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Testy Tuesday – Will the Russell Survive the Death Cross?

The charts are getting ugly!

Yesterday the Russell 2000 fell 1.2%, below the 50 day moving average and below the 200 day moving average which are about to form a "Death Cross", where the 50 dma moves below the 200 dma and is generally considered to be a bearish sign.  

Death Cross

Of course, we've been telling you for weeks now that the markets were toppy but at least now it's getting obvious.  The Fed may still pull a rabbit out of its ass and goose the markets once again but I very much doubt anything is going to stop the eventual correction now.  Delay, maybe – stop, no.

Fortunately, we're well-positioned for this and our bearish, Short-Term Portfolio was up 50% on yesterday's dip while our bullish, Long-Term Portfolio held on to 21.2% of its gains for the year, giving us our best combined total for the year, even as the markets are pulling back.  I'll be reviewing all of our Member Portfolios live this afternoon (1pm) in our Weekly Webinar (Members Only, but you can join right here).  Our Members get trade ideas like this one (from our 9/2 Morning Alert):

 If, however, you buy just $2,500 worth of the of the TZA Oct $13/16 bull call spread at $1 (25 contracts), they will pay you back $7,500 if TZA goes up about 15% (just a 5% move up in the RUT) AND they don't lose all their money until TZA is down 10% (a 3% move up in the RUT).  

This is how we teach our Members how to hedge.  As you can see, TZA crossed $15 yesterday and that spread is on it's way to a 200% gain already – a very nice offset against a relatively small drop in the Russell.  This is how we can lean our portfolios just a little bearish and actually make more money as the market sells off than we did on the way up.  

In the next day's post (9/3), we set our Futures shorts at 17,120 on the Dow (/YM), 2,005 on the S&P (/ES), 4,093 on the Nasdaq (/NQ), 1,179.50 on the Russell (/ES) and 15,800 on the Nikkei (/NKD).  As of this morning, we have:

  • Dow (/YM) Futures at 16,900 – up $1,040 per contract
  • S&P (/ES) Futures at 1,973 – up $1,600 per contract
  • Nasdaq (/NQ) Futures at 4,015 – up $1,560 per contract
  • Russell (/TF) Futures at 1,137.50 – up $4,200 per contract 
  • Nikkei (/NKD) Futures at 15,840 – down $200 per contract

Hey, they can't all be winners but 4 out of 5 for net $8,200 in just two weeks is pretty good, right?  All of those picks were also discussed in that Tuesday's Live Trading Webcast as well – the perks of being a Member!  In that same morning's post I asked "What kind of idiot is paying $286 a share for TSLA?"  We shorted the stock the next day with a target of $250, using the October $250 puts at $3.  Yesterday we were able to cash them out for $11.50, up 283% in just two weeks with each $300 contract returning $1,150 – nice work if you can get it.  As I said that Thursday:  

So many suckers, in fact, that I can post trades like the ones above, which anyone can follow by simply reading our morning post – and they still make money.  Usually (and we still usually do), you have to guard trades like that for fear of people taking advantage of your known position but, in this case, the market is being so blatantly manipulated and so many Trillions of Dollars are at stake for the manipulators – that our trading can't alter their plans, even when it costs them a lot of money.  Still, if they're offering – we'll take it, right?  

Just for good measure, we added an oil short to that post at $95 (/CL Futures) and oil bottomed out at $91 yesterday for a $4,000 per contract gain on that trade.  This stuff isn't hard to follow folks – all I said in the morning post was:

Oil is probably too expensive at $95 (/CL Futures) and we can short them below that line into the 11am inventory report.  Anything but a 2Mb net draw is going to be a disappointment and we had a lovely collapse on Tuesday to below $93, which would be $2,000 per contract if it's repeated.  Set a stop at $95.15 and your risk $150 to make much, much more – a good risk/reward ratio! 

We shorted oil again, at $93, in this morning's Live Member Chat and we already got a nice dip to $92.50 (up $500 per contract), which pays for our Egg McMuffins – so we're pleased with that and now we'll let it bounce and look for another short entry.  Ahead of the Fed, we're not going to be too brave with our futures trading but we're still on the bear side – lonely though it may be over here.  

Yesterday, in the morning post (did I mention you can SUBSCRIBE HERE), we talked about shorting China (FXI) and India (EPI) and the Shanghai dove off a cliff into the close this morning, falling almost 2% after being propped up all morning.  Foreign Direct Investment fell 14% from last year, a 4-year low for China and Bloomberg ran an article titled: "Bad Loans Could Bust China," something we've been warning our Members about all year, but it is nice to see the MSM catching up to our premise.  

Another thing the MSM is finally catching on to is how much of this market is nothing more than companies buying back their own shares.  While we've been complaining about it through our own observation, the figures compiled by the WSJ this morning are kind of shocking.  

  • Corporations bought back $338.3 billion of stock in the first half of the year, the most for any six-month period since 2007, according to research firm Birinyi Associates. Through August, 740 firms have authorized repurchase programs, the most since 2008.
  • In mid-August, about 25% of nonelectronic trades executed at Goldman Sachs Group Inc., excluding the small, automated, rapid-fire trades that have come to dominate the market, involved companies buying back shares. That is more than twice the long-run trend, according to a person familiar with the matter.
  • According to Barclays, companies in the second quarter spent 31% of their cash flow on buybacks, the most since 2008.
  • IBM accounted for one in eight open-market purchases of its stock in the first quarter of 2014, spending $8.2 billion repurchasing 45.2 million shares.

I've been warning for quite some time that we've seen all this before – in 2008.  Unfortunately, it's all been forgotten already by complacent investors even though we're in the same month that crash began at the same levels that crash began with the same BS from the MSM we had when that crash began with the same signs of weakening foreign markets we had when that crash began

Never forget indeed!  

 


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  1. Good Morning everyone!

    The link for today's webinar is:

    http://bit.ly/PSW091614


  2. Phil 
    September 14th, 2014 at 7:52 am

    PSECNat 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.  


  3. Can anyone repost the article that Barrons ran about expecting TASR going down


  4. Oil Lines

    R3 – 95.62
    R2 – 94.32
    R1 – 93.57
    PP – 92.27
    S1 – 91.52
    S2 – 90.22
    S3 – 89.47


  5. I guess we always expected that this would only be a drop in the revenue bucket at AAPL:

    http://mashable.com/2014/09/15/apple-pay-15-cents-100-dollars/

    Apple Pay, Apple's new mobile payment service it unveiled in Cupertino last week, may net Apple 15 cents on every $100 transaction, according to a report.


  6. Burrben; here it is;

    ~~Taser International announced a number of new orders for its police-worn body cameras Monday, yet its arresting rally may soon stall.

    Before the bell, Taser International (ticker:  TASR  ) said it received orders for its AXON body-worn video cameras and its back-end digital evidence management system from cities including Columbus, Missouri and Knoxville, Tennessee, as well as international customers as far flung as Abu Dhabi. It said it expects the orders to ship before the end of the quarter.

    The shares jumped in early trading on the news, but surrendered gains by mid-morning, and were down $0.52, or 2.8%, to $18.32 in afternoon trading.

    Taser is a Wall Street favorite, with nearly every analyst who covers the $950 million market-cap stock a bull. It bounced last week after a positive mention on Jim Cramer's Mad Money.

