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Fabulous Friday – Counting our Blessings in the Market Collapse

Wheeeeeee – isn't this fun?  

We're certainly having a good time and, if you've been following our posts and getting our trade ideas – you probably are too as yesterday's DXD trade idea, for example, made 100% in a day for the 2nd time this week!  

Now let's say you put just 2% of your portfolio into a hedge like that against a worry that we'd have a 5% drop.  Well, on Tuesday we collected 100% of that 2% on a 2.5% drop and yesterday we collected another 100% of 2% on another 2.5% drop – there's 4% back and we never even fell 5%.  This is how you hedge and hedging is what we teach you to do at PSW (sorry, Memberships now full, try the wait list for next month).  

Of course, if you find yourself on the wrong side of the market, the Futures also make excellent hedges and it just so happens that we teach that as well!  We did a Futures Webinar just this Wednesday and you can watch us make money live on the replay.

 Those are the hedging strategies that led us to call for shorts yesterday (right in the morning post) at 1,100 on /TF (Russell Futures), 4,040 on /NQ (Nasdaq Futures), 1,965 on /ES (S&P Futures) and 16,900 on /YM (Dow Futures).  Aside from the Alert we sent to our Members, we also Tweeted out and Facebooked? the trade ideas – THAT'S HOW SURE WE WERE!  If you followed those, we closed the day at:

  • Dow (/YM) 16,550: down 350 points at $5 per point – Gain of $1,750 per contract 
  • S&P (/ES) 1,918: down 47 ponts at $50 per point – Gain of $2,350 per contract 
  • Nasdaq (/NQ) 3,950: down 90 points at $20 per point – Gain of $1,800 per contract 
  • Russell (/TF) 1,060: down 40 points at $100 per point – Gain of $4,000 per contract 

The margin requirements for the Futures trades are roughly $4,000 per contract so we're talking net gains of roughly 50-100% IN A SINGLE DAY on our hedges.  It's a very simple process – we send out an alert pre-market and we have a Live Member Chat Room where we discuss these and other trade all day long as the market progresses – this allows us to adapt to changing market conditions very quickly.  

There are not the vague, empty promises you get from other Newsletter services – this is our LIVE performance!  We gave you the trade idea yesterday, for free – no credit card, no firewall, no nothing – and now we're discussing the results.  Usually we don't give out free trades in October but, this being a crisis and all – we felt it was a valuable public service (plus it sold a lot of new Memberships to people who realized these are JUST the free ideas!).  

Of course, our whole Short-Term Portfolio is a hedge for our 2 Long-Term Portfolios, so we are very happy campers as we closed the day up 63%.  Of course our Income Portfolio and Long-Term Portfolio (one is Conservative and one is Aggressive) both lost some money, but, as we discussed extensively in Member Chat this morning (very good discussion on Portfolio Management Techniques as well as Crash Management, Following the Crowd and Valuation Studies in a Down Market), we are more than happy to use the short-term cash gains to add to our long-term positions.  

And what do we do when we add more long-term positions?  We buy more short-term hedges!  See how easy this concept is?  At the moment though, we're playing for a bounce but we're not expecting too much as those 200 dmas are starting to act like magnets for our indexes.  

That's fine, as this is the 5-10% correction we had been waiting for.  In fact, just over a week ago, in our Live Member Chat room at 9:41am  - I said:

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

INDU DAILYAs you can see from Dave Fry's Dow chart, that was a pretty good call, as were our EWJ Oct $12 puts at 0.20 (from last Tuesday's post) that are now 0.85 – up 350% in 10 days – yet another nice hedge that was given away for free.  We really don't mind giving away free trade ideas because – unlike other market newsletters – we have hundreds of them.  

In that same post we called gold (/YG) long at 1,200 (now $1,221 and up $750 per contract) and silver long at $17.15 (now $17.30 and up $750 per contract too) and GDX has now completed the down pattern we were following that day so we'll be pulling the trigger on some miners back in our Live Member Chat Room today and next week.  

Yesterday we flipped long into the close with a very aggressive TNA bull call spread into next week's expiration.  It was the October $58/60.50 bull call spread, which filled at 0.95 and finished a bit lower with TNA at $57.50 into the close but we needed a long for our Short-Term Portfolio, as well as our $25,000 Portfolio.  

RUT WEEKLYThis morning, in Member Chat, we went long on /TF (Russell Futures) at 1,057 - just in case the Fed speak isn't as bearish as we thought it would be.  We're not enthusiastic about it and we do expect to complete our down move to 16,500, etc but we're already very bearish, so we like to have a little balance.  So far so good at 1,062 but we'll stop out at 1,060 if it fails with a 2-point trailing stop ($100 per point, per contract).

No matter which way today goes, we intend to keep a bearish stance into the weekend.  In fact, like Wednesday, when we shorted the open – the higher the market goes today the more we'll see it as a chance to beef up our shorts.  Still, I think it's more likely the relentless Fed hawks will give us the nice, blow-off bottom we've been waiting for – and then we can hit the Buy List!  

Have a great weekend, 

- Phil

 


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  1. Oil Lines

    R3 – 90.93
    R2 – 89.44
    R1 – 86.57
    PP – 85.08
    S1 – 82.21
    S2 – 80.72
    S3 – 77.85

    S3 happens to be the next support line on a long term chart – coincidence…


  2. I love Google Now and it seems to be pretty smart – not Watson yet, but maybe! That data mining is paying off I guess.

    http://lifehacker.com/smartphone-assistants-go-head-to-head-google-now-comes-1644478146

    For the most important aspect—the results completely and directly answering the question given—Google Now answered completely 88% of the time, with Siri at 53%, and Cortana at 40%. This means, that in general, Google Now was able to directly answer the question with the information it provided immediately, with no additional digging required.

    Smartphone Assistants Go Head to Head, Google Now Comes Out On Top


  3. And getting smarter:

    http://techcrunch.com/2014/10/09/googles-conversational-search-gets-smarter-adds-opentable-integration/

    Google’s conversational search is a great example of how well the company can handle natural language queries. It’s not just about the initial search (“How old is Barack Obama?”), though, but also about the follow-up, which means the service has to be able to understand pronouns and the keywords they relate to (“Where was he born?“).

    Today, Google is updating its mobile apps with an even smarter version of conversational search that includes, among other things, support for making OpenTable reservations.


  4. iRobot controls moving to the 21st century:

    http://www.wired.com/2014/10/irobot-android-app/

    Now, iRobot’s redesigned system can control all the robots in the company’s defense and security stable. The new control hub is called the uPoint Multi-Robot Control system, and it’s an Android app. It supports hopping between individual robots, so if you have several in your setup and simply tab over to control a different machine. With it, controlling the robots is even easier than driving a remote-control car.


  5. Our Supreme Court in the pocket of big money:

    http://www.esquire.com/blogs/politics/The_Supreme_Court_Means_Business

    The conservative majority among the Nine Wise Souls may be willing to let the Court throw the occasional head-fake toward reasonability on things like marriage-equality, and it may prefer to slowly core out precedents it doesn't like rather than overturn them entirely and all at once, but on the things it really wants to do, it's as serious as they can be. One of the things it really wants to do is open the political system to the new Gilded Age of corporate oligarchy. One of the other things they really want to do is block off any avenue of political resistance to that goal, particularly at the ballot box. They really are dedicated to restricting the franchise as much as they can, and to allowing the states to do whatever they want in furtherance of that purpose.


  6. Oil/Phil- Is OPEC supposed to make some statement about production today? If they are could a statement about cutting production have an impact on the slide in oil or is the need to get out of those fake orders outweighing anything OPEC could say about production? Just curious what your thoughts are on the subject if indeed OPEC is making a statement today. Also do you know when this would occur?



  7. I think Elon might be cutting back on his tweeting after today.  I'm sure he's going to get some blowback from shareholders.


  8. Good morning!  


  9. Good Morning!


  10. Google Now/StJ – I use it on my iPad – it's way better than Siri and I do notice that GOOG is constantly tweeking it to make it better.  

    Ouch – so much for longs – game off until/unless we cross back over 16,550, 1,920, 3,950 and 1,060 – at lest 2 of 4 to go long. 


  11. Today, there will be no talk of the markets, ebola or elections…

     

     

    We're off to Disneyland!  Good trading everyone!  :)


  12. Back to Google Now – That is an actual danger to IPhones because, ultimately, the Star Trek communicator model makes sense.  Why do you need to look at a screen at all when a little pin you wear on your shirt can tell you anything you need to know?  The battery life would be huge with no screen and the form factor can be anything.  So, in the end, what will matter is who makes the best digital assistant and that will follow through into car and home smart appliances and, ultimately, robots.  Asimov was right 70 years ago – it's all about who makes the best positronic brains – the rest is just hardware…

    Oh no, flipped right back up.  /ES good over 1,925, /NQ 3,950, /TF 1,165 (missed the flip – too fast), /YM 16,600 – don't be greedy, this is crazy!  


  13. iRobot/StJ – I remember reading a report that indicated they expect a typical army deployment in the Future to be one human and 6 robots.  That's why IRBT is my stock of the century, they are well on their way to getting those kind of contracts for tens of thousands of robots (and it will be so much easier for us to go to war!).  

    Court/StJ – They are just noticing this now?  

    OPEC/Craigs – As far as I know, they won't meet until about Thanksgiving.  Will be very unpolitic for them to raise prices right before Christmas so I think, if they are going to do something, it will have to be quietly and soon, not at a meeting.  Most likely the Saudis will bite the bullet on 1mb and the rest may try to cut a bit and may actually cut a bit if they see it working but that's a process that will take weeks to resolve.  Meanwhile, $85 remains the fair price given the current conditions so, down here, I look for opportunities to play /CL long, not short.  Shorting ended when we failed $90, for the most part.  

    As noted in earlier chat (end of yesterday's post), the overhang of contracts at the NYMEX makes long betting very dangerous too so, on the whole, I prefer the non-committal USO long spread, the same way I preferred the non-committal SCO spread when we thought we were at the top.  

    LOL – and down we go again – what a mess this market is!  

    Musk/Rustle – Isn't he supposed to be a genius?  That was really stupid, raising people's expectation and then coming out with that nonsense.  $30,000 more for another engine?  How is that going to give them more sales and, even if it does, the upsell of another engine and toys probably doesn't have a huge margin.  People want the cheap car he promised but that's impossible, so he's vamping…

    Disney!/1020 – Have a great time, I'd be jealous but I'm just 20 days away from a week in Vegas!  

    Vegas, by the way guys – sign up now!!! 

    Come join us at our annual Las Vegas conference, Nov. 9-10th! Come beat Phil at Poker, and join us for a LIVE trading session Monday morning!

     

    http://www.philstockworld.com/nov2014-conference-signup/

     


  14. Oil/Phil- Kind of amazing how oil keeps finding its way back to that $85 point you talked about for the longest time!


  15. what is the current long USO spread?  thankrs. 


  16. TXN really hammered today (down 7.6%) in the Butterfly portfolio.  I hope the short puts will chill out a bit by expiration, since the drop is related to MCHP warning for the quarter.  Short calls are near zero.  Any reason to reposition or just chill till expiration as usual?


  17. Terra / USO – Jan 32/34 BCS for $1.00. I believe it was in the Oct 8 post.


  18. You'd think they announced accounting fraud with TSLA.  Wondering if it's too soon to write a put for next week on it, like the 215's.  Waiting for now.


  19. Wish I wrote more than 1/6 of a position on GPRO yesterday.  Not going to get that chance again.


  20. Actually not that amazing, Craig.  If you look at the LONG-TERM chart of oil, the range (if we ignore the spike caused by Bush, the moron) is $60-$120 and the mid-point is $90 and we adjust that for a Dollar that's up 5% and, PRESTO!, $85.   

    That's one thing TA is useful for – in LONG-TERM studies, what you are looking at is the behavior of Millions of investors making Billions of decisions with Trillions of Dollars.  Some of them, most of them, may be idiots but there are idiots on both sides and they tend to balance out and those big trend lines really are a generally good indication of what the "smart" money is really willing to pay for a thing.

