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Thrilling Thursday – Can Super Mario Save the Markets?

SPY 5 MINUTEWheeeeeee - What a ride!

As with skiing, a nice drop can be lots of fun – if you are ready for it.  If not, things can get broken…  Supports were broken yesterday as we lost the 200-Day Moving Average on the NYSE (10,600) and the 50 dma on the Dow (16,930), Nasdaq (4,500) and the S&P (1,975).  

We lost the Russell ages ago, when we made our Death Cross so "told you so" on that one.  As I said at the time (9/16):

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

Our trade idea that day in our morning post that day was:

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

That trade is already 110% in the money and on it's way for a $5,000 per unit gain (200%) – a very nice way to hedge what is, so far, less than a 10% pullback in our indexes.  What we do, once these hedges go in the money (if we're still bearish) is add another layer of hedges at higher strikes and we put a stop on our original hedges to lock in those gains.  That's where we are now as we begain playing for a bounce yesterday in our Live Member Chat Room (you can join us HERE).  

This morning, we're waiting on Draghi to wave his magic stimulus wand and stop the market slide but I'm not sure he can pull it off (see our early morning discussion).  Overnight, oil collapsed down to $88.18 and, since $88.50 was the -2.5% line for the day, we applied our 5% Rule™ and called a bullish play from there to $89, which I tweeted out along with an Alert to our Members at 6:30 am and already we've gotten our $500 per contract gains for the morning and the Egg McMuffins are paid for.  

In preparation for this morning's hopefully bullish action, we cashed in our DXD Oct $24 calls at $1.20 (up 166% from our 0.45 entry) in the Short-Term Portfolio, which finished the day up an ominious 66.6% for the year.  We swung more bullish but maintianed DXD and SQQQ spreads – just in case Draghi fails us but we locked in the gains on our directional shorts, satisfied with where we are off that little dip.  

Greed kills in the market and we try to hammer that point home to our Members.  This morning we'll take off the EWJ Oct $12 puts we highlighted for you on Tuesday as those should be up 150% (yes, in 48 hours) at 0.50+ with the Nikkei falling 2.6% overnight.  Also from yesterday's post (and Tuesday's post), our long Yen position did exactly as we'd hoped and USD/JPY fell to 108.31 overnight – up $1.69 from our 110 entry at $900 per penny, per contract for a total gain of $152,100 per contract.  Nice work if you can get it!  

We don't do a lot of currency trading as it's just too annoying but 110 on the Yen was the fat pitch we'd been waiting for to short USD/JPY and you can read the logic that led up to that call in Tuesday's morning post (which would be delivered to your mailbox if you subscribed!) which, of course, was a mere summary of all the discussions we'd been having in Member Chat.  What I said that morning was:

Ahead of the open, the Euro went into free-fall this morning with a plunge to $1.257 and that sent the Dollar flying to 86.30 and the Yen to 109.85.  If you like currency trading, you can play for a retrace at 110, which means the Dollar will pause below 86.50 and that run was from 83 so 3.5 in September means we expect a retrace of 0.75 (weak) to 85.75 and, possibly, a strong retrace back to the 85 line.  

The Yen, meanwhile, should drop back to 109 (weak) and 108 (strong) and that means it's game on for the /NKD shorts (16,250) and EWJ can be played short at $12 with Oct $12 puts at 0.20.

As you can see, we also caught a 645-point drop on the Nikkei Futures, which pay $5 per point, per contract for a $3,245 per unit gain on those.  That's 3 trade ideas, played 3 different ways, using the same 5% Rule™ based on our same Fundamental observations of the Asian markets and our own currency – something we discussed extensively in our Live Member Chat Room last week and over the weekend.  

Welcome to Las Vegas!Fundamental trading is not for everyone – it requires patience and a good deal of study before we come up with our trade ideas but, as you can see, it's very rewarding when it hits!  This is probably a good time to invite you to join us for our LIVE 2-Day Seminar in Las Vegas, November 9th and 10th, where we'll be teaching our techniques – including a live trading session on Monday, the 10th.  

Meanwhile, Draghi has gone hog wild in Europe. Though the ECB did not lower their rates, they are stepping up their Asset Purchase Program by about $1.3Tn ($1,300,000,000,000.00) AND will widen the scope of asset purchases to include bonds from countries with ratings below BBB- (ie. JUNK!).  This will make the ECB the biggest, baddest bank in the World with $4Tn of crap on their books.  Promises include:

  • Covered bond purchases will begin this month, and asset backed securities purhases will begin this quarter.
  • The weakening growth momentum and inflation outlook in the Eurozone warrant two years' worth of purchases.
  • The governing council is unanimuous in its commitment to use further unconventional mechanisms if the outlook worsens (this means QE is still on the table)
  • Draghi says it's "hard to give a figure" on the purchases because the ABS and covered bond programmes overlap with the disappointing TLTRO bank credit policy. Another announcement on this is coming at 10:30 a.m. ET.
  • Draghi has "decided to include countries that have a rating below BBB-" in the purchases programmes. That means Greece and Cyprus will be included, as the Financial Times suggested
  • "We did a lot of things since June. We did a lot of unprecedented things." Draghi is cheering the ECB's actions over the summer, but says "let's see" over sovereign bond purchases (QE). 

Well, as promised, Draghi has indeed pulled out all the stops in an attempt to keep the EU out of a full-blown Recession.   The only question that remains is – is he doing enough?  As we can see from the US example, Central Bank policies alone are not enough to restore prosperity – all it does is make a lot of Banksters and the top 1% investors that own them happy.  

So far, there is little change in the European indexes or in our own futures and God help us all if we begin failing the sad levels we're at now. We'll have to play it by ear in our chat room but, at the moment, I'm inclined to get a bit more aggressively bearish until I see some bounce lines taken back.  

Let's be careful out there!  


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  1. Oil Lines

    R3 – 94.89
    R2 – 93.92
    R1 – 92.40
    PP – 91.43
    S1 – 89.91
    S2 – 88.95
    S3 – 97.42

    Not really surprised by that move. Back a couple of weeks I had mentioned that we had areas of support around $91 and then it was a vacuum all the way to $85. We have bounced around $91 in September (back to 95 which is another S/R line) but it's possible that test the $85 line again sometimes soon, especially with a stronger dollar. We have to keep in mind though that all the oil producers can't live with oil at these levels so "drastic" measures are to be expected to try to prop up these prices.

  2. Phil/oil,
    Are you looking at options plays to play long oil when the time comes?
    Thanks as always

  3. Another keeper from Rolling Stone:

    The great 20th-century economist John Maynard Keynes has been widely quoted as saying, "When the facts change, I change my mind. What do you do, sir?" Sadly, in their quest to concentrate economic and political power in the hands of the wealthiest members of society, today's Republicans have held the opposite position – as the evidence has piled up against them, they continue spreading the same myths. Here are six simple facts about the economy that Republicans just can't seem to accept:?

    1. The Minimum Wage Doesn't Kill Jobs.
    2. The Stimulus Created Millions of Jobs.
    3. Taxing The Rich Doesn't Hurt Economic Growth.
    4. Global Warming is Caused by Humans.
    5. The Affordable Care Act is Working
    6. Rich people are no better than the rest of us.

    Some good stuff for each of the topics! 

    I just had a discussion with a Conservative neighbor who seemed to think that in the 50's when the highest tax bracket was at 90% in the US, the economy was not growing fast because of the high taxes. The average then was probably over 5%. 

  4. StJ / Oil  yes I remember your comment, and frankly I took  it for granted and you are quite right!.

  5. Why is there no revolt of the top 99% – unless you are the top 1%, you are getting screwed! And even the top 1% are not getting much love.

  6. Phil,

    Your thoughts on RGR please. Estimates and actual earnings have been down YoY and QoQ. I have 50 strike Oct puts in @ 2.53, much wider bid/ask pre-market today 2.75/3.4.


  7. Oil / Advill – I am somewhat skeptical that we make it to $85 given the current geopolitical context though. It could happen, but even Brent is at $94 and Putin needs $110 to balance his budget. Another incursion into Ukraine is probably needed! There is just too much riding on oil prices right now.

  8. Good Morning!

  9. So pissed at myself, thought TSLA was a bit oversold yesterday 33RSI and thought maybe I should take a shot and buy some 242.50 calls at 1.35 when stock was at 237.50 -238 thinking between the afternoon and later in the week it might rebound to 245.  Then you have Musk's tweet this morning and I lost out on a one day 10 bagger.  UGH.  Well, will be able to write calls higher up today as premiums will be higher and write some puts to as a credit spread to take advantage of pumped up premiums.

  10. Good morning!  

    Not sure Draghi did enough (and he did everything he could) to fix things.  Simply putting a cap and a time-frame causes the number-crunchers to look at the potential effect vs the 5% decline in the $18.5Tn GDP and, over 2 years, they're still $1Tn in the hole.  

    As I've been saying all summer, this wouldn't be an issue if the markets weren't at all-time highs and anticipating ACCELERATING GROWTH, not contraction.  

    In fact, be very careful because the lack of an ECB rate cut has sent the Dollar down to 85.66 (-0.5%) and that is masking a lot of weakness in commodities and our indexes at the moment.  

    Oil is $89.57, gold $1,215, silver $17.09, copper $3.0015 (if $3 fails – RUN AWAY!!!), Nat gas just failed $4 at $3.985 (inventories at 10:30 likely to disappoint on warm weather) and gasoline $2.3963.

    TSLA with a super-pump today as Elon gets his tweet on:

    About time to unveil the D and something else

    Embedded image permalink

    I love the Internet. Comments had me literally ROFL. No, it wasn't intentional. Glad I didn't mention the other letter!


    This is really amazing, a company that makes it's big announcements on Twitter – and conveniently whenever the stock is about to fail a critical level ($240).  

    Looks like he popped them all the way to $255 before a few people wised up but still over $250.  

  11. twain

  12. USO WEEKLYGood call on oil a couple of weeks ago StJ, that was a turning point.  

    Great article from Rolling Stone, I liked this one yesterday too:  Corporate U.S. Healthiest in Decades Under Obama With Lower Debt

    That's the funny thing, the GOP isn't even good for the corporations they pretend to represent, they are simply good for the greedy individuals who use corporations to transfer shareholder wealth (top 10%) into their personal accounts.  

    As evidenced by the chart StJ posted above.  When will the top 10-0.01% realize they are getting as screwed over by the top 0.001% as everyone else in this country is?  

