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Friday Follies – Will Today be the 13th Day Below S&P 2,000?

SPY 5 MINUTE12 failures so far.

12 trading days since the S&P first hit 2,000 (Aug 25th) in which we have failed to hold 2,000 for a full day.  Not one and, unless the Futures pop 10 points before we open, not today either.  On 10 of those days, we've had a late-day run-up on low volume that popped us over 2,000 and on 7 of those days, 2,000 held at the close but EVERY SINGLE DAY – it also failed to hold.  

Let's not forget that, during this time, we've had TRILLIONS of Dollars of additional stimulus pledged by Carney, Draghi, Kuroda and other minor Central Banksters and Yellen has certainly been as doveish as she could by (while still tapering our existing Trillion Dollar stimulus).  This is how our market behaves WITH Trillions of Dollars of cash being pumped into the Global economy – I wonder what will happen when it stops?  

Of course, maybe it won't stop but, if it doesn't, this chart will look even uglier.  This is a chart of our projected net annual interest payments on our debt in 10 years.  That's $880 BILLION Dollars each year, just in interest payments, up $650Bn from the $233Bn we are spending now.  

That's WITHOUT additional stimulus so I guess we can go for a bit more and make it an even Trillion, right?  These are what we used to call CONSEQENCES – back when we used to care about such things.  The US is not the leader in debt issuance, not by a long shot.  Japan is 150% more in debt than we are and China has now doubled our debt to GDP ratio, after having been a creditor back in 2007 but now the undisputed king of stimulus spending.    

EWG WEEKLYEurope is also a mess.  As I said to our Members in an early-morning Alert:  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 Fry'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!!!  

Hopefully AAPL can save us today as the iPhone 6 begins taking pre-orders this morning and Apple's web site has already crashed once (back up now) as people begin the rush.  

It's Friday, so we're not going to take today's action too seriously and, as I mentioned in yesterday's post, we've doubled down on our DXD hedges into the weekend for protection.  

The top 1% should be in a good mood as their GOP lackeys successfully filibustered an attempt at Campaign Finance Reform and that means it's going to be clear sailing into the November elections for our nation's Puppet Masters (see Brookings Brief) to tighten their grip on our once-great Democrocy/now Oilgarchy-Corporate Kleptocracy.  

Have a great weekend,

- Phil.  


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  1. Good morning!  

    National Review Columnist A.J. Delgado told Fox News host Sean Hannity on Wednesday that Ray Rice’s wife, Janay, had actually “knocked herself out” by…

    What's the insurance cost on that thing?

    The design uses engineered steel pins that drive into the rock.

  2. Campaign finance / Phil – The irony escapes these people:

    Senate Minority Leader Mitch McConnell (R-KY), a fierce opponent of campaign finance restrictions, blasted Democrats for bringing up the measure.

    "I have to say it’s a little disconcerting to see the Democrat-led Senate focusing on things like reducing free speech protections for the American people," he said before the vote. "This is what they chose to make their top legislative priority this week. Taking an eraser to the First Amendment."

    Free speech for the top 0.01% restricts the free speech of the other 300M people, but that's not erasing the First Amendment there! Jefferson is rolling in his grave now.

  3. Oil Lines

    R3 – 97.06
    R2 – 95.25
    R1 – 94.05
    PP – 92.24
    S1 – 91.04
    S2 – 89.53
    S3 – 88.03

  4. That's a tough choice

    There has long been speculation that some of China’s deadly earthquakes were caused by nearby dams and filling of reservoirs. If the findings of Fan Xiao, an engineer at the Sichuan Bureau of Geology and Mineral Resources, are accurate, they raise a serious question: Should China’s government stop operating its dams to reduce life-threatening quakes, even if it requires losing an important clean energy source?

  5. How the Kochs bought the Florida State University economics department.  - Koch foundation proposal to college: Teach our curriculum, get millions - Proposed gift from Koch foundation to Florida State University in 2007 came with strings attached.

    BofA moves up forecast of first rate hike by 3 months

    • The first Fed rate hike will occur in June of next year, not September as earlier forecast, says the team at Bank of America. Over the 18 months following, BofA sees rate hikes at every other Fed meeting and a peak Fed Funds rate of 4%.
    • Why the changed forecast? Growth and inflation data have been stronger than the bank expected, and booming asset markets alongside falling long-term bond yields have triggered a "re-engagement of the banking system."
    • Also seen is a gradual change in rhetoric from Janet Yellen, and the bank expects an imminent change to the Fed's long-used phrase of rates at zero for a "considerable time."

    Stressed Borrowers Rattle Resurgent Subprime Lending Industry. Subprime lenders have surprised everyone in recent years by churning out billions of dollars in loans that have not led to a pileup of bad debts. But this month, some signs have appeared that suggest subprime lenders are pushing this spree to the limit. The problems are occurring when they extend credit to particularly risky borrowers or make loans that are harder to repay. The latest indicators are a reminder of the constraint that has always dogged subprime lending: The number of stressed borrowers who can take on debt and repay it with relative ease is often smaller than lenders believe. “We’re five years into the new cycle, so you’ve got to imagine that there are excesses cropping up,” said William Ryan, of Portales Partners, a research firm.

    Draghi announces need for euro zone to increase investment

    • After announcing a new round of stimulus measures a week ago, Mario Draghi called on governments to match the ECB's effort to boost growth in the euro zone.
    • "A decisive rise in investment is essential to bring inflation closer to where we would want to see it, to stimulate the economy, and to bring down unemployment," says Draghi.
    • The ECB President also signaled that the central bank can't foster economic growth on its own, and that governments should remove the barriers to investment that are entrenched in regulatory red tape.
    • The EU has agreed to implement its new sanctions against Russia today, but will continue to assess their application based on the "situation on the ground."
    • The new restrictions will hit Russia's state-controlled banks and oil companies, but will not include the gas sector, including Gazprom (OTCPK:OGZPY), the biggest gas supplier to Europe.
    • The U.S. is preparing its own set of new sanctions, which will be announced by President Obama later today.

    What a fantastic economy this must be!  IEA cuts oil demand forecasts, citing economic weakness in China, Europe

    • The International Energy Agency lowers its forecast for global oil demand growth for the third month in a row, calling the recent slowdown in demand "nothing short of remarkable."
    • The IEA now foresees global oil demand growth of 900K bbl/day in 2014, a decrease of 65K bbl/day vs. last month's forecast and down by 300K bbl/day since July.
    • Oil demand growth in Q2 was at its lowest in two and a half years due to economic weakness in Europe and China, a trend the IEA expects will continue to hurt demand; the agency now expects oil demand to rise by 1.2M bbl/day next year, but that's 100K bbl/day less than it forecast last month.
    • Saudi Arabia finally appears to be responding to the lower demand outlook, as it cut its oil output by 330K bbl/day last month and appears to have run below 7M bbl/day for the last four months, its lowest level since Sept. 2011.

    Tesla's $1.3B tax breaks approved by Nevada lawmakers

    • Tesla's (NASDAQ:TSLA) $1.3B in tax breaks and other incentives has been approved by Nevada lawmakers, cementing a deal for the electric car company to construct a $5B battery plant in the state.
    • The new bills grant sales tax exemptions for 20 years, an incentive estimated at $725M, and will allow Tesla to save more than an estimated $300M in payroll and other taxes through 2024.

    Potash Corp. miners rescued after fire

    • Potash (NYSE:POT) says it has rescued the last of 96 miners trapped after a fire in one of its Saskatchewan potash mines, after some of them had spent more than 24 hours underground.
    • Fire broke out Wednesday in a water truck inside POT's Allan mine, and the workers were sent to underground refuge stations while a crew entered the mine and put out the fire.
    • POT says it will assess the situation before deciding when to resume mining.

    CSX says well positioned for continued growth as long-term trends favor rail

    • CSX today raised Q3 EPS guidance to slight growth Y/Y from flat, saying its volume in the current quarter is growing at a faster rate than expected.
    • CFO Fredrik Eliasson told the UBS Best of Americas conference in London that crowded and underfunded highway systems are boosting demand for rail transportation.
    • The railroad operator expects Q3 EPS at slightly above last year's $0.45, despite increased costs to keep the network fluid and restore higher service levels; the analyst consensus expects $0.47.
    • CSX says economic expansion is spurring broad-based growth across nearly all its markets, as the housing market continues to recover, another strong harvest is expected and the energy renaissance continues to drive growth in the industrial sector.
    • Titan Machinery (TITN +4.9%) popped more than 5% around noon and held most of its gains, as CEO David Meyer disclosed a purchase of 90,250 shares at $13 each worth ~$1,174M; the transaction occurred yesterday.
    • Meyer now owns more than 750K TITN shares.
    • Burger King (NYSE:BKW) will meet with leaders next week to discuss a $7.25B loan package, including a $6.75B seven-year term loan and a $500M five-year revolver, to back its $11.5B purchase of Tim Hortons (NYSE:THI).
    • The loan, being arranged by JPMorgan Chase, would be the single biggest term loan for an acquisition by a speculative-grade borrower since 2007.
    • Berkshire Hathaway (BRK.ABRK.B) is also providing $3B of preferred equity financing for the transaction.

