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$5,000 Friday – How to Profit from Market Corrections

$5,000! 

That's how much our FREE Futures suggestions made between the time I put them in yesterday's morning post (8am) and the close of trading at 4pm.  That's not bad for 6 hour's work, is it?  As I said in the morning:

So, you may wonder, why would we want to go against the wishes of two of the most powerful people and short oil ($93.40), gasoline ($2.75), the Dow (17,150) and the Nikkei (16,350)?  Well, that's because, as powerful as these people may be – they are still fighting physics in trying to make the markets do things they simply shouldn't be doing.  

I'm sure ALL the newsletters you follow are able to give you equally profitable advice so, by all means, DON'T SUBSCRIBE HERE – especially ahead of the rate increase in October (sorry, inflation). blush  But, can you really blame us for being pleased that we totally nailed the drop?  

In fact, had you simply joined us on Wednesday and replicated our virtual Short-Term Portfolio, which was only up 53.4% at the time, you would have caught a ride from there to 60% in just two days.  Last Thursday, the STP was up only 30%, so that's a 30% ($30,000) gain for the week as our bearish bets paid off and it very much offset the $15,560 decline in our bullish Long-Term Portfolio.  So much so that we took some of our shorts off the table to get us more neutral into the morning (as we expect a slight bounce unless GDP sucks).  

SPY 5 MINUTEYou don't have to trade the Futures to make great money on your hedges.  Our DXD Oct $24 calls jumped from 0.50 on Tuesday (when I reminded you about them in the morning post) to 0.96 at yesterday's close – up 92% in 3 days!  That's a good hedge, especially when you consider the Dow only fell 2.5%, so we got 36:1 leverage on that hedge – and THAT is how we balance our portfolios and protect them from sell-offs.  

Even a straight purchase of TZA (also noted in Tuesday's post – why don't you subscribe?) gained 13% in 3 days, 5:1 leverage without even using options.  Our SQQQ suggestion popped from $35.26 to $37.13 for a 5% gain (2:1) and FXI shorts also gained 5% but, of course, we were playing the options for much better leverage (all from Tuesday's morning post) in our Live Member Chat Room.  

SPX WEEKLYNow all this SOUNDS very sexy but the real point is to have BALANCED positions so we can make money in up or down markets.  What we really care about is the COMBINED gain of our STP and LTP, which went from 22.5% for the year last week to 25% this week as we gained a combined $15,000 overall.  Had we been totally wrong and the market had jumped instead, perhaps we'd be down 2.5% instead but the hedging keeps us BALANCED and able to CALMLY make adjustments in any market conditions.  

More to the point, the gains we make in our Short-Term Porfolio on the way down can flow to the Long-Term Portfolio where we establish positions at a nice, low-cost basis.  I mentioned yesterday that we'd been doing some bottom-fishing this week and our Buy List (sorry, Members only) is full of great stocks we can add now that we're back at the bottom of a still-rising channel and we've already started taking advantage of the higher VIX to buy more stocks for a 15-20% discount off their current prices:

When you are not balanced, a sell-off like this leaves you licking your wounds, PSW Members are licking their chops!  

Have a great weekend, 

- Phil

 


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  1. Good morning! 

    Hmm, this is more disturbing than a bad GDP report – a good GDP report that gets no reaction:

    • GDP Q2: +4.6% in-line with consensus, +4.2% previous estimate.

    Maybe it's a "Fed off the table" thing but, geeze, what do people want to be happy?  

    Also, WTF?

    • "Bond king" Bill Gross is leaving Pimco, the company he helped found, to join Janus Capital (NYSE:JNS) to manage a newly created Janus Global Unconstrained bond fund and related strategies.
    • "I chose Janus as my next home because of my long standing relationship with and respect for CEO Dick Weil and my desire to get back to spending the bulk of my day managing client assets," Gross says.
    • JNS +19.2% premarket.

    That's disturbing.  

    • Janney lifts Nike (NYSE:NKE) to a Buy rating from Neutral after digesting the athletic retailer's FQ1 report (earningsdetailsguidance).
    • Citigroup says it's duly impressed by Nike's guidance. Shares are reiterated at Buy and the price target is taken to $93.
    • Edward Jones analyst Brian Yarbrough notes the strong results are more than a World Cup lift.
    • "The product is resonating with consumers. They are dominating and keep taking market share," says Yarbrough.
    • NKE +6.8% premarket

  2. Good Morning!


  3. OK, we have 16,900 (/YM), 1,958.5 (/ES), 4,010 (/NQ) and 1,105 (/TF) and all those need to hold today and all should be playable for a bounce UNLESS ANY of them fail.  Going long the laggard is safest.   

    • Dow 17,300 to 16,900 is now a 400-point drop so we need 80 points to 17,000 (rounding) for a week and let's stick with 17,100 for a strong (which was the weak bounce earlier). 
    • S&P 2,010 to 1,965 is a whopping 45 points and we'll call those 10-point bounces to 1,975 (weak) and 1,985 (strong)
    • Nasdaq 4,600 to 4,450 is 150 so let's call it 25-point moves (because the Nas loves 25s) to 4,475 (weak) and 4,500 (strong)
    • NYSE 11,000 to 10,700 is 300 points so 10,760 (weak) and 10,820 (strong).
    • Russell 1,180 to 1,110 is 70 points so we'll go 15 points for bounces and that's 1,125 (weak) and 1,140 (strong), which works out as 1,140 is the -5% line.  

    Oil just failed $93 again from $93.30 again so still in our channel (down to $92.25) but soooooooooo dangerous to play on a Friday.  


  4. JNS now up over 40%…….


  5. For the Futures challenged, TNA dropped $3 yesterday but the SHORT $68 puts can be sold for $3, which is almost no premium and you make all of the upside over $65 (now $64.96), out if /TF fails 1,105 or Russel fails 1,110 (now 1,110.24) with what should be a very small loss.   Let's sell 20 in the STP for $6K.  


  6. Oops, sorry, no trade, they changed to $2.25 at the open – that's not worth it!  TNA popped to $65.66 and it's not something I'd want to buy on the way down.  


  7. Phil/Medicine

    I know we try to limit non-trading discussion during trading hours, but thought I'd share some thoughts from this yesterday evening's and this morning's conversation about this.

    We all agree that the SYSTEM is broken, and in many ways the doctors (myself included) are subject to the same forces that affect the patients. As you mentioned, insurance companies have played a huge role in changing the pay/reimbursement structure when it comes to medical care, and those guys have gotten their greedy hands into the clinical decision making process by doing this. Most physicians are good hearted people who really have dedicated their lives to their trade. It is an enormous challenge to manage and master a clinical specialty, and most of us do it very diligently and with great enthusiasm. Unfortunately, like every other part of life there are crooks and cheats among us, and some that just aren't cut out for the job. We all have to deal with that, its just a fact.

    Imagine how it feels for a physician to have a family member ill or themselves needing care. It's awful!!!! I've been through it several times, and let me tell you that nobody HATES the system more than a physician or healthcare worker that ends up on the other side of things. It's unfair, and poorly executed. The doctors/nurses/aides/etc are the face of the system, not the creators or manipulators. I think we just have to be careful where we aim the criticism. Sure, the doctors submit big bills and prescribe expensive drugs, or administer expensive therapies. But honestly, they aren't the ones determining the costs soley…and you know that. The cost to develop, test, trial, and produce medications is imense. New therapies don't just pop up, it takes years (sometimes decades) to develop them, etc, etc. It's expensive to advance the science of medicine, those costs get passed on to the consumer. The problem is that there are a bunch of A*holes adding to the cost for their benefit as part of the delivery system. That's what's screwing us all. They don't give a cut of that to the pediatrician in South Dakota with a small practice barely hanging on, or to the neurosurgeon who spent 12 years training to do a handful of very specific operations. Those guys are just trying to earn what they can to support themselves and build a business, one that thrives and grows to let them care for more patients and advance healthcare. In general, doctors are awful businessmen/women and they too get a pretty raw deal if you ask them about their percieved value in monetary terms.

    There will always be people who want to take advantage and cheat the system for their own benefit. But as you correctly stated, that MAJORITY of doctors are really not in it to screw you over. They'd like to offer you good care, and not get screwed over themselves in doing so.


  8. JNS/1020 – Wow, companies should just hire Bill Gross for the stock pop alone!   Too bad the spreads are so wide on long puts but let's buy 10 Oct $14 puts for 0.40 in the $25KP.  ALWAYS sell into the initial excitement!  


  9. LOL, make that 0.30 – WOW!  


  10. Well said Jeff, thanks for the inside perspective.  It occurs to me that patents for pills should extend indefinitely UNLESS SOMEONE IMPROVES IT and predicated on the idea that the treatment goes down in price on a reasonable schedule to reflect a fair amount of production costs + reasonable profits.  Of course, you'd need the big, bad Government to watch over things but the FDA does already so no biggie.  I think that would reward people who make truly breakthrough treatments while encouraging both them and their competitors to improve it over time.  The problem is the system only encourages an endless search for blockbuster drugs or massively expensive drugs that people need to live.  

    Flights/Pstas – That's interesting.  That's going to ruin a lot of people's weekend.  

    • Dow +0.39% to 17,012.50. S&P +0.17% to 1,969.40. Nasdaq +0.3% to 4,479.95.
    • Treasurys: 30-year -0.15%. 10-yr -0.12%. 5-yr -0.1%.
    • Commodities: Crude +0.25% to $92.76. Gold -0.38% to $1,217.20.
    • Currencies: Euro +0.25% vs. dollar. Yen -0.88%. Pound -0.15%.

    Oops, longs off – we're failing already!!!!  

    JNS puts already at .50!   Those are the kind of obvious trades we always have to look out for.  


  11. jeffdoc – well said.  I work in the biotech sphere and before that, big pharma.  My only issue is how do they repay the gov't for the work they did in discovering that linker for disease.  Very rarely does big pharma find that linker, but they do exploit it. 

    It is extremely expensive and difficult to navigate the sphere of finding new drugs.  Old drugs on the market would have failed in today's environment.  Acetaminophen … for example, would not be here.  Aspirin, MOA inhibitors, etc. etc. 


  12. OK, maybe on again with longs as the Dollar spiked to 85.62, so that explains the pullback.  /TF 1,108.50 is the most fun to play at the moment and /SI is fun too at the $17.50 line but VERY TIGHT STOPS at $50 per penny!  