    RGR/8800 – You're betting on the elections.  If the GOP gets more power, it will be easier for them to sell guns, if the Dems get in power, there may be mad rush to buy guns (like we had a few years ago) before the laws change but the laws will change – that's very high on the Dem's agenda.  I'd hold off until they prove a real bottom, if you are going to sell shorts and buy a bull spread, you won't miss much waiting to see if they can take back $50. 

    Level notes from yesterday's close, by the way:

    • Dow 17,350 to 16,800 is 550 = 3.17%.  That could be 2.5% with a 0.5% overshoot or it could be (since we finished at the low) a fairly good indicator that we'll be completing the 5% drop to 16,500.  
    • S&P 2,010 to 1,945 is 65 = 3.23%.  Same as above 
    • Nasdaq 4,600 to 4,400 is 200 points = 4.35%.  This one is past the overshoot, would be very surprising not to see follow-through to -5% at 4,370.  
    • NYSE 11,050 to 10,550 is 500 points = 4.5%.  Like the Nas, we should watch for -5% at 10,500.
    • RUT 1,180 to 1,080 is 100 points = 8.4%.  -10% is 1,062 BUT there's a larger retrace at work there from 1,205 and that's 125 points and THAT is 10%, so this is where we would expect the RUT to be bouncy and, if not, then certainly down 1.6% to complete that 2nd 10% leg (from minor consolidation). 

    So, if the RUT isn't bouncy at 1,080, we're pretty screwed.  I didn't get a chance to recalculate yet but yesterday's weak bounce lines are now the strong bounce lines and the weak bounce lines should all be down about one notch (the distance between weak and strong) from where they were:

    • Dow 17,350 to 16,900 is 450 points so call it 100-point bounces to 17,000 (weak) and 17,100 (strong)
    • S&P 2,010 to 1,960 is 50 points so 10-point bounces to 1,970 (weak) and 1,980 (strong)
    • Nasdaq 4,600 to 4,450 is 150 points so we'll call that 25-point bounces to 4,475 (weak) and 4,500 (strong) but we'll also know we're not really impressed until 4,510.  
    • NYSE 11,050 to 10,650 is 400 points and we'll call it 100-point bounces to 10,750 (weak) and 10,850 (strong)
    • RUT 1,180 to 1,090 is 90 points so we'll call that 20-point bounces to 1,110 (weak) and 1,130 (strong)

    Keep in mind that ANYTHING less than a weak bounce is BAD!!!

  13. EMN – the Jan16 $75 puts looks like can be sold for something over $7..

  14. TSLA/Rustle – I would have gone for the short at $255 but not into chasing.  I'm sure he'll goose it more next week and maybe we get another crack at shorting $260.

    GPRO/Rustle – Only 6M shares (5%), I'd want to get some of that cash off the table too at $90+!  

    Oil back over $90. Don't be fooled, Brent is still laying near lows, they are probably just running up into the Nat gas report at 10:30 but a very impressive-looking recovery. 

    USO Oct $33/34 bull call spread is 0.60 and makes 0.40 (66%) on any move up in oil (now $33.98), that's a fun way to go bullish.

  15. Phil / any suggestion in / RB?

  16. I suggest not playing!  wink

    Actually, it's a fun long off the $2.40 line (/RB) but get the hell out if that doesn't hold.  USUALLY we get some kind of pop into the weekend but it's kind of an unusual day.  Still, there's a lot of money riding on keeping gas expensive so expect a lot of people to be working on your behalf to make that trade a winner.  

  17. Phil,

    That jump in /TF from the open…..totally unreal….what gives….somebody buying??? WTF

  18. From Bloomberg, Oct 2, 2014, 7:45:54 AM

    European Central Bank President Mario Draghi has said he wants to steer the central bank’s balance sheet back to the levels seen at the start of 2012, signaling as much as 1 trillion euros ($1.3 trillion) in assets could be added. Photographer: Martin Leissl/Bloomberg

    The European Central Bank kept interest rates unchanged at record lows as investors wait for President Mario Draghi to reveal details of a plan to buy assets.

    To read the entire article, go to

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

  19. From Bloomberg, Oct 2, 2014, 8:41:14 AM

    Oct. 2 (Bloomberg) — The number of Americans filing applications for unemployment benefits unexpectedly fell last week, a sign the job market is sustaining progress.
    Jobless claims dropped by 8,000 to 287,000 in the week ended Sept. 27, from a revised 295,000 in the prior period, a Labor Department report showed today in Washington. Scarlet Fu reports on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)

    The number of Americans filing applications for unemployment benefits unexpectedly fell last week, a sign the job market is sustaining progress.

    To read the entire article, go to

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

  20. From Bloomberg, Oct 2, 2014, 9:07:58 AM

    Oct. 2 (Bloomberg) — The first Ebola patient diagnosed in the U.S. arrived in Texas on a United Airlines jet to cap a journey among four airports spread across three continents. Bloomberg’s Shelby Holliday reports on “In The Loop.” (Source: Bloomberg)

    More than 80 people in Dallas are being monitored for symptoms of Ebola after coming into contact with patient Thomas Eric Duncan or others who Duncan had met, health officials said.

    To read the entire article, go to

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

  21. From Bloomberg, Oct 2, 2014, 9:16:47 AM

    Oct. 2 (Bloomberg) — In an effort to bring credit cards into the twenty-first century, Visa’s Chief Executive Officer Charlie Scharf is embracing Silicon Valley from the company’s new design lab office in San Francisco, in search of new technologies to develop a digital wallet. Bloomberg’s Elizabeth Dexheimer reports on “In the Loop.”

    A 4-foot-tall robot with a video screen for a head swerves past an orange couch and bumps into the wall of a conference room. A few feet away, an engineer tests a virtual reality headset that can allow a coffee-shop owner to forecast hot-chocolate sales during a blizzard.

    To read the entire article, go to

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

  22. From Bloomberg, Oct 2, 2014, 12:00:01 AM

    Photographer: Joe Raedle/Getty Images

    Mobile payments are having a heyday. Apple Pay has been splashed across the news and 20-somethings are paying for taxis with their smartphones. Yet one stalwart risks being left out of the conversation: PayPal.

    To read the entire article, go to

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

  23. Watch this video at

    Toyota Unveils Hybrid Crossover C-HR Concept Vehicle

    Oct. 2 (Bloomberg) — Karl Schlicht, executive president at Toyota, discusses the automaker’s new hybrid concept vehicle, production on their first fuel-cell vehicle and a joint venture with BMW on a dual sports car project. He speaks with Hans Nichols at the Pairs Motor Show on “The Pulse.”

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

  24. Watch this video at

    Hong Kong Chief Leung Faces Resignation Deadline Day

    Oct. 2 (Bloomberg) — Bloomberg’s Andrew Davis reports on the seventh day of pro-democracy protests in Hong Kong as students demand the resignation of Chief Executive Leung Chun-ying. He speaks on “The Pulse.”

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

  25. From Bloomberg, Oct 2, 2014, 12:00:01 AM

    A red light photo enforcement sign is seen below a red light camera on Franklin Corner Road in Lawrence Township, New Jersey. Photographer:Mel Evans/AP Photo

    New Jersey Governor Chris Christie is leaning toward eliminating red-light cameras after a five-year test was fraught with glitches and gripes, even as data showed fewer crashes at intersections with the equipment.

    To read the entire article, go to

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

  26. From Bloomberg, Oct 2, 2014, 12:00:00 AM

    The U.S. apartment-vacancy rate rose
    for the first time in almost five years, a sign that supply is
    starting to catch up to rental demand after a boom in
    multifamily construction.

    To read the entire article, go to

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

  27. Factory Orders BAD:

    • August Factory Orders: -10.1% vs. consensus of -9.3%, +10.5% in July.
    • Ex-transportation -0.1% vs. -0.7% (revised from -0.8%) prior.

    That's good enough to short /TF at 1,085 and /CL at $90.25 (tight stops, of course). 

  28. SQQQ/Phil- I am still holding the Jan 35 calls and have am up 33%. Just wondering if it is a good time to book the profit here yet?

  29. /TF/Jasu – Just a bit oversold and, as noted yesterday (and above) it's completing a 10% drop from 1,200 at 1,080, so that's a very firm line for a bounce and that's 20% of a 120-point drop, so we're looking for 25-point bounces to 1,105 (weak) and 1,130 (strong) now.  Anything less than 1,105 today is a failure and, if not tomorrow, then expect more downside next week.  


    Notice Dave's TA lines end up being our 5% Lines over time – only we drew our lines in 2009!  

    Wheeeee on oil and the RUT already!  

    I guess we'd better look at a more serious play if we're going to be turning red.  In the STP, we have 50 DXD spreads for $20,000 and 40 SQQQ spreads for $28,000, both to Jan and the LTP has dropped about $25K from the highs so far (now up just 15% at $574,425) so we can afford another $25K loss but we'll take a hard look at things later today.  

    For now, I want to give it a couple of hours to see what holds before shifting gears, so we'll review the portfolios after lunch. 

    Stops on /CL should now be $90.05 and /TF should be 1,082.50. 

  30. CREE was one of my remaining positions still positive.

  31. Idiot Option Traders on Fast Money, the ones hawking their book for the last year and a half, were telling people to go long GPRO the last couple days.

  32. SDRL, DO, NE, RIG all saw a brutal September.

  33. SQQQ/Craigs – If it's a bet, then sure, take the money and run.  If it's a hedge, I'd take the $2.50 profit and buy the Nov $35/40 bull call spread for $2 since it's $2.80 in the money and stop it at $1 so you have $3 more of upside protection from here and worst case you still have $1.50 profit.  

    Now Dow is interesting bull play at 17,000 (/YM).   Notice I just flip to whoever has the best resistance to stop me from losing too much if it goes the other way.  Out if the RUT fails 1,080 or /NQ fails 3,975.  /ES 1,938 for reference and over 1,940 would be a nice, bullish confirmation.  

    VERY TIGHT STOPS – Europe is getting worse into their close – I'm not even sure why we're heading up.

    GPRO/Rustle – I don't understand how these guys have any ratings at all.  If people actually listened to them, they wouldn't be able to afford the cable!   Good call on the short calls – nice pullback:

  34. Oil hitting $90.50 again into /NG inventory report (10:30), I'm liking a short (/CL) below that line but very volatile over the next few minutes. 

  35. wrote a 232.5 – 265 TSLA credit spread earlier this morning for next week.  Thnking that range should hold.

  36. Xco is looking really weak. I have a  buy write with a 1x entry that I think is in one of the  PSW portfolios. It is obviously down a ton because of oil.  Should I be considering adding more now? Or wait?