    Obviously, you have to then factor in changing conditions but at least it gives us a starting point to make a call.  Over 8 years on this chart, there are wars and booms and busts and terrorists and collapses and demand surges and hurricanes, etc, etc. and, through all that BS, we average $90 – spending half the time above and half the time below.  It could be argued that the proper band is $50 – $110 if we throw out both spikes and that makes the technical bottom $75 and $75 does happen to be the global avg cost of production but I think that's the point at which we really can't go lower for an extended period and I think, giving the current global unrest, that $85 is more realistic for a target.  

    Until/Unless we get new facts, of course.  

    USO/Terra – We picked up 30 of the Jan $32/34 bull call spreads for net 0.96 in the STP.  Just $3K to hopefully make $3K but the $32 calls are $1.70 so, at around $1.25, our plan would be to roll out to a April spread and leave the short $34 calls.  That means, ignoring the short calls, we'd actually be taking out more cash than we put in and we could use that to buy a wider April spread (the $30s are $3.50 and the $33s are $1.80 for net $1.70 on a $3 spread that's $2 lower).  

    TXN/Rev – We'll just have to ride out the dips.  I'd be inclined to just roll to the same short puts in a longer month and give them a chance to recovery.  Keep in mind, it's Hawk day and we do HOPE this forces a nice market bottom.  Earnings are after expiration (10/20):

    TSLA/Rustle – Certainly at least Twitter fraud!  cheeky

    Our NFLX shorts doing well already.  

    Holy cow!  16,550, 1,909, 3,895 and 1,052.50 – MADNESS!  

    That's another 2% drop on the Nas – good thing it was our favorite short.  Dow only fell 0.29% today – good thing we cashed in the DXDs.  See how well the 5% Rule guides us?  


  21. phil// I have XCO at 5:00.  Now it is around $2.25.  Is this a good time to add more or wait?

    Terrapin22:  USO Long recently traded was jan 32/34 for $1.00 20 contracts


  22. WMT holding strong at 78


  23. VIX 19.99 – Party! 

    Prince and The Revolution – 1999 from Willy Lunaspot on Vimeo.


  24. Phil/RIG/LQMT

    LQMT – 0.17!

    RIG – below 29!

    But markets are going down…and don't know how much they will fall. In addition to USO long spread can you suggest any straight USO call like 35 Jan 15 or 35 Apr 15.

    Thank as always


  25. $LINE getting another 9% wack.  


  26. Q – Regarding short puts with no "juice" or time premium left.  What to do?

    For example, I have -20 PLX Nov14 3P @ .25.  PLX trading now at 2.23.  Puts trading at .75x.90.

    Parity value would be 0.75, so bascially nothing left to decay.

    If I take ownership I would have 2000 shares at $3, or $6000 worth.  With the current price of 2.23, I would lose $1540.  If I bought the option back at 0.75 (parity) I'd only lose 1016.

    Do I believe in the company?    Hmmm…  I'm basing it mostly on Pharm's belief.  What to do?


  27. GOOG / Phil – The only thing that I would worry about IBM is that with their data prowess, GOOG has a  Watson on every phone 10 years from now for free! I have seen first hand what they have done to the Machine Translation business for example. What used to be a very specialized field is now in the hands of everybody who owns a smartphone. Obviously not perfect, but still ahead of what the US government paid millions for 30 years ago… There are not too many people who can match GOOG there. AAPL doesn't seem to be that interested yet (Siri is not really based on their data) and MSFT seems to be playing catchup although they certainly have the R&D capacity and a better CEO. It's really GOOG's game to lose right now it seems. 


  28. How soon do you short Dave and Buster's which is not in great shape to begin with.


  29. XCO/Rookie – Well, had we not just taken such a big hit from GTAT, I would be gung-ho to DD on XCO in the Income Portfolio but, at the moment, we'll be thrilled to get our money back.  If you are in at $5 and don't mind riding them out long-term, I'd sell the 2013 $5 puts for $3.10 and the $3 calls for 0.40 to knock the basis down to net $1.50/3.25.  So, if they get back to $3, you still make $1.50 which, even over 2 years is a good return on $5 or, if they go lower, then you have your DD at net $1.90, not net $2.32.  

    USO/Pat – It's way to early to stick our necks out on straight calls.  As noted about, our spread is very flexible and makes 100% if it's right – what more can a straight call do for you?  

    LINE/Burr – Told you I don't like them….  blush

    Dollar hopefully topping at 86 may give the market a break but, unfortunately, we still have George at 1 pm, Fisher at 1:30 and, if there are any survivors left, Lacker at 3pm.  That's not the kind of data points you want to go long into.  HOWEVER – if they are even the tiniest bit doveish – could still boost us into the close as it would be completely unexpected.  Better if they are true to form and we bottom at close for a blow-off bottom at 10% next week.

    Also, this may be just selling pressure from Europe who were very upset Draghi wasn't writing checks yesterday – that may abate after 11:30. 

    Updated monthly (not the short-terms) 5% Rule levels are:

    • Dow 17,350 to 16,600 is 750 = 4.3%.  We're waiting on the drop to 16,500, which is the rounding of a 5% drop to 16,482.50.   So, using the 850 anticipated drop, the bounce lines would be 170 points at 16,670 (weak) and 16,850 (strong).  
    • So, at the moment, the Dow's downward slide is paused at the weak bounce line but that's a good sign that the 5% line is likely to hold (since it hasn't been tested yet but it's theoretical bounce line is acting as support).  If we move up from here and get over strong at 16,850 – that then becomes a bullish reversal as we make an air turn over the -5% line.  
    • S&P 2,010 to 1,920 is 90 = 4.5%.  Same as above with the 5% line at 1,910 and 100 points down means 20-point bounces so 1,930 (weak) and 1,950 strong.  
    • Nasdaq 4,600 to 4,300 is 300 points = 6.5%.  This one is past the overshoot (6%) but right where we predicted we'd be back on 10/2.  So 4,360 is weak but I'd want to see 4,425 before I call a strong bounce  
    • NYSE 11,050 to 10,350 is 700 points = 6.3%.  Overshoot, like the Nas, and we can watch for 150-point bounces to 10,500 (weak) and 10,650 (strong) and 10,500 is what we predicted last week so we have EXACTLY a one-unit overshoot.  
    • I don't really think anything has fundamentally changed since last week other than Europe and Asia data showing what we already knew.  So, possibly a bit of an overreaction but it would have to be saved by earnings next week – if at all. 
    • RUT 1,180 to 1,060 is 120 points = 10%.  Last week, I said:
    • "-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, it's doing exactly what it's supposed to do down here but, with everyone else overshooting, the RUT might too.  We'll call the bounces 25 points to 1,085 (weak) and 1,110 (strong)

    As you can see, with the longer-term lines, it's going to be harder and harder to get bullish again but that's the way it should be as you enter a prolonged downturn.  Following the 5% Rule stops us from getting head-faked into going long when it's nothing more than a weak bounce on the way down.  Not following this rule (and it's not like we have a lot of rules!) is what killed people in 2008 – as they chased "bargain" after "bargain" and took loss after loss as things got more and more unbelievably cheap.  


  30. MSFT must represent the greatest franchise squandering in the history of capitalism.  Nadella, "women asking for raises (due to gender inequality) is bad karma."  And this is their new star who just parachuted in to revitalize the company!   Maybe Gates should just hire Deepak Chopra and finish the job!!


  31. Burben/LINE – I'm in the stock at $28.50 and sold the Jan '16 25.00 puts for $3.82. I think drop this is way overreaction and I'm looking to sell some more '17 put and calls which are pumped up with volatility. The last sale on 20 puts was $5.00! I'll take being in the stock at $15 any day with that dividend.


  32. 0-0 What in the world do you expect from an India indian??The women are still bought & sold as chattel & treated like the family goat! Very sad Gates didn't pick someone who believes in tapping all the talent available to put his company ahead of the curve. Anyways, with LQMT at .17 anyone taking the dive? Sold my QQQ puts this morning for 100% gain, looking for more to get rid of this 16 GTAT 15 short. Would rather do it with OPM.


  33. I'm closing my short XCO 5C and rolling down to the $3 call.  Gotta find someway to make up the 55% drop in the stock price.  Sheesh….


  34. hi phill im late to the party, i was wondering if any of the hedging is still worth taking….


  35. Microsoft should've hired Ron Burgandy as CEO:

    Ron Burgundy: I'm a man who discovered the wheel and built the Eiffel Tower out of metal and brawn. That's what kind of man I am. You're just a woman with a small brain. With a brain a third the size of us. It's science.


  36. Phil/BTU,

    close to $10. the last time it was here was around 2004! Has something changed fundamentally? Sorry if I have missed your previous posts on this but have been in and out this week.

    thanks and always.


  37. PLX/Burr – The Nov $3 puts are 0.85 and the May $3 puts are $1 so you can pick up 0.15 by rolling but that's why this stock is a poor choice for put selling – the rolls suck and there's not a long enough time-frame to fix it and, if you do end up owning it, the call premium sucks and is too widely spaced to be useful.  You are working with such tiny amounts (sold for 0.25) that the cost of rolling for 0.05 is costing you 20% of what you sold!  I don't know enough about them to say if they are good or bad but I only play biotechs when the options give me a 50% discount and lots of room to roll because, more often than not, you need to!  

    Take BCRX, for example.  Those guys I like to play when they are cheap (they are not now) because, at $10.52, I can sell the 2016 $7 puts for $1.70 or the $10 puts for $3.40 to net out at $5.30 or $6.60 and the 2016 $10 calls are $4.20 so, if I DO get assigned, I flip and sell calls and knock at least another $2.50 off the total so my commitment on BCRX (barring sudden bankruptcy, which I now worry more about) is more like $2.80 or $4.10 – more than 50% off.  So, if Pharm says something nice about BCRX, THAT's when I jump in with a play because I consider them all 50/50, so the combination of his pick AND my ability to engineer a 50% discount puts the odds on my side.  Otherwise, I pass.  

    GOOG/StJ – I think the advantage GOOG currently has is that they get a ton of input from billions of live tests every day.  IBM will be able to catch up once they have supervised systems handling customer service, fast food orders, tech support, etc.  Don't underestimate IBM, there's a reason they stay in Armonk, away from the noise in Silicon Valley.  They scoop up all the finest minds and have been giving them a cool work environment decades before GOOG existed – they just don't make a big spectacle of it. 

    PLAY/Rustle – Too soon.  I think they have big trouble in this economy as it's an outrageously expensive way to spend an evening with kids.  Also, the same problem any arcade has – we have better games at home.

    MSFT/ZZ – Amazing!  

    LQMT/Pirate – If we're finishing at the week lows – it's not a good time to initiate longs.  

    Hedging/Triboy – Wow, terrible time to jump in, it's very likely we'll be up 1 or 2% by Tuesday (see above bounce lines).  I'd wait unless you are so unprotected that you can't and then I still like the Jan SQQQ $33/40 bull call spread, now $3.50 that pays 100% more if SQQQ is over $40 (now $39).  Yesterday it was $1.70 so, a 3% pop in the Nas will cost you 50% of this bet but a 1% drop will give you 100% downside protection.  


  38. privateinvestor/Indian,

    Please do not generalize your views for the whole country with what you have seen or heard. I agree that some of the old things are still there but it is one of the most diversified country and the world largest democracy with the highest percentage of young population. What you see in one region or state may not be true or practiced in another state. At least the country provides cheap as well as free medical treatments in many places :-) …not like here.

    And I believe things are going to improve a lot under Modi!

    pat


  39. GTAT – good grief. sounds like they were a bumbling gang inspired by an old Tom Swift story..

    http://www.tomswift.net/tssr07.htm


  40. Burgundy/rustle – LOL!


  41. Phil I know we discussed the matter before LMT The where down a bit yesterday but look at up again on a day like this at 1.50 !!!


  42. Ebay from 59 down to 52 again what a roller 


  43. They just showed the performance of the Fast Money Traders and it's a joke that anyone would listen to them.  Half are down for the year, one is down as much as 17% and the best trader is up 14% but next highest is 9% and the rest are up like 3% or less so basically flat.


