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Fabulous Friday – Our AliBaba Play Pays off Big!

We're already up over 100% on Alibaba.

How, you may wonder?  Well, two ways:  Back in October of 2007, before Alibaba IPO'd in China, I was touting the company when it had an $8Bn valuation ($1.10 per  share – pre-split).  I was the first and only analyst in the US to point out the benefits of Yahoo's investment back then and our Members who play the Asian markets were able to take advantage of that and today should be the culmination of the white whale of investing – the 20-bagger as Alibaba is expected to IPO in the US at $160Bn just 7 years later

YHOO, on the other hand, took the long and winding road but it should finally be getting to our $50 target and that's another 100% gain on the stock – though a very small consolation to those who didn't pick up AliBaba directly.  Fortunately, at Philstockworld, we know how to BE THE HOUSE – Not the Gambler and, back in June, when the rumors of the AliBaba IPO began we came up with a way for our Members to make 400% playing YHOO into the AliBaba IPO.  

From our Live Member Chat Room:

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.

That $4,800 bet in our Short-Term Portfolio is already well on the way to $21,000 if Yahoo can get over $45 and hold it to expirations, already the spread is $3.40 ($10,200), up over 100% in less than 3 months (and I will be up another 100% in 3 more months if you play it today and Yahoo hits our $45 target)!   This is how we play the IPO game at Philstockworld – the SMART way.

I have, of course, been pounding the table on Yahoo all quarter and it's in both of our short-term trading portfolios.  All indications is the demand for the IPO is very strong and we may see IPO hit $200Bn today – a very nice bonus for both YHOO and SFTBY.  

Meanwhile, congratulations to all who followed Wednesday's suggestion to buy the SCO Sept $30 calls at 0.25, those were a daily double, topping out at 0.55 yesterday but we weren't greedy an took 100% gains off the table at 0.50.

That trade idea came right from our Morning Post, as well as the previous afternoon in our Live Member Chat Room.  If you would like to get trade ideas like these live during the trading day as well as our Morning Market Outlook (what you are reading now) while it's in progress at 8:30 every day – you can join us here.  

We don't know what the next great investing opportunity will be (BTU, CLF, GTAT?), but we have a very sharp group of investors who share their trade ideas in our daily chat room and we have a wide range of tools at our disposal to take advantage of all sorts of market situations.  It's a very exciting way to spend our days - and profitable too!

Take BTU, for example, that is one UGLY chart and no less an authority than Goldman Sachs has told their clients to dump this coal company but one of our Members, Sibe, pointed out this morning that BTU has just issued an update that casts significant doubts on the bear premise.  

 "We believe there is a fundamental mismatch in early reporting regarding China's new coal quality policies relative to the emerging view of its likely beneficial effects on Australian high-quality coal exports," said Peabody Energy Chairman and Chief Executive Gregory H. Boyce.  "In addition, global announcements of metallurgical coal supply reductions continue to build, and we have seen a sharp increase in Indian thermal coal imports in recent months.  And in the United States, Peabody is encouraged by recent Southern Powder River Basin coal supply agreements that are being signed well above those of published indices, as customers end the summer with stockpiles at their lowest levels in nine years."

We were having extensive discussions on BTU yesterday because it's on our Buy List (sorry, Members Only) of stocks we want to add to our portfolios if they get cheap.  As BTU comes down to our $13 floor, we have several attractive ways to play it.  If, for example, you were looking to pay for a year of Premium Membership (still just $5,000 until the end of the month), you could sell 15 of the 2016 $13 puts for $2 ($3,000 credit) and buy 10 of the $10/15 bull call spreads at $2.45 ($2,450) for a net $550 credit.  

The worst case on that spread is BTU is below $13 and you end up owning 1,500 shares at net $12.64 ($18,960) while, if BTU makes it to $15 (now $13.49) into Jan 2016, you collect $5,000 in addition to the $550 credit you already pocketed.  Since BTU pays a 2.2% dividend, that's a trade we'd like to add to our Income Portfolio.  

Rather than letting Jim Cramer and his Bankster buddies scare us out of perfectly good companies – we prefer to wait patiently for the the sheeple who follow them to stampede out of stocks and then we are able to go bargain hunting!  

GTAT ($11.60) is another example of a company that people are being chased out of for all the wrong reasons but, unfortunately, those plays are reserved exclusively for our Members – these are just the free samples folks, don't get greedy!  

Have a great weekend,

- Phil


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    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

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  1. Good morning!   

    I apologize for my unscheduled day off today, I have to leave at 10 to give a deposition on a business case and I very much doubt I'll be done in time to get back.  I still favor our fairly aggressive shorts into the weekend and we'll make more bullish adjustments next week.  

    The BTU play above is official for the Income Portfolio.   Thanks to Sibe for giving us a good reason to pull the trigger.  

    153927 600 National Football League cartoons

    153913 600 BOOTS cartoons

  2. Line for iPhones in Toronto:

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    My man Nobu was on the Tonight Show.

    Don't forget, we'll need to finalize Vegas Plans next week!  Please contact Greg (at philstockworld) if you haven't expressed interest already (Nov 9th and 10th).  

  3. From Bloomberg, Sep 19, 2014, 8:04:47 AM

    U.S. stock futures rose, signaling
    equities may extend a record, amid continued investor optimism
    that interest rates will remain low even as the world’s biggest
    economy is strengthening.

    To read the entire article, go to

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

  4. From Bloomberg, Sep 19, 2014, 5:48:13 AM

    The currency extended its decline to a record low this week after Russia’s Central Bank Chairman Elvira Nabiullina kept interest rates on hold on Sept. 12. Photographer: Andrey Rudakov/Bloomberg

    Russia’s ruble, bonds and stocks rallied on March 18, a day after the European Union announced sanctions against the nation as President Vladimir Putin prepared to annex Ukraine’s Crimean peninsula.

    To read the entire article, go to

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

  5. From Bloomberg, Sep 19, 2014, 7:46:10 AM

    Sept. 19 (Bloomberg) — Simon Derrick, chief currency strategist at Bank of New York Mellon Corp., talks about the outlook for the pound after the Scottish vote, and ahead of next year’s general election and future referendum on European Union membership.
    He speaks with Guy Johnson on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)

    U.K. shares helped lead European
    equities near a 6 1/2-year high and the pound strengthened
    against most major peers as Spanish bonds surged after Scotland
    rejected independence. U.S. stock-index futures rose, while
    commodities fell to a five-year low.

    To read the entire article, go to

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

  6. From Bloomberg, Sep 19, 2014, 4:38:31 AM

    Vladimir Putin, Russia’s president, has been unmoved. On Aug. 9, just days after the U.S. and EU announced that they would restrict the export of technology needed for Arctic, shale and deep-sea exploration, Putin personally ordered the start of drilling on the well, Russia’s first in the Arctic Ocean. Photographer: Andrey Rudakov/Bloomberg

    Exxon Mobil Corp. (XOM) and OAO Rosneft halted drilling on an offshore oil well intended as the first step in unlocking billions of barrels of crude in Russia’s remote Arctic, according to people familiar with the project.

    To read the entire article, go to

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

  7. From Bloomberg, Sep 19, 2014, 7:47:11 AM

    Sept. 18 (Bloomberg) — U.S. Senator Bob Casey, a Pennsylvania Democrat, talks about risks he feels are associated with the initial public offering by Alibaba Group Holding Ltd. and the Securities & Exchange Commission’s review of the proposed transaction.
    Alibaba is scheduled to begin trading tomorrow in a deal which could make it the largest IPO in history. Casey speaks with Emily Chang and Cory Johnson on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

    Alibaba Group Holding Ltd., the e-commerce company started in 1999 with $60,000 cobbled together by Jack Ma, cemented its status as a symbol of China’s economic emergence by raising $21.8 billion in a U.S. initial public offering.

    To read the entire article, go to

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

  8. From Bloomberg, Sep 19, 2014, 8:04:21 AM

    Narendra Modi, India’s prime minister, right, and Xi Jinping, China’s president, attend a meeting to sign a series of agreements between the two nations at Hyderabad House in New Delhi, India, on Sept. 18, 2014. Photographer Graham Crouch/Bloomberg

    A bear hug, a riverfront stroll and
    a swing-set session helped Prime Minister Narendra Modi win more
    than $53 billion in loans and investment pledges from China and
    Japan this month. He’ll need to make progress on cutting India’s
    red tape to turn those promises into reality.

    To read the entire article, go to

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

  9. From Bloomberg, Sep 19, 2014, 4:05:08 AM

    An Apple iPhone 6 Plus gold at a Verizon store on Sept. 18, 2014 in Orem, Utah. Photographer: George Frey/Getty Images

    Liu Min stands a few feet from an Apple Inc. store in Beijing hawking something that can’t be bought inside: the new iPhone 6.

    To read the entire article, go to

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

  10. From Bloomberg, Sep 19, 2014, 7:16:59 AM

    Employees cheer before the launch of Apple Inc.’s iPhone 6 and iPhone 6 Plus at the company’s Omotesando store in Tokyo on Sept. 19, 2014. Photographer: Tomohiro Ohsumi/Bloomberg

    Apple Inc.’s stores attracted long lines of shoppers for the debut of the latest iPhones, indicating healthy demand for the bigger-screen smartphones.

    To read the entire article, go to

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

  11. From Bloomberg, Sep 18, 2014, 7:55:09 PM

    Sept. 17 (Bloomberg) — Manish Singh, head of investments at Crossbridge Capital, says he’s convinced Alibaba Group Holding Ltd., which sets a final price for its initial public offering tomorrow, is a “buy.”
    He speaks with Jonathan Ferro on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    At least six big institutional
    investors are poised to take substantial stakes in Alibaba Group
    Holding Ltd. (BABA)
    , people familiar with the matter said, as the
    company raised $21.8 billion in a record-breaking initial public

    To read the entire article, go to

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

  12. From Bloomberg, Sep 18, 2014, 9:09:13 PM

    Sept. 15 (Bloomberg) — Simon Cox, a managing director and investment strategist for the Asia Pacific at Bank of New York Mellon Corp., talks about the outlook for Japan’s economy.
    He speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    Japan’s household wealth rose to a
    record as Prime Minister Shinzo Abe reflates the world’s third-biggest economy, giving a cushion to consumers facing higher
    costs of living.

    To read the entire article, go to

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

  13. TSLA/Phil

    You were so money the other day when you said and I'm paraphrasing that you didn't think TSLA would get their 35k batteries down to just 20k and if they did, they would have to build the rest of the car for 15k.  TSLA down today because their Model 3, which is not till 2017, will be priced 50-80k.  There goes every ahole analyst's targets.

  14. Shorebird-Inspired Water Harvester Significantly Outperforms Competition.

    The Voice of America (9/19, Lapidus) reports University of Texas at Arlington engineering professor Cheng Luo and doctoral student Xin Heng have developed a device for harvesting water from fog and dew, modeled after the beaks long-billed shorebirds such as sandpipers. The device’s two rectangular glass plates open and close at a hinge near a collection tube, causing condensation to accumulate and fall. Over a two-hour span, the device outperformed other natural and artificial fog-collectors by 400 to 900 times, potentially aiding water-scarce areas.

  15. And a-hole analyst alert, Pacific Crest, the firm that just downgraded AAPL for selling the crap out of the new iPhone, were pumping up TSLA yesterday which looks like it will soon be down 10 today.

  16. Oil Lines

    R3 – 94.92
    R2 – 94.26
    R1 – 93.09
    PP – 92.43
    S1 – 91.26
    S2 – 90.60
    S3 – 89.43

  17. Talks about AAPL being added to the Dow again:

    It has now been over three months since Apple (AAPL) split its shares 7 for 1, making the stock $100 per share instead of $700 per share.  Talk of Apple getting added to the Dow heated up on news of the split.  Since the Dow is a price weighted index, Apple shares could never have been included in the Dow as a $700 stock because its weighting would simply be too high.  At $100/share, though, the stock could easily get added to the Dow.

  18. Hey, good news everyone!  I wrangled another hour out of the morning, I should be here until 11 now, unless they call me sooner.  

    TSLA/Rustle – LOL!  Funny how those Fundamentals do tend to catch up with people in the end.  There is so much money to be made playing off the fact that most traders can't do simple math (most analysts too, it seems).  

    Water harvester/QC – Oh come on, they had those on Star Trek! blush  Still, nice to see reality finally catching up with science fiction.  

    AAPL/Rustle – Relentless dogging of that stock this week.  I'm worried they're going to have a super-pop when it's done and mess with our short calls.  

  19. Oh, and my Mom was in "Day of the Triffids" – she was one of the people who ran screaming from a train.

  20. Good Morning!

  21. It looks like the NASDAQ is pulled only by a couple of stocks:

    Nasdaq 0914 596x420 Wednesday links:  unique life experiences

  22. /TF shorts paying already but don't be greedy, 1,157.50 is a stop now.    The other indexes are not confirming.

  23. Nas/StJ – Such a joke of an index, almost as bad as the Dow. 

    Well, now they're all curling over so just keep a trailing stop of about 1.5 now.  17,250 on /YM is the lagging short line – watch 4,100 on /NQ an 2,005 on /ES to confirm.  