  37. XCO- continued –   If I had to guess your answer I would say market is looking weak, and Rig and others are not working at all, so it may be premature to add more. I don't think we expect oil to stay below 80 for very long, so the play is still a good one. .  So wait and see  if the market (and oil) finds support, and then add more. 


    My position is a buy write, stock at $5.11 short the 2016 $5 puts and calls for $2.20. Gives me a 2.90/3.95 net. 

  38. Back to $90.50 on oil already and I'm for shorting it until it doesn't work anymore from here.  

    Indexes are very weak, I think we'd better add 30 of those Nov SQQQ $35/40 for $2 in the STP – just in case we're not bearish enough.  

  39. SDRL/Scott – How else could it go with the stuff they're selling down 10%?  

    TSLA/Rustle – You are risking their 10/9 announcement.  

    XCL/Palotay – Like the one's Scott mentioned above, the stuff they sell is in the crapper so, like BTU, ABX, etc – they are tanking because, legitimately, if you extrapolate their earnings at these prices they are significantly lower than was previously expected.  That's why they call them cyclicals – this is the ass-end of the cycle and this is the time to add more, but no hurry – let's see if they can form a real bottom first.  Not even weak bounces so far.  

    And what you said I'd say!  cheeky

  40. I am having a very hard time buying and/or selling the SQQQ or DXD spreads.  Orders at the avg. are ignored.  Was unable to sell positions yesterday at the bottom (fortunately) so I still have the earlier hedges.  But I am concerned that I wont be able to exit when I want.  Any ideas?

  41. I'm higher on the upside, I can risk it or cover before then as these expire on 10/10, so I might be covering on 10/8

  42. last comment was supposed to be headed:


  43. Phil the SQQQ Nov 35/40 BCS is at $2.25 and doesn't look like it will be so easy to get for $2 as suggested. I am trying to get a fill at $2.10 but what would you recommend in a situation like this. Patience to get the price we want, or do you still think we should go for it at $2.25 if it doesn't move back?

  44. Spreads/Sibe – When the market is volatile, intra-day, you will always have a very hard time filling a spread order.  You need to fill the individual legs.  This is why we try to work into our orders when the market is still going up – when you chase them, they are very hard to fill.  Same goes with the exits, you have to leg out as well.
    Don't forget you don't have to sell all the long calls or all the short calls at once, you can chip away on each end until you are out (or in).  
    • Dow -0.18% to 16,774.00. S&P -0.08% to 1,944.60. Nasdaq +0.04% to 4,423.83.
    • Treasurys: 30-year -0.34%. 10-yr -0.07%. 5-yr +0.01%.
    • Commodities: Crude -1.1% to $89.73. Gold -0.03% to $1,215.10.
    • Currencies: Euro -1.1% vs. dollar. Yen -1.08%. Pound -0.34%.
    • Dow -0.42%.
    • 10-yr -0.11%.
    • Euro +0.27% vs. dollar.
    • Crude -0.41% to $90.36.
    • Gold -0.05% to $1214.90.

    Natural Gas slides on inventory data

    Carney: Don't buy the dip in Frannie

    • The 52-page ruling from U.S. District Judge Royce Lamberth "meticulously demolishes"every argument made by investors claiming Treasury and the FHFA acted illegally when altering Fannie Mae's (OTCQB:FNMA -10%) and Freddie Mac's (OTCQB:FMCC -7.3%) bailout agreement in 2012.
    • The new agreement, says Lamberth, is clearly within the bounds of authority Congress granted in 2008 when passing a law overhauling oversight of the GSEs.
    • Yes, Lamberth's ruling doesn't directly affect the dozens of other pending lawsuits, but now plaintiff's attorneys will have to start out explaining how Lamberth got things wrong.
    • Previously: Fannie and Freddie plunge after investor lawsuit dismissed

    Eurozone producer prices continue fall

    • Producer prices in the EU continued to fall in August, with Eurostat displaying new figures of a 0.1% drop from July. Goods leaving the eurozone's factory gates were down 1.4%from August 2013.
    • The fall indicates that the currency area is set to remain mired in a state of very low inflation, weakening the eurozone's fragile economy even further.
    • The producer price figures were released as members of the ECB's governing council meet in Naples, Italy, to decide upon further stimulus measures.
    • Euro Stoxx 50 -0.4%; DAX -0.1%; FTSE 100 -0.3%; CAC 40 -0.3%.

    Draghi details asset purchase plan

    • The ECB will being buying covered bonds beginning in the middle of the month and ABS at some point this quarter, said Mario Draghi in his post-rate decision press conference (the ECB left policy unchanged).
    • The purchases, says Draghi, will last for at least two years and have a "sizable" impact on the ECB's balance sheet.
    • "This program is orientated to boost lending to SMEs (small and medium-sized enterprises)," said Draghi, adding that those assets targeted will be "simple and transparent."
    • Traders sold euros on the news, but have since bought them back and the currency is flat vs. the dollar on the session at $1.2654. European shares resume sliding, the Stoxx 50's (FEZ -1.8%) decline led by a 3.7% dive in Italy.

    This can't be good:  Argentina central bank chief resigns

    • After a long tussle over inflation policy with the economy minister Axel Kicillof, Argentina's central bank chief Juan Carlos Fabrega has resigned.
    • Fabrega had argued for tighter anti-inflation policies and opposed the government's heavy fiscal spending, in stark contrast to Kicillof, who pushed to boost growth in the stagnating economy.
    • Economists estimate that inflation is climbing to as high as 40% in the country
    • Argentina's Merval Index closed down 8.2% yesterday, with rumors surfacing of the resignation prior to the market close.
    • ETFs: ARGT
    • Bank of America (NYSE:BAC) is boosted to a Buy with price target raised to $20 from $16.80, while JPMorgan (NYSE:JPM) is cut to a Neutral with $64 price target.
    • BofA's deposit profile means it will be under less pressure than peers to pass along Fed rate boosts to depositors, says UBS. JPMorgan, on the other hand, has a smaller amount of "core deposits" than its peers, says UBS, and could see outflows when rates rise.
    • BAC +1%, JPM -1% premarket
    • Richard Branson's Virgin Money is planning its IPO in London this month, and expects to raise about £150M ($243M) from the offering.
    • The bank is expected to aim for a £2B valuation, and shares will be sold equivalent to about 25% of the bank's capital.
    • Virgin Money will also return £50M of the proceeds to the British government as part of its payment plan for the purchase of Northern Rock, a British bank that was nationalized during the financial crisis, completing its acquisition price of £1B.
    • "We are constructive on Nasdaq OMX's (NDAQ +0.3%) progress over many years in creating a lower-risk, high-recurring revenue business model with solid execution, especially in cost management," says analyst Brian Bedell, upgrading to a Buy with price target lifted to $49 from $46. "We see the story as increasingly gaining traction among investors and improving NDAQ's P/E from subdued levels."
    • Also boosted to a Buy is IntercontinentalExchange (ICE +1.5%), with price target lifted to $219 from $202.
    • CME Group (CME +1.5%), however, is Bedell's top pick in the exchange sector, and he lifts the price target to $95.
    • Previously: Brisk September business at CME

    Pulte boosted, NVR cut at Goldman

    • "We think that the homebuilder’s lack of growth is well understood and that upside and downside is now more balanced," says analyst Eli Hackel, pulling his Sell rating on PulteGroup (NYSE:PHM), with price target remaining at $18.50. "We think the builder is closer to community count inflection given recent data, and its strong cash flows have translated into strength of balance sheet."
    • Alongside Pulte's upgrade, NVR is downgraded to a Sell with price target of $1,050, with Hackel noting the firm's pricier valuation and big earnings expectations.

    Brent crude hits 28-month low, WTI tumbles near $88.50

    • Crude oil is selling off again, with Brent crude oil hitting a 28-month low just above $92/bbl and WTI tumbling to $88.57, after Saudi Arabia cut its official selling prices for its customers across all regions in November.
    • The Saudis were expected to cut output in the coming months to support prices, but the price cuts seem to suggest a drastic reduction in output may not happen, at least not in the near term.
    • "Such measures give rise to doubts about OPEC's long-standing strategy of striving above all for price stability,” a Commerzbank analyst says.
    • But crude has been dropping for months, and Jefferies points to four reasons behind the sustained slide: weak global demand with Q3 estimates up only 800K bbl/day vs. 2013, a surge in Libyan production, dollar strength, speculators.

    Bottom call for coal?  Report: Walter Energy may be acquisition target by BHP, Rio Tinto

    • Walter Energy (NYSE:WLT) +5.7% premarket after The Guardian says BHP Billiton (NYSE:BHP) or Rio Tinto (NYSE:RIOmay be interested in buying the coal company for $5/share.
    • Clarkson Capital is out with a note saying the paper has passed along many rumors on U.S. coal activity over the years and none have proven true (
    • In response to strong market demand, Boeing (BA +0.6%) will increase production of its 737 program to 52 airplanes per month in 2018. Boeing currently produces 42 airplanes per month at its factory in Renton, Washington.
    • The company previously announced plans to increase the production rate to 47 airplanes per month in 2017.
    • Airline stocks move higher in early trading after suffering a painful drop yesterday.
    • The sector was grounded from fears stirred up by the Ebola case in Dallas.
    • The CDC issued a statement later yesterday on its website indicating that newer airplanes have a cabin environment that is not conducive to the spread of most infectious diseases.
    • Gainers: Delta Air Lines (NYSE:DAL) +1.3%, United Continental (NYSE:UAL) +1.2%, American Airlines Group (NASDAQ:AAL) +0.8%, Southwest Airlines (NYSE:LUV) +0.8%
    • Delta Air Lines (NYSE:DALreports consolidated passenger unit revenue rose 2% Y/Y in September.
    • Revenue passenger miles rose 5.4% during the month as both domestic and international capacity was higher.
    • The carrier's load factor headed up 40 bps to 83.7%, led by an improved performance for the domestic mainline unit.
    • DAL +1.2% premarket