    Yet even analysts, who aren't traditionally known for their restraint, have an average price target on the stock of $18, which is near current levels. Investors looking to make a bet on Taser might want to consider trading options (see The Striking Price, "Cash in on Taser's Gains With Call Sales, Put Buys," Aug. 19).

    The shares have jumped more than 70% since hitting a 52-week low of $10.46 in July and change hands for more than 40 times forward earnings. The company's 30% long-term estimated growth rate is based on just one analyst's opinion, according to Thomson Reuters. And more than 9% of its float was sold short as of August 29th, more than twice the level in July.

    Certainly, wearable body cameras for police have come into the spotlight of late given the controversy in Ferguson, Missouri and other high-profile stories. However, while these may be increasing in popularity with the nation's police forces, they comprise less than 10% of Taser's business. Not surprisingly, Taser's products also face intense scrutiny from both regulators and civil liberties groups, and the company is often named in wrongful death suits brought against police departments that use its products.

    While many analysts have pointed to an ongoing weapons upgrade cycle for U.S. police departments, Taser's dependence on these orders means that earnings visibility is limited and quarterly results have a history of being lumpy, as law enforcement usually is beholden to long trials and municipal budgets.

    However, the runway for police departments embracing technology like the Cloud is long, and the age of many weapons in the field likely portends an extended upgrade cycle. Taser has an interesting mix of assets in its arsenal and a relatively strong balance sheet as well.

    Yet at current levels, Taser seems richly valued. And even bullish analysts don't see a great deal of upside from here. The stock's uneven earnings history and volatility — Taser lost half its value in less than five months after hitting a 52-week high in February — likely means that investors will have a chance to buy in at a lower price.


  7. Sometimes statistics don't lie:

    http://qz.com/265756/the-single-buried-statistic-that-explains-chinas-slowdown/

    After a years-long boom, domestic investment is sucking wind in China. For our money, this statistic is a perfect snapshot of the situation. Cement production growth rates in the People’s Republic have slipped sharply in recent months. In August, cement production was up a scant 3% compared with the prior year. (You’ll notice that the data is pocked by lacunae, due to the lunar holidays early in the year.)


  8. The Dow is such a joke… 

    http://theirrelevantinvestor.tumblr.com/post/97430837568/a-closer-look-at-the-dow-have-you-ever-seen-the

    After making a new all-time high on August 26th, we have seen the Dow basically trade sideways for the past twelve sessions. You’ll hear people say that we are either stalling out before a correction, or digesting the recent gains before we break out of this range. Whatever your opinion, here are the facts: Currently, the Dow is just 1% from the all-time high, however, if we take a closer peek under the hood, we find that the average Dow component is actually 5.2% off their high.

    A closer examination shows that the top three weightings in the Dow (Visa, IBM, and Goldman Sachs) make up 22% of the index, yet represent just 8% of the total market capitalization. Furthermore, the top ten Dow stocks make up ~52% of the index, although they only represent ~36% of the total market cap.

    The most over-weight stock in the Dow is Visa, which is awarded an 8.1% weighting although its market cap is only 2.8% of the index. The most under-weight stock is Microsoft, which is just 1.8% of the index, although it represents almost 8% of the total capitalization. To put this in some context, Microsoft is a bigger part of the S&P 500 than it is of the Dow 30, pretty amazing.


  9. Good Morning!


  10. It's all buybacks and tradebots:

    http://thereformedbroker.com/2014/09/15/buybacks-and-tradebots/

    Is anyone trading? Not really. Except HFT players and corporate CFOs executing the buybacks that generate their compensation packages.

    You got a 7%+ gain in the S&P this year on basically nothing and for no reason other than float-shrink initiatives that have zero to do with fundamentals. For every Disney, a company that is truly killing it right now, there are a dozen stagnant names masking slowing growth with a smaller overall pie to spread profits across.

    If IBM and McDonalds were trading on the actual condition of their respective businesses, the Dow would be 500 to 1000 points lower.

    But they’re not, and this is why short-term price predictions based on fundamental research are moronic, generally speaking. Because this is not at all unusual. Distortions based on non-fundamental factors are a permanent feature of both bull and bear markets. 1 +1 doesn’t equal 2 in the short run.

    If no one’s involved with the market directly – apart from buybacks and tradebots – then theoretically whatever sell-off may come should do very little damage to the real economy.


  11. And look at the buyback stats:

    Corporations bought back $338.3 billion of stock in the first half of the year, the most for any six-month period since 2007, according to research firm Birinyi Associates. Through August, 740 firms have authorized repurchase programs, the most since 2008.

    They could be buying at the top which is what happens very often with buybacks as I had posted last year. These buybacks are rarely a good indication of value…


  12. GTAT getting creamed, -4.5% , down again today…


  13. Good morning! 

    AAPL took a nice dive to $99 at the bell, someone wanted out really bad.  Not doing too much damage to the Nas yet (down 0.34% at 4,012.50 on /NQ) but it will if it heads lower.  

    We'll probably bounce up into the Fed tomorrow (2pm) but hard to read anything into it.  We failed those weak bounce lines yesterday and we're still watching:

    Dow 17,100 to 16,950 is 150 points so 30-point bounces to 16,980 (weak) and 17,010 (strong).  On /YM, we'll use the 16,840 bottom and assume the same 30-point bounces to 16,870 and 16,900 (strong) and we're already back to 16,900.  

    S&P 2,005 to 1,980 is 25 points so 5-point bounces to 1,985 and 1,990.  /ES hit 1,970 so 1,975 (where it is now) and 1,980 would be strong. 

    Nasdaq 4,600 was the non-spike top and 4,550 was the bottom until this morning (4,530).  I'm going to consider this morning a spike for now and throw it out (though we're still at 4,531) and I won't consider it a weak bounce until 4,560 and strong 4,570.  Intraday, using the 4,530 line, we'd look for 12 points weak to 4,542 and then 4,554 bit. of it does take it back intra-day, then we'd throw out the spike anyway – get it?   As to the /NQ, at 4,025 we can apply the same 12-points but, since 10s are significant, let's watch 4,035 and 4,045 but not be actually impressed until 4,050 is taken back.  

    NYSE 11,100 was the top but we know 11,000 is our Must Hold line so that's way more significant.  Still, it was a 200-point drop and that's 40-point bounces but, 50-point lines matter so 10,950 and 11,000 will be what we're going to watch this week.

    Russell 1,200 of course, was the top and we just tapped 1,150 and that works out to 50 points so 10-point bounces to 1,160 and 1,170 very simple or, it would be, if /TF wasn't at 1,144 now.  Still, let's call 1,140 the bottom on the Futures and look for 1,150 and 1,160 there.  

    If we fail these weak bounces today, it does not bode well for the week – though the Fed might save us on Wednesday – they're watching these levels too….

    So don't get sucked in by little moves up today.  As StJ points out, the Dow is BS and the other indexes are giving us no sign at all that they are strong.  

    Nat gas/QC – Thanks for reminder!  

    AAPL/StJ – I'm surprised they went so low, they must be expecting huge top-line numbers.

    TASR/Options – That slow, steady pace of the weapons cycle means they'll have orders for many years to come – not sure how it's a negative but yet, they have run up a bit much.  