  24. Oil still a good long over that $92 line (tight stops below).  /CLX4

  25. YHOO- why on the day of the Alibaba IPO which appears to be such a huge success would the shares of Yahoo be down? Even for a little bit at the open.

  26. craigsa620:-i am wondering the same thing

  27. I had posted that the next resistance line for the dollar was between 84.70 and 85 where we had been last year and we have been hitting that the last 3 days. Above that is unchartered territory – you have to go back to 2010 to see the dollar stronger where we hit over 88! It's pretty amazing the see strong market in the face of a 5% move in the dollar! 

  28. Got the iPhone 6! No long lines here. 

  29. phil , did you say close the XRT 93/88 put spread today? we're in at $3, i think.

  30. YHOO/Craigs – It's the "sell on the news" crowd.  Huge gains to lock in, I am tempted as well.  

    • Dow +0.46% to 17,346.00. S&P +0.41% to 2,019.70. Nasdaq +0.33% to 4,608.78.
    • Treasurys: 30-year +0.21%. 10-yr +0.11%. 5-yr +0.04%.
    • Commodities: Crude -0.28% to $91.72. Gold -0.31% to $1,223.10.
    • Currencies: Euro -0.28% vs. dollar. Yen -1.3%. Pound +0.21%.
    • Japan +1.58%.
    • Hong Kong +0.57%.
    • China +0.58%.
    • India -0.08%.
    • London +0.66%.
    • Paris +0.54%.
    • Frankfurt +0.79%.

    Celebrating nothing happening:  Stock futures follow Europe higher after Scottish vote

    • Stocks are set for a solid open after Scotland voted to remain part of the U.K., but the current advance represents about half of earlier overnight gains; S&P +0.3%, Nasdaq+0.4%, Dow +0.5%.
    • Most Asian and European markets are higher; the British pound surged in reaction to the first set of results from the failed Scottish independence vote, but fell victim to a sell-the-news reaction once the results became clear.
    • Adding to the positive sentiment, Alibaba priced 320M shares at $68, at the top end of its upwardly revised range; the stock will begin trading today.
    • Treasury prices are slightly higher, with the 10-year yield down 1 bp at 2.60%.


    • Japanese stocks soared to a seven-year high this morning following the yen's sharp drop on Scotland's independence and the announcement of Prime Minister Shinzo Abe's pension reform plans.
    • The Nikkei climbed 1.6% to 16,321.17, its highest closing level since 2007. The Topix rose 1.1% to 1,331.91, while the JPX-Nikkei Index 400 gained 1.2% to 12,085.85.

    Canadian inflation comes in hot

    • The pace of core inflation in Canada popped to 2.1% in August from 1.7% in July. On a monthly basis, core inflation rose 0.5%, the fastest pace since May, and ahead of expectations for a 0.2% gain.
    • The Bank of Canada's forecast is for inflation to average 1.7% in Q3 and 1.8% in Q4.
    • The loonie (NYSEARCA:FXC) is ahead by 0.4% and buying $0.9178.
    • "I cannot support the Committee’s planned approach to moving the Fed’s balance sheet toward its normal state," says Richmond Fed chief Jeffrey Lacker. The FOMC currently doesn't plan to sell its vast trove of MBS, he notes, and "this approach unnecessarily prolongs our interference in the allocation of credit."
    • The Fed's MBS holdings unfairly tilts the playing field to those taking out mortgages, but against consumers borrowing for other purposes, says Lacker. "The desire to avoid such effects is a long-standing principle in the conduct of U.S. monetary policy over the last half-century."

    Drillers can return to fight oil slump after Scotland’s 'no'

    • BP CEO Bob Dudley and Shell's (RDS.ARDS.B) Ben van Beurden were among those who said before the Scottish referendum that keeping the U.K. united was good for the oil industry; now they can return to combating a slump in output that’s the steepest of any major producer.
    • Oil companies are now able to move forward with contract obligations with certainty, and the U.K. government will work with the companies on incentives to invest in mature fields and make it worthwhile to produce from more marginal deposits.
    • Negotiations will begin over a range of new powers promised by U.K. PM Cameron in a bid to woo Scottish voters to stay part of the union, and Scotland could push for a greater share of its oil wealth to be spent north of the border.

    Oaktree Capital discloses 9.1% stake in Molycorp

    • Molycorp (NYSE:MCP) +5.3% premarket after Oaktree Capital Management discloses a 9.1% stake, or nearly 24.5M shares, in the company.
    • Last month, Oaktree agreed to provide MCP up to $400M in financing through credit facilities and the sale and leaseback of equipment at the company's Mountain Pass facility.
    • MCP shares had slumped to a new 52-week low yesterday, and have plunged 76% YTD.

    Cocoa futures at 3-year high on Ebola fears

    • Cocoa futures are at a 3-year high on fears the risk of Ebola in West Africa will impact crop yields.
    • Some business activity near cocoa production facilities has slowed down.
    • Related ETFs: NIBCHOC.

    Tesla Motors dips on speculation over capital raise

    • Shares of Tesla Motors (NASDAQ:TSLA) are lower in early trading.
    • There's some chatter that Goldman Sachs is out with a note saying a capital raise could be in the works for the EV automaker.
    • Nothing official on the matter has been issued by Tesla.
    • TSLA -3.1% premarket to $255.72.
    • Lockheed Martin (NYSE:LMT) is narrowing in on a ~$4B deal with the Department of Defense for 43 more F-35 fighter jets that will lower the cost of the jet's airframe by 2-4%.
    • The government buys the jets' engines separately from Pratt & Whitney, which said this week that contracts for the seventh and eighth batches of its F135 engines will result in prices 7.5%-8% cheaper than the firm's last purchase.
    • Other initiatives are also being worked on to lower the plane's costs, including changes in manufacturing and "block buys" by some foreign countries with pending orders.
    • Lockheed is also investing $170M in cost-cutting measures with suppliers BAE Systems (OTCPK:BAESY) and Northrop Grumman (NYSE:NOC) to generate combined savings of $1.8B.
    • As heavy cost-cutting and lower demand hits Boeing's (NYSE:BA) defense division, the company is planning the possibility of retiring its fighter jet program. Production of Boeing's F/A-18E/F Super Hornet could end in 2017.
    • Boeing reduced its defense unit's spending by $4B annually over the past three years, cutting thousands of jobs, and targeting another $2B in savings.
    • Space and Defense CEO Christopher Chadwick plans to move responsibilities and products around within the defense unit's three core divisions, and shift the focus to bombers, drones and trainers.
    • Ford (NYSE:F) plans to cut production at its plant in Cologne, Germany to adjust for slipping demand in some key regions.
    • Production on the Ford Fiesta will be halted for 11 days in October and November.
    • The U.S. automaker picked up a good chunk of market share in Europe during August.

    Heard during Nike's annual meeting

    • A shareholder with Nike (NKE +0.6%) asked the company during its annual meeting yesterday if recent off-the-field incidents have made it think twice about the sponsoring athletes with huge contracts.
    • Executives responded that Nike will continue to look at sponsorships on a case-by-case basis and heralded some of its successful partnerships (Kevin Durant, Lebron James, Landon Donovan).
    • The company has seen Oscar Pistorius, Adrian Peterson, and Ray Rice dominated sports headlines over the last month, and took some lumps when Lance Armstrong had a fall from grace a few years ago.
    • Nike promised to keep up its pace of innovation and noted key categories such as soccer, basketball, and training still have room to grow.
    • All proxy votes were approved by shareholders.
    • Nike Annual Meeting webcast

    Data breach math: Sometimes more is less

    • Though Home Depot's (NYSE:HD) data breach involved 16M more accounts than Target's (NYSE:TGT), so far the damage to the company and the stock has been lower.
    • While Target disclosed its attack during the peak of the holiday season and saw an immediate drop in store traffic, Home Depot announced its breach during a slower period after the peak summer peak selling season.
    • Wedbush notes that Home Depot also benefited from "data-breach fatigue" in the retail sector

    KeyBanc: Lululemon nice fit for VFC Corp.

    • Lululemon (NASDAQ:LULU) would make an "ideal" acquisition for VFC Corp., reasons KeyBanc.
    • The investment firm thinks VFC could swing paying a 30% premium for LULU in what would be a highly-accretive combination.
    • KeyBanc lifts its rating on VFC Corp. (NYSE:VFC) to a Buy rating from Hold after taking in the company's Analyst Day.
    • VFC has a "systematic" process to make good brands great, says analyst Edward Yruma.
    • The investment firm raises its estimates for 2015 EPS to $3.56 on confidence in the Timberland brand.
    • Deal breakdown: VFC brings strengths in product quality and store operations, while Lululemon has the strong brand in the high-growth active lifestyle category.
    • LULU +0.7% premarket, VFC +1.0% off of a KeyBanc upgrade.

    GSK to pay $488M penalty over Chinese bribes

    • GlaxoSmithKline (NYSE:GSK) will pay a $488M fine after being found guilty by a Chinese court for bribing doctors to promote use of its medicines.
    • Former head of GSK’s China business, Mark Reilly, and four other senior Chinese GSK managers pleaded guilty to the charges, and received suspended prison sentences of between two and four years.
    • Glaxo could also face further action at a corporate level from U.S. and U.K. authorities which have the power to punish the company for overseas corruption.

    Long lines seen worldwide for iPhone 6 release

    • Thousands are lining up all over the world for Apple's (NASDAQ:AAPL) new release of the iPhone 6 and 6 Plus. The record demand for the bigger-screen smartphones has already outstripped supply, with preorders selling out last week.
    • The two went on sale today in Australia, Hong Kong, Singapore and Japan, before rolling out in France, Germany, Puerto Rico, Canada and the U.S.
    • The iPhone release is Apple's most important event this year, with the devices generating more than half of the company’s $171B revenue in 2013.

    iPhone 6 teardowns: QCOM, INVN, SWKS, AVGO, BRCM among winners

    • iFixit's teardown of the iPhone 6 Plus turned up five Qualcomm (NASDAQ:QCOM) chips, up from the three found in last year's teardown of the 5S and nearly matching the six found in certain Galaxy S5 teardowns.
    • In addition to the expected Cat-4 LTE baseband modem, a Qualcomm power management IC, RF transceiver, receive-only chip (needed to enable LTE carrier aggregation), andenvelope-tracking IC (relatively new, improves battery life) were found in the 6 Plus.
    • In-line with rumors and the company's hints, an InvenSense (NYSE:INVN) motion sensor – specifically, a 6-axis gyroscope/accelerometer – was found. That suggests InvenSense has displaced STMicroelectronics (NYSE:STM) as the iPhone's motion sensor supplier.
    • Two Skyworks (NASDAQ:SWKS) power amplifier modules are found, including a low-band LTE part. Avago (NASDAQ:AVGO) has both a high-band amplifier module, and an integrated ultra high-band amplifier/FBAR filter module. TriQuint (NASDAQ:TQNT) cab claim a 3G amplifier module, and merger partner RF Micro (NASDAQ:RFMD) an antenna switch module.
    • Broadcom (NASDAQ:BRCM) appears to remain the iPhone's combo chip supplier (courtesy of a module from partner Murata), and also supplies a touch controller IC.Chipworks thinks Broadcom also has the Wi-Fi slot for the Apple Watch.
    • As expected, NXP (NASDAQ:NXPI) is supplying an NFC module and the M8 motion co-processsor and Cirrus Logic (NASDAQ:CRUS) the audio codec IC. Texas Instruments (NASDAQ:TXN) is providing a touch transmitter IC.
    • Moving in response: INVN +1.9%. AVGO +1.5%. STM -3.9%.

  31. Where's here Nicha? 

    XRT/Lunar – We're not closing the Oct spread, XRT is $89.45, we're $3.55 in the money and our premise hasn't changed. 


  32. From above;

    I'm short some INVN puts from $4.20.  Still appear to be over priced relative to theoretical value.

    "In-line with rumors and the company's hints, an InvenSense (NYSE:INVN) motion sensor – specifically, a 6-axis gyroscope/accelerometer – was found. That suggests InvenSense has displaced STMicroelectronics (NYSE:STM) as the iPhone's motion sensor supplier."

  33. Any guesses as to where BABA will open ?   I'm thinking somewhere around $80.

  34. Any guesses WHEN it will open? :)

  35. Good luck with the deposition Phil.

    I didn't see long lines at AT&T this morning or people even in line but this is in the Middle of nowhere, Michigan where Dow Chemical's HQ is. I would have thought some of those guys would have purchased a new iPhone 6, but maybe they did like I did and pre-ordered it at 3:01am on Friday of last week.

  36. Kwan 

    Midland area  ?

  37. qcmike – yup! I don't work for them though, I work for the red headed stepchild Dow Corning.

  38. Phil I am very sorry we did not set up a new trade when we discussed LMT at 150 only left with a Jan15 75 short put valued at .02 sold at 5.90 bad luck 180 now!!!

  39. INVN/Albo – I guess that's the case but it never did STM much good to supply AAPL.  I never assume AAPL contractors will make a lot of money – AAPL is relentless at getting vendors to cut prices to the bone and I'm more worried companies will make a pricing mistake trying to please them than likely to get a windfall.  Still, it should have a big impact on sales and that should bring the stock higher and they've been on a good growth patch anyway, so I think they are fairly priced at the 200 dma ($22 – and note how well it held) and likely to do better unless AAPL really screwed them over.  