    AutoNation reports sales tallies

    • AutoNation (NYSE:ANreports retail sales rose 10% Y/Y to 84,225 new vehicles in Q3, boosted by a 16% increase in September.
    • The company says same-store sales for September rose 14%.
    • Q3 segment sales: Domestic +9% to 25,589; Import +9% to 42,451; Premium Luxury +15% to 15,915.
    • Van Tuyl Group is the country's largest privately-owned auto dealership group, and the 5th-ranked overall.
    • After being folded into Berkshire Hathway (BRK.ABRK.B), the company will be known as Berkshire Hathaway Automotive, and – no surprise – will continue to be led by its existing management team.
    • Buffett: "The Van Tuyl Group fits perfectly into Berkshire Hathaway from both a financial and cultural viewpoint … [It] enjoys excellent relations with the major auto manufacturers and delivers unusually high volumes at its 78 locations. This is just the beginning for Berkshire Hathaway Automotive."
    • The deal is expected to be closed in Q1. Term were not disclosed.
    • Press release
    • There's more than passing interest in the auto retailer/dealership group over Warren Buffett's acquisition of Van Tuyl Group.
    • Analysts have already tapped the sector as ripe for M&A opportunities before Buffett skipped into the fray.
    • AutoNation (AN +2.2%), CarMax (KMX +1.5%), Sonic Automotive (SAH +3.5%), Lithia Motors (LAD +7.1%), Penske Automotive (PAG +3.4%), Group 1 Automotive (GPI +3.5%), Asbury Automotive (ABG +5.5%), Rush Enterprises (RUSHA) are all higher in early action.
    • Related: Strong comps at AutoNation.
    • "About time to unveil the D and something else," tweets Tesla's (NASDAQ:TSLA) Elon Musk with an accompanying photo displaying an Oct. 9 date.
    • Just what either of those entail is still unknown, although Musk has previously suggested that the third generation of Teslas would involve both the long-awaited "budget" sedan and an SUV smaller than the Model X.
    • Shares of Tesla Motors (NASDAQ:TSLA) move higher in early trading after CEO Elon Musk teases on an October 9 announcement from the company involving a D.
    • There's plenty of guesswork focused on if the D is a new model class or an update.
    • Speculation on the D: 1) An entirely new model. 2) An all-wheel drive Model S. 3) A Model S with some self-driving capabilities. 4) A Chinese version of the Model S with a long wheelbase.
    • TSLA +2.8% premarket to $246.89.



    • Kandi's (NASDAQ:KNDI) SMA7001BEV EV has passed inspections carried out by the city of Nanjing, and a subsidiary of ride-sharing firm ZZY (Kandi has a 9.5% indirect stake through its JV) has been cleared to create a Nanjing subsidiary.
    • The company notes its EVs are eligible to receive both a national subsidy of RMV47.5K ($7,738), and (in Nanjing) a subsidy of equal size from municipal and provincial authorities.
    • Kandi has already made efforts to support EV ride-sharing programs to Shanghai, Beijing, and Chengdu. Its first supported program launched in the city of Huangzhou last year.
    • Dow Chemical (NYSE:DOW) says it plans to raise more than $2B from three chemical businesses it is putting up for sale as part of a plan to raise $4.5B-$6B from asset sales.
    • Dow expects to sign deals for its Angus Chemical and AgroFresh subsidiaries, as well as its sodium borohydride business, by the end of the year, with the deals closing in early 2015.
    • Dow adds that it has completed the sale of a portion of its North America rail car fleet for nearly $450M in proceeds.
    • Constellation Brands (NYSE:STZ): FQ2 EPS of $1.11 misses by $0.04.
    • Revenue of $1.61B (+10.3% Y/Y) misses by $30M.
    • Press Release

    Better comps for Darden Restaurants in September

    • Darden Restaurants (NYSE:DRIreleases same-restaurant sales growth numbers for September.
    • Fiscal September 2015 same-restaurant: Olive Garden +0.6%; Longhorn Steakhouse +3.2%; The Capital Grille +6.4%; Yard House +3.8%; Seasons 52 +1.3%; Bahama Breeze -0.3%; Eddie V's +4.0%.
    • The company says it expects FQ2 EPS to fall in the upper range of its previously announced range of $0.26-$0.28.

    Rights offering sale planned for Sears Canada

    • Sears Holdings (NASDAQ:SHLD) says it expects to rake in $380M by early November from the sale of the rights to 40M shares in Sears Canada.
    • Clients of Fairholme Capital Management and Eddie Lampert are reported to be buyers.
    • The retailer needs liquidity to help it get through the holiday season.
    • Sears Holdings (SHLD +6.4%) trades higher after announcing the sale of most of its stake in Sears Canada.
    • The retailer will have up to $1.45B in liquidity for FY14 after factoring in its $400M short-term loan from Eddie Lampert, real estate transactions, and a Lands' End dividend.
    • Despite today's bump, shares of SHLD are off 46% YTD.
    • GoPro (NASDAQ:GPRO) founders Nicholas and Jill Woodman have gifted 5.8M shares to a "charitable organization" under their names. Lead IPO underwriter JPMorgan has agreed to release the lockup restrictions on the organization's shares.
    • The Woodmans sold over 5M GoPro shares through the IPO. They still held 50.8M shares post-IPO, good for a 47.4% stake.

    I like these guys a lot:  Upgrades pour in for Autodesk after investor day

    • Citi, Credit Suisse, Cowen, and Morgan Stanley have upgraded Autodesk (ADSK +4.1%) following its investor day. Shares are making fresh highs.
    • The main catalyst: Autodesk disclosed it will stop selling up-front licenses in 12-24 months to further migrate its base to cloud/subscription-based services. Adobe made a similar move last year (in part to combat piracy), and the results have been solid thus far. Autodesk had 1.94M subscribers at the end of July, and has guided for 200K-250K FY15 subscriber adds.
    • Credit Suisse, which has also upped its target by $20 to $70: "We believe that several significant changes to its business model will result in meaningful long-term upside to revenue (at limited incremental cost) and, therefore, operating profitability that is not reflected in consensus estimates or the stock's valuation."
    • Autodesk also guided for a 12% billings CAGR from FY14-18, and that its value/account and subscriptions would respectively rise 20% and 50% over this time. The company hopes to get over 70% of its revenue from recurring streams by FY18, and to grow its op. margin to 30%. FY15 op. margin guidance is at 15%-16%.
    • Investor day slides
    • Yesterday: Autodesk names CFO, reiterates FY15 guidance

    Cree -13.1% on FQ1 warning

    • Due to weak LED chip/component sales, CREE now expects FQ1 revenue of $428M, below prior guidance of $440M-$465M and a $455.3M consensus. GAAP EPS is expected to be below guidance of $0.25-$0.30; the non-GAAP consensus is $0.42.
    • Chip/component sales are expected to fall 13% Q/Q and 20% Y/Y to $174M; the latter is a bigger decline than FQ4's 8%. LED lighting sales are expected to rise 7% Q/Q and 51% Y/Y to $223M, and power/RF sales 8% Q/Q and 24% Y/Y to $31M. LED lighting sales were near the high end of target ranges.
    • A mix shift towards LED bulbs relative to chips/components will lead gross margin to be below prior targets; prior non-GAAP gross margin guidance was 37.5%. $54.3M was spent on buybacks during the quarter.
    • Cree adds FQ2 "order visibility remains limited and similar to this point in the first quarter."
    • Shares are making new 52-week lows. Cree has been dealing with tough LED chip/component competition in the mid-range, where (thanks to indoor LED lighting demand) much of the industry's growth has been concentrated. Goldman's downgrade was well-timed.
    • New York Times (NYT +4.8%) extends on its rally yesterday off of positive statements about Q3 trends.
    • The shift to a digital advertising model has been accelerated by the company with its recent moves.
    • survey of consumers by RBC Capital Markets indicates viewership of network TV websites has fallen.
    • YouTube, Netflix (NASDAQ:NFLX), and Amazon (NASDAQ:AMZN) scored a higher percentage of viewers from a year ago – while NBC (NASDAQ:CMCSA), ABC (NYSE:DIS), CBS (NYSE:CBS), and Fox (NASDAQ:FOXA) were all in decline over the period.
    • HBO Go (NYSE:TWX) saw its percentage of users rise to 10% from 6%, while Hulu fell back.
    • Secular T V ratings have also been in decline.
    • Netflix (NASDAQ:NFLX) signs an exclusive deal with actor Adam Sandler to produce and star in four movies.
    • The company cites Sandler's global appeal as a major factor in striking the arrangement.
    • It's been a huge week already for Netflix after it created a shockwave in the movie industry with its plan to release its first feature film.

    Sirius XM will appeal California judge's copyright ruling

    • Sirius XM Radio (NASDAQ:SIRI) will appeal a California federal judge's ruling stating it violated state copyright laws for airing pre-1972 songs by the band, The Turtles, without paying royalties.
    • Last month, U.S. District Judge Philip Gutierrez found that California law gave the band copyright protection, although federal copyright only applies to recordings made after February 1972.
    • The outcome of the case will have wide reaching implications for not only digital music services, but for radio stations and public venues as well.

    Twitter up 2.5% on JPMorgan upgrade

    • "Increasingly confident" Twitter's (NYSE:TWTR) user monetization gap with Facebook will narrow, JPMorgan boosts Twitter to Overweight with $64 price target.
    • Shares +2.5% premarket

    Buffett buys as stocks drop

    • We actually bought some stocks on the dip yesterday, says Warren Buffett (BRK.A,BRK.B), appearing on CNBC. More from The Oracle …
    • "I made a mistake on Tesco (OTCPK:TSCDFOTCPK:TSCDY). That was a huge mistakeby me."
    • The new Coca-Cola (NYSE:KOcompensation plan makes "great sense." His involvement came only after being asked, and was not adversarial. "I feel as good about my Coke investment as I've ever felt."
    • "It doesn't have anything to do with taxes," says Buffett, of the Burger King/Tim Horton's deal. He notes Tim Horton's earns twice as much money as BK, and the deal has to pass muster with Canadian regulators.
    • Alibaba? "I don't think we've bought an IPO in over 50 years."
    • Asked about today's announced purchase of a major auto dealer, Buffett says it's a play on the strength of the auto sector right now. "I fully expect we'll buy a lot more dealerships over time."

  45. TSLA/Rustle – I'm sure the announcement will be another big nothing – just a question of riding it out because Musk certainly does fool some of the people all of the time.  

    SQQQ/STP, Craigs – The $35s filled at $4.45 and the $40s filled at $2.58 for net $1.87 after I posted that spread.  That's still the last fill on each and the bid/ask spreads are $4.40/480 and $2.20/2.90 so I'd offer $4.50 for the $35s and offer to sell the $40s for $2.70 and see which one fills first and then work on the other side.  Sometimes you ge lucky and fill both!  

    Also, you can make a directional call – since we're heading lower, you want to get your buy out of the way first and then when the momentum slows, you try to sell the short calls.  It's the same skills we use to get in and out of Futures trade.  

  46. Lagarde: Global economy is weaker than expected

    The global economy is weaker than was envisioned just six months ago, IMF Managing Director Christine Lagarde said on Thursday.

