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Wednesday Market Weakness – Oil Collapses to $80, Good or Bad?

If what goes up, must come down – oil has a LONG way to fall:  

As you can see, during the glorious Clinton era, oil prices generally stayed down in the $20s despite OPEC cutbacks (because Clinton counteracted them by releasing oil from the SPR), hurricanes, tornadoes, wars in the Middle East (we used to win them, you know), etc.  Then, a real disaster struck and oil man GWB was elected to office.

Bush and his Enron buddies destablized the commodities markets (under looser regulations) and Bush started wars in Iraq and Afghanistan to catch Osama Bin Laden, who was in Pakistan and, while he had the US military destroying Iraq's 3Mbd production and burning up another 1 Million barrels of oil a day looking for Osama in all the wrong places, he was also BUYING an average of 500,000 barrels a day to stick in the ground – doubling the size and filling to the brim our strategic petroleum reserve.  

That led to a "reserve oil gap" and, of course, other countries began building and filling their own SPRs as well so more oil was bought by more countries, only to be shoved into the ground and never used.  This created a very false sense of demand for oil and, when the price of oil rose to the point where consumers could no longer afford to drive – President Bush gave every family $3,000 to spend on oil – and they did – and oil hit $140 a barrel.  "Cha-ching" indeed! 

But then the $3,000 was gone and so was the ridiculous spike in oil and it fell and fell and fell and fell and fell – all the way down to $35 before stabilizing for a few months around $40 and then heading back to $80 as the market doubled and then, since 2010, US production has jumped 50% and generally kept oil under $100, despite MASSIVE manipulation by the Banksters (see "Goldman's Global Oil Scam Passes the 50 Madoff Mark").  

Now it is falling again and, like 2008, people love to call the bottom every $5 on the way down.  All the same reasons are being used but, in commodities, a glut is a glut and you can't always count on the cost of production to set a floor on the price of a commodity until the surplus is worked off – we're still a long way from that on oil because the demand that the current production is geared-up to serve simply isn't there anymore.  

USO WEEKLYWe called a bottom on the Oil Futures (/CL) this morning in our Live Member Chat Room (as well as /TF at 1,150) but we're only playing for the bounce to $81 (weak) or $82 (strong).  Already this morning we're at $81.31 so $81 is now our stop line and the Egg McMuffins are paid for!  I gave my outlook for oil in yesterday's Live Trading Webinar and I'm sure there will be a replay available, so I won't bore you with those details here.  

We did pick up 25 USO Jan $32/34 bull call spreads for net $0.94 ($2,350) in the Short-Term Portfolio since we needed some long plays (we're up 80% for the year and too short now) and the net on the spread is now 0.73 (-22%) but the Jan $32 calls are still $1.50 and now we can roll those out to the April $30 calls at $2.94 for net $1.44 ($3,600) and, if oil fails to hold $80, we will sell the April $30s to some other sucker for $2.50(ish) and use that $2.50 to roll down to the 2016 $27 or $28 calls (now $5) and that would be our bet that oil is higher than $75 by Jan 2016.  

That's what we call a "trading plan" and it's good to have a road map so you are prepared for any market situation.  Also in the STP, since we needed longs to protect our short gains, we have 30 TNA Oct $58/60.50 bull call spreads that we bought for net 0.85 and now they are $1.12 (up 24%) and we'll take advantage of the morning dip to roll the Oct $58s ($2.05) to the Nov $56/63 bull call spread at $3 for +0.95 ($2,850), which will put us in the $7 spread ($21,000) for net $1.80 ($5,400), giving us $15,600 (288%) of upside protection should the Russell bounce back just a bit.  

We're very well-covered to the downside and this is where we expect a bounce so the above plays are all about locking in our massive gains we made by shorting ahead of this correction.  In Monday's morning post, for example, we discussed the DXD Nov $26/29 bull call spread at net 0.62, using $5,000 to hedge against a loss this week.  Yesterday, that hedge closed at 0.88, up $2,100 (42%) in two days – THAT's HOW YOU HEDGE!  

Whether you are too bullish or too bearish or your portfolio is "just right" and you are looking for new trade ideas – today is a good day to join us in Member Chat as we will be going over our Buy List and rebalancing our portfolios for the month ahead.  

 


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  1. Good morning!  

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    When some future-bearer of Howard Zinn's history is written about the tenure of Mitch McConnell, it will rightly conclude that there has never been, nor will there…
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  2. Phil- with Dow futures now down almost 1% this morning, could this be the blow off bottom you were looking for the other day? Or do you think this is just another step in a continuing drop? I ask because I may have cashed out my DXD and SQQQ hedges a bit prematurely right before the close yesterday, thinking I could get back in on a bounce today. Obviously, I was wrong and now if we are going to continue down, I need some new plays to cover that, so should I use the DXD spread you mentioned on Monday (I think it was Monday) or is there something better now that we have legged down a bit more. Any help would be appreciated. I am fairly diversified, but a bit heavy Apple and have some losses from the energy plays we have dabbled in such as RIG, BTU and CLF (even though CLF isn't really energy). Should I add back some downside hedges, and if so which ones at this point do you recommend?



  3. Oil Lines

    R3 – 88.94
    R2 – 87.27
    R1 – 84.66
    PP – 83
    S1 – 80.38
    S2 – 78.71
    S3 – 76.1

    S1 holding so far this morning!


  4. QuikTrip, a convenience-store chain with 700 locations, pays cashiers $40,000/year--twice the average--and managers earn $70,000. Employees also receive excell

    See More

    Walker has no patience for advocates for a higher minimum wage—in Wisconsin or nationally.
    MOTHERJONES.COM

     


    This is classic – police burst into a comedy club in NYC to arrest someone and chaos ensues:

    In some strange out-of-mind experience, McConnell whimpers about Nixonian wiretaps and some bizarre leftist conspiracy regarding his wife's ethnicity
    SAMUEL-WARDE.COM

     


  5. Wow drcraig – that looked first like an April fools type of news but could be huge…

    Initial work demonstrated the feasibility of building a 100-megawatt reactor measuring seven feet by 10 feet, which could fit on the back of a large truck, and is about 10 times smaller than current reactors, McGuire said.


  6. Phil

    If I'm not mistaken the Oct 58/60.5 TNA spread finsished at .82 yesterday with the long 58's at 1.40 .  Still roll to the Nov spread you suggested in this morning's post? 


  7. McClellan Oscillator dropped 74pts from the little move we had to -140.  A very bearish sign.  Last time a 200 point drop and 60 point Nasdaq move only moved it down 20 pts.  Should be bigger now but don't think we will hit -300 today.  Meaning, not catching this falling knife.  Glad I wrote the TSLA 240 yesterday when they got to 230, kaching, will let those expire worthless, no way TSLA gets up to 240 this week.


  8. Craigs – I'm with you.  I need more hedges.  I've been adding more the past few weeks but want to get more aggressive now that this seems to be the long awaited 20% correction.  European declines are accelerating.  


  9. Good Morning!


  10. Cramer's in a suit – time to pump up the markets!  

    • The 10-year Treasury yield is quickly heading towards a "1" handle, off nine basis points this morning to just 2.11% after a trio of weak economic reports, led by core retail sales falling 0.2% in September vs. an expected gain of 0.3%.
    • There was also a big slump in the Empire State survey, and core PPI came in flat vs. an expected gain of 0.1%.
    • Down moderately earlier, S&P 500 (NYSEARCA:SPY) futures are now lower by 1.1%.
    • TLT +1%, TBT -2% premarket
    • September Retail Sales-0.3% vs. -0.1% expected, +0.6% in August.
    • Ex-auto -0.2% vs. +0.3 expected, +0.3% prior.
    • September Producer Price Index: -0.1 M/M vs. +0.1% expected  and flat prior.
    • Core PPI flat M/M vs. +0.1% expected  and +0.1% prior.
    • Oct Empire State Survey: 6.17 vs. 20.5 expected, 27.5 prior

     

    • MBA Mortgage Applications:
    • Composite Index: +5.6% vs. +3.8% last week.
    • Purchase Index: -1.0% vs. +2.0% last week.
    • Refinance Index: +11.0% vs. +5.0% last week.

    • The report of a second Ebola infection at the Texas hospital that treated Thomas Eric Duncan has traders clamoring for Ebola-related stocks this morning.
    • Premarket moves for the Ebola Small Cap Index: (NYSEMKT:IBIO): +4%; (NYSEMKT:HEB): +5%; (NASDAQ:TKMR): +4%; (NASDAQ:NLNK): +6%; (NYSEMKT:NNVC): +1%; (NASDAQ:INO): +0.4%; (NASDAQ:BCRX): +5%; (OTCQB:GOVX): n/a; (NASDAQ:SRPT): +2%; (NASDAQ:CMRX): +4%; (NYSEMKT:PLX): +2%; (NASDAQ:NSPH): +5%; (NASDAQ:SMED): +6%; (NASDAQ:LAKE): +15%: (NYSEMKT:APT): +20%; (NYSEMKT:VSR): +37%.
    • LAKE, APT and VSR are the only ones up on high volume.
    • Up more than 2% following a headline beat for Q3 results, Intel (NASDAQ:INTC) is lower by 3.6% premarket as Morgan Stanley cuts the stock to Underweight, citing concerns over an inventory build (also not helping is another slump in the broad averages).
    • Commenting on "very solid" results, analyst Joseph Moore says the disparity between unit growth of 15% and flat PC unit growth implies an inventory build, and is thus worrisome. This suggests a larger risk of an overbuild in H2, and unit growth deceleration in 2015 H1.
    • Previously: Intel talks server demand and mobile profits on CC; AMD and MU higher
    • Chinese inflation dropped to an almost five-year low in September, tumbling to 1.6% on year from 2% in August and coming in below consensus of 1.7%.
    • On month, CPI +0.5% vs +0.2 and +0.4%. (PR)
    • Factory gate prices (PPI) slumped 1.8% vs -1.2% and -1.6%. Producer prices have been dropping since February 2012, brought down by declining commodity costs, overcapacity and falling demand.
    • Inflation is well below the government's target of 3.5%, giving it to room to ease if it wants to. However, BNP economist Richard Iley is concerned about the numbers, which don't yet take in the full impact of sliding oil prices.
    • "You got falling oil prices, falling house prices, excess capacity in the industry and an appreciating currency," Iley says. "So everything is pointing to deflation getting a whole lot worse before it can get better," he added.
    • German CPI remained flat on month in September, as initially estimated.
    • On year, CPI held at +0.8%.
    • The low inflation rate was mainly due to decreasing energy prices, the government's Federal Statistical Office says.
    • The data adds to CPI figures from across the EU yesterday, which provided further evidence of the danger that deflation poses to the region.
    • The DAX is +0.1%, while the euro is flat at $1.2659. (PR)

  11. Dollar slashed to 85.41, didn't help oil much but gold $1,235 (rejected at $1,240) and silver $17.37.  Copper actually lower ($3.045), nat gas no help at $3.811 and gasoline bottomed at $2.1373, now $2.172. 