    BABA/Albo – It is looking like $80, which would be just under $200Bn, which is what I predicted so {pat pat}.   

    Oil just collapsed!  Fell from a stop out at on the long side at $92.25 all the way back to $91.50, where it seems like a fun long again but SUPER tight stops below.   

    When/DC – Should be 15-20 mins. 

    Thanks Kwan.  Are you getting one?

    LMT/Yodi – Damn, I did mean to do that too!  That's OK, our RTN play is doing quite well (from last Thursday's post).

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

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

  40. Where  is here nicha? I was going to finally get an Iphone and give up my GalaxyIII but I would have to give up my unlimited data plan with Verizon if I do (the bastards don't make enough money?) so I am deciding if it is worth it. I figured out that if I do actually use data, which is becoming rarer and rarer as just about everywhere I go has wifi anymore, that it would be a hell of a lot cheaper to buy the Iphone for the full price, go month to month and get an unlimited data plan rather than paying $50, or $80  or $100 month for the various plans they offer. the phone ends up paying for itself in just a few months if you do this and use data! Its amazing how people don't really analyze this stuff and just take whatever deals Verizon offers thinking that by not paying retail for the phone they are saving. They wouldn't be subsidizing the damn things if they weren't making a fortune on the usage! People sure can be suckered easily when someone dangles a "deal" in front of them. 

  41. AMZN – Catching some e-commerce love.

  42. @craig

    When I upgraded to new iPhone, had to give up unlimited data from verizon too but found out that 2GB is $30 a month, same as I was paying.  I was using 670MB per month because like you said, so many places have WiFi so not too worried about it.

  43. Oil- Wow it is certainly volatile today! I went long with Phil yesterday evening, and since I wasn't awake at 2AM when it shot up to my breakeven and a little more for about five minutes before plummeting back down, I missed that and awoke to find myself deep in the red. Fortunately, I didn't panic and I hung on for the ups and downs for two hours and was rewarded with the awaited spike at about 9:40 and made almost $500 for my troubles. Had to be quick there too, because within minutes it was back down, then up and now way down again! I have been very lucky for the last three or four days and made a several thousand $ on these futures just watching and not trying to catch exact tops and bottoms. I have been lucky to be playing these at a time when it is going up and down so often that even when it goes in the wrong direction at first, it has been correcting back if I waited long enough. I do realize how badly I could get burned if it drops or spikes the wrong way and sticks for a while, That has not been happening lately though, fortunately for me.

  44. Just turned on CNBC.  They are guessing $84-$87.

  45. Phil – yeah I'm getting one, but not because I specifically want to upgrade my 5S. T-mobile's coverage here is abysmal, so even though I have unlimited data it doesn't do me much good when I never have a 4G connection (unless I'm home). I actually have a AT&T mifi right now because I can't even stream music when I'm driving between here and Chicago. The new phone is on AT&T, so I can get rid of the MIFI and still come out paying less every month even with the 10GB data plan.

  46. rustle- yes, until you do actually need that data as my son found recently when he was in a place where there was no cable or wifi and in just two weeks he racked up 7 GB of data usage. Fortunately he had the unlimited plan then, but he just got his new Iphone and is now on that 2GB plan. I am expecting a call, "Dad I forgot to keep an eye on my data usage, can you help me out with this big bill I got? Pleease dad" I'm sorry, it won't happen again.(until the next time it does happen). I shouldn't complain, he may not be good with money but he is working at a job helping the developmentally disabled, which makes me very proud of him. A 23 year old with a social conscience. Must have done something right. Just hope he marries money!

  47. @Craig

    If that ever happens during the month with Verizon, you can retroactively change it to a higher GB plan and then change it back the next month.

  48. Check out /SI.  Oh my.

  49. Data/Craigs, Rustle – As we speak, I have my monthly warning message that we're over 65% usage on our family plan.  You need an accountant to figure out what kind of plan to get with these Telcos. 

    Now they are talking possible $90 open for BABA – MADNESS! 

    Nice wheeeeeeee! in the indexes, not sure why but maybe poor Leading Indicators at 10:

    • Aug Leading Indicators: Leading Index +0.2% to 103.8 vs. +0.4% expected, +1.1% in July (revised).
    • Coincident Index +0.2% vs. +0.2% prior.
    • Lagging Index +0.3% vs. +0.2% prior.

    CMG $666!  

    Oil/Craigs – Just make sure you are playing /CLX4 and not /CLV4, which expires on Monday.  I imagine /CLX4 will begin to head back up once the selling pressure from /CLV4 eases off.  As of this morning, there were still 48M barrels on order for Oct and probably 30M of them were fake and that means the contracts either have to be dumped or rolled between now and Monday:

    Click for
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Oct'14 92.97 93.22 91.91 92.19 10:39
    Sep 19


    -0.88 30839 93.07 48176 Call Put
    Nov'14 91.96 92.24 91.15 91.49 10:39
    Sep 19


    -0.49 114023 91.98 285808 Call Put
    Dec'14 91.30 91.67 90.64 90.96 10:39
    Sep 19


    -0.43 34161 91.39 221675 Call Put
    Jan'15 91.07 91.39 90.50 90.72 10:39
    Sep 19


    -0.39 5050 91.11 89788 Call Put

    Oil failing to hold $91.50 is a dead play until it hits $91 or breaks back over.  

    Oh no – /TF at 1,150!  

    Looks like BABA will beat my $200Bn target at the open though I might be right on the money re. my estimate that Yahoo's 22% stake will be $50Bn.  Not bad for a 6/30 estimate.  wink

    LOL Craigs, I feel your pain!  

    /SI/John – Oh my indeed, all metals getting whacked again with Dollar hitting 84.85.  /SI below $18, /YG $1,216 and /HG 3.085.   The demand picture is just not there with markets at their all-time highs.  There shall be a day of reckoning ahead!

  50. Phil:-BABA can't push yahoo up so far.

  51. Phil/metals

    It might be that people are pulling money out of metals and putting into ALI BABA!!!

  52. I think it's funny that a lot of the Momo's are starting to squeeze higher as BABA is about to come out like their price is going to do anything for TSLA sales.

  53. I heard from someone in South Africa that the banks are failing. Said the Federal Reserve extended a loan to them but things are turning bad all over that country. But we have no problems, just IPOs to worry about.

  54. is BABA trading already? it was supposed to be 7 am but cant find a quote anywhere.

  55. BABA last trade is a joke here $2.34.

  56. Phil- TDAmeritrade won't let you play the expiring oil contract 3 days before the expiration. They cut over to the new one late wednesday I think and as of yesterday you couldn't trade anything new on the /CLV4. So no worries. I have been using /CLX4 since Wednesday evening

  57. craig

    Looking at what I can CLX4 has been selling heavy since the open, no idea why but think 3 times before long.

  58. YHOO/Absety – As I said, traders can't do simple math.  You can still get the Jan $38/45 spread for $3.40 if you don't mind getting $7 back in 119 days.  Just sayin'…

    Banks/Shadow – I'm telling you, that China stimulus this week was a secret bank bailout.

    BABA/Lunar – Not yet, so much oversubscribed that they can't get it to settle down for a price.  Over $90 now. 

    Oil/Craigs – Good, just making sure.  

    Well, time for me to go guys – Have a fantastic weekend (assuming we get through the afternoon), I'll catch up on things in the morning!  

    House GOP Bill Combines Worst Tax Break Ideas of 2014 for Half-a-Trillion Dollar Giveaway

    Have three of the Guantanamo detainees swapped for Bowe Bergdahl now joined ISIS on the battfefield? No. Pants on Fire.

    A reader recently sent us a link to a rather startling claim — that three of the five Guantanamo detainees released by the United States in late May in exchange for…

  59. Phil Agreed on banks in a system tied together.

  60. IWM is breaking down, will someone step in this time?

  61. Dollar up/Market up- not amazing at all. Fundamentally, there is just under .4 positive correlation over longer periods (i.e., 20yrs).

    Here is a look at some shorter term positive correlations:

    All of which suggests that daily dollar/market movements are perhaps more coincident than generally "accepted".

  62. BABA opens at $95? Am I seeing that right?

  63. brillion: Yes, now 99 and change

  64. When it comes to BABA, all I have to say is WOW.

  65. BABA – YHOO did well with their investment, but left quite a bit of money on the table by selling some at $68.  SFTBY didn't sell a share and still owns 37%.  Of course that could change if BABA comes back down.  If BABA does well over the next few years, SFTBY should do well.

  66. Another dick analyst is on CNBC saying BABA is not overvalued here because if you compare it to FB it's good.  Except for the fact that FB is overvalued.  NFLX is undervalued if you compare it to TSLA.

  67. BABA- now coming back to Earth. Still an amazing performance. I was watching CNBC and you would think it was the second coming the way they were gushing about this. I swear Pisani was genuflecting when talking about the transparency and what a fantastic example of how our markets work! I think he used the word exhilarating 10 times.

  68. Phil you showed the house bill, here is my letter from the senate.


    This week, the Senate passed S.2440, the BLM Permit Processing Improvement Act of 2014. This bipartisan bill I introduced with Senator Tom Udall from New Mexico expedites the permitting of oil and gas wells on federal lands. 


    S.2440 reauthorizes and makes permanent the Bureau of Land Management's (BLM) pilot office program for oil and gas permitting. The program provides funding for local BLM offices – including the Buffalo, Casper, Newcastle, and Rawlins Field offices – for processing applications for permits to drill (APDs). To ensure that our local BLM offices have sufficient staff to process APDs, the bill increases the APD fee and requires that 75 percent of all revenues from these fees be made available to the BLM state office in the state from which the fees were derived. The Wyoming County Commissioners Association, the Western Governors' Association, and oil and gas trade associations, including the Petroleum Association of Wyoming, support this legislation. I have attached an article highlighting my bill. 


    In Wyoming, we know that energy production is a vital component of our state and nation's economy. By giving local BLM offices the resources they need, we can help to ensure oil and gas permits are processed in a timely manner.


    As your Senator, I continue to fight to ensure that energy producers are able to provide good paying jobs for Wyoming people, while generating a critical source of revenue for local economies.



     John Barrasso, M.D.                                                                         
    United States Senator

  69. From Bloomberg, Sep 19, 2014, 8:43:32 AM

    Opposition candidate Marina Silva lost support in a Datafolha poll that shows a runoff against President Dilma Rousseff is too close to call.

    To read the entire article, go to

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

  70. From Bloomberg, Sep 19, 2014, 5:55:12 AM

    Sept. 19 (Bloomberg) — France has carried out airstrikes against Islamic State targets in Iraq, according to a statement issued by President Francois Hollande, following a pledge made yesterday.
    Guy Johnson and Hans Nichols report on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)

    French jets destroyed an Islamic State depot in northeast Iraq today and further strikes are planned, President Francois Hollande said in a statement.

    To read the entire article, go to

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

  71. From Bloomberg, Sep 19, 2014, 12:00:10 PM

    Alibaba Group Holding Ltd. surpassed Facebook Inc. (FB) by market capitalization on its first trade as a public company for a valuation of more than $200 billion.

    To read the entire article, go to

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

  72. From Bloomberg, Sep 19, 2014, 11:39:56 AM

    The dollar is poised for its longest stretch of gains since Lyndon Johnson was in the White House after the Federal Reserve signaled an end to unprecedented monetary stimulus measures next year.

    To read the entire article, go to

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

  73. From Bloomberg, Sep 19, 2014, 10:16:59 AM

    U.S. money markets rates may
    periodically dip below the Federal Reserve’s target range after
    the central bank limited use of a policy tool as part of
    operational plans for raising interest rates next year.

    To read the entire article, go to

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

  74. From Bloomberg, Sep 19, 2014, 12:09:40 PM

    An iPhone 6 Plus, left, and iPhone 6 during the sales launch at the Apple Inc. store in New York on Sept. 19, 2014. Photographer: Victor J. Blue/Bloomberg

    Apple Inc.’s larger iPhone 6 Plus is already selling out at some stores across the U.S.

    To read the entire article, go to

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

  75. From Bloomberg, Sep 19, 2014, 11:38:39 AM

    Federal Reserve Bank of Dallas
    President Richard Fisher said Alibaba Group Holding Inc.’s
    record-large initial public offering today was tapping a stock
    market the U.S. central bank has helped reach an all-time high.

    To read the entire article, go to

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

  76. From Bloomberg, Sep 18, 2014, 7:00:00 PM

    The U.K. Serious Fraud Office is
    readying more criminal charges this year against traders in its
    Libor-manipulation probe, according to people with knowledge of
    the matter.

    To read the entire article, go to

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

  77. From Bloomberg, Sep 18, 2014, 6:01:00 PM

    A Danish flag flies in central Copenhagen, Denmark. Photographer: Chris Ratcliffe/Bloomberg

    Danes are leaving their wallets at home as mobile-phone payments are spreading to supermarkets, Starbucks Corp.’s coffee shops and even the illegal hash trade in Copenhagen’s Christiania district.