    Read more:

    Sent from the CNBC app. Available on the App Store

  47. The Fed is making a major shift in rate policy

    The Federal Reserve may go from moving the goal posts to removing them altogether when it comes to setting interest rate expectations.

    Read more:

    Sent from the CNBC app. Available on the App Store

  48. What? Wealthy investors expect double-digit returns

    A new survey finds super-rich investors are expecting returns of 9 percent or more, and some expect returns of at least 11 percent. Are they crazy or just good investors?

    Read more:

    Sent from the CNBC app. Available on the App Store

  49. Bad idea, Beijing: Crackdown may kill golden goose

    China’s recent push to tighten control over Hong Kong’s political process could turn out to be a very costly move for Beijing.

    Read more:

    Sent from the CNBC app. Available on the App Store

  50. Steve Wynn: I’m ‘more scared’ about US than China

    Casino tycoon Steve Wynn says government crackdowns in Macau and protests in Hong Kong don’t worry him so much.

    Read more:

    Sent from the CNBC app. Available on the App Store

  51. Cops can’t stop this Financial District sex club

    A swinger’s club has set up in a Financial District office building, disturbing fellow tenants and neighbors throughout the workday.

    Read more:

    Sent from the CNBC app. Available on the App Store

  52. A bad omen for agriculture? Cramer’s warning

    The entire farm complex could see widespread selling after a fertilizer maker issued an earnings warning, says CNBC’s Jim Cramer.

    Read more:

    Sent from the CNBC app. Available on the App Store

  53. Phil/BTU

    down 5% again today!

  54. DIS down to a 30 RSI

  55. Just bought some DIS

  56. Interesting note that I read yesterday, and now of course I cannot find it after the Microsoft upgrade/shut down of my computer.  In 2008, oil tumbled first, then home builders, then banks, then…..zoom zoom.  Oil started a week ago, home builders are now….banks….??

  57. Phil,

    your thoughts on a new DIS position: Jan 2016 67.5P….thanks as always

  58. Maybe we finally found a place that can hold?  Lows were 16,589 on /YM, 1,918 on /ES, 3,927 on /NQ and 1,072 on /TF.  Obviously, not at all impressive if we don't bounce but 1,080 on /TF is the key line as that's -10% and, if we can't get over -10% – we're not really recovering.  

    BTU/Pat – Not even connected to reality anymore. Barrons just told people to take the loss on the sector:

    Coal: When Tax Loss Selling is a 'Better Opportunity Than Hanging On'

    Even in that article, they say it's an opportunity for long-term investors but that's an endangered species these days.  

    $89.40 held on oil and already back to $90.25 – you can be bullish or bearish and make money in this market…

    DIS/Rustle – I agree, nice down here but might get nicer.  

    2008/Pharm – Yeah but it didn't happen in days like this is doing.  Hopefully we cycle through it over a short period and find our footing at the -10% lines, which is still another 5% down from here.  

    DIS/Jasu – Here's one I haven't had to say in a while but, before buying a stock – say this 3 times:


    After you say that, take a 15-minute walk and then come back and look at the stock again.  If you still feel you need to buy, do the chant again and take a 10-minute walk.  If you still feel compelled to buy – have a good night's sleep and then do the chant and take a walk and THEN we can discuss it!  

    Seriously, if you liked DIS so much at $85, where were you in July or Aug?  The 200 dma is $82 so the average person in the last 2 Qs has only liked them there (and half the people liked them lower than that).  So the stock wouldn't look attractive at all if it hadn't spiked up to $91.20, which was completely without merit (going up with the rest of the silly, low-volume rally) and now it's coming down with the market and testing its 200 dma with the market so why should we buy this particular stock?  

    Yes, DIS is better than many companies out there but the $85 I need for DIS can buy me 3 shares of RIG.  Do I think it's more likely DIS goes over $100 or 3 shares of RIG go over $35?  For RIG to get back to $35, it only has to retrace 1/3 of this year's drop and they've averaged $45 for the last 3 years.  $100 on DIS would be 10% over the all-time high and the p/e of DIS is 20 while RIG is 10.

    Now, if you already have RIG, like we do in the LTP, but not DIS and need an entertainment company to diversify – well, TWX is still a better deal (p/e 15 but less growth potential), then DIS might make sense but certainly not just because it pulled back $6 (7.50%) from it's all-time high. 

    In 2008, when the market began failing – A LOT of stuff looked very attractive at 10% down.  Then it looked more attractive at 20% down and 30% and 40% and 50% – by 60%, 70% and 80%, things looked amazingly attractive but no one had any money to spend because they had all jumped in earlier and lost 50% and now they were just PRAYING to get some of their money back.  

    We're NOT in a hurry, this is why we stayed mainly in cash.  If DIS gets away there will still be hundreds of other companies lagging behind it like TWX, RIG, BTU, CLF – blue chips don't recover by themselves.  The key to the blue chips is, when the market is down 50%, those are the stocks we can still buy with confidence because, even if we are reduced to hunting and gathering – you are still going to want to go to Disneyland one day…

  59. Europe / Phil – I saw the news above regarding the Europe PPI down 1.4% on YoY basis today and there was an article in a French newspaper this morning titled "Why fight inflation when it doesn't exist?". That has been the conundrum for the ECB over the last 6 years – they are fighting an non-existent enemy out of fear of a repeat of the Weimar Republic. And in doing so condemned the entire continent to actual deflation. And good luck fighting that – ask Japan about that! I guess another lost decade!

  60. Phil,

    Thankyou….Not my job to save the Market(3times)……..Yes I did do 2 slide-ins of RIG at 35 and 33--5 contracts each; see I do listen and learn. and the usual BTU, ABX, CLF; HoV etc. Been a grass hopper for awhile…..I'll go around the block , Cha an OMMM, and hold my piece.

  61. got partial fill before of GPRO call at .10.  Trying to cover rest there and call it a day.  These last two days have been fun.

  62. $25,000 Portfolio Review:  I'm very proud of this, up 18.2% as we salvaged the year.  Now we have to not blow it!  

    • GMCR – I'm still hoping for a big sell-off BUT I'm very discouraged at how little they sold off ($4) in the last couple of days so I am thinking of pulling the plug and then I'm planning on being really, really pissed off when they finally do fall and we don't have a bet…
    • JNS – We were greedy and let a nice double slip away.  I would like to go over the weekend with these as I still feel that the estimates for inflows to JNS in any reasonable period of time is completely unrealistic for a 30% jump in the price of JNS.  $13.50 remains my target but, at this point, we should be thrilled to get .50 for our puts.  
    • YHOO – They are holding up nicely and we're in the money.  If we stay in the money, our net $4 spread makes $3 more ($1,500) – that's why I love these in the money bull call spreads!  

  63. There's 1,080 taken back, /ES struggling at 1,930, .YM 16,666 is the mark of the Blanfein, /NQ 3,964 improving a bit.  On the whole, we're down half a point, which is not too bad if we hold it.  1,080 is super-key though.  NYSE 10,500 on the button too.  Oil $90.65, Dollar 85.67, gold $1,213.  

    Remember – it don't mean a thing if they can't take back weak bounce lines – which are even lower now than they were this morning.  

    Europe/StJ – That's the problem over there, you have 28 countries essentially ruled by Germany who have totally different economic needs.  Italy, in particular, has always inflated their way out of trouble and that was simply part of the charm of the country and, when they devalued their currency too ridiculously, we all headed over there for vacations and dropped off a bunch of hard currencies to pick their economy back up.  France too with Paris fashions flying out the door when the Franc was cheap – since they are now priced in Euros, there's never a sale and now we buy the latest Chinese fashions.  

    I don't really know how the ECB can fix anything the way its structured.  

    Ommm/Jasu – That's the spirit!  

    Now XOM says they are affected by Ebola.  

  64. Butterfly Portfolio Review:  This will be quick – all fine.  

    Well, BTU isn't fine but we can fix that closer to expiration.  OIH stings a bit too as it corrected more than we thought but no worries. 

    Income Portfolio Review:  Looks like we picked the wrong week to press our positions.  We made some aggressive moves in our last review (Monday) and now we're down 4.2% but we still have $470,000 in cash and are using just $119,500 in margin, only about 10% (non-PM).  Anyway, all good now in watch and wait mode – looking to buy more if things get cheaper.  

    I guess, looking over these, that I don't really think the market has much further to fall.  I hope I'm right.  

  65. Gold and such – other than ABX, super low for CEF, KGC; and silver miners CDE, HL, SVM

  66. Phil / BTU

    You mentioned (I think it was in the webinar) that we could buy the Dec short calls and sell something else. The talk was to buy them back for $0.10 or so. How about placing an order for $0.05 and when/if it fills THEN sell something else ($13 Jan’s for $0.55?).

  67. Short-Term Portfolio Review:  Clearly we're not bearish anymore because it's a down day and we lost 6% since yesterday's close.  That's not good because the LTP is down to 15%, so $575K and that plus $160K is only $635K, well below our $645 danger zone.  So we blew the call for a turn yesterday and we added the new SQQQ November spread (not updated yet) to get a bit more bearish but I do almost wish we'd cashed out at $750,000+ now.  

    It's tricky to stay invested during a downturn.  The real review starts when we get to the LTP.  

    • CAKE – Looks OK, right on the line with two weeks to go.  
    • GMCR – Same as $25KP, I'm losing faith and patience.  
    • FAS – Looks like we picked the wrong week to sell puts there.  That's OK because we had a huge win on the short calls and $22.50 should hold on XLF and that should keep us over $95.
    • DXD – That's a terrible price for the Jan $23s, a real rip-off.  According to PowerOptions, we're losing money on the long calls and the short calls at the same time!  
    • SQQQ – Now we have two and, if the market pops higher, we can sell our Jan calls and leave the short Jan calls naked covered by the Nov spread – that would flip us way more bullish very quickly, but only if we're looking strong over the weak bounce line on the Nas (4,450).
    • BIDU – That's coming along nicely.
    • XRT – The spread is $5 and we can take $8.25 off the table if we cash the short $93 puts now.  I say let's go for it, I feel like we should nudge a bit more bullish.  Stop on the short $88 puts at $5 but this line has held so well, it's worth a gamble:
    • FAS – As noted above, we made good money on the short calls and now we're we're waiting for a bounce to sell more.  Same old, same old on this one.  
    • SLW – Brand new and still a good entry.  
    • TSLA – I'm still happy with our range.  
    • YHOO – Also 100% in the money and just waiting 106 days to cash in.  