    That looked like someone put the emergency brakes on the Futures slide by manipulating the Dollar to offset.  Generally we're at S1 (first resistance down) on the indexes, close to 1% below yesterday's close. 


  12. Cramer/Phil

    You know I love bashing Cramer, but I have to defend him.  He's been telling people not to buy the dips and to sell into any strength for the last week.  I was very surprised.


  13. Sorry to hear about your loss Phil.


  14. Did I mention – BAD!!! 

    Blow-off bottom/Craigs – Not enough panic yet.  I'm getting more worried that we were only consolidating for the next leg down.  Not a bad call cashing out, you can always add a Jan spread and maybe you pay $2 for $5 instead of $1.85 – so what if you took nice gains off the table already?  We'll have to see the prices once we open – we'll certainly need SQQQs for the STP.  We'll be looking at lots of stuff today.  

    LMT/DrC – That's why they are my favorites!  I love the Skunk Works…  

    TNA/Jeff – I was going by the last numbers in PowerOptions, should be lower this morning but, hopefully, so will the roll target.  

    McClellen/Rustle – Yep, big pop up yesterday on nothing is not really a good sign – it shows that we get very quickly overbought on the smallest up move.  Also, check out the MACD – that's not encouraging.  

    NYMO  DAILY

    Longer-term Summation Index still heading south:

    NYSI DAILY

    Cramer/Rustle – Even a broken clock…

    Thanks DM and all re. my cousin.  I do have to leave in the afternoon, not sure what time yet.  


  15. Wish I covered my LAKE short yesterday, have small position but it will stay up today.


  16. Still liking /TF over 1,050!  


  17. You can't defend Cramer, because he simply says whatever is the prevailing sentiment on any given day, and I believe he fuels people's emotions. For instance, he is saying not to buy dips so he won't look bad as he did on 2008, but at the same time he is yelling about $79 oil as though it has happened already, so I guess he is short from here! I always feel like he is either manipulating for his benefit, or just covering his ass to avoid the criticism he has faced in the past.


  18. Think I might write TSLA 200 puts for this week if they get above $1


  19. Dow at 16,130 and 16,000 is a very tough line so good time to take 50 DXD Jan $23s off the table at $4.80 in the STP, leaving us with naked Jan $27s ($2.10) with DXD at $27.11.  As with SQQQ, if the Dow fails 16,000 – we have to re-cover

    VIX 27!

    We're assuming this is a blow-off bottom until it shows us that it  isn't.  Futures are 16,050, 1,846, 3,749 and 1,043 and yesterday we set our lines at:

    • Dow – 15,480 should hold.  Weak bounce 15,824, strong bounce 16,168.
    • S&P – 1,800 should hold.  1,840 (weak) and 1,880 (strong).  
    • Nasdaq – 4,140 should hold.  4,232 (weak) and 4,324 (strong).
    • NYSE – 9,900 should hold.  10,120 (weak) and 10,340 (strong)
    • Russell – 1,050 MUST HOLD.  1,080 (weak) and 1,110 (strong) 

    NOT GOOD – so we'll need aggressive hedges, starting with 50 SQQQ Jan $40/50 bull call spreads at $3.50 to cover our 30 naked Nov $30 short calls as well as our now 50 naked DXD Jan $27 short calls.


  20. Long on /YM over 16,000, of course.  Lined up with 1,840, 3,750 and 1,040 (also long now on /TF). 

    Oil $81.80 completing our strong bounce, stop now $81.75 and out at $82.


  21. Good morning!  FYI, this is plunge territory.  The Feds cannot fight this…. not doom and gloom, but it does not look good technically.


  22. 10 yr is at 1%. 


  23. 10 yr – 1.99% now


  24. What a flush for now.


  25. Phil/TLT,

    TLT above 124! I know you are no longer interested in TLT trade but how high can it go. What does it effect if it is this much high?

    Thanks as always.


  26. TLT/Pat – TLT has been crazy low for ages due to irrational Fed policies.  Getting back to the 120s is "normal" – especially since it's priced in weak dollars today.  

    Speaking of the Dollar – fell to 84.50 and now back to 82.25 – just manipulated BS – /TF up over 1,055 now – +$1,500 per contract in minutes – ridiculous.  


  27. Now this is what we call a blow-off bottom.  So glad we stuck to our guns and flipped bullish.  

    Now it's time to take off the SQQQ Jan $33 calls (40) in the STP at $11.30 – we may never get that offer again (SQQQ $43.25).  That leaves us with naked short $40s ($7) but now we have the new spreads to cover.  


  28. Now that was a blow-off bottom!  I think!

    Sorry for your loss, Phil.


  29. Same in the Income Portfolio – we have 20 SQQQ Jan $33 calls so let's cash them in and leave the naked short Jan $40s and hope we are timing it right.  


  30. VIX popped to 28 and now back to 25.13 so panic sort of averted for now.  

    /TF hitting 1,060 – don't be greedy!  


  31. Phil / IRBT – I messed up on one of my positions and rather than asking before messing it up, I'm asking now for your help in saving what can be saved. Thanks.

    -5 IRBT 31 calls, .90 now 2.90
    -5 IRBT 35 calls, 1.35 now 1.95
    5 IRBT 30 calls, 5.09 now 3.60
    -5 IRBT 30 puts, 3.36 now 1.80


  32. Phil/SQQQ(Jan,33/40)

    Is there anything we can do, other than wait, if we are restricted from having an open sold call?


  33. Phil- are we almost ready to go over the buy list and look for long term bargains, or is it still too early to find any bargains because we are just getting back to fair price levels?


  34. Phil – my condolences for your loss, a death is always a good reminder, life is short and precious. And I hope you pull the kids out of school for the day as well. FU school!


  35. Good Morning everyone! The latest weekly webinar is up on the PSW YouTube Channel here:

    http://youtu.be/hCRfCexHm8g

    The original webex version can be found here for download: http://bit.ly/101414Replay


  36. Walt Mossberg discusses what to expect in tomorrow's Apple event.  Two new iPads and more importantly, Apple Pay.  Sounds like it could be meaningful.

    http://www.nbcnews.com/video/cnbc/56232486/#56232486


  37. @craigs

    This market is all over the place today, I'd wait till it settles, don't have to be a hero.  Right now this is a trader's market, in on big dips and out on rip and that could be 15 minutes.  I think we go down over 200 again today.


  38. Phil./WMT Butterfly.

    Your comments please.

    Will you stick with the same spead of  $75 call and $77.5 put for WMT in the Butterfly portfolio for November or will  earnings on the 11/13/2014 change your spread strategy after WMT getting more bullish lately?Thanks


  39. I'm so confused.  I'm adding hedges to the downside, trying to play the upside bounce, long oil, long a bounce via TNA.  

    I need some adderall to figure this out.  One thing I know is my portfolio keeps going down a bit each day….

    Sorry, needed to vent to someone who is smart.


  40. @burrben

    Instead of adding upside plays to hedge your downside plays which are probably hedging your bullish position, wouldn't it just be easier to be flat and pick your spots carefully?


  41. Bur, I'm not smart and I am down each day also.


  42. That's the problem with Jan16 postions and having so many.  Getting flat isn't easy.  What I used to do before inverse ETF's was to Betaweight my portfolio against the SPX and then figure out how many delta's I'm long.  Then short X amount of ES futures to balance my delta's….   Maybe I should do that again.


  43. These are the day's I wish I could watch Phil live on the webinar…. anyway it's up to me to figure this out….

    More coffee please.


  44. As far as smart goes, Stephen Hawking couldn't pick a direction in this market consistently.  It's impossible, that's why cash and patience are extremely valuable right now. 


  45. Burr

    Don't forget that your portfolio is either hedged appropriately, or it's not.  Otherwise, you are just trading the ups and downs. There is a difference.  Trying to predict a direction right now is perilous!


  46. AGNC, CIM, NLY all up today and have been the calm in this storm lately


  47. Pfehl/IRBT, for what it's worth, your spreads look OK along with the short puts. Maybe roll you naked calls when they come out and cover with same amount of short calls at 33. I'm sure Phil will have a better solution.


  48. Phil//  With quite a few shorts calls left alone with a higher BCS to protect a runaway, what is our expectatiosn for the market?  Since we are still not there with the 1% weak bounce, with a posting that mentiioned that it looks like a consolidation for another leg down, where do we see the market settling?  Earnings haven't been that bad.  So what will protect this market if decent earnings can't?  Maybe Fed?.


  49. nflx getting smacked


  50. IRBT – Hadn't looked at in awhile.  Stock really acting well.


  51. go HBO!


  52. BRCM/Phil – still too early for BRCM or UBNT?


  53. Phil//  Did we do the roll on USO? or we are waiting for a good entry point? Thanks.


  54. NFLX snapping right back, can't wait for earnings.  Love playing NFLX into it.


  55. Phill// Clarification on my post at 10:59 was regarding the SQQQs.  Thanks.


  56. Income Portfolio – Time to roll our short 35 AAPL Oct $84.29 calls ($14.40 = $50,400 ) to 40 of the Jan $90 calls at $10.40 ($41,600)


  57. jomptien – I'm glad i have held onto my NLY position.  need to add more CIM.  


  58. Phil: Wow, you're a magician!  I just cashed in the bought calls on the SQQ spread for a big gain (I sold the $41s vs $36 b/c I was late to the game) and was having a brief heart attack holding the sold calls and they've started dropping!  Luck, sure, but I've had 'em for a week!


