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Tempting Tuesday – Low Volume Rally Challenges Our Bounce Lines

RUT WEEKLYIt LOOKS impressive, doesn't it?  

As I said to our Members this morning in our Live Chat Room, all is going according to plan, as we expected to see strong bounces in our indexes by Wednesday – no matter what news or earnings turned out to be.  If the powers that be want the market to bounce – it bounces.  

Our general rule of thumb is that dip buyers only learn their lesson after they have been burned 3 times and, so far, only the August dip buyers are being relly burned but a failure to retake that line and a move lower – that might get them to think twice about mounting another rescue effort next time we test 1,050 on the Russell.  

On this next chart, you can see how the various Fed speakers were used at key inflection points to guide the markets exactly where they wanted them to go.  

As you can see from this S&P chart with Fed notes attached, the manipulation we told you about on 10/6 (see: "Market Mayhem – 12 Fed Speeches in 5 Days Causes Chaos") is merely playing out according to plan and this is why we were able to take full advantage of both the dip (see: "Money-Making Monday: How to Profit from a Market Correction") and the bounce (see: "Wednesday Market Weakness – Oil Collapses to $80, Good or Bad?").

In fact, the TNA Oct $58/60.50 bull call spread that we pointed out last Wednesday at $1.12 closed on Friday morning at $2.40 – up a very nice 114% in 48 hours for those of you who get our morning newsletter (which you can subscribe to here).  Our suggested roll to the Nov $56/63 bull call spread at $3 still has to play out but, so far, we're at $4, so up 33% in 4 trading days is "on track" towards our planned 133% gain in 30 more days.  

This is how rich people get richer folks – if you are in the top 1%, the Fed is out there working for us – and they are going to make sure we can make nice, little leveraged bets like these to pull off some stunning returns in any kind of market conditions.  That's why, on a Monday two weeks ago, I was able to tell you what the market was going to do for the next 10 sessions – it's all according to plan – "even when the plan is horrifying."  

Yesterday, we used our 5% Rule™ to plot the action ahead for the next few days, the bounces we're looking for are:

  • Dow 16,466(weak) and 16,632 (strong).
  • S&P 1,878 (weak) and 1,903 (strong).
  • Nasdaq 4,280 (weak) and 4,360 (strong).
  • NYSE 10,360 (weak) and 10,540 (strong).  
  • Russell 1,104 (weak) and 1,128 (strong).

SPX WEEKLYAt yesterday's close, we hit 1,903 on the nose on the S&P (turning it from red to black) and added a green on the Nasdaq but that was it – not a great start towards our strong bounce goals but the markets were held down by IBM's poor performance, which dragged down the Dow, S&P and NYSE so we remained bullish and we're still looking for those strong bounce lines by Wednesday. 

Failing those bounce lines would be BAD!!! and we'll cross that bridge if we come to it but already we're not liking the way what we are seeing in the Futures as overnight selling was reversed on rumors (false) of more ECB stimulus.  When they jam up the low-volume Futures ahead of the open – you know someone big is manipulating the tape so they can dump their shares on the retail schmucks.  

As noted yesterday, our virtual Short-Term Portfolio has gone bearish again, in anticipation of failing those strong bounce lines and that TNA long we're working on can be dismantled by selling those Nov $56 calls, which would leave us agresssively short on the $63 calls – and that's how quickly we can flip our portfolio from slightly bearish to VERY bearish – even as we move our cash to the 90% level.  

Cashing out those TNA Nov $56 calls at $9 (assuming RUT 1,100) will drop $27,000 on our cash pile and leave us aggressively bearish with our SQQQ spreads and the naked, short TNA Nov $63 calls, so it's not a decision we'll make lightly but that's our PLAN if it looks like we are topping out at 1,100 on the Russell.

We'll discuss this and other strategies today in the Live Member Chat Room as well as during our Live Trading Webinar at 1pm (EST) this afternoon.  

Until then, be careful!  


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  1. Oil Lines

    R3 – 84.81
    R2 – 83.75
    R1 – 82.90
    PP – 81.84
    S1 – 81
    S2 – 79.93
    S3 – 79.08

  2. Phil Like your view on one of my dogs SDRL 

    Hold stk @ 35.00 now 23.56 sold Jan16 put @ 4.70 now 11.40 against me. Leaving out the callers I sold at strike 30 which will be toast in any case.