  44. Isn't PLX in one of the portfolio's?


  45. Burgundy/Rustle – And how do they think with all that hair?  

    BTU/Pat – Sure, coal is the evil villain at the moment and everyone is trying to cut back use to save the planet, that sort of thing. Mostly though, it's China, who were buying up 2 years' worth of commodities at what they thought were cheap prices ahead of the Global expansion that never happened and, because that never happened and their own economy slowed considerably, they now have all sorts of materials coming out of their ears, including coal.   No other countries, not even us, are picking up the slack so demand is down while all that extra production that China's fake demand called for is mostly still on-line and oversupplying the markets.  This will all take a while to work itself back to normal and the reason I like BTU better than other coals is they are big enough to take the hit and survive, maybe even pick up assets from other competitors cheaply.  

    GTAT/Scott – And now the blame game starts.  

    GTAT Blames `Burdensome' Apple Terms in Sapphire Halt

    LMT/Yodi – I think this is where we decided we did like them ($175), still good reasons to buy (war).  

    Hey Yodi – do you like my screen colors above?  I know you have waited forever and finally got TOS to do that background, which I don't hate as much.  

    Fast Money/Rustle – As you are saying that I'm realizing that I totally tune those guys out.   They are completely useless.  All of CNBC is.  When I wake up, I watch Bloomberg, it's always on in my living room so whenever I get up for anything or sit down for lunch, I see it but, sadly, CNBC still drives the sheep – so I am tortured, day after day, by their constant drivel…

    PLX/Burr – Not that I know of.  Nope, I checked, not at all.  Here's my only mention of them going back a full year:

    PLX/Pharm – Unfortunately, the options are less than thrilling on those.  Only go to Aug and not very good premiums to sell. 

     At least I'm consistent! 


  46. Burrben/PLX Wouldn't stock be put to you at 2.75 net, not 3.00?


  47. Griffin – Yep, you're right


  48. Phil / TXN

    Last time when you sold the October puts and calls in the butterfly I did not get a fill on my orders so I have been selling front months waiting for the October roll. I never sold Octobers because the VIX was too low and the premiums sucked, so I simply waited. Do you recommend taking advantage of the dip and higher VIX now, or should I wait for next weeks roll? The Oct $47 puts in the portfolio can be sold for $4.05 and maybe the Oct $44 calls for $0.38. Maybe half allocation?


  49. Burr/ I'm gonna frame that comment:)  Now, back to my usual inept self:

    Phil/ I sold one (thank goodness) RIG 2016 35 put for 3.91. I was going to wait for 2017's, but shouldn't I roll this down now??


  50. Phil Screen color I can see I can see what happened? Just before you enter your pass word to open the TOS platform You could have changed the color with exception of PINK(8


  51. Phil/RIG Rolling down won't help me much at this point, right? Wow, 40,000 open interest at 30 put.


  52. Phil/hedges

    Thanks for your detailed response to my post of last night.  It is very hard to be disciplined enough to buy low and sell high, even with the cushion of selling premium.  I always have to remember the "opposite George" Seinfeld clip you played sometime last year because my instincts are often either wrong or come at the wrong time.


  53. Griffin – Technically, the broker will show that the stock is put to you at $3, but that you recieved the .25 in cash for selling the put.  

    But you are right, in actual effect you own the stock for 2.75.  

    This is why I have to keep a program that will journal my trades, cause I stink at it.


  54. TOS- anyone having problems with the Analyze tab- theo price?

    I am showing some strange numbers and TOS tech support suggests it has something to do with the font? 

    Does not make any sense.


  55. Here we go putting the toe in the water for a new tree:  LMT Jan16 BCS buy Jan16 BCS for 13.95 sell Jan16 155 put for 10.65. Max profit at 180 with a return of 4.92 % P.M. lower protection 158.10

    If no change the return will be 3.92% per month.

     Sell  ½ the Nov14 180 call for 3.00 reducing you cash layout to 1.80  


  56. XCO 

    Exco board member T. Boone Pickens said yesterday that the company has drawn interest from buyers. He refused to identify the companies. Exco didn’t respond to voicemails seeking comment.

    Pickens, the chief executive officer of Dallas-based BP Capital Management LP, yesterday expressed his support for Exco’s management.

    “Somebody suggested that Exco is a candidate for bankruptcy,” he said. “They have $750 million of liquidity. They’re not a prospect for bankruptcy. But when it gets down like $2.50 a share, that starts the talk that they’re a prospect.

    Phil, my EXCO short puts are a good example of, when they are considerably higher from where they were sold, how they overstate the loss in one's account.  I'm currently showing a loss of 18k on my short put position.  If the stock just closes where it is now, that loss turns into a small profit.  That said, I would second Palotay's suggestion to keep track of your put obligations on each position.


  57. /CL looking strong…maybe the Chinese are finally stockpiling


  58. Poor little GTAT, stumbled on the deal of the century, and then:  "Are you frightened?" "Yes."  "Not frightened enough — I know what hunts you!!"


  59. Ah, Phil saw it first, sorry.


  60. MO smoking away 44.15 up .80 cents today 


  61. Actually I stink at most things, other than tennis.  My quote of the day  "For I am Costanza.  Lord of the Idiots!"


  62. Sorry about the screw up on LMT copied correctly from word but come out like that. Should read sell 1/2 Nov 14 call


  63. Zero/ Do you think AAPL planned this whole scenario from the beginning? In order to gain control of Sapphire production?


  64. griffin:  I doubt it.  Apple is full of young chargers on the make, and senior mgmt. went along with the classic mistake of driving too hard a bargain.  A big, prestigious company can do that — only to realize down the line that having a Sub crash and burn, because your MBAs-on-the-make were determined to make their numbers, only to find out the overawed Sub ["we'll be rich!!] was writing checks with their mouths that their production line couldn't cash.  Apple senior management's fault all the way -- they should have known better.


  65. I'm a bit lost on which hedges we have on and which were cashed, but Phil are you still focusing on taking a nice fat hedge of SQQQ into the weekend?  Maybe something with a Nov exp to hedge against the short term vol, rather than a sustained drop?  My Nov 35/40 is showing a 50% profit now.


  66. TXN/Akad – The overall position is only down about $1,200, despite the huge drop and we have 15 months to sell more premium and the last sale we made netted $3,450.  Granted it went against us but we only have to be lucky once to get back on track and, so far, TXN has spent a grand total of 5 hours out of our trading range with 5 more days to trade.  I'll wait, thanks…

    RIG/Griffin – I'd wait for 2017s.  The 2015 $35 puts are $7 and the 2016 $30 puts are $6.30 and you sold yours for $3.90 so let's say it costs you 0.90 to roll to the 2017 $30 puts.  That would put you in them for net $27 but then, if RIG goes lower, you can roll to the 2018 $25 puts for another $1 and then you have a $2 credit left for net $23.  If that doesn't work (and RIG doesn't drop more than 20% a year), you can spend another $1 to get to the 2019 $20 puts with a $1 credit.  And, if you aren't THRILLED to own 100 shares of RIG for $19 (now $29.30), then why wouldn't you just take the $300 loss and get out now instead of wasting time worrying about it?  

    Screen color/Yodi – That's NOT how it works, I have been going back and forth with TOS and they came up with a much better solution.  Gee, I was expecting a "thanks Phil" since I've kept at this for months on your behalf. Lesson learned, I guess…  frown  

    Opposite/Jet – As I pointed out to MrM at one time, if you "always" get it wrong, it's not because you have bad instincts – you SEE the inflection points, you are just misreading what to do at them.  How about try telling me what you see and what you think when it happens and I'll try to go over the logic with you?  

    Markets just can't get anything going – finishing at the lows of the week = BAD! 


  67. With oil much lower, it might be worth looking at RCL and CCL.  They should also move up when Ebola talk starts dying down.


  68. Good article about Europe:

    http://www.washingtonpost.com/blogs/wonkblog/wp/2014/10/09/germany-is-killing-its-economy-and-europes-too/

    But Germany is stubbornly sticking with spending cuts instead, and it's making the rest of Europe do the same.

    It's an austerity suicide pact, and Germany doesn't even want the ECB to cushion the blow. It turns out, though, that forcing your customers into a worse depression than the 1930s isn't good for you, either. It's left Germany, which despite its image as an economic powerhouse has only grown 1.1 percent a year the past decade, teetering on the edge of its own slump — with Russian sanctions maybe enough to push it over.

    It doesn't seem like it, but Germany is still the sick man of Europe. It's just that everybody else is terminally ill now. The problem, of course, is that Germany won't let any of them, itself included, take the economic medicine they need. It would rather pat itself on the back for following self-imposed budgetary rules than maintain its roads and canals.


  69. What a horrible situation !

    Isis in Kobani: John Kerry says preventing the fall of the town is 'not a strategic objective'

    The nation’s top military leader said he is concerned that ISIS could soon take the key city of Kobani located on Syria’s border with Turkey.

    “I am fearful that Kobani will fall,” Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, told ABC News’ Martha Raddatz in an exclusive interview

    Richard Engel: Kerry Is "Tone Deaf" To The Fall Of Kobani As An "Important Symbol"

    Thousands 'will most likely be massacred' if Kobani falls to jihadists, UN warns.


  70. Inflections/Phil – ok, some time back I set an alert on DBC for 22.46 which triggered this morning, and the tongue in cheek note: "It's the end of the world!" for myself in the email.  So, seems to have bounced right at 22.45. Is this a good place to enter? and if so which way?  (My original thought is to enter long here, with very tight stop if fails 22.45, or even swing short.)  Next obvious support below is 21.24. (But because it is so obvious… )


  71. Phil / TXN

    Well, since I didn’t sell October options I’m actually ahead for the year on the butterfly. But I guess I didn’t explain myself. I wanted to know if you would consider selling NOW next week’s options. I only have the 2016’s long calls and puts on the butterfly and NO shorts.


  72. Colors what do you want me to say. It is only a good thing if the man improves his website so customers do not damage their eyes 

     


  73. Dam all the little figures I put in above do not show up how do you get them in here?


  74. Albo:  All comes back to the Chief Executive.  And I voted for him.  I'm pretty sure Governor Moonbeam would have done a much better job, since he actually ran something [California], which has to teach you a few lessons.  Pathetic.  I wonder how the U.S. will survive his incompetence until January 2017.


  75. ZZ – I'm afraid that's true :-(


  76. Along with Germany's brilliant monetary policy during this recession, they now have an even better idea; good luck to 'em:   http://www.bloomberg.com/news/2014-10-10/ecb-weighing-first-step-to-buying-yuan-for-foreign-reserves.html


  77. Uh oh, market is going to tank now, Finland got downgraded


  78. Marc Faber's not my go-to guy for global macro, but I think he may be more right than wrong in this piece – which, if true about China, which I believe it is, makes the timing of the ECB's announcement on Yuan reserves just one more reason to short Germany, in case one were needed.  http://www.bloomberg.com/video/marc-faber-on-global-stocks-economy-gold-prices-Ss46S88mQmurJJzzCmRwlQ.html


  79. LMT/Yodi – With luck, maybe we'll escalate in Ukraine – Tomahawks for everyone!!! 

    XCO/Albo – You should never sell puts on a position you aren't very happy to own at the net price. 

    Oil/Ivan – Very nice move off $84 but down from $92.50 is a 10% drop and $8.50 x 0.20 = $1.70 weak bounce to $85.70 (there now) and not a strong bounce until $87.50 (rounding a bit).  

    LOL ZZ, you have to be faster than that!  

    AAPL/Griffin – I don't think so.  I've dealt with small vendors who promised to do things with key components and, when you don't trust them to come through, you make onerous terms that guarantee your own business won't be compromised by their screw up.   A lot of times, it pays off very well to give a small firm a chance and it becomes the cornerstone of a great long-term relationship.  Other times, unfortunately, it ends badly but you can't let "being nice" stop you from getting the job done for your own clients.  