    To read the entire article, go to

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

  78. From Bloomberg, Sep 19, 2014, 8:40:31 AM

    Federal Reserve Bank of Richmond
    President Jeffrey Lacker said he couldn’t fully support the
    central bank’s revised exit strategy released this week because
    he opposes a measure to hold mortgage-backed securities.

    To read the entire article, go to

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

  79. From Bloomberg, Sep 19, 2014, 10:15:14 AM

    Joe Hockey, Australia’s Treasurer, center, the host of this weekend’s meeting of finance ministers and central bankers, said Sept. 16 there was “no way” the group would soften its commitment to the growth target. Photographer: Jeremy Piper/Bloomberg

    Global finance chiefs gathering in
    Cairns, Australia, face growing pressure to take steps to
    bolster growth as the global economic outlook dims.

    To read the entire article, go to

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

  80. scotts // CL
    ya, I got caught in the same trap. Had to get my kids off to school. Irony was I woke at 3am and saw that it came back even and I let it go.
    TOS sucks that way. I've had words with them and I posted this yesterday.

    SIttin down and 92 I don't think theres anything to do but let it go.

  81. From Bloomberg, Sep 19, 2014, 7:22:05 AM

    Source: Bespoke Investment Group

    Is it Friday already? How did that happen so quickly? Before we send you off to work, here are some morning reads to round out your week:

    To read the entire article, go to

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

  82. From Bloomberg, Sep 18, 2014, 5:52:03 PM

    This time, he’s worried about Islamic State.

    Remember Richard Clarke, the presidential counterterrorism adviser whose hair was on fire about al-Qaeda long before the Sept. 11 attacks and whose warnings of a threat from hijacked planes were ignored by the administration of President George W. Bush?

    To read the entire article, go to

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

  83. From Bloomberg, Sep 19, 2014, 11:31:35 AM

    “It’s after long reflection that I’ve decided to offer the French a new political choice because it would be a form of negligence to remain a spectator to the situation that France finds itself in,” former French President Nicolas Sarkozy wrote on his Facebook page. Photographer: Pascal Le Segretain/Getty Images

    Nicolas Sarkozy is back.

    To read the entire article, go to

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

  84. Can anyone explain why Yahoo is dropping so hard on what seems to be a spectacular Alibaba IPO which they own a big chunk of? I jumped in and bought the Jan '15 38/45 spread for $2.85 based on Phil's comment earlier about a $7 return in 116 days. Sure do hope that turns out to be the case. When you come back Phil, perhaps you can comment on this and your thoughts now about Yahoo, as I now see it down almost $2/share. I guess I pulled the trigger too early! WTF.

  85. craigs // BABA
    Phil was saying thats its a 'sell the news' move. lots of profit taking, but shouldn't change the position long term.

  86. … which is an interesting move as BABA has just 'lost' 10 BB in mcap in 20 minutes. wow.

  87. should we go long tf at 1141 with nq halted

  88. shadowfax 

    I phone drop test

  89. qcmike

    What I got was BABA on that link. Doesn't matter as hard shatters and soft bounces, besides they need to sell either glass or a new phone.

  90. Creationism is just the start: How right-wing Christians are warping America’s schools

  91. CNBC beating on fund manager Fleckenstein that took money off the table.. (how DARE he!)

  92. Phil Boehner will cherry pick even if 1 out of a million.

  93. Craig/Yahoo – "I share yo pain"  - So I doubled down.  It turns out I phased, in four chunks, into a deteriorating TZA position over the last week, went nicely green today, this phase-in thing works very nicely [although requires stones], thank you Phil!!  I suspect Yahoo will do the same, the math on their AliBaba ownership is pretty clear.  Unless Ali tanks on the open, which seems unlikely.

  94. Phil/here – here is Albany, NY. 


    i was lucky to keep the unlimited data plan with ATT which I have had for the past 5 years. I pay $30 a month for it  

  95. Update: my GreenCoin project is maturing. Sign up your solar! Let's get some carbon emission offset credits going!

    On another note, a good read here: Krugman nails it

  96. strange for a expirations day but It seems the 11:30 post of IWM breakdown may be getting worse. Next serious support 112.55. When or if?

  97. Krugman – Good one BDC:

    So here’s what you need to know: Climate despair is all wrong. The idea that economic growth and climate action are incompatible may sound hardheaded and realistic, but it’s actually a fuzzy-minded misconception. If we ever get past the special interests and ideology that have blocked action to save the planet, we’ll find that it’s cheaper and easier than almost anyone imagines.

  98. ~~ Krugman nails it BDC

    And I could add pages to the economic benefits but I fear being labeled an ecomoron.

  99. Members, various on the YHOO trade. I find many members just place orders without analysing  the trade them self. Big mistake. Even Phil said this morning SELL ON THE NEWS an old rule! Just think about it today all is big hip and nothing else. We have seen it at FB TWTR etc. So why do you jump on a running train. 

    Let the dust settle and possible you can pick up the pieces. 

    Again we are all humans on this board (I think so) so please make sure any trade proposed, analyse in value and quantity if it suits your portfolio. 

    Obviously the old hens here have learned that lesson but for any newbies you always can ask but the buck stops with you. I am now for some time on this board and I still ask question, which Phil answers to the best of his knowledge. But still I am the one who gains or loses the money. 

    So what if you set out on the YHOO play. Just the other day I consulted Phil on a YHOO BCS even that it looked good I did not enter. 

    Remember here we try to be the house not the gambler. 

  100. BABA matter of fact the stock shows as more than 24$ up today just for the fun of it I will short the stock and put it in the queue of TOS just to look at it in a few days or weeks and I am sure all the heat is gone out of it. BUT looking at TSLA one could be wrong they have not run out of suckers yet!

  101. I am not generally a cruel person, but I must admit to a certain schadenfreude in watching the premium on my Tesla puts melt away week after week.  Elon has proven beyond a shadow [sorry Shadow] of a doubt that "you can fool some of the people some of the time, which is enough to make a living."

  102. Pretty cool stuff:

    Wouldn't it be great if you could just call up a supercomputer and ask it to do your data-wrangling for you? Actually, scratch that, no-one uses the phone anymore. What'd be really cool is if machines could respond to your queries straight from Twitter. It's a belief that's shared by Wolfram Research, which has just launched the Tweet a Program system to its computational knowledge engine, Wolfram Alpha. In a blog post, founder Stephen Wolfram explains that even complex queries can be executed within the space of 140 characters, including data visualizations. If you fancy giving it a go yourself, you can tweet queries to @wolframtap, but be advised that you'll have to learn the basics of the Wolfram Language Code before it'll give you anything in return.

  103. Shadowfax 

    I phone drop test

    That’s the one I tried to link to

    It was on cnbc


  104. Ali B rising, Yahoo falling.  I must be missing something.

  105. Yodi- Phil said earlier today buy the Jan '15 38/45 spread for $3.40 and get a $7 return in 116 days. I bought it for $2.85 and was questioning this. If the drop was expected why not wait with that call? I guess as always with spreads, Phil says what happens today doesn't matter only what happens at the end.

  106. re: YHOO, I saw something on USA Today where they were spinning that Yahoo was not smart, because they had put a small portion of their stock on the block at the IPO price of $68, rather than holding all of it until after the IPO as Softbank did.  So this cost them about $3 billion, although the current IPO price puts about $47 billion in value into YHOO based on the remaining stock they still hold.  Seems somewhat prudent to me, really, there aren't guarantees that BABA would shoot up like this after the open, why not take a small bit off the table at the IPO price.  Of course, hindsight is 20-20, and now I guess traders are focusing on that $3B rather than the $47B that is going on to their bottom line.  At any rate, no doubt I could be wrong, but I feel OK to hold on to my spreads.

  107. craigs // BABA
    thats correct. it doesn't matter what BABA does today, as they even IPO's 10% over the math that we did. This drops right to YHOOs bottom line.
    It's really quite simple – just give it time to play out.

  108. DPS got a late day spike. Yellen's preferred soda?

  109. Right now the YHOO '16 30/40 BCS is $6 – which is a nice return and a very conservative, margin free trade

  110. Why are gold prices falling:

    Said differently, gold investors embedded a huge premium in the price of gold betting on a disastrous inflation in 2008 & 2009.  And as it’s become more and more obvious that that high inflation isn’t coming the premium has been sucked right back out.  That’s my theory anyhow.  Who knows if it’s right, but it would seem to make a good deal of sense to me….

  111. TLT is up 1.25%, RUT lost 2 lines and IPO didn't fluff much.

  112. YHOO
    still filling at $6 – thanks deano

  113. Gold – I saw an article the other day claiming lots of british pounds were rolling into gold before the vote. maybe a lot of that is coming back out?

  114. So what might be the bottom on gold?  Most central banks are doing what they can to inject inflation into the system.  Certainly there is enough paper being printed to assume that there will be a flight into something else going forward, and stocks have their limitations.  Or do they?

  115. ZZ

    For inflation to kick in demand has to rise. Demand will not rise without wage inflation. Most of the wage inflation must be at the lower end or consumption will fall.

  116. I guess the question re: whether YHOO was smart to cash out a portion of their BABA stake depends on what Marissa Mayer can do with the 8 billion or so they received.  Think the jury is still out on her efforts to get YHOO growing again.  Thinking that it would be interesting if Jack Ma now buys YHOO and uses that as his U.S. base.  Stranger things have happened.

  117. Shadow:  Makes sense.  And no central bank is throwing money out of helicopters — yet.  Obama's a lame duck, maybe he'll do a WPA-light at some point and [re]build a few highways or bridges.  It would have to be out of his own pocket, unfortunately, since the Congress seems terminally constipated.

  118. ZZ

     Only thing I have seen in years that made any sense was they could have given $56K to every family in America instead of the banks and that would have kicked the economy in the ass!

  119. YHOO / Albo – I heard  a discussion about that the other day and that was the main question – will YHOO be smart with that pile of cash or just blunder it away. Given the recent history, I am not optimistic and based on today's price action, it seems that I am not alone.

  120. Yamana Gold (AUY) – you could buy shares at 6.75 & sell the Jan16 8 puts & calls for 2.70 for a net entry of 4.08 (40% discount), below financial crisis levels. Avg 5.41 if assigned. Worth a punt?

  121. apologies – 6.04 if assigned

  122. Wow, looks like i missed a fun afternoon!

    I'll catch up tomorrow – time to drink now… ????

  123. let me know about vegas please, interested in attending again this year. BDC

  124. Good morning!

    On YHOO, I'm considering taking advantage of this dip to roll the Jan $38s ($5) to the April $35/45 bull call spread at $4.75 which gives us $3 better position and a $10 spread covering the short Jan $45 calls ($2).  The only bad thing there is we'd have to put a stop on them at $3 because I'm terrified of the upside move but, even if we stop out, it would only be because YHOO moves up $3 (delta 0.36) back to $44 and that would put the new spread $9 in the money.

    We'll see what YHOO does on Monday but there's no logic to that drop but here's the mumbo jumbo that can drive the stock even lower because it's in the WSJ (but note it's a BLOG in the WSJ):

    Yahoo's Core Business Value Cut in Half to $6.8 Billion After Alibaba IPO

    As Alibaba shares soared in their first day of trading on Friday, the value that investors are placing on Yahoo YHOO -2.74%’s core business was sliced in half to about $6.8 billion.

    That’s because Yahoo still owns a large chunk –about 400 million shares — of the e-commerce giant after the IPO. Alibaba’s shares rose 38% on Friday, while Yahoo’s shares fell about 2.7%, so even more of Yahoo’s market capitalization is made up of non-core assets.

    Yahoo made about $5.1 billion in cash, net of taxes, from the sale of shares in the Alibaba IPO. Its remaining stake is valued at about $23.4 billion, presuming it will be taxed at the full capital-gains rate of 38%. Add that to a stake in Yahoo Japan 4689.TO +0.91%worth about $5 billion, and net cash of about $1.55 billion, and Yahoo’s non-core assets now total about $35 billion.

    With Yahoo’s market capitalization at $41.86 billion, the value that investors are placing on the core business – the entire empire of media sites, advertising, email, mobile apps and other Web properties like Tumblr and Flickr – sits at about $6.8 billion. That number was $13.85 billion at the IPO pricing, but it fell as Alibaba’s stock rose and Yahoo’s shares sank.

    A long list of factors could influence the value of Yahoo’s core business in the coming months. Chief Executive Marissa Mayer may look to use her new war chest on acquisitions that could accelerate growth and change investors’ muted outlook on the stock.  Finance chief Ken Goldman is on the hunt for ways to avoid paying the full tax rate on the remaining Alibaba shares.

    If the run up on Alibaba’s stock continues, and Yahoo’s stock sags, the value of its core business could dwindle to nothing at all.

    I'm not even sure where they are getting this math.  YHOO already has $3.3Bn in cash and made $1.4Bn last year and it looks like they sold 122M shares of BABA at $68 ($8.3Bn), which will only be taxed as a capital gain (-$1.6Bn) so YHOO is in a position to do a $4/share cash distribution (50%) to shareholders or make a blockbuster acquisition.  Unfortunately, with BABA closing at $94, they left $3Bn on the table – maybe that's why people are pissed at them.  Still, their REMAINING 400M shares are now worth $37.6Bn.