    Well, nothing wrong with that collection and buying back the XRTs flips us more bullish and we have a plan for SQQQ as well to get even more bullish.  I feel good about that. 

  68. Looking through my ports I do not see any blood on the street. Matter of fact many of my positions have pluses I am very pleasant surprised .

  69. Gold/Scott – All getting very attractive but I still like my ABX, HMY, GLD and NAK (0.50 now).  

    BTU/Akad – Sure, if you can get it, why not?  It certainly makes sense but not if you pay .05 more than you should.  

    Bounces weak so far but just getting back to even would be an accomplishment today.

  70. Phil / Gold:

    You don´t like to trade 3X ETF¨s like  NUGT  and DUST ? 

  71. Blood/Yodi – It depends where you started, etc.  I'm only concerned with finishing at the year's highs now so any small pullback is pissing me off.  

    ETF/Advill – Due to the decay and the possibly LONG time-frame for a recovery, I prefer to stick with the normal trades on gold.  

    Oil testing $91, Dollar down to 80.64, so down 0.5% for the day which makes nothing else very impressive.  Not good for gold that it's flat with a down dollar.   USD/JPY did, in fact hit 108 on the button for an exact strong retrace off 110 – maybe we should play currencies more often… wink

  72. Phil/NAK,

    Do we already have any trade set up or it is just on the wish list?

    Thanks as always

  73. just got new iPhone 6+, all I have to say is it's fucking beautiful and awesome.  As big as it is, you can still hold it very easily in your hand.

  74. glad I covered GPRO

  75. Phil I looked at it this way At the years high I felt my port was actually to high and I set myself a figure where I could live with. Especially lots of my monthly short callers where running in to ITM and I had to do a lot of rolling. Now the stocks have come down a bit my callers as well have cooled down, and I can expect more worthless callers at witching day of the month. But looking today at a lot of my stocks I could not buy them for the price I paid for them. So as you advised one member above I asked myself do I need that stock at today's price 3X !!! Yes I bought 200 BX. and rolled CREE to a lower Jan16 position as we have no Jan17. That is about all.

  76. Yodi:  "No sufres" — if your portfolio gets "too high," you can always send some to my wife, she will make good use of it!!

  77. Rustle / GPRO

    It seems that JPMorgan allowed the CEO to sell now over 5 million shares today market price  and that is violating the IPO conditions, hedge funds become mad with the decision….well maybe is old news but I´m not receiving Bloomberg TV

  78. What happened it shares were released for a charity but then he said on CNBC before, but I'm not selling them so they won't hit the market.  Doesn't excuse the fact that the stock is now overbought again and valuation is crazy.  These are shorts filling.  Will wait till tomorrow then look to write a 95 call or higher for next week.

  79. talk about manipulating a stock

  80. Picked up GPRO calls on the selloff this morning after reading Phil's "ecosystem" comments on the company the other day, just cash 'em.  NICE!!  A year's worth of EggMcMuffins.  Assuming an inclination to eat them.  Thank you, O sage One!!!

  81. Long-Term Portfolio Review:  5% = $25,000 so we dropped $25,000 deciding to ride out this dip.  We knew this would happen and our premise was that it would be, at worst, a 5-10% correction and the good news is that the Portfolio doesn't take more damage than the broad market and that means it's very easy to hedge, which we've been doing in the STP with great effect.  

    Still, IN CASE things get worse, we want to have a clear handle on which positions to press and which ones to jettison.  With the Income Portfolio, it was easy, as we've barely got anything invested yet.  Here we are using $343,750 of margin, about 1/3 of our buying power, so we can't just double down any time we lose money (assuming we like the stock), the way we can in the 10% invested Income Portfolio.  

    • ABX – Love them long-term, happy to buy more if they drop 20%.  Our net is $14.30 on 1,000 shares with ABX at $14.67 and we can roll them for 0.70 to the 2017 $15 puts ($2.85) and drop our net to $13 but that's not really worth it as we have 0.70 less to gain over a longer period of time and the short 2016 $17 puts still have $1.20 of premium to pay us, which is more than we'd gain from the short 2017 $15 puts over the next year – so no point in changing.
    • BBBY – Net $50 with the stock at $65 means this is just a  waiting game. Goes in the vault (forget about it).  
    • CCJ – Net 16.55 @ $17.51 and we love the upside story (Japan reactors coming back on-line, more being built) and we're very comfortable owning 1,000 shares.  No 2017 puts yet and we'll check them out when they are released.
    • HOV – Net $4.05 @ $3.67.  Certainly we don't mind owning 4,000 @ $4.05 ($16,200), so we'll wait for 2017s to come out. 
    • IBM – Net $150.70 @ $187.32.  I WISH we could get an entry at that price!   Another for the vault. 
    • RIG – Net $30.10 and $29.95 @ $30.84.  I didn't realize they were essentially the same net – silly to have both contracts then.  We'll clean it up when the 2017s come out but I have lots of confidence in these (and we have longs as well).  Probably one of my favorite beaten-down stocks.  
    • SGEN – What happened to these guys?  Net $28 @ $35.94 is fine but they dropped hard on us (from $45) in the last month(ish).  Since we only sold 5 for $7 and I wish we'd sold more, let's sell 5 more for $7.  We still have a 2017 roll to look forward to as well.  
    • TWX – We were just talking about them this morning.  Net $59.10 @ $72.67 is a joke!  Before we put it into the vault, let's roll the short 2016 $62.50 puts ($3.70) to 2x the 2017 $65 puts at $7.50 (net $55).  This is FREE MONEY folks
    • WEN – Net $6.20 @ $8.10.  Also free money.  It's WENDY's – a major burger chain.  They've been around since 1969 and have 6,500 stores.  Growth is at about 10%, no worse than MCD or BKW and WEN's p/e is right between them but keep in mind we're not buying them for $8.10 – we're taking a 25% discount, which drops our effective p/e below MCD.  Anyway, just wanted to say I like these…
    • WFM – Another mispriced stock down here.  Our net is $30.35 @ $37.63 so 20% below the current price and 20 contracts is plenty.  Great for a new entry.  
    • CIM – Net $2.75/3.03 @ $3.05 but we get paid 0.36 to hold it (13%) so couldn't be happier.  I'd rather wait until June contracts come out to move our short puts and calls. 
    • NLY – Net $9.71/9.86 @ 10.80 is also great and here we're getting paid $1.20 (12.35%) to hold it.  Not worth rolling yet as we're right on target and have $1.48 in premium to collect (0.10/month) and that's more than the 2017 combos would pay us.
    • AAPL – This one is hurting us but I'm not worried.  In fact, I was thinking of buying back the short calls on the dip.  Now we have two spreads, on 2016 and one 2017 and they both look good to me.  
    • ARO – Breakeven is $3 @ $3.42 and still a good entry.  
    • CLF – The 2017 $10 calls ($2.16) can be rolled to the 2017 $8/15 bull call spread at $1.95 and we can leave the short 2016 $18 calls to expire worthless.  The short 2017 $12 puts are fine as is.  
    • GTAT – No 2017s yet and we're way down but happy to add more when they come out.  
    • IRBT – Still good for a new entry. 
    • LULU – Small entry, on track. 
    • SLW – New entry
    • TASR – On track.
    • TM – Good for a new entry.  
    • WFM – Good for a new entry.  

    Wow, that was way more boring than I thought it would be – I love all these positions!  OK then, nothing to do, the bottom line is we got ahead of ourselves 8 months into 24-month positions and now we're back to where we should be (on track) but that's no reason to panic at all.  The plan was to make 40% in two years and that's 5% a quarter and we're up 15% at the end of Q3.

    The thing is, when we were up 20%, what would have been the point to cashing out when we have such lovely positions that we expect to make another 20% on in the next 5 Qs?  It just wasn't worth the hassle to cash out and the fact that we don't have much to adjust or DD on indicates we need a much bigger dip before we're ready to plow more cash in at bargain prices.  

  82. CRIS is up 10% from Yesterday….

  83. CREE blows chunks.

  84. It's amazing that so many rich people say the dumbest things and think they are funny, latest is from Giants co-owner Steve Tisch:

  85. zeroxzero 

    I like that !!!!!

  86. Phil, current thoughts on CL?   Low of 88.18 and has come all the back to 91.45.  Who is buying it to drive the price back up?  Even CNBC has experts saying it could drop below $80 by Thanksgiving.  Speaking of which, who/what was doing the selling over night to drive the price down?  Are you considering holding a short overnight?

  87. We need a few people to contribute from a state.  $10 is great…just need the state to turn blue…..FireIssa…..


  88. NAK/Pat – It's just a fun, speculative gold play.  The kind of thing you put a few bucks worth under your pillow for 10 years and maybe you get a 10-bagger and probably you have an expired lottery ticket.  

    Congrats Rustle, let us know how it works over time.  

    Good way to look at it Yodi.  

    You're welcome, ZZ. Can't stand Egg McMuffins myself but tedious to say "Bacon Egg and Cheese Croissant Money" each time but that's what I treat myself to on occasion.   Actually I'm most looking forward to a week of Nobu breakfasts in Vegas – you do need to make money each morning to afford those!  

    CREE/Burr – I've never been a big fan but I did think they'd hold $40.  They are just victims of the Global Recession, no reason for a long-term investor to bail.  

    Tisch/Rustle – I don't blame him for that, reporters ask idiotic questions like "are you worried about your team catching Ebola in Dallas" and he makes a joke.  Not a big deal.  My kids are making Ebola jokes with their friends in the kitchen as we speak – that's how people deal with unknown scary things.  Meanwhile, that poor guy's whole family is quarantined for 21 days.  

    Oil/Options – Coming back to $91.40 now but now we're heading into the weekend so not really playable overnight.  Gasoline (/RB) at $2.4206, up $840 per contract off our morning long – that was easy money.  We had a fall from $95 to $88 so call it 7.5% and a bounce there is $1.40 so call that $1.50 and that's $89.50 and $92 (strong) and right between them is $91.25 and you can see how those lines have been working so far. 

    So this is a tricky spot, between the weak and strong bounce lines so, as I said earlier, I'd rather not play given the tendency to go up into the weekend.  Under no circumstances would I ever listen to anyone on CNBC – they were telling people $150 and $200 in June and now that we're down instead, they have people with low-ball figures – all idiots is what they have in common.  No way would I go to sleep with a long or a short – look how much a mistake can cost you!

    Issa/Pharm – Is he beatable?  