  59. IRBT/Pfel – That's not so bad but I do need dates because the calls seem to be different dates.

    SQQQ/DC – Yes, the Jan $33s are still $11.50 so you can roll them out to the 2016 $40s for about even and then you have a calendar spread with a 4:1 time advantage to the short calls (you will decay at 1/4 the speed) and wait for them to die out or, if SQQQ stays high, you can just roll the short callers along to longer months at higher strikes.  

    Buy list/Craigs – It's another weak day, I want to go over the portfolios first and invest in positions we already have if merited.  

    Thanks Deano.

    WMT/DM – Not sure yet, need to get to that portfolio. 

    Confustion/Burr – At the moment, I'm just trying to take advantage of what is hopefully a blow-off bottom.  If not, we are going to be way on the wrong side of this and will need more hedges quickly.  Whenever we make adjustments, we need to WATCH our portfolios and see if they had the desired effect.  Intra-day, it's tough as the price of options fluctuates wildly but we should now, in the STP, be very bullish and we should be losing money on a dip back to the bottoms.  

    And, as Rustle says – CASH!!  What did we accomplish today in the STP with the above moves?  We now have $220,000 in cash (though we are using a lot of margin now with the naked short calls), which makes us flexible and, if the market does move up and those short (bearish) calls expire worthless, we get to keep that $220K. 

    Or, as ZZ notes – MAGIC!  


  60. Phil / IRBT – Oops.
    -5 IRBT 31 Oct calls, .90 now 2.90
    -5 IRBT 35 Dec calls, 1.35 now 1.95
    5 IRBT 30 Dec calls, 5.09 now 3.60
    -5 IRBT 30 Dec puts, 3.36 now 1.80


  61. Keep in mind that our premise in flipping bullish is that 16,000 will hold on the Dow but Europe is closing at a wipe-out with Greece down 6% today and London down 2%, Germany 2.35%, France 2.88%, Italy 3.68% and Spain 3.54% – that's BAD!  But why are they down – because the energy sectors are collapsing and, as I said yesterday, energy is a big part of these indexes.  Look below on our sector chart – energy is down 2.69% (as I'm writing this) and almost everything else is green.  So should we be panicking out of other sectors just because oil is dragging the indexes down?  

    This is, most likely, just a rotation out of energy and, as Bill Clinton taught us, that's a very good thing for the economy because spending money on something you light on fire is very stupid!  


  62. Is GILD an opportunity at it's current level under $97 with a PE of 21.8 and all the recent positive news? Obviously nothing is great today, but could this one be almost ready for a new entry?


  63. Phil// Is this a good time to initiate some AAPL bcs?  If so what would be your recommendation?  Thanks.


  64. REITS/Jomp – There's the value in being diversified.  

    SQQQ/STP, Rookie – I will want to cover with an aggressive November bull spread if we're not recovering before I have to leave today – not worth risking in case Asia follows Europe down – even if we don't.  As noted above, it's probably rotation but rotation can be a bitch when it's the 2nd biggest sector.  

    BRCM/Scott – Lots of yummy-looking things (as noted in yesterday's webcast) but, first, we need to repair what we already have.  

    USO/Rookie – Above trades for STP from the post are actionable.  With the up and down action, you should have gotten great prices on both sides.  

    You're welcome Rookie.  

    That's great ZZ but don't get cocky – it's a crazy, whipsaw market.  

    Wow, what is with these Europeans?  They ran out of time to sell stuff there and now they are selling here!  

    IRBT/Phel – Ah, now we can see something.  So IRBT is at $33.06 so I'd roll the short Oct $31s to the short Dec $33s ($2.55) and then you are 10 short Dec and the Dec $30 calls ($4.10, not $3.60) can be rolled out to 10 March $33/39 bull call spreads at $2 and you may as well pick up a buck rolling to the March $30 puts ($2.85) since it's the same margin, etc.  

    GILD/Craigs – Looks good but may look gooder if you give them time.  

    AAPL/Rookie – It's always a good time for AAPL, especially if the VIX is high.  2017 $90/120 bull call spread is $11 and is $8 in the money so you are paying a $3 premium to have $19 of AAPL upside – that's a pretty good deal to me.  If you are so inclined, you can sell the $75 puts for $7 and then you are in the spread for net $2 and your worst case is you own AAPL for net $77 (21.6% off the current price).  


  65. Phil;  Before you leave today, can you put out new futures lines?  Last ones I wrote down were 16200, 3800, 1870, 1050 which are clearly outdated in this market.  thx 


  66. Phil,

      Regarding TNA, I have the 10 of the Oct $58/60.50 bull call spreads. Am I understanding you correctly to say I should sell the $58 calls, buy the Nov $56/63 bull call spread and leave the sold Oct $60.50 calls naked?


  67. Now we have Dow 16,043, S&P 1,845, Nas 4,167, NYSE 10,010 and RUT 1,053 so we know what needs to hold.  If not, the STP has 70 naked, short SQQQ calls (Nov and Jan $40s) and 50 short DXD Jan $27 calls SO, we need to add 50 SQQQ March $38($8.50)/45 ($7) bull call spreads for about $2 if the Nas fails 4,150 OR the DOW fails 16,000 OR the S&P fails 1,840 – That goes for the STP AND the Income Portfolio

     

    As it's a pretty cheap spread, if you are at all worried – fill it while it's cheap (net $1.50 at last sale)!  


  68. Phil,

      I have 10 of the Nov SQQQ $35.40 bull call spreads. Should the Mar $38/45 spread be added or replace those?


  69. Phil/rotation out of energy-

    It never ceases to amaze me how we can have moves in the market like this without someone on the inside at the big firms talking to the media and saying, "yeah, this is why we did it."


  70. Phil / Actionable – Not sure if it's just on my end but I don't see the actionable trades for the STP in the above post as referenced in your 1148am post.


  71. And thanks for the IRBT comments!


  72. Phil,

      Just saw the post from yesterday about your cousin's passing. Please accept my condolences.


  73. Phil,

    I'm seeing $22  midpoint for the 1/17 90/120 AAPL bcs. How  are your getting your $11 figure ? 75 puts are in the $7 range.

    Thanks


  74. Phil   My condolences.


  75. Phil   Not normally a dupont (DD) lover, but i have several relatives in the hospital industry, and in casual conversation, indicated that they are and will continue to load up on dupont products for the ebola fight.

    Any thoughts? Its sitting on the 50 MA  Condolences to you on your loss….


  76. 8800: I just got filled in on aapl 2017 90/120 bcs for 10.40.


  77. Phil,

    re AAPl 1/17 sprd, must have been those demons form cyberspace messing with my cmptr again; now seeing $9+ on the 90/120 sprd

    Rookie – thanks for the bcs info. Not sure what happened to my quote system.


  78. Lightened up a bit on my hedges to book some real gains.  Now, if I can just ignore the unrealized loses in my long positions, it will be a good day.


  79. /TF acting like a cat on a hot tin roof……any body on the board playing this cat?


  80. Levels breached.  I'm adding the SQQQ spread now.


  81. Phil…..been travelling more than not but reading and watching you guys every night.  This is to say a big thank you.  Even though I don't have the time to trade every day now I set up hedges and base long term strategy on PSW.  I now it may sound like BS to some readers but my 401k is down a mere 3%.  It hardly gets my attention when I open my brokerage portfolio accounts.  And that is by using your longer term hedges and strategies.  I don't need to be a day trader to take advantage of PSW.  At this time in my life when I cant trade every day……. not losing what we've gained moves front and center.  It's just a great feeling to watch your brokerage account hold steady in a sea of red.  Thanks Teacher.


  82. added the SQQQs.   Apple reports earnings on Oct 20th so that may pop the Nasdaq for a day.


  83. XCO holding firm.  And unloved HERO catching a bid.  my gold positions – ABX, GDX, GDXJ, IAG and PAAS - are acting as a nice hedge.  


  84. Futures lines/Options – I still like trying /TF long at 1,050 or, failing that, 1,040 but we're below 16,000 on /YM and 1,834 on /ES (1,840 needed to hold) and 3,734 on /NQ (3,750 needed to hold) so It's not a good time to go long on anything at the moment.  Don't forget, we'd be down a lot more if the Dollar weren't down 1%.

    By the way, that March SQQQ cover triggered on the Income Portfolio and Short-Term Portfolio, of course!  

    TNA/Kevin – Yes because the October calls expire on Friday and TNA is at $55 so it needs a 10% pop before you owe money and that's 3% on the RUT (over 1,080) and that's not terribly likely at the moment. 

    CDC News conference is freaking people out.  

    SQQQ/Kevin – We cashed the long $35 calls and then the new spread is to cover the naked short $40.  

    Rotation/DrC – They only tell you something when it's to their advantage.  When you have these tight-lipped sell-offs, it's usually because the big boys are scrambling as well and have no clue and no plan.  

    STP/Phel – We discussed changing USO and the TNA's in the above post – Wednesday.

    Thanks all for condolences.  

    AAPL/8800 – $22???  The 2017 $90s are $18/18.95 with last sale at $18.63 and the $120s are $7.90/9.30 so, if you are getting a net spread of $22 – you must leave your broker IMMEDIATELY!!!!  I mean now – to even show you such a price means they are so far out of touch with reality that you can never trust them for any price indications, ever.  

    And what Rookie said! 

    And what you said.  Please check things before making me research something, thanks.  

    DD/Willsons – Good company and low oil prices are good for them.  Still not really cheap at their 200 dma $65.76 when the rest of the market is crashing below it.  

    If only, Sibe.  

    1,828 on /ES is the 2.5% line – very bad if that doesn't hold.  It's 1,834 on SPX.  

    You're very welcome Living, glad to hear you're getting the hang of it.  


  85. BAC – Crashed thru the 50dMa and the 200 as well. 

    AAPL with it's 14% weighting crushing the Qs. 


  86. I like the way the RUT is hanging in there.  Everything else is sucking though…


  87. These are the days where I am thankful to have so much in cash right now. A bit early for a shopping list though. Probably will add some VXX as well with the VIX so high. It's scary but decay has been working – back in February, the VIX topped at 21.50 and VXX was at 55. The VIX is now over 30 and VXX is at 44. But too soon to move yet.