    LOL, now they say Gross being fired from Pimco due to "erratic behavior".  This is getting very interesting.  


  13. Pharm

    What up with  Alnylam Pharmaceuticals, Inc. (ALNY), look at the Dec 2014 call

    Thanks


  14. This is a fun story!  

    Gross has had what MarketWatch called his "terrible, horrible, no good, very bad year." Plagued by massive outflows for years — especially in the flagship fund he personally managed. As of August his PIMCO Total return fund had seen 16 straight months of outflows totaling $68 billion, cumulatively.

    pimco outflows

    Matters were made worse when his respected co-CIO Mohamed El-Erian left the firm in January.

    A public spiral followed shortly thereafter. Stories started flowing out of the powerhouse bond firm about Gross' management style. Employees described him as a showboat, and an aggressive one. His behavior became erratic at public conferences.

    In June when he appeared on stage at the Morningstar annual investor conference to "Smooth" by Carlos Santana and Rob Thomas while wearing a pair of shades, people started to wonder — is something weird going on with Bill Gross?

    And then finally this week, the news broke that regulators were investigating Gross' flagship Total Return ETF. They are trying to decide whether PIMCO undervalued assets within the security to make returns appear larger. 

    In a statement Gross said that Janus is "the right fit" for him because he won't have to deal with the "complexities" of managing a massive organization.

    It's kind of like Shakespeare, with these giant captains of industry going to war with each other along with the betrayal and intrigue at the palace….


  15. 100% gain in JNS already, do we take them off the table?


  16. I've always admired Bill Gross as he always spoke plainly & honest in his opinions. I think Adlerian leaving threw him for a loop & he needs time off to recharge. Bet between the emotional stress & ongoing struggles he has burn out & needs a rest. I couldn't get in on .30 on jns. The quote was .50. I'm getting very perturbed at TDAMD. I think they "play" me constantly as I can never make the same trades you make & as soon as I put the trade in, they up the bid & ask immediately. Also, I don't have sqqq at 35 & am not close to break even. Still have the 12x 40's?


  17. 100%/Dennis – I'm not seeing that (0.50) other than a quick spike to 0.65 but if you can get 1/2 off the table and a free ride on the rest – that's never a bad thing.  For the $25KP, I think I'm inclined to give it until next week.

    Gross/Pirate – I think something has been going wrong there for a long time and that's WHY El Arian abandoned ship and now there are accusations of manipulating the books and who knows who knew what when, etc.  I agree, Gross is a smart guy and I enjoy reading his outlook but I think they all may see the imminent collapse of the bond market coming and PIMCO is way too big to turn that ship around fast enough to deal with rising rates.  Those outflows aren't really Gross' fault, it's just wise men getting out of low-rate bonds in a rising rate environment.  The problem is, with $3Tn under management, they can't unwind those bets without crashing the bond market themselves.  This is a trap I predicted years ago – it's just taken longer than I thought to play out.  

    Nice move up now in the Futures, /TF 1,111.50 so 1,110 is now the stop there.  Silver $17.49, not good yet but I still have hope.  


  18. I think Bill Gross has been a manipulative unstable slave driver for awhile from what I heard first hand from people who worked there and saw again in articles.  Not surprised his fund is being investigated and Phil called them Pimpco for a long time because they get on tv and try and manipulate bonds.


  19. Pirate/JNS

    Sometimes you win, sometimes you lose. There are plenty of trades to be had. .30 lasted for seconds, but .40 rolled by twice. Put a limit at .40 and it might come around again, but only if you believe the premise of the trade. Who knows Bill Gross may be worth an extra 35% to JNS share value! 


  20. ALNY/qc – interesting.  Looks like they have a floor in there, as they are either selling calls against their long positions, buying activity with a BCS or someone thinks they are going to get bought out?  I really don't know.  For and RNAi co, and a market cap of >4B, to me, it is a very risky proposition.  The Baker Bros don't own any of them, and they are a good outfit who know science.


  21. Up 50% on GPRO calls.  Love this stupid company.


  22. rustle

    Good job! 


  23. Pharm

    Alnylam Pharmaceuticals, Inc. (ALNY), they are hiring a management team VP”S

    For some reason

    Thanks


  24. And $93 again on oil.  Fun day for nickels and dimes but even more fun just to watch!  cheeky

    Pimpco/Rustle – Man, those guys used to piss me off.  They cut down a bit but only after I really blasted them in some posts – I think PimpCo was starting to trend, I know ZH picked up the ball and started using it too.  

    LOL, I crack myself up when I read my old posts:

    CNBC Goes Too Far With Tag Team PIMPCO Bond Pusher El-Erian With Roubini Dr Doom

    Stock-Markets / Stock Markets 2010 Jun 15, 2010 – 12:36 PM GMT

    By: PhilStockWorld

    Once again CNBC has gone too far!

    The futures were doing very well, up almost 1% until CNBC put together the tag-team guest spot of Mohamed El-Erian, the notorious bond pusher from Pimpco and "Doctor Doom" himself – Nouriel Roubini in a classic bear and bigger bear face-off that was timed right into the EU's lunch hour.  Roubini's new book is called "Crisis Economics" and there's nothing like a crisis to chase people into the loving arms of PIMCO, where El-Erian gets the fees.  It's odd that there's not even a simple disclosure statement from El-Erian to guide viewers like: "You know, I do well when the market does bad."   

    This same gloom and doom tag-team was touring America in September of 2008 (see "Roubini, El-Erian – 'Things are Getting Worse'") and we're up about 20% since then but, to be fair, things did get worse first.  The boys teamed up again this February (12th) and their prediction of an additional 20% drop off the February lows (also brought to you by the fear-mongers at CNBC) was completely wrong at the time but the boys dusted themselves off and took this show on the road again as noted in this May 28th article pairing the two's depressing outlook.   

    Things were getting better yesterday until Moody's (the company Buffett owns a large stake in but has nothing to do with according to his testimony) downgraded Greece in the afternoon – something that was not at all unexpected but was treated as market-moving information on a slow news day.  Does CNBC push doom and gloom for ratings or are they trying to help their bosses at GE water down the financial regulation bill by making it seem like the average investor is against it or are they just trying to keep Cramer and the Fast Money team from looking clueless?  This is why we used to have LAWS that kept our news sources "fair and balanced" - the moment a news provider takes a side with one of their high profile shows or personalities – they then have a vested interest in MAKING the prediction come true – how can that not color their future editorial positions? 

    As I said last week, Dr. Doom doesn't have to be in on a conspiracy – He's Doctor Doom!  The media loves him because he is predictable tool and he is happy to perform his little act on command like a one-trick pony because that one trick has gained him fame, fortune and, apparently, women – something few modern economists have ever achieved…  As Paul Simon says:

    He's a one trick pony 
    One trick is all that horse can do 
    He does one trick only 
    It's the principal source of his revenue

    He's a one trick pony 
    He either fails or he succeeds 
    He gives his testimony 
    Then he relaxes in the weeds 
    He's got one trick to last a lifetime 
    But that's all a pony needs  


  25. seams like the indexes are following apple tick by tick


  26. I'm not much for investing in cigarette companies, but this is interesting nonetheless.

    http://www.bloomberg.com/news/2014-09-25/lorillard-bet-on-merger-nod-offers-arb-payoff-real-m-a.html?cmpid=yhoo


  27. qc – yes, but who left?  There was a good article here… on the matter of BoD and other CxO arriving/departing companies.


  28. No much going on so far this morning I see :-)

    Oil Lines

    R3 – 94.87
    R2 – 94.20
    R1 – 93.38
    PP – 92.71
    S1 – 91.90
    S2 – 91.22
    S3 – 90.40


  29. Today I like to share with you my following trade. NIKE.

    I am holding the Jan16 65/75 BCS against that I sold a while back 1/2 the Oct 14 80 call.

    NIKE up more than 10% on rumors. It put up my Oct caller to about 88.00 no premium left.So how can you run with the herd and not get called? I rolled the 1/2 Oct 80 caller to Jan15 87.5c and sold an other 1/2 at Jan15 87.5c with out any cash outlay. 1. Taking the Oct 80 caller out of danger and putting the caller up by 7.50 without any real extra cash. My expectation; the heat of the herd will cool down and you can cash the bal. of the 1/2 Jan15 caller for what ever is left. Done it before on such buying franzies and I hope to do it again.


  30. I wonder if WEN ever gets out of the woodshed? Holding it since June and up .10 on the puts.?


  31. Pharm

    Thanks interesting article, good point


  32. GPRO/Rustle – Great call on that one.  Good example of ALWAYS sell into the initial excitement as well:

    Notice folks that ALWAYS sell into the initial excitement doesn't mean "just because it's going up" – the key is to wait PATIENTLY for the momentum to slow down or turn and that is likely the time to sell.  With GPRO, they gapped up 4 days in a row but that 4th day they slowed and the next day they gapped lower – both good times to go short.  

    Same thing happened at the same height a month later and the simple rule is – get out if they make a new high and wait for the next time the momentum slows down.  As to the 5% Rule – $50 was up 100% so retrace of 20% of the run ($10) to $40 was weak and $30 was a strong retrace.  Consolidation on the pullbacks was around $40 so a weak retrace at $60 would be $4 ($56) and $52 would be strong and strong held on the first pullback and $56 would have been the place to go bullish again.

    Then you expect $80 is the next 100% line and a pullback off that $40 run is $72, which is where we were rejected on the way up and back to $64, which is the strong retrace line  but that held and then we blew through $72 on to $80 so, on the whole, it's just repeating the behavior it had around $50 so far.  

    AAPL/DC – Good article:

    The Three-Point Bend Test

    This test is probably “more relevant to the videos you’ve been seeing,” Riccio said. Up to 25 kilograms of weight is pressed across the center of the phone (front and back), which is less than the weight the phone can actually tolerate. In the test below, the smartphone did bend under the weight; but when the metal bar was released, the phone looked like it breathed back into shape.

    I asked Riccio why these phones appeared to reset themselves when customers are reporting that theirs remain bent. He said it’s because in certain cases, if users apply a huge load beyond a natural point of deformation, the phone can “take a set.”

    The three-point bend test: If you look closely, you can see the phone is actually bent. After the weight was lifted, however, the phone returned to its normal form factor.