    AAPL/ZZ – I don't agree.  For one thing, it was GTAT's process and AAPL wanted it to work.  They have been doing the same with LQMT but LQMT isn't promising to do things they can't accomplish.  GTAT dropped everything else (apparently) and went after AAPL's business and AAPL had to know that if they said no, then Samsung or someone else would lock up Sapphire.  Keep in mind it's not a fantasy, there were already phones in small production using it.  GTAT said they needed new equipment, and a whole new factory, to be able to mass-produce it for AAPL.  They tried and failed and now, per the contract, AAPL gets to take over the production facility that the paid for and try to produce their own Sapphire.  

    Hedges/Burr – The only ones we cashed were the short-term TZA and the naked long DXDs.  All the other spreads are still there.  

    Nice 10% day today.  LTP down to 13.2% ($566K), Income -11.1% ($444K), Butterfly 14.4% ($114K) and $25KP 15.3% ($29,000).  

    Ebola/Rustle – Given the last infection vectors I saw, I think you may be a quarter early on that idea, at least.  Just because people and the media have tiny little attention spans, doesn't mean the problem went away.  

    Germany/StJ – Yes, the tide is turning.

    Kobani/Albo – It is ridiculous to run a war in the media.  There are strategic decisions to be made.  Kobani is about the 20th city to fall to Isis, not the first.  If we're not ready to go in should we?  I guess that's what Fox and the GOP want, so they can scream about how we went in before we were ready and now we're caught in a quagmire in Kobani.  It's even alliterative – I'm sure they'd love to have that for the election cycle!  It's not even near Iraq, where we were supposed to be sending troops.  So Fox/GOP wants us to split up our small forces and get into a ground war to defend a city on the Turkey/Syria boarder where Turkey considers the people in Kobani to be as much a threat to them as ISIS is?  

    US: Airstrikes on ISIS won't save key city of Kobani – CNN.com

    Renewed assault on Kobani; 21 dead in Turkey as Kurds …

    All this stuff is very simple for the armchair generals and twitter experts, isn't it?  

    LOL Scott, good note!  DBC is like DBA + oil and we went long on DBA last week and this week we like oil long so yes, I think DBC is a good play down here.  Doesn't mean there won't be more pain ahead but let's say this represents a good low on the DBA side and a maybe low on oil at $22.63.  Unfortunately, they don't have good options to sell.  The 2016 $25 puts are just $3.10 for net $22.90 – that's total BS.  It reflects the fact that no one actually believes it will go lower (your crowd) but it doesn't mean they are right.  I'd just take a small flyer on the $25 calls, equally stupidly priced at 0.60 (10% out of the money), considering the 12-month high was $27 and you have 15 months to go.  

    Remember though, the point of taking the cheap call is because I DON'T believe in the trade (so we limit our losses) but, if it bounces, the delta is 0.29 so you make about 50% per $1 that DBC improves.  If, for example, you sold the $25 puts (that would be stupid), the delta is 0.68 on $3 so you make about 20% per $1 DBC improves so that means you can spend 1/3 as much on the longs and get the same gain you would on the short puts with way less downside exposure.  Again, stressing I have no interest in this play as it's not rollable or adjustable and I don't have any particular reason to think oil will go up faster than the option will decay.  

    TXN/Akad – Nice job not playing.  That's a very valid strategy when you are not sure.  I think it's a bit too volatile to sell next week options after that big fall ($3 today) since you can only sell $1.50 but, if you have no short options, the Jan $42 puts are $1.80 and the $44 calls are $1.40 and there's $3.20 and you can see what happens after earnings. Maybe a half sale and there's your $1.50 you would have gotten for Oct.  

    Figures/Yodi – You mean the faces?   I have a face button on the bar in the comment box.  You should too as you have admin rights.  If not, we'll ask Greg to look.  

    Yuan/ZZ – China might be in very deep trouble and there may be covert measure in place to begin helping them.  A meltdown there will take us all with them anyway.  

    Finland/Rustle – Not Finland!!!  


  80. Phil / CNI – upgraded by BMO today with a $82 target. April '15 60 puts for $2.00 and 60/65 BCS for $3.05 for a $1.05 debit on a $5 spread that is 100% in the money. Unless the world is ending (quite possible) do you like or no like? Thanks in advance and also for the oil analysis.


  81. TSLA just came out with another announcement.  Seems in their new cars, they will have a cool air able to blow on you when it's hot out from these vents they are installing.  They call it "Cool Wind Blow".  So ahead of their time.


  82. Faces Phil I do not have.  Yes  it would be nice to lighten up the comments some times Thanks 


  83. CNI/Ivan – How much money is burning a hole in your pocket?  Come meet me in NY, I'll help you lighten up a bit… cheeky  As I said above, finishing at the days lows = BAD!  Bad for the indexes, bad for things in the indexes like CNI, who are down 1.7% today despite the upgrade.  90% of $75 is $67.50 and the overshoot takes them to $65 so, if I were an analyst and wanted to look influential, I would certainly time may call on CNI for today to make it look like I moved the stock - that was a clever move for his career.   

    As to whether or not CNI is good?  Well rail traffic has been boosted by a lot of crude moving around.  Though demand is down, that's not likely to change too much unless oil gets so low it cuts back shale and sands production (the kind that moves by rail because it's new and has no pipelines).   

    Kansas City Southern Rides Fast Track With Cars, Oil

    What I don't like about CNI is that I'm old and, as long as I can remember, Railroads were cyclical and had a p/e of 10, CNI has a p/e of 20, even after this drop.  It's too rich for me but at $60 I could warm up to them but I wouldn't jump the gun until we see how things look next week.  

    TSLA/Rustle – Wow, that Musk, what will he think of next?  Maybe hot air in Winter too?  Dare we dream?  Though, the way things are going, maybe a D3 with 3 engines and 6 wheels for $150,000 – that HAS to be better, right? 

    Faces/Yodi – I'll mention it to Greg.  


  84. Fisher: Federal Reserve overshot mark on stimulus

    Richard Fisher said the Central Bank had overshot its mark on stimulus, reiterating his view that rate hikes will come “sooner rather than later.”

    Read more: http://www.cnbc.com/id/102070640

    Sent from the CNBC app. Available on the App Store


  85. Dimon: Shadow banking threat to US economy

    The JPMorgan CEO sees one thing that could derail the recovery: The $3.2 trillion nonbank financial system, or “shadow banks.”

    Read more: http://www.cnbc.com/id/102077834

    Sent from the CNBC app. Available on the App Store


  86. DBC/phil – I think i'll just watch it and play the swing low below 22.50.  More pain ahead is more compelling.


  87. Why go solar? Homeowner says: ‘To save money’

    The residential solar market is on fire, and while the trend has sent solar stocks on a tear, it could disrupt some traditional energy companies.

    Read more: http://www.cnbc.com/id/102077585

    Sent from the CNBC app. Available on the App Store


  88. What’s causing decline in crude oil: Dan Dicker

    The last $4 in the decline of crude oil prices was due to distressed players getting out of the market, MercBloc President Dan Dicker says.

    Read more: http://www.cnbc.com/id/102078540

    Sent from the CNBC app. Available on the App Store


  89. Richard Engel: Kerry Is "Tone Deaf" To The Fall Of Kobani As An "Important Symbol"

    http://abcnews.go.com/ABCNews/jimmy-carter-obama-waited-long-isis/story?id=26050505

    Phil, I think your comments about FOX and the GOP were misguided.  The situation there is about human tragedy, not about political rhetoric. 

    Last time I checked Jimmy Carter was a democrat and Richard Engel worked for NBC News.

     

    "If we're not ready to go in should we?  I guess that's what Fox and the GOP want, so they can scream about how we went in before we were ready and now we're caught in a quagmire in Kobani.  It's even alliterative – I'm sure they'd love" If we're not ready to go in should we?  I guess that's what Fox and the GOP want, so they can scream about how we went in before we were ready and now we're caught in a quagmire in Kobani."

    Unfortunately, this is the kind of movement that grows exponentially, picking up crazies like a rolling stone gathering moss.  We should have acted sooner.

    BTW, according to reports, these whackos are getting paid $1000 per month.  What could be better than getting paid to get killed and receive your virginal gifts ?

    A most dire human situation IMHO, not a political one..


  90. Phil

    Is there anything else besides the TNA spread from earlier this week you'd consider playing for a bounce early next week?  If I understand right, you're using the same principle as with your futures trading, ie playing the "laggard".  The RUT has fallen the most, so it's most likely to bounce to the upside if we move up.  Do I have that right?


  91. Albo:  I have sympathy for Kobani, but hasn't the U.S. mucked around in the Middle East for too many decades with no conceptual clarity on what it was supposed to accomplish? Quite arguably, taking out Saddam Hussein [boo, hiss] from Iraq caused more deaths and human misery than leaving him in place would have done.  Has this not been repeated now with Bashar Al-Assad [boo hiss II]?

      The U.S. military is supposed to protect U.S. interests, and those of our close allies [which presumably serves our interests.]  Vietnam was a crock, and killled 58,000 young Americans, @ 150,000 wounded [plus almost 1.5M North & South Vietnamese] for no ultimate purpose] ; over 4,500 Americans were killed in Iraq, plus another 500 amputees; Afghanistan & Iraq [War on Terror] total was over 6,000 American dead.

    So now we're supposed to "send in the troops" to Iraq to do, what??  Impose "peace" – maybe it will "take" this time?  Maybe Saudi Arabia, Iran, Syria and Turkey will all hold hands with the U.S. and work diligently to install democracy and human rights in Iraq, a rat's nest of warlords financed by exactly those countries?  Your humanism is to be admired; your geopolitical acumen, not so much.


  92. Kobani/Albo – I'm saying it's much, much more complicated.  If Clinton says we should go (either one), then we should go – the rest of these people are clueless.  As I noted, Kobani is nowhere near our "theater of operation" in Iraq.  If there's ISIS activity in Lebanon, do we go there too?  Oman?  Yemen?  That's already an area the size of the Western US – how many other places should we go to simultaneously?  I'm saying don't make ridiculous definitive statements about what should and shouldn't be done involving a tremendously complex action and you come back with more over-simplifications.  

    It's a dire human situation?  Like the genocide that went on in Darfur throughout the Bush administration?   Does ISIS rape and murder little girls while forcing the parents and siblings to watch?  Do they take the boys and brainwash them into becoming the next generation of murderers?  I'd say that's pretty dire too!  

    ISIS pays soldiers?  We pay soldiers too, you know.  Most people pay soldiers.  What I object to is you feeling it's necessary to make a blurb of Fox talking points in the middle of a trading day – save it for the weekend please. 

    And what ZZ said!  

    Meanwhile, back to the markets.  Things getting ugly into the close, sellers don't seem done with us yet and not even a weak bounce holding.  To some extent, I want to blame the Fed hawks but what's going to change next week?  Just earnings, really – they'd better be good! 

     
     
    Week of October 13 – October 17

    Date ET Release For Actual Briefing.com Forecast Briefing.com Consensus Prior Revised From
    Oct 15 07:00 MBA Mortgage Index 10/11   NA NA 3.8%  
    Oct 15 08:30 Retail Sales Sep   0.2% -0.1% 0.6%  
    Oct 15 08:30 Retail Sales ex-auto Sep   0.6% 0.3% 0.3%  
    Oct 15 08:30 PPI Sep   0.0% 0.1% 0.0%  
    Oct 15 08:30 Core PPI Sep   0.1% 0.1% 0.1%  
    Oct 15 08:30 Empire Manufacturing Oct   20.0 20.0 27.5  
    Oct 15 10:00 Business Inventories Aug   0.5% 0.4% 0.4%  
    Oct 15 14:00 Fed's Beige Book Oct   NA NA NA  
    Oct 16 08:30 Initial Claims 10/11   295K 290K 287K  
    Oct 16 08:30 Continuing Claims 10/04   2400K 2400K 2381K  
    Oct 16 09:15 Industrial Production Sep   0.5% 0.4% -0.1%  
    Oct 16 09:15 Capacity Utilization Sep   79.1% 79.0% 78.8%  
    Oct 16 10:00 Philadelphia Fed Oct   15.0 20.0 22.5  
    Oct 16 10:00 NAHB Housing Market Index Oct   58 59 59  
    Oct 16 10:30 Natural Gas Inventories 10/11   NA NA 105 bcf  
    Oct 16 11:00 Crude Inventories 10/11   NA NA 5.015M  
    Oct 16 16:00 Net Long-Term TIC Flows Aug   NA NA -$18.6B  
    Oct 17 08:30 Housing Starts Sep   975K 1022K 956K  
    Oct 17 08:30 Building Permits Sep   1000K 1040K 998K  
    Oct 17 09:55 Mich Sentiment Oct   83.5 84.0 84.6  
     

    Bounce/Jeff – Not really.  Mondays are generally meaningless, "watch and wait" days but today's action doesn't bode well for a bounce and, as noted earlier, the TNA trade has 100% upside potential – I think that's enough for a week to be interesting without taking any major risks on a dubious outcome.  Yes, the RUT is most likely to bounce if the others turn up but so far, the Nas is catching up to the RUT – as we expected with our SQQQ hedges.  