    More on Darden Restaurants' FQ1

    • Darden Restaurants (NYSE:DRI): FQ1 EPS of $0.32 in-line.
    • Revenue of $1.6B (+4.6% Y/Y) beats by $10M.
    • Press Release
    • Darden Restaurants (NYSE:DRI) reports a -1.3% dip in same-restaurant sales at Olive Garden in FQ1.
    • Longhorn Steakhouse ran a +2.8% comp, while the Specialty Restaurant Group was at 2.1%.
    • Revenue by brand: Olive Garden -0.5% to $912.5M; Longhorn Steakhouse +9.7% to $356.9M; Specialty Group +14.5% to $322.3M.
    • Darden Restaurants (NYSE:DRI) declares $0.55/share quarterly dividend, in line with previous.
    • Forward yield 4.56%
    • Payable Nov. 3; for shareholders of record Oct. 10; ex-div Oct. 8.

    TiVo set-top deal with Broadcom looks like big European boost

    Everybody's doin' it:  HP Russia pleads guilty to bribery allegations

    • Hewlett-Packard's (NYSE:HPQ) Russian subsidiary, ZAO Hewlett-Packard (also known as HP Russia), has been sentenced to pay a $58.8M fine after pleading guilty to violating U.S. anti-bribery law.
    • HP Russia admitted to having created a multimillion-dollar slush fund, at least part of which was used to bribe officials.
    • The fine is part of a broad package of $108M in criminal and civil penalties announced by the DOJ and HP in April to resolve allegations of violations by the company’s Russian, Polish and Mexican subsidiaries.

    eBay to launch mobile ad network

    • eBay (NASDAQ:EBAY) plans to launch an advertising network for its mobile app in the fourth quarter, shifting from the "retail-only" space into the fast-growing mobile ad market.
    • Despite the new danger of drawing people away from the website, eBay's head of advertising Stephen Howard-Sarin downplayed the risk, citing how many users repeatedly return to the site.
    • eBay will also have an easy time tailoring the ads, as users have a universal login across all their devices.

    ROFL – Why wait for them to actually go public and set a price?  Wedbush initiates Alibaba coverage at Outperform

    • Alibaba (Pending:BABA) is started with an Outperform rating and $80 price target at Wedbush, where analyst Gil Luria sees potential gross merchandise volumes greater than Amazon and eBay combined.
    • Wedbush foresees growth in Chinese e-commerce at 30%-plus for several years based on low penetration and leapfrogging of offline commerce, and views BABA’s competitive position as sound given its network effect and scale advantages.
    • Meanwhile, several companies that have filed IPOs are waiting for Alibaba to make sure they aren't hit with an IPO market freeze as happened with the Facebook IPO; sidelined companies include solar installer Vivint Solar, internet company GoDaddy, and online storage Box Inc.

    Verizon readying digital video service

    • Verizon (NYSE:VZ) may introduce an over the Internet digital video service by the middle of next year, says chief executive Lowell McAdam.
    • The new service would be similar to Netflix, Amazon and Hulu but would also stream live channels via a technology called multicasting. The technology avoids clogging the network, delivering content straight from broadcasters to smartphones over a single stream of airwaves that users can "tune" into.
    • The U.S. government threatened to slap fines of $250K/day against Yahoo (NASDAQ:YHOO) in 2008 if the company didn't comply with a demand to hand over user data, according to the Washington Post.
    • The report provides details from documents unsealed today showing an ultimately unsuccessful legal battle by YHOO to resist the government's demands.
    • The documents show how federal officials forced U.S. tech companies to participate in the National Security Agency's PRISM surveillance program.

    Apple back above $600B in market cap, Exxon hangs on vs. Google for no. 2

    • After moving back above the $100/share level, Apple (NASDAQ:AAPL) is back over the $600B mark in market cap, pushing it nearly $200B above Exxon Mobil (NYSE:XOM), the next largest company in the U.S.
    • XOM is still valued at more than $400B, but Google (NASDAQ:GOOG) at $397B and Microsoft (NASDAQ:MSFT) – which has surged in 2014, adding $74B in market cap to $386B – are closing the gap.
    • Berkshire Hathaway (NYSE:BRK.B) completes the top five with a $339B market cap; no other companies are worth more than $300B.
    • Rounding out the top 20 market caps: JNJWFCGEWMTCVXPGJPMFBVZIBM,PFEKOORCLTMRK.

  6. I guess it could be big for ATVI:

    Despite that, retailers are betting that gamers will line up to buy a brand new title this week. The makers of Destiny, which revolves around a group of “guardians” trying to protect Earth’s last city, sold over $500 million worth of the game on the first day of its worldwide release, Sept. 9. (That $500 million in sales is what retailers have paid the publishers, not end-user spending, but “while this is not the same as actual gamer purchases, retailers would not order the title on this scale without confidence in the high level of consumer demand,” writes Macquarie’s Ben Schachter in a note.)

    Part of Destiny‘s early success may be attributable to the pedigree of its publisher, Activision, which lists Call of Duty, the Quake series, and the Guitar Hero series, among others, as part of its line-up. The first-day sales for the new game have helped justify Activision’s ambitious 10-year plan (paywall) for the Destiny franchise, in which the company has committed to spending that same amount—$500 million.

    I guess I'll have to try it!

  7. intern

  8. Interesting observations:

    “In my great grandfather’s day great wealth was largely commodity and manufacturing based. Because the workers and the tasks were physical there was interaction. I remember when I went to the company Christmas parties as a child. I saw how many people my family was responsible for. I was taught to have a middle-class perspective, which is why I’m so frugal.”

    “Is that different today?” I tickled my martini’s green olive with the swizzle stick.

    “Great fortunes are being created through technology and finance and there is little or no contact with workers, customers. One isn’t held accountable for bad behavior. Many wealthy exist in a cossetted ether. They live protected lives in luxury and don’t have to come in contact with the average person, adding up to a sense of un-reality. The idea that the world exists for them and owes them what they want when they want it.”

  9. Irony/StJ – That was the genius of the Supreme Court decision, now, when one of these jackasses says "American People" they can mean Corporate People.  

    Deflation continues:

    • Aug Import/Export Prices: Import prices -0.9% M/M vs. consensus of -1.0% and -0.3% prior (revised).
    • Export prices -0.5% M/M vs. consensus of -0.1% and 0.1% prior (revised).
    • August Retail Sales+0.6% at $444.4B vs. in-line with expectation, 0.3% (revised) in July.
    • Ex-auto +0.3% in-line with expectation, +0.3% (revised) prior.

    Alibaba closing books early on IPO

    • Its road show barely begun, Alibaba (Pending:BABA) is closing the books on its IPO, reports Bloomberg, as the offering has been covered at all price points.
    • It's no surprise, says CNBC's Dan Nathan, as a hedge fund friend told him the IPO was already pre-sold to mutual funds. The road shows's purpose, he says, is to generate media hype so U.S. retail investors show up in the after-market.


  10. Good Morning!

  11. XRT $89.30 at the open on the BTE Retail Sales Report.  We'll see what they can get out of it but this is not a strong reaction as they already popped from $88 on Weds in anticipation of good back to school numbers.  

    Indexes not looking too strong at the open – 16,950, 1,995, 4,080 and 1,165 all make good shorting lines (short the laggard!).  

    Oil failed to hold $93 after $93.75 high and a tempting short but too risky on a Friday.  Gold $1,234, Silver $18.55 (and I like it long with conviction on /SI) with the Dollar at 84.52.  

    If the Dollar fails 84.50, it's game on for Silver longs, game off for index shorts but game on for /NKD shorts (now 15,920) again.  

    We're waiting on Consumer Sentiment at 10 along with Business Inventories.  

  12. OK, that was a nice drop already – it hasn't paid to be greedy on these dips so be careful – you can always switch horses after cashing out at 16,900, 1,985, 4,070 and 1,160 if they break.  