    No me/StJ – I'm persona non-grata at business insider because I pointed out that Blodget is that guy who screwed people over in the dot com days.  I was told to "let it go" – or else.  So, no comment other than what's in Wiki:

    In 2002, then New York State Attorney General Eliot Spitzer published Merrill Lynch e-mails in which Blodget gave assessments about stocks which allegedly conflicted with what was publicly published.[5] In 2003, he was charged with civil securities fraud by the U.S. Securities and Exchange Commission.[6] He agreed to a permanent ban from the securities industry and paid a $2 million fine plus a $2 million disgorgement.[7]

    GTAT – also persona non-grata:

    AAPL bounces back over $100 already and all is well with indexes getting back to green.  

    Oil at $93.50 is a good shorting line (/CL), Dollar bouncing off $84.30 so watch that line for now.  


  14. Just sold GTAT March '15 9.00 naked puts for 1.05 … they make SOMETHING people will buy right? 


  15. I agree with you sn0, I'm in on a few of those


  16. GTAT/Sn0 – People are worried about this:

    MERRIMACK, N.H., Sept. 15, 2014 (GLOBE NEWSWIRE) — GT Advanced Technologies Inc. (GTAT) today announced that it will be holding a webcasted conference call the week of September 29th, after the close of its current quarter, to provide a business update. 

    /ES hit 1,980 so 5 more points and we're weak-bouncing!  

    Here's another fun one:

    • Shares of Sears Holdings (SHLD -6.3%) fall after the company announces it struck a deal for a short-term loan with Eddie Lampert.
    • Sarcasm is running sky-high over the deal, with a particular focus on the 25 properties that's backing the loan.

    So Eddie is lending SHLD $400M backed by 25 of SHLDs best properties so that, when they default (because Eddie decides not to pay Eddie), then he can confiscate the properties from himself for pennies on the Dollar and totally screw over the non-Eddie holders of SHLD stock – BRILLIANT! 

    • ICSC Retail Store Sales: +3% Y/Y vs. +4% last week.
    • -2.6% W/W vs. +0.7% last week.
    • "The report sees the year-on-year rate for September as a whole coming in at a steady +4-5%".
    • Part of an effort to simplify assets and cut costs, Calpers – the largest U.S. pension plan with $298B in AUM - will shed its entire $4B in hedge fund investments over the next year.
    • The decision comes following a review of the portfolio which began in March following the death of CIO Joseph Dear.
    • The move into hedge funds was part of the trendy alternative investments strategy in which private-equity and real estate were also embraced by Calpers and numerous other pension funds as ways to boost returns (and limit losses during market downturns).
    • The hedge fund program returned 7.1% to Calpers in the most recent fiscal year vs. its overall return of 18.4%. Fees, however, continued their upward march, costing Calpers $135M vs. $115M the year prior. Among those in which Calpers invested is Och-Ziff (NYSE:OZM), which had over $700M of Calpers' money at latest check.
    • Macau casino operators will see revenue drop 5% Y/Y for the June-to-August period, according to an estimate by Macau Business Daily.
    • A more aggressive stance by Beijing against corruption and lavish spending is viewed as changing the mindset of gamblers in Macau.
    • Morgan Stanley issued a report on Macau last night in which it noted a fact-finding mission to Macau left it with the impression that a floor hasn't been found yet for the revenue slide. A labor shortage in the territory could also have an impact, note analysts.
    • Shares of Macau-related stocks are lower in premarket trading: Melco Crown (NASDAQ:MPEL) -2.7%, Las Vegas Sands (NYSE:LVS) -3.0%, Wynn Resorts (NASDAQ:WYNN) -2.2%, MGM Resorts (NYSE:MGM) -2.9%, Galaxy Entertainment (OTCPK:GXYEF) -1.9%.

     

    • Based on recent signals from the Obama administration, it looks like Boeing (NYSE:BA) will win NASA's multibillion-dollar "space taxi" contract, WSJ reports.
    • Boeing is competing with Elon Musk's SpaceX and Sierra Nevada for the funding, although a joint award is a possibility.
    • The development of space taxis will also clear the way toward commercial space endeavors, which is likely to allow contractors to develop and operate space vehicles with limited federal supervision.

     

    • United Continental (NYSE:UAL) says it will pay eligible flight attendants up to $100,000 to leave the company through a voluntary buyout.
    • The deal aims to end furloughs at the over-staffed airline, and will recall all 1,450 flight attendants on leave so they may request the severance payment or return to work.
    • Problems of over-staffing at the airline increased after United retired some of its planes, leaving the company 2,000-plus flight attendants above capacity.

     

    • Microsoft (NASDAQ:MSFT) will give a sneak peek into Windows 9 at a Sept. 30 event in San Francisco.
    • People familiar with the company's plans say Microsoft will restore corporate user's confidence in the new version of Windows, after alienating some of the "office-worker" segment with the introduction of Windows 8.
    • Corporate buyers say the operating system did not integrate well into the typical office setup.
    • According to a report in the state-owned 21st Century Business Herald, Apple (NASDAQ:AAPL) may not get Beijing's approval for iPhone 6 sales until next year.
    • Meanwhile, China Mobile (NYSE:CHL) Chairman Xi Guohua tells reporters he doesn't know when the new iPhones will be available, and his company will focus on selling cheaper phones which don't require subsidies. "The direction of our development is to completely focus on the mass market,” says Xi. “We have 4G devices selling for ¥1K. I believe, subsidy or no subsidy, discount or no discount, the common person will be able to appreciate this.”
    • China Mobile fell the most in two years in Hong Kong acton overnight, down 3.9%. Apple is lower by 1.1% premarket.
    • President Barack Obama will announce an expansion of military and medical resources to fight the Ebola epidemic in West Africa later today.
    • The new plan involves as many as 3,000 U.S. forces to help organize, train new health care workers and build treatment clinics. The Department of Defense will direct $500M for the effort.
    • The World Health Organization's latest count estimates that 4,784 people have been infected with the virus, while 2,400 have died.

  17. Phil// GTAT – What would be a good bcs at the moment?  Or do you suggest to wait a bit till the con call is over?

    Thanks.


  18. ~~The new plan involves as many as 3,000 U.S. forces to help organize, train new health care workers and build treatment clinics. The Department of Defense will direct $500M for the effort.

    Why spend $50million when we can spend $500,000? The military cost is what? $1 million per year deployed.


  19. add 3 0s!


  20. TSLA / Phil – Thanks!

    AAPL – looking to do an initial trade – whats your view on selling the Jan16 90/80 bull put spread here, using half the proceeds to pay for a new TZA Oct 15/18 BCS to add to hedges going into the Fed tomorrow?

    Thanks


  21. TSLA/Phil .. just for learning purposes I thought I would share my speculative play on TSLA which I opened the same time you opened your long $250 puts .. I Sold naked Oct $300 calls and covered with Dec $310/340 call spread… I closed today locking in almost $1,000 ($2 per set) whereas you managed to make $8 per contract on your play … well done on the idea and thanks as usual :)


  22. ApplePay / Phil – At 0.15%, they need a lot of transactions to move the profit needle… $100B of sales brings in $150M in profits. No chump change but a rounding error in AAPL's balance sheet.

    I am sure there are other calculations in the part of AAPL like getting more people to get to the newer phones since everything below a iPhone 5 is locked out of ApplePlay.


  23. http://circuitcellar.com/cc-blog/solar-power-the-circuit-cellar-free-download/

    This is rare, allowing a free download, this is on solar power. Looks very good, I have only scanned down, if interested down load and save it soon before they change their mind.


  24. SHLD / Phil – Besides Eddie, the IB and traders, who made on money on SHLD? I really don't care about guys like him. Shareholders are just treated like money bags. 