    Lauren GoodeThe three-point bend test: If you look closely, you can see the phone is actually bent. After the weight was lifted, however, the phone returned to its normal form factor.

     

    Speaking of patterns that repeat – AAPL is always attacked on new product launches by hyenas, who try to drive down the stock price.  From 2011:

    Mr. Jobs' very obvious signs of life don't stop the hyenas from using their media attack dogs to try to scare people out of Apple's stock. Take Jim Cramer's TheStreet.com, for example, who headlined a real hatchet piece this morning with the very scary title of: "Dozens of Hedge Funds Sell Apple Shares." This is, of course, totally misleading as the net of fund flows was 6.1 million shares added in the quarter vs 1.6M sold but let's not let the truth get in the way of a good headline, right Cramer?

     

    Of course TheSleaze.com takes the opportunity to allude to the fact that this is about the National Enquirer photos (aka Jim's research department) and they make sure to drop the symbols of 7 very popular stocks (C, GE, SIRI, LVS, MSFT, VZ & T) to make sure Yahoo and Google Finance pick up this article from this "trusted source" as well as tossing in the phrases "iPad 2" and "iPhone 5" – just to make sure their headline hits the fanboy sites as well and causes as much panic as possible. Yet, amazingly, no arrests will be made!

    This is how the game is played, folks. These hack publications are nothing but tools of the hedge funds who use rumor, innuendo and, of course, completely misleading extrapolations of thinly researched data to herd you in and out of stocks that they are looking to load up on or unload – depending on the plan of the day.

    We have long-term "safe" plays on AAPL with very wide margins of error in our hedges (down to $270) as we did anticipate the possibility of Jobs dying and we did take a speculative bullish position yesterday as a trade but, when I see such a blatant attack on AAPL being carried out by the hedge funds' hatchet men, I have to think now is a really good time to get more aggressive on AAPL, who do have the iPhone 5, the iPad 2 and a $99 or maybe $49 iPhone coming out shortly.

    Keep in mind AAPL had $65Bn in sales in 2010 and dropped $14Bn in cash to the bottom line with $25Bn worth of cash and short-term investments (another $25Bn in long-term investments) and a p/e of 20 while Cramer fave NFLX had $1.6Bn in sales (1/40th), $115M in profits (1/121st), $257M in cash and short-term investments (1/97th) and a p/e of 80 (4 times greater). Which one do you think should be the "BUYBUYBUY"


  33. CNN post from 9/25: They did the same split screen on a UN feed yesterday & Jimmy Fallon called them out on it. You could see them same people walking in the background. A slightly wider shot would have both of the reporters in view.


  34. Jon Stewart also called CNN from doing the same thing a few months earlier.


  35. Pimpco: I used to help cover them for bond trading. They did some very sketchy things for performance, but if you called them on it they would bitch and threaten to pull their business. Working conditions were not good except for those at the top.


  36. LO/DC – I don't like that one because there are regulators involved and it's not an all cash deal so, if RAI goes down, the value of the "offer" goes down too.  Also, the combined entity MUST spin off some brands to get approval and that, just like any asset sale, detracts from the whole. 

    Even so, the scrutiny has kept some investors at bay. Last month, Reynolds and Lorillard were asked for additional information from the FTC in what’s referred to as a second request. It gives the agency more time to vet the transaction, which caused some traders to abandon their bets while creating an opportunity for others who are still bullish the deal can pass regulatory muster.

     

    The FTC will study how Reynolds’ and Lorillard’s various brands compete with one another, as opposed to making a decision based solely on their combined market share, according to Beau Buffier, a New York-based partner at Shearman & Sterling LLP and co-head of the law firm’s global antitrust group.

    “It’s going to come down to analyzing scanner data and what that says about consumer-buying patterns,” Buffier said in a phone interview.

    For instance, Lorillard’s Newport menthol cigarettes don’t compete on price with non-menthol brands, he said. “If you’re a menthol smoker, you’re probably not going to switch to non-menthol cigarettes in response to a small change in price.”

    AAPL/Tommy – Struggling to get over $100. 

    WEN/Yodi – If those are the 2016 short $7 puts in the LTP, we sold the for 0.80 and WEN is at $8.22 so lots of cushion and just a matter of time.  People still very worried about them – especially with MCD having so much trouble.  

    NKE/Yodi – Not just rumors, they kicked ass on earnings.  Maybe a little over-reaction but you may want to consider selling the 2016 $75 puts for $4 to offset a bit.  

    CNN/Randers – The news is just as staged as any reality show.  

    Pimpco/Randers – Interesting, I'd like to hear those stories!  That's the problem when you let people or companies get too big and powerful – they are able to use pressure in all sorts of ways to bend the rules in their favor.  


  37. Phil // JNS
    >>NS/1020 – Wow, companies should just hire Bill Gross for the stock pop alone!   Too bad the spreads are so wide on long puts but let's buy 10 Oct $14 puts for 0.40 in the $25KP.  ALWAYS sell into the initial excitement!  >>

    Not to be a wet bagel, but isn't this BUYING into excitement, why not sell calls ?


  38. RIG/Phil:

    Just got around to the RIG trade/adjustment that you put up yesterday. Have spent the last 45 minutes or so going through the permutation on what I have.  Need some Sherlock help.

    Trade opened 3-19-14:

    STO  15  Jan16 40 puts for $7.30

    BTO 30 Jan16 40/50 Bull call

    9-10-14    STC the Jan16 40/50 Bull calls for a loss of $4790 or $1.60/spread

    Rolled the proceeds to 30 long 35 calls for 4.46 or $13380.00. Did this based on your very logical post to Griffin on 9-10-14.

    “ I see +$2 to roll to the $35s and that seems like a no-brainer as you go $2.33 in the money for $2 – so you are buying intrinsic value for a discount and moving your strike down $5 – a very good deal.  I'd buy back the $50 calls (0.65) and, if RIG goes lower, you can sell those $40s for $2 and spend another $2 to roll your $35s to the $30s or, if RIG goes higher, you can hopefully get $2.70 for the $45s (now $1.20 with a .22 delta so a $5+ move up to $42.50 required) and then you would have rolled the spread down $5 for no net money.”

     My obvious mistake was not paying close enough attention and getting the Jan16 35 long calls covered. The Jan16 40s never did get to $2.00, which was the trigger I was looking for. Regardless, no excuse.

    Options at this point that I can see:

    1.        Let the trade stand and look to sell Jan16 calls to cover, if and when RIG moves up. I don’t feel comfortable letting my long calls stay uncovered, even though I strongly believe RIG will move up.

    2.       Close the Jan16 35’s taking the loss and entering the covered straddle: buying stock at 33.10, and selling the Jan16 35 straddle for about $9.40.

    Thanks Phil.


  39. 90-minute level check:

    • Dow - 17,000 (weak) and 17,100 (strong) 
    • S&P  1,975 (weak) and 1,985 (strong)
    • Nasdaq 4,475 (weak) and 4,500 (strong)
    • NYSE  10,760 (weak) and 10,820 (strong)
    • Russell 1,125 (weak) and 1,140 (strong)

    So RUT is the laggard (see how useful these charts are) and, if the NYSE or S&P go green, then /TF should be a good long over 1,110.  

    Silver $17.555 is up $275 now, do not be greedy and let gains slip if they fail to hold $17.55!  


  40. ABX – at bottom of channel – time to sell some puts


  41. Phil Thanks for the idea on NIKE. WEN no we sold the Jan16 10 puts for 2.55 6/10/14  I do not recall any 7 puts.


  42. Phil / TF
    I don't know man – that 1100 has always been a harsh mistress ( in a good way : > )


  43. sorry ==== 1110


  44. Wow, it was only 4 weeks ago I was telling Shadow that the dollar needed to go over 82.70/82.80 to truly breakout and look at today – another strong day at 85.70. No wonder the markets are struggling – the dollar is up close to 4% in that period and commodities and energy stocks have been slaughtered! 

    You have to go back to 2010 to see the dollar at these levels now! It topped off around 88.5 then. Don't know that we can make it there again but the other currencies are not exactly showing strength.


  45. Correlation between the market and the dollar has waned though… Not that much of an impact on a long term chart. But the correlation with commodities is certainly still quite strong:


  46. Phil / RB

    With respect to yesterday's discussion on the RBV4 – RBX4 futures contract spreads, that differential has now narrowed to ~15cents from ~20cents (good for $2000 per contract spread). If the RBV4 contract rolls over next week at current levels, gasoline futures would be approaching a support/resistance line around $2.45 that stretches back to 2010. Would you expect that support to fail? If not, does that channel bottom suggest a good long prospect? 


  47. Putin will save his buddies with new law.  Looks like the sanctions are starting to hurt:

    The law, submitted after Italian authorities seized €30m worth of shares and bank accounts belonging to the Russian businessman Arkady Rotenberg, would also allow for oligarchs to get compensation from the state in the case of an "unjust judicial act of a foreign court." The full (Russian language) text of the draft law can be found here.

    Given Russia's parlous economic position — GDP grew only 0.8% this year — the concept of using state funds to bail out multimillionaire businessmen may be received poorly in the country. Already opposition leaders are rounding on the government with Boris Nemtsov, co-chair of the RPR-PARNAS political party and outspoken critic of Vladimir Putin, writing on Facebook:

    What is [the benefit of] a strongman's friendship? It's when you have 4 villas, apartments and a hotel seized in Italy and your accomplice in the Kremlin immediately introduces a bill for damages from the Russian budget. 

    Read more: http://www.businessinsider.com/russia-law-would-allow-state-to-seize-foreign-assets-2014-9#ixzz3ER8hsfrA


  48. Time to resell GPRO calls that I just covered. 


  49. JNS/Wombat – Because the $25,000 Portfolio can't afford to sell naked calls and, also, we didn't know FOR SURE that JNS would stop there but it was a very small risk to play for a pullback with $300 worth of puts (now $600).  You can't just do the same thing in every situation, you have to think through the relative risks and rewards and find the best, safest way to take advantage of that particular situation at that particular moment.  

    Do you always use the same lens with the same focus and the same filter and the same F-stop (or whatever other camera terms there are) or do you go take the various tools you have at your disposal and make the best call for that particular shot in that particular situation?  The key is to get you to understand the various option tools as well as you understand your photography tools and, once you embrace that, you will be able to find hundreds of creative ways to make money.  