    So, we add $37.6Bn to the $8.3Bn they just sold and call their cash in the bank a wash to their debt and that's still $46Bn and YHOO has 994M shares so about $46 a share in cash and then they are the 5th most popular internet site in the World, making about $1.40 per share so $14 would be a p/e of 10 on the remaining business.  

    Amazingly also, YHOO bought Tumblr last year for $1.1Bn and that is being valued at zero but, if it were still a stand-alone App with "potential", it would probably have been worth more by now based on growth.  The last company YHOO spent $1Bn on was AliBaba.  Oh, and they still own Yahoo Japan, which is worth about $5Bn –  just a bonus.

    So, for those of you who paid $3 or $3.50 for the Jan $38/45 bull call spread – keep in mind YHOO is still over $40 and we have until Jan but also keep in mind, even if you don't want the exposure of the short calls, that the spread is still $3 – so just GET OUT if you don't have faith or you can pick up the 2017 $30/38 bull call spread for $4.50 and, if that doesn't appeal to you – take the .50 loss and run – because you hate this stock!  

    Actually, I like that spread and we can sell the 2017 $30 puts for $2.50 to pay for it.  It's hard to imagine how they could blow it so badly that they fall below their cash on hand (assuming BABA doesn't crash anyway).  But there's no reason at all to buy BABA when the net on that YHOO spread (with the puts) is $1 for each $8 you want back and TOS says the net margin on the short puts is $3 – a lot cheaper than buying BABA!

  125. Holy crap on the RUT – I wish I'd left those shorts on after I left.  Once they failed 1,150 they dropped like a rock and all the way down to 1,136 after hours.  I had literally the experience people often complain about in the futures – as soon as I bought back my shorts – THEN they dropped the index.  It did almost seem like they were specifically waiting for me to stop shorting before the big move but I don't think my few silly contracts were holding up the index – who knows with these low-volume markets, though?  

    Check out these adavance/decline levels:

    9-19-2014 8-01-02 PMDiary

    3x declining volume on the AMEX (NYSE MKT)!  WTF?  And check out the new lows on the Nasdaq.  All is not well…






















  126. Oh, I do still have my /NKD shorts on over the weekend – just about even at 16,225.  Those I felt confident with when I walked out the door but they did hit a nice, low stop I set and 1/3 are gone (7/20).  

    Amazingly, SFBTY took a hit yesterday too, down 1.2% despite their huge win on BABA.  Traders are very, very strange.  

    $2.85/Craigs – Well, you can get $3 for the YHOO spread now and that's a 5% gain in a day, certainly on track to make 100% by Jan at that rate.  Actually, that's an annualized gain of 1,500% – why complain? blush

    TZA/ZZ – Congrats.  I hope you took a little off the table on that good of a dip.

    $30/Nicha – Wow, that's a great deal.  It does occur to me that people should probably go elsewhere in the country to get their phone contracts.  A lot of rural areas (and Albany isn't that rural) have way better deals on the exact same contract we have in the urban areas.  It's not a little money, we pay at least $200/month for 4 mobile phones and I'm sure I could save $1,000 a year by making a $500 trip so someplace with better rates.  There should be an app for that – to find the best rates by location.  

    GreenCoins/BDC – You dropped the ball on that one, we could have accepted them for the Conference!  Actually I was just talking about you with a money guy in NYC last weekend, let me know when you're around NY and we'll get together and discuss.  

    As to Krugman – it's a funny thing because the real issue is that we don't VALUE clean water and clean air.  That's the fault of education and, if course, the fact that places like WFM do well proves that there are plenty of people who are willing to pay for a better World.  If we began in schools and began education people differently, then the values of people would change over time and Green Industries could become the next hot thing in 20 years.  It just takes the will to change.

    Good point Yodi. 

  127. Schadenfreude/ZZ - I'm just waiting for ALL of the people to wise up one day.

    Drop test/Shadow – LOL, well, at least we've got a real one now.  

    Wolfram/StJ – Very clever idea.  

    Big Chart – Yike, RUT looks scary, NYSE failing Must Hold again, Nas rejected at 15% line.  I still like SQQQ, that's for sure…

  128. Wolfram / Phil – The only problem is you need to learn the codes to tweet. But you can get some good information about stocks that way just in a tweet. For example:

    TradingChart[FinancialData["GOOGL", "OHLCV", {2012, 1, 1}]] gets you this:

    FinancialData["GE"] gets you this the last GE price and so on.

    More information at

  129. Just tried that Wolfram tweet system and it does look great!

  130. Well, that's great because all we really need are a few good formulas and anyone can plug in a symbol.  In fact, you could make an app the lets users pick a study and enter a symbol and the handle the tweet and retweet in the background and that would make it much more user-friendly.  

  131. Here is a explanation of Schwarz about YHOO :


    -Masayoshi Son owns 36.7% of Alibaba.  It’s no coincidence that he and Jack Ma allowed Yahoo to maintain a 16.3% ownership stake.  Marissa Mayer is nowhere to be found during this Alibaba circus which implies she is no longer acting as the public voice of Yahoo.  Today would be a terrific opportunity for her to hit the airwaves with positive talk about Yahoo’s cash, Yahoo Screen, Yahoo Mobile, Yahoo’s remaining stake in Alibaba, etc…but she is silent.  Now that the complexities of filing the IPO are over, we expect Masayoshi Son to purchase Yahoo thereby giving him a 53% ownership stake in Alibaba.  The opportunity is too good.  Listen to his interview on CNBC and there’s no question he’s a long term investor.  He views today as the beginning of Alibaba, not the end.  He see’s this as a 100 year opportunity as Alibaba grows into the first global marketplace.  As Alibaba trades at a $250 billion valuation Yahoo’s stake is worth $40 billion.  This Yahoo 16.3% stake is held in Hong Kong and can be sold basically tax free.  I doubt Masayoshi Son ever wants to sell it.  Masayoshi Son owns 42.5% of Yahoo Japan.  Yahoo owns 35%.  Clearly their interests are aligned.  Yahoo now has $10 billion in cash.  YHOO trades at a dramatic discount with it’s current $40 billion market cap.  This is a no-brainer of a deal.  


    -Why isn’t YHOO rising today?  Hedge funds who own Alibaba are shorting YHOO (selling shares) as a way to hedge their investment in BABA. Traders expect this hedge will last for approximately one week. As Alibaba shows stability, YHOO’s short trade will unwind as hedge funds buy shares to cover.   As long as BABA trades over $80 we love YHOO.  Therefore BABA $80 is the new momentum sell point for YHOO. 


    -We're not getting caught up in short term trading shenanigans with YHOO. We're willing to hold this thing over the next month as the market re-adjusts.  In the big picture what is good for Alibaba is good for Yahoo.  Today is a great day for Alibaba which means it's a great day for Yahoo. One year ago analysts thought BABA would have an $80 billion market cap.  One month ago analysts thought BABA would have a $150 billion cap.  On the first day of trading it's in excess of $200 billion.  It's poised to reach $300 billion sometime during the first year of trading.  At current prices, Yahoo is Alibaba but with a more favorable valuation.     

  132. App / Phil – That sounds like a good idea actually. I wonder if anyone of the members has the app gift…

  133. The Mobility of Capital - My untutored macro view is as follows.  The global economy is in bad shape and getting worse, and I see nothing that would suggest that "something" might turn it around.  If there is a principal "cause", it is due to one of Phil's central themes:  that by far the lion's share of the Chinese, Japanese, U.S. and European "recession mitigation" measures ended up in the pockets of the "saving" class (the global "1%") rather than the "consuming" class (everyone else).  We now have a global recession, and I see no dynamic that might turn it around.




    I speculate that, there is a structural factor in the global economy that militates against the creation of government-led economic policies (understanding that "governments" are, everywhere and always, in the hands of elite political classes) that might put the brakes on this global recession (a polite term for "depression") by redistributing wealth to the great majority who -- having less of it per capita -- would tend to consume it and create a demand-led global economic recovery.



    This structural factor is the unprecedented mobility of global capital in an era where solving a country's domestic problems runs a poor second place to simply pushing a button and moving your wealth, and family, to Malibu, Miami or Manhattan.  Or, less poetically, the United States, plus Canada and Australia.  



    There was a time when wealth consisted largely of land ownership, and the trading of the resources – agricultural, mineral, riparian, and industrial – that they afforded.  But once the lion's share of those resources were placed within the ownership of limited liability corporations, that wealth was parceled into tradable bits (shares) which has had the tendency to disconnect the owners of those shares from their countries of origin. 



     This development can rather easily be put into reverse, being essentially artificial in structure - as Mao pointed out, power (still) emanates from the barrel of a gun.  But if all the "gun owners" are now part of a supra-national wealthy class which still dominates politics in their home countries, , then it is quite natural for the wealthy to emigrate to Manhattan, etc., where their heirs can be better educated and incorporated into this class with their peers, while still maintaining their ownership rights in their home countries.  In short – there is simply no need for the elite of Eastern Hemispheric countries to invest and sacrifice domestically on behalf of their impoverished fellow countrymen if they can just push a button and buy the SPX.




    PSW-ers are all bored to death by now with my frequent references to the 86.5% /13.5% population split between the eastern and western hemispheres.  But if you juxtapose the “U.S.A. and Canada and Australia” against all others, the split is an even less favorable 5% / 95%.   Simply put, they constitute the chunk of the planet that is most clearly distinguishable from the Rest Of The World in its performance in recovering from the depression of recent years.



    How we got here is academic.  It seems that Asia, the U.S., and Europe all over-leveraged their growth, driven by the vote-buying/getting elected/ better now/worse later dynamic of your average democracy, among other factors.  Even the Chinese fell victim to it, surprisingly. 



    But where we are going seems somewhat clearer:  a structural divide between the Eastern and Western Hemispheres in terms of economic potential, in favor of their region with far fewer people, far more per capita natural resources and wealth, and the insulation of large oceans combined with a military budget roughly the equal of all other military budgets combined.  What's not to like?   [I would be glad to receive PSW instruction on where I might have gone astray.]

  134. ZZ no separation of hemispheres the separation is those the do the work are worthless and the moneyed are deserving. The problem is we are close to the workers saying fuck it.

  135. Phil – technically speaking, there is no preferential corporate capital gains rate (YHOO / BABA math).

    But we all know that (giant) corporations in the US essentially pay zero income tax due to the zillion loopholes out there, so this is a big whatever.

  136. Question Green? That is bigger than what? Or does it matter?

  137. Phil – hope you are having a good weekend. Have a question, something that i'd like to learn. I understand the concept of being the house, i understand that when we write a put we intend to own the stock cheaper and may be even double down – but here is a question and appreciate if you can explain. Assume we sold a put and collected premium now with the premise that the company is solid… 

    (a) Say in a few months, stock crashes, our premise is still that company is good – how would we repair that trade? roll over? can you explain that – double down? i am not clear on what we would do. Would we have to accept some loss as we try to repair or can we do those things without taking loss?

    (b) Say, stock crashes and also our premise changes and now we believe that it is not a good stock – how would we respond then? how do we salvage our trade?


    Appreciate your teaching – Once this is clear, i think i can understand better and have more confidence going into the trade…


    Thank you!!

  138. Phil – i thought an example would be better.

    Lets take the example of GTAT – the stock is ~12 – say we sold a 12 put 2016 for certain premium. 

    (a) we still think company is good but say stock goes to 7 or 6… what would we do.

    (b) say stock goes to 7 and at that time we change our premise and think the company has more downside – what would we do.



  139. Shadow: I'm not saying that income inequality looks different in the U.S., Canada and Australia than it does in other countries.  What I am suggesting is that the global elites in all major countries may tend to invest abroad in the U .S, Canada and Australia because those countries are both among the weathiest and most attractive towards which to emigrate for these wealthy elites of less developed countries, or their children.  In what appears to be a lengthy period of global recession, these three countries might have a tendency to recover faster —  a divergence that is beginning to show up in recent growth figures.

  140. From Bloomberg, Sep 20, 2014, 9:02:43 PM

    U.S. Treasury Secretary Jacob J. Lew said the global economy continues to underperform, particularly Europe and Japan. Photographer: Krisztian Bocsi/Bloomberg

    Group of 20 finance chiefs will
    warn that risks to the global economy have increased in recent
    months, an official said, citing the latest draft of a
    communique due to be released today.

    To read the entire article, go to

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  141. From Bloomberg, Sep 20, 2014, 6:24:39 AM

    Currencies are back on the G-20 agenda as diverging monetary policies from the U.S. to Japan threaten to increase exchange-rate volatility.

    To read the entire article, go to

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  142. From Bloomberg, Sep 20, 2014, 9:17:02 AM

    Guinea’s Red Cross health workers wearing protective suits carry a stretcher at the NGO Medecin sans frontieres Ebola treatement centre near the hospital Donka in Conakry on Sept. 14, 2014. Photographer: Cellou Binani/AFP via Getty Images

    The Ebola outbreak in West Africa could spread to hundreds of thousands more people by the end of January, according to an estimate under development by the U.S. Centers for Disease Control and Prevention that puts one worst-case scenario at 550,000 or more infections.