  25. Zacks:  Cliffs Natural Resources Inc. (CLF) has amended its revolving credit facility through a successful negotiation with the banking group party, which enables it to repurchase its outstanding common shares in the open market or in private negotiated transactions up to a maximum of $200 million. The authorization is valid till Dec 31, 2015.

    Phil, this seems to be CLF borrowing money to buy back its own shares,  Is this just the new board skimming money off for the major stockholders in a bout of financial engineering, or is this a good thing long term in your opinion.


  26. Phil,

    RUT /TF the laggard now?


  27. why is oil bouncing so hard ? inventory ?


  28. Wow, big pop on the EU close.  

    Their markets finished down about 0.35% but then we started flying right at 11:30.  I'm liking a short entry on /ES at 1,990 (strong bounce) and /CL at $95.75 (last one failed) – just seems unrealistic to me.   Dangerous plays though, I imagine some rumor started this rally – don't know what yet.  

    17,050 on /YM looking good to short too if it gets there (17,033 now).

    GTAT/Rookie – I'd just go with the short puts at the moment, you can always add a bull call spread AFTER we're sure it's bottomed. You should always assume your entry is going to be wrong and expect to have to DD so selling a few 2016 $12 puts at $4 is a net $8 entry and a good way to test the waters with the stock at $11.63.  

    Ebola/Shadow – I think it's much worse than they are letting on.  This virus is a very nasty potential to wreck economic havok and I bet they are worried about terrorists purposely infecting themselves and then going to a major city to infect others.  That would cost a crapload more than $500M and take a lot more than 3,000 troops to contain.  

    AAPL/Mckeojh – I do not like selling bull put spreads for money.  The risk ($6.25 in this case) is greater than the reward and, while I agree it's very unlikely for AAPL to fail $90, anything can happen over two years.  If you REALLY want to own AAPL at $80, you can sell those puts naked for $4.70 and, if you don't, then you shouldn't use AAPL for an offset anyway.  Think about it, if you are not 100% confident that AAPL will hold $80, why are you selling $90 puts with 150% risk?  GTAT above is a good put sale to offset, or the $10 puts at $2.70 also very nice.  


  29. /CL
    PBOC ?


  30. Ebola Phil

    The problem is spreading and to me it is stupid to put the military at such an extra cost or is the terror threat real?


  31. Thanks Phil, appreciate it – margin requirements on my account essentially. Don't mind it too much whilst I've got my training wheels on!


  32. TSLA/DM – That's another nice way to play it.  We were confident enough to sell the naked calls too ($270s) with no cover.  

    Submitted on 2014/08/29 at 9:36 am

    400/Rustle – Yes but only 20 superchargers.  The other 380 are what we call in the US – "outlets".  I like shorting those Sept $270s at $8 on this BS. 

    ApplePay/StJ – That makes me think their projections must be in Trillions, not Billions.  I think they are projecting that they really do replace credit cards or this wouldn't be worth the trouble.  Using the other assumption, that AAPL thinks it will sell more iPhones, the base assumption is still that ApplePay will be the next big thing for people to use.  Will be interesting to see how it goes.  

    SHLD/StJ – Really seems like only the iBanks made money so far.  Eddie looking at huge losses if he can't squeeze value out of the real estate.  Also, this thing has been a career trap for the guy who was supposed to be the next Warren Buffett – at this point, he may just be chewing off his leg to get out of the trap – OR – this may be the end game of his brilliant strategy and he's about to buy another huge chunk of SHLD after chasing out more weak hands.   We had faith last time but this time I'm not feeling as good about them – as they've already ditched a lot of good assets.  

    CLF/Jet – Well we always like them down here (teens) and they also command really good prices on short puts.  The 2017 $8 puts are selling for $1.75 and that nets you in for $6.25 with the stock at $15 – that's pretty cool!  You can be more aggressive and sell the $15 puts for $5.40 and that nets $9.60 – also not a bad 33% discount off the current price in exchange for you agreeing to accept $540 per contract!  

    /TF/Jasu – Sure, if you want to make a bull play, /TF at 1,140 is the way to go.  That's just the kind of thing we look for when the market takes off – who hasn't moved yet?  

    Oil/Wombat – I have no clue what's driving this.  I guess we can credit the PBOC but $81Bn used to be a month of POMO. Still, better than nothing and indicates they are willing to get more aggressive.  

    Ebola/Shadow – It's a clear threat to national security and the morons in Congress blocked regular aid so Obama has no choice but to deploy the military.  Go watch Contagion if you want to get an idea of what kind of hell an outbreak would be like in the US.  

    See the guys in this picture – that's just for one guy who died and, despite these measures – doctors are still catching it.  That's a VERY NASTY disease, the kind of disease that costs hundreds of thousands to treat and even the bodies must be disposed of very carefully.  The more people who catch it, the more chance it may mutate and get more aggressive.  Even China is rushing in on this one – the potential for this to get out of hand is growing every day.  

    China's Evolving Role in the Fight Against Ebola

    According to Xinhua, the team that left for Sierra Leone on Tuesday is from the Chinese Center for Disease Control and Prevention and will be conducting its work at the Sierra Leone-China Friendship Hospital in the outskirts of Freetown, the country’s capital. The Chinese team is expected to “carry out lab screening and observation to help Sierra Leone to improve lab testing.” The 59-member team adds to the 115 medical experts China has already sent to Guinea, Liberia, and Sierra Leone. This group is the first Chinese humanitarian team to bring laboratory resources to the frontlines in the fight against Ebola.

    Now, if you are a paranoid American, you may also be uncomfortable with the Chinese getting their hands on the World's most deadly virus – you can be sure Lindsey Graham is freaking out:

     

    No problem, Mck – letting me know your restrictions is helpful.  


  33. Oh, the Dollar was smacked down to 84 (0.5%) – there's your rally!  Wow, what a huge scam.  /NKD hasn't fallen, so they know it's a scam (15,910) but best to let this play out – likely some kind of Fed easing rumor is afoot.  

    The Pound jumped from $1.62 to $1.63 minutes after the EU close and even the Euro went from $1.294 to $1.30.  The Yen went from 107.20 to 106.80 – huge currency moves.  

    Also on daily show – Roosevelts on PBS by Ken Burns is probably going to be great:

     


  34. CLF/Phil  Thanks, I have already been in CLF for a while (Jan 16 13/20 BCS and 13 short put, plus some at a higher level).  Just wondering if this latest news (which seemed to pop the stock yesterday) changes anything going forward.


  35. CLF/Jet – No change, just shows management thinks they are underpriced too. 

    Time for our Webinar folks – See you HERE.  


  36. i love that Ken Burns is a rock star. There may be hope for this country.


  37. Phil / StJ / Apple Pay:

     

    The case is not clear because they are not competing with V or AMEX they will get a "transaction fee" that surely will  be a "per transaction" amount, independent of the value of the voucher , so assuming that 40% of the cards base store in Apple use it for $1000 in 10 operations means around 380 million./ year

    I know they are not taking so much work for this but still model is not clear at least for me at this moment.


  38. /CL
    inventory today or tomorrow ?


  39. wombat inventory is tomorrow 10:30 or 7:30 for you.


  40. Adobe Systems Inc. (ADBE) anyone trading earnings today?

     

    Thanks


  41. maybe oil is bottoming, world is safe again for oil crooks?  :)

    Brent contango seems to be backing off a bit.