    RIG/JBur – Sorry, if the 2016 $40s never make $2 and the stock goes lower, the fallback is to sell the $38s for $2 (now $1.65).  Anyway, what do we have.  The short $40 puts are $7 in the money at $7.40 but you sold them for $7.30 so who cares.  When 2017 comes out, then you can deal with them.  

    That leaves you with a $4,790 ($1.60) loss from the spread and now you bought the 2016 $35s for $4.46 and now they are $2.50 so another $2 ($6,000 bites the dust).  As I noted yesterday, at this point, I'd rather BUY RIG For $33 and sell the 2016 $30s for $4.60 to net (with your 10 short $40 puts at $7.30 ($2.43 per long) and the $3.60 loss on 30 contracts) $34.17 on 3,000 shares and, if assigned to you, you would have 1,000 more at $40 for an average of $35.63 on 4,000 but the good news is you'd be collecting $12,000 a year in dividends so knocking $15,000 off by Jan 2016 ($3.75 per long) for a net net of $31.88.  That's all without rolling to 2017s.

    So, if you REALLY want to own RIG, that's one way to go and, if you didn't, then why the Hell did you buy 30 spreads.  In the LTP, with $1M in buying power, we're only short 15 puts.  If you don't REALLY want to own $120,000 worth of RIG ($60K buying power used) then I'd just sit on the short puts, which offset your losses to date if all goes well and, when 2017 comes out, you can do a 2x roll like the Jan $40 puts ($8.32), which can roll into 2x the 2016 $30 puts ($4) for about even but, of course, you still have to REALLY want to own 2,000 shares of RIG at net $30 and, if not, you REALLY have to start planning this out sooner and setting realistic stops on positions you don't want to own for the long haul.  

    ABX/Edro – $13.25 was last year's panic low, didn't last long.

    WEN/Yodi – Well, in the LTP it's the Jan $7 puts that were sold on 8/1 but net $7.45 for selling the $10 puts is good too.  

    1,110/Wombat – That's why we wait for it to go OVER before we play long.  As it stands, it doesn't look like we're getting the signals anyway.  

    Dollar 85.685.

    Rick Santelli with a good point.  He said "Hey BMW owners, try pressing your knee in the door and see if you can bend it – does that mean you don't want to buy it?"  

    Dollar/StJ – If we do ever raise rates, the Dollar can go way up if other countries stay low.  There's no real long-term correlation, it's just short-term repricing of commodities and stocks as the buying power of the Dollar goes up and down each day.  Over the long haul, you'd need to look at the 200 dma of the Dollar to see any real effect.  

    /RB/Decad – I really don't think you can trade /RBV4 next week (now $2.65).  /RBX4 is now $2.488 and I think the whole thing may collapse soon, so I'm not too keen on going long, tempting though it may be.  We're coming into the winter, with much less driving and the manufacturing data sucks and global warming is keeping people from burning oil for heat in the winter.  Not a good mix.  Oh, and the wars could end.

    Putin/Rev – Oh nice, so the Russian people will end up bailing out Putin and his friends?  That's sick!  Poor Boris Nemtsov – something tells me he is about to come down with something fatal…

    GRPO/Rustle – Wow, you have to move fast!  


  50. GPRO/Rustle

    Are you selling naked calls?


  51. Phil // 1110
    Ya, I know. I always like to check your thinking when its not clear to me. Thats how I learn. I never do something just because you mention it.
    /TF, If you're in a TA mood – descending triangle, perfectly formed, ¾ along the axis, should break right about …. now.


  52. CIM is becoming attractive again 3.07


  53. From Bloomberg, Sep 26, 2014, 6:03:16 AM

    This one seems flat.

    Apple’s triumphant product launch turned into a public relations mess in less than a week. Some users couldn’t make phone calls after they updated their mobile software. Some new iPhones bent. Bent! Amid all of the bad press, Apple representatives have been fairly quiet as their company scrambles behind the scenes to figure out the best internal and external moves.

    To read the entire article, go to http://bv.ms/1xp8WB6

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


  54. From Bloomberg, Sep 26, 2014, 11:28:44 AM

    Google for more curious types.

    “You suspended Ray Rice after our video,” a reporter from TMZ challenged National Football League Commissioner Roger Goodell the other day. “Why didn’t you have the curiosity to go to the casino yourself?” The implication of the question is that a more curious commissioner would have found a way to get the tape.

    To read the entire article, go to http://bv.ms/1rkcv9w

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


  55. After hours, I'd be interested in Craig620/Jeffdoc comments on how (or whether?) to health insure a family of 6, inc. kids infant to 13.  Moving to U.S. this year or early next.  


  56. Colorado, if that matters.


  57. @jeffdoc

    yes


  58. zero // HMO
    WHere are you moving to ?


  59. wombat – not far from Denver.


  60. ZZ medical in Colorado, insurance doesn't cover, self medicate!

    http://www.youtube.com/watch?v=lGwkt1CWhhw



  61. zero // health
    feel free to mail me at jj2010@me.com
    I'd be happy to give a few opinions.
    We have to little girls, 3 and 1 in San Francisco.


  62. I was going to pull a clip but this whole episode of Colbert is great.

    Thinking/Wombat – Good call on resistance at 1,110.  

    CIM/Yodi – Rising rates not good for REITs, I'd wait for the dust to settle. 

    Notice in the picture of the IPhone 6+ it's plugged in.  I see a lot of pictures of it plugged in – I wonder if the batteries run out too fast.  I only plug in my 5 once every few days, but I don't talk on it much (I'm here with you guys!).  

    That curiosity article is good too. 

    Interesting that Dow is up 76 but /YM only up 39.  I'd say the Futures are a better indicator of reality than the intra-day pump job.  


  63. Phil I did see somewhere(maybe here) that Apple had responded to the bending issue by saying that out of millions already sold they had received 9 complaints about bending. 

    Speaking of AAPL, I have a portfolio that I need to lighten up my holdings of AAPL. I have 500 shares outright, 7 contracts of 80/100 Jan'2016 BCS and 20 85.71/100 Jan '15 BCS. 
    If I understand how this works finally, the Jan'15 spread is about 2/3 of the way to max value, so is that the one I would want to take off the table in your opinion? 


  64. zeroxzero insurance

    I know what you homework you have to do and a Colorado situation but will not post any of it. nsenape@Hotmail.com


  65. craigs // AAPL
    I saw that too – it was on Bloomberg

    Phil // Reminder
    You mentioned yesterday we were going to talk about a new hedge for the weekend. From yesterdays commentary, because of the NDAQ it sounds like near term SQQQs ?


  66. zz the h should be small auto changes.


  67. GPRO is like Christmas every day recently


  68. Pimpco: Some operations people had to pass traders notes rather than talking to them directly and interrupting their thoughts. SEC never seemed to care about their methods.

    I have a feeling that Gross knew his time was up for poor performance and personnel issues and was working on a noncompete agreement and offers from other firms the past couple of months. Guys like that always land on their feet, Kind of like coaches that create a scandal and then move on to another school or level.


  69. Phil- What about selling some AAPL Bear Call Spreads to hedge against Apple dropping again?

    Having some during yesterdays drop helped reduce my losses quite a bit. 

    Nov '14 105/110 are paying about $1

    Maybe a Bear Put Spread?

    Nov '14 97.5/95 costs about $1 

    Or Both?

     

    I'm also thinking whether I should own 100 shares of AAPL, it's half of my 20k portfolio. Main benefit is it lets me sell something like $30 a week of covered calls, but I don't know if it's optimal allocation. 

    Having adequate TZA to counter AAPL drops would mean I lose too much on up days. 
     


  70. sn0

    How well does TZA correspond (as a hedge) with the movement of AAPL?


  71. I also saw another story about "bendgate" saying there was a time lapse that didn't add up on the video from Unbox. The implication is that they doctored the video and it didn't bend as shown. They point out that as he is starting the test 1:38 into the video the time on the phone shows 2:26, and 30 seconds later when he shows us the bent phone it has a time display of 1:58. I would say that is weird at the least, unless bending takes you back in time? 


  72. dclark- re: TZA/AAPL correlation, I'm not real qualified to answer, in general I think AAPL and TZA will have negatively correlated movement. but I think AAPL is a NASDAQ stock and I think TZA is based on Russell index. 

    Some days you get a double win if AAPL out-gains a declining market. (where TZA  moves up). 

    The thing I'm trying to do is have my cake and eat it too, if I own Apple and it goes up a bit, I can also gain on a Bear Call Spread if it stays out of the money. 

    I think the bend scare is already dying out, in that test they sat 50+ pounds on the middle of an iPhone supported on the ends-- I'd say that's abuse right there, and if it snaps back after that it's appropriately over-engineered. 50 lbs is a heavy weight most adult males will have to exert quite an effort to lift up. 


  73. By contrast (and as we have seen from other phablets) the 6 Plus uses its extra size well to push iPhone battery life to a whole new level. The big winners are audio (doubling to 80 hours), video (a 40% boost to 14 hours) 3G talk time (from 10 to 24 hours), 3G browsing (8 to 12 hours) and standby (up to 16 days). Arguably the most pertinent ratings – WiFi browsing and LTE browsing – only increase 20 per cent to 12 hours, but it remains the biggest generational leap in iPhone history.

    http://www.forbes.com/sites/gordonkelly/2014/09/09/iphone-6-vs-iphone-6-plus-what-is-the-difference/


  74. Hey Albo, anything new on QUIK, it's looking pretty ugly.


  75. ROFL, GPRO back down to $79.60 again – nice job Rustle!  

    AAPL/Craigs – Sure but it must be bothering them since they took the time to respond.  As to the spreads, why not cash your $50,000 position and leave the spreads to pick up the additional gains?  If you have $14/20 on 7 spreads, then you gain another $4,200 at $100 but your 500 shares of stock need $108.40 to make the same amount.  If AAPL goes down, you can sell 5 puts to pick up cash and the worst they can do is force you to own the stock again at a lower price.  

    Same for the 20 Jan spreads although you can also consider taking the $85.71s off the table at $15 ($30,000) and buying the 2017 $90/120 bull call spreads for $10.  If you buy 20 of them, you have $30 upside protection on the short Jan $100 calls ($5, delta .50)) and you can set a stop schedule of 5 at $6 ($102), 5 at $7 ($104), 5 at $8 ($106) and 5 at $10 ($108) at which point AAPL would be at $108 and you would have lost $5 per short call ($105 avg exit) but your 2016 $80/100s would be nicely in the money, as would your 2017 $90/120s.

