezes up all the tabs i have open and requires a firefox restart).  i'm now quite fast at restarting it--i just have not had the time to talk to a technician.  i also use TOS on a PC (winXP, if you believe it, which i never allow to do an auto update and so it works like a charm, winXP that is).  TOS is quite stable on that platform and i have nver experienced a crash.


  44. rdn
    same here and I have 32GB of DDR. Write TOS at Support – TOS <support@thinkorswim.com>
    they sometimes seem responsive.


  45. RUSTLE PROBABLY HAS ALOT TO DO WITH MCDONALDS NO LESS HIDEOUS (BUT UNTAPPED) CRIME. GOODELL THE LEAGUE THIS WHOLE MESS IS SICKENING


  46. /CL
    There goes the spread – WHAM !


  47. I made a small amount ( all I was trying to make) with Qty 4 bull put spread on Apple Sept 12 92/94, just trying to make 20-30 per trade hoping to repeat. I bought it about three weeks in advance and it didn't really decay enough to make most of the profit midweek before expiration.

    I'm trying to repeat these small victories but I am having trouble with commissions eating up the meager spread profit when I am looking at a short leg with a delta under 0.15. I have to issue 5-7 spreads to make $30 with relatively low risk, and commissions eat it up. 

    Any ideas how I can try to regularly grab crumbs with these kind of trades? 


  48. Re: Crumbs spreads--Also should I put a good-tip-cancelled order in on the short leg, or both legs for protection, although I know that still doesn't protects against gapping. 


  49. There are always going to be issues with the lone wolf AAPL. As far as TOS goes fact is most business is done on PCs which means they have little incentive to adopt AAPL solutions. The good news is AAPL is slowly accepting it must allow more outside sources. 


  50. wombat, are you long the /clv4-/clx4?  or short?


  51. Phil,

    If you were to play /SI in the futures, are you thinking wait to see if it touches 18.50 before trying to go long?

    I was thinking 19.00 was the floor and got burned last night with the big drop..(.note to self, either set a stop or don't play the futures overnight)….  Thanks…


  52. 2-3 years ago when I first switched to a Mac TOS worked better, faster and used less memory than on my   pc.  I think the programmers at TOS have gotten lazy, because every single update since then has degraded the MAC performance.  Yesterday, i fired up the windows computer as a backup, and it crashed on me when I was entering futures orders, so i was stuck in limbo not being able to tell the status of my orders.  Not a good day.


  53. rdn4ever, i find the iphone app for TOS works really well.  you just can't do pivot points on the charts--or at least i don't know how.


  54. pw
    short
    i think short covers blew us up – i'm back in – dec was zero !!


  55. PHIL/ROST (ROSS STORES)

    I have a relative who works for the above. They are planning to open about 30 new stores. How about a new position?


  56. Phil, what are your present thoughts on VLO. Took a hit this week. How would you play a new position and is it prudent?


  57. Zte,

    ROST they relative on the high end of the scale, how high can you go? Hard competition in the rag trade!


  58. hey Yodi 
    I shop at ROSS !!!!


  59. $2 shirts
    $4 pants
    $10 shoes
    34K watch

    thats how I roll ; >



  60. Scotland/Scott – It's a binary event, so trading ahead of it is just a coin flip.  Does losing Scotland hurt the Pound?  I don't think so, it's a few less banks they have to bail out overall.  Scotland is like a red state, they get more money from the Government than they contribute, but then they complain anyway.  Also, consider that if Scotland gets out of the UK, then what happens to all those Pounds they "don't want anymore"?  I wouldn't bet against the Pound on this and, frankly, the Pound should be higher against the Euro now and is being held back by this uncertainty.  

    Thanks Wombat.

    You're welcome Pat, GLL still a good entry up here, $94 was the top last time too:

    Submitted on 2014/08/27 at 2:58 pm

    GLL – I'm starting to like them again (as a short) because gold is back down to $1,285.  I'd rather catch a spike but we may not get another one to play.  We can play gold to head higher by buying the April $87/77 bear put spread for $4.30 and those can be offset with short ABX 2016 $17 puts at $2 for net $2.30 on the $10 spread.

    So far, so bad on that spread as it's down to $3 and the short ABX puts are $2.50 for net .50 and I still like the spread though I think I'd spend an extra $1 to get the $91/81 bear put spread for $4 instead.  

    IBM/StJ – Nanomedicine will be huge one day.  

    Nanotech could make humans immortal by 2040, futurist says

    Google Says "Nanobots In Our Bloodstream, Brains On The …

    TOS/Rdn – I run mine on an IMac and haven't seen a problem yet but it's the only thing I run on that computer.  

    30-year notes went off at 3.24%.  

    Gold/Scott – It could plunge lower but it gets irrational. 

    AAPL/Sn0 – Well you need to extend your length so you make more and trade less.  It doesn't do you any good if all you are doing is churning commissions for the broker.  For example, the Oct $91.43/94.29 bull call spread is $2.35 on the $2.86 spread so you make $51 (9%), not $30.  On the other hand, the April $90/95 bull call spread is just $3.60 so that one makes $140 (38%) if all goes well.  While making 9% 8 times (every month) SEEMS better than making 38% one time – if your commission is 5% then you net less – EVEN IF YOU WIN EVERY SINGLE TIME (which you won't) – on the short-term trades.

    /SI/Sun – I like $18.50 on /SI enough to play long with conviction here ($18.60) which means I'd DD at $18.50 for an average of $18.55 on 2x and then add 2x more at $18.45 (to average $18.50 on 4x) with a stop at $18.40 for a $2,000 loss.  Of course, at any point I get back to even, I get back to 1x. 

    By the way, it's possible that silver and gold are selling off as people who bet on a 9/11 terror attack are giving up today.  

    ROST/ZTen – It's not for me, they already popped 20% since July.  I don't think they are overpriced, but they are certainly fairly priced at $75 and they'll likely come back to $70, even if they are gathering strength.  If you feel like you MUST own them, you can still sell the 2016 $70 puts for $5.25 and that's back to where you missed the rally but, personally, I'd wait. 


  61. Might be the network to watch in the future:

    http://www.businessinsider.com/raoul-pal-real-vision-television-2014-9


  62. Wombat

    Great buys hope you still have them after the first wash. The 34K watch is a bit steep for me or did I get this wrong?


  63. TASR – From an article in the Fort Myers News-Press today:

    Fort Myers Police Department will become the first in the region to use body cameras while in the field.

    National police incidents have brought greater attention to body cameras, which are expected to help law enforcement and the public. Fort Myers is expecting to receive 40 of the cameras this month.

    "I want to make sure we're following policy and, when people are filing complaints, they're being accurate," Chief Doug Baker said. "It's a device to keep everybody safe."

    The body cameras, manufactured by TASER, and the technology to program the videos and download them cost an initial $70,000, Baker said, adding that the bulk of the cost is in maintaining the software and downloads, not the actual cameras


  64. VLO/JMD – I love them when they are cheap but they haven't been cheap in over a year.  TSO makes a better short, if you want to go that way but neither makes a good long with falling fuel prices and poor demand.  