    To read the entire article, go to

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  143. From Bloomberg, Sep 19, 2014, 7:56:20 PM

    Corinthian Colleges Inc. (COCO), the for-profit college operator that’s being shut down, said it’s facing two further criminal probes related to financial aid and reporting student outcomes.

    To read the entire article, go to

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  144. From Bloomberg, Sep 19, 2014, 4:59:04 PM

    Environmental activists demonstrate in lower Manhattan on Sept. 21, 2013 in New York City. Across the country numerous protests were planned on what activists are calling a national day of action regading the climate. Photographer: Spencer Platt/Getty Images

    The people are coming.

    To read the entire article, go to

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  145. From Bloomberg, Sep 20, 2014, 2:04:53 AM

    Yahoo, led by Chief Executive Officer Marissa Mayer, has benefited for years from stakes in Yahoo Japan and Alibaba — and the stock action shows just how much the company depended on those businesses for value. Photographer: Simon Dawson/Bloomberg

    Yahoo! Inc. (YHOO) is now worth less than
    the value of its Asian assets.

    To read the entire article, go to

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  146. From Bloomberg, Sep 19, 2014, 5:25:58 PM

    Sept. 19 (Bloomberg) — White House Press Secretary Josh Earnest speaks about U.S. airstrikes against the Islamic State and the training of Iraqis and Syrians to fight the extremists.
    He speaks at the daily White House news conference in Washington. (Source: Bloomberg)

    Islamic State militants seized control of more Kurdish villages in northern Syria, extending the group’s advance as Turkey opened its border to admit some of the thousands of refugees fleeing their homes.

    To read the entire article, go to

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  147. From Bloomberg, Sep 18, 2014, 5:01:03 AM

    A homeless woman in New York City. Photographer: Spencer Platt/Getty Images

    America’s poverty rate fell in 2013 for the first time in this economic recovery. For women, though, it was hard to find much to cheer about.

    To read the entire article, go to

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  148. From Bloomberg, Sep 20, 2014, 6:27:00 PM

    Former U.S. President Bill Clinton. Photographer: Daniel Acker/Bloomberg

    The Ebola crisis, the Alibaba IPO and the failed Scottish independence vote all fit in to what former President Bill Clinton said he sees as the defining trend of our time — the need for effective, organic collaboration among nations, businesses and civil society to tackle challenges too complicated for anyone to deal with in isolation.

    To read the entire article, go to

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  149. From Bloomberg, Sep 19, 2014, 5:00:00 AM

    Pastureland remains barren and dry at the height of the rainy season on Feb. 14, 2014, east of Bakersfield, California. Now in its third straight year of unprecedented drought, California is experiencing its driest year on record, and a summer that is in their top five for heat. Photographer: David McNew/Getty Images

    Much of the talk in the eastern U.S. has been about how cool it’s been day after day this summer. It turns out that’s a topic that wouldn’t have come up in many other places in the world.

    To read the entire article, go to

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  150. Watch this video at

    iPhone 6 Review: Now Fewer Reasons to Get an Android

    Sept. 16: Bloomberg’s Sam Grobart reviews Apple’s new iPhone 6. The smartphone is bigger, thinner, with more storage and a longer battery life. So should you upgrade from your older iPhone or Android?

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  151. From Bloomberg, Sep 17, 2014, 7:13:27 PM

    Photograph: Getty Images

    In the parlance of Wall Street, there’s the “smart money” and the “dumb money.” The dumb money falls for investing fads, sells into market panics and pays ridiculous fees. The smart money doesn’t.

    To read the entire article, go to

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  152. From Bloomberg, Sep 21, 2014, 2:03:54 AM

    Sept. 21 (Bloomberg) — U.S. Treasury Secretary Jacob J. Lew speaks about the U.S. and global economies, financial regulation and tax inversions at a news conference in Cairns, Australia, following a meeting of Group of 20 finance ministers and central bankers. (Video courtesy of G-20. Source: Bloomberg)

    U.S. Treasury Secretary Jacob J. Lew said the department is finishing work to limit the benefits
    companies gain from moving their addresses overseas even if his
    action won’t be enough to stop the practice known as inversion.

    To read the entire article, go to

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  153. From Bloomberg, Sep 20, 2014, 8:00:00 PM

    Guinea’s Red Cross health workers get their protective suits prepped to carry the body of an Ebola victim at a treatment center in Conakry, on Sept. 14, 2014. Photographer: Cellou Binani/AFP via Getty Images

    Aid organization Direct Relief had
    100 tons of gloves, masks, medicines and gowns stockpiled in a
    California warehouse. Doctors fighting Ebola were calling from
    West Africa desperate for supplies.

    To read the entire article, go to

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  154. Watch this video at

    Stiglitz: Austerity ‘Dismal Failure,’ New Approach Needed

    Aug. 20 (Bloomberg) — Columbia University Professor and Nobel laureate Joseph Stiglitz says austerity policies in Europe have been a “dismal failure” and that a new approach is needed including a form of fiscal union.
    He speaks from Lindau, Germany, with Jonathan Ferro on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)

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  155. From Bloomberg, Sep 19, 2014, 12:01:00 AM

    American Airlines first class seats include a lie-flat bed. Source: American Airlines via Bloomberg

    For $8,000, American Airlines (AAL)
    treats select Los Angeles passengers to private berths, three-course meals boasting shrimp scampi and even vented compartments
    that can house a socialite’s pet chihuahuas.

    To read the entire article, go to

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  156. From Bloomberg, Sep 20, 2014, 9:56:00 PM

    The European Central Bank may not
    need to add stimulus measures after steps in the past three
    months pushed down the euro, said Governing Council member
    Ignazio Visco

    To read the entire article, go to

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  157. From Bloomberg, Sep 19, 2014, 1:00:01 AM

    Exports of flowers to the U.S. and
    fuels to India are buffering Colombia from a slowdown in Chinese
    growth that is hurting the Andean country’s neighbors.

    To read the entire article, go to

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  158. From Bloomberg, Sep 21, 2014, 7:23:32 AM

    Ed Miliband, the leader of the
    U.K.’s opposition Labour Party, pledged to increase the minimum
    wage to 8 pounds ($13) an hour by 2020 if he wins power in next
    year’s general election.

    To read the entire article, go to

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  159. From Bloomberg, Sep 21, 2014, 2:38:43 AM

    Sept. 21 (Bloomberg) — Australian Treasurer Joe Hockey speaks about global growth, international taxation and financial regulation at a news conference following a meeting of the Group of 20 finance ministers and central bankers in Cairns, Australia. (Video courtesy of G-20. Source: Bloomberg)

    Group of 20 finance chiefs and central bankers said low interest rates are contributing to a potential increase in financial market risk, as major policy makers rely on monetary stimulus to bolster growth.

    To read the entire article, go to

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  160. From Bloomberg, Sep 19, 2014, 5:00:57 PM

    High five or self-defense?

    How did Kansas become perhaps the largest question mark in the battle for control of the Senate — and host to a closely contested election for Governor, too?

    To read the entire article, go to

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  161. From Bloomberg, Sep 19, 2014, 1:54:24 PM

    Europe is experiencing a reversal.

    To read the entire article, go to

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  162. From Bloomberg, Sep 20, 2014, 8:45:08 AM

    Good Saturday morning. Before you head out to enjoy the weekend, try perusing some of our dry-aged, longer-form reads:

    To read the entire article, go to

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  163. From Bloomberg, Sep 17, 2014, 5:41:54 PM‘s China head office in Hangzhou. Source: Alibaba Group

    If you live in China, or perhaps Russia, or are part of the Chinese diaspora, you already know how big a deal Alibaba Group is. And if you’re one of the investors clamoring for a piece — any piece — of the giant e-commerce company, there’s no doubt you’re sold on its prospects.

    To read the entire article, go to

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    In a growing practice, medical assistants, consultants and other hospital staffers, often called in without patients’ knowledge, are charging hefty fees.


    The independence movement in Scotland was another sign of widespread dissatisfaction with an established order that has failed to deliver.

  166. Phil

    Kansas republicans going against their governor and tax cuts. We can hope the extreme  swings are starting to reverse. Anti-Anti-Tax-Cuts!

  167. Phil – I am not sure why you keep ZH links on your site. I was reading one of their articles this morning and the comments of their readers are truly appalling – I don't mind a joke here and there and everybdoy is entitled to their opinion but this really goes too far:

    A mix of racism of the worst kind, some anti-semitism mixed in there. I would not want to be associated with that crowd! I believe you kicked out some members for the exact same comments. It's not the first time I have seen it either. And in some ways, their articles often call for that kind of comments. Just my $0.02!

  168. ZH/StJ – I'm not sure what you mean on that post, there are no comments or perhaps someone posted a comment that has since been taken out if it was offensive.  As to that article, I find the quotes themselves interesting and ZH, while extremely uneven in content – does have some very good stuff.  Following the article link back to Quinn's blog – I do see 6 comments but none too horribly offensive.

    Oh, now I see, it's the readers on Zero Hedge who are disturbing!  Well, that's why we carry the articles and not the comments.  It is scary though, to see the level of hatred and prejudice, even among readers of a financial site like theirs.  Of course, that's why I don't have comments open to the general public – I used to get the same crap before we went private and, frankly, it bums me out when my own readers sicken me. 

  169. YHOO/Craigs – Yes, that is the plan but, bear in mind that, if YHOO can't hold $40, better off taking a small loss and waiting for the dust to settle, no point in losing money on the spread – no matter how much we believe in it.  With the STP, we have 30 of them and I'm happy to go longer with more in the LTP if they do go down but still – I'm sure not going to take a loss and $2.50 is about a 50% profit – so that's about where I'll either stop or adjust.  

    Gold/StJ – That doesn't change the fact that actual inflation has raised the cost of pulling gold out of the ground to around $1,150.  That should be the new floor and it's doubtful it would stay down that long although corn is 4 for $1 in our supermarket this week – so you never know how low things can go.  

    $56K/Shadow – Actually my plan was much better.  The government was to buy out $100,000 of anyone's mortgage who asked for it and refinance it interest only at 3% in exchange for $125,000 worth of the home's sale value at that time.  For most Americans, with an average $200,000 mortgage, it would have halved their payments, saving them about $670 a month ($8,000/yr) and it would have put that $100,000 directly into the banks anyway and would essentially force them to re-loan the money to new home-buyers (who would also be eligible for a reduction). 

    That would have put a ton of money into the economy and improved the banks equity/loan ratios substantially and, as it turns out, now that housing has recovered, the government would be looking at paybacks of 150-200K when people sold their homes as prices came back.  This would have cost the government essentially nothing and the Fed wouldn't have to have printed any money and the Dollar would be miles stronger.

    There are 110M homes in the country so if 55M had taken the government's deal, that would have been about the same $6Tn the Fed created that DIDN'T trickle down to help anyone but 55M people with $670 more per month to spend, that's $442Bn in ANNUAL stimulus, adding about 2.6% to the GDP EVERY YEAR GOING FORWARD.  

    This would have cost the government nothing because, even if the homes were foreclosed on, the Government is on the hook for it anyway with bank bailouts.  This is essentially what I pitched to Geithner when I saw him but they went with TARP 2 instead because no one wants a Trickle UP solution!  

    YHOO/Advill – All those shorts are why I'm too worried to let the short calls go naked, they could snap back hard and fast.  

  170. ZH / Phil – I am not sure it's a financial web site anymore! It's like calling Fox News a news channel! Their readers are truly horrible and they fan that hatred with their articles… I have pretty much given up on reading their stuff because of that even though they sometimes have interesting stuff. But who can sponsor the bile that they generate…

  171. Global Recession/ZZ – The untested part of the theory is "how much do we really need the bottom 90%?"  If the top 10% have 90% of the wealth, then who gives a crap what the slaves are doing?  Obviously, we have plenty of examples of thriving economies in which the Slaveowners or Royals or Oligarchs have had wild streaks of prosperity while the people below them lived in abject poverty.  As long as the state is able to collect enough taxes to motivate the officials to go along with the system and the peasants are kept in line – all is well.  The persecution of the masses can go on for centuries before something upsets the apple-cart.  

    Things do seem to happen these days at hyper-speed though, so it will be interesting to see how things play out.  At the moment, the market is a sort of "bread and circus" to keep the people amused while the treasury is bled dry by the ruling class.  The barbarians aren't at the gate yet (though they do seem to be in Syria and Iraq), so we haven't been forced to make hard economic choices that are likely to enrage the people but demographics will force that hand eventually.  

    Good point about wealth being disconnected from the land.  Same goes for manufacturing as well – there's nothing to tie the Capitalist to his community, other than sentiment.  And yes, we've out-sourced poverty for decades and all we are really seeing now is a little pushback on wages as 3rd-world workers are now able to compete on a level playing field with their US counterparts and, of course, that's REALLY bad for US workers.  

    On the whole, we will have to be REALLY lucky for this to all work out nicely in the end…

    Gains/BDC – Good point, though I'm sure YHOO has plenty of divisions/projects/investments they can write off to offset.  If Marissa is as awful as people think, then they can write down $10Bn with their eyes closed!  

    GTAT/Nraman – Let's go with that example as it's in the the LTP from 7/15 and down substantially since.