    Weekend Hedge/Wombat – Well, I was hoping we'd pop higher but we did decide SQQQ would be the way to go so I like the Nov $35/40 bull call spread at $1.60 as those are $1.70 in the money so you catch all of the move down from here on the Nas and, since $40 is up $3.40 (200% gain away) which is 10%, then a 3%ish drop in the Nas would trigger the full gain (if it sticks).  So many stocks on the Buy List can be used to offset that, with CCJ (Jan $19 puts can be sold for $2) and BTU (Jan $12 puts can be sold for $1) at silly lows or CHK (Jan $23 puts can be sold for $1.30), DBA (2016 $25 puts can be sold for $1.40), FCX (Jan $30 puts can be sold for 0.85), GSK (Jan $45 puts can be sold for $1.20), MAT (Jan $29 puts can be sold for $1), WFM (Jan $35 puts can be sold for $1.20) or ABX (Jan $15 puts can be sold for 0.90).  

    Gross/Randers – Well, he's a good deal for JNS so far, adding $900M in market cap today.  The assumption is that some % of Pimpco's $3Tn will flow to JNS, who only have $167Bn in their fund so it is possible to justify the bump but look at the above chart – it took all year for $68Bn to flow out of Pimco and that outflow SLOWED when El Arian left and when rumors were going that Gross was on the outs.  The way JNS popped, you would think $167Bn will be walking out of Pimco the day Gross joins them.  While I'm sure that what Gross promised them, he won't be the first guy to leave a company and find that very few of his customers will actually follow him.  

    AAPL/Sn0 – I'm not expecting AAPL to drop long enough to care.  I don't think any stock should be 50% of your portfolio, it's simply not a stock you should be playing with or you could use the mini options so you can cover 10 at a time instead.  

    Bendgate/Craigs – Hey, that's wild if true.  Huge lawsuit if he faked that.  

    AAPL/Sn0, DC – Not a good correlation to TZA:

    To SQQQ (trade idea above) though, it's almost perfect.  


  76. Funny thing, Sn0, I'm doing exactly the same thing — Apple/TZA, although waiting for a change in momentum on the latter.  Phil's piece on the Japanese trader was an eye-opener – "buy when going up, sell when going down."  I've shed the last vestige of my am-I-trading-or-investing identity crisis.  Other, smarter people "invest" for me, although with my guidance, which having a daily hand in the market gives me the perspective to lend.  Now let's see what happens when I become  Z-san.


  77. Phil- Oil is currently at the top of today's channel at 93.40 so do you think they run it up more into the close as usual? If so, could we play a drop after hours? 

    Here's the link to the time lapse story, it appears at the end of the story after addressing the bends.

    http://seekingalpha.com/article/2523205-apple-investors-should-focus-on-the-facts


  78. By the way, not sure I trust the SA author either, so just passing it along.


  79. PSW / TF
    /TF holding a pretty solid channel >> 1107 / 1110
    Have fun
     


  80. Watch this video at http://bloom.bg/1sxW3DG

    Rep. Michele Bachmann: Declare War on Islamic State

    Sept. 26 (Bloomberg) — U.S. Representative Michele Bachmann, a Minnesota Republican, talks about President Barack Obama’s strategy to defeat Islamic State extremists, the outlook for the 2016 presidential election and House Speaker John Boehner’s career.
    Bachmann speaks with Peter Cook on Bloomberg Television’s “Market Makers.” (Source: Bloomberg)

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


  81. Watch this video at http://bloom.bg/1BgZzBl

    Corporate Tax Reform: Could We See It Before 2017?

    Sept. 26 (Bloomberg) –- Former White House Budget Director Peter Orszag discusses inversions and corporate tax reform. He speaks on “Market Makers.” (Source: Bloomberg)

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


  82. From Bloomberg, Sep 3, 2014, 12:47:38 PM


    In Highland Park, this house sold in April for a neighborhood record of $1 million, $121,000 higher than the asking price. Source: L34 Group with Keller Williams Los Feliz via Bloomberg

    Jeanette Cross took out a payday loan to cover her May rent of $1,600 in South Los Angeles. She skipped car and insurance payments to keep a roof over her head.

    To read the entire article, go to http://bloom.bg/1ulmVV6

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


  83. From Bloomberg, Aug 11, 2014, 12:01:00 AM

    City of Los Angeles Public Works Department Street Services workers repair a sidewalk in Los Angeles. Photographer: Kevork Djansezian/Getty Images

    Los Angeles is showing its age, and city officials don’t have plans for financing the facelift.

    To read the entire article, go to http://bloom.bg/1q4ozpi

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


  84. From Bloomberg, Sep 26, 2014, 1:25:12 PM


    A customer browses sports shoes displayed for sale at a store in Tokyo. Japan’s consumer prices excluding fresh food rose 3.1 percent from a year earlier, the statistics bureau said today in Tokyo. Photographer: Akio Kon/Bloomberg

    U.S. stocks rebounded from the
    biggest decline since July as data showed the fastest economic
    growth since 2011. Treasuries fell after Bill Gross departed
    from Pacific Investment Management Co.

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

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


  85. From Bloomberg, Sep 26, 2014, 12:47:52 PM


    Starboard Value LP CEO Jeffrey Smith. Photographer: Jacob Kepler/Bloomberg

    Activist investor Starboard Value
    LP, which has acquired a stake in Yahoo! Inc. (YHOO), said it wants the
    Web portal to explore a combination with AOL Inc. to “unlock
    value.”

    To read the entire article, go to http://bloom.bg/Zgdig8

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


  86. From Bloomberg, Sep 26, 2014, 9:47:26 AM


    Sept. 26 (Bloomberg) — Bill Gross, co-founder and co-chief investment officer of Pimco, will join Janus Capital Group. Betty Liu reports on “In The Loop.” (Source: Bloomberg)

    The U.S. regulatory probe into Pacific Investment Management Co.’s Total Return ETF (BOND) is highlighting an industry that supervisors say may pose an increasing risk to the stability of the bond market.

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

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


  87. From Bloomberg, Sep 26, 2014, 11:58:02 AM

    The Federal Reserve Bank of New
    York
    said it “categorically rejects” allegations made by a
    former examiner at the Fed bank that her colleagues there were
    too deferential to the institutions they regulated.

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

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


  88. From Bloomberg, Sep 26, 2014, 10:37:42 AM


    Sept. 24 (Bloomberg) — Federal Reserve Bank of Chicago President Charles Evans talks about factors contributing to central bank monetary policy decisions and the U.S. labor market.
    Evans, speaking at Washington conference on labor-market slack, also discusses inflation expectation and the Fed’s stimulus exit strategy. (Source: Bloomberg)

    The longest commodity slump in more
    than two decades is helping to keep U.S. inflation in check as
    consumers benefit from cheaper supplies of everything from
    gasoline to peanuts.

    To read the entire article, go to http://bloom.bg/ZUl3YY

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


  89. Phil // Hedge
    Thanks for the SQQQs. I have long term ( Jan15 35/50 and Nov 35/40 )
    I would like to do the same with TZA, layer them. 
    My thinking is that allows me to cash in any dips and still have protection, waiting for the VIX to come back down.
    I'm thinking TZA Jan15 15/20 and Nov 16/21

    Does that sound reasonable? This is a workable system for me, and I just gauge the number of shares by the amount of the account ( 5% )


  90. From Bloomberg, Sep 26, 2014, 9:45:55 AM

    Cliffs Natural Resources Inc. (CLF), the
    U.S. iron-ore producer, has drawn interest for its Australian
    mines from producers including Mineral Resources Ltd. (MIN) and Mount
    Gibson Iron Ltd. (MGX)
    , people with knowledge of the matter said.

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

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


  91. From Bloomberg, Sep 26, 2014, 9:23:24 AM


    Traders work on the floor of the New York Stock Exchange in New York, U.S., on Sept. 19, 2014. Photographer: Scott Eells/Bloomberg

    Short sellers are making their first bets on a retreat in Alibaba Group Holding Ltd. (BABA) a week after the company priced the world’s biggest-ever initial public offering.

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

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


  92. From Bloomberg, Sep 26, 2014, 6:39:28 AM


    An attendant refuels a customer’s automobile at the fuel pumps in an OAO Rosneft gas station in Moscow, Russia. The decline in oil prices is exacting a toll on the world’s biggest energy exporter. Photographer: Andrey Rudakov/Bloomberg

    The easing of tensions in Ukraine will offer little respite to Russia as the lowest oil prices in more than two years threaten to tilt the $2 trillion economy toward recession, according to a Bloomberg survey of analysts.

    To read the entire article, go to http://bloom.bg/ZTqo2Y

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


  93. From Bloomberg, Sep 26, 2014, 3:58:16 AM

    Sept. 26 (Bloomberg) — In today’s “Global Outlook,” Bloomberg’s David Ingles takes a look at the prospects for European markets on “On The Move Asia.” (Source: Bloomberg)

    Mario Draghi may find a falling currency can’t buy much of an economic recovery.

    To read the entire article, go to http://bloom.bg/1u2Muey

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


  94. From Bloomberg, Sep 26, 2014, 5:50:28 AM

    An estate agent arranges a sign offering mortgage advice amongst a display of residential properties up for sale in London. Photographer: Simon Dawson/Bloomberg

    London house prices fell for the first time in almost two years this month as declining demand led to a weakening of the property market across Britain, Hometrack Ltd. said.

    To read the entire article, go to http://bloom.bg/YfBAG3

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


  95. From Bloomberg, Sep 25, 2014, 9:17:48 PM


    Sept. 26 (Bloomberg) — Izumi Devalier, a Japan economist at HSBC Holdings Plc in Hong Kong, talks about the nation’s economy, government and central bank policies.
    Japan’s inflation slowed more than expected in August, highlighting the risks facing Bank of Japan Governor Haruhiko Kuroda in his push for prices to rise 2 percent. Devalier speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    Japan’s inflation slowed more than expected in August, highlighting the risks facing Bank of Japan Governor Haruhiko Kuroda in his push for prices to rise 2 percent.