    I can close the deal selling the stk and buying back the Jan16 put but paying still a premium of some 4.40! So take the loss and close the book on it. Same as with RIG 

    Or sell jan17 18 call @ 6.40 only leaving a premium of some .75 cents. Possible rolling the putter down at a later state once premium has been burned down. By dropping the Jan17 strike to 18 will possible let me enjoy the 17% div P.A. TIA

  3. Good morning!  

    Photo Credit: Tom Corbett website

    The GOP's latest effort to win black support has hilariously backfired.



    This is what's going on in our country:

  4. Good Morning Everyone!

    Today's LIVE webinar can be found here (1pm Eastern!)

  5. TNA spread / Phil – I have the Nov 55/62 BCS. For margin reasons I cannot leave the 62s naked so, just to confirm what you said the other day, I could roll the 55s to something like the Apr62s for a calendar spread to turn bearish? 

  6. Good Morning!

  7. Not hiding the facts:

    China is just about the only economy in the world to aim for a specific rate of GDP growth every year, and when you make a measure a target, it ceases to be a good measure. Chinese premier Li Keqiang has acknowledged that his government’s GDP figures are “man-made” and “for reference only.”

    LOL! The USA is now growing at 5% a year – it's for reference only!

  8. This guy needs some advice from the GOP – can't let poor people influence the elections. What would be left for the top 0.01%:

    Hong Kong’s Umbrella Movement protesters have been demanding that the city’s top official, CY Leung, step down for weeks now. They may soon be joined by many more of the city’s 7 million residents, after a controversial interview last night in which Leung suggested that election reforms sought by the protestors would invite undue influence from the city’s poor.

  9. SDRL/Yodi – Keep in mind this is a function of low oil prices, which come and go over time and not a particular flaw in the business.  I assume the short 2016 puts are the $30s and it looks to me like the 2017 $23 puts are $8.50 so I'd spend $3 of the $4.70 you collected to drop the strike 20%.  That leaves you with the stock at $35 less the short calls ($2?) and the $1.70 left from the short $30s is net $31.30/27.15 and, if you sell the $30s for $2.25, that drops you to net $29.05/26.03.  If they keep up their dividend ($4), it still makes for a nice hold as you're getting 13.7% while you wait.  You can be more aggressive on the call sale but the $25s are only about $1 more and I don't think it's worth it.  

    Although, interestingly, as a new trade idea, since the SDRL 2017 $25 calls are $3.30 and the 2017 $30 calls are $2.25 –  I love buying 20 of those spreads for $1.05 ($2,100 but $1.25 would be fine) and selling 5 of the short 2017 $13 puts for $3.20 ($1,600) and then you are in $10,000 of long spreads for net $500 and your worst case is owning 500 shares of SDRL for net $14, which is 39% off this already low price.

    What a fantastic way to profit from Yodi's pain! cheeky



    "The driver of the snow plough was drunk, according to Russian investigators."


    Was it snowing?  …… No.

  11. Is Bezos the best or under-performing:

    So is Bezos the best or not? It may be a silly question. It’s incredibly difficult to identify the impact that individual CEOs have on their companies. As the founder, CEO, and guiding spirit of Amazon, Bezos obviously has a lot to do with the company’s development.

    But who’s to say that there’s not someone out there who could run a better, more disciplined Amazon, who transforms its tremendous sales into solid quarter-on-quarter profit growth? We’ll never know. Economics isn’t a controlled experiment that you can re-run to prove a statistically significant point.
    In the backdrop of all efforts to quantify CEO performance is what Thomas Piketty calls the “illusion of marginal productivity.” The influential French economist argues that in large corporations, it’s essentially impossible to connect the performance of a single manager with the company as a whole. Also lurking behind that argument is that age-old bugbear: CEO pay. After all, if you can’t quantify the performance of a CEO, how can you justify his or her pay?

    The obvious answer is, you often can’t.

  12. Total / 1020 – Something smells there! Payback for the sanctions? Although the Total CEO was apparently in good terms with Putin. Who knows?

  13. Pharm – what is your buddy Pretzel saying?  Looks like SP could tag 1940 and it still is below the bottom of the channel in yesterday's chart.  

  14. stjean/smells   No doubt!

    "Pictures from the scene show the driver looking shocked, but walking unaided and without any obvious serious injury."

    "Reports say the visibility at the airport was 350m (1,150ft). "


    The World will be a better place when Putin get's "plowed"…….