    VLO is on my perma-buy list but I have no interest until/unless they have some kind of catastrophe that takes them down to the mid $40s.  

    LOL Wombat! 

    CNBC/Rustle – Ah, that does make me think there is a God.  That Raoul Pal idea is good, a good station should be subscription (not ad)-based.  

    CNBC August 2014_0

    TASR/Albo – That's good, we need a push to make $20:


  65. DIAMOND:  RHETRA@AOL.COM


  66. re: 9/11, I was in Beijing at the time, I remember it was about 9:30pm Beijing time when the whole thing started.  I was having a beer in my apartment, got a call from my Bulgarian friend, saying I'd better turn on the TV, so I said yeah, sure, OK, he said "no man, you had really better turn on your TV."

    I have to admit there was some "schedenfreude" evident among some of the Chinese around me at that time; I was the only American in my immediate circle, and I felt pretty isolated.  I remember thinking at the time that it was going to be hard to know what to say to my Chinese customers, colleagues, etc., but actually as things went it really wasn't complicated at all; sadness and silence were enough.  Chinese people and others with some maturity could understand that entirely, and, if they couldn't, well to hell with them.  I remember later sometimes feeling that we should go into Iraq, just because "we've got to do something;" so I guess my hands are no cleaner than anybody else's.  But I guess the whole thing made me feel like "nationalism," or "patriotism," or whatever, ought to, at the end of the day, be sort of low on the "totem pole of importance."   But that can be sort of easier in theory than in practice, once the bullets start flying. 


  67. GLL FYI
    At least in TOS, this roll won't work. You have to create an Iron Condor to push through the ticket
    Pain in the Ass, but it works.



  68. If someone works on a mac, Phil, and some don't the first place to look is cookies and spy ware that is not detected as malware because it is part of marketing profiling systems. Bottom line is you visited a bad site. Sometimes you have to save to an external device, reformat, reboot from scratch and load only used important programs. In the process all the junk in memory is deleted. If there is a program that finds these issues seems no one has found it and macs have the least.


  69. New trade on AFL  Buy Jan16 50/60 BCS @ 6.40 and sell Jan16 55p @ 3.80 net cost 2.60.

    Low protection 53.85 max profit at 60 740.00 per 1 opt. return 3.3 % per month and for good measure you can sell 1/2 the Oct 60c for .90 cents 


  70. yodi
    i like watches ; >


  71. Wombat at 35K watch your arm!!!


  72. Rustle123 – Great timing so far on GPRO.


  73. The beauty of 35K watches, is that they don't look like 35K watches.
    Here is my daily wear around that I adore 

    I started studying watches about 10 years ago. Its an amazing art form with mind boggling complexity.
     


  74. Thanks Phil….


  75. Wommer:  C'mon, don't keep us in suspense, what is it?  A little 3rd World tip:  standard procedure for street grabs of expensive watches goes as follows:  Perp #1 walks towards you on sidewalk, small pin in his hand, and, as he passes to your left, reaches out and pricks your left arm with it.  You instinctively reach over and grab your pricked arm, he rips your watch off and runs.  You start to give chase, Perp #2 bumps you accidentally and blocks your path, Perp #1 jumps on back of anothe buddy's motor scooter, done!!!  It works as well in Paris as in Bogota.


  76. Ah, the "coin edge" watch.  Very nice.


  77. Nice watch every man to his own 


  78. zero
    i used to teach a class in pick pocketing in London long time ago. Not saying I'd never be victim, but it would click pretty fast.
    I guess my compromise is I won't live in Columbia ; >


  79. ZZ – I feel pretty safe with my watch.  It's a Casio sports watch.  Currently being offered on Amazon @ $11.34.  Alarm & Stop Watch.  Who could ask for anything more? 8-)


  80. albo – hahahaha. you crack me up.


  81. Wow, this up and down action is really exciting today.  Fantastic for the Futures channel we were watching from this morning:

    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.  

    Nationalism/Pwright – That's my worry now, we're "doing something" again without taking the time to really consider what needs to be done.  Obama made the mistake of being honest and saying we didn't have a strategy yet and that was like raw meat thrown to the Conservative dogs, who were able to shove us back into war by making him look weak if he doesn't and now he has to use words like "Destroy" to seem tough enough for his critics – idiocy!  

    We don't even know who ISIS is, who their leaders are, how they operate.  We had been dealing with Al Qaeda since the late 80s and ex-CIA boss Bush Sr. didn't think it was prudent (at that juncture) to rush in and do something about them yet people expect Obama to "take care of" ISIS immediately.  

    Historically, rushing Foreign Policy decisions has not had a good outcome yet, unfortunately, these days our Government is run by Oligarchs who control Congress and the Media and are every bit as capable of starting a war to boost business and ratings as Hearst was back in 1898, when he decided the country needed a good war. 

    What he actually said was:

    OBAMA: You know, I have consulted with Congress throughout this process. I am confident that as commander in chief I have the authorities to engage in the acts that we are conducting currently. As our strategy develops, we will continue to consult with Congress, and I do think that it'll be important for Congress to weigh in and we're — that our consultations with Congress continue to develop so that the American people are part of the debate.

    But I don't want to put the cart before the horse. We don't have a strategy yet. I think what I've seen in some of the news reports suggests that folks are getting a little further ahead of where we're at than we currently are. And I think that's not just my assessment, but the assessment of our military, as well. We need to make sure that we've got clear plans, that we're developing them. At that point, I will consult with Congress and make sure that their voices are heard.

    But there's no point in me asking for action on the part of Congress before I know exactly what it is that is going to be required for us to get the job done.

    That's all it takes – one drop of blood in the water and the sharks are able to attack.  MADNESS  

    Cool clip Wombat. 

    AFL/Yodi – I like them.  I'm a little concerned about hurricane season this year.  

    You're welcome Sun.  

    Pick pocketing classes/Wombat – Cool, sign me up!  


  82. Phil remember I do live partly in a hurricane area Cancun, they come and go every year part of nature, AFL is on the 52 week low and I gave it a crack with my tree planting system. 


  83. OH BABY THOSE ALGOS LOVE THE OIL REVERSAL!


  84. AFL/Phil: I don't think AFL has any exposure to hurricane related property insurance or Super-Cat insurance.

    Aflac has traditionally made the majority of its money selling supplemental life insurance and cancer insurance to the Japanese people… 73% fo its business is done there.

    27% fo sales are in the US, and it is primarily disability, cancer, and hospital indemnity insurance.