    To read the entire article, go to http://bloom.bg/1pfgGh5

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


  96. From Bloomberg, Sep 26, 2014, 12:49:01 PM

    Gloom and doom.

    Bill Gross is out at Pacific Investment Management Co. For those of you who don’t follow the bond market, that may not seem all that interesting. So here’s some background color: Bill Gross was, until today, the absolute monarch of the world’s largest bond fund, which he founded, and has run for decades.

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

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


  97. From Bloomberg, Sep 26, 2014, 12:33:18 PM


    Sam Wyly is shocked, etc.

    Back in the eighties and nineties, the Wyly brothers ran, and owned huge stakes in, a weird bunch of public companies, including some craft stores, some software companies, and a reinsurer. These companies were good and made the Wyly brothers a lot of money. An odd biological fact is that a big enough pile of money will spontaneously generate tax advisers, and so some tax advisers duly crawled out of the Wylys’ pile of money and told them how to avoid paying taxes.

    To read the entire article, go to http://bv.ms/1yua2NG

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


  98. From Bloomberg, Sep 26, 2014, 9:22:27 AM

    Is the week almost over? Well, we earned a break after enduring this up-down-up-down market, not to mention the huge dollar bull-market getting under way. It’s all here, in our free-range morning reads:

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

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


  99. Craig / Seeking Alpha

     

    Be careful with this writers in SA, I found a lot of university students from India flowing the site  with articles that mostly are copy paste and  having poorly informed recommendations for readers.

    What they are after is the few dollars that SA is paying per clicks,  paying you $100 per article  could create  an smile in you or me, but for this people  means something as the amount they use in a month in expenses.

    It all started when SA started  a back office activity  in India, customer service, comments moderation etc. this is done by part time students who are in call centers and processing hubs.


  100. @wombat If you ever eat in the marina, try out Causwells. I invested in it with a few friends. It got a good chronicle review and seems to be doing well. Right across from a16. We’ll have outdoor seating soon. It’s on the sunny side of the street.


  101. advill- I agree and rarely read this stuff anymore, but somehow this one popped up somewhere and caught my eye. I could probably check it out myself, but I'm too lazy. So I passed it along for you guys to check out for me. :)


  102. Phil // CLF – I'm long 3x 2016 15 / 25 call spreads (and short 5x 2017 10 puts).  This used to be a 3x 20 / 25 BCS but I rolled the 20's to 15's and sold puts to offset the cost.  Rather than sell more puts or add money to roll the 15c's down, I was thinking about buying back the 25c's and selling short dated calls over the next year against the 15's to create a calendar spread.  The short puts covered the cost of the BCS's, so just looking to maximize profits on the lond calls.  Thoughts?  Thanks


  103. market swings are ridiculous the last 3 days.  Seems like it was 3 years ago during the Greece crisis.


  104. /CL good lesson learned. Put my green toe in the water started with a credit of 180.00 So thinking 93.50 was the top I shorted again down I was to  minus 1000.00 But I ignored it. Thinking what goes up must come down. So I closed my lesson with 300.00 plus. My opinion back to paper trading. 


  105. ZZ/insurance

    Sure, I'll share some thoughts after hours.


  106. Window dressing into month-end I'm guessing? Took most of my hedges off this morning and will add half back just before close in case something happens over the weekend. Great to see YHOO catch a break finally…….


  107. Phils/JNS

    For these shorter term momentum type trades I always seem to either miss an exit or get out too early.  At the point you put a trade like this on, I'm assuming you have some idea of what you expect to exit at.  Do you have a way of determining that?  In other words, what do you expect out of this trade as an example.  You're cost basis is around .30 based on what you posted earlier, and from how it moved earlier in the day you might have exited with nearly 100% today but didn't.  Are you expecting more? Do you have some sort of rationale that you apply to this, like wait for excitement you sold into to disspate and THEN exit? I'm realizing I don't handle these as well, and have missed something in the past…so interested to see how you think about it.

    Thanks.


  108. GPRO right back up again…amazing, its just bouncing around like a yo-yo


  109. Look at the action on CMG over the last week. Up $10, down $10, up $10, down, and up $10 again.  A trader's dream!


  110. Phil – Hedges – I currently have a size-able position in TZA, as my main portfolio hedge. About 5% of my portfolio.  I have the 2015 14/21 spread.  I sold about 15% of the long calls yesterday to lock some of my gains in, and put a reasonable stop on the extra short calls just in case the market tanks.    I'm showing considerable gains in the position for the year (about 5% of my portfolio), and am wondering if/when I should start to roll the position out in time.  


  111. Gosh Phil, we need hedges that pay off every other day! :)


  112. @jeffdoc

    And coming back down.  Look how it's moved in last few days even when market was down.  Now market is screaming up and GPRO can't stay up.  Profit taking time.  That's why I went back in calls.


  113. Nice move up now in the indexes, oil over $93.50, pretty good with even Dollar going up (85.79). 

    Concentrating/ZZ-san – Good plan.  

    Oil/Craigs – It will likely run up into the NYMEX close at 2:35 and THEN it might make a good short but still tough to do over the weekend.  I imagine they'll try to pin $93.50 but it's still BS because they can't get /RB over $2.50 (/RBX4) so where's the demand?  Thanks for link.

    (Source: StockTwits)

    Wow, talk about irresponsible journalism if this whole thing is a sham!  You are right, we can't trust SA either.  Worth checking into over the weekend.  

    And what Advill said!  

    TZA/Wombat – All good but it looks like we'll get better pricing on hedges by waiting.  

    CLF/EmailMike – Wow, $11 today!  The 2016 $15s are $1.20 and the 2017 $10/17 bull call spread is $1.80 so I'd spend 0.60 and do that.  You can buy back the 2016 $25s (0.30) and it's still not a bad net but I'd just put a stop on them at 0.50 if you can have the naked short calls.  

    Ridiculous/Rustle – And getting more so every second, it seems – really flying now, up about 1%.

    Oil/Yodi – Sounds exciting!  Mondays and Fridays are not good days to trade oil if you don't like surprises.  Wednesday's not so hot either…  wink

    End of months/Mckeo – Could be but we have until Tuesday for that.  I don't see anything in the news to justify it.  

    Yippee for YHOO!  

    Oh wait, screw YHOO, check out RSH:

    That proves it, some buy program is simply out of control!  

    AAPL over $100 again thanks to upgrade saves:

    • Bendgate isn't a concern for Stifel's Aaron Rakers: Citing "continued strong demand data points" for the iPhone 6 (AAPL +1.4%) and an expectation Chinese sales will start by year's end, he's raising respectively raising his FQ4 and FQ1 iPhone sales estimates by 1.8M and 6.7M to 39.6M and 65.3M, while reiterating a Buy.
    • Rakers adds a stronger mix of iPhone 6/6 Plus sales could yield upside to his forecasts. He thinks the 6/6Plus could account for 60-70% of FQ1 iPhone sales, leading iPhone ASP to rise to $680 or higher. ASP was only at $561 in FQ3, and $596 in FQ2.
    • The iPhone 6 carries unsubsidized U.S. prices of $649-$849, and the 6 Plus prices of $749-$949. Rakers notes Apple's decision to double the storage capacities of higher-capacity models could also provide an ASP lift.
    • BMO's Keith Bachman (Outperform) has upped his FY15 (ends Sep. '15) iPhone sales estimate by 10.6M units to 189M. The hike comes even though Bachman "[remains] unclear about Apple’s ability to sell the iPhone 6 and 6 Plus in China, particularly in the December quarter." He's also setting an FY15 Apple Watch forecast of 12M units.
    • Also: MacRumors reports Apple is prepping a refresh for the Mac Mini, which was last updated two years ago. The site thinks the refresh could arrive in October, along with new iPads and Mac OS X Yosemite.
    • Yesterday: Apple falls as Bendgate, iOS 8.01 get more publicity

    Madness in Pimco funds too:

    • Pimco's closed-end funds and ETFs are plunging in the wake of Bill Gross' exit to Janus:PHK -8.7%, PGP -8.5%, PTY -6.2%, PCN -4.2%, RCS -4.3%, PFL -3.6%, PFN -2.7%,PKO -2.5%, PDI -2.2%, PCI -1.4%, BOND -0.2%.
    • "A lot of people bought into Pimco because of Bill Gross, who was the face of the organization, and so they’re shooting first and asking questions later,” says Motley Fool Asset Management CIO Bill Mann. "Investing is a personal business, and the market is saying it trusted Bill Gross.”
    • Meanwhile, headlines indicate Dan Ivascyn, Pimco's (OTCQX:AZSEYOTCPK:ALIZF) deputy chief investment officer, will succeed Gross and take over portfolio management; WSJ had written earlier this week that Ivasycn already was growing in popularity among Pimco investors, who had been putting more money into his fund even as they were pulling it from Gross’ fund.

    JNS/Jeff – If you are short-term trading and you don't take 50% gains off the table, you shouldn't be short-term trading.  How often do you make 50% in a day?  If that's better than your average (10,000% per year), then it's certainly going to improve your average, right?  As a rule of thumb, any quick 20%, no matter how much you think it's going up from there, should be locked in with a stop of at least 1/2 at 20% (on the way down or if momentum slows) and then the other 1/2 at 10% to lock in 15%.  

    In the $25KP, it was greedy not to take 0.70 off the table, as I said earlier, taking off half leaves you 1/2 for free and then stopping the other half even still nets you a 50% gain – how can you not do that?  So, I should have done it but I don't have a good attitude for trading $25K and it just didn't seem worth it to me for $400, which is what Yodi lost and made on oil in 5 minutes but, if $25K matters to you, then that's how you need to play it.  

    On the whole, as noted above, I think the inertia of Pimco investors and limitations on JNS taking in capital are not likely to double them up as fast as people think and I believe that, by next week, disappointment will set in and we have a good chance of getting $1+ from the puts – enough so that I'm willing to risk $300 on the outcome but, as I said, $700 in the hand earlier is foolish to gamble on another $300 in the bush and not something anyone should do if $25,000 is all they are trading with – that's my bad!  sad

    CMG/DC – Could very easily turn into a nightmare as $10 is the same as a $6 stock moving up and down 0.10 – would you jump in on that "channel?"  

    TZA/Palotay – We lightened up 1/2 of our main hedge (DXD) yesterday as well, just in case today happened.  I'd give it until next week and then we can see how things shake out. 