  42. FL/Phil – any idea why so strong?


  43. Burns/Wombat – So many great documentaries he's done.  

    Transaction Volume by Network, 2006-2010AAPL/Advill – No, it's a percentage of the transaction – much more than a fee in most cases and a very unusual arrangement.  V, MA and AXP were at about $6Tn in 2010, probably $7.5Tn now.  While 0.0015 may not sound like much, it's $11.25Bn of that amount and it's all profit for AAPL as they just collect the fees.  I'm sure they think they'll capture 20% of that market but also they will enable transactions in the third World and that's a market the CC companies are anxious to reach as well.  

    Keep in mind, with AAPL, all they are looking at is how many people will use their phone instead of their CC to complete a transaction.  People already have the phones, they already have the credit – it's just a matter of getting the new phones and the app and then deciding which they'd rather use.  Maybe they'll get 50% of the transactions from AAPL users?  If they end up with as many people owning iPhones as iPods one day (ie. everyone), this could be bigger than people expect.  

    TEX finally got an upgrade (Stifel) and they are already in the Income Portfolio from our Buy List and I'm for adding 5 more 2016 $35 calls ($4.50) and selling 5 more 2016 $35 puts ($6.50) on that position

    CNBC says rumor of OPEC output cut is boosting oil.  If it wasn't for the Fed, I'd short the crap out of it – this is just manipulation to get the price up so they can roll their barrels ahead of expiration on Monday.  

    ADBE/QC – I like them but not cheap anymore.  Wouldn't buy them here but also wouldn't bet against.  


  44. FL/Scott – I don't see anything but a lot of money pouring into all sorts of things.  


  45. SCO Sept $30s at .25 are a fun play on oil coming back.


  46. They're working hard to keep 2,000 into the close.  Dow 17,150 – very impressive but NYSE still not 11,000.

    I have to leave a bit early for a meeting today.  


  47. i'm coming to the conclusion that selling puts in a normal account simply isn't worth it.


  48. Phil / Apple pay

    Well is an unusual deal no doubt, still, if you lose your battery you lose your credit!. 

    Is  an interesting operation if they are able to make it happen.


  49. TEX/Phil:  So BUYING 5 more $35 calls in addition to the 5 $30 calls we already have as part of a $30/$40 BCS?


  50. advil // APay
    I don't think they're mutually exclusive. I think that Apple fans will use their phones for convenience but also carry cards. Thats a hard habit to break.
    Cash is 'hole other discussion ; >


  51. wow – RIG is just tanking (pun intended )


  52. Wombat/ selling puts in regular acct? Even on full margin, the return can be quite good sometimes. Why do you say not worth it?


  53. grif / i'm not having the same experience. in a PM they're great, but in a reg-t account it just ties up too much cash.


  54. Wombat? I didn't mean full margin, meant cash-secured.  


  55. Phil:- do u think SQQQ is better or TQQQ ?


  56. For cash secured put selling – executing spreads helps with margin requirements considerably. Sell higher strike put and purchase a much lower put to cap your margin requirements.


  57. eric //
    ya, thats a good idea.


  58. Puts/Wombat – It's never worth it if you don't fully intend to buy the stock at the net price.  Otherwise, it's a leveraged gamble that you can be forced out of on a move against you and you can only win if it goes your way the whole time – silly bet in that case. 

    Battery/Advill – Not if the merchant has a charger!  Expect a lot more charging stations at retail outlets, like the ones at airports.  

    TEX/Kinki – Yes, I didn't want to buy back the 5 short $40 calls (still $2.75) but adding 5 long $35s puts us more bullish and also lets us stop out the $30s if we get a good run up.  Keep in mind we sold the $40s for $7.05 so, if we end up in the $35/45 bull call spread it's a net $2.55 credit and then anything over $5 we sell the $30s for (now $7) is profit with a $5 kicker on the remaining spread (and the short put money).  

    Cards/Wombat – As soon as they accept my phone as a driver's license, I doubt I'll ever carry a wallet again.  When I am in Vegas, I generally put my wallet in the safe and just take my license, my CC, cash and my phone with me.  Now, if I can just use my phone and that's with me anyway, it's only a matter of time before I get comfortable not needing the rest.  It's really up to AAPL to pull it off so people feel it's easier than using cash or credit.

    SQQQ/Abseth – Depends on the goal.  The reason we used TQQQ puts is because ultras tend to decay over the long haul so it was in our favor on a long-term position to bet TQQQ would go down, rather than SQQQ would go up.  In a short time-frame (1-3 months), I prefer to just bet SQQQ up.  

    Fail at 2,000 (as usual)!  


  59. Wombat/ selling puts/  just to add to the discussion:

    The way I understand it, even if you buy back a sold put that you've held for over a year its still considered a short term gain. But, If you let a sold put expire worthless that is over a year old, it will be considered , for tax purposes, a long term capital gain. 


  60. I missed today's webinar because I was sent on errand runs all day. While driving all over the suburbs of Philadelphia I noticed that there is more road work going on than I have seen in quite some time. I don't know if these are federal or state projects, but someone is doing their part to keep recove ry in gear! Cynical part of me says it could be our embattled incumbent Governor, reading (hopefully, if there is any justice) his poll numbers and seeing that his time is ending. He probably owes a bunch of wealthy construction company owners for buying him this office and had to scramble to pay them back. If it's federal, then I don't know how they got so much for PA , but there was work going on at every major road I turned onto today! It was unbelievable. Of course, the sight of 10 guys , and only two working while eight stood around talking was also a theme. The biggest jam on the biggest road, was the one that steamed me most, because when I finally got up to where the work was being done, at least five guys were laying down, napping on a grassy knoll, two guys were flagging for the one open lane on a four lane road, and one guy was staring at drying asphalt. I am guessing it was lunch, but why not take away the cones for that period of time? I think they get off on having that power for however long they do have it. Pricks. 


  61. stock // puts
    interesting – thanks


  62. OPEC's Badri expects OPEC to lower output target

    Fox Business-4 hours agoShare
    OPEC's secretary general said he expected the group to lower its oil output target when it meets in late November, which would be its first …
    Oil Rebounds on Report that OPEC Could Cut Output

    Wall Street Journal-5 hours ago

    They are really working that story.  Almost makes you forget its that guy's job to talk up oil:

    Libya, Iraq Insecurity May Hit Future OPEC Supply Prospects

    Wall Street Journal-Sep 15, 2014Share
    VIENNA—Amid a continuing slide in global oil prices, the head of OPEC has said political insecurity in Iraq and Libya could affect the ..

    OPEC ChiefSees Oil Price Rebounding by Year End

    Wall Street Journal-Sep 12, 2014
    VIENNA—OPEC's chief said on Friday that no emergency meeting is being considered as he expects oil prices to rebound by the end of the …

    Global demand for crude oil slowed at "remarkable” pace in second 

    FinFacts Ireland-Sep 12, 2014Share
    Global supply declined 400,000 barrels per day (400 kb/d) in August, to 92.9 mb/d, as non-OPEC production eased. Also, non-OPEC …

    US EIA: Trims 2014 Oil Demand Outlook, Upgrades Non-OPEC

    MNI News-Sep 9, 2014
    WASHINGTON (MNI) – The U.S. Energy Information Administration Tuesday lowered its forecast for how much it sees world oil demand growing …

    OPEC cuts Russia's oil supply outlook

    CNBC-Sep 10, 2014Share
    The Organization of the Petroleum Exporting Countries (OPEC) slashed its oil supply forecast for Russia next year and said continued …

    OPEC unfazed by oil's drop below $100 – sources

    Reuters UK-Sep 8, 2014
    Top OPEC exporter Saudi Arabia favours oil at $100, which many others … A second source made similar remarks to the Gulf OPEC delegate.
    OPEC crude oil production increased to a one-year high in August, led by … OPEC ministers kept their output target unchanged at 30 million …
    Reuters-Aug 19, 2014Share
    The Organization of the Petroleum Exporting Countries (OPEC) logo is pictured at its headquarters in Vienna June 10, 2014.