  89. Ebola/Phil

    No problem with joking about Ebola but it wasn't a funny joke at all, was just dumb and you know when you are in the spotlight and an owner of a team that stuff like that will bite you.  That's why I believe 90% of celebrities should not have twitter at all.  Cee Lo and Adam Richman both lost show because of twittering dopey things all ready.

  90. Why would the Oct17th USO 33/34 bull call be 0.66 now, and the Oct24th USO 33/34 bull call be 0.40?  

    Buy more time for less money?

  91. Never mind, IB was showing the bid, not the Mid.

  92. Issa….yes he is.

  93. Phil/Explanation of legging in / out of spreads. 
    Good advice I bought a DXD spread at the supposed "midpoint" and as soon as I bought it I had a loss of $100. 
    My father used to call being an arbitrageur having a "license to steal."
    More input on how to handle /avoid this welcome, especially when we are trading the far-off expirations thinly traded. 

  94.  Nice hammer formations today on some of the falling knives.  …..if only.

  95. Tisch/Rustle – I cut a lot of slack to people who are hounded by the press, rather than seeking them out.  

    USO/Burr – Well, when they are real, those are exactly the kind of things you do want to take advantage of.  

    Not a very strong close.  

    Issa/Pharm – Worth every penny then.  

    Legging/Sn0 – Sure, remind me on weekend or slow day (not likely tomorrow).  

  96. OMG, CNBC is so god damn stupid.  They have the idiot trader who told everyone to buy GPRO now saying the put option action was so heavy that someone knew about this and that was the reason why.  Put action was huge because it was so overbought on a technical scale and extremely overvalued and only went up on short squeezes.  Way to try and save face.

  97. Phil – Opinion on port loss.  I had 431 in my account around the Sept 7th time frame.  It's now down to 407 or a 24K loss.  I have 1 port with long and hedges combined.  Seems like that's a 5.5% loss.

    My margin used is 77K.  

    What do you think?   

    I basically have had 0 hours since Sept 7th to even trade, except to throw on a few SQQQ DXD hedges as I read them.

  98. Ebola Patient in Dallas Lied on Screening Form, Liberian Airport Official Says

  99. Beijing Warns of ‘Chaos’ if Hong Kong Protests Persist

  100. Burrben:  i know nothings about CREE as an investment, just today I was buying more CREE-equipped flashlights – Olights, Nitecore and others — b/c those are the best high-intensity, low draw led's I've used.  Here's a 5000 lumen searchlight: Olight X6 Marauder 5000 Lumen Rechargeable LED Searchlight with 6 x CREE XM-L T6 LEDs   definitely overkill for my needs. 


    My favorites are two:  a 3 inch long, 1 CR123 battery, fits-in-your-jeans-watch-pocket 400 lumen with 4 light levels adjustable bright enough to get you out of a dark woods or signal from a boat or liferaft at night.  Ironically, I mostly use the small lights in the daytime, when your eyes are bright-adjusted and you can't find anything in dark drawers or closets.   But,ounce-for-ounce, this M-22 tactical light, which adjusts from 20 lumens / 30 hours up to a blinding 950 lumens / 1 hour using 1 CREE XM-L2 led using 2 CR123s is the best power-to-weight ratio I have found in a super-adjustable and versatile light, which also has a carved steel bezel designed for, um, "tactical" use.  Just saying.

  101. Teenage Pregnancy and Abortion Rates Plummet With Long-Acting Female Contraception, Study Says

  102. Hollywood Salaries Revealed, From Movie Stars to Agents (and Even Their Assistants)

  103. Don’t Go To Las Vegas To Gamble — Go For The Food

  104. This Is What a 4% Market Drop From All Time Highs Does To Investor Sentiment

  105. The New York Times’ Thinks the EU Can “Afford” Mass Unemployment but Not “More Government Spending”

  106. A Cargo Ship Just Completed A Historic Trip Through The Northwest Passage

  107. Global Retailers Could Suffer From Hong Kong Protests

  108. Argentine Stocks Continue Crash After Last “Moderate Voice” Resigns


  110. Is This Why Christine Lagarde Is Suddenly “Quite Worried” About Disconnect Between Market, Economy?

  111. LOL:

    Ben Bernanke: I tried to remortgage but was turned down

    Former Federal Reserve chairman Ben Bernanke admits that he failed to remortgage his home recently, and suggests that banks aren't lending enough

  112. Zero – That's great and all, but CREE is now down 50% from where I bought it.  Even with lots of premium sales, it's been tough to keep up with that kind of drop.  On Thur they just reported crap earnings.

    I'm really thinking of just moving back into playing index's and futures.  

  113. Apple Takes Surprise Analyst Downgrade From Deutsche Bank

  114. TSLA – Here is the early reveal to Elons tweet

    dual motor model s. Big deal…..not!

  115. Note the D after the P85

  116. Burrben:  I subscribe to the NYTimes and any other of publications in which stock I would never thinking of investing.  I also admire Elon' Tesla efforts greatly – we need a less-combustible future – but I have a family to feed and have shorted the company mercilessly and with great success.  I do draw the line in a few places, though –  no shares in XOM, for example.  Perhaps it balances out. 

  117. From Bloomberg, Oct 3, 2014, 3:10:41 AM

    Demonstrators gestures as they gather outside the Chief Executive’s office in Hong Kong, China, on Oct. 3, 2014. Photographer: Tomohiro Ohsumi/Bloomberg

    Stocks gained, with a European index
    recovering from its biggest loss in 15 months, and the U.S.
    strengthened versus major peers before the world’s
    largest economy reports payrolls data. Hong Kong shares rallied.

    To read the entire article, go to

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

  118. From Bloomberg, Oct 3, 2014, 2:37:52 AM

    Oct. 2 (Bloomberg) — Allan Zeman, chairman of Lan Kwai Fong Holdings Ltd., a bar and restaurant operator in Hong Kong, talks about the pro-democracy demonstrations in the city.
    He speaks with John Dawson on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    Hong Kong pro-democracy protesters
    strengthened barricades around the government’s main office
    building, digging in ahead of talks pledged by top official
    Leung Chun-ying aimed at defusing a week-long standoff.

    To read the entire article, go to

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

  119. From Bloomberg, Oct 3, 2014, 3:39:23 AM

    Mario Draghi, president of the European Central Bank, speaks during a news conference to announce the bank’s interest rate decision in Naples, Italy, on Oct. 2, 2014. Photographer: Alessia Pierdomenico/Bloomberg

    Mario Draghi hasn’t moved any closer
    to full-blown quantitative easing.

    To read the entire article, go to

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

  120. From Bloomberg, Oct 2, 2014, 11:41:42 AM

    This undated file image posted on a militant website on Tuesday, Jan. 14, 2014 shows fighters from the al-Qaida linked Islamic State of Iraq and the Levant (ISIL) marching in Raqqa, Syria. Photograph: Militant website via AP Images

    Islamic State extremists have herded hundreds of women to be given to its fighters in Syria as a reward or sold as sex slaves and have summarily executed women in professions, according to the United Nations.

    To read the entire article, go to

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

  121. From Bloomberg, Oct 3, 2014, 3:09:59 AM

    Demonstrators sit on a road in Hong Kong, China, on Oct. 3, 2014. Photographer: Tomohiro Ohsumi/Bloomberg

    Hong Kong stocks climbed, with the
    benchmark index headed for its biggest gain in two weeks, as
    Chinese developers surged and investors speculated the economic
    impact of the city’s pro-democracy protests will be limited.

    To read the entire article, go to

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

  122. From Bloomberg, Oct 3, 2014, 2:10:43 AM

    Demonstrators sits in protest in front of the gate leading to Hong Kong’s chief executive Leung Chun-ying’s office in Hong Kong, China, on Oct. 2, 2014. Photographer: Tomohiro Ohsumi/Bloomberg

    Chinese companies with almost no
    business in Hong Kong have gotten caught up in the city’s
    biggest stock-market selloff in eight months. For two of the
    world’s largest investors, that spells a buying opportunity.

    To read the entire article, go to

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

  123. From Bloomberg, Oct 2, 2014, 7:21:00 PM

    U.S. Attorney Zachary Fardon. Photographer: Andrew A. Nelles/AP Photo

    A high-frequency trader was indicted
    for “spoofing” — placing and immediate canceling orders as a
    way to manipulate commodities markets — in what the U.S.
    Justice Department says is the first criminal case of its kind.

    To read the entire article, go to

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

  124. From Bloomberg, Oct 3, 2014, 12:42:07 AM

    A customer pays for merchandise at a RadioShack Corp. store in Peoria, Illinois, U.S. Standard General said in a filing last month it’s working to improve RadioShack’s liquidity ahead of the holiday season. Photographer: Daniel Acker/Bloomberg

    RadioShack Corp. (RSH), the electronics chain trying to stave off bankruptcy, reached an agreement with a consortium led by Standard General LP to refinance about $590 million of loans to re-stock ahead of the holidays, a person familiar with the matter said.

    To read the entire article, go to

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

  125. From Bloomberg, Oct 2, 2014, 7:39:35 PM

    The JPMorgan Chase & Co. headquarters in New York City. Photographer: Ron Antonelli/Bloomberg

    JPMorgan Chase & Co. (JPM), the biggest U.S. bank, said a previously disclosed data breach affected 76 million households and 7 million small businesses.

    To read the entire article, go to

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

  126. From Bloomberg, Oct 2, 2014, 5:42:32 PM

    While investors traditionally negotiated prices for U.S. Treasuries by telephone, they’re increasingly turning to computer-based marketplaces for a range of price quotes from different dealers. Photographer: Thomas Trutschel/Photothek via Getty Images

    Human traders are increasingly losing out to machines in the world’s biggest bond market.

    To read the entire article, go to

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

  127. Watch this video at

    Obama: Hard to Swallow Tax Cuts for Top 1 Percent

    Oct. 2 (Bloomberg) — President Barack Obama comments on the U.S. tax system during a speech at Northwestern University in Evanston, IL. (Source: Bloomberg)

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

  128. Watch this video at

    Mario Draghi’s Own Words on ECB Purchase Plan, Inflation

    Oct. 3 (Bloomberg) — European Central Bank President Mario Draghi speaks at a news conference in Naples, Italy, about interest rates, the euro-area economy and details of the ECB’s purchase of covered bonds and asset-backed securities. (Excerpts. Video courtesy of European Central Bank. Source: Bloomberg)

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

  129. From Bloomberg, Oct 3, 2014, 3:46:54 AM

    UBS AG (UBSN) dropped in Zurich trading
    after Swiss newspaper Le Temps reported the bank may be facing a
    fine of as much as 4.9 billion euros ($6.2 billion) in a French
    probe of allegations it helped clients evade taxes.