  13. /NKD also a bit of a laggard – still 15,890.  

  14. Last chance to get on our early bird list for LAS VEGAS!!!  

    The conference will be Sunday, Nov 9th and Monday, Nov 10th with live trading on Monday.

    • Last year we had our traditional Saturday (8th) dinner at Nobu (optional) in Caesar's Palace (where the conference was) followed by a Poker Tournament that night.
    • Sunday we started at 10 am and Brunch was served and we talked about various trading strategies with guest speakers.  At night we went to the Buffett but that wasn't so great so this year I think Rao's or Carmine's (optional).
    • Monday we had a breakfast and started early at 6 am to catch the markets opening and we stayed until the end of trading (1pm Vegas time) that day.  

    I love the conferences as it's a great chance to meet everyone in person and our Members seem to get a lot out of the experience.  Please contact Greg (admin at philstockworld dot com) and let him know you are interested and we'll be putting up an official announcement in a few days.

    As always, we give some rebates to the first 20 people based on how many participants we end up having in appreciation for their early commitment.  

  15. Hi Phil, EBAY looking tempting again despite the dears over Apple Pay … down at $50 .. what you think? Thanks

  16. No bounce yet in the Futures, down and down.  /NKD still slow to drop at 15,880.  Other looking like 16,885, 1,978, 4,060 and 1,159 – just watch 1,980 and 1,160 and 16,900 for signs to stop out.  

    Dollar at 84.43 – not helping.  Oil $92.59, should bounce off $92.50.  Silver back over $18.60 so that's our stop now, gold not moving yet, still $1,233 and that can be a fresh horse if you get out of silver and regret it.  

    Euro stronger at $1.2935, Pound $1.6233 and 107.25 Yen to the buck.   Just bouncy on Euro – it's only a change in direction if the Dollar fails to hold 84 and the Euro gets back over $1.30 (doubtful).




  17. EBAY – Stock strengthening on rumor that GOOG is taking a large stake.

  18. Latest poll shows Scotland vote as No 51% – Yes 49%  So too close to call.

  19. So now we stopped out on those lines and we look for strong or weak bounces (intra-day) and we don't go short again unless those stop lines break OR we get back to 17,000, 1,990, 4,085 and 1,170 and fail them again.  

    Banks/Shadow – One trick ponies.  

    EBAY/DM – I only really like EBAY because of PayPal and ApplePay is a big threat to them.  Hovever, we are long on them (just 5 contracts) at $50 in the Income Portfolio from the last time they went low so I agree with GOOG (if the rumors are true), that they are undervalued here.  If you want to take a poke, I certainly like selling the 2016 $50 puts for $5.50.  

    Scotland/Brit – I think the biggest problem they'd have going independent (assuming they got the oil because, without the oil – they are doomed) would be the size of their big banks compared to their GDP – they simply have no way to backstop them should anything happen. 

  20. Phil – I now have a nice profit in SFTBY.  However, your YHOO trade was the better way to go. :-)

  21. PHIL

    The EBAY put price if for the Jan 16 option

  22. Scotland / Phil – Of course, in Europe they are in good company:

    And the rest of the world:

    Madness all around! How could state contain a banking crisis when assets are 200% of GDP? China not looking so hot either.

  23. SFTBY vs. YHOO – From this point, it depends on how Alibaba does after the IPO.  AT that point, SFTBY will control about twice the ownership that YHOO will. 

  24. Phil / Scottish banks -  Although they are mainly Scottish, the banks will relocate HQ to London to stay under the BOE protection.  They are mostly "Scottish" only because of previous takeovers ie Bank of Scotland took over Halifax bank and Royal Bank of Scotland took over Nat West.  So they are both UK wide.  Also many large Scottish insurers will also relocate if the vote goes yes

  25. EBAY/ZTen – Sorry, that was for the 2016 puts!  

    SFTBY/Albo – I'm glad you did well but, as you say, SFTBY is a $94Bn company and YHOO is a $34Bn company so if YHOO has 1x of Alibaba and SFBTY has 2x then we know that 2x/94 is a lot less and 1x/34, don't we?  And it's not 2x, it's actually 1.5x/94.  This is just math (and how arb traders make their money – so worth learning), as we had discussed months ago:

    YHOO/Albo – Why not just buy YHOO?  YHOO is $35Bn and owns 22% of AliB while SFTBY is $91Bn and owns 33% of AliB, so you get a lot more bang for your buck with YHOO, whose forward p/e is only 19, than SFTBY, whose forward p/e is about 17 – so not all that significant.  Of course, more significantly is the potential impact of (guessing) $50Bn worth of AliB on a $35Bn company!  

    So we don't even have to go crazy if we want to play the "YHOO is undervalued" game.  The Jan $38/45 bull call spread is $1.60 on the $8 spread with 400% upside if YHOO gains 28%.  I think that's worth $800 for 5 shares in the $25KP (stop at $400) and $4,800 for 30 in the STP with a stop at $2,400.


    Relocating/Brit – Well that's not good for Scotland, is it?  Banking is 20% of our markets.  

  26. Lately we've been talking about manipulation.  EBAY weekly 52.5 calls have gone from $.03 at the open to $.60 currently.  While it's possible that the rumor is true, more than likely, it's another egregious example of manipulation in the market.

  27. EBAY/Phil .. Thanks

  28. Phil

    Do think there a trade in, Inc. (JD)

    On the Alibaba IPO


  29. Manipulation/Albo – The best rumors have a grain of truth to them.  GOOG hurt EBAY by changing the algos this month and that makes the rumor that GOOG would partner with EBAY very effective as we assume it would put EBAY back on top of the searches.  So much BS you need waders to get through it all! 

    And has anyone noticed how Musk got a total pass for flat-out lying about partnering with Toyota?  WTF is going on in this country???

    You're welcome, DM.  

    JD/QC – I stay miles and miles away from these Chinese ADRs.  Look at their description in YHOO:

    Business Summary  

    Beijing Jingdong Century Trading Co., Ltd. operates as an online retailer in China. It retails various categories of products to customers worldwide. The company was founded in 1998 and is based in Shanghai, China.

    There's no Income Statement, no Balance Sheet, no Cash Flow, no SEC filings of any kind.  On what basis would we be trading it?  Nonetheless, they are up 50% since the US IPO so plenty of people are buying it but I like to play stocks that I have some possible clue as to what they do and what they make rather than "some stock that has something to do with AliBaba."  

  30. From Bloomberg, Sep 12, 2014, 10:06:00 AM

    U.S. stocks fell, with the Standard & Poor’s 500 Index poised to end a five-week stretch of gains, as investors speculated the Federal Reserve may raise interest rates sooner than estimated after retail sales climbed at the fastest pace in four months.

    To read the entire article, go to

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

  31. From Bloomberg, Sep 12, 2014, 10:33:19 AM

    Pedestrians walk on Madison Avenue in New York on Sept. 3, 2014. Photographer: Ron Antonelli/Bloomberg

    American consumer confidence rose
    to the highest level in more than a year in September, as
    households’ views on the outlook for the economy brightened.

    To read the entire article, go to

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

  32. From Bloomberg, Sep 12, 2014, 11:03:11 AM

    Sept. 12 (Bloomberg) — Alix Steel reports on additional European Union trade sanctions against “In The Loop.” (Source: Bloomberg)

    The U.S. expanded sanctions against Russia to include the country’s largest bank, OAO Sberbank (SBER), energy companies as well as five state-owned defense and technology companies.

    To read the entire article, go to

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

  33. From Bloomberg, Sep 12, 2014, 5:00:00 AM

    A major solar eruption is seen in progress Oct. 28, 2003. Geomagnetic storms caused power failures in 1958 and in 2003 as well, the U.S. Space Weather Prediction Center said on its website. Source: Solar & Heliospheric Observatory/NASA via Getty Images

    Global positioning system and radio
    transmissions may be degraded through tomorrow as two solar
    eruptions strike Earth and affect its magnetic field.

    To read the entire article, go to

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

  34. From Bloomberg, Sep 12, 2014, 10:04:14 AM

    Luc Coene, Governing Council member of the European Central Bank. Photographer: Jasper Juinen/Bloomberg

    The European Central Bank welcomes
    the euro’s decline as it helps spur inflation and boosts the
    economic recovery, Governing Council member Luc Coene said.

    To read the entire article, go to

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

  35. From Bloomberg, Sep 12, 2014, 10:53:19 AM

    Twitter Inc. (TWTR) raised $1.8 billion
    after boosting its first-ever debt offering, selling notes that
    owners can convert into the microblogger’s stock at a price
    that’s 47 percent above yesterday’s closing level.