  88. Wow! VIX hasn't been this high since 2011.


  89. I ´ve been expecting this fall  during weeks (months) and now I´m out in a pyrenees walk everything happens!

    Will be something left for Friday?…


  90. SGEN – Buying a few Dec $40 calls for 90c.


  91. GLD Dec5 124 calls are looking very tasty.  Taking 1/4 off the table, as they are up almost 75% from the entry.


  92. $25,000 Portfolio – Those damned GMCR puts still aren't working!  We could only roll the TNA calls to Nov per above post because we can't have a naked short call in the $25KP so we have to wait for the short $60.50s to expire (now .30) before turning November into a spread.  

    Butterfly Portfolio:  Big moves play hell with us but we need to simply roll out if we're not sure:

    BTU – There's no point in not buying back the short Dec $16 calls for 0.10 and, since we're on the hook for the short Jan $18 puts (now $7.70) and a $4.30 loss, we may as well roll those to March $14 puts at $4 and sell the March $10 calls for $1.65.  There are no 2017s yet, so we'll wait on rolling the longs.  

    DIS – Wow, down $3 today!  We sold Jan puts and, though way down, maybe we bounce.  No point in the Oct $87.50 and we'll let those expire and sell some Jan $85 calls for $2.40 to offset some of the short put loss.   Keep in mind, it doesn't seem like much but we just adjusted by selling $2,400 worth of out of the money premium against a $6,400 loss on the short puts and we already made $3,550 on the short Oct calls so the net loss on this set is $450 when all is said and done (because they can't both expire in the money) – even on this horrific sell-off.  That's why I love these spreads – this is just our first crash test.  

    • JPM – Earnings were good.  The short calls should expire worthless but, unfortunately, we sold the $60 puts and those we'll have to roll ($5.60) to the Jan $57.50 puts ($5) and we'll sell the Jan $55 calls for $2.90 and that's another $2,300 in our pocket despite the terrible sell-off.  
    • OIH – Catastrophic failure but, it's Jan.  I guess we should buy back the short Jan $52 calls (0.20) and wait and see what happens.  Hopefully oil will bottom here and there will be some recovery.  
    • TXN – The short calls will expire worthless and the short $47 puts are $5 and we'll roll to the Jan $45 puts ($4.35) and wait on selling calls because TXN is only down 0.30 in this mess – so I think they may have suffered enough.  That being the case, I also want to roll the 2016 $50 calls ($1.45) to the 2017 $45 calls ($3.35).  
    • WMT – These are actually on track since we sold $75 calls and $77.50 puts so we'll let it play out until Friday on this one. 

  93. Starting to feel a little 2008 again.


  94. Well, this message system takes a bit of practice. Blessings to you and your family. The way things are going, your cousin may have won the game. 


  95. Phil,

    First please accept my condolences on you loss….

    Do we get the fabled 2:30 express liftoff….


  96. GILD, taking a poke here – sold 1 2017 65 put for 7.85


  97. Short-Term Portfolio Update (STP):  Wow, way to blow $20,000 in a day!  I'm not upset, of course, we flipped bullish and now we'll see if we're right and, of course, we now have $209,000 in cash in our $100,000 portfolio.  As noted by Sibe above, if only we can ignore the short calls on DXD and SQQQ (-$69,000) – we might really have something!  

    • CAKE – Well, that was a waste, was $2+ yesterday and we were greedy.  Let's roll to the Nov $45s at $2.30 for + $1.15 as earnings are 10/22 and I do feel good about them.
    • DXD, SQQQ (x2) – We just went naked short on those, which is ultra-long.  Then we chickened out and bought 50 more March SQQQ $38/45 bull call spreads but those 50 are only $11,000 vs the short $69,000 so we don't give a crap if those March spreads go belly up, do we?  On the other hand, since the short Nov and Jan SQQQs are $40s, we have $5 worth of upside protection – see how clever that is? 
    • GMCR – Why won't they DIE?!?  
    • FAS – Looks like we picked the wrong week to short puts!   Bank earnings are good, too soon to panic.  
    • SQQQ – As noted above, these are covering our $69,000 of short puts but it won't be enough if today's lows start to fail. 
    • BIDU – That's coming along nicely.  
    • USO – No worries.  
    • FAS – At least we made money on those short calls finally. Let's let them expire worthless and see where we are next week.  
    • NFLX – Very nice. 
    • SLW – Back to even on this one, not worried.  
    • TNA – Wow, look at the gains off that adjustment!  ALWAYS sell into the initial excitement!  
    • TSLA – As I said earlier in the week, I'm more worried about the $140 short puts losing than I am about the $275 short calls.
    • YHOO – Nasty pullback with BABA down to $84 but this too shall pass.  

    Surprisingly not much to do, I thought we'd need more but these positions are rockin' as is.  


  98. Levels/Palotay – That's a good job, by the way.  No emotion, just make sure you have a plan and execute it.  Good job.  

    Gold/Terra – Yes, time to go shopping.  

    VIX hit $31.08. 

    Friday/Advill – On the way up, there are always laggards.  

    Winning/Garland – Are we related?  I'm always looking for long-lost Davis' wink.  

    Speaking of my cousin – I skipped his funeral service this morning and was going to go sit shiva (memorial) with the family but, because today is one of those 100 Jewish holidays no one has ever heard of, they can't do that today so I'm not going until tomorrow now.  

    Oh yeah, the Beige Book – I forgot about that.  Obviously couldn't have been too bad as we kind of stopped falling (or paused).    

    Fed's Beige Book: Economic Activity Expanded "modest to moderate" pace

    FED'S BEIGE BOOK [Full Text]

    BEIGE BOOK: Most Fed banks reported increased manufacturing activity

    FED BEIGE BOOK: Most regions saw modest or moderate economic growth

    There, that seems to sum it up nicely.  The reality (which is what we like to trade on) certainly doesn't match the panic.


  99. The Ebola news just keeps getting worse and worse… 2nd nurse was contagious while flying.

    http://www.zerohedge.com/news/2014-10-15/second-ebola-infected-nurse-identified-was-symptomatic-995-degree-fever-while-flying


  100. Phil/GMCR – I think the reason they won't die is as the markets crash, more people will need to be wired on their product!  You know… fundamentals as you always point out.


  101. terrapin

    The problem is fear, and with Ebola killing most of its victims that makes it worse. It just won't take that much to create greater panic. I agree with Phil and others that it can be controlled, but what can't be controlled is how people react to more cases. At what point do people stop flying, going out to eat, going to movies, all because of the fear of being around other people? This is scary only because of the potential overreaction that may occur.


  102. I think GPRO took less nerve to play than GMCR.  With Coke involved and never knowing if they are going to buy more of the company, staying away from that.  And Monster too


  103. IWM…in case of a crash, an you never know in this type of market, IWM 100 Pts are 17c.  IF 104 fails, watch out.


  104. Is it just me, or does this trading day seem  r e a l l y   long ?


  105. Phil

    Do you think the FED pulled stimulus too soon? It seems to me that as long as inflation is moderately under control less stimulus might have been a better plan than no stimulus at all?  Of course that is very easy for me to say in hindsight!


  106. HMY – "We’re probably a good target right now,” Graham Briggs, CEO of Harmony Gold Mining Co., South Africa’s third-largest bullion producer, said in an interview last week." 

    http://www.bloomberg.com/news/2014-10-13/south-africa-gold-ceos-ready-for-mergers-as-bullion-prices-drop.html


  107. Phil / TXN

    A couple of TXN questions:

    You said we would hold on selling calls since “TXN is only down 0.30 in this mess” What do you mean by that? Since October 1st TXN has lost over $5.00 (+10%).

    The spread on the 2015 $45 calls is huge! IB gives me $3.35/$5.10 ($4.22 mid) and that is only because I placed a buy order at $3.35 (it was $3.30 before). We can probably sell the 2016 $50 calls for $1.50, but then we would be uncovered until/IF the 2017’s fill. Shouldn’t we hold on to the 2016’s until/IF the 2017’s fill?


  108. stjean

    Are you watching the VXX or VIX for a possible downside play.  I can't remember specifically what you did a couple of months ago. Regardless, how much higher either one of those goes, I doubt they can hold these levels for an extended time. Just curious.


  109. Cliffs Natural upgraded at Axiom on valuation
    Cliffs Natural Resources (CLF -4.4%) gets an upgrade today as iron ore miners are pounded, as the generally bearish Gordon Johnson of Axiom Capital raises shares to Hold from Sell on valuation.While acknowledging the potential for further downside, Axiom views CLF's risk/reward as balanced at current share price/valuation levels after the stock have been more than cut in half since July; the firm sees increased chatter around asset divestitures and management plans fueling volatility around the stock over the near term.


  110. dclark41, I have utilized VIXY in the past and it has options.  You do not want to hold it long, but for a quick hit it has worked pretty well for me.


  111. Phil

    I have TEX Jan 16 30/40 BCS, would you adjust now or do you think its also a falling knife and wait it out?  They have 2017's out and I could roll the 30's down to the 2017 25's for about +3.50 now.

    Thanks


  112. There's always a buyer somewhere.

    http://seekingalpha.com/news/2032775-china-cashing-in-on-russias-shrinking-options-with-sweetheart-deals

    China cashing in on Russia's shrinking options with sweetheart deals.During a three-day visit to Moscow that ended yesterday, China and Russia signed 38 new deals, including a big expansion in Russian gas sales to China; Russian Pres. Putin sealed a $400B gas contract with China in May, but the fresh deal reportedly would double that (OTCPK:OGZPY).New projects include a reported $10B Chinese commitment to upgrade Russia's railroads, a "strategic partnership" between Russia's Rosneft (OTC:RNFTF) and China's CNPC (NYSE:PTR), joint development of a long-haul passenger jet, and a deal to open a yuan-ruble swap line worth $24B in an apparent bid to reduce dependence on the U.S. dollar.It's a golden opportunity for China to leverage Russia's political problems with the West and nail down long-term oil and gas contracts at bargain prices, experts say.