    Hedges/DC – Amen to that. 


  114. Phil // CLF – Thanks Phil!


  115. …then the same guy shows you how better the Galaxy is than the IPhone 6 because it is made of plastic. This is such a hatchet job on AAPL- not news.

    He continues to say the Samsung phone has a plastic build, which offers the best solution for durability in some cases.

     

    http://pix11.com/2014/09/25/video-can-the-samsung-galaxy-note-3-bend-like-the-iphone-6-plus/

    Here (different test-probably legitimate) an S4 actually breaks.  The fact is, if you abuse any phone, it breaks!

    http://www.iphonehacks.com/2014/09/video-samsung-galaxy-s4-bends-cracks-bend-test.html


  116. Phil/ CMG

    NO, NO, AND THEN NO AGAIN. Only amusing. I am not a trader….mostly. :)


  117. FWIW 1/2 cent opinion

    I don't like the volume and would be surprised if the ruff ride is over. 


  118. Phil,

    I'd like your thgts on an old, admittedly forgotten short position in 1/15 ABX 25 puts (they were hiding under the bed). In @ 3.40, now 9.50. 1/16 17 puts are 3.20 vs 1/17 17s are 3.80. I realize the cost of prod equates to present levels (ABX 15) but am having trouble understanding what would propel gold higher since I don't see any catalyst that would stimulate the economy (esp if the Repubs get control of the Senate -which is the current polling per Nate Silver) and hence deliver any significant inflation. On the fear side – an ISIS attack in Nebraska? Roll to 1/16s as opposed to taking the loss?

    Thanks as always


  119. Phil/TASR

    I bought back the $13 2016 puts (sold for $3.36 and bought back for $1.65) I held before TASR dropped. Do you think from a technical standpoint it's a good time to sell some puts again?


  120. what a nutty week..



  121. Got caught up in a conference call – have a great weekend folks!


  122. You too Phil – really been a great week to stress test the portfolio &, whilst I may not yet have achieved the right 'balance', I certainly feel a great deal more in control of things. Thanks so much to you and all! Have a good one


  123. I've ramped up my AAPL position steadily all week to a substantial size.  Very profitable company, very good products, excellent ecosystem.  And I've carried around a large screen Samsung for the last two years, which I like just fine, but it's trashed [no fault of Samsung] and I'll go back to Apple now that they have big screens.  I expect a breakout by Xmas.


  124. Sorry, that was supposed to be a quick call and took an hour.  Still, very good, a company we might be acquiring for PSW Investments.  

    Friggin' GPRO finished at $82!  

    JNS $15.89, even crazier at the close.  

    OK, let's see where we ended up:

    • Dow - 17,000 (weak) and 17,100 (strong) 
    • S&P  1,975 (weak) and 1,985 (strong)
    • Nasdaq 4,475 (weak) and 4,500 (strong)
    • NYSE  10,760 (weak) and 10,820 (strong)
    • Russell 1,125 (weak) and 1,140 (strong)

    Wow, all back to the strong bounce line except the RUT – AMAZING!!! 

    Volume about 2/3 of yesterday. 

    STP finished at 59.2%, thank goodness we lightened up on DXD, back to 0.55 now. LTP improved back to 18.9% at $594,295 so + $159,200 = $753,495 – another new high!  I guess we'll raise the stop to $740K now…

    VIX still warm at 14.85 – that's unusual for a rally day.  Wednesday we went back to 13.25.  

    You're welcome EmailMike.  

    AAPL/DC – Interesting isn't it, the effort that is being put into bashing them.  

    ABX/8800 – LOL, how do you lose positions?  Actually, I shouldn't say that, I just found out I still have money at Merrill.  So Jan ABX $25s that are now $9.50 with ABX at $15.25 sounds wrong to me, probably closer to $10.  You sold them for $3.40 so down let's say $6.50 and I'd roll to the 2016 $17 puts at $3.80 and sell the $15 calls for $3.10 and buy the stock for $15.25 so, if called away at $15, you'll be about even and, if not, you own 2x at $15.  You could go with the naked short calls as well and cover with the stock only if it goes up (and maybe stop out some of the short calls) or you could go 2x the $10/17 bull call spread at $3.60 with the short puts and your net entry (taking the $2.90 loss on 1x from the $25 puts) is $5.45 on the $7 spread so a bit of possible upside there - all sorts of things you can do with it.  As to what makes gold go higher – REALITY! :

    M2 Money Supply vs. Gold 2005-Present

    If the velocity of money wasn't in the crapper, gold would be up around $2,000. 

    TASR/DC – Sure, I love TASR down here ($15ish) but I'd like them much better at $12 so I wouldn't be the hero here and catch the falling knife – let them settle down first.  2017 options aren't even out yet but the $13 puts are $1.80 so just keep an eye on them as that's a net $11.50 entry.  They have a delta of 0.27 so a $2 drop in TASR to $13.50 should be $2.25ish so I'd offer that and just see if it fills if you are anxious to put a bet in.  

    Stress test/Mckeo – I can't tell you how much I love to make money when the market is gyrating like this – makes me feel like we've really accomplished something building these portfolios – especially when the market whips around like this and we can navigate right through it.  Glad you are starting to feel it – feels good, right?  

    AAPL/ZZ – You may just be the sale that tips them over.   I agree.  It was our stock of the year two years in a row and, at just $100 (old $700), I'll have a hard time finding one I like better next year too.  

    Submitted on 2014/01/28 at 4:15 am

    Good morning!  

    AAPL still languishing around $505 but Futures bouncing back half a point, except the Nas, which is down about half a point.  Don't be fooled by the Futures though, They are bouncing back to where they were at 1:30 pm and another failure there would not be good at all.  

    Amazingly, AAPL has pretty much announced they'll be moving into the mobile payment space with their 400M ITunes users (Visa has 50M users) and no one seems to be doing the math on that!   Of course, it's hard to get traction when CNBC runs headlines like this:

    This is how bad it could get for Apple stock

    In the article, they are talking about a 40% drop ($350) due to these "horrific" earnings, especially guidance, where AAPL "only" forecasts $43Bn in sales with the usual 37% margins.  This Q they made $13Bn per $550 share (now $505).  At $505, that's about $14.50 per share or a current p/e of 8.7 (assuming 3 more "terrible" quarters like that one) NOT INCLUDING, of course, their $160Bn pile of cash which at $420Bn, is 40% of their market cap.  

    So AAPL $505 is RIDICULOUS.  It's a BUYBUYBUY and, if they drop to $400, then it's a BUYBUYBUY.  You will hear ever single moron who ever had an opinion lining up to dis AAPL today but keep in mind we EXPECTED this reaction – we took a very light bullish entry in our LTP, despite the fact that AAPL is my stock of the year because we were only worried it might go up and we'd miss our chance but mostly, we were waiting for this!  

    Submitted on 2014/02/06 at 8:13 am

    AAPL – Apple is our stock of the year but we only took a small entry because, like last year, we expected them to sell off before they head back up.  Our 2 contract spread is down $3,520 but this is what we wanted (a cheaper entry) so now we need to take advantage of it.  We bought the $500 calls because the $450s were too expensive but now the 2016 $450 calls are "just" $96 and our $500 calls are $71 so there's that magic $25 we pay for $50 of IN THE MONEY position – we'll take it!  So we'll roll the 2 2016 $500 calls to 2 2016 $450 calls and that raises our net from $9.70 to $34.70 but now we have a $200 spread that's $60 in the money.  That's almost as good as CLF but, since it will cost us $90,000 to buy 200 shares of AAPL at $450 (our obligation) – we are in no hurry to double down on this one unless AAPL goes on a much bigger sale.  As it is, our upside on this trade is $40,000 at $650 against the $6,940 cash (after roll) we're laying out – that's not too bad…

    That's how we do it!  


  125. Climate not settled - oh dear… and even Jon Stewart showed how ice will overflow a glass. How can this be?  "The claim that “climate science is settled,” which runs through today’s popular and policy discussions, is misguided, says computational physicist Steven E. Koonin*, Director of the Center for Urban Science and Progress at New York University…"

    http://www.kurzweilai.net/is-climate-science-settled


  126. Phil // GPRO
    I saw the analysis of its move but did you ever recommend a strategy ? I was thinking a Jan15 70-80 Bull Call, selling Nov $80 calls
    Rinse and repeat if it goes well ?


  127. 71% Of 16-To-24-Year-Olds Want ‘Wearable Tech.’ Why Don’t I Even Want To Wear A Watch?
    http://www.forbes.com/sites/victorlipman/2014/09/22/71-of-16-24s-want-wearable-tech-why-dont-i-even-want-to-wear-a-watch/







  128. The U.S. has a shamefully high infant mortality rate. Where’s the pro-life GOP’s outrage?
    http://www.salon.com/2014/09/26/the_u_s_has_a_shamefully_high_infant_mortality_rate_wheres_the_pro_life_gops_outrage/


  129. ALEC tries to prove it’s not lying about climate change, fails miserably
    http://www.salon.com/2014/09/26/alec_tries_to_proves_that_its_not_lying_about_climate_change_fails_miserably/




  130. Virginia Board Of Elections Says Over 450,000 Voters May Be Disenfranchised By Voter ID
    http://thinkprogress.org/justice/2014/09/26/3572658/virginia-voter-id-450000/


  131. How Goldman Controls The New York Fed: 47.5 Hours Of “The Secret Goldman Sachs Tapes” Explain
    http://www.zerohedge.com/news/2014-09-26/how-goldman-controls-new-york-fed-475-hours-secret-goldman-sachs-tapes-explain


  132. Succinct Summation of Week’s Events 9.26.14 | The Big Picture
    http://www.ritholtz.com/blog/2014/09/succinct-summation-of-weeks-events-9-26-14/


  133. BofA Fears “This Would Exacerbate Any Equity Market Sell-Off”
    http://www.zerohedge.com/news/2014-09-26/bofa-fears-would-exacerbate-any-equity-market-sell



  134. One for all, or all for one? RT @conradhackett Income gains going to top 1% in 1954-7: 5% 1975-9: 25% 2009-12: 95%
    http://twitter.com/conradhackett/status/515579520212926465/photo/1


  135. FINANCIAL ADVISOR INSIGHTS: The Financial Services Business Is Running Out Of Registered Advisors
    http://www.businessinsider.com/financial-advisor-perspectives-september-26-2014-9


  136. The Fascinating Reason Many Billionaires Get Depressed (And How They Snap Out Of It)
    http://www.businessinsider.com/psychology-of-success-why-billionaires-get-depressed-2014-9


  137. “Buy Low Sell Higher? Worst sector over the past 90 days on rising channel support. Hmmm… $XLE $SPY “
    https://twitter.com/KimbleCharting/status/515572885746774016/photo/1


  138. Ha ha, SGEN up big after hours.  I nursed a bunch of SEP calls, covering and uncovering, for six months, but when they hit opex last week I didn't roll them because SGEN looked weak. So Pharmboy you can thank me for this action, with options it's all about the timing, baby, and mine is always "close but no cigar".