    Roads/Craigs – Always a disaster but at least it puts people to work.  


  63. SHLD / Phil – you touched briefly on them today but interested if the structure of the 400mm loan vs the 25 properties changes your view on the break-up value overall. Not in them but looks a lot more ominous for shareholders now right?


  64. ~~craigsa620

    I sent you an e-mail.


  65. SHLD/Mckeo – That's not something that can be determined without study but it's BS self-dealing, no matter how "fair" he tries to make it look.  Eddie has a responsibility to his Fund to get the best properties he can as collateral and also has a responsibility as CEO of SHLD to not let some Hedge Fund jackass take him to the cleaners.  Eddie + ESL own more than 50% of SHLD, so no one is going to complain – other than the SHLD minority shareholders, of course.  As far as I know, they haven't even disclosed the properties they are putting up – that's strange in and of itself.

    Oops, I was supposed to leave early – later all, big day tomorrow!  



  66. Selling cash-secured puts// I don't mind tying up cash to make 10-20% or more yearly gains, with 20% or more downside protection (more with rolling), knowing I would want to buy stock at put-to price. The fact that my sold puts are cash-secured keeps me prudent and very selective. Realistically, even if you have PM, you MUST have the money to buy the stock (as Phil said!). Thanks for tax info, Stockbern. That adds another element to decision-making.


  67. RAX taking to the shed and beaten senseless AH – down 15% or so!


  68. VFC – holy cow! this designer juggernaut is boogying along..!

    https://www.youtube.com/watch?v=_YZnzwJ2mbk#t=6



  69. When will they quit:

    http://talkingpointsmemo.com/livewire/walker-drug-test-food-stamps

    Wisconsin Gov. Scott Walker (R) has proposed drug tests for recipients of food stamp and unemployment benefits, even though the requirement would violate federal law.

    I would be for it if they tested anyone who receives help from the government – bank CEOs, farmers, senators and congressmen, defense industry CEOs and so on… I guess people on food stamps don't have lobbyists.



  70. stjean

    They have tried it and they don't find drug abusers because people that broke can't afford drugs!


  71. Fact about being on narcotics for a total over 3.5 years. I signed contracts for random drug testing and each of three times I was told we have to stop this I offered to pee in a cup. Not once would they test me because the results wouldn't match their profile. This is a scare you from collecting and the drug abusers would never apply. 


  72. do you like nkd short overnight phil?

    thanks




  73. Adobe revenue misses on disappointing digital media sales
    http://www.reuters.com/article/2014/09/16/us-adobe-systems-results-idUSKBN0HB2ET20140916


  74. 401(k) fail: Expert sees ‘totally unexpected’ drop in accounts
    http://fortune.com/2014/09/16/401k-balances-drop/




  75. Leading tech investors warn of bubble risk ‘unprecedented since 1999′
    http://www.theguardian.com/technology/2014/sep/16/tech-bubble-warning-investors-dotcom-losing-money


  76. Space X / Phil – Will NASA also buy Model S cars for the astronauts?


  77. http://www.answers.com/Q/Does_Bayer_aspirin_raise_blood_pressure

    This is the problem, on TV take it and the reality is this and I have a BP problem and many doctors have said this aspirin thing is BS! But the ads pay for TV.


  78. From Bloomberg, Sep 16, 2014, 7:14:59 PM


    Sept. 16 (Bloomberg) — Christopher Wood, the chief equity strategist at CLSA Asia-Pacific Markets in Hong Kong, talks about stocks, economies and governments’ policies of India, China and Japan.
    He also talks about Federal Reserve policy and its implications for Asia. He speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    Asian index futures paced gains in
    U.S. stocks after a report that China’s central bank intensified
    its stimulus measures. The dollar held declines against most of
    its major peers before the Federal Reserve reviews interest
    rates
    , while crude oil was near a two-week high.

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

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


  79. From Bloomberg, Sep 16, 2014, 1:34:01 PM

    Syrian government troops sit atop a tank as they drive past a damaged building in Mleiha, on the outskirts of the capital Damascus, on August 15, 2014. Photographer: Louai Beshara/AFP via Getty Images

    U.S. House leaders of both parties said they expect to pass a measure granting President Barack Obama’s request to arm and equip Syrian rebels.

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

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


  80. From Bloomberg, Sep 16, 2014, 5:54:17 AM


    A foreign exchange brokerage in Tokyo. Photographer: Yuriko Nakao/Bloomberg

    The world’s biggest banks are overhauling how they trade currencies to regain the trust of customers and preempt regulators’ efforts to force changes on an industry tarnished by allegations of manipulation.

    To read the entire article, go to http://bloom.bg/1BHM0wH

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


  81. From Bloomberg, Sep 16, 2014, 3:51:41 PM


    Borrowing to buy doesn’t make you richer. 

    It’s pretty obvious how credit drives my personal household consumption. If I borrow, I can get a nice big TV and a new car, but eventually I’ll have to skimp to pay it back. In a way, the consumption-fueled borrowing binge is an illusion of wealth — after all, borrowing doesn’t increase my salary. Pleasure today means pain tomorrow.

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

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


  82. From Bloomberg, Sep 16, 2014, 5:09:39 PM

    The dollar fell the most against
    its major peers in four months on speculation the Federal
    Reserve
    will maintain a pledge to keep interest rates low for a
    “considerable time” in its policy statement tomorrow.

    To read the entire article, go to http://bloom.bg/XcFfU6

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


  83. From Bloomberg, Sep 16, 2014, 5:46:17 PM


    Pedestrians walk past an Industrial and Commercial Bank of China Ltd. (ICBC) branch in Shanghai, China. Photographer: Tomohiro Ohsumi/Bloomberg

    Chinese banks rallied in New York trading as Sina.com said the central bank is providing the biggest lenders with 500 billion yuan ($81 billion) of financing to bolster loan growth and shore up the economy.

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

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


  84. From Bloomberg, Sep 16, 2014, 9:54:25 AM

    Visitors at the High Line park in New York City. Photographer: Spencer Platt/Getty Images

    Janna Weaver is proud she’s managed to keep her bamboo plant alive for more than a year. She’s not quite ready for a pet yet, and a child? “Definitely not anytime soon.”

    To read the entire article, go to http://bloom.bg/1m9V0aj

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


  85. From Bloomberg, Sep 16, 2014, 2:30:00 PM

    A train moves past a giant hoarding displaying portraits of Indian Prime Minister Narendra Modi and Chinese President Xi Jinping in preparation of Xi’s arrival in Ahmadabad, India. Photographer: Ajit Solanki/AP Photo

    Chinese President Xi Jinping heads to India today as the world’s two most populous countries look to bolster economic ties and resolve a long-running border dispute.