    To read the entire article, go to

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

  36. From Bloomberg, Sep 11, 2014, 8:00:00 PM

    Chicago Mayor Rahm Emanuel. Photographer: Scott Olson/Getty Images

    Chicago’s deteriorating credit
    quality has pushed taxpayers to the brink of paying almost $400
    million to Wall Street banks on derivatives contracts that are

    To read the entire article, go to

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

  37. From Bloomberg, Sep 12, 2014, 12:01:00 AM

    Tim Cook, chief executive officer of Apple Inc., left, and the band U2 during a product announcement at Flint Center in Cupertino, California, on Sept. 9, 2014. Photographer: David Paul Morris/Bloomberg

    U2, one of the most popular rock bands in the world, gave a new album for free to half a billion users of Apple Inc. (AAPL)’s iTunes software.

    To read the entire article, go to

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

  38. From Bloomberg, Sep 12, 2014, 10:15:15 AM

    An attendee displays the new Apple Inc. iPhone 6 for a photograph as the iPhone 6 Plus is displayed after a product announcement at Flint Center in Cupertino, California on Sept. 9, 2014. Photographer: David Paul Morris/Bloomberg

    People who rush today to order Apple Inc. (AAPL)’s iPhone 6 Plus won’t get the new smartphone until next month as a surge in demand for early purchases of the device leads to a supply shortfall.

    To read the entire article, go to

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

  39. From Bloomberg, Sep 12, 2014, 5:42:45 AM

    China will create a dashboard of
    more than 40 economic indicators to measure the efficiency and
    quality of growth, in a bid to shift attention away from the
    pace of expansion of gross domestic product.

    To read the entire article, go to

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

  40. From Bloomberg, Sep 12, 2014, 10:42:43 AM

    Customers buy fish from vendors at Goubert market in Puducherry, India. Consumer prices rose 7.8 percent in August from a year earlier, compared with 7.96 percent in July, the Statistics Ministry said in New Delhi today. Photographer: Sanjit Das/Bloomberg

    Indian retail inflation held near 8
    percent while growth in factory output slowed more than
    economists had estimated before the central bank reviews one of
    Asia’s highest interest rates.

    To read the entire article, go to

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

  41. The second solar, possible G2 event, should arrive a noon eastern. If things go a little crazy you know why.

  42. Watch this video at

    James Galbraith Punches Holes in Austerity

    Sept. 12: University of Texas at Austin Chair of Government James Galbraith discusses the financial crisis and austerity.

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

  43. From Bloomberg, Sep 12, 2014, 8:42:31 AM

    I surrender.                       

    One of my favorite pastimes is dissecting accepted Wall Street wisdom to see if it contains any value for investors or traders. Often, upon examination, the widely held beliefs turn out to be closer to magical thinking than financial acumen.

    To read the entire article, go to

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

  44. From Bloomberg, Sep 12, 2014, 11:02:37 AM

    Nice work, if you can get it.

    U.S. consumers have made a lot of progress in paring down the extreme debt loads that helped make the 2008 financial crisis such an epochal disaster. Fresh data from the Federal Reserve, though, offer an important caveat: Millions of the poorest families are still very deep in the hole — and might be getting deeper.

    To read the entire article, go to

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

  45. Thanks phil

    the cold water is good

  46. ~~James Galbraith Punches Holes in Austerity

    Texas escaped the boom bust house because of stricter banking regulations than other states and its good there only because of large shale gas not Austerity!

  47. phil/APPL, so do you think we are done with consolidation? missed the chance to buy under a 100?  i know you've said that you're concerned about general market weakness affecting AAPL

  48. You're welcome QC – good enough for the ice bucket challenge?  

    AAPL/Lunar – I think the whole market is still due for a pullback, so I'm leery of starting AAPL here as a new trade.  If they don't fail $100 over the next 10 days, then you can get bullish as they may never do so again. 

    10 minutes then, Shadow.  

  49. Woops, so much for a bounce in the Futures – retesting our lows already!  Watch those lines for re-entries. 

  50. phil, also wanted your thoughts on the FXI and XRT trades, though you are likely to review them today.  TIA

  51. Phil

    Like a lottery 1 hit to a million misses, but if communication stops or the lights go out it was a natural disaster which will hurt insurance companies.

  52. Drillers weak again.  RIG has turned into a real falling knife.  Was short some Jan 15 $33 puts.  Rolled those out to Jan 16 $28 puts for + $.75.  Happy to buy the stock there.

  53. Curious about the oil futures. Brent crude down today and WTI crude is up bringing them about $5 apart which is something that I think hasn't happened for quite some time. Any explanation and should we expect a nice drop in WTI next week?

  54. Phil, are you recommending to go long at these levels in the futures?

  55. FXI/Lunar – Was that a trade we put in one of our portfolios?  If not, then which one.  As to XRT, today's action suggests we should be heading lower, so waiting and that goes for all portfolios, no changes this week but next Wednesday we'll have to go over all of our Sept changes.  

    RIG/Albo – Amazingly down again.  P/E now below 10 and Zacks likes them

    Oil/Craigs – I'd say WTIC is being pushed up for no good reason.  Hard to play /CL for a drop here just because we're so low and any sort of escalation in Ukraine or Middle East can send it flying again (see yesterday) so, as the moment, I'm mostly watch and wait.  

    Futures/Jasu – Not after a weak bounce on the first test.  That's often a sign they will fail second test.  

  56. Phil,

    Sept options expire next week….From earlier comments, DA Boyzs are rolling over these options, hence the drop, next week wash and rinse and repeat the slow grind up…no?

  57. HK/dclark – good idea but i'm happy with just the puts now. It's trend is not up at the moment and markets too iffy. As an initiating play, a worse case of 3.60 net entry is acceptable.

  58. YHOO – I have the following spread:

    BTO YHOO Jan 33 call @ 3.69 (now 9.875)

    STO YHOO Oct 39 call @ 2.23 (now 4.50)

    with Yahoo at 42.30 that leaves my short call with about 1.20 in premium left.  With the IPO set for next week I am thinking of rolling the short call out to Jan. I can roll about even to the Jan 41s. Does this make sense or should I got further, possibly the 45s. Thanks

  59. Najarian is stealing my premise that lower commodity prices is good for restaurants.  

    Grind/Jasu – I think that this game (which is what causes spitting cobra patterns) is running out of gas and will eventually collapse.  The reason funds run the market up on low volume is so they can dump the same shares at higher volumes to the well-trained dip buyers.  

    The thing is, there is a goal on the part of the manipulators – they want to get rid of all their shares and, once they do and the retailers are left holding the bag, they then WANT the market to collapse so they can come back in and buy those stocks back for less money.  That's the "wash, rinse, repeat" part of the game – where the real money is made.  

    So, the question is – when have the Big Boyz finished extracting their max profits?  Once they do, suddenly the MSM will turn bearish and tell you how awful stocks are and analysts (who work for those same funds) will suddenly start issuing downgrades – even when stocks are ridiculously cheap.  We just went through this cycle 5 years ago but everyone seems to have amnesia already. 

    YHOO/Dave – I'd be very happy with netting into the Jan $33/41 bull call spread at $1.46 – that's 448% profit if they expire over $41.  Why risk anything when that's in the bag?  If you really think there's no possible way YHOO can fail to hold $41 (which would have to be the case if you roll higher), then why not just sell the Jan $41 puts for $3.10?  Of course, you'd feel pretty silly if YHOO falls back to $39 for some reason but, if you stick with the more conservative $33/41 spread – you'd still have $6 back (up 310%) even if YHOO drops 10% from here vs potentially taking a loss by being greedy.  

    • It's taken less than two weeks in September to erase all of the summer's big gains in long-term Treasury prices. Today's five basis point jump in the 10-year yield to 2.60% brings it above the level it was at just after the Memorial Day weekend.
    • If Europe led yields south during the summer, it's leading them north now, with the German 10-year Bund yield up another five basis points to 1.05% after sinking to below 0.9% two weeks ago. Italian, Spanish, and British yields are sharply higher as well (though all three countries sport 10-year rates lower than the U.S.).
    • TLT -0.7%, TBT +1.4%

    Nine week streak marks longest dollar rally in 17 years - And who was President 17 years ago?  Just sayin'….