  93. Got it, thanks Phil


  94. Monday is a holiday.  markets closed?


  95. Markets / Terra – Stock and future markets are opened. Bond market is closed!


  96. You're welcome Jeff.  

    Nope, we're open Monday.  No off days until Thanksgiving, when OPEC has their meeting!  

    And what StJ said.  

    Well, what a crap finish, Nas down more than 2.5% for the day – pathetic.  

    Have a great weekend folks,

    - Phil


  97. Phil & ZZ – I agree that it's a complicated situation, and it seems to me that we get into these situations without any clear objectives or any plans to extricate ourselves when things don't go according to plan.

    It is what it is, and almost a damned if we do, damned if we don't situation.  For once, this seems like a situation where we had a very identifiable enemy who could have been wiped out rather easily in the early stages.  Question is, where do now  draw the line now.  Or do we ?  Seems like we have more wars going on than anytime in my lifetime. 

    Why can't we all just get along;  he asked naively ?

    Have a good weekend guys, looks like a tequila evening for me; maybe a tequila weekend.


  98. Phil – Good afternoon Phil.

    wanted to share my thoughts on this topic and get your perspective. Fortunately i had small positions in GTAT and CLF so i did take a hit but thats part of learning. I wanted to make sure that the recent market volatility is not impacting my thought process and thats why i am checking with you.

    (1) I like the strategy of LTP, STP and IP. That makes sense. Being the house made sense but after GTAT and CLF experience i feel it is very hard to know really what will happen to a company and if i really want to own that stock in the future or not. However, i feel the same strategy can be applied to SPY, IWM or any of the index ETF's and those i feel more comfortable holding so thats something i am leaning towards…

    (2) I wanted to share that i am having a very hard time with the futures… To the effect that i have lost more money there than GTAT and CLF combined and the problem is that they fluctuate so much that i have found myself stopping out very frequently… I was very excited about trading futures few weeks back and yes there are occasionally some big wins but i dont think it is very reliable – not sure if others are struggling with it too…

     

    Thanks

    NR


  99. Phil / TXN

    Thank you for your input. I think I’ll just wait for your official roll and see what happens in the meantime.

    Have a great weekend.


  100. Sorry to be disruptive during trading hours.


  101. Shhesh.  Friday funday, 1.75L of wine later.  Are my eyes crossed?  1906?  


  102. Civil Forfeiture – I'm glad this is getting all the attention it is (finally). John Oliver, take it away:

    http://www.youtube.com/watch?v=3kEpZWGgJks&list=UU3XTzVzaHQEd30rQbuvCtTQ


  103. Tequila/Albo – Now THAT I can agree with!  devil

    Strategy/Nram – To be clear, the LTP is aggressive, the Income Portfolio less so.  Most people wouldn't do both.  Both use the Short-Term Portfolio as a hedge though.  Yes you can apply that logic to indexes but, in 2008, would you REALLY have wanted to own the S&P at 1,400 – on the way to 666?  I much prefer picking stocks that are likely to outperform and, if one or two fail – then we take a partial loss.  If you make huge bets on the indexes, your losses will be equally huge in a major correction.  

    As to the Futures, I guess I don't say often enough that you should paper-trade only until you get VERY comfortable because it's very expensive to  learn otherwise.  Practice should be months, not days.  If you can't learn to take quick profits and make quick exits – then no strategy will save you.  

    Also, if you don't have a fairly large portfolio or, more importantly, if you can't afford to drop $1,000 on a single roll on a craps table and smile about it – you have absolutely no business playing the Futures in the first place.   I've done Webinars where my position went a few thousand against me while I was on another screen – you can't even look away for a minute and you MUST stop out when a trade goes against you.  It's learning how to do that that takes a lot of practice.  

    For instance, I'm flying to Vegas next month and I booked 2nd class.  I might get upgraded, I might not but it was a $1,000 difference.  If I play the Futures, I want to make $1,000 to pay for my upgrade.  If I win, I get the upgrade, if I lose, I don't get the upgrade and probably decide to skip a $300 dinner or skip a show while I'm out there to help make up for it – that's the amount of impact a Futures trade (or any short-term trade) should have on your life – almost none!  

    It's hard enough to make money on long-term trades when we are being the house and the odds are stacked in our favor – short-term trading is GAMBLING – don't try to fool yourself into thinking otherwise.

    You too Akad.  

    That's OK Albo but we've all been pretty good since the last political blow-out – I'd hate to ruin the streak. 

    • 16,544 on Dow – 16,500 predicted bottom (5%)
    • 1,906 on SPX – 1,910 predicted bottom (5%)
    • 4,276 on Nas – 4,300 predicted bottom (6.3%) 
    • 10,293 on NYSE – 10,350 predicted bottom (6.3%) 
    • 1,053 on RUT – 1,060 predicted bottom (10%)

    Not bad for 10/2 predictions although, realistically, they are expected results off the drop from 9/1 had we bothered calculating then.  On the whole, we held up OK in the face of 4 Fed Hawks having their say in the same day.  The VIX is done at 21.24 after spiking to 22.06 earlier.  The Dollar is 85.99, oil $85.50 and gold $1,223.8 – not too much panic – yet.  

    Forfeiture/Scott – That's a crazy thing going on.  Also not simple though because the law does very good things going after guns and drugs etc using those rules in ways they couldn't otherwise.  Like any power though, it gets abused (and corrupts).  


  104. Private Contractors Will Probably Join The Fight Against ISIS
    http://www.businessinsider.com/why-eric-prince-is-right-about-isis-2014-10


  105. It Took Just One Sentence From A Semiconductor CEO To Send Tech Stocks Into Free Fall
    http://www.businessinsider.com/microchip-revenue-warning-october-10-2014-10


  106. Sadly, I’ve already been to most of these – you can see why I love living in NY area!


  107. Malcolm Gladwell Says Successful Entrepreneurs Share This Rare Combination Of 3 Personality Traits
    http://www.businessinsider.com/gladwell-entrepreneur-personality-traits-2014-10


  108. Getting People to Believe in Something They Can’t Yet Imagine
    http://blogs.hbr.org/2014/10/getting-people-to-believe-in-something-they-cant-yet-imagine/


  109. Amazon’s Brick-and-Mortar Store Shouldn’t Come as a Surprise
    http://blogs.hbr.org/2014/10/amazons-brick-and-mortar-store-shouldnt-come-as-a-surprise/





  110. How America can help save the planet and still come out ahead
    http://www.salon.com/2014/10/10/how_america_can_help_save_the_planet_and_still_come_out_ahead/


  111. Maria Bartiromo’s ‘Sunday Morning Futures’ is No. 1 Weekend Show
    http://www.mediabistro.com/tvnewser/maria-bartiromos-sunday-morning-futures-is-no-1-weekend-show_b241391



  112. Uber receives an “F” from Better Business Bureau
    http://www.salon.com/2014/10/10/uber_receives_an_f_from_better_business_bureau/


  113. Phil, so this is how I get in trouble.  Let's say I have a $10,000 allocation per position and I decide to take a position in RIG when it is $40, selling 5 of the 2016 35P for $4.50. Then in August after a run up, then back down, I added another 5 of the same puts for $4.30.  So I am in for about $4.5K.  Now RIG tanks and the puts are $11, so about 40% premium still in them.  But I am up to my full allocation.  I could roll to 2X the $28 put, but that potentially obligates me to buy $45K of RIG if it tanks just a bit more.  I know I have 16 months to run, but I get nervous with that big a position.  So I know the answer is to start with a smaller position and not double down without being able to get a better price, but it seemed like a good idea at the time.


  114. The majority of states are woefully unprepared for climate change
    http://www.salon.com/2014/10/10/the_majority_of_states_are_woefully_unprepared_for_climate_change/



  115. Venezuela calls for emergency Opec meeting – fastFT: Market-moving news and views, 24 hours a day
    http://www.ft.com/fastft?post!9042



  116. The last time we crossed below the 200 DMA on the Dow was back in February and we bounced back very quickly! On the other hand, the Nasdaq has not been below its 200 DMA since December 2013. Overall, not looking very good.


  117. Yeah, essentially, the only reason the S&P stopped was because it hit the 200 dma.  


  118. That 1900 level is also where we stopped back in August some might be some technical support there! Next week should be interesting.


  119. This week is the anniversary of another debt ceiling showdown!

    I always reuse the calendar from last years to recreate the new one and it's interesting to look at the new numbers compared to the forecast for next week. Numbers in the US have been looking better but Europe's number seem to be stagnating and it does reflect reality. Obviously things could get better here as well, but one can wonder where we would be if Germany had not applied the hand brake on the European economy. They forgot they were in the same car!


  120. This makes sense.  So price should not go much lower and hopefully the January USO spread works out.  

    http://www.zerohedge.com/news/2014-10-10/why-oil-plunging-other-part-secret-deal-between-us-and-saudi-arabia


  121. Fiscal space is a real, not a financial concept
    http://bilbo.economicoutlook.net/blog/?p%105


  122. Richard Koo’s newest paper: About the Ineffectiveness of Monetary Expansion
    http://snbchf.com/balance-sheet-recession/richard-koo-newest-paper/


  123. Here’s Proof That Congress Has Been Dragging Down The Economy For Years
    http://www.businessinsider.com/brookings-fiscal-impact-on-the-economy-2014-10



  124. The economy still sucks: Economist Stephanie Kelton on why we can’t declare victory just yet
    http://www.salon.com/2014/10/04/the_economy_still_sucks_economist_stephanie_kelton_on_why_we_cant_declare_victory_just_yet/




  125. Why public investment really is a free lunch
    http://www.ft.com/cms/s/2/9b591f98-4997-11e4-8d68-00144feab7de.html



  126. The Real Great Rotation: Bond Funds Have Biggest Inflow On Record
    http://www.zerohedge.com/news/2014-10-10/real-great-rotation-bond-funds-have-biggest-inflow-record



  127. Republican Senate Candidate Bashes Single Women For Not Supporting Him, Says They Would If They Had A Man
    http://www.addictinginfo.org/2014/10/10/republican-senate-candidate-bashes-single-women-for-not-supporting-him-says-they-would-if-they-had-a-man/




  128. GT Advanced to shut down Ariz. plant, cut ties with Apple
    http://www.cnet.com/news/gt-advanced-moves-to-cut-ties-with-apple/


  129. GOLDMAN: Here Are The 40 Cheapest Stocks In The Market
    http://www.businessinsider.com/goldman-stocks-with-most-upside-2014-10



  130. Predictions for actual earnings growth and earnings surprises heading into Q3 earnings season — FactSet Research Systems
    http://www.factset.com/insight/2014/10/earningsinsight_10.10.14#.VDgylfldW8A



  131. How to break Europe’s economic taboos without shattering its union
    http://www.ft.com/cms/s/0/b08047ae-4fa3-11e4-908e-00144feab7de.html


  132. SPY 5 MINUTEGood morning!  

    Futures seem to have slipped a little lower into their close – scary stuff….