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

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


  86. Janet Yellen Trolls America’s Poor: Tells Them It Is Important To Get Rich
    http://www.zerohedge.com/news/2014-09-16/janet-yellen-trolls-americas-poor-tells-them-it-important-get-rich





  87. Massive Flight Cancellations as Air France Pilots Go on Strike
    http://time.com/3380583/air-france-pilots-strike/


  88. ‘Bloodied’ Kent State sweatshirt removed from Urban Outfitters website
    http://www.theguardian.com/world/2014/sep/15/bloodied-kent-state-sweatshirt-urban-outfitters


  89. Housing The Homeless Saves Money--Here’s The Research That Proves It
    http://www.fastcoexist.com/3028384/housing-the-homeless-saves-money-heres-the-research-that-proves-it


  90. China seems a scary place to invest, given its politics, demographics, population profile, and the general collapse in world wide consumer demand.  On the other hand, I've been reading Kissinger's "On China", which is a weighty tome but, half way through it, feel that it almost reads like a contemporary thriller. He writes very well, by the way.  

     

    One aspect that shines through Chinese history again and again is China's ability to re-invent itself — their incredible pragmatism — without losing their cultural anchor in a 3,000 year old continuous history of civilization.  I'm only halfway through it  - Mao comes off as 1/2 visionary, 1/2 fruitcake, but, damn, he did pull off some amazing feats — even the "Cultural Revolution" wasn't a total writeoff in terms of taking China forward. No prognoses, though — lemme finish it, if I find an invest-able thread I'll mention it down the road.  Don't sell 'em short, though — at least, not for long.


  91. ‘Impulse Society’ blames hyper-capitalism for America’s social ills
    http://www.latimes.com/business/la-fi-books-20140914-story.html




  92. I'm in the third world now, and even people subsisting who can 't afford to go the to dentist for most of their lives know that the iPhone is the premium brand. Galaxies are very common but are always viewed as what those who can't afford an iPhone have. 

    I think ApplePay is going to kill it. They seized a huge opportunity with smartphones in the iPhone, now they will leverage that success onto a new scale. "Opportunities when seized, multiply" Sun Tzu. 


  93. Good morning!  

    Just ditched those oil shorts about even at $94.66 (up 0.09) after leaving them overnight.  Best was $94.45  but moving up now.  /ES shorts sill on at 1,991.32 avg entry and about even and I'm still hoping for 1,980.  

    The API Report was certainly not encouraging but we're still up on the OPEC BS – the meeting isn't until November – this is utter nonsense and I'm still into shorting but not over $94.75 unless it's $94.95, at which point I'm short again until $95 breaks and then I would just wait for inventories to see what's up.

    The industry-funded American Petroleum Institute (API) reported its own, separate readings on US oil stocks yesterday. The group read a 3m-barrel build for crude inventories and 1m for distillates, while gasoline stocks were drawn by 1.2m barrels.

    Demand outlook

    On a broader scale of demand in the economy, several key figures will be reported today. CrucialCPI readings for the US will be posted, and analysts expect robust figures, after PPI readings met expectations yesterday, strengthening outlooks of an earlier-than-previously-expected US rate hike. The US’ monetary policy body will announce any decisions from its September meeting today, which could hint towards a stronger dollar.

    A pricier greenback would be bearish for oil, as it would increase its cost for other currencies, while also boosting demand outlooks in the top-consumer.

    Meanwhile, Europe, which consumes about 14% of all oil, has also clocked in its fair share of bearish sentiment with a plethora of negative data. Unlike China, however, the European authority has already intervened with a central lending rate cut to 0.05%, the lowest ever, and the launch of a €3tn QE program.

    Investors now eye upcoming EU CPI data, set to gauge any early effects of ECB’s intervention, and the pace of the Bloc’s recovery.

    Previously, China, which accounts for 11% of total oil demand, posted the latest in a string of downbeat economic data, with industrial production for August logging the slowest annual growth in almost six years. Below-par data on retail sales, investments and CPI had also weighed on Chinese outlooks, though also spurring speculation that authorities will intervene more heavily to stimulate faltering growth.

    Technical support and resistance levels

    According to Binary Tribune’s daily analysis for Monday, West Texas Intermediate October futures’ central pivot point is at $94.18. In case the contract breaches the first resistance level at $95.89, it will probably continue up to test $96.91. Should the second key resistance be broken, the US benchmark will most likely attempt to advance to $98.62.

    If the contract manages to breach the first key support at $93.16, it will probably continue to drop and test $91.45. With this second key support broken, movement to the downside will probably continue to $90.43.

    Meanwhile, November Brent’s central pivot point is projected at $98.65. The contract will see its first resistance level at $99.85. If breached, it will probably rise and test $100.66. In case the second key resistance is broken, the European crude benchmark will probably attempt to advance to $101.86.

    If Brent manages to penetrate the first key support at $97.84, it will likely continue down to test $96.64. With the second support broken, downside movement may extend to $95.83 per barrel.


  94. National Debt 2014Happy $18Tn in debt, by the way!  

    Officially, the Nikkei was flat but /NKD back to 15,850 – as if yesterday's idiotic Futures pump never happened.  

    As I said – you have to have conviction to play these positions with all these rumors flying around.  I can only hope our own indexes correct all of yesterday's nonsense too!  

    Hang Seng came back 1% (1/2 of yesterday's loss) on stimulus news (the one that rallied us 1%, half a world away) but check out their chart – ristickulous!  

    Of course, not as silly-looking as the Shanghai, which faked a government-mandated 0.5% gain into the close.

    I will just keep saying that this is the same kind of manipulated BS we saw in 2008, when huge efforts were being made to keep the markets up – despite all Fundamental evidence to the contrary.  People told me Fundamentals didn't matter then too!  

    Europe gapped open about half a point up and is still up about half a point into lunch.  Our Futures are flat so far.  In fact, total flatline since the pumped-up close.  It's almost as if someone wants to make sure we stay here – for now.  

    Since the Fed is not supposed to be doing anything and even Hilsenrath said they won't do anything – what was that rally about?  No one thought they were going to tighten at this meeting.  I think the point of the "rally" was to re-position us for a nice drop when the Fed does nothing.  This is GS and JPM's way of putting on a big temper-tantrum later for Janet, in hopes of getting her to back off at the next meeting – that's my working theory.  

    Look who's been reading PSW:   Russell 2000 a concern as Cashin alludes to 'Death cross' - "On the macro scale, we're all worried about Europe and whatever, so they [Russell 2000 stocks] actually should be doing better than they are," Cashin said. "The weakness is concerning, and it does look like if the bears are going to have a day, if they're going to make things break, it will be the Russell they'll use as a vehicle."

    How Financial Bubbles Fester And Burst – Even As The Fed Says Not To Worry

    Economic Policy Treats Symptoms, Not Underlying Causes

    How Banks Continue FX Rigging Right Under The SEC's Noses

     

    Foreigners snub long-term US assets for 2nd month in July. Foreigners sold long-term U.S. securities in July for a second straight month, led by outflows in Treasuries, stocks, and corporate bonds, data from the U.S. Treasury Department showed on Tuesday. Net sales of long-term U.S. assets notched $18.6 billion in July after $18.7 billion the previous month. Including short-dated assets such as bills, overseas investors bought $57.7 billion in U.S. assets, recovering from outflows of $142 billion in June.