    • The last time the greenback climbed for nine consecutive weeks was from Dec. 1996-Feb. 1997, and Morgan Stanley sees next week's Fed meeting as a catalyst for more gains should forward guidance tilt a little less dovish.
    • The reason for the dollar strength is no secret: U.S. growth is outpacing that of most of the rest of the world, and the Fed is talking rate hikes, while central banks in Europe and Japan are figuring how to ease policy even more (though the Bank of England is also on course for rate hikes).
    • Previously: BofA moves up forecast of first rate hike by 3 months
    • The PowerShares U.S. Dollar Index Bull ETF (NYSEARCA:UUP) is higher by about 6% since the streak began.

    Greece's credit rating lifted at S&P

    • "Risks to fiscal consolidation in Greece have abated," says S&P, upgrading the country's credit rating to B from B-. S&P expects the economy to emerge from seven straight years of recession next year, enabling the government to have a primary surplus of 2% of GDP from 2014-2017 – less than the 4.5% target envisioned by the Troika, but "politically more feasible."
    • "We also view as low the likelihood of additional step-rises in government debt due to bank recapitalizations," says the ratings agency, noting €8.4B in private capital raises by Greek lenders and the Hellenic Financial Stability Fund with a balance of €11B for any capital calls from the public sector.
    • GREK -0.7%, NBG +0.3%

    Chesapeake Energy lower following Oppenheimer target price reduction

    • Chesapeake Energy's (CHK -1.3%) stock price target is cut to $30 from $35 at Oppenheimer to reflect a weaker natural gas price outlook.
    • The firm expects CHK's stock performance to reflect management's ability to deliver on its strategic objectives of creating value through capital efficiency and superior operating performance, while strengthening and simplifying the balance sheet and growing production and cash flow.

    Fitch Ratings slashes Macau growth projections for this year

    • Fitch Ratings cuts its forecast for 2014 revenue growth in Macau to 4% from 10%.
    • The ratings agency says long-term fundamentals still look strong.
    • 2014 Macau growth projections: Mass-market gaming +15%, Slot machine gaming +5%, VIP gaming -15%.

    Analysts weigh in on Lululemon

    • Lululemon's (LULU +3.3%) earnings beat this week had a lot to do with conservative guidance, says BMO Nesbitt Burn's John Morris.
    • The analyst thinks visibility is still lacking on the apparel seller's sale and margin recovery.
    • Citigroup warns on a mix shift at Lululemon to lower-margin items and pricing pressure from competitors.
    • There's still plenty of positive to latch onto say other analysts leaning to the bullish side. The addition of new "smart money" board members at the company and the expansive growth of the athletic apparel category gives Lululemon long-term potential.

    Hollywood studios could feel impact from Tesla tax breaks in Nevada

    • The state of Nevada slashed a tax credit pilot program aimed at bringing film and TV production to the state in order to free up money to lure Tesla Motors and its gigafactory with $1.3B in tax breaks.
    • The development could slightly pinch the bottom of line of Hollywood studios (LGFSNE,VIACMCSADIS) that were looking to use the Nevada tax breaks to gain leverage in California.

    WSJ: Facebook pitching to lure content creators away from YouTube

    • Facebook (FB -0.3%) reportedly has reached out to some of YouTube's (GOOG -0.7%) top content producers and encouraged them to test distributing their videos on the social network, in another signal that it wants to muscle in on the video site.
    • Content creators now use Facebook to promote their programming but prefer people to watch the videos on YouTube and other platforms where they can make money through ad sales more easily.
    • FB and the video content creators are discussing how advertising might be incorporated into these videos, and some sort of ad product likely will be rolled out by the end of the year, WSJ reports.

    eBay shoots down chatter of Google stake

    iPhone 6 Plus pre-orders sold out, smaller iPhone 6 still shipping on schedule

    • Apple's (AAPL +0.1%) iPhone 6 Plus is now on backorder and not available to ship for 3-4 weeks in the U.S., judging by shipment quotes after the device went on sale after midnight.
    • The iPhone 6 Plus, the larger of the two iPhone 6 models offered, is showing a shipment time of 3-4 weeks rather than delivery on the first day of sale, Sept. 19th, for the iPhone 6.
    • Also, BGR reports that iPhone 6 Plus units through AT&T (T -0.4%) will now ship in 21-28 business days, Verizon's (VZ -0.6%) models are backordered until Oct. 7 (for 64 GB) or Oct. 14 (16 GB and 128 GB), and Sprint (S +7.3%) says all of its shipments are currently delayed.
    • Worldwide demand also is said to be high for the Plus, with customers in France and the U.K. saying the larger iPhone has sold out.
    • AAPL is expected to announce next weekend the total initial sales results for the first three days of availability.

  60. Phil / Managed Futures.  Looks like an interesting asset class.  have you looked into building your own model?  Some buddies of mine are heading down to UVA for squash event and the brand new squash facility there was largely financed by QIM's Jaffray Woodriff.   Interesting story as he was mediocre student with no background in software, modeling or quant.  He built the programs to trade futures automatically and has decent performance although lagging a bit as of late.  Based in Charlottesville, QIM manages $3.6bn.

  61. OK, about an hour late the power went off and on. With luck the solar event will only effect high elevations where the protection is thinner. We should see northern activity after dark if this turns out a strong magnetic wave. 

  62. Phil. This will be quite an achievement if the "manipulators" can run the market up to 2,000 on the S&P before the close today.

  63. SVU/Phil – looks like been consolidating for a bit. considering lower commodity prices (and increasing product prices in grocery stores) do you see more potential or risk with them here, also considering the "wash rinse repeat game"?  I have Jan16 $3 calls covered with Jan15 $7 calls. Wondering if I should roll the $7 calls now to 2016 for .57, cash out this current winner, or let ride for now. Initial plan was to roll the $7s along to 2016 at some point. Just not sure when… Only a question because stock has risen well above $7, and maybe has stalled..

  64. IRBT testing 31 again!

  65. Market could really sell off if AAPL rolls over.

  66. Managed/Terra – Man, I cannot believe people give these guys money for that!  If you want to set up a fund for that stuff, it might be fun but really it's all the same nonsense – these systems work until they don't and you either catch a good swing or a bad one.  Of course this fund, which underperforms in an up market but doesn't go very negative, is not a bad hedge to a bullish portfolio but, as a straight-up investment, it's not counting dividend yield in the S&P (SPY pays $3.40 or 1.7%), which then puts the SPY on top of this strategy in a much more liquid investment with MUCH less fees.  

    Solar flares/Shadow – No problem over here and I live on a mountain (though not what you guys would call a mountain).  

    The Greater Depression:

    A year and a half ago, those who expected a return by 2017 to the path of potential output – whatever that would be – estimated that the Great Recession would ultimately cost the North Atlantic economy about 80% of one year’s GDP, or $13 trillion, in lost production. If such a five-year recovery began now – a highly optimistic scenario – it would mean losses of about $20 trillion. If, as seems more likely, the economy performs over the next five years as it has for the last two, then takes another five years to recover, a massive $35 trillion worth of wealth would be lost.

    SVU/Scott – Wow, I lost interest in them after they hit $8, hard to get excited by them at $9.50.  I think they are fairly priced here and no bargain at all.  The reason we liked them a couple of years ago was because $2 was stupidly cheap and represented panic on the part of the shareholders.  THAT is the kind of thing we like to take advantage of.  I'd take the money and run and, if they ever get cheap again (below $7 now), then I'd look to get back in but, otherwise, 9,000 other stocks might be on sale.  

    IRBT/StJ – Speaking of stocks going on sale.  

    iRobot Secures Multi-Year Canadian Defense Contracts

    In Apr 2014, iRobot secured a $59.2 million contract from the Department of Defense (DoD) to supply Man Transportable Robotic System (:MTRS) production systems by Apr 2015. 

    For 2014, iRobot anticipates revenues to be within $555−$565 million and earnings in a range of $1.10−$1.20 per share. In the third quarter, revenues and earnings are estimated in a range of $133−$136 million and 32−35 cents per share.  The Zacks Consensus Estimate for iRobot Corp. is pegged at $1.14 for 2014 and $1.37 for 2015, representing year-over-year growth of 30.7% for 2014 and 20.8% for 2015.

    Will iRobot Stop Cleaning Up on Dyson's 360 Eye Arrival?

    Dyson says it out-Roombaed the Roomba

    Robot Cleaners Enter Japanese Homes As Women Enter Workplace

    This is the kind of stuff we wait for – to buy stock at the bottom of their channels, not the top.  It goes back to my usual Levis example – if you KNOW what a stock is worth, then these charts don't scare you away from buying something.  When a stock goes on sale, we buy – when it gets too expensive, we sell.  Learn to do that and you will learn to win at the markets.  