    Not that I want to start a position in AFL at this time, it may have further to drop being below all it's moving averages ( on the daily), and the MACD and Stochastics are negative.

    http://www.wikinvest.com/stock/AFLAC_(AFL)


  85. wombat re: /CL, I think the shorts will pay, the only concern is, like you say, if it keeps tanking there will be short covering.  I'm trying to figure on what would be a strategy if the whole thing flips negative, Dec is more expensive than Nov for example.  I understand it was like that back in 2008-2011, when financial crisis tanked oil to $35 or so.  There were guys buying spot oil and leaving it in the tanker, selling forward contracts for $5 higher and making risk-free profit; I understand there's a few guys trying to do that with Brent again right now.  (Wish I had a spare tanker or two).  But if the thing flips negative and you're short at the right time, you'll make way more than you normally would, it could shoot from $1.00 positive to $1.00 negative, that's $2 for you per contract.  Only question is, will it happen fast enough to affect Oct contract or does it just shoot to the sky due to short covering.  So that's a long way of saying, it's either up or down from here :)


  86. for those who like functional wearable art.. I love my 'snake belt' from Taos Leather..  never seen anything else like it.  

    http://taosleather.com/photos.html


  87. AFL/Yodi:   And by the way, nice trade construction.


  88. pw
    i think the short covering is over, the options on the front month expire tomorrow. the volume will start to plummet.
    i just took profit off the drop. i'll wait for the last spike and then cash out tomorrow.


  89. Phil--oliver…. wow.. perfect


  90. AFL/Yodi – I don't disagree with the trade at all, just pointing out it may be a rough quarter ahead.  I'd love them on a dip anyway.  

    Aflac Incorporated to Webcast 2014 Tokyo Financial Analysts Briefing

    Aflac Survey Finds 2 in 5 American Workers Spend Less than 15 Minutes on Benefits Selection

    Here's my candidate for quote of the day from Berkshire's Charlie Munger:
    • Elon Musk? He's a genius, says Munger, "and I don't use that word lightly … He’s also one of the boldest men who ever came down the pike.  So put me down as saying I’ve always been afraid of the guy whose IQ is 190 and he thinks it’s 250.”
    • Dow -0.28%.
    • 10-yr +0.06%.
    • Euro +0.07% vs. dollar.
    • Crude +0.75% to $92.36.
    • Gold -0.52% to $1,238.80.
    • Dow -0.2%.
    • 10-yr +0.09%.
    • Euro +0.04% vs. dollar.
    • Crude +1.31% to $92.88.
    • Gold -0.46% to $1,239.60.
    • The average rate for a 30-year fixed-rate mortgage rose to 4.12%, a bit higher than last week's 4.10% reading which was the lowest rate since last October, according to the latestFreddie Mac survey.
    • The average rate for the 15-year fixed-rate mortgage rose to 3.26% in the latest week from 3.24% in the prior week.
    • A year ago, the 30- and 15-year averages were 4.57% and 3.59%, respectively.

    Betfair: Big money says Scots to vote "No" on independence

    • There's a lot being made of last weekend's poll showing a majority of Scottish voters for the first time favoring independence, but in the spot where folks need to put money behind their opinions, it's not even close.
    • Wagers placed at Betfair Group show an 80% chance of a "No" vote for independence – roughly £4M has been placed on no and just £1M placed on yes. "The big money trades continue to go on no, fueled by significant bets from south of the border," says Betfair.
    • The easiest way to play a "No" vote (referendum is Sept. 18) would probably be to buy pounds, but, alas, it's bounced by nearly 200 pips since diving Monday morning in wake of the weekend poll.
    • ETFs: FXBGBB
    • Other possibilities would include buying the British banks - BCSRBSLYGHSBC,OTCPK:SCBFF - which have also been under pressure on worry of a break-up.
    • Previously: RBS, Lloyds to relocate if Scottish independence announced

    Bitcoin exchange Coinbase expands reach

    • Bitcoin exchange Coinbase is expanding into 13 European countries, allowing users with European bank accounts to now buy and sell Bitcoins (COINOTCQB:BTCS) in exchange for euros.
    • The move marks Bitcoin's accelerating adoption, and will add to the company's already 1.6M customer accounts.
    • European purchases and sales will initially be limited to €500 a day, but will be increased in time. Coinbase allows U.S. users to buy and sell up to $50,000 a day in Bitcoin.

    Gazprom's Q1 profit falls 41% on Ukrainian gas debt

    • Gazprom (OTCPK:OGZPY) reports a 41% Y/Y drop in FQ1 net profit to 223B rubles (~$6B) from 381B rubles, citing a foreign currency loss and Ukraine’s debt for natural gas supplies.
    • Last year's FQ1 results were helped as the state-owned entity paid less back to European clients in retroactive discounts than expected.
    • Gazprom, which provides 30% of the EU’s gas, halted supplies to Ukraine in June over unpaid bills, and now estimates it is owed $5.3B after raising the price for Ukraine to a level higher than it charges Germany, which Ukraine's government says is unfair.
    • Gazprom says it lost 172B rubles on depreciation of the Russian currency as well as a 71.3B ruble provision for “doubtful trade accounts” mainly related to Ukrainian gas debt.
    • Nabors Industries (NYSE:NBR) -4.3% premarket on reports that activist investor Pamplona Capital has sold its ~8.5% stake in the company.
    • Seadrill (SDRL -2.1%) CFO Rune Lundetrae says sanctions against Russia may still affect the $4.25B deal between SDRL, North American Drilling (NADL -5.5%) and Rosneft (OTC:RNFTF).
    • NADL and Rosneft rushed to sign five-year contracts for six offshore rigs at the end of July, just days before the EU broadened sanctions against Russia to target its energy sector directly; SDRL, which owns 70% of NADL, said at the time the contracts appeared not to be affected by the restrictions.
    • “It’s not necessarily looking brighter,” Lundetrae says, but notes that some of the contracts start as late as 2017 and none earlier than 2015, which reduces the risk for NADL and SDRL.
    • Alcoa (NYSE:AA) says it has signed a multi-year supply contract with Boeing (NYSE:BA) valued at more than $1B to supply aluminum sheet and plate products.
    • Alcoa says the deal makes it the sole supplier to Boeing for wing skins on its metallic structure aircraft; Alcoa says its plate products, such as wing ribs and skins, also will be on every Boeing platform.
    • The contract is the largest ever between the two companies.

     

     

     

    • High-flying U.S. Silica (SLCA -0.4%) enjoys at least three analyst price target raises, to $83, $83 and $77 from BofA/Merrill, Cowen and Howard Weil, respectively.
    • BofA says it came away more bullish on the stock following the company's recent investor conference, where it raised full-year EBITDA guidance implying a 2014-20 compound average growth rate of ~25%; the firm finds the raise particularly encouraging given management's conservative approach.
    • Cowen, in lifting its target from $67, sees the SLCA investment case evolving to a more durable long-term thesis, and continues to forecast secular growth in frac sand demand owing to rising proppant intensity (Briefing.com)
    • Continuing the crack down on foreign automakers in China, anti-monopoly regulators have fined a Chinese Volkswagen (OTCQX:VLKAY) joint venture $40.6M for fixing prices on vehicles and parts with dealers. A local arm of Fiat (OTCPK:FIATY) was also fined.
    • The probes from Chinese antitrust officials are part of a broader investigation taking place across many industries in the country. China's regulators say the recent investigations will widen market access for foreign firms and increase transparency.
    • Kroger (NYSE:KR) reports identical supermarket sales rose 4.8% (ex-fuel) in Q2.
    • FIFO gross margin rate -12 bps to 20.54%.
    • Guidance: FY14 EPS view lifted to $3.22-$3.28 from $3.19-$3.27. Identical supermarket sales growth of 3.5%-4.5% expected vs. 3%-4% prior.
    • KR +0.7% premarket
    • The cereal industry is undergoing a "death by a thousand cuts" with no single competing category or product delivering a knockout blow – but volume in the U.S. remaining stuck in a downward trend.
    • Though Greek yogurt, the smoothie craze, fad diets, and the explosion of organic brands are all major headaches for cereal sellers, it might be the ambivalent attitude of millennials that proves to be the biggest challenge.
    • A recent swing by Kellogg (NYSE:K), Post Holdings (NYSE:POST), and General Mills (NYSE:GIS) to wax nostalgic with marketing campaigns hasn't delivered as strong as results as anticipated and new product innovation (protein, gluten-free, no-fat) has been somewhat hit and miss.
    • The battle for breakfast: An aggressive push by fast-food and fast-casual restaurants as well as the appeal of hit-and-run breakfasts from convenience-store chains has also impacted cereal sales, according to analysts.