    We went with 20 of the 2016 $12/20 bull call spreads at $2.70 and sold just 10 of the 2016 $15 puts for $4.80 for a net cost of 0.30 per long position.  If GTAT is assigned to us at $15, we own 1,000 shares for net $15.60 (because it's a 2x cost basis against a 1x assignment).  

    Back in July, the stock was about $15 and now it's $11, down 26%.  Do we NEED to repair the trade?  Well, on the one hand, it looks awful as the 2016 $15 puts are down 31% and our long 2016 $12 calls are down 54% and, on the whole we're down about $3,500 on the position.  

    But the position is owning $15,600 worth of GTAT and, at $11.16, we should be down $4,500 so we were actually better off with this spread than if we had just bought the stock.  Either way, there's no rush to fix it.  If we decide GTAT is no longer desirable, we will simply shut the trade down and take our $3,500 loss, which is only 23% of the $15,000 we promised to buy.  Since a full allocation in that portfolio is $50,000, we haven't even lost 10% of an allocation block on this trade yet. 

    So, if GTAT comes back 20% in the next 3 months, that will be about $13.50 and we'll actually be on track again, since we have the $12/20 spread at net 0.60 that's $1.50 in the money with 12 more months to gain.  If GTAT is down 20%, to $9, we should be down about $4,500 and we can take the loss and move on or we may decide then to buy 2017 $7/15 spreads and sell $10 shorts.  At the moment, that combo is about 0.25 so let's say we re-commited to 20 of those at $500.  If we carry our $4,500 loss forward into that spread, it means we've paid net $2.50 for 20 of the 2016 $7/15 bull call spreads with the stock at $9 and a potential return, at $15 of $16,000 ($11,000 profit).  The risk, if assigned to us is owning 2,000 shares of GTAT at net $12.50 ($25,000) and that's still half an allocation block.  

    So, if you don't like the risk/reward of owning GTAT for $12.50 (now $11.16) or possibly making $11,000 if it hits $15 – then by all means take the damned $3,500 loss now and walk away.  We constantly have to make these evaluations in our portfolio and it's not based on a formula – it's based on whether, given what you NOW know about the stock, you think it's the best use of your money for the period of time you're examining.  

    We recently walked away from CZR in the Butterfly Portfolio because we couldn't get a handle on them and they had sold off relentlessly to what I thought were stupid lows ($12) but it wasn't worth the risk so we let it go.  On the other hand, we stuck with them in the Income Portfolio because we REALLY would like to own 1,000 shares of CZR at net $15ish – even though there were $12 at the time.  

    That goes back to the Levis example – if you KNOW what a stock is worth then, when the price drops – it's an OPPORTUNITY to buy more.  That's what Buffett and other value investors do.  The problem is that it's very hard to follow that discipline because you have to really understand your own stocks and you have to really understand that the people who you are reading (including me) aren't any smarter than you are and your opinion is just as valid as theirs.

    Just go back to 2008-9 and look at all the blue chips that went on sale at the time.  Now, in retrospect, you can say it was madness to be able to buy BA for $30, GE for $5, BAC for $2, AAPL for $85 – yet other than me and Buffett, there was almost no one willing to speak up at the time.  

    It's up to YOU to decide what stocks you want to have in your portfolio a decade or two from now and, if they go on sale, that's the time to add more but it's also your responsibility to KNOW what is going on with those stocks and to make damned sure your assets are doing what they are supposed to be doing.  These are not random numbers on a roulette wheel, these are companies with income statements and balance sheets and quarterly reports that YOU need to be studying so YOU can make informed decisions about what to do when the PRICE goes up and down on you.  

    This advice pertains to INVESTING, not trading.  For trading, study Optrader's rules for getting in and out of things.  

  172. Kansas/Shadow – I need to go traveling next year because the people I consult with in NY and DC all seem to have a similar question – "How much more can the bottom 80% take?"  It's such an abstraction to people who live in the DC-Boston corridor or the West Coast that even "sensitive" guys like me can't get a feel for what's really going on out there.  Why are people not in revolt already?  

    I've been kicking around the idea that the Liberals are pacified since Obama is in office and they still hope things will get better while the GOP base has been assured a Senate victory in November will put a stop to Obama's nonsense that is killing all the jobs in this country or whatever other evils he's being accused of this week.  

    Even if the GOP does take the Senate, they'll have 2 more years blaming Obama ahead of them but, if they do, then winning the 2016 Presidency would be a disaster for them if the economy turns south again.  They would then get blamed for everything by everybody and would be back to 40 years in exile, like they were after Hoover.  If the GOP wins the Senate and blocks Obama for 2 years and the economy collapses – it will energize the Dem base and probably win the Dems the 2016 election and the Senate back.

    So not too many ways things can actually go well for the GOP, other than this minor victory in the next election (if the pollsters are right, which they might not be).  I think what's keeping them in the game is being able to blame everything on Obama and the Senate and, unless they take the Senate AND the economy improves AND they can keep Obama for getting credit for doing it over their dead bodies – the end game is not going to be pretty. 

    Body Cameras/QC – Go TASR!  

    ZHedge/StJ – Well, I only read the ones that Ilene picks for our site, I agree that their own site isn't that good anymore.  I have, on occasion, considered booting them but they do put up some stuff I don't see anywhere else that's worth reading so, still useful – even if occasionally distasteful.  

  173. Oh, by the way, I was watching the Ken Burns great documentary on the Roosevelts and it's funny how much the GOP was attacking him for 4 terms as well.  Same crap as today, essentially, we even forget that Dewey was a typical GOP Big-Business lackey who was put up against Roosevelt in his last turn and again against Truman (barely losing).  On the whole, Dewey was a liberal compared to Taft, who represented more of the Tea-Party wing of the time.  

    In a 1949 speech, Dewey criticized Taft and his followers by saying that "we have in our party some fine, high-minded patriotic people who honestly oppose farm price supports, unemployment insurance, old age benefits, slum clearance, and other social programs…these people believe in a laissez-faire society and look back wistfully to the miscalled 'good old days' of the nineteenth century…if such efforts to turn back the clock are actually pursued, you can bury the Republican Party as the deadest pigeon in the country." He added that people who opposed such social programs should "go out and try to get elected in a typical American community and see what happens to them. But they ought not to do it as Republicans."[28]

    Looks like they just had to wait 30 years for the re-education centers to do their job…

  174. Phil / Futures /NKD

    Some long questions for the weekend or after hours…

    I managed to extricate myself from my /NKD position with some pain and I would really like you to expand on your own /NKD position, especially for overnight positions.

    First some math… You stated “/NKD is now at 16,165 and the high was 16,185 and it's $5 per point, per contract so I'm good to short 1 here and 1 at 16,175 to average 2 at 16,170 and then 2 more at 16,190 to average 4 at 16,180 and then 4 more at 16,200 for 8 at average 16,190 with a stop at 16,210 for a $160 loss.” Wouldn’t that be an $800 loss? ((16190-16210)*$5*8contracts)=-$800

    Then: We have conviction and we are going to let it overnight, but overnight it shot up to 16330 and, since we don’t use hard stops, we are at 16190 average and with a loss of $5,600 on 8 contracts. Since it retraced to 16260 by opening time we are down only $2,800. You are already at 8 contracts, do you double down to 16? You get your average to 16225 and with a retrace you can get back to one or two contracts (as it has), but if it hadn’t? Had it gone back up to 16300 or more?

    Yesterday you made a comment: “Those I felt confident with when I walked out the door but they did hit a nice, low stop I set and 1/3 are gone (7/20).” So you did place a hard stop or was that a mental stop that you manually triggered during the night? When you leave futures during the night, do you check on them at regular intervals or do you place hard stops?

    It would be really helpful if you could detail your position as much as possible: Opening position, doubling downs, partial exists, what ifs, monitoring hours, hard stops, mental stops, etc. Since live seminars are time constrained and you have to enter and exit positions at unfavorable times a few REAL trading sessions like this would be REALLY helpful. I think a couple of successful sessions would be great, but I think bad, unsuccessful and disastrous sessions would be even better since I make it a point to learn as much as possible of mistakes/bad situations. We all know your success stories, but I would really like to hear your REAL horror stories and the lessons you learnt from them. Of course you’re time constrained, but a couple a week after hours would be great.


  175. Phil ZZ

    I still think the masses are close to saying FU. On top of that the .1% up don't get who buys their meal ticket!

  176. I could go on but everyone wants others opinions, links, and I thing most of them a full of shit!

  177. are

  178. Any ideas to how low /SI might go? Sitting on some big losses and trying to decide whether to bail or wait it out…Contract has 70+ days til expiration but it seems there is no floor to this metal in the current environment….thanks for any and all comments

  179. From Bloomberg, Sep 21, 2014, 6:57:27 PM

    Japanese index futures fell with
    contracts on U.S. equities, while New Zealand’s stocks and
    currency climbed after the government was returned in an
    election. Copper futures dropped with Brent crude oil.

    To read the entire article, go to

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

  180. From Bloomberg, Sep 21, 2014, 7:01:01 PM

    Mario Draghi’s stimulus pledge
    didn’t convince investors for long.

    To read the entire article, go to

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

  181. From Bloomberg, Sep 21, 2014, 4:00:00 PM

    Hedge funds extended this year’s
    longest exit from bullish gold bets as slumping prices and
    investor outflows since June erased $6.7 billion from the value
    of exchange-traded funds backed by the metal.

    To read the entire article, go to

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

  182. From Bloomberg, Sep 21, 2014, 1:01:00 PM

    Asia’s developing nations may have to sacrifice some growth next year and focus on keeping their economies stable amid a potential fallout from higher U.S. interest rates, Indonesian Finance Minister Chatib Basri said.

    To read the entire article, go to

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

  183. From Bloomberg, Sep 21, 2014, 1:18:31 PM

    Former U.S. Treasury Secretary
    Lawrence Summers called for a “major” plan to boost the
    country’s economic growth and said borrowing to fix aging
    infrastructure would help lower the jobless rate.

    To read the entire article, go to

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

  184. From Bloomberg, Sep 21, 2014, 7:01:00 PM

    Workers move coal out from a mine in Shanxi Province, China. The country depends on coal for two-thirds of its energy. Photographer: Nelson Ching/Bloomberg

    China surpassed the European Union
    in levels of pollution levels per capita for the first time last
    year, propelling to a record the worldwide greenhouse gas
    emissions that are blamed for climate change.

    To read the entire article, go to

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

  185. From Bloomberg, Sep 21, 2014, 7:01:00 PM

    A barge transports coal on the Rhine river in Dusseldorf, Germany. ermany used coal, the dirtiest fuel, to generate 45 percent of its power last year, the highest level since 2007, as Chancellor Angela Merkel is phasing out nuclear in the wake of the Fukushima atomic accident in Japan three years ago. Photographer: Krisztian Bocsi/Bloomberg

    When Germany kicked off its journey
    toward a system harnessing energy from wind and sun back in
    2000, the goal was to protect the environment and build out
    climate-friendly power generation.

    To read the entire article, go to

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

  186. From Bloomberg, Sep 21, 2014, 4:23:02 PM

    Demonstrators hold signs during the People’s Climate March in New York. Photographer: Timothy Fadek/Bloomberg

    Hundreds of thousands marched
    through Manhattan and in cities around the world today demanding
    government action on climate change in what organizers called
    the largest climate demonstration ever.

    To read the entire article, go to

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

  187. From Bloomberg, Sep 21, 2014, 7:00:00 PM

    UNDP Volunteers raise awareness about symptoms of the Ebola virus to students at Sainte Therese school, in Abidjan, Ivory Coast, on Sept. 15, 2014. Photographer: Sia Kambou/AFP via Getty Images

    The economic costs of the Ebola outbreak in West Africa will escalate to “catastrophic” proportions if the virus spreads to other countries in the region, Francisco Ferreira, World Bank chief economist for Africa said.

    To read the entire article, go to

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

  188. Phil

    I tend to agree with stjean respectfully that you need to read the news before you post it.

  189. Good morning!

    Asia down across the board, trading at day's lows into lunch.  Nikkei down 0.8%, Hang Seng down 1.3%, Shanghai down 1.5% and India down 0.4% so far.  

    At least two people were killed and an undisclosed number injured after multiple explosions in China's western Xinjiang region on Sunday, state media said. 11 min ago


    In the July 28 attack, unnamed assailants—which were believed by authorities to be Xinjiang separatists—attacked civilians, state buildings and vehicles in two towns, before police gunned down 59 people and arrested 215 others, according to official media.

    Ethnic tensions between Han Chinese migrants and Xinjiang's Turkic-speaking, mostly Muslim Uighur ethnic group have been high for years, with religious, political and economic overtones. A Xinjiang separatist movement has periodically targeted the government and police for decades, though in the past year, the number of violent attacks have picked up and increasingly targeted civilians.

    As to Japan – pretty much what we were playing for:

    Stocks in Tokyo slipped Monday from their highest levels in almost seven years, as the Japanese yen edged higher after a big month-to-date loss. 11:14 PM

    /NKD/Akad – First of all, that comment was from THURSDAY at 10:53 am.  A LOT has happened since then.  At that exact moment, that's what I was looking at and, at the time, this is the chart that went with the comment:

    Since then, it's done this:

    I also said in the same comment (and this was HUGELY important):

    That's my plan going in so I'm comfortable letting it play out.  At any time there's a pullback and I can get back to 1 contract at my new average, I do that and my ladder resets itself.  Since /NKD is up from 15,850 yesterday and I think the run-up to 16,200 is BS, I'm looking for a weak retrace of 20% of the 150-point run (30 points) to 16,170 and maybe a strong retrace to 16,140 in the very least.  