  67. BBY winning today.. iPhone sales?

  68. IRBT/Phil – so what would you take as a new entry here? buy stock and still sell Dec $30 calls and puts?

  69. FXI/phil,

    maybe not an official portfolio trade…from 8/18

    We shorted India last week (EPI) and now FXI has got my mouth watering as a potentially good short.  I'd feel better about taking up a short on FXI at $45, not $42 but the Jan $42/38 bear put spread is just $1.80 on the $4 spread and that makes it very interesting as it pays 122% on a less than 10% decline in the Chinese markets – a nice way to hedge your bullish China bets! 

  70. BBY/Scott - Best Buy Is Apple Inc.'s 'Biggest Fan,' Says Brian Sozzi

    FXI/Lunar – Well FXI is below $41 and we're making progress on that January time-frame trade, so what is the question? 

    Embedded image permalink

  71. Just ordered my iPhone with Apple Care.  The iPhone 6+ with 128gb and apple care came out to 640.00 including tax.  Will ship out in 3-4 weeks right now.

  72. 1,150 is a nice play to speculate a bounce on /TF (very tight stops below).  We've got 16,875 on /YM, 1,975 on /ES and 4,057.50 on /NQ so watch those lines to hold as well but very tight stops now on shorts.  /NKD just testing 15,850 too.  Gold $1,230, /SI $18.605, Dollar 84.20. 

    Let me know how you like it, Rustle – I'll be a few months behind you, maybe in Jan.  I like to just go to the store and buy them after they work the bugs out of the early shipment models. 

  73. I'm cool with bugs that can be fixed with updates.

  74. STP doing it's job – up over 40% now at $140,693.  LTP holding up well at $607,100 so, on the last day of the week, we finally hit a new combined high of $747K!  

  75. GLW/Phil – rolling over? no one wants gorilla glass anymore?

  76. Jan15 FXY $95P are only 0.64 premium at the mid-point.  With the fed tightening and the BOJ easing that could be a pretty reliable play.

  77. GLW/Scott – Gorilla Glass is "ion-strengthened", Sapphire is not.  AAPL didn't say who made the glass but they did say it was ion-strengthened and it's hard to imagine that someone else snuck in and became their supplier. GLW announced in the last CC that they expected an uptick in glass sales in Q3, due to "smartphone launches".   

    Interestingly, GTAT and GLW have fallen off so I like BOTH at these prices but I'd let GLW test $20 first.   GTAT I mentioned on the Tuesday Webcast and in chat I liked (and still like):

    Submitted on 2014/09/10 at 11:46 am

    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.  

    I love this report – Nurse Loses Job Due to Obamacare.  Send to all your Conservative friends: 

  78. FXY/JPH – Nothing is "reliable" with currencies.  The BOJ is expected to add $50Bn of stimulus shortly.  If not, the Yen could drop back to $105 (up 2%) pretty quickly.  

    1,155 failed on /TF, 16,900 on /YM also fail.  1,976.50 on /ES and 4,081.50 on /NQ – weak bounces again but nice bounce profits!  

    /NKD having trouble getting back over 15,850.

  79. Phil
    Would you recommend a position in GTAT in a smaller portfolio? Like a 25k size or smaller.

  80. Top 20 list – the one company that jumps out to me as really not belonging, is… FB.

  81. UBNT – rr tracks. how come?

  82. follow – up // AAPL
    I spoke to my client at IDF about the AAPL launch and he said the crew that did the event has been there from the inception of AAPL. He also added, that if Jobs was still there, anyone and everyone that was involved would have been fired.
    But on a larger note, he just sent me this – can't say I disagree.

  83. TEX/Phil – do you like selling 2016 $35 puts…today?

  84. Wow. RIG at 2004 prices. TA indicates will fall to negative $80.00 from large descending triangle:) Yikes.

  85. The GPRO options I wrote yesterday lost value real quickly once hype was gone.  Went from 1.50 to .40-.50 right now.

  86. GTAT/Dforst – Well, if you allocate, say $5K to owning them, you can sell 5 2016 $10 puts for $2.25 ($1,125) and buy 10 of the $10/17 bull call spreads at $2.50 ($2,500) to net $1,375 on $7,000 worth of spreads that are currently $2,700 in the money and you get 100% of the upside from here to $17 with a max profit of $5,625 (400% – reward) vs a worst-case of owning 500 shares at net $12.75 (the current price).  Because you own the $10 calls, the actual break-even is the average of $12.75 and $10 = $11.38.

    There's that bounce on /TF at 1,150 again.  If they want to keep paying us – we should be willing to take the money!  

    TEX/Scott – Well I like them at this price, for sure, but if we're finishing the week on such a down note, you might want to wait until next week and see how things look.  

    RIG/Griffin – Can I sell the -$80 puts?  

    GPRO/Rustle – Good job selling into the excitement (especially in being patient about it).  

  87. Good old CNBC – trust them to get a guy on to call S&P 2,350 when the market is down and needs a boost!  

  88. Phil // IRA
    Looking at CIM ( expensive ) and RIG (not ) for IRA.
    Can you redo a strategy ( buy/writes, straight spreads, etc )


  89. Phil // DBA
    Been holding DBA Jan15 $28 calls ( .65 ) for a few years.  ( now .20 )
    Can you recommend a move here ?

    They were originally bought for inflation protection, which never came.

  90. My watch list looks like a grid where Phil's recommendations went UP and everything else went DOWN! It looked something like an ad for Philstockworld

    I am half in cash,  followed the recommendations (AAPL TASR YHOO) on a 20K portfolio and still up 1% for the day. Thanks! 

    However I need more hedges.

    1) Should I add to the TZA 15/20 BCS recommended, or short another index
    ?2)  Based on choice in #1 should I wait for an up day to do the new hedge 

  91. Rustle

    You were a lucky one, seems pre orders sold out in less than 1/2 a day.

  92. @shadow

    wow, did it at a little after 1p

  93. @shadow

    Just went on site, you can still order it with no problem.  If site crashed, it wasn't very long.

  94. CIM/Wombat – Understand the point on this stock is not to make money on the stock but to simply keep collecting the dividend and accumulating more when it's cheap.  To that end, at $3.24 at the moment, I'd buy the stock and sell the March $3 calls for .35 and the $4 puts for $1 to net $2.88/2.94.  It's just a wash, rinse, repeat kind of trade and dividends come (0.9) in Oct and Jan so the net is $2.70/2.85 and the idea is to roll every 6 months and keep knocking off .30 until your basis is $1.50 and then DD and do it again until you have a nice amount at a basis of about $1.80, which would make the 0.36 dividend 20% a year.  

    If you are going to play it like a trade and panic when it hits $3 (on rising rates or whatever) – don't bother.  This is a 10-year accumulate kind of stock.

    RIG/Wombat – Oil prices may collapse and RIG can go much lower so I'd stay out on an IRA if short put margin is an issue or maybe just go for the 2016 $33/43 bull call spread at $3.40 s a proxy for owning the stock.

    DBA/Wombat – Why did you not sell it when it was over $29?  Or $28, or $27, or $26?  Do you know what happens to people who never take profits?  They don't make any!!!  There's no "move" – they are effectively dead now and a more sensible DBA play would be not being a jerk and buying premium and selling the 2016 $24 puts for $1 and buying the 2016 $24/28 bull call spread for $1.80 for net 0.80 on a  spread that's $1.50 in the money to start and pays +400% if DBA gets to goal at $28.  If it makes you feel better – you can call it a roll. 

    It's not good enough to know a stock you like is underpriced – you have to know when it's overpriced too! 

    LOL, thanks Sn0!  I liked TZA (and DXD) a lot more yesterday, when they were much cheaper.  With TZA at $14.62, you can look at the Jan $14/18 bull call spread at $1 as locking in some gains since it has just a net 0.27 delta, so nothing wrong with them as a move up in the RUT should be good for your bullish positions to offset losses on the hedge.  Of course, I like selling puts on something you REALLY want to own to offset that $1 but not really possible in a $20KP.

    With such a low premium on the spread though, there's no major need to offset it since it pays 300% on a $3.50 move on TZA (7% drop in the RUT to 1,080).  So, if you want to cover 1/2 of a $4K  loss, you can buy 8 of these guys for $800, set a stop at $400 and you get $3,200 back if the RUT takes a dive – very simple.

  95. Scottmi/ HK

    I agree, a conservative play is best while oils are weak-let alone the market in general.