     

    • Jefferies lowers estimates on McDonald's (NYSE:MCD) after factoring in the company's latest weak monthly sales tally.
    • The restaurant chain lost traction in the U.S, China, and Japan in August with issues in all three regions which could linger well into Q4.
    • The estimate by Jefferies on McDonald's 2014 EPS goes to $5.40 from $5.60, while 2015 EPS is taken to $5.80 from $5.94.
    • A group of Senators have sent a letter to Burger King Worldwide (NYSE:BKW) in protest of the acquire-and-invert plan of the company involving Tim Hortons (NYSE:THI).
    • The Democrats make the argument that Burger King Worldwide relies on taxpayer money in a large number of ways for its U.S. operations.
    • There is also Republican support for a quick legislative fix to the issue of tax inversions, although many Republicans are likely to want to roll the issue into a broader tax code rewrite.
    • The Burger King issue is expected to remain a hot topic in D.C. right up until the November elections.
    • Shares of Crocs (NASDAQ:CROX) skid in early trading after Buckingham Research shifts its rating on the company to Neutral from Buy.
    • The investment firm warns that Crocs will see some near-term headwinds which could clip sales and profit.
    • CROX -2.6% premarket
    • Lululemon (NASDAQ:LULU) says it expects full-year revenue to be $1.78B-$1.80B based on a low single-digit comp. The consensus estimate of analysts is $1.78B.
    • The forecast for full-year EPS is $1.72-$1.77 vs. consensus $1.74.
    • Guidance assumes a tax rate of 38.5%.
    • Lululemon (NASDAQ:LULU) reports comparable-store sales fell 5% in FQ2.
    • Direct-to-consumer sales rose to $65.2M.
    • Gross profit rate -350 bps to 50.5%.
    • Operating margin -550 bps to 17.4%.
    • Inventory -5.2% to $176.5M.
    • Store count +9 Q/Q to 263.
    • Previous: FQ2 earningsdetails
    • LULU +12.2% premarket.
    • Shares of RadioShack (NYSE:RSH) reverse themselves with a hard skid after posting a 28% post-earnings early rally.
    • RadioShack (NYSE:RSH) reports comparable-store sales fell 20% in Q2.
    • Gross profit rate +30 bps to 35.3% on a shift in mix away from mobile.
    • SG&A expense ratio +920 bps to 48.0%.
    • The company says it's actively exploring options for overhauling its balance sheet.
    • RSH +27.9% premarket to $1.19.
    • Some early investors seemed to have jumped on the "actively exploring" balance sheet options part of the press release before stumbling on the part where RadioShack discloses its cash on hand is down to $30.5M from $180M at the start of the year.
    • RSH -5.5% premarket.

    Damn, I would have bought them for $182.5M!  Ski report: Vail Resorts acquires Park City

    • Vail Resorts (MTN +8.3%) acquires the Park City Mountain Resort from Powdr Corp. for $182.5M.
    • The deal ends all litigation between the two companies.
    • Vail expects $35M in incremental EBITDA in FY15 as a result of the deal.
    • Presenting at the UBS Global Paper and Forest Products Conference this morning, International Paper (IP +2.5%) management says it's moved from a study phase on possible conversion to an MLP structure to a "more serious evaluation phase."
    • At the same conference, KapStone (KS +2%) says it's taking a look at the MLP idea as well.
    • Others in the industry also have their tails in the air: Rock-Tenn (RKT +2.2%), Packaging Corp. (PKG +1.3%), MeadWestvaco (MWV +1.9%).
    • International Paper Tuesday night boosted its quarterly payout by 14% to $0.40 per share. The dividend is payable on Dec. 15 to holders of record on Nov. 17. The annualized yield is 3.2%.

    This sounds VERY GOOD:  Carbon Boost gives batteries faster recharge

    • A new battery from Exide Technologies (OTCPK:XIDEQ) will be able to recharge up to 1.5x faster due to the company's new Carbon Boost technology.
    • Carbon Boost was first developed for Exide's Start-Stop AGM and EFB batteries, and uses unique carbon additives to improved charge acceptance, resulting in a significant reduction in charging times.
    • Exide Premium Carbon Boost will be launched at the Automechanika tradeshow in Frankfurt this September, along with the company's new range of AGM and EFB batteries.

    Energy Focus +40% after winning $7.7M U.S. Navy order

    • Energy Focus (EFOI +40%) is sharply higher after receiving the largest single order in the company's history, a $7.7M order for U.S. Navy combatant ship forces.
    • EFOI says the order is for its energy efficient LED retrofit tubes, which are now employed and installed in more than 140 naval vessels in the U.S. Navy military fleet, up from fewer than 20 in the beginning of 2014.

    The zombie apocalypse is coming to Lion's Gate

    • Lion's Gate (LGF -0.3%) purchase of the North American rights to zombie thriller Maggiecould pay off, according to analysts.
    • The apocalyptic tale set to be released in 2015 has the right mix to potentially become a franchise which is a key element of the investment story on LGF with Hunger Games and Divergent set to run out the string.
    • Another bonus: The Arnold Schwarzenegger vs. zombies plot line has already created a buzz a year out.

    Time Warner CEO: HBO spinoff a no-go

    • "We're not going to do that," said Time Warner (NYSE:TWX) CEO Jeffrey Bewkes in response to a question posed to him yesterday at the Goldman Sachs Communicopia Conference on spinning off HBO.
    • The exec makes the case that scale at the company is expansive enough to keep HBO energized. It's a take that runs counter to the sum-of-the-parts argument on HBO made by some media analysts.
    • Comcast (CMCSA +0.2%) has struck a global wi-fi deal with Liberty Global (LBTYA+3.9%), according to The Wall Street.
    • Comcast (CMCSA +0.2%) and Liberty Global (LBTYA +3.1%) have agreed to allow users to access each others Wi-Fi networks, granting many Xfinity Internet and Liberty Global customers access to millions of new Wi-Fi access points in various countries by 2015.
    • The two plan to trial the shared Wi-Fi service later in 2014 and offer it on a wide-scale in 2015.
    • Comcast has more than 3M Xfinity WiFi hotspots in the U.S., while Liberty Global has more than 2.5M Wi-Fi home spots in various countries in Europe.
    • The shared service, which will include piggybacking on each other's network, will be introduced in 2014 and then rolled out on a broader scale in 2015.