  113. Thanks sibe.  I will check it out. Although, I am in no hurry.


  114. Income Portfolio:  Ouch!  Down 15% ($75,000).  Really nasty considering we're only using 20% of our margin.  There's a reason for that, of course.  We lost $25,000 on GTAT and, since this portfolio is full of long-term puts we sold, the increasing VIX and falling markets gives us a real double-whammy.  The question is – is this then an opportunity to get more invested or was this the wrong time to buy longs?  

    • SQQQ – Like the STP, we're taking a small stab at getting more bullish but note the 50-unit SQQQ hedge is much larger.  
    • DIS – We said we wanted to own them at net $65, for net $60 I say we double down (ie. sell 5 more puts for $10, if possible).  Probably we can't get that price – yet another reason not to freak out about balances on a sharp downturn – all the calculations are messed up.  
    • FCX – Back where we liked them. Not doubling down, that's for ones that are even CHEAPER than when we liked them.  
    • GOGO – Cheaper but not sure if they are better so we'll wait for earnings.  
    • HOV – Cheaper is better on these guys but we're already on the hook for 4,000 at net $3.70 with the stock at $3.32 so let's hold out for $2.50 before we double up.  
    • SBUX – Still not back to where we entered.  
    • AAPL – This one is the spread we mentioned today and still my favorite.  
    • SQQQ – As noted above, this one is the hedge to the short SQQQs as well as a bonus hedge to this portfolio (in addition to the STP).  
    • ABB – Net $20.80/$21.40 and the stock is $20.19 and pays us 0.77 a year (3.7%) while we wait.  OK…
    • CLF – Only 1,000?  No because we did a spread below.  So no touch on this one, we just have to wait and see. 
    • NLY – Holding up nicely but still where we started.  As long as they keep paying us 0.10 per month to hold it, that's OK.  
    • OPTT - The fact that they are still in business is a nice win.  Not looking to add to it, that's for sure.  
    • XCO – That's the one I forgot the name of yesterday.  Another massive loser so far.  Our net is $2.70/3.85 but it's 5,000 for $19,250 so I'm not dying to add more.  We'll wait for 2017s to come out and re-position.  
    • AAPL – Roll not yet reflected (35 short Oct $84.29s to 40 short Jan $90s).  We're ALMOST back to where we sold some puts, but only almost.  
    • ABX – Now here's one we went to add to.  We already have a bullish position with no hedge and now we can roll the 10 short 2016 $17 puts ($4.40) to 20 short 2017 $15 puts ($3.50) and pick up both cash ($2,600) and $2 of position.  
    • ARO – A bit of a set-back but I still like them. Keep in mind the spread prices they show you are incredibly unfair in these portfolios – especially when it's small amounts.  The last sale of the $3.50s was 0.69 and the $5s were 0.30, just a penny under the 0.40 spread we started with but we're showing a loss of 0.20 ($1,000 vs. $50).
    • BTU – Unfortunately, the short calls have a ridiculous premium, so we can't buy them back and 2017s aren't out yet, so we wait.  
    • CCJ – As with BTU, I'd rather wait for 2017s.
    • CLF – These we already rolled.  Gotta cross our fingers on this one.  
    • CZR – They totally collapsed this month.  No 2017s, so we'll wait but I do like them down here (under $10).  In fact, let's buy back the 2016 $22.50 calls for 0.65 to clear the deck for our next move (may take a while to fill).  
    • EBAY – Back where we entered.  
    • GTAT – Dead stock most likely.  Just hoping for a miraculous save.  
    • HPQ – Not sure how the company break-up will pan out but let's take advantage of the volatility and roll the 10 short 2016 $32 puts ($4.10) to the 2017 $30 puts at $4.50 and let's roll our 2016 $32 calls ($3.85) to the 2017 $28/35 bull call spreads at $3.30 and we'll leave the short 2016 $40s for now and see how they play out.  
    • LULU – Back where we liked them.
    • PFE – Waiting for 2017s.  
    • PNRA – This one took off on us already. 
    • RIG – Let's roll the 10 2016 $35 puts ($11) to 15 of the 2017 $27 puts ($7.50) and we'll roll our 10 2016 $35 calls ($2.05) to 20 2017 $25/32 bull call spreads at $2.70.  Our original price was $7 on the calls so down $5 on the roll essentially increases our net cost of the new spreads by $2.50 each which makes over $30 our new break-even (not counting put profits).   This is how you work a position, our old net was $2 with $35 calls so we needed $37 to break even.  The trade went against us and, without making a much larger commitment, I've lowered the break-even by 20% and given us another year to get there.  
    • TASR – On track
    • TEX – Wow, that went ugly!  Already rolled so waiting and seeing.  
    • TM – Already rolled.  
    • UBNT – Do you really think the 2016 $45s are the same price as the $55s?  Silly pricing.  Our net was $1.75 and the last sales were $3.85 and $2.20 for net $1.65, yet it shows us down $1,700 on the spread.  So nothing to do here because the spreads are so wide, otherwise I'd like to roll lower but let's wait for 2017.
    • WFM – I still like that entry.  

    So, as much as I felt good about playing for a bounce in the STP,  when push comes to shove on our long-term positions – I'm still feeling very cautious.  


  115. DPS – today, lost the Snap in their Snapple, the Pep from their Dr. Pepper, their.. oh, you get the idea.


  116. Oops, I guess I missed the roll to the 2017 26/37 call spread….


  117. NKE – still some gap to fill..


  118. Amazing! Phil – how about a "Come and See the Show"?


  119. major squeeze at end of day


  120. MXWL really popping up today.


  121. could be a chance for market to sell off again tomorrow now.  Crazy volatility, definitely fun to watch.


  122. Plunge protection team, working hard for traders everywhere!


  123. CNBC analysts appear mystified by the end-of-day upwards trend in the Russell and Nasdaq. It's like they can't imagine the way in which a short squeeze comes to be when too many people are short. 


  124. Ebola/Terra – People love to panic but they also have a 3-week attention span, usually.  The media is loving it, though, #Ebola is #1 on Twitter.  

    GMCR/Grant – Yes but do they want $1 per cup coffee? 

    Fear/DC – Combine that with the beginning of cold and flu season and a guy with a cough in a crowded room can cause a stampede.  I can laugh because I work at home, though Jackie just came home from school early with Ebola or maybe something less severe…  cheeky

    Trading day/Albo – Try updating 4 portfolios and it flies by!  

    Fed/DC – No, not soon enough, they should have let us consolidate gains back at 1,200 (2011) rather than jump in with QE3 – all that did was overheat and distort things.  Without wage inflation we'll never have proper growth and, unfortunately, that's more up to Congress than the Fed.  

    HMY/Scott – They are way too cheap.  

    TXN/Akad – I mean today.  An indication they may be done going down if they barely move on a 2.5% market drop.   The market goes up and down so, generally, I just ask and offer what I'll be happy with for each leg and, when I'm left with just one leg, then I make a decision.  What's the premise, that we think TXN will go higher so, if you are worried that you'll sell your 2016s and you won't be able to buy the 2017s, why not buy the 2017s first and sell the 2016s when they go higher?  In fact, had you done that earlier, you'd already be a winner as now they have flipped up 0.70 ($43) for a 2% turnaround since I posted at 1:30.  

    There are always 100 reasons to not execute a trade – that's why you should only trade stocks you have a very good feel for, where you understand their value and the nature of their business.  You have to KNOW when they are cheap and KNOW when they are expensive and ACT to correct either side of that equation.  Otherwise, you are just a deer in the headlights on days like this. 

    TEX/Jeff – No one is building anything so, if you are looking for a quick win – it's not going to happen.  HOWEVER, they are not losing money.  Last year they sold $7Bn and made $226M, this year, in the first half, they sold $3.7M and made $175M yet the stock is back to last year's lows.  So yes, I'd invest in a better position, worst comes to worst, you roll the $40s to the 2017 $35s to make some up. 

    See the show/Deano- Guaranteed to blow your head apart!  

    Yippie, what a stick!  Friggin' Russell is green….

    CNBC/Yo – Oddly enough they were the ones telling people to get out – even Cramer.  


  125. There you go – down just 1% on another boring day…


  126. Thanks for the portfolio update Phil. I found a lot of comfort in the fact that my portfolio is fairing similarly to the model ones. Some follow through on this bounce sure would be nice though. 


  127. Hindsight is 20/20.  But, why oh why didn't we have a long term short oil position on?  It's fun playing the little moves, but man.  

    We would all be going to Monaco for the meeting….  shoulda woulda coulda.  Move foreward.  Press forward.  Get up.

    https://www.youtube.com/watch?v=mgmVOuLgFB0


  128. Phil – Thank you for all your good work today !

    A lot of smaller E & P stocks up today, i.e. XCO up 40% in the past two days.  Hard to tell if it's legitimate buying or simply shorts taking profits.


  129. NFLX decimated


  130. NFLX down 13% a/h – wow


  131. nflx…wow..finally


  132. NFLX going straight to Hell on a miss.

    Netflix Releases Third-Quarter 2014 Financial Results

    You're welcome Palotay.  One lesson people forget is that, if you have $115,000 and your portfolio is up 15% in a good market and then the market drops 20% and you still have $100,000 left – you can buy 105% of the stock that you could have bought with $115,000.  If you are a long-term investor, that's not a problem – it's an opportunity!  As long as we can tread water while the market falls – we'll be able to bargain-shop.  

    Oil/Burr – It fell faster and farther than we thought in the end.  No real bounce since $92.50, but that was down from $107 and we were shorting every day for those $15.  You can't play everything all the time – oil is very dangerous and was obvious from $107 to $92.  From $92 to $80 – less so but the long this morning – that was obvious. 

    You're welcome Albo.  XCO maybe just tired of falling.  


  133. Every momo is toast tomorrow


  134. From Bloomberg, Oct 15, 2014, 2:09:46 PM

    Oct. 15 (Bloomberg) — Bloomberg’s Matt Miller, Olivia Sterns and Julie Hyman report on Ebola’s effect on today’s market decline on “Market Makers.” (Source: Bloomberg)

    The global economy faces its biggest test of confidence since the European sovereign debt crisis as investors fear it’s running out of engines.