  96. Last week the put volume was very heavy on CMG and it has been weak this whole week.  My guess is a fund was selling out their position and bought puts before hand knowing how illiquid the stock is.  Figured make money on the puts while they knock the stock price down to hedge.

  97. Once again weak bounces are failing into the close (weaker weak bounce levels than before too, as we made new lows!). 

  98. rustle

    The report only said the 6 plus sold out. To me it makes no sense to stop pre orders so you get yours in 3 to 4 weeks, some will be able to buy on the 19th at stores and the rest wait till they are made makes more sense. But hype is what you get from the media.

  99. SVU/Phil – thanks. cleared out of the call spread.

  100. Spoke to a store and they said order it online unless you want to wait a couple days outside the store.  Once they sell out, it will be a couple weeks before they get a reorder.  The girl said she personally orders from the site because it's easier.  I think they don't get first dibs on new apple products.  Goes to customers first.

  101. FWIW technical of USO

    Monday/Tuesday, Thursday/ Friday what was support is now resistance at 34.75 ish.

  102. Is it just my computer? Every refresh this afternoon kept going back to the Daily Show clip and now the Spy chart.

  103. My suspicion is sun flares are making them selves known. This is a major one, not 1856 level but significant.

  104. CMG/Rustle – Their expansion schemes are BS so far, that's been disappointing but I think they'll do well next Q on lower food costs and higher prices.  

    You're welcome Scott.  

    Refresh/Doro – I'm not getting it.  What browser and windows version?  

    Have a good weekend folks!

    Here's a quick 5% Rule view of the S&P this week:

  105. Thanks Phil //

  106. So, for the day, we failed to take back the 1,986 strong bounce and, for the week, we now use 2,005 to 1,980, so 25-points down means 1,985 is weak and 1,990 is strong on Monday.  Generally, you want to take back daily-calculated 5% Rule Bounce Lines weak by day one and strong by day two or you assume more downside to come.  

    You're welcome Wombat.  

  107. Windows 7 using Firefox, after the 2:20 Daily Show post every auto refresh brought me back to that post, then after the 3:42 Spy chart post that became the new restarting point.  Must be something with Windows update this AM.

  108. Thanks Doro, I'll have Greg and Scott check it out.  Might just be a glitch with their embed code but I've used their clips before.  

  109. doro

    Did you play the daily show? A fix might be as simple as delete cookies and browsing history. no problem after playing back on IE and I did the updates also without the NET updates. I used to have your problems all the time but a few months back I rebooted everything to get rid of the NET stuff, un-delete able. There is a member who totally disagrees with me but I had no issues until I mistakenly let them in on my big system, trouble double trouble, removed took all day, and no trouble again. The NET stuff is for development, that seems to be what conflicts. On my laptop which has NET trouble.

  110. Phil // NXPI
    Now that ApplePay is official and it promises to be huge ( I think so ) how about not playing AAPL directly but through their main NFC chip provider. I caught this a bit late but
    Jan16 $70 / 80 Bull call spread ( $4 )
    Jan16 $60 short puts for $6
    $2 credit and right at the money

  111. Doro

    One last point I checked my laptop, maybe you can delete the last 2 NET updates and turn off auto updates as then you get every recommended update wanted needed or not.

    A major problem with programmers is they always know they are right, usually even after it is proven they were wrong. Next big problem is who is the first person asked about a new problem right after the problem appears. The person who made the change. The answer is automatic my change was a fix—————— for something else! I have had these arguments since the 70s.

    Now you all can call me stupid but I have always succeeded in solving problems when others fail because I go back to "When did this start?" Updates, you have a strong direction!

  112. Not much going on next week but we'll hear from Yellen and the gang on Wednesday!

  113. wombat / NXPI

    Because NXPI is more expensive…

    AAPL P/E=17

    NXPI P/E=38

    I’m not touching margins, ROE, ROA, revenues, cash, debt, cash flows, etc. ;-)

  114. can anyone verify for me

    /CLv4 /CLX4 >> TOS has .89 spread
    TOS mobile has .85

    is it me or is TOS lame ?

  115. Phil

    I posted this AM solar flares and look north. The evening news and minutes ago local news 8 said look for northern lights. Please try to understand I only say things I know, that doesn't mean you on your Ha ha mountain will see it, a power failure, or your IPhone stops working, but many more have predicted what I said might happen much much later than me.

  116. Still a ways to go for inventories before this heating season gets underway.  And it feels like fall here now. The door has closed on summer.


    Natural gas storage deficit to five-year average continues to narrow ›

    Storage injections have continued to outpace the five-year (2009-13) average this summer, with inventories as of September 5 at 2,801 billion cubic feet, according to data from the Weekly Natural Gas Storage Report. The winter of 2013-14 led to a large drawdown in inventories, with stocks ending March 2014 almost 1 trillion cubic feet lower than the five-year average and at their lowest end-March level since 2003. Relatively higher weekly net injections into storage reduced that deficit to 463 Bcf as of September 5. More

  117. Russia and China discussing 32 joint projects: Russian deputy PM

  118. Drones may provide big lift to agriculture when FAA allows their use

  119. wombat re: /CL spread, I show $.85

    Also since you like spreads, I've been fooling with some grain spreads recently, for example long corn and short wheat, long soybeans short corn, etc.  The idea behind this trade is that the overall long term movement of the grains tend to go in the same direction, but there are short term gaps that open up as the spread changes between them.  So you hope at some point the gap opens in a direction where you can take profit.  (So if you're long wheat and short beans, and then beans drops but wheat stays stable, you can just cash both and take profit, etc.).  On the other hand, if your short goes up more than your long, you can still take the profit out of the long (you will be showing a paper loss due to the short that is going against you) and flip your long to the other grain (for example, you were long corn and short wheat, so you take profit on corn and flip your long to soybeans).  Then you hope that, at a certain point, wheat backs off and you are profitable on the overall exercise.

    Looking at the long term charts, I notice that there is a tendency for the wheat-corn spread to narrow during the fall / winter, and widen during the spring.  Also the spread between soybeans and wheat is at a several year low.  I understand that for farmers, if they can get better than 2.4 times the price for soybeans relative to corn, they will prefer to plant soybeans; the spread is wider than that right now, because everything has fallen quickly, and also soybeans will be somewhat dependent on the upcoming south American harvest.  So this suggests a trade where wheat is the anchor short, corn is the best long and soybeans somewhere in the middle.  I'll see how it goes next week and maybe try a few trades; I've been trying 5 contracts on a side (3 for soybeans, which is a bigger contract), and take profit when the spread gives me $500 or more net of commissions.  I misjudged wheat last week and took a small loss on it, but overall I'm still up some on these, have been doing them for a few weeks only.

    At any rate, FWIW; I can't get a bead on oil yet, so still sitting on the sides, but would like to get back in on those once I can start feeling I can do so with any conviction..

  120. What $1,500 in Rent Gets You in 11 U.S. Cities

  121. Orrin Hatch ‘Ready To Kill Somebody’ Over Business Tax Breaks Not Being Extended

  122. Why big banks fear an independent Scotland, in their own words

  123. HBO is now “seriously considering” whether to offer HBO Go without cable TV

  124. Bitcoin could pose threat to financial stability of UK, warns Bank of England

  125. Can corporations go to hell? An existential quandary for the Supreme Court

  126. Autodesk Explores the Future of Material Science

  127. China August factory growth slows to near six-year low, more stimulus expected

  128. GTAT – I caught this in the comments section of a CNET article about Apple glass. No idea if it's real but it's interesting:

    I work at GT Advanced Technologies in Mesa AZ.. I will not post my name but if I figure our how to post pics on this site I will… the original plan was to make the Crystal Saphire screens… the only problem was that the growth technicians were poorly trained and hired in masses.. they were contaminating the crystal with sweat and dust and other particles making the whole boule useless… we had about 600 unusable boules at one point… (28 day process to make one boule)… one time the water shut off and the whole plant's boules were destroyed again.. our plant is big enough to supply more than enough saphire but until we find out how to make it properly, we will be stuck to the iWatch. A couple weeks ago a fab supervisor also sent some of our only good boules to be recycled on accident and was fired… anyway we made some screens and they are incredible… we just have to perfect the process before going widespread…

  129. Ivan/ GTAT

    Very interesting if true. Not sure what to think of that? Hard to believe that with such an expensive process and product, and so much on the line (not to mention the 700 million AAPL invested)  they could be that careless.  Thank you.