    Sprint on the move as Claure addresses conference

    • "We're implementing a culture of must-have and nice-to-have," new Sprint (S +5%) CEO Marcello Claure tells the audience (webcast) at the Goldman Communacopia Conference. "We have to focus on must-have and nice-to-have will have to go."
    • Everything is on the table, he says, and "some [managers] will make it and some won't."
    • The advice he got upon becoming CEO of a public company for the first time was not to change anything for the first 100 days, "but I just couldn't help myself," and Sprint overhauled its offerings on day 4.
    • Previously: Claure: Sprint to slash prices, cut more jobs

    Another Buy List Stock takes off!  JDS Uniphase +12.4% on plan to split

    • "Combined, the two companies might be valued at $9.85-$14.80 with a midpoint of $12.33," says RBC Capital, upgrading JDS Uniphase (NASDAQ:JDSU) to Outperform, with price target lifted to $18 from $11.
    • Previously: JDS Uniphase to split into two public companies
    • JDSU +12.4% premarket to $13.61; other optical networking names, Ciena (NYSE:CIEN) +0.8%, Finisar (NASDAQ:FNSR) +1.5%.

  91. Thanks Jbur


  92. Munger quote / Phil – I guess good for another 200 points in TSLA!

    Though coming from Charlie Munger, that's impressive. The guy is no Cramer or Icahn!


  93. And here my quote of the day:

    Tim Richards, “In the face of the unknown a little humility is our best protection. Be tentative in your decision making, change your mind if the facts change, diversify widely and don’t go around boasting about your successes: be humble, and become wealthy.”  (The Psy-Fi Blog)


  94. Speaking of Munger and his partner Buffett, interesting discussion on stock valuation based on some Buffett's thoughts about bond yield, inflation and other factors:

    http://brooklyninvestor.blogspot.com/2014/09/buffett-on-market-valuation.html

    Long article but worth a look at least for the various valuation exercise (agree or not). Conclusion:

    But anyway, despite all of that, I am not forecasting low inflation forever.  It's more of an expression of my doubts about high inflation on the horizon that so many people expect.  As I've said for a long time, my suspicion is that we go along the road that Japan has, but in a much better situation.

    I really have no idea what is going to happen; where GDP or inflation will go etc.  I have no clue.

    But playing with these various factors that might impact p/e ratios, I can see why many see the market as reasonably valued despite the really scary looking Shiller p/e charts etc.


  95. AFL/JBur – You're right, I was going by this chart but it's a breakdown of their brokers, maybe not the same as what AFL actually is exposed to:

    Oliver/Jabob – So nice when I am able to share the noises that are always in the back of my head…  wink

    Munger/StJ – I took it as a subtle dis on Musk, not a compliment.  Good Richards quote.  Here's another:


  96. Oil's up about $3 off the lows ($93.25).  


  97. LTP back to $607K but STP down to $134K so we just can't get off that $741K mark.  I guess you can say we're well-balanced but it will be a problem as our hedges get closer to expiration so we'll need to reposition next week, whether we like it or now.  

    $25KP back up to 10%, Income Portfolio 7% and Butterfly Portfolio 22% so not much excitement this week but next week we'll be busy with our expiration adjustments.  We'll go over all on Tuesday's Webinar.  

    Still waiting for a whole day that the S&P is over 2,000 to add more long positions.  


  98. What would equity markets look like in an sustained era without inflation?  As flat as asset and product prices, presumably.  But the market concentration / monopoly power question arises, as we've already seen. Inquiring minds….


  99. zz

    Claimed or actual non-inflation?


  100. Munger / Phil – There is a subtle dis in there, no doubt and we know that Musk has high self-esteem. But the "boldest" part has to be a compliment… I would take it as such if someone said that about me. 


  101. Inflation / Zero – Look at the Japanese markets! Although the comparison might not be fair altogether because when Japan suffered through deflation, they had no company. Now, it's the new fad around the world… So who knows!


  102. Munger: I have personally met Munger and can tell you he has a huge ego and is one of the most arrogant people I have ever met. It's likely that his huge ego ( and pride of his vastus intelligentsia) is disturbed b/c Musk has him beat on both accounts. 


  103. Tesla Motors vs. Toyota: The gloves are off • 3:40 PM

    Clark Schultz, SA News Editor

    Toyota (TM -0.2%) says it has no new or pending battery projects under discussion with Tesla Motors (TSLA -0.3%).

    The announcement is the Japanese automaker's first official response to a statement from Elon Musk earlier this week that a fresh Tesla-Toyota partnership could happen within a few years.

    The development could ratchet up the dialogue in the electric car vs. hydrogen fuel cell debate as both automakers have aggressive plans for 2015 for their preferred technology and have been known to take swipes at each other.


  104. Munger Phil STJ

    Definitely a dis in their, Musk is the worst of know it alls when what he is really? Master manipulator and money grabber. He actually tells everyone how to help his causes and holy crap a lot of people believe he knows all the answers. May be the next Bernie Madoff.


  105. Someone is not jumping in ApplePay just yet and looks at worse case scenarios. Still, chip secured cards are a pretty easy way to pay already. Everybody uses that in Europe and it's quick and convenient. Is a phone that much more convenient? 

    http://www.nytimes.com/2014/09/11/upshot/apple-pay-tries-to-solve-a-problem-that-really-isnt-a-problem.html?abt=0002&abg=1

    And whatever the benefits of buying items with a phone offers, consumers will also have to deal with some key disadvantages. Because using Apple Pay requires that you use your fingerprint ID, you can’t do the equivalent of handing your credit card to a friend or family member and have them make a purchase for you. (No sending the intern to pick up coffee with instructions to put it on your card, for example.)

    And if your phone battery dies or you spill something and your phone goes kaput, you could easily find yourself broke and with no way to get home unless you keep plastic cards in your wallet as a redundancy measure, which is the whole thing Apple says it is trying to make unnecessary to begin with.

    There’s a broader lesson for anyone trying to overhaul these purchasing mechanics, which applies to Apple, digital-payment companies like Square, and even the enthusiasts of digital currency Bitcoin who envision that the cryptocurrency will become central to electronic transactions of all sorts.

    Capitalism has long made it easier to buy and sell things, with a centuries-long evolution from barter to metal coins to paper money to the credit card. But each of those represented a major advance in convenience over its predecessor. If Apple Pay or competing mobile payments products are to succeed, they’ll need to convince us they have a better way.


  106. Greg / replay

    Do you have a direct link from Webex for the replay? I like to file them locally and it’s a pain in the rear end to do that from Youtube. Thank you.


  107. And another take on ApplePay:

    http://www.bloombergview.com/articles/2014-09-10/apple-pay-could-make-you-poorer

    These are societal changes that probably will have some unintended consequences:

    Might electronic payments affect pricing decisions by sellers as well? MIT’s Amy Finkelstein found in 2007 that when toll facilities use electronic collection, toll rates end up significantly higher. Adoption of electronic collection produces a 20 percent to 40 percent increase in rates, apparently because payment is less salient to drivers.