    To read the entire article, go to http://bloom.bg/1w3dmuN

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


  135. From Bloomberg, Oct 15, 2014, 4:04:29 PM


    Oct. 15 (Bloomberg) — Bloomberg’s Matt Miller, Olivia Sterns and Julie Hyman report on Ebola’s effect on today’s market decline on “Market Makers.” (Source: Bloomberg)

    Benchmark U.S. stock indexes slid to six-month lows as banks sank after reporting earnings while a drop in retail sales reignited concern about the economy and a second health worker in Texas caught Ebola.

    To read the entire article, go to http://bloom.bg/1qro4GN

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  136. From Bloomberg, Oct 15, 2014, 3:55:24 PM


    Oct. 15 (Bloomberg) — Ellen Zentner, senior U.S. economist at Morgan Stanley, talks about the performance of financial markets and the economy, and Federal Reserve Chair Janet Yellen’s stated confidence in the durability of the U.S. expansion in the face of slowing global growth and turbulent markets.
    Zentner speaks with Mark Crumpton on Bloomberg Television’s “Bottom Line.” Michael McKee also speaks. (Source: Bloomberg)

    Federal Reserve Chair Janet Yellen voiced confidence in the durability of the U.S. economic expansion in the face of slowing global growth and turbulent financial markets at a closed-door meeting in Washington last weekend, according to two people familiar with her comments.

    To read the entire article, go to http://bloom.bg/1w3e7nI

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  137. From Bloomberg, Oct 15, 2014, 1:32:39 PM

    Companies with the highest hedge-fund ownership are leading the U.S. market selloff, with stocks from Ally Financial Inc. (ALLY) to Zynga Inc. (ZNGA) retreating twice as fast as other shares over the last month.

    To read the entire article, go to http://bloom.bg/1w33Vvh

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  138. From Bloomberg, Oct 15, 2014, 12:32:11 PM


    A rig drills for natural gas at a hydraulic fracturing site located atop the Marcellus shale rock formation in Washington Township, Pennsylvania, U.S. Oil production is surging as a combination of horizontal drilling and hydraulic fracturing, or fracking, unlocks supplies from shale formations. Photographer: Ty Wright/Bloomberg

    Gobbling up $50 billion of high-yielding U.S. junk-bond offerings by energy companies this year
    may have seemed like a good idea when oil was above $100 a
    barrel and yields were at record lows.

    To read the entire article, go to http://bloom.bg/1tt5K73

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  139. Phil,

    Finally back online. Apologies for the misquote on AAPL bcs. As indicated not sure why I kept getting the aberrant quotes but it was resolved  right before my system crashed – the first time. No place else to check the accuracy of the quotes. One of those days. Again, sorry for the false alarm and extra effort on your part.


  140. From Bloomberg, Oct 15, 2014, 4:13:20 PM


    Oil drilling in the Bakken shale formation on July 23, 2013 outside Watford City, North Dakota. Photographer: Andrew Burton/Getty Images

    U.S. oil producers that saw profits soar on the North American shale boom are feeling the downside of success: falling prices and shrinking cash are threatening to slow development.

    To read the entire article, go to http://bloom.bg/1w39lGy

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  141. From Bloomberg, Oct 15, 2014, 4:14:23 PM


    Oct. 15 (Bloomberg) — Wal-Mart cut its annual sales forecast and predicted slower profit growth over the next three years. Julie Hyman reports on “Street Smart.” (Source: Bloomberg)

    Wal-Mart Stores Inc. (WMT), facing a retail slump and a decline in traffic to big-box chains, cut its annual sales forecast and predicted slower profit growth over the next three years.

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

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  142. Watch this video at http://bloom.bg/1zaRpPa

    Is the Global Economy a Huge Bubble?

    Oct. 15 (Bloomberg) – Bloomberg’s Peter Coy examines the S&P 500 falls to the lowest level since April and the global markets selloff. He speaks with Bloomberg’s Tom Keene and Matt Miller on “Market Makers.” (Source: Bloomberg)

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


  143. From Bloomberg, Oct 15, 2014, 3:40:14 PM

    Junk bonds in the U.S. extended
    declines that are handing buyers their biggest losses in more
    than a year, all but shuttering the market where speculative-grade companies borrow.

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

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


  144. From Bloomberg, Oct 15, 2014, 1:21:49 PM

    Two months ago, a Federal Reserve
    interest-rate increase in September looked like a sure thing,
    based on futures prices. Now, it’s a long shot.

    To read the entire article, go to http://bloom.bg/1w353iA

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  145. I'm in shock that NFLX is down this much.  Where is TSLA going to be after earnings?  130?


  146. From Bloomberg, Oct 15, 2014, 2:26:31 PM

    Hedge-fund managers trading across
    markets are suffering losses as a bear market for oil converges
    with a global stock rout and a drugmaker merger unravels.

    To read the entire article, go to http://bloom.bg/1w3f7YX

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  147. From Bloomberg, Oct 15, 2014, 12:34:06 PM

    Oct. 15 (Bloomberg) — U.S. President Barack Obama is
    meeting this afternoon with federal officials coordinating the
    government’s response to Ebola after test results showed the
    virus spread to a second health worker at a Dallas hospital.

    To read the entire article, go to http://www.bloomberg.com/politics/articles/2014-10-15/obama-cancels-trip-to-convene-meeting-on-ebola

    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 15, 2014, 4:06:54 PM

    The resignation calls have begun. Two Republican members of Congress have joined FOX News host Bill O’Reilly in calling for Centers for Disease Control Director Tom Frieden to step, saying the nation’s top disease-fighter hasn’t been alarmed enough about the possible spread of the deadly Ebola virus.

    “This Ebola situation is beginning to spiral beyond control. The reports my colleagues and I have received are utterly unacceptable and the information provided to the public has been cryptic and in some cases misleading,” Representative Tom Marino said in a statement issued today. “This has provided a false sense of security to many of our citizens. That is exactly the opposite of the CDC Director’s primary responsibilities—to communicate clearly and honestly. I have no ill will towards him personally but he should resign his position effective immediately.”

    Marino tied his call, issued less than three weeks before the mid-term election, to what he said is a pattern of President Barack Obama failing to appreciate the danger of Ebola.  

    To read the entire article, go to http://www.bloomberg.com/politics/articles/2014-10-15/cdc-director-should-resign-gop-lawmakers-say

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  149. From Bloomberg, Oct 15, 2014, 1:48:55 PM

    Another scary turn in the Ebola crisis emerged Wednesday: A second Dallas health care worker, who recently flew to Cleveland and back, has tested positive for the disease. The Centers for Disease Control is now reaching out to the individuals on the plane with that health care worker, who wasn’t showing symptoms on the flight. President Obama canceled a planned fundraising trip to meet with his Cabinet.

    To read the entire article, go to http://www.bloomberg.com/politics/articles/2014-10-15/fearmongering-index-responses-to-the-ebola-outbreak

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  150. From Bloomberg, Oct 15, 2014, 12:38:24 PM


    Pump jacks and wells are seen in an oil field on the Monterey Shale formation where gas and oil extraction using hydraulic fracturing, or fracking, is on the verge of a boom on March 23, 2014 near McKittrick, Calif. Photographer: David McNew/Getty Images

    OPEC is resisting pressure to cut oil production while demand slumps as it tests how low prices must go to make U.S. shale oil unprofitable. As producers become more efficient, that floor is sinking.

    To read the entire article, go to http://bloom.bg/1Cj2oST

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  151. From Bloomberg, Oct 15, 2014, 5:30:00 AM

    EBay Inc.’s headquarters in San Jose, Calif. on Dec. 6, 2013. Photographer: David Paul Morris/Bloomberg

    Danni Ackerman, an antiques merchant in Las Vegas, sells collectibles on EBay Inc. (EBAY)’s online marketplace and gets paid through its PayPal unit. Now that EBay plans to separate those businesses, Ackerman has one reaction: relief.

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

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  152. From Bloomberg, Oct 15, 2014, 11:08:07 AM

    An worker transports rocks at the El Teniente copper mine, owned and operated by Corporacion Nacional del Cobre de Chile (Codelco), near Rancagua, Chile. Photographer: Morten Andersen/Bloomberg

    With demand for copper set to swell,
    producers are turning to 21st century ideas to boost output of
    the metal that’s becoming a more crucial component of the
    expanding global economy.

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

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  153. From Bloomberg, Oct 15, 2014, 8:30:01 AM

    Wholesale prices in the U.S.
    unexpectedly fell in September for the first time in a year,
    propelled by a drop in fuel costs that continues into this
    month, Labor Department figures showed today.

    To read the entire article, go to http://bloom.bg/ZZ8w72

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  154. From Bloomberg, Oct 15, 2014, 12:15:53 PM

    The global growth scare that has
    sent stocks tumbling may be overblown, an index compiled by
    Goldman Sachs Group Inc. suggests.

    To read the entire article, go to http://bloom.bg/ZDV8EK

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  155. From Bloomberg, Oct 15, 2014, 3:23:02 PM

    A shopper walks past mannequins displayed at a store in New York. Purchases at clothing stores dropped 1.2 percent, the most since October 2012. Photographer: Craig Warga/Bloomberg

    Retail sales dropped more than forecast in September on a broad pullback in spending that indicates American consumers provided less of a boost for the economy in the third quarter.

    To read the entire article, go to http://bloom.bg/ZZ7yrx

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  156. NFLX – So I was short 5 of the March $380 puts, and short a total of 26 calls, Including March 500, 525, and 550 calls.   I'm feeling pretty dumb now for having the short puts on still into earnings, but felt I needed them just in case NFLX beat and shot up to $500.  I'm mulling over what to do tomorrow.  I think I should probably split up the short puts, and roll half of them to short calls, pretty close to the money, and then roll the left over short puts, down and probably double down.  Phil – Any thoughts?   This position was a recovery position after getting burned on short calls on NFLX earlier in the year.


  157. I will obviously let the short calls expire worthless.


  158. I was THIS CLOSE to gambling on Oct 385 puts for NFLX for a buck an a half. I haven't played short ter options in a long while, so it was actually funny I even considered it. And then there is is down 100 points. Wow.