    It's tricky because there's nothing happening now that we didn't see months ago.  Here's some of my notes on China this year:

    Faltering Thursday – China's Downhill Move Picks up Steam 

    www.philstockworld.com/…/faltering-thursday-chinas

    Phil's Stock World

     

    Mar 13, 2014 - CHINA!!! China is the reason so many companies tell you how great their … Merck raised doubts about the veracity of the new study and  ..

     

    • Manic Monday – Shanghai Surprise | Phil's Stock World

      www.philstockworld.com/…/manic-monday-shanghai-…

      Phil's Stock World

       

      Jul 28, 2014 - How is China achieving 7.5% growth if it is powering down steel plants …..overbullish syndromes that have been sustained even longer in the  …

    So now the markets are starting to see the problem in China and, of course, we've had similar discussions about how Europe isn't working and about how our own "recovery" has been nothing but a transfer of wealth from the bottom 90% to the top 1% – all obvious to us but, unfortunately, now "shocking" to the rest of the World. 

    I think, without more stimulus, there isn't going to be a "recovery" back to the market highs.  The fact is, we never should have gone that high in the first place.  That's why we've stayed stubbornly mostly in cash all year – there haven't been many cheap things to buy so we "settled" and bought things that didn't seem as crazy as the other stuff.  It still remains to be seen whether or not that was a good plan.  

    It's hard to tell how sour investor sentiment can turn, that's what we have to watch out for.  That's why (as you can see above), I'm doing a lot of reading this weekend.  Let me know what you guys see as well.

    SPX WEEKLY

    INDU DAILY

    INDU WEEKLY

    RUT WEEKLY

    NDX WEEKLY

    XLB WEEKLY

    XLE WEEKLY

    XLP WEEKLY

    XRT WEEKLY

    TLT WEEKLY

    UUP WEEKLY

    GLD WEEKLY

    USO WEEKLY

    DBA WEEKLY

    DBC WEEKLY

    IEV WEEKLY

    EWU WEEKLY

    EWG WEEKLY

    EWJ WEEKLY

    RSX WEEKLY

    EPI WEEKLY

    NYMO DAILY

    NYSI DAILY

    VIX WEEKLY



  133. Harvard Univesity has produced the vast quantities of insulin-producing cells needed for transplants
    TELEGRAPH.CO.UK

     


  134. Embedded image permalinkThat @iamarepublican site is yet another major political backfire for the GOP:

    because I accept all races, religions, and classes of ppl. As long as they're white, Christian, and rich.

    because I got mine and I'm hiding it offshore from the rest of you freeloading socialist commie fascists

    because people working 90 hours a week at 3 low-wage jobs are lazy and don't deserve health care.

    I scare easily and respond to fear as a means of control.

    b/c I want to take America back to a better time, when white men controlled 100% of the things, not just 98% of the things.

    because strong prisons are more important than strong public schools

    because it's more offensive to salute with a cup in your hand than murder a teenage and let them bleed out on the street

    because I believe in a Christian nation. Just,y'no,not the part about helping the poor & loving one another without judgment

    B/c I'm "PROLIFE!", except for the death penalty, and food-aid, and healthcare, and gun control, and endless war.

    Because no one knows a woman's body better than a middle aged man.

    because i believe in the new testament except for the communist parts

    because white people shouldn't have to share the wealth they stole with minorities

    and I demand less government interference for me, but more for you if you have a uterus or if you're two dudes in love.

    because I believe a guy with a radio show knows more about climate science than someone who has spent their life studying it

    because science is just a money-making scam, but oil companies have no financial incentive to lie about climate change.

    I think white people with guns are patriots but black people with guns are thugs and that's why

    Because millions of guns are just fine but health insurance for everyone will ruin America.

    RT : because I believe the way to move America forward is to continue relying on a 19th century energy source.

    because I believe girls are people until they are born.

    because my uterus is a bigger threat to this country than that guy down the street with a closet full of AK-47s, obviously.

    RT : because I don’t believe that the impoverished residents of Detroit are entitled to water.

    because I'm terrified of but still don't want people to have access to healthcare which can prevent it spreading.

    because I'm pro-life but support executing all Ebola patients:

    because global warming is a hoax because it was pretty cold the other day

    because no matter how much evidence disproves something Ill keep saying it.

     

    Embedded image permalink

  135. Phil

     

    and I'm good with CEOs making 475 times more that workers. All that money is going to trickle down

    Embedded image permalink

    Embedded image permalink

     


  136. Wow Phil – already in full election mode….


  137. The cost of austerity – good reading for everybody (and in particular Yodi)

    http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/11150306/German-model-is-ruinous-for-Germany-and-deadly-for-Europe.html

    The Hartz IV reforms – so widely praised as the foundation of German competitiveness, and now being foisted on southern Europe – did not raise productivity, the proper measure of labour reform. Data from the OECD show that German productivity growth slumped to 0.3pc a year in the period from 2007 to 2012, compared with 0.5pc in Denmark, 0.7pc in Austria, 0.9pc in Japan, 1.3pc in Australia, 1.5pc in the US and 3.2pc in Korea. Britain has been negative, of course, but that is no benchmark.

    Prof Fratzscher says the chief effect was to let companies compress wages through labour arbitrage. Real pay has fallen back to the levels of the late 1990s. The legacy of Hartz IV is a lumpen-proletariat of 7.4m people on “mini-jobs”, part-time work that is tax-free up to €450. This flatters the jobless rate, but Germany has become a split society, more unequal than at any time in its modern history. A fifth of German children are raised in poverty.

    Philippe Legrain, a former top economist at the European Commission, says Germany’s “beggar-thy-neighbour economic model” works by suppressing wages to subsidise exports, to the benefit of corporate elites. This is “dysfunctional”, and the more that EU officials try to extend the model across the eurozone, the more dangerous it becomes.

    Capital flows within EMU have been a form of vendor financing for buyers of German exports, but it should be obvious that such a structure must reach breaking point – for Germany as well as EMU – if France and Italy buckle to demands and follow Greece, Spain, Portugal and Ireland into wage deflation. Europe is already sliding slowly into a contractionary vortex, replicating the errors of the Gold Standard in the 1930s. Doubling down would be calamitous.

    Germany must move with great care. As Mr Gersemann argues in his book, it is enjoying the last days of a particularly powerful demographic dividend, soon to reverse with a vengeance. The European Commission’s Ageing Report (2012) said Germany’s workforce will shrink by 200,000 a year this decade. The old age dependency ratio will jump from 31pc in 2010, to 36pc in 2020, 41pc in 2025, 48pc in 2030 and 57pc in 2045, tantamount to national suicide.


  138. And while we are at it with political statistics – good recap from Rolling Stone:

    http://www.rollingstone.com/politics/news/the-obama-hope-and-change-index-6-years-of-progress-by-the-numbers-20141008

    Peak unemployment, October 2009: 10 percent
    Unemployment rate now: 5.9 percent
    Consecutive private sector job growth: 55 months
    Private sector jobs created: 10.3 million
    Federal deficit, 2009: 9.8 percent of GDP
    Deficit in 2013: 4.1 percent of GDP
    Average under Ronald Reagan: 4.2 percent of GDP
    Average tax rate for highest earners 2008: 28.1 percent
    Average tax rate for highest earners 2013: 33.6 percent
    Banks regulated as too big to fail, 2009: 0
    Banks regulated as "systemically important financial institutions" — a.k.a. too big to fail — 2014: 29
    Billions returned to consumers by Consumer Financial Protection Bureau enforcement: $4.6 billion
    Americans compensated for being swindled by banks, lenders and credit card companies: 15 million
    Dow Jones close, inauguration day 2009: 7,949
    Dow Jones yesterday: 16,719
    Required MPG (miles per gallon) for cars when Obama took office: 27.5
    Required MPG for light trucks/SUVs when Obama took office: 23
    MPG requirement by 2016 for cars, light trucks/SUVs: 35.5
    MPG required by 2025: 54.5
    Gigawatts of wind power installed when Obama took office: 25
    Gigawatts of wind power installed through end of 2013: 61
    Peak summertime solar power generation June 2008: 128 gigawatt hours
    Peak summertime solar power generation June 2014: 2,061 gigawatt hours
    Coal burned in electrical generation 2008: 1 billion short tons
    Coal burned in electrical generation 2013: 858 million short tons
    Reduction: 14.2 percent
    EPA-proposed CO2 reductions for power sector by 2030: 30 percent
    Pell grant funding 2008-2009: $18 billion
    Pell grant funding 2013-2014: $33 billion
    Adults gaining insurance under first year of Obamacare: 10.3 million
    As a percentage of the uninsured: 26
    Annual cost for birth control prior to Obamacare: Up to $600
    Annual cost for birth control under Obamacare-compliant policies: $0
    Prescriptions now required to obtain emergency contraception: 0
    2009 projection for Medicare going broke: 2017
    2014 projection for Medicare going broke: 2030
    Troops in Iraq, inauguration day 2009: 144,000
    Troops in Iraq today: 1,600
    Osama bin Ladens alive 2009: 1
    Osama bin Ladens alive 2014: 0
    Troops in Afghanistan, day, 2009: 34,400
    Troops pledged in Afghanistan by end of 2014: 9,800
    Guantánamo detainees inauguration day 2009: 242
    Gitmo detainees today: 149
    Crack vs. Powder cocaine-crime sentencing disparity when Obama took office: 100:1
    Crack vs. Powder disparity today: 18:1
    Drug offenders eligible to seek early release under new sentencing guidelines: 46,000
    States with medical marijuana, 2009: 13
    Jurisdictions with medical marijuana today: 23 states, plus Washington, D.C.
    States with legal recreational pot 2009: 0
    States with legal recreational pot today: 2
    Jurisdictions with marijuana legalization on the ballot in 2014: Alaska, Oregon, Washington D.C.
    States where gay marriage was legal inauguration day 2009: Massachusetts, Connecticut
    States where gay marriage is legal: 24, plus Washington, D.C. (soon to be 30 plus D.C., following Supreme Court refusal to intervene)
    Immigrants brought to the U.S. illegally as children now shielded from deportation: 800,000


  139. What can I say Politicians are ass holes and if they would make to pay for their own faults it would be the end of assholes. Still have no faces to go with. 


  140. Thank you Phil.

     

    NR


  141. Phil/ question: Phil, can you please help explain this…

    I have seen that when a stock has dropped, and you like it – you usually suggest buying a bull call spread (same expiry date) with a net payment and then selling a put (expiry date further out) at a level where we really want to own the stock and there by paying for the spread or having a credit.

    I was wondering if there is a downside to the following modification of the bull call spread. Why not make the spread where we buy the lower call at a certain date but sell the higher call at a later date and make it cost neutral or get a credit? OR, in a bear situation (bear put) - buy a higher near term put and sell a lower further out put? —-- is there a problem with this strategy?

    Take an hypothetical example: What if a bought a USO Jan'15 32put for 1.90. But sold a Jan'16 30 put for 2.27. Net credit of 0.27 – Is this a reasonable logic or are there issues with it? If USO goes down , the shorter term put profits and we could roll the 30 out?

    Similarly for bull cases, could we buy shorter term calls and sell higher further out calls for credit?

    As always appreciate your critique of idea – i am sure there is a hole in this logic…

     

    Thanks

    NR


  142. more – sorry for so many posts…

    I think the scenario where if a stock does move much may be the weak link of the above strategy? in the sense the nearer term put or call will decay more quickly vs. the longer term and then we will have to worry about covering that? may be that's the problem with the strategy?

    thanks

    NR 


  143. Phil Going through my garden I come across two option positions which might need some attention EZCH and JDSU. Both stocks reporting this month and it is expected they will report lower as expected. EZCH trading at 21.16 I bought the Jan15 BCS for 7.80/4.90 now 2.42/.55 I can close the play for 1.85 and overall will show a profit at the overall play with this stock. I could roll the BCS to Apr15 to 18/23 for a debit of .75 and sell ½ Nov 14 22 call for 1.00, with the opportunity to sell an other caller in Jan15. Question how low will they go?