    Scots Independence Campaigns Make Last Appeal for VictoryThe battle over Scotland’s future in the U.K. entered the final day of campaigning with the pro-independence side saying it had the momentum to win the ballot and the “no” camp urging voters not to use it as a protest. Three polls last night showed the anti-independence Better Together group backed by Prime Minister David Cameron and the main U.K. parties leading the “yes” campaign by 52 percent to 48 percent, excluding undecided voters. All the latest surveys showed the gap was closing fast. ?

    Move along folks, nothing to see here - Citi Warns Moody's May Put France On Downgrade Review This Friday

    Ukraine Truce Wobbles as Eastern Regions’ Power Expanded

    Ukraine Currency Crashes To Record Low As IMF Blasts "Gross Abuses"

    Russia Takes Double Punch as Vanishing Workers Fan PricesThe aging workforce is packing a double punch for the Russian economy. The unborn generation of the 1990s, a period of hyperinflation and instability after the Soviet breakup, left the nation depleted of younger workers. Unemployment is at a record low, putting pressure on wages (RUMEREAL) and helping keep inflation near the fastest since 2011. The poor demographics are shaving 0.5 percentage point off economic growth a year, according to the Higher School of Economics in Moscow, which estimates the working-age population will shrink by as many as 15 million people, or more than the size of the Russian capital, by 2030.

    Fed Dims Emerging Markets' Allure

    Data Flaws in China Cities With Worst Air Risk Xi Pledge. China’s efforts to name and shame its filthiest power stations and impose tough new emission standards are the leading weapons in President Xi Jinping’s war on pollution. The world shouldn’t hold its breath waiting for him to declare victory.

    Calls For China Stimulus Suggest Lack of Faith. Calls for stimulus policies including interest rate cuts following negative economic data suggest a lack of faith in China's reform efforts, an unsigned commentary said. Hoping for stimulus policies in the face of increased economic pressure is short-sighted and does no good to long-term economic development. China has enough tolerance and policy tools to deal with economic slowdown.

     

    The Ultimate Billionaire Status Symbol In China: Leaving The Country

    Sydney’s Hot Housing Speculators Spark RBA Alarm at Fallout RiskA 16 percent jump in Sydney house prices in the past year is sparking alarm at Australia’s central bank. Buyers shouldn’t be overly bullish in property purchases, Reserve Bank of Australia Assistant Governor Christopher Kent said at a Bloomberg Summit in Sydney yesterday. An investor-led surge in prices may amplify any subsequent fall and risk a drop in consumer spending, hurting the economy, the bank said yesterday in minutes from its Sept. 2 board meeting.

    Calpers exit could heap pressure on hedge fund feesThe California Public Employees Retirement System handed fellow U.S. pension funds a hefty club to beat down hedge fund fees and demand better returns this week when it voted to pull out of hedge funds entirely, investors said.

    Cloud Computing Company Rackspace(RAX) Isn't Selling Itself And Now Its Stock Is Crashing

    • Sony Loss Forecast Grows to $2.15 Billion

      Sony Corp. expects to post a much deeper net loss for the current fiscal year, as it cut the value of its mobile communications unit after smartphone sales failed to meet forecasts. 3:45 AM

    iOS 8: A New Phone Without Buying One

    Ebola's Warning for an Unprepared AmericaThe slow response to the worsening crisis in Africa shows how vulnerable the U.S. is to bioterror or a pandemic.Crude Oil Production


  95. That's the right attitude on puts, Griffin.  

    RAX/StJ – As I keep warning people, it's a crap commodity business with prices subject to Moore's law (always dropping) with newer competitors having an advantage over old ones.  These guys have ridiculous valuations compared to their actual growth potential.  

    VFC/Scott – Cramer just pushed them.  Good premise, cotton dropping is good for them.  Yahoo Finance is now doing an interesting thing by featuring the video clips on the stock page – it's going to be important to watch out for that as it's a powerful way to pump stocks.  

    Big Chart – Sad, not even weak bounce on the RUT but the rest are looking good.  Watch that 50 dma on the RUT to see if it comes back (1,152.81).  We still have 3 reds on our Must Hold lines so we need those 20 points on NYSE before we can tap the Buy List. 

    Walker/StJ – This one says it all:

    When you stop aiding people, the need doesn't go away, you're just shifting the burden.  Government should be involved in solving the problems and, if not, then giving aid.  This cutting aid, ignoring the problems and blaming the victims crap is sick!  

    And let's not forget:

    /NKD/Tommy – Sorry I'm late on that but of course I like it short.  I actually wish we would have gone higher so we could hit EWJ shorts over $12 again.

    Space X/StJ – Very big win for them on this contract.  Maybe Musk will make an electric space shuttle, to create demand for all those batteries he wants to make.  cheeky

    OK, I have to admit that's a kick-ass shirt!   I love the mandatory line-up of children – looks like some PR person stuck them up there.  

    Insulin pen/Shadow – What's wrong with that?  

    Kissinger/ZZ – World Order is the new one.  I think Kissinger is a brilliant guy but he's also done some very twisted stuff when he had power.  I guess he got wiser in his old(er) age (90 now) or maybe he's just papering over his legacy.  Still, as the reviewer of his recent book rightly says:  "it is a book that every member of Congress should be locked in a room with — and forced to read before taking the oath of office."

    As to China, they are in their 2nd generation of only children having only children – how can we possibly relate to them?  That is such a profound and fundamental difference from our own way of life and it's really just a huge social-engineering experiment that's in progress (since 1979).  Even with that policy, longer life expectancy and lower infant mortality have raised the population by 40% in 35 years (now 1.35Bn).  Of course, that's also led to a society that has more men than women – I've visited colleges like that – they are no fun!  

    Sex ratio at birth in mainland China, males per 100 females, 1980–2010.

    I found it interesting that Kissinger took none of this into account in "On China" – I think the China today is not the China of history – how can it be when such a profound change in family life has been introduced?  Still, it doesn't make Kissinger's observations invalid – just incomplete and, of course, while I respect him, I don't think I can ever be a fan of the man – not after all he's done.  

    Water/StJ – Anyone who's gone to Mexico has learned to appreciate how great our country is for fresh water.  So many people live their whole lives without ever thinking about water safety.  Let's hope we never have to…

    ApplePay/Sn0 – They now have $149 iPod Touches, soon to be $99 so I imagine in 5 years they'll have iPhones just as cheap with all the pay features.  You don't need a phone plan to use the payment system so that means that, down the road, almost anyone will be able to have a wallet device.  Interesting times ahead…

    Apple® - iPod nano® 16GB MP3 Player (7th Generation - Latest Model) - Blue - Larger Front

    Overall Customer Rating:
     

     4.6

    96% of customers would recommend this product to a friend (3,189 out of 3,328)
    • 2.5-inch Multi-Touch color display with 240-by-432 pixel resolution
    • Only 5.4-mm thin—the thinnest iPod ever
    • Easy-to-use controls to quickly adjust volume, or play, pause, and change songs
    • Bluetooth 4.0
    • Widescreen video
    • FM radio with Live Pause
    • Built-in pedometer for fitness
    • Built-in Nike+ support for voice feedback and syncing to nikeplus.com
    • Anodized aluminum in seven gorgeous colors
    • 16GB capacity*
    • Up to 30 hours of music playback**
    • Apple EarPods
    • Works with Mac and PC

    Damn, that's miles more powerful than a laptop I spent $2,000 on 10 years ago!  


  96. Oil back at $94.60, great call!