  159. I did buy ERY puts however, because those leveraged bear funds are just total garbage and free money when they spike up. I'll put $100k into VXX puts if they hit 50. (ok ok maybe only $10k but I'm just sayin'…)


  160. NFLX/Palotay – Ouch, that sucks!  They are down like $115 now (25%).  That's why I was worried about my TSLA $140 short puts – not as far away as you think with these over-priced monstrosities.  Fortunately, you portioned it well and 5 $380 puts should be rollable to 10 2016 $250 puts and 10x $250 is not that much worse than 5x $380 but I'm not sure you want to sell calls.  Remind me pre-market and we'll see what the prices look like.  If you can, it might be good to sell more puts into the excitement and then wait for a bit of a bounce before closing out your hurting puts.  


  161. STJ/VXX – Hello STJ, can you please elaborate on your thinking around VXX. You said you were looking to add VXX but not yet? if the market stops going down and VIX recovers VXX will significantly decay in value right? so were you thinking of shorting it? or buying a put for VXX? thanks 

    NR


  162. VXX / nramanuja – I have a set of 2016 25 Puts already and I'll be adding some more on the assumption that 15 months from now we will be much lower. These spikes are the perfect opportunity for that. But still risky although it has been working that past 5 years or so.


  163. Good stuff from Google:

    http://www.engadget.com/2014/10/15/nexus-6-official/

    I like this feature in particular:

    It also benefits from Motorola’s turbo charging technology, which can deliver as much as 6 hours of battery life from just 15 minutes of charging.


  164. Nexus 6 is getting glowing reviews and is trumping AAPL iPhone6.   Rutro!

    Speaking of Ebola and infectiousness…



  165. NFLX could cut in half from here over the next two months, 165 target.

    It's time to take a hard look at CMG. A mature restaurant with a P/E of 57…. earnings Oct 20th


  166. PCLN / Ebola isn't that scary in reality but do 10% of folks take a holiday from travel for a few months. You bet they do. You don't invest in reality, you invest in perception.


  167. Phil/NFLX – Thanks for the advice.  I actually covered my short puts by shorting NFLX in after hours at around 335.  My thinking is that I can handle getting the $24k back on the short $380 puts, but it will be a huge pain if it is down another 20+ points tomorrow.  I'd rather get neutral, and see how things look.  Good idea?


  168. Palotay – Good luck.  I'm pulling for you !


  169. Thanks Albo!


  170. PCLN / BDC – What an old friend used to tell me – "Things that are perceived to be true, are true in their consequences!"


  171. Well, we had an up day today – the Russell is up over 1%. It has come down the most so maybe long Russell and short Dow is the pair trade to go with.


  172. Biodieselchris

    CMG, PCLN, and other stocks that could be affected by people "staying away" could be facing a real Black Swan of sorts if the Ebola scare gets worse. I am with Pharm. Irrational thought will rule the day if many more cases are discovered in the US.


  173. GTAT NEWS: "interesting comments from judge"

    "Boroff also provided a colorful analogy for the dispute between Apple and its would-be supplier. "I’m seeing what looks incredibly like a construction suit, where a homeowner says to the contractor, 'It didn't come out the way I wanted to,' and the contractor says, 'Well, it would have come out that way if you didn't continue to change the specifications."

    http://seekingalpha.com/news/2034315-gt-bankruptcy-hearing-delayed-apple-grilled-over-secrecy-requests


  174. From Bloomberg, Oct 16, 2014, 12:01:00 AM

    Oct. 16 (Bloomberg) — Dallas County Commissioners will vote today to declare a local state of disaster caused by the Ebola virus.

    To read the entire article, go to http://bloom.bg/1w7Shzg

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  175. From Bloomberg, Oct 16, 2014, 3:24:22 AM

      Oct. 15 (Bloomberg) — Dennis Stattman, head of global allocation at BlackRock Inc., talks about Japan and Europe stocks, and global bonds. He speaks with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    European stocks climbed and U.S. equity-index futures signaled a rebound after about $672 billion was wiped from global shares yesterday. Crude oil extended declines while Japan’s Topix index entered a correction.

    To read the entire article, go to http://bloom.bg/1w4E1ao

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  176. From Bloomberg, Oct 15, 2014, 5:27:09 PM

    The lowest oil price in four years will provide stimulus of as much as $1.1 trillion to global economies by lowering the cost of fuels and other commodities, according to Citigroup Inc.

    To read the entire article, go to http://bloom.bg/1w3P03S

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  177. From Bloomberg, Oct 15, 2014, 11:45:25 PM


    Oct. 16 (Bloomberg) — China’s broadest measure of new credit rose to a three-month high in September, suggesting the central bank’s targeted measures to boost liquidity have helped spur lending. Bloomberg’s Stephen Engle reports on “Asia Edge.” (Source: Bloomberg)

    China’s broadest measure of new credit rose to a three-month high in September as the central bank’s targeted measures to boost liquidity helped spur lending.

    To read the entire article, go to http://bloom.bg/1xU56xw

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  178. From Bloomberg, Oct 15, 2014, 7:01:00 

    It’s futile for the U.S. and its allies to “blackmail” Russia over the Ukraine crisis, President Vladimir Putin said in a newspaper interview.

    To read the entire article, go to http://bloom.bg/1w3mMpX

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  179. From Bloomberg, Oct 16, 2014, 3:04:42 AM

     
    Oct. 2 (Bloomberg) — European Central Bank President Mario Draghi speaks at a news conference in Naples, Italy, about the bank’s plans to buy assets for at least two years to boost inflation and growth in the euro area. He spoke after the Governing Council voted to keep interest rates unchanged at record lows. (Statement only. Source: European Central Bank)

    Just last month, Europe’s stocks were trading near their highest levels in six years, with optimism spreading that central-bank stimulus would ignite the economy. Much has changed.

    To read the entire article, go to http://bloom.bg/1w5XE1X

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  180. From Bloomberg, Oct 15, 2014, 5:33:24 PM

    What a dismal time for bond traders who were optimistic about growth.

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

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  181. From Bloomberg, Oct 16, 2014, 3:07:22 AM


    Online streaming of Netflix on Sept. 15, 2014. Photographer: Stephane De Sakutin/AFP via Getty Images

    Netflix Inc. (NFLX) tumbled after saying a price increase had slowed subscriber growth, while coming competition from HBO gives the world’s largest subscription-streaming service a new challenge.

    To read the entire article, go to http://bloom.bg/Zu2rhV

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  182. From Bloomberg, Oct 16, 2014, 3:18:41 AM


    Oct. 16 (Bloomberg) — A four-minute news video showing a pro-democracy protester being beaten and kicked by Hong Kong police is unraveling more than two weeks of efforts to win back the hearts and minds of Hong Kong citizens. Bloomberg’s Rosalind Chin has more on “On The Move Asia.” (Source: Bloomberg)

    Hong Kong Chief Executive Leung Chun-ying said his government is ready to meet with student leaders next week to discuss “universal suffrage” as he seeks to end three weeks of protests.

    To read the entire article, go to http://bloom.bg/1w9S1AM

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  183. From Bloomberg, Oct 15, 2014, 9:12:58 PM

      Oct. 15 (Bloomberg) — U.S. Centers for Disease Control and Prevention Director Thomas Frieden and Health and Human Services Secretary Sylvia Mathews Burwell speak about a second Dallas health-care worker diagnosed with Ebola. The caregiver flew from Cleveland to Dallas hours before she reported her symptoms. Frieden and Burwell speak at a news conference. (Courtesy: CDC Source: Bloomberg)

    The Ebola outbreak in West Africa has raised concerns of international spread — and economic impact — similar to the SARS epidemic in 2002 and 2003.

    To read the entire article, go to http://bloom.bg/1w7Pvdk

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  184. From Bloomberg, Oct 15, 2014, 7:17:02 PM


    Oct. 11 (Bloomberg) — Federal Reserve Bank of San Francisco President John Williams participates in a panel discussion on China’s remnimbi at the International Institute of Finance’s annual membership meeting in Washington. Fitch Ratings’s Andrew Colquhoun, HSBC’s Stephen Williams and Bank of China’s Yuqiang Xiao are also speak. IIF’s Sonja Gibbs moderates. (Video is courtesy of IIF. Source: Bloomberg)

    The U.S. said China has shown “some renewed willingness” to let the yuan strengthen while reiterating the currency “remains significantly undervalued.”

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

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  185. From Bloomberg, Oct 15, 2014, 11:15:59 PM

      Sept. 22 (Bloomberg) — John Saunders, managing director and head of Asian real estate at BlackRock Inc., talks about markets in Hong Kong and China. He speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    Zhou Bingguo expected to find a few buyers for the 20 apartments for sale next to Beijing’s Central Business District in the first week of October, he said. It was the Golden Week holiday, traditionally a peak time for homes sales, and China had just eased mortgage restrictions.

    To read the entire article, go to http://bloom.bg/100aJz5

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  186. Watch this video at http://bloom.bg/1w8q5LR

    Netflix Shares Tank: What Caused the Free Fall?

    Oct. 15 (Bloomberg) — Bloomberg’s Julie Hyman reports on Netflix and American Express earnings. She speaks on “Street Smart.” (Source: Bloomberg)

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  187. Watch this video at http://bloom.bg/1zc1nzz

    Hong Kong Police Criticized for Using Excessive Force

    Oct. 16 (Bloomberg) — A four-minute news video showing a pro-democracy protester being beaten and kicked by Hong Kong police is unraveling more than two weeks of efforts to win back the hearts and minds of Hong Kong citizens. Bloomberg’s Rosalind Chin has more on “On The Move Asia.” (Source: Bloomberg)

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


  188. From Bloomberg, Oct 16, 2014, 2:53:41 AM

    The ruble erased its first advance in nine days as more than $9 billion in interventions failed to stem the Russian currency’s rout amid a slump in oil prices.

    To read the entire article, go to http://bloom.bg/1rx3FPP

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  189. From Bloomberg, Oct 16, 2014, 3:16:10 AM

    European stocks rebounded from their biggest drop in almost three years as investors watched financial results for clues about how companies are coping with the region’s economic woes. U.S. index futures also climbed, while Asian shares fell.

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

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  190. From Bloomberg, Oct 15, 2014, 7:01:00 PM

      Growth projections for 2015 made earlier this year were more optimistic than they are now, Italian Finance Minister Pier Carlo Padoan said on Oct. 14 at the conclusion of the Luxembourg meeting. Photographer: Andrew Harrer/Bloomberg

    The European Union started a two-week probe of euro-area governments’ draft budgets as a re-emergence of the bloc’s debt-crisis nightmare risked undoing its economic recovery.