    To be sure, electronic tolls are even more automatic, and less visible, than what Apple has in mind. But it is a safe bet that there will be an “Apple Pay premium.” And if payment-by-phone turns out to be as convenient as Apple hopes, or even fun, that premium might be even higher than the credit-card analogue.

    Of course, convenience matters, and all things considered, Apple Pay will probably be a great boon. But a warning for prospective users: When consumers don't use cash, and when payment is simple, they often ending up spending a lot more than they otherwise would — and regretting it later.


  108. Apple/StJ

    Think the guy who wrote that is missing the point, it's convenience.  If I don't have to take my wallet out and can just scan my phone to pay, it's easier.  Or If I was going into the movies and wanted to leave my wallet locked in my car so I didn't have to carry it with my and could just have my phone scanned, I'm doing that.  I don't think people are going to leave home without a wallet completely and be stuck broke with a phone with no battery.  Slanted article looking to knock Apple.  I remember a lot of those articles coming out when iTunes first started.  They would state why would anyone buy a song, when you can get the whole album for not much more or that you can get it free illegally on Napster.


  109. stjean

     AAPL pay has another issue and that is the communication link in the store. Phones generally don't work well in stores and for the masses to start using them other upgrades will be necessary and the transaction not through wires leaves another level of security open. I give it one up on AAPL medical being the next thing.


  110. Like I said Rustle, worst case scenarios! I like the concept, but it's not something that I must have…

    I would actually rather have the nanotechnology from IBM but apparently smart phones are more profitable right now.


  111. I wonder if the new slot machines at the Bellagio will take Apple Pay :)

    http://www.theonion.com/articles/casino-reporting-steady-profits-from-slot-machine,36906/


  112. Munger/Musk/dis – "There are old mushroom hunters, and bold mushroom hunters, but there are no old, bold mushroom hunters." [Traditional]


  113. stjean/"the inconvenience of needing your thumb"

    Would you give up some conveniences for greater security?  I would!


  114. Sustained/ZZ – That would be Japan for the last 20 years – not a pretty picture.  

    Musk/Jbur – But, as Jabob notes, Musk is a known liar (or exaggerator, to be polite).  That Hyperloop was grade-a BS and I think the GigaFactory is as well – not to mention TSLA's stock price. 

    ApplePay/StJ – The bottom line is (as Rustle notes) that my Phone can be my wallet but my credit card can't be my phone or my cash or my ID or all my store discount cards or other credit cards, etc…  That's all there is to it – boy scouts use Swiss Army Knives not because they have the best scissors or knives or toothpics or rulers – but because they have ALL of those things in one place.  

    The only advantage a CC has is that it doesn't need a battery and is harder to break but, if you were going to carry a phone anyway, size and weight aren't an issue and neither is batteries or fragility for the several Billion people who already carry phones and wallets.  Which one will they ditch?  

    Stores/Shadow – Have you had a cell phone since 1995?  There's really not a problem and certainly nothing that can't be solved with a $99 router.  

    LOL Pwright – they should try it.  

    Still no 2,000 but 1,172 on /TF is something at least.  


  115. Manipulation /NKD

    Speaking of manipulation… Exactly 1 minute before closing /NKD spikes 30 points so it closes green… Five minutes later those 30 points are almost gone!!! (I’m on the Dec contract).


  116. +$500 on /SI ($18.70).  It's not the kind of thing I'd leave on overnight though – just happy it worked.  

    /NKD/Akad – Also a nice short re-entry at 15,900!   That one we can play overnight. 


  117. Say what you will about Japan's "Lost Decade" it was a peaceful and relatively prosperous time with unemployment under 5%.  What Ray Dahlio probably calls a "Beautiful Deleveraging".  America should be so lucky. ;)


  118. hyperloop/Phil

    And he stole that idea from a professor at MIT who published it 2 years prior.  Colbert had him on.


  119. Overnight /NKD

    Yes, I have been on /NKD all week, including nights, making between $100 and $600 per day. I have also been moving up my average position from 15695 to 15885, now with 4 contracts thanks to that last spike. I expect to sell 2 of those for $100 profit and get back to 2 contracts.


  120. Phil

    I ditched my cell phone Jan 2013 and just a few weeks ago Arlyn's had issues. Seriously I only say things about what I really know and you think I hate AAPL. I don't but you think they are the answer with every tiny variation. Check out you latest drivers license, the resemble the latest $100 bill. Will the cops except a corruptible  phone? Not likely. An Apple world has been going for decades and not succeeded because many don't want to submit to a system. So put back moderation of me but don't preach ready things you disagree. I disagree on AAPL and TSLA popular opinion because it assumes compliance. 


  121. your latest       they resemble   read not ready      and screw my opinion we have a perfect digital world where some peoples Macs crash on TOS, but not yours!


  122. Apple/ your phone can be your subway travel card, wallet, music player, entertainment,library, satnav… The list goes on… It's going to be the theme. Our kids and grand kits will think having a wallet is what old people do!


  123. Kinki:  Very useful point.   For me, anyway.  I've spent the last half-hour researching and trying to imagine what a sustained zero inflation environment would look like [no, not a precipitous loss of all asset value a la "Great Depression", as I don't think that's the correct paradigm for our much more globalized economy].

     

    In a world where inflation not expected to devalue all fixed-rate debt in real terms — and where variable rate debt inherently comes with tremendous investment decision uncertainties —  I don't believe it improbable to think that predictably low inflation for the foreseeable investment-relevant horizon might eliminate, rather than exacerbate, many of the distortions that debt can, and has, created over time, amplifying boom & bust cycles, unduly enriching some and unfairly beggaring others.  Of course, I'm no economist, but economists seem to agree on so little that I don't find this idea as unlikely as it might sound at first blush.


  124. MUSK MUNGER

    PLAUSIBLY  A BETTER NAME THAN ELON MUSK.BUT ALSO LIKE A CHARACTER IN RIDDICK? ONE GUY WITH A BILLION (HOW COME CHARLIE JUST HAS ONE FIFTIETH OF WHAT THE BUFFER HAS?)  ESSENTIALLY MAKING FUN OF ONE GUY WITH GIGA BILLIONS ..ISN'T ELON THE TONY STARK OF HIS GENERATION?

    I THINK WHAT MUNGER WAS SAYING IS SHORT IT IN A MUNGERIAN SORT OF WAY.


  125. Tony Stark is funny though and I wouldn't short him!


  126. For those of you who follow the NFL (besides domestic violence) – some stats from Nate Silver:

    http://fivethirtyeight.com/features/skeptical-football-go-go-andrew-luck-and-a-must-win-for-the-pats/

    morris-feature-nflweek1-chart-1

    So a team that start 3-0 has a 75% chance of making the playoff! 0-3 and basically it's down to 2%!


  127. zeroxzero economists

    Once upon a time economics was based on history, observation and mathematics. Some old guys still believe that but for the last 2 to 3 decades economics have been designed to present a preferred picture. In the last few years we have changed what and how we look at everything and changed how it is calculated and what that means. The meaning has become the goal real or not and more can be changed as needed.