  130. Hi Phil 

    I like your opinion on my AAPL holdings all Jan16

    acc # 1: long calls between 68.57 to 84.23  46 X  against  short calls 88.57 to 105.71 37 X

    acc # 2: long calls between 64.27 to 84.29  68 X  against short calls 78.57 to 105.71  43 X

    acc # 3: long calls between 67.14 to 84.29 X of against short calls 91.93 to 105.71 72 X 

    The above always looking good when AAPL goes up but looking at any possible down turn I feel I am taking the bad and of the stick. So my thought was to balance the long calls at par with the short calls obviously increasing my cash at present considerably but on the other hand capping my profits in the end. I have been only reluctant to sell short month callers against my positions as the span in monthlies or weeklies has been rather big. I could as well close some of the BCS however I feel paying up to 8$ on the lower callers is quite a bit. For example it has become my way to close Jan15 BCS with say a spread of 10$ to close for 9.45 to 9.50 than to wait for an other 4 month for the 50 cents but Jan 16 I feel the TREES are still very young to cut.  TIA for your thoughts.

  131. Sorry on the # 3 acc the long calls are 77 X 

  132. Good morning! 

    Nothing too exciting this weekend news-wise.  

    NXPI/Wombat – Do you know for sure that it's NXPI's tech in the iPhone?  I didn't know that was confirmed?  They're already up 20% in Aug so I imagine that a lot of your "news" is baked in but it's a good company with strong growth nonetheless – I think I'd just be a bit less aggressive with the bull spread.  

    Big Chart – Looks like the 50 dma saved the Dow, NYSE and RUT (so far).  Nas getting that Spitting Cobra look – the coiling action that comes before a downward strike.  Others just look like they are just failing tops.  It's not a real thing but I use it when there's fake action attempting to keep an index at a high for too long – those often end in tragedy. 

    Fed on Weds will drive the week, of course and I can't imagine German Sentiment will be good on Tues am.  

    Nat gas/Sibe – May be a good time to go long.  The real purpose of LNG is to take 2 years worth of Nat Gas supplies and stick it in storage and put it on ships and we're already seeing the effect in low inventories.  This has nothing to do with demand and everything to do with LNG facilities being built and stocked and it's a macro that will go on for years now.   If someone reminds me, we should talk about it in Tuesday's webinar.  

    Oil/Pwright – It's been unplayable since it failed $92.50 last month.  Waiting for it to settle into a proper channel again but we need to confirm a new bottom first.  I'm certainly willing to bet $95 is the top (if it ever gets there). 

    GTAT/Ivan – Not sure I'd trust a post like that, doesn't seem too likely that they would be throwing out 600 x 28 (16,800) days worth of work unless they have thousands of these things going on at once perhaps? On GTAT's web site, they talk about 18 days for 100 Kg boule, but I'm not sure what a boule is in the first place.   It's one of those things that has a ring of truth to it, because we know they are having manufacturing issues (GLW had similar issues when first making Gorilla Glass) so it sounds right but this guy would be so fired for posting that if true.  

    AAPL/Yodi – I'd absolutely take the $9.50 on $10 spreads and just worry about the $84 x $105 spreads.  I'm not really sure what you have but I assume it's $68.57/88.57 bull call spreads and $84.23 and $105.71 bull call spreads in acc #1 but I can't figure out what you mean by 46 against 37 – unless you have more longs than shorts in which case I'd certainly cash in at least half the excess longs.  

    Generally, at this point, I think AAPL will end up at $130 in Jan 2016, at least $115 so I like the 2016 $90/110 bull call spread at about $9.20.  It makes 100% if all goes well so that's nice and, if AAPL goes about $10 lower, I'm happy to spend $5 to roll down to the $80 calls and widen the spread and then sell some puts for $10 (currently the $94.29puts, hopefully the $87.14 puts, now $6.60 with a .29 delta so -$10 in AAPL should put them in play) and that's that.  

    So, if AAPL goes up, the spread makes 100% in 16 months and we settle for that.  If AAPL goes down, we roll to the $80 calls (now $25 vs the $90s at $18.35) for $5 and sell puts for $10 and then the net on the $80/110 bull call spread with the short $87.14 puts would be $4.20 – I can certainly live with that, can't you?  

    Great video on bank fraud:

  133. I always enjoy when these come out, but watch the spreads, they can be very wide when first listed:

    January 2017 Equity (Stock) & ETF LEAPS:

    Monday, September 15, 2014:   2017 LEAPS begin trading for

    January Cycle option classes.
    A notice listing the new LEAPS series will be distributed during
    the week of September 8th.

    Monday, October 13, 2014:   2017 LEAPS begin trading
    for February Cycle option classes.
    A notice listing the new LEAPS series will be distributed during
    the week of October 6th.

    Monday, November 17, 2014: 2017 LEAPS begin trading
    for March Cycle option classes.
    A notice listing the new LEAPS series will be distributed during
    the week of November 10th.

  134. Thanks for your comment obviously in all accs I have much more longs than short calls as said but I was thinking instead of cashing the longs to sell say 105 to 110 short callers so to make it even pairs with the long calls. If AAPL goes down I would lose on the longs not having shorts calls to balance. By selling the longs I am out of the game. God only knows where this market is going to. but to me it is overpriced but now one can tell. There were to many positions to list after the split., but you guessed right, all my existing spreads are 10 and up to 20 $ apart. 

  135. I know if in doubt sell half!!!

  136. If you are an IPad user, here's a good trick – you can scroll to the bottom of a web page (like this one) by creating a bookmark called "Bottom" (or whatever you want to call it) and then editing the bookmark and replacing it with this Java code:  javascript:window.scrollTo%280%2C100000%29  – that bookmark will then take you right to the bottom of whatever page you are on.  

  137. Phil

    Great video I have likely said a few things different but that is it and all is well in auto and commercial financing. Any questions ask your favorite bankster.

  138. My feeling is the financing of corporate buy backs and takeovers will be hundreds of times worse than mortgage derivatives and then the secondary kicker, subprime auto liar loans. Together massive beyond belief and the legal authorities are in on it all.

  139. Safari hack/Phil – @%#* the hack. Just give me "home" and "end" features. What is so hard about that?!

  140. CENX is on roll, and it should continue for another 12 months.
    Up 250% in the past 12 months.
    Aluminum demand is high, and the surplus has been taken. Spot prices have
    been going up.
    Demand is coming from automobiles and aerospace, both military and
    commercial. There is a back order on jets that continues to climb.
    The risk is the cost for production. Aluminum requires a massive amount of
    electricity. CA has an electricity credit trading system, and producers
    found it was more profitable to let their plants go idle and sell the
    credits. Eventually that all moved out of CA due to the high costs of
    electricity. (CA has about the 2nd highest electricity prices in the USA).
    Expect aluminum production to move to China, where they¹ll build a coal
    plant to power it. That doesn¹t happen over night.
    So aluminum prices should continue to climb, after having bottomed out

    pw / very adventurous > keep me tuned in. Know squat about commodities really.

  141. Good morning! 

    Big recovery in the Futures in progress – we were down 0.3%, now flat.  Europe also recovering off a poor open after Asia was mixed and, of course, we're recovering because we had more bad economic news which, in this insane market, means MORE FREE MONEY (hopefully):

    Fresh fears of sluggish growth in China hit Asian stock markets, adding to a lengthy list of worries for investors that include the possibility of higher U.S. interest rates and signs that Europe is slowing. 5:29 AM

    • OECD Cuts Growth Forecasts

      The Organization for Economic Cooperation and Development cut its economic growth forecasts for the U.S. and other large developed economies, and said the continued weakness of the recovery demonstrated the need for significant changes in economic policy. 6:05 AM

    Isn't that great?!?  

    Oil back at $91.25 to reflect true economy, gasoline $2.5042, down 0.04 from Friday's fake pump.  

    Thanks Deano, I always get those dates mixed up. This is my favorite time of year, when we get to go over 2 years out on our leaps!  Too bad the VIX still sucks….

    When in doubt/Yodi – That's how I feel about it.  I love AAPL but I fear the correction so better to have plenty of cash to adjust.  Over $105, you can always add more long spreads.  

    Safari/Scott – You can scroll up on an iPad by touching the top of the screen, you just can't go down for some reason – I guess because people put their thumbs there and that might get annoying.  

    CENX/Wombat – They are up along with AA (who we did play) since last year.  I think that story is pretty much priced in now.  I kind of like AA better, since they actually make money (and pay a dividend) though CENX has the modern advantage of having no profits and, therefore, they can get an infinite p/e and people just keep buying as if it doesn't matter.