    To read the entire article, go to http://bloom.bg/ZZRMg7

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  191. From Bloomberg, Oct 16, 2014, 1:45:59 AM

    Job seekers wait in line to speak with recruiters at the Career Choice Inland Empire Career Fair in Ontario, California. Reports this month showed the U.S. jobless rate fell to a six-year low in September as additions to payrolls beat estimates. Photographer: Patrick T. Fallon/Bloomberg

    The longest Treasuries rally in two years has pushed 10-year notes to the most overbought level in more than a decade, technical indicators show, heightening risks the securities will drop back as fast as they climbed.

    To read the entire article, go to http://bloom.bg/1rwTkU4

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  192. From Bloomberg, Oct 15, 2014, 2:30:01 PM


    Narendra Modi, India’s Prime Minister. Photographer: Tomohiro Ohsumi/Bloomberg

    India’s ruling Bharatiya Janata Party is poised to win one of two state elections while nearing majority in the other, as exit polls signaled a verdict that would boost Prime Minister Narendra Modi’s ability to carry forward legislative reforms.

    To read the entire article, go to http://bloom.bg/1rt9MVk

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  193. From Bloomberg, Oct 9, 2014, 7:24:03 PM


    Two years ago, Clayton Barker’s interaction with the national Republican party was limited to a hamburger.

    To read the entire article, go to http://www.bloomberg.com/politics/features/2014-10-09/saving-senator-roberts

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  194. From Bloomberg, Oct 16, 2014, 1:45:00 AM

    The Swiss government expects slower economic growth this year and next due to weaker domestic demand and exports to the euro area.

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

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


  195. SPY  5  MINUTEGood morning!

    Asia diving into the close – Nikkei down 2.2%, Hang Seng -1%, Shanghai -0.7%, India down 0.5% and Singapore down 1.16%.  

    Asian Stocks Head to Six-Month Low; Bonds Rise, Oil Drops. Asian stocks slid toward a six-month low and average bond yields for the biggest developed economies fell to a record on concerns that global growth is at risk. Crude oil extended declines as South Korea’s won led emerging-market currencies higher. The MSCI Asia Pacific Index sank 1.1 percent by 10:47 a.m. in Tokyo, as every major Asian benchmark gauge retreated.

    Commodities Sink to Five-Year Low Led by Metals Declines. Commodities dropped to a five-year low on growing concern that slower economic growth will cool demand in China, the world’s top consumer of metals, grains and energy. The Bloomberg Commodity Index (BCOM) of 22 raw materials fell as much as much as 1.3 percent yesterday to the lowest since July 2009. Copper futures dropped by the most since March on the Comex, while hog prices posted the biggest loss in 25 months. Raw materials slumped 7 percent this year, headed for a fourth annual decline and the longest slump since at least 1991, amid concern that economic growth is weakening as global equity markets lost $1.5 trillion last week. A stronger dollar has curbed demand for commodities as alternative assets.

    Sands China Fall as Macau Competition Hit High-end Margin. Sands China Ltd. (1928) led declines among casinos in Hong Kong trading as intense competition between the resorts hit margins for higher-stakes mass-market gamblers.

    IEV WEEKLYIt's Europe again, they started heading down as soon as they opened and have dragged our Futures back from about 0.5% gains back to flat.  

    At the moment, our Futures are at 16,042, 1,849, 3,748 and 1,068.  Oil still weak at $80.55, Dollar 85.13, gold $1,239, silver $17.43, copper BAD! at $2.995, nat gas $3.80 and gasoline $2.14.  

    There's not really much NEW in the news, but it's a busy calendar today – sorry I won't be here in the afternoon.  What Dave Fry meant on his intra-day SPY chart (above) re. "Bloomberg Leak" that boosted us into the close was the same old BS we're used to, courtesy of our Corporate Media:

    Not so surprising is Yellen oracle Bloomberg suddenly posted a well-timed report: "Federal Reserve Chair Janet Yellen voiced confidence in the durability of the U.S. economic expansion in the face of slowing global growth and turbulent financial markets at a closed-door meeting in Washington last weekend, according to two people familiar with her comments.

    The people, who asked not to be named because the meeting was private, said Yellen told the Group of 30 that the economy looked to be on track to achieve growth of around 3 percent going forward. She also saw inflation eventually rising back up to the Fed’s 2 percent target as unemployment falls further, according to the people."

    Then again, this meeting was last weekend and she had yet to see the poor economic data and market conditions so far this week. Some believe these comments are bearish since it would mean no changes in policies while others were heartened by her steadfast defense of how the Fed sees conditions.

    SPX WEEKLYThursday's economic calendar

    Fox News Poll: As election nears, voters say things are 'going to hell in a handbasket'The new poll, released Wednesdayfinds 58 percent of voters feel things in the world are “going to hell in a handbasket.” That includes nearly half of Democrats (48 percent) and majorities of independents (61 percent) and Republicans (71 percent).

    Risk of Deflation Feeds Global FearsFalling Commodities Prices Pressures Central Banks. Behind the spate of market turmoil lurks a worry that top policy makers thought they had beaten back a few years ago: the specter of deflation. A general fall in consumer prices emerged as a big concern after the 2008 financial crisis because it summoned memories of deep and lingering downturns like the Great Depression and two decades of lost growth in Japan. The world’s central banks in recent years have used a variety of…

    This Is What Happens, Janet, When You Take The Punchbowl Away

    Brutal period for hedge funds

    9 Ominous Signals Coming From The Financial Markets That We Have Not Seen In Years

    For Bank Of America(BAC), Crime Is Now An Ordinary Course Of Business

    • AbbVie Drops Plan to Acquire Shire

      AbbVie said its board is recommending shareholders vote against the $54 billion takeover of Shire in light of new tax rules from the Treasury Department. 19 min ago

    eBay(EBAY) trims 2014 revenue outlook amid economic fearsEBay Inc trimmed its full-year revenue forecast on Wednesday, signaling a weaker-than-expected holiday shopping season for the e-commerce company as it prepares to split from its fast-growing payments arm, PayPal.

    Netflix(NFLX) Obliterated After Guiding To Half Expected Q4 EPS, Streaming Adds Hit Brick Wall: Stock Down $100

    Why Netflix(NFLX) stock isn't a 'buy': Wedbush analyst

    HBO's Standalone Web Service Is Good News For Companies Trying To Revolutionize TV

    Putin Warns Of "Nuclear Power Consequences" If Attempts To Blackmail Russia Don't Stop

    INDU DAILY

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  196. Now our Futures are down about half a point as Europe moves lower into lunch.  Italy and Spain down 1.5% but Germany flat.  


  197. From Bloomberg, Oct 15, 2014, 4:52:37 PM


    A shopper walks past mannequins displayed at a store in New York. Purchases at clothing stores dropped 1.2 percent, the most since October 2012. Photographer: Craig Warga/Bloomberg

    Retail sales dropped more than forecast in September on a broad pullback in spending that indicates American consumers provided less of a boost for the economy in the third quarter.

    To read the entire article, go to http://bloom.bg/ZZ7yrx

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


  198. Europe in free-fall again and dragging us down.  They've dropped about half a point in the last half hour.  No, more, Spain and Italy down 2.5% now, France down 1.5%, Germany down 0.8%, UK -0.7%.

    Our Futures are down more than 1% now – heading to re-test yesterday's lows.  

    Eurozone Woes Hammer Markets

    Barroso: ‘We Were Very Close to the Abyss’

    Italy, France Challenge Europe Over Spending

    Hong Kong Chief: Police to Clear Protesters

    I still like the bull play on /TF off the 1,150 line but with very tight stops and again at 1,140 if we hit it.  /NQ  3,700 has to hold and 1,820 on /ES and 15,850 on /YM so nice, firm resistance areas we can hopefully count on for at least a bounce.


  199. Phil,

    Good Morning.  At this point in the market would you expect volatility (particularly with respect to the VIX) to rise further, stay up for some period of time or drop back to the lows we have seen in recent times?


  200. By the way, when you are playing a bounce like this, it's a momentum play – you get out as soon as the momentum slows down (/TF now 1,053.50 so 1,053 is the stop) and wait to see the next set tested lower or crossed above before taking another chance.  3 points on the RUT is $300 in 5 minutes – why be greedy?  


  201. VIX/Sibe – The VIX tends to make dramatic highs as people panic and then settle down pretty quickly.  Historically, you have to let the spikes play out and then, on the other side, it's usually a pretty easy short. 

    I don't like to play it because the option spreads are ridiculously wide and it's not a very liquid market (so hard to get in and out of positions – especially when it's moving dramatically).  As a rule of thumb, 12 is too low and 30 is too high but that wouldn't have stopped a short from breaking you in 2008 and those who went long on Vol since 2013 have long since lost their money before this spike.  


  202. So much for our rally.  Back to 1,050 (/TF) but more nervous the 2nd time a floor is tested so tighter stops.  


  203. From Bloomberg, Oct 15, 2014, 3:20:14 PM


    Relax? We don’t think so.

    The first half of October and particularly the last five days and today have been brutal for investors who had bought into the notion of the low-volatility “Goldilocks” economy and markets. They have experienced large losses on their highly correlated positions in different asset classes. Indeed, with the exception of government bonds — a generally unappreciated asset class until recently — they have found few if any shelters from the storm. And the market choppiness is likely to continue for what many will feel is an uncomfortably long period of time.

    To read the entire article, go to http://bv.ms/1zb9z3l

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


  204. Oil below $80!  

    15,835, 1,822, 3,697 and 1,052.8 in the Futures.  


  205. Spain down 3%, Italy down 2.9%, France down 2%, Germany down 1.7%, UK down 1.8%.  


  206. Something to cheer us all up, or at least those who followed Phil's advice to remain "cashy"!

    The S&P 500 (SPX) is down 5.6% so far this October. If the month ended today, it'd be the fifth-worst showing since 1950, according to the Stock Trader's Almanac. Over those 64 years, the S&P has declined in October 26 times. Of those 26 instances, November through December has registered gains 21 times, with an average advance of 3.4%. For the Dow (DJI), the numbers are even better. 
    So keep some powder dry. If you have any powder left.