    The phone unless wealth is redistributed is not going to replace everything when 90% don't have them. I have seen more things become necessity but what has been eliminated without replacement? Statistically you can create any elusion with a select 3% example.


  128. HK – going over the buy list and selling the 2016 $5 puts for 1.40 today will give you a 20% annualized return even on 100% margin (such as an IRA). With regT margin, you get a sweet annualized 46% return. I like it!



  129. From Bloomberg, Sep 11, 2014, 10:21:29 PM


    Sept. 11 (Bloomberg) — Bhaskar Laxminarayan, the chief investment officer at the Asian banking unit of Pictet & Cie., talks about China’s economy and stocks.
    Laxminarayan also talks about central bank policies in the Philippines and Indonesia, and India’s economy. He speaks in Hong Kong with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    Most Asian stocks slipped with gold
    after Chinese lending data as wheat dropped a fifth day. The
    dollar headed for its biggest weekly gain versus major peers
    since November as investors assessed the U.S.-rates outlook
    before the Federal Reserve meets next week.

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

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


  130. From Bloomberg, Sep 11, 2014, 4:29:43 PM


    U.S. Senator Ron Wyden, a member of the Democratic Party from Oregon. Photographer: Victor J. Blue/Bloomberg

    The U.S. Treasury Department said
    it’s considering ways to end a “loophole” that allows hedge-fund managers to avoid taxes by routing their investments
    through an insurance company in low-tax countries like Bermuda.

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

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


  131. From Bloomberg, Sep 11, 2014, 7:20:00 PM


    David Woo, head of global rates and currencies at Bank of America in New York. Photographer: Rukhsana Hamid/Bloomberg News

    Japan is likely to replace China
    and U.S. banks as the lead supporter of Treasuries as the
    Federal Reserve moves toward ending bond buying, according to
    Bank of America Merrill Lynch.

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

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


  132. From Bloomberg, Sep 11, 2014, 7:03:30 AM

    Whose currency will it be?

    Currency markets are back in the news as the U.S. dollar has gained sharply against the euro and yen, and jitters about Scottish independence have hit the pound. So far, though, analysts are largely missing an important potential consequence of the gyrations: They could erode the broader financial stability that central banks have worked so hard to achieve.

    To read the entire article, go to http://bv.ms/1wi6nQM

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


  133. From Bloomberg, Sep 11, 2014, 2:01:51 PM


    Russia’s annexation of Crimea and support for the eastern Ukraine rebellion led the EU to first cancel summit meetings with President Vladimir Putin, followed by asset freezes and travel bans on Russian politicians, military officers and businesspeople. Photographer: Andrey Rudakov/Bloomberg

    The U.S. joined the European Union in stiffening sanctions on Russia over Ukraine, as the 28-member bloc offered to ease the restrictions once the Kremlin makes a good-faith effort to end the conflict.

    To read the entire article, go to http://bloom.bg/1qGN4gF

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


  134. From Bloomberg, Sep 11, 2014, 10:05:25 PM


    Sept. 12 (Bloomberg) — China stepped up its defense of recent antitrust probes into companies including Microsoft and Volkswagen after U.S. and European trade groups said investigators were unfairly targeting foreign businesses. Craig Trudell has more on “First Up.” (Source: Bloomberg)

    China stepped up its defense of recent antitrust probes into companies including Microsoft (MSFT) Corp. and Volkswagen AG (VOW) after U.S. and European trade groups said investigators were unfairly targeting foreign businesses.

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

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


  135. From Bloomberg, Sep 11, 2014, 9:15:59 PM


    Choi Kyung Hwan, Finance Minister of South Korea. Photographer: SeongJoon Cho/Bloomberg

    The Bank of Korea kept borrowing costs unchanged, opting to watch the effects of last month’s rate cut and fiscal stimulus on Asia’s fourth-largest economy.

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

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


  136. From Bloomberg, Sep 11, 2014, 2:05:29 PM


    Bill Gross, co-chief investment officer of Pacific Investment Management Co. Photographer: Andrew Harrer/Bloomberg

    While the idea of using leverage may still invoke memories of the 2008 financial crisis, the billionaire manager of the world’s biggest bond fund says it makes sense now to borrow money to magnify returns in the credit markets.

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

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


  137. Watch this video at http://bloom.bg/1tNTzAM

    Boots on Ground Needed to Fight Islamic State: Rep. Moran

    Sept. 11: Rep. Jim Moran (D-VA) discusses President Barack Obama’s plan to combat the Islamic State militant group.

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


  138. From Bloomberg, Sep 11, 2014, 10:15:19 PM


    A man on a motorcycle drives past a man pulling a cart laden with cardboard in the Dongmen area of Shenzhen, China. Photographer: Brent Lewin/Bloomberg

    China’s broadest measure of new credit trailed analyst estimates in August, adding to the government’s challenge to meet its economic growth target amid a slumping property market and a pullback in manufacturing.

    To read the entire article, go to http://bloom.bg/1pV1ox8

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


  139. scottmi/HK

    Why not add the 2016 3/5 BCS for net .35 credit. You collect an extra .95 per contract plus the 1.40 for the puts if HK holds simply holds $5 until January 2016.


  140. From Bloomberg, Sep 11, 2014, 12:00:01 PM


    Li Keqiang, China’s premier, is seeking to shift financing to official channels after shadow-banking assets jumped 32 percent in 2013 to 38.8 trillion yuan, according to Barclays Plc estimates. Photographer: Brent Lewin/Bloomberg

    Chinese banks are selling notes
    backed by loans at a record pace as they seek to offset a slump
    in deposits, prompting credit analysts to warn of the risks of
    securities that sparked the global financial crisis.

    To read the entire article, go to http://bloom.bg/1pUv6lM

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


  141. From Bloomberg, Sep 11, 2014, 7:01:00 PM


    European Central Bank President Mario Draghi. Photographer: Ralph Orlowski/Bloomberg

    Investment in the euro area’s economy will only return to pre-crisis levels if governments work with the European Central Bank to achieve reforms and stimulate growth, ECB President Mario Draghi said.

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

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


  142. From Bloomberg, Sep 11, 2014, 5:22:34 PM

    Chile cut its benchmark interest
    rate
    by a quarter point for the seventh time in 12 months as
    investment tumbles and the economy expands at the slowest pace
    in more than four years.

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

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


  143. From Bloomberg, Sep 11, 2014, 9:02:55 PM


    Sept. 12 (Bloomberg) — Prime Minister Shinzo Abe will need a 5 trillion yen ($47 billion) fiscal stimulus package to cushion the impact of a further increase in Japan’s sales tax, a survey by Bloomberg News shows. John Dawson reports on “First Up.” (Source: Bloomberg)

    Prime Minister Shinzo Abe will need a 5 trillion yen ($47 billion) fiscal stimulus package to cushion the impact of a further increase in Japan’s sales tax, a survey by Bloomberg News shows.

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

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


  144. From Bloomberg, Sep 11, 2014, 3:17:55 PM

    The U.S. budget deficit narrowed 22 percent in the first 11 months of the fiscal year as accelerating economic growth boosted tax receipts, Treasury Department figures showed.