    JDSU trading at 11.61 and I am holding the jan15 12 putter sold for 3.50 now 1.20 with still .59 cents of premium. Can wait here to let the premium burn down but the stock could fall lower and obviously the putter will run up.

    Good brain excise for you. TIA


  144. And Stockworld weekly went crazy again and sent 6 emails.  Screenshot  :  http://www.tiikoni.com/tis/view/?id=89cdc07


  145. From Bloomberg, Oct 10, 2014, 10:57:45 AM


    Oct. 10 (Bloomberg) — Federal Reserve Bank of Philadelphia President Charles Plosser speaks about monetary policy, efforts to improve the Fed’s transparency and communications, and the U.S. economy.
    Plosser speaks at a Society of American Business Editors and Writers conference at the City University of New York’s Graduate School of Journalism in New York. McClatchy Newspapers’ Kevin Hall also speaks. (Source: Bloomberg)

    Federal Reserve officials are hunting for new tactics to raise price increases to their target as slowing global growth, cheaper commodities and flat wages sound warnings that inflation is descending toward the danger zone.

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

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


  146. From Bloomberg, Oct 11, 2014, 1:38:55 PM


    Oct. 11 (Bloomberg) — European Central Bank President Mario Draghi talks about the management of the ECB’s balance sheet and the outlook for inflation in the euro area.
    Draghi speaks at a news conference in Washington at the conclusion of the annual meetings of the International Monetary Fund. (Source: Bloomberg)

    President Mario Draghi said
    expanding the European Central Bank’s balance sheet is the last
    monetary tool left to revive inflation although there is no
    target for how much it might be increased.

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

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


  147. From Bloomberg, Oct 11, 2014, 8:16:54 PM

    Demonstrators protest outside the Ferguson police department in Ferguson, Missouri, on Oct. 10, 2014. Photographer: Scott Olson/Getty Images

    More than 1,000 protesters marched peacefully through downtown St. Louis, demanding justice for police violence including the fatal shooting of an unarmed teenager in suburban Ferguson two months ago.

    To read the entire article, go to http://bloom.bg/Zjvm8e

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


  148. From Bloomberg, Oct 12, 2014, 9:19:37 AM


    Ukrainian armored personnel carriers patrol along a road leading to the town of Debaltseve in the Donetsk region. Photographer: Anatolii Boiko/AFP via Getty Images

    President Vladimir Putin ordered Russian forces to withdraw from Ukraine’s borders as rebels used multiple rocket launchers in fighting with government troops in eastern Ukraine, bucking a five-week old truce.

    To read the entire article, go to http://bloom.bg/1199xcZ

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


  149. From Bloomberg, Oct 10, 2014, 1:58:53 PM


    New — sort of.

    The auto industry has developed certain unwritten rules over the last hundred years or so. Got new technologies or features? Save them for the new model year. Have a new product announcement? Make it at a car show. Want a new product? That will be several years of development.

    To read the entire article, go to http://bv.ms/1sly5d2

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


  150. From Bloomberg, Oct 11, 2014, 12:00:02 AM


    Mourners attend a funeral in the Turkish town of Suruc, in the Sanliurfa province, during fighting between Kurdish People’s Protection Units (YPG) militants and the Islamic State for the control of the Syrian town of Ain al-Arab, known as Kobani by the Kurds, on Oct. 11, 2014. Photographer: Aris Messinis/AFP via Getty Images

    The Pentagon is estimating the cost of U.S. air operations in Iraq and Syria at about $7.6 million a day.

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

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


  151. From Bloomberg, Oct 10, 2014, 6:01:02 PM

    To fight wrong-headed oversight, insurers traditionally turn to lobbyists and lawmakers.

    To read the entire article, go to http://bloom.bg/1vUEvz0

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


  152. From Bloomberg, Oct 10, 2014, 5:34:36 PM


    John Paulson is the founder and president of Paulson & Co., Inc. Photographer: Scott Eells/Bloomberg

    The world’s 400 richest people lost
    $70.2 billion from their collective net worth this week amid a
    global selloff that sent the Standard & Poor’s 500 Index to its
    biggest weekly drop in two years.

    To read the entire article, go to http://bloom.bg/1vThai0

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


  153. From Bloomberg, Oct 12, 2014, 8:46:44 AM

    Dubai shares dropped the most in
    almost four months, leading Middle East equity declines, after
    investor concern global growth will slow sparked a selloff
    worldwide. Saudi Arabia’s stocks fell the most since March 2011.

    To read the entire article, go to http://bloom.bg/1nhTS4N

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


  154. From Bloomberg, Oct 12, 2014, 12:00:00 AM

    Federal Reserve officials sounded an alert over the threat to U.S. growth from a slowdown elsewhere in the world, warning it could make them delay an interest-rate increase.

    To read the entire article, go to http://bloom.bg/1qe91jr

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  155. From Bloomberg, Oct 11, 2014, 12:00:01 AM


    Traders work on the floor of the New York Stock Exchangeon Oct. 10, 2014. Photographer: Spencer Platt/Getty Images

    For most American stocks, the correction has arrived.

    To read the entire article, go to http://bloom.bg/1EEU7fZ

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  156. From Bloomberg, Oct 10, 2014, 6:21:21 PM

    Democratic efforts to increase voter turnout in next month’s election got a boost as courts blocked two of the strictest voter photo-identification laws in the U.S. in Wisconsin and Texas.

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

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  157. From Bloomberg, Oct 10, 2014, 5:44:50 PM

    GT Advanced Technologies Inc. (GTAT) asked
    for bankruptcy court permission to shut down its synthetic-sapphire operations, citing terms of a contract with Apple Inc.
    that it called “oppressive” and “burdensome.”

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

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  158. Watch this video at http://bloom.bg/1vXG1Ci

    Nadella’s Blunder: Outrage Over His Comments on Women

    Oct. 10 (Bloomberg) — On today’s “The Roundup,” Bloomberg’s Trish Regan, Alex Barinka, Julie Hyman and Pimm Fox break down some of the day’s top market stories on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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  159. Watch this video at http://bloom.bg/1vXyvYd

    Are We Seeing the Start of a Real Correction in Stocks?

    Oct. 10 (Bloomberg) — Wells Capital’s James Paulsen and J2Z Advisory President Jay Pelosky discuss the outlook for U.S. stocks with Bloomberg’s Trish Regan and Mike McKee on “Street Smart.” (Source: Bloomberg)

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  160. Watch this video at http://bloom.bg/1oYp6JT

    Oil Futures Head for Weekly Decline Amid Signs of Glut

    Oct. 10 (Bloomberg) — Bloomberg’s Su Keenan recaps today’s top commodity stories. She speaks on “Bottom Line.” (Source: Bloomberg)

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  161. Watch this video at http://bloom.bg/1oYCA8p

    France Rating Outlook Dropped to Negative by S&P

    Oct. 10 (Bloomberg) — France’s credit rating outlook was reduced to negative from stable by Standard & Poor’s, which cited a deteriorating budgetary position amid constrained economic growth prospects. Scarlet Fu reports on “Street Smart.” (Source: Bloomberg)

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  162. From Bloomberg, Oct 10, 2014, 5:02:43 PM

    This week’s vortex in equities is a sign of things to come for Donald Selkin, the chief market strategist for National Securities Corp.

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

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  163. From Bloomberg, Oct 7, 2014, 11:24:43 AM

    Apple’s iPhone 6 Plus and iPhone 6, launched on Sept. 19, 2014. Photographer: Evrim Aydin/Anadolu Agency via Getty Images

    Big screens are a big deal for smartphone users in China. If it’s any indication, reservations just to pre-order the new and larger iPhones may already be in the several millions, according to reports. And before Apple’s latest devices were cleared for sale in the country, we know that black market demand was fueling high prices and sparking fistfights between rival resellers.

    To read the entire article, go to http://bloom.bg/Zs0XVG

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  164. From Bloomberg, Oct 11, 2014, 11:51:04 PM


    Oct. 7 (Bloomberg) — Claire Kim, a Seoul-based analyst at Daishin Securities Co., talks about Samsung Electronics Co.’s profit outlook.
    Samsung posted third-quarter earnings that missed analysts’ estimates as the world’s biggest smartphone maker loses ground to Apple Inc. and Chinese competitors. Kim speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    Samsung Electronics Co. (005930) said it has
    developed a Wi-Fi technology that can increase data transmission
    speeds by five times the maximum rate possible with existing
    consumer electronics devices.

    To read the entire article, go to http://bloom.bg/1z0uYw1

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  165. From Bloomberg, Oct 12, 2014, 7:57:21 AM

    Demonstrators gather in Hong Kong, on Oct. 10, 2014. Photographer: Lam Yik Fei/Bloomberg

    Hong Kong leader Leung Chun-ying
    said there is “zero chance” China will change its decision to
    vet candidates in elections for the city’s top position, and
    that he won’t resign as chief executive amid calls from pro-democracy protesters for him to step down.

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

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  166. From Bloomberg, Oct 11, 2014, 12:00:03 AM

    JPMorgan Chase & Co. (JPM)’s Mary Callahan Erdoes said U.S. stocks are likely to fall by a little or tumble
    a lot. Just nothing in between.

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

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  167. From Bloomberg, Oct 11, 2014, 10:12:52 AM

    WASHINGTON, DC – SEPTEMBER 16: Senate Minority Leader Mitch McConnell (R-KY) answers questions following the weekly Republican policy luncheon at the U.S. Capitol September 16, 2014 in Washington, DC. McConnell answered questions about the midterm elections and the remaining legislative agenda for the Senate. (Photo by Win McNamee/Getty Images)

    A super-PAC working to re-elect Senate Minority Leader Mitch McConnell in Kentucky raised $3 million in the third quarter from donors including an NFL team owner, a sister-in-law, and Papa John himself.

    To read the entire article, go to http://www.bloomberg.com/politics/articles/2014-10-11/promcconnell-superpac-rakes-in-3-million-more

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  168. From Bloomberg, Oct 11, 2014, 3:56:06 PM

    WASHINGTON, DC – JULY 31: U.S. Speaker of the House Rep. John Boehner (R-OH) pauses during a press briefing July 31, 2014 on Capitol Hill in Washington, DC. Boehner held his weekly news briefing to discuss Republican agenda. (Photo by Alex Wong/Getty Images)

    Republican leaders are sticking with California congressional candidate Carl DeMaio after he denied allegations of sexual harassment made by a former campaign staffer this week.

    To read the entire article, go to http://www.bloomberg.com/politics/articles/2014-10-11/gop-stands-by-demaio-after-harassment-allegations

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  169. From Bloomberg, Oct 10, 2014, 10:31:38 AM

    Six months ago, Michigan’s Republican U.S. Senate candidate, Terri Lynn Land, cut a gimmicky ad and convinced the press that it was a humdinger. The spot, titled “Really,” was undeniably hooky. Land faced a camera, told viewers that Democratic Representative Gary Peters was accusing her of waging a “war on women,” and sipped from a cup as quasi-Jeopardy music played.

    To read the entire article, go to http://www.bloomberg.com/politics/articles/2014-10-10/three-republican-campaigns-that-tell-us-where-the-war-on-women-is-headed

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  170. From Bloomberg, Oct 12, 2014, 5:01:25 AM

    Weakening property demand will dim
    China’s economic prospects, dragging growth lower in the second-largest economy, said Li Daokui, a former central bank adviser.

    To read the entire article, go to http://bloom.bg/1uY9n3c

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  171. From Bloomberg, Oct 10, 2014, 5:06:51 AM

    China’s main government-backed
    research organization just gave one of the strongest signs yet
    that leaders will eschew broad stimulus to meet this year’s
    economic-growth target and plan a lower goal in 2015.

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

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  172. From Bloomberg, Oct 11, 2014, 5:53:10 PM


    Oct. 11 (Bloomberg) — Federal Reserve Vice Chairman Stanley Fischer talks about the impact of weaker global economic growth on Fed policy.
    Fischer delivers the annual Per Jacobsson lecture at the annual meeting of the International Monetary Fund in Washington. Former Mexican central bank governor Guillermo Ortiz moderates. (Video is courtesy of the IMF. Source: Bloomberg)

    Federal Reserve Vice Chairman Stanley Fischer said weaker-than-expected global growth could prompt the U.S. central bank to slow the pace of eventual interest-rate increases.