    Of course you have to keep close tabs on the Dollar (now 84.43) as your premise is that the move below 84.50 is not being recognized by the /NKD.  Also, if the Dow is strong, the Nikkei has a tendency to follow the Dow during the day more so than the Dollar.  

    First of all yes, the loss is $800, not $160, no idea what I was thinking other than the 16 contracts.  Anyway, that never happened because we hit 16,150 before we went over 16,200 so the whole thing was profitable.  There's no point in doubling down if you are not going to take half of it off even (or more if it's your 2nd DD) because the only reason you double down is to reduce your average basis – not to double your risk.

    The Nikkei gave us another run and rejection at 16,200 that afternoon and then another fall to 16,140 at night for another winner.  I think I had left one or two on overnight and my next comment on /NKD was the next morning:

    September 19th, 2014 at 2:25 am | (Unlocked) | Permalink 

    Futures are way up, Dollar 84.45 but Yen 109.11 and /NKD hit 16,330 but back to 16,245 already.  My average short is 16,200 so I'm sticking in for now.  

    So yes, at some point, overnight, they shot up to 16,330 but, fortunately (or not, as it turns out), I was sleeping but, had I not been, I would have simply doubled down there and averaged 16,265 and then dropped back to 1 or two as we got back to that level.  It was FRIDAY that I left my big block of shorts on but, on those, I left a hard stop to get 7/20 out at my break-even level because I wasn't quite comfortable with 20.  If we had another pop to 16,300, I wanted room to double down and still be able to sleep.  angel

    And I certainly did NOT say to leave it on overnight and ignore stops, the stop was still 16,210 for a conservative play.  I personally play very aggressively because I enjoy it and I can afford the losses.  At the moment, my /NKD trade is up $6,925 at 16,140 and I am now down to 10 contracts and I'll probably drop back to 5 before I go back to bed as that's the big score I was looking for so, no need to be greedy. 

    So FRIDAY, as I was walking out the door at 11:20 am, I had 20 short at 16,225 and the Nikkei was around 16,250 and I set a buy on 7 at 16,225 and that was that. Had we gone up 75 instead of down 75, depending on why, that position would have been down $7,500 but that is the difference between a momentum trade and a fundamental bet – I felt that the odds were not 50/50 that the Nikkei would go up or down but heavily in my favor that it would go down – based on the news I was reading (that Shadow says I should read first) and based on the US market action ahead of it. 

    Now, as to checking at regular intervals.  As I had 13 still open, I checked before bed and wasn't impressed but then, at about midnight, I woke up (not alarm, I just happened to wake up) and checked my IPad and saw we were down enough to be worth getting out of bed for.  That led me to where I am now, which is now 5 at 16,225 since we crossed back over 16,150 so I stopped 5 more out.   Had I happened to have been awake at 11:20, when /NKD hit 16,110, I probably would have cashed the whole thing then. 

    MOSTLY, I am EXTREMELY against leaving futures open overnight – or anytime your finger isn't right on the trigger.  In all cases, you should never play any contract where a move of 2.5% (400 points on /NKD) can hurt you financially because, if you play long enough, it WILL happen.   

    Another very important point is that I only make conviction plays when I STRONGLY feel we are at the top or bottom of a major channel.  All week we've been discussing how the Yen can't go much lower and the Dollar can't go much higher and the Nikkei was getting silly over 16,200 so those were all good reasons to short and, at 16,300 I would have wanted to short more and at 16,400 – more and, at 16,500 – more but at 16,600 I would have been very bummed out!  

    Hard stops to get even – I don't care if they flush those – I WANT to get out even!  With a Futures play, you should be dying to get out the minute you get in.  

    As to horror stories.  I left an oil short on many years ago and had to go to Texas that day and it was short "just" 10 contracts so I figured $5,000 up or down at the worst.  When I got to Texas, I found out I had taken a $50,000 flight as oil had jumped up $5 that day.  On the other hand, in one of our Webinars this year, we made $40,000 on Nat Gas when that went up and down like crazy and at least that one was on purpose!  

    Silver/Sun – There's no limit to a panic low.  Logic doesn't enter into it. /SI bottomed at $17.325 overnight but back to $17.585 now and that is NOT a contract I'd leave on overnight at $50 per penny!  I think $18 is a fair floor for /SI and $18.50 is the right price so I'm certainly bullish down here but, if you want to play with conviction over the long term, I prefer SLW, since you can sell options on it. 

    /YG hit $1,207 and we know it costs about $1,150 to pull gold out of the ground so, to me, that's a no-brainer long down here.  EVENTUALLY, SOMETHING will happen and gold will go up – eventually.  GLD is at $117.06 and they even have mini contracts and you can sell the 2016 $105 puts for $4 and buy the $115/127 bull call spread for $5 so that's net $1 on the $12 spread that's $2 in the money so you get 100% of gold's move up from here ($1,200ish).  

    Gold is down on expectation of ultra-low inflation forever.  If you are a consumer, you know that is total BS and it's based on fake Government statistics, not to mention the monetary bases are all collapsing.  It's the Central Banksters that want to chase you out of gold so you keep buying their fiat currencies but, again – there's only so many tables I can pound and I'm NOT going to turn into a gold bug – I just think it's an excellent hedge against inflation.  

  190. agree on /SI and leaving open overnight….I have been burned twice in 2 weeks with silver dropping anywhere from .40 to .60 cents in a matter of an hour or so during the middle of the night(west coast time)

    its definitely an expensive lesson but worthwhile nonetheless….the idea was to hold it anyways( 3 contracts) til expiration and play for a bounce but watching thousands of dollars vanish in minutes was crazy….I'd rather get back in on the way up after some sort of floor that lasts more than a few days is set….Futures are fun but quite stressful at times!!!

  191. Good morning again! 

    /NKD back at 16,215 after just testing 16,230 again as the Dollar popped back to 84.85.  Asia finished around the lows at -0.7% for Nikkei, -1.44% on Hang Seng, -1.7% for Shanghai, India turned up 0.4% and Singapore down 0.25%.

    Global Stocks Drop With Commodities on China Growth

    Most Asian Stocks Fall as SoftBank Slides; Kiwi Advances. Most Asian stocks fell, as SoftBank Corp. drove Japan’s Nikkei 225 Stock Average lower after Alibaba (BABA) Group Holding Ltd’s U.S. trading debut. New Zealand’s shares and currency gained after the government was returned in an election, while Brent crude fell with copper. The MSCI Asia Pacific Index dropped 0.1 percent by 9:59 a.m. in Tokyo, with the Nikkei 225 declining the first time in three days as SoftBank, Alibaba’s biggest shareholder, slid the most in a month.

    Chinese H Shares Fall to Two-Month Low as PetroChina Leads Slump. A gauge of Chinese stocks traded in Hong Kong fell, heading for its lowest close in two months, led by a retreat in energy shares. PetroChina Co. and China Petroleum & Chemical Corp. both slumped 2.1 percent in the city. China Galaxy Securities Co., a Hong Kong-listed broker part-owned by China’s sovereign wealth fund, tumbled 4.3 percent after saying its fixed-income chief Dai Xu and two other employees are cooperating with the nation’s judicial authority. Agile Property Holdings Ltd. plunged 7.1 percent after announcing a rights offer. The Hang Seng China Enterprises Index dropped 1.6 percent to 10,612.95 at 9:46 a.m. in Hong Kong. The MSCI China Index slid 1.4 percent, while the Shanghai Composite Index (SHCOMP) fell 1 percent.

    Short sellers target China, this time from the shadows. Short-sellers who profit from stock price declines have resumed targeting Chinese companies after a three-year lull, but many of the researchers who instigate the strategy are now cloaked in anonymity, shielding themselves from angry companies and Beijing's counter-investigations.

    U.S. Stock-Index Futures Fall as China Damps Policy Bets

    China risks ‘balance-sheet recession’ as stimulus impact wanes. China has launched a fresh effort to boost its flagging economy with cash injections by the central bank, but signs are mounting that monetary stimulus is losing its effectiveness as debt-ridden companies lose their appetite for borrowing even at low rates. ?

    Europe turned way up since the open and down about 0.2% except FTSE, down 0.8%.  I guess this may be why – more Free Money talk, of course:

    • The summit of G20 finance ministers wrapped up in Cairns over the weekend, with the U.S. and Canada urging the EU to resolve its internal political differences and do more to stimulate its economy.
    • "If the efforts to boost demand are deferred for too long there is a risk that the headwinds get stronger," says U.S. Treasury secretary Jack Lew.
    • Lew also announced that the G20 had made progress towards a deal on the safety buffers the world’s largest banks have to hold.
    • The summit concluded with the G20 agreeing on a suite of structural reform measures that would boost collective growth with a target just short of 2% over the next five years, which ministers claim would add about $2T to the world economy by 2018.

    German Industry Group Cuts Economy Growth Forecast. German economy to grow 1.5% rather than 2% as projected earlier, citing Ulrich Grillo, president of Federation of German Industry. Crises in Ukraine, Middle East hurt German economy, citing Grillo. Growth to become increasingly volatile because of German economy's international ties, he said. Russian sanction and countersanctions "really hurt" German companies, Grillo said.

    Weidmann Says Governments Must Take Lead Amid ECB Policy LimitsEuropean Central Bank Governing Council member Jens Weidmann said monetary policy can only play a limited role in fostering growth, encouraging governments to press ahead with structural reforms. European countries with high debt levels should focus on a “credible path toward sustainable public finances” and restructure their economies to increase competitiveness, Weidmann told Bloomberg News in Cairns, Australia, where he is attending a Group of 20 meeting of finance chiefs. “Monetary policy should not be overburdened and asked to do tricks it cannot deliver,” Weidmann said. It “should also not be expansionary for longer than necessary to ensure price stability as we should not forget that the loose monetary policy also creates risks and comes with side effects,” he said.

    ECB Not Currently Planning Quantitative Easing, Noyer Says. ECB not currently planning to loosen its stability policy or to buy government bonds, citing ECB Governing Council member Christian Noyer. ECB to to monitor financial market reaction, including lending and effect of new interest rates, to monetary policy measures taken in June and Sept. before even considering QE, Noyer said. Noyer agrees with Bundesbank's Weidmann's criticism of asset-backed security program; ECB has to verify quality of loan securitizations before purchase. Noyer doesn't see deflation in euro zone.

    Draghi Didn't Convince: Bets on Higher Consumer Prices Collapse

    US Futures are down about 0.4% at /YM 17,163, /ES 1,995, /NQ 4,074 and /TF 1,127 with the dollar at 84.80, oil at $91.29, gold $1,215, silver $17.69, copper $3.0465, nat gas $3.83 and gasoline $2.595.  

    Interest-Rate Hopes: Dollar Wipes Out Losses for Foreign Holders of Treasuries

    10 warning signs of global financial meltdownStock markets and investors around the world have enjoyed record gains but the clouds are gathering.  ?

    Quantitative Proof The Fed Is Destroying The Middle Class

    Citi(C) Asks "Who Is Levering Up?", Answers "Everyone" And Finds Median Leverage Has Never Been Higher

    The US Ponzi Economy

    Insider Buying Dries Up Defying $275 Billion of Buybacks

    Fleckenstein Goes After CNBC Anchor And Her Rabid Colleagues For Talking Up A Happy Future 'When There's No Shot That That Happens'

    Global Leading Indicator Plunges To Economic "Slowdown", Goldman Warns

    Ukraine Is On The Brink Of Total Economic Collapse

    Meanwhile, Here's What The "Super-Rich" Are Rushing To Buy

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  192. Phil- I was reading your comments about gold and using it as a hedge against inflation and it brought up some ideas I had been thinking about for a while. While I realize this is a very simplistic view and theory, I'd like to know your thoughts. As you have been saying for a while, 99% of the people are not taking part in the wealth creation of the stock market to the extent of the 1% and corporate America (using buybacks instead of expansion). So, for the most part these 99% have lost earning power and are struggling just to pay the basic bills (mostly debt service on student and consumer loans) and survive. Therefore no one can raise prices without a significant drop in demand because the consumer is too stretched at current pricing levels already to afford to pay a drop more for goods and services. So, inflation is kept at bay by the natural forces of supply and demand and availability of purchasing power for the masses. So in this simplistic view, there is no need to worry about inflation until there is some incentive to create jobs that pay well and expand the workforce with more than minimum wage/no benefit jobs at Walmart and similar companies with similar employment policies. Until we see this starting to happen it would seem that we don't need inflation hedges. Real estate will stay depressed, even with record low financing rates , until then as well because the majority of the potential buyers can't afford to buy and won't be able to until something changes drastically, or so it seems to me. While history tells us it won't stay this way forever, it sure seems we are locked into this pattern for a while unless there is a significant change in the political landscape at least to pump money into the hands of workers rather than those needy 1% the GOP keeps giving to.