    To read the entire article, go to http://bloom.bg/1AD8jkX

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


  145. From Bloomberg, Sep 11, 2014, 4:55:40 PM


    At the center of all this is still Ukraine.

    For the first time since Russia annexed Crimea six months ago, the European Union has surprised President Vladimir Putin instead of the other way around. Despite a cease-fire in eastern Ukraine, and despite Russia’s apparent withdrawal of troops from the region, the EU decided this morning to impose new sanctions on Russia, starting tomorrow.

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

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


  146. From Bloomberg, Sep 11, 2014, 6:11:30 PM

    Not a lot of sinister-looking Warren Buffett photos!

    Here’s a story for you. Warren Buffett was thinking about investing a few billion dollars in a deal. But he worried that the deal might be negatively affected by some possible legislation. To assess the odds of that legislation happening, and being bad for his deal, he did what anyone else would do if they could: He called Senator Orrin Hatch to say “you’ve got to do something about” the legislative discussions. And then Hatch gave Buffett some non-public information about the possible legislative action. “I think he wanted to know where we were going and he knows I’ll tell him the truth, which I did,” said Hatch, publicly, with his own mouth.1 So, armed with the information he got from Hatch, Buffett went off and made his investment.

    To read the entire article, go to http://bv.ms/1rYyWC6

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


  147. From Bloomberg, Sep 11, 2014, 1:41:06 PM

    Philippa Dunne and Doug Henwood, managers of the Liscio Report, have been updating the chart below.

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

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


  148. From Bloomberg, Sep 11, 2014, 11:23:01 AM

    In the long-term, he lost.                                                   

    If you use the word “Keynesian” as a synonym for “socialist,” “progressive,” or “liberal,” well my friend, you’re doing it wrong.

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

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


  149. Some kind of cobra pattern to the charts? Or am I imagining things?


  150. SPY 5 MINUTEGood morning!  

    Futures are flat but look down on TOS because they rolled the contracts.   No problem unless you held things overnight and, if so, time to get out and move to new contracts – it's way too confusing to track the old and new for a week.  

    That's giving us 16,961 on /YM, 1,997 on /ES, 4,084 on /NQ and 1,169.3 on /TF.  /NKD is still 15,885 and the /NKDU4 contract should have stopped out anyway as we dipped to 15,820 (+$400 at 10:30pm) before bouncing back to 15,920 this morning.

    So, no change of lines, Dow is most affected but it's always the flakiest index anyway – the others are pretty much back where they were so no need to change our lines but we'll keep in mind the Dow Futures have little upside resistance for the next 150 points.  

    SPX WEEKLYI know it must get boring hearing Dave and I bitch about the quality of the rallies and the manipulated closes but that is what's happening – we're like weathermen in San Diego – pretty much the same report every day…  One day something might happen, maybe.

    The S&P is down 10 for the week (0.5%) so that's the magic number today to keep the weekly chart from looking ugly but really 2,000 is the key – they really don't want to close lower than that for psychological reasons.  We have still NEVER had an entire day over 2,000 – not one! 

    Last Friday though, we closed at 2,007.71 after opening at 1,998 and falling to 1,990.10 so strap in for a possible wild ride again today which, like last week – we'd do best to ignore for the most part. 

    INDU DAILYThe Dow is double plus unpretty but, (Maya), it's not a Spitting Cobra pattern yet, those are a bit more jagged but another fake run up to 17,150 that quickly fails would do it!  The weekly S&P chart above has more of that look – the sort of coiling action at the top, ready to strike.

    Speaking of 17,150 – a fall to 17,000 is 150 points so the 40% Strong Bounce is 60 points to 17,060.  If the Dow has trouble at that line – that's going to be a big sign of weakness and it shouldn't have trouble at 17,075 either (50%) if it's really going to rally back.  

    Asia didn't do much, kind of mixed but Shanghai put up 0.8% gains.  Hang Seng is at 24,595, still down 400 from 25K to finish the week on a down note.  

    Asia Less Vulnerable to Taper Tantrum, But Risks Remain

    Goldman Sachs says emerging markets are better prepared than last year to handle the impact of Fed monetary policy tightening.

    • Tokyo Shares Continue Rise

      Stocks in Japan continued to push higher with the dollar's rise, but Hong Kong fell amid uncertainties over China's economic growth and monetary policy outlook.

    • Rising Dollar Takes Shine Off Gold in Asia

      A rallying U.S. dollar is fueling expectations in Asia that gold prices, already at their lowest in more than seven months, have further to fall, offsetting the expected rise in demand from year-end festivities in China and Indian weddings. 17 min ago

    China Credit Gauge Misses Estimates as Growth Risks Escalate

    EWG WEEKLYEurope is also mixed this morning but generally selling down into lunch so far.  Another thing the US Media is purposely ignoring is the 12.5% correction in Europe (example on Germany chart) since July that, so far, has bounced weakly (4-point drop on EWG has weak bounce at 28.8 and strong at 29.6) – failing exactly at the weak bounce line (the top blue line on Dave's chart).  

    I know the narrative from the MSM is to ignore the rest of the World and I hate to sound like a broken record but that's exactly what they told us while we were "rallying" in 2008 – just sayin'….

    Of course, in 2008, we weren't almost at war with Russia and there wasn't a massive terrorist takeover of Iraq and Syria and Spain wasn't about to burst into civil war and Ireland wasn't breaking out of the UK and Italy wasn't teetering on Depression with the rest of Europe clearly in Recession and all with twice as much debt than they had at the time so yes, this time is different – it's MUCH WORSE!!!  

    Germany Bans Islamic State

    Germany confirmed Friday it is banning the Islamic State militant group after it was found that hundreds of German nationals and residents had traveled to Syria and Iraq to support the radical faction.

    Germany Sees Rising Anti-Semitism Among Muslims

    Authorities have largely succeeded in banning anti-Semitic speech from the public domain, but community activists say the focus on the far-right has left prejudice in Muslim communities unchecked.

    ECB's Noyer: Euro Still Too Strong

    • Eurgroup Doesn't Condemn France on Budget

      Eurozone finance ministers didn't immediately condemn France for missing its budget targets, saying they await an evaluation of Paris's budget proposals by the European Commission.

    France Imported German Wheat After Poor Harvest

    French buyers have been forced to purchase wheat from Germany after excessive rain ruined the quality of French grain, the chief executive of German agricultural merchant BayWa said.

    Scottish Leader Says U.K. Using Fear

    Alex Salmond said the U.K. government was using intimidation tactics to persuade Scots to vote against independence by greatly exaggerating the financial risks.

    Iceland Volcano Sending Gases Throughout Region

    Foul-smelling gases from a volcanic eruption in Iceland are pestering the region, reaching Norway and Finland more than a thousand kilometers away.

    International Energy Agency notes ‘remarkable’ oil demand growth fallThe world’s appetite for crude oil slowed at a “remarkable” pace during the second quarter because of weak economic growth in Europe and China, prompting the International Energy Agency to revise lower its demand forecasts for 2014 and 2015.

    Meet The Puppetmasters: Here Are The 25 Most Politically Influential Billionaires In The US