    To read the entire article, go to http://bloom.bg/1vXk8RD

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  173. From Bloomberg, Oct 11, 2014, 3:07:30 PM


    Oct. 11 (Bloomberg) — International Monetary Fund Managing Director Christine Lagarde and Singapore Finance Minister Tharman Shanmugaratnam speak at a news conference following the IMF’s annual meeting in Washington. (Video is courtesy of IMF. Source: Bloomberg)

    Risks to an “uneven and weaker-than-expected” global economic recovery have increased, the International Monetary Fund’s steering committee said.

    To read the entire article, go to http://bloom.bg/ZkBa1a

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  174. From Bloomberg, Oct 11, 2014, 1:33:35 PM


    Oct. 11 (Bloomberg) — Federal Reserve Governor Daniel Tarullo talks about banking regulations and the impact of global economic growth on Fed policy.
    Tarullo speaks with Tim Adams, president of the Institute of International Finance, at the IIF’s annual membership meeting in Washington. (Video is courtesy of IIF. Source: Bloomberg)

    Two Federal Reserve officials warned
    of risks to the world economy amid global financial cross
    currents, as the Fed reviews raising interest rates while the
    euro area and Japan concentrate on boosting stimulus.

    To read the entire article, go to http://bloom.bg/1o5gypV

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  175. From Bloomberg, Oct 10, 2014, 11:03:28 AM

    U.S. housing affordability has taken a big hit in the past year after soaring amid the financial crisis, when interest rates fell and prices collapsed. Declining affordability, lately the result of rebounding prices, often means fewer home sales and pressure on prices.

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

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  176. http://www.bloomberg.com/news/2014-10-12/fed-officials-may-slow-tightening-if-world-growth-disappoints.html    Um, so, mild correction next week followed by frantic large cap buying?  Investing is even more about fed-watching than fundamentals these days, it would seem.


  177. From Bloomberg, Oct 12, 2014, 7:18:17 PM

    U.S. index futures (DJA) fell with
    Australian stocks, signaling the rout in equities may be
    extended after Federal Reserve officials said the global
    slowdown could delay interest-rate increases. The yen climbed
    with gold and Treasury futures, while crude oil slid.

    To read the entire article, go to http://bloom.bg/1yrf0JZ

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  178. From Bloomberg, Oct 12, 2014, 7:20:13 PM

    Australian stocks fell, extending a
    decline in global equities, after Federal Reserve officials said
    a slowdown in global economic growth may delay the start of U.S.
    interest-rate increases.

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

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  179. From Bloomberg, Oct 12, 2014, 12:00:01 PM


    Li Keqiang, China’s Premier. Photographer: Brent Lewin/Bloomberg

    Rating companies say the risk of
    defaults in China has risen as Premier Li Keqiang pares implicit
    guarantees for local-government financing vehicles.

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

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  180. From Bloomberg, Oct 12, 2014, 4:21:37 PM

    A demonstrator protesting the shooting death of Michael Brown and 18-year-old Vonderrit Myers Jr. raises his fist behind police in St. Louis, Missouri, on Oct. 12, 2014. Photographer: Joshua Lott/AFP via Getty Images

    Police confronted protesters in St.
    Louis
    early today after demonstrators staged a sit-in at a
    gasoline station, fueling tensions after a day of peaceful
    rallies.

    To read the entire article, go to http://bloom.bg/119hzCG

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  181. From Bloomberg, Oct 12, 2014, 7:08:13 PM

    Alex Chow, secretary general of the Hong Kong Federation of Students, left, listens on stage as Joshua Wong, leader of the student group Scholarism, speaks outside the Central Government Offices in the Admiralty business district of Hong Kong, on Oct. 11, 2014. Photographer: Brent Lewin/Bloomberg

    Hong Kong police began removing some
    barricades erected by pro-democracy protesters in the Central
    business district as the demonstrations enter their third week.

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

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  182. From Bloomberg, Oct 12, 2014, 12:00:00 PM

    Hongkongers have posted snaps of Canto-pop star Alex To, actress Linda Chung, actor Julian Cheung and his actress-singer wife Anita Yuen taking the train. Photographer: Etienne Oliveau/Getty Images for IWC

    Hong Kong’s commuters are sharing
    crowded subway cars with some rarefied company these days: movie
    stars.

    To read the entire article, go to http://bloom.bg/1tme0pk

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  183. From Bloomberg, Oct 12, 2014, 12:07:01 PM

    Dutch police arrested four drivers
    in Amsterdam early Sunday after they were found to be improperly
    using the Uber app for taxi services, posing another challenge
    to Uber Technologies Inc.’s efforts to expand in Europe.

    To read the entire article, go to http://bloom.bg/1tlRn49

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  184. From Bloomberg, Oct 12, 2014, 7:11:37 PM

    Investors have had enough of Europe.

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

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  185. Futures down a lot already. /TF down almost 1%.  /ES down 0.6%.  



  186. From Bloomberg, Oct 12, 2014, 8:21:45 PM

    U.S. index futures slipped,
    signaling more equity declines following a three-week selloff
    that last week sent stocks to the lowest level since May.

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

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  187. DPS an impressive rise from Oct 13 43 to today 64 looks like we all drinking cool aid. Even KO same time only from 37 to 44 !!!!! sorry no FACES


  188. /CL 84.54 and I do not see any major price drop in gasoline here in Germany. Diesel 1.30€ per liter only in Spain my friend reports 1.08€ and France 1.10€ Looks like we pay for the rest of Europe!!! 


  189. I guess you guys do not know how cheap you buy the black gold in the US 1.30 x 3.8 = 4.94 €  3.89 $ / gal.

    Gasoline by the way 1.60€ x 3.8 = 6.09 € / gal. or 4.79 $. So you will understand that I use my bike to move around. 


  190. Good morning!

    Futures were down over 0.5% at the open last night but back above even now – that's an improvement.  

    /ES right on that 1,900 line so good to play bullish above it, if you are so inclined.  It's matching up with /YM 16,472, /NQ 3,857 and /TF 1,050 – so /TF is also playable above 1,050 – but, of course, only if the others are holding too!  

    The Dollar is down 0.5% at 85.63, so that's helping.  Oil $84.66, gold $1,226 but spiked to $1,242 when Asia opened.  Silver $17.40 after spiking to $17.60, copper $3.037, Nat gas $3.842 and gasoline $2.224 makes a nice long over $2.225 (/RB)


  191. Allocations/Jet – Check out the article on Scaling In and Out of Positions in the Strategy Section as well as the comments (there are lots).  If you have a $10,000 allocation, that means your initial entry block on a position is $2,500 so you can't afford to play RIG at $40 because 100 shares is $4,000 and you can't enter with a 1/4 position below $2,500 - very simple.  If you start out with 5 contracts, 500 shares at $40 is $20,000 – you are double your total allocation before you did anything, so OF COURSE you get into trouble.  

    You are confusing the price of the stock options with the obligation you are accepting when you sell those options – that is a HUGE NO-NO!!!  When we say NEVER sell a put against a stock that you are not READY, WILLING AND ABLE to buy as a long-term hold for the net price – WE'RE NOT JOKING!!!  When you sell 5 puts and then sell 5 more puts, you are offering to buy 1,000 shares of RIG for net $30,000+.  If we assume you are allocating properly, you have a $100,000 portfolio with $200,000 of margin buying power so you are starting with $10,000 allocation blocks.  Clearly having $30,000 worth of RIG would be undesirable.  You need to stick to stocks you can AFFORD to own!  

    Now, I like RIG a lot, but it's at $28 and you are in for net $31, so down about $3,000 on 10 contracts.  That's only 30% of a single allocation block and, if you don't actually intend to make RIG one of your most significant long-term holdings – I'd strongly suggest you lighten up.  2017 puts should be out soon, you can roll your 10 2016 $35 puts to 5 2017 $35 puts for maybe a couple of thousand out of pocket but you'd still have the $4,000 you initially collected so net $2,000(ish) credit on 5 short $35s isn't too terrible – but you are in no positions to adjust it as it's way too big for you so think long and hard before making even that commitment. 

    Let's say, instead, you bought something you could afford, like F.  F is $13.79 and you can sell the 2016 $13 puts for $1.43.  If your allocation block is $10,000, then you are happy to own $2,500 worth of F and selling 2 of the 2016 $13 puts for $286 is a good way to start.  If you have $100,000 with $200,000 worth of buying power and do just 10 trades like that each quarter – EVEN IF NONE OF THE STOCKS GET CHEAPER AND LEAD TO A 2nd ROUND ENTRY – you still collect $2,860 per quarter or $11,440 per year by JUST SELLING PUTS.  That's an 11.4% return on your $100K with minimal risk.  

    If F drops to $7.32 (the current price of CLF), then you would be obligated to buy 200 shares at net $11.57 but you could then roll (using current CLF prices) the 2 short 2015 $13 puts ($6.15 = $1,230) to 4 of the 2017 $8 puts ($4.30 = $1,720) and drop another $490 in your pocket and then your obligation is to buy 400 shares at net $6.06 (=$2,424).  That's still just a 1/4 allocation and, over 3 years, you collected $776 on your unused $10,000 allocation block – even on a terrible trade.  

    If you really liked F at $7.32, you could allow the first 200 to be assigned for $2,314 and then sell the 2017 (again using CLF) $8 calls for $2.35 and the $8 puts for $4.30 and that drops $1,330 in your pocket (another 13.3%) and STILL you are not even using 1/2 of your allocation block. 

    THAT is how you allocate positions.  You may scoff at starting out making 10% a year but the trick is, as Buffett admonishes – DON'T LOSE MONEY.  In 6 years at 10% (and this is the bad luck route we're looking at), you'll have $200,000 and 10% will be $20,000 more a year and 6 years later you'll have $400,000 and 10% will be $40,000 a year and 6 years after that $800,000 and now, 24 years later, you are making each year about as much as you started with.  

    What's wrong with that for a conservative strategy?  


  192. Big Chart – So ugly it's hard to imagine us bouncing without more pain.  

    I like those Rolling Stone stats, StJ!  

    Bull spreads/Nram – You have to manage your time very carefully but it's a valid strategy (as long as you are EXTREMELY selective about what you play it on).  I prefer to keep things simple as I have a lot of things to look at and, as you've seen, I have enough trouble keeping my 2016s and 2017s straight without adding a ton of additional factors on each trade.  In your example, if USO goes against you and wipes out your $32 put, the 2016 put would still have value.  You would low your $1.90 by Jan but the delta on the 2016 $30 put is 0.35 and USO is at $32 now so it would have to be at $34 just to knock 0.70 off the short call while your put is worthless at anything over $32.  Also, the time decay on 458 days when your 95 days has passed is maybe 22% of the long premium, so figure 0.50 the best so, the puts you sell will maintain $1.75 of their value while you will lose $1.90 of your value over the same period so, if USO flatlines or goes up, your net 0.27 credit turns into a $1.50ish loss.  What exactly were you trying to accomplish???  Hopefully this gives you an idea of why I don't bother…

    EZCH/Yodi – They are at the bottom of the channel and your net $3 is now net $2.  If the market holds up, I'd rather roll the $2.42 calls ($20s?) out to the April $19/24 bull call spread at $2 so your drop your net to $2.50 on the $4 spread that's $2 in the money – if you still believe in them.  I wouldn't sell puts unless they drop further, maybe the $17s for $1.50+.

    Stock World Weekly/Burr – Thanks, that's the last straw for me, we're pulling the plug on that thing.  

    Time for me to work – please reask anything I missed in new chat.  

    Futures not holding our lines – Game off for longs but I'm not looking short yet:  16,456, 1,899, 3,853 and 1,050.5.  

    I do HOPE we'll get a blow-off bottom (heavy volume) today or tomorrow and THEN we can buy back some callers and hit the buy list.