  139. (What’s Left of) Our Economy: New GDP Figures Show Record Exports and Imports — and Continuing Big Trade Recovery Drag
    http://wallstreetexaminer.com/2014/09/whats-left-of-our-economy-new-gdp-figures-show-record-exports-and-imports-and-continuing-big-trade-recovery-drag/



  140. Here’s How Much Exposure The S&P 500 Has To The Middle East
    http://www.businessinsider.com/sp-500-company-earnings-in-middle-east-2014-9


  141. Oversupply Pressuring Coal Producers, But Bottom Near?
    http://www.valuewalk.com/2014/09/oversupply-coal-producers/


  142. >>NFLX The 2015 $420/380 bear put spread is $23.50 and you can sell the $500 calls for $23 for net .50 on the $40 short spread.>>

    I remember when this sounded so juicy …




  143. Finding Entrepreneurs Before They’ve Founded Anything
    http://blogs.hbr.org/2014/09/finding-entrepreneurs-before-theyve-founded-anything/


  144. Workers Don’t Have the Skills They Need – and They Know It
    http://blogs.hbr.org/2014/09/workers-dont-have-the-skills-they-need-and-they-know-it/


  145. Ken Burns on “The Roosevelts” and American Leadership
    http://blogs.hbr.org/2014/09/ken-burns-on-the-roosevelts-and-american-leadership/


  146. Why major creative breakthroughs happen in your late thirties
    http://qz.com/177694/why-major-creative-breakthroughs-happen-in-your-late-thirties/



  147. Have Economists Been Captured by Business Interests?
    http://blogs.hbr.org/2014/09/have-economists-been-captured-by-business-interests/


  148. If Your Kids Get Free Health Care, You’re More Likely to Start a Company
    http://blogs.hbr.org/2014/09/if-your-kids-get-free-health-care-youre-more-likely-to-start-a-company/




  149. Since it's the weekend, a political piece about Islamic State I thought quite good: that it is entirely distinguishable from fundamentalism in a historical sense.

    http://opinionator.blogs.nytimes.com/2014/09/03/isis-is-a-disgrace-to-true-fundamentalism/?_php=true&_type=blogs&_php=true&_type=blogs&_r=1


  150. I own 300 shares of SGEN bought at around $34. I recently sold Oct '14 $44 calls thinking it probably wasn't jumping in the current environment. So, since I have never experienced a call  option expiring above my strike price, what is the likely scenario if it finishes on Oct. 18th at say $45? Will it definitely be exercised. maybe exercised, or probably not? Anyone? Thanks for any help and if there is anything I should do to prepare or a strategy I should know about, feel free to shout it out!


  151. craig exercised, the computers take every penny.



  152. craig

    If SGEN is above $44.01 at the close of business on Friday of opex, your 300 shares will (definitely) be sold at $44.00.   Prior to opex there is always a very slight possibly that the owner of the call could exercise his right to acquire your shares at  $44.00. Usually, that only happens if there is a dividend involved.


  153. thanks stockbern. 


  154. I may be the only one that can honestly say I exercised options for as low as $.10. I called the broker, he had no idea how to do it, in NYC. I think he was about to die but I was very calm and asked, "Wasn't it obvious why I did this 3 days ago?" He did get it done. That was before programed trading.


  155. Phil / GPRO
    Yes, its so bad it's finally peaked my interest. I've read all the previous threads I could find ( have no idea what Russell is doing ) but I'm trying to construct a LEAP play.
    I understand the theory on the 5% rule and turning a bad buy into a 'good sell' -
    I mentioned a beginning salvo – can you comment on it this weekend when you have time ?
    My mind goes // bull call spread, sell expensive calls.
    Thoughts ?

     


  156. Phil,

    Thanks for the great ideas on the ABX option workout. Opens up interesting possibilities. My remaining question has to do with the macroeconomics of gold and the timing of entering a position. The 2013 divergence between gold and money supply I assume was and is due to QE and the decreased velocity of money. That being the case, wouldn’t gold continue to diverge from the money supply (Big Disconnect) until the Fed really does stop printing and really does taper ? How realistic is that in the current economic/political environment? Until the velocity of money increases (due to a much stronger economy) wouldn’t inflation and gold be expected to remain at depressed levels? If my reasoning is correct wouldn’t the first concrete indication that the FED is about to reverse course be the trigger to enter gold? Just looking for a light on the other side of the swamp.

    Thanks again


  157. DirecTV shareholders on Thursday voted to approve AT&T's offer to buy the satellite TV company for $48.5 billion. DirecTV said 99 percent of shareholders voted in favor of the deal.

    http://www.cnet.com/news/directv-shareholders-ok-at-t-takeover-deal/



  158. Question on Delta and Hedges.  

    I used to use the greeks as a measure of my exposure to market moves.  Delta would tell me how long or short I am, vega would be my exposure to vol increase, etc.

    Now with things like SQQQ, if you are long SQQQ it will show a long delta, even though it's actually a negative effect on delta since it's an inverse ETF.

    Anyone have any ideas how to deal with this?


  159. Raytheon, my old employer is drooling over this terror and Russia stuff. Missiles to attack and defend.

    Who win this non-war? The military industrial complex!

    http://finance.yahoo.com/news/raytheon-links-polands-wb-electronics-101125516.html


  160. Burr // SQQQ
    no idea : .? Thats why I try to gauge the 1% – 5% dips and pops. Even that is a moving target because of Theta, but it will give you a rough idea of the reality of your ports reactions.
    My problem is I'm overweight in a number of stocks, so if KKR or NLY busts, my ports are all screwed up anyway.
    Thanks for the grub info – did I tell you I'm an ex-chef ? Thats why you sent it ? Get me some comps and I'll gladly go and give you a private review. I don't tend to get up into the Embarcadero much because of the tourists, but it can be a goldmine for churn and burn mark up.
    Next time you're in town I'll take you to some of the local favs.

    JJ


  161. @wombat

    I used to live in SF for 10 years before I left to "travel" the world…. and end up in FL running a food truck :)  So at least I know the old "hip" spots.  

    I didn't know you were a ex-chef, but I'm trying to tell all the people I know that live in SF about it.  We partnered with the GM that made Delarosa and Lolinda so big.   It's not on the Embarcadero.  It's right on Chestnut St in the Marina.  Here is the location :  https://goo.gl/maps/DPru4

    We just got a really good review from Michael Bauer of the SF Chronicle.  http://m.sfgate.com/restaurants/diningout/article/Causewells-Bold-flavors-at-new-Marina-spot-5767397.php

    If I could get you some comps I would, but since I'm not in town it's hard to do.  If I was in town, no prob.  I have a house acct.    Although I'll email my man.  


  162. Wombat / irrationality

     

    There are a few groups ( my number is 28) that are using huge investments in mathematicians, algorithms, computers, have political influence and are living out  there as common citizens, and they are the group that is controlling all this weird without rational explanation events.. they are not GS, CS, etc.  they are free.

    Perhaps a is "reloaded" version of middle age conspiration  of freemasonry  societies, but for me now, a very very few individuals controlling  $ 100 B each,  are controlling the show in the markets….and they are over all the old style market practices


  163. Phil / ABX.TO – In one of my restricted accounts (can only do covered calls), I have ABX.TO shares at $19 covered by the Jan/15 $19 call (1.80 now 0.44). I want to roll the call but not sure what I need to look for.

    I was thinking of rolling to the Jan/16 $17 call at $2.50 dropping my breakeven to $15.14 (19-1.36-2.50). If I get called away at $17 that's still a 10% gain ((17-15.14)/17). And I was thinking that when ABX starts to turn around, I can always remove the cover but in the meantime I'm protected for another 10% drop and improved my delta on my call with the roll.

    If you have the time, could you give me your advice and input on what I'd like to do vs what would be a better option? Thank you.


  164. GPRO/Wombat – Though wrong so far, I still like our play of the short bear call spread covering the short calls, not a long bull call spread.  

    NFLX/Wombat – They are still below $500, aren't they?  The idea would have been to follow the rules and roll out the Jan $420 puts (now $18.90) BEFORE they fell below $23.50 (the net of the spread) to preserve their value while waiting for the short $500 calls (now $12) to expire worthless. Nothing is "juicy" if your plan is to just sit there and stare at it with your fingers crossed – as if making a trade incapacitates you from making changes when the conditions change. 

    Also, I'm surprised you caught on to my hobby – I thought the disguise would have worked… cheeky

    ISIS/ZZ – I don't know why more Muslims don't speak out against these guys.  It would help Westerners understand that there is a difference and their actions are not condoned.  

    SGEN/Craigs – You have to check with your broker as some will net out a spread and some will not.  If you have shares and a spread, they will likely call your shares.  For the sake of a nickel or dime, I would rather get out of things just before the close if I'm not sure as the hassle of an unwanted assignment isn't worth it.  Even TOS, who is really good about that stuff – won't put that policy in writing, so you just have to hope they cancel them out, which they have always done in my experience.  

    Goldman/ZZ – That's a major scandal – see today's news.  

    ABX/Pfehlm – At $15.24, you might want to give ABX a chance to come back a bit before re-selling.  They came off $15 last November and hit $21 in Feb.  If you sell the 2016 $17 calls for $2.50, that's 5 quarters at .50 each you have to gain if ABX stays below $17 but that's also AFTER you buy back the short Jan $19s (which look like 0.16 to me, not 0.44).  Meanwhile, if you are not restricted from having a bull call spread, I would point out that you can get a 2017 $10/17 bull call spread for $3.70 and that's net $13.70 and you get 100% of the upside to $17 but you take $11.50 off the table.