    To read the entire article, go to

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

  130. From Bloomberg, Oct 2, 2014, 7:00:01 PM

    Feb. 13 (Bloomberg) — If you are in the market for a $2 million car you are in luck — Bugatti is looking for a buyer. Volkswagen’s Bugatti has 40 Veyron super-cars to unload.
    In order to sell them the company is luring potential buyers to enticing locales for high speed test drives. Bloomberg went to Palm Springs, California to see how Bugatti sales manager John Hill gets the elite to buy Bugattis. (Source: Bloomberg)

    A $1.85 million Bugatti with platinum
    trim, a silent electric Lamborghini that hits 60 miles an hour
    in three seconds, and a $570,000 Rolls-Royce with in-built
    dining tables — when the super rich hit the road next year they
    will be given more choice than ever.

    To read the entire article, go to

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

  131. From Bloomberg, Oct 3, 2014, 4:00:00 AM

    ECB President Mario Draghi said that while survey indicators “confirm the weakening in the euro area’s growth momentum,” it’s still on track for a “modest economic expansion in the second half.” Photographer: Alessia Pierdomenico/Bloomberg

    Stagnation in the euro area may be
    around for some time to come.

    To read the entire article, go to

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

  132. From Bloomberg, Oct 2, 2014, 7:01:00 PM

    Mark Carney, governor of the Bank of England. Photographer: Simon Dawson/Bloomberg

    Mark Carney might find a fresh
    assessment of economic history sharpens the divisions between
    rate setters on both sides of the Bank of England debate.

    To read the entire article, go to

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

  133. From Bloomberg, Oct 3, 2014, 3:30:51 AM

    Goldman Sachs Group Inc. says it’s
    losing confidence in its forecast that Brent crude will recover
    to $100 a barrel next year.

    To read the entire article, go to

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

  134. From Bloomberg, Oct 2, 2014, 10:04:27 PM

    Toshiro Muro, chairman of Daiwa Institute of Research. Photographer: Tomohiro Ohsumi/Bloomberg

    The Bank of Japan may need more time
    to achieve its 2 percent inflation target and the country can’t
    ignore harm caused by an abrupt weakening of the yen, said
    Toshiro Muto, a two-time contender to lead the BOJ.

    To read the entire article, go to

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

  135. From Bloomberg, Oct 3, 2014, 2:31:18 AM

    The Japanese yen goes into freefall. China’s fragile economy tips over the edge. A wave of profit-crushing deflation comes washing over the U.S. and Europe. Investors panic. Photographer: Tomohiro Ohsumi/Bloomberg

    The Japanese yen goes into freefall. China’s fragile economy tips over the edge. A wave of profit-crushing deflation comes washing over the U.S. and Europe. Investors panic.

    To read the entire article, go to

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

  136. From Bloomberg, Oct 2, 2014, 11:55:16 AM

    Artist Jeff Koons at the opening of his Whitney Museum exhibition with “Moon (Light Pink)” sculpture mounted on the wall behind him. A yellow version of the piece will be offered at Sotheby’s in November. Photographer: Timothy A. Clary/AFP via Getty Images

    Multimillionaire British collector Frank Cohen waited eight years for the Jeff Koons sculpture he had purchased to be completed. It turned out that “Balloon Monkey (Orange)” was too big for his nonprofit art center in London.

    To read the entire article, go to

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

  137. From Bloomberg, Oct 3, 2014, 3:33:32 AM

    Shinzo Abe, Japan’s Prime Minister, told lawmakers in Tokyo that big firms and exporters should pass on the benefits they have reaped from the weaker yen to smaller enterprises. Photographer: Kiyoshi Ota/Bloomberg

    Japan’s government moved to address
    mounting concerns about the weakening yen by pledging assistance
    for small companies, as the central bank governor said the
    decline wasn’t a minus for the economy.

    To read the entire article, go to

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

  138. From Bloomberg, Oct 3, 2014, 3:13:15 AM

    Economists pushed back their
    forecasts on the timing of additional easing by the Bank of
    after the yen weakened to a six-year low and business
    confidence improved.

    To read the entire article, go to

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

  139. From Bloomberg, Oct 3, 2014, 1:55:26 AM

    Oct. 2 (Bloomberg) — Fraser Howie, a director at Newedge Singapore and co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise,” talks about the pro-democracy demonstrations in Hong Kong.
    He speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    China’s tourism board has stopped approving mainlanders’ group tours to Hong Kong because of the spread of pro-democracy demonstrations in the city, amplifying the impact of the protests on the economy.

    To read the entire article, go to

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

  140. From Bloomberg, Oct 3, 2014, 12:12:57 AM

    Oct. 21 (Bloomberg) — Today the air pollution was so
    thick in Harbin, in northern China, that visibility was reduced
    to fewer than 33 feet in some parts of the city. In response to
    the conditions — which are equivalent to levels that exceed
    “hazardous” on the air-pollution measurement system used by the
    U.S. State Department in major Chinese cities — Harbin shut
    down some schools, canceled flights and sent out relevant
    officials to stop polluting behavior.

    To read the entire article, go to

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

  141. From Bloomberg, Oct 3, 2014, 12:03:33 AM

    Not doing enough.

    European Central Bank President Mario Draghi had nothing new to say at his news conference yesterday, which is a pity. Mainly, he confirmed measures previously announced to stimulate Europe’s flatlining economy — steps that looked too timid even before the latest dire news on euro-area inflation.

    To read the entire article, go to

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  142. From Bloomberg, Oct 2, 2014, 11:27:13 PM

    Under siege by a soft-power army.

    On Sept. 25, just two days before pro-democracy protests began in Hong Kong, the Wen Wei Po, Hong Kong’s most prominent pro-Beijing newspaper ran a column purporting to expose the “three channels” by which the Central Intelligence Agency had infiltrated Hong Kong university campuses. It was a well-timed, if a bit off-the-wall conspiracy theory designed to undermine the student movement that has since taken over large swathes of Hong Kong. Indeed, in a related article published the same day, the paper went so far as to suggest that “U.S. forces” had recruited 17-year-old protest leader Joshua Wong while he was still in junior high school.

    To read the entire article, go to

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  143. From Bloomberg, Oct 2, 2014, 3:49:45 PM

    Without pensions, is this America’s new retirement plan?

    President Barack Obama said today that the middle class is squeezed by stagnant wages, slow job growth and ever-higher college tuition. A new report shows that more and more U.S. workers are getting squeezed in another way: pushed into inadequate retirement plans by the country’s largest employers. Worse, their employers acknowledge as much.

    To read the entire article, go to

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  144. Good morning! 

    Asia up about half a point but it was one huge 500-point pop in the Hang Seng to get there and flat otherwise so I'm a bit suspicious. 

    Germany is closed to day but the rest of Europe is up almost 1% into lunch, but it was a gap up open with no progress since so, again, not too convincing.  

    Our Futures are up about half a point @ 16,786, 1,947, 3,995 and 1,095 and of course we'll want to see 16,800, 1,950, 4,000 and 1,100 before we are the least bit impressed. 

    Oil just slipped below $91 for a good short with tight stops.  $90.50 should be good support so don't be too greedy.

    Gold $1,207 with the Dollar back at 86, silver $17.05 and I still like the long on /SI over the $17 line as well as copper ($3.003) over the $3 line (/HG).  /NG is $3.997 and /RB is back to $2.40 but no play today as it's riskier than yesterday.  

  145. Portfolio/Burr – I was thinking about this last night and it seems that the only reason I'm still bullish is because "THEY" have saved the market from minor corrections over and over again the past few years so I think I'm just scared of being short (or all cash) and missing out.  


    That's not actually a good reason to be long, is it?  Still, we are essentially following the same pattern we have before so, as long as the S&P can stay over 1,950 and make progress next week – then we can assume the powers that be have not lost control – yet.  

    We had a reverse on pretty good volume yesterday but, on the whole, we're still in a dangerous spot. 



    As you can see, we did a trade review and there's not really any stock in our Long-Term Portfolios that I wouldn't be happy to own 2x of if the market drops 40% (meaning I'd spend about 60% more to DD and average 80% on 2x with the market at 60%).  Given that math and my expectations that, from a 60% level we'd likely be back to 100% in 2 years – then we're looking at our LTP dropping to $200,000 (as we're losing $25,000 per 5%) while the STP gains about $200,000 to $300,000 so we net $500,000 with the market down 60% and we DD there which changes our upside delta to $50,000 per 5% recovery and a move back to 100% would take us to $900,000 in 2018, which is still on track for our 20% annual gains. 

    So, as a LONG-TERM investor, I'm not going to be upset if the market does tank and, of course, we might make some better adjustments along the way to mitigate some of the losses if it does.  THAT is the basis under which I'm willing to stay long – that we have nice positions that I still have faith in and, even if I'm wrong and we collapse, there's plenty of cash to go bargain-hunting with.  

    Keep in mind though that we are essentially BALANCED in the STP and LTP so I don't expect any great changes in the net balance, even on a big market dip and I'll be THRILLED if we have $650,000 left (now $740,000) when the market is down 30-40% from here – that's the opportunity of a lifetime (or since 2009, anyway).  In the Income Portfolio, we're only 10% invested so we could be wiped out on a massive dip and still be happy that we have 80% left to go shopping with ($400K) plus whatever in the STP.

    So, do I trust the market?  Not at all but that's the way we've been playing it.  If I did trust the market, we would have been a lot more bullish this year but I'm very happy with the way we played it – even though I was beginning to think we'd regret it only a few weeks ago, when we were finally topping 2,000 for a couple of days in a row. 

  146. There's $90.84 on oil already, that puts the stop at $90.85 – gotta practice to pay for my Nobu room service! 

  147. Nobu………….roger!

  148. I love how these charts always stop by the top 5% – because the top 1% starts to get sickening:

    The charts in the census report are very interesting.  

    Every category is down in the last 10 years except the top 10%.

    Meanwhile, inflation is up 25% over that period.  

  149. $90.55 baby!!!  Stop is now $90.65.  

  150. From Bloomberg, Oct 3, 2014, 4:32:57 AM

    The Westfield Group company logo sits on display at the Westfield Centre, in London, U.K. Photographer: Jason Alden/Bloomberg

    For the first time in four years there are signs of life in Europe’s market for asset-backed securities.

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  151. Looks like long Russell and short NYSE was the way to go! NYSE below its 200 DMA now.

  152. Well, they look like reversing candles but the volume is a little light.

  153. phil, PNRA has gone up quite steadily. might it be time to perhaps sell some calls?