  15. Phil still have no faces but thanks for nothing on SDRL !!!!!!!!

  16. Putin / 1020 – Maybe he'll lose the next election :-)

  17. Really looking up in Europe – deflation, unemployment.

  18. Huge rise in capesize drybulk shipping rates overnight helping DSX and other shippers.

  19. GTATQ – Catching major squeeze this morning.

  20. Phill// IRBT March 30/36 bcs combined with a 30 put sold.  Not sure if you had covered this for a roll out for a longer period or close out the position.  Sorry missed it.  Let me know what the course of action should be for this.

    March IRBT 30 puts sold for 3.10

    March IRBT 30/36 bcs bought for 2.64


  21. That last trade idea went out as a new "Top Trades Alert" – if your Membership allows you to read this, you are eligible.  Go to your account link (your name on top right of page) and set preferences if you want Emails or Text Alerts from Top Trades (it's always going to originate in chat).  

    Good job whoever is asking $9.35 for those TNA $56 calls – that's the way to look for a fill!  

    TNA/Mck – The max payoff on the spread is $7 and we can pull $9 now, that's what makes it attractive.  If you roll it, you are not pulling anything so it's a less attractive move BUT if you roll out longer-term, you can decrease your delta considerably (now 0.78) relative to your caller (delta 0.57) and, of course, drop your time decay substantially as well.  If you could manage something like the Jan $68s ($4.60), I think that's better because you are taking $4.50 off the table, locking that in – though you use it as margin for now.  Figure you have $9 and, if all goes well, the short callers expire worthless and you salvage $2 off the spread so you net $6.50 out of the potential $7 had the spread gone well.  

    Sleep/StJ – Highly overrated.  LOL on China – numbers now so obviously made up that they have to admit it. 

    Snow/1020 – I was just saying to Tina that TOT's CEO's death had all the markings of a James Bond hit. He had a meeting with the bad guy, possibly some disagreement and they parted on "friendly" terms yet, suddenly, just as he was about to "safely" depart, he is killed in an ethnically stereotypical fashion (drunken Russian) that looks like a very unfortunate accident.  

    Good catch on the weather – of course our Corporate Media doesn't question it at all.  

    Bezos/StJ – Like Musk, he is a master of BS – if they replace him, it would be a disaster because people will start looking at the numbers and then they might notice that AMZN only made $274M on $74Bn in sales last year (0.3%) or that they are not even on track for that this year (net -$18M so far).  

    TOT/StJ – It's my understanding he was a strong advocate for Russia and against sanctions – more like fun speculation than anything else – but you never know what's going to piss a bond villain off.  

    By the way, Youtube now officially sucks when they make you watch a 30-second commercial to see a 2min video!  

    And thank you for the idea, Yodi.  

    Unemployment/StJ – Almost looks like Germany kicks their unemployed out of the country.  

    GTAT/Albo – On fire!  cheeky

  22. Germany / Phil – Maybe Yodi has more insight into the numbers but from what I have read, their numbers are somewhat distorted by all kinds of artifices – for example, rather than lay you off, a company will employ you only for 20 hours and the government makes up the difference. But you don't count as unemployed. And they have people working on 450 euros/month contract that also don't count as unemployed. Not limited to Germany BTW although they didn't have a minimum salary up to now. I just read that Portugal minimum salary is around 500 euros/month. And Spain has similar deal between employers and the government. They all try to hide the scary numbers it seems!

    In the US, we subsidize employers instead - we pay Wal-Mart undirectly to keep working poors!

  23. Phil, any suggested plays in IBM at current prices?  Thanks!

  24. Phil – I'm sure they were best of friends. You could tell by Putin's 'heartfelt' statement after the accident….

    "Russian President Vladimir Putin sent his condolences.

    News agency Tass quoted a Kremlin spokesman as saying: "The President highly appreciated de Mergerie's business skills, his continued commitment to the development of not only bilateral Russian-French relations, but also on multi-faceted levels."


    With friends like these……

  25. TNA / Phil – thanks, appreciated as always!

  26. Bezos / Phil – Who can blame him though, Seems to work for AMZN investors so far.

    I wonder if CLF could hire him or Musk to run their operations. They could announce plans to mine the moon for iron ore deposits for example! And watch the stock take off (pun intended)… 

    I guess at least Bezos and Musk are creating jobs as opposed to other BS people like Icahn who tweets about AAPL every time he needs another $10M!

  27. Saw that story about my Governor (hopefully soon to be former Governor) Corbett photoshopping African Americans into his ads. Of course this revelation last week, leads to a story this morning that his challenger is only up by 7 points in polls, down from 19 a few weeks ago. Of course we must keep in mind that this poll was done by a GOP backed polling company, so perhaps it is like all things Republican completely lacking in facts and truth. Then again, the people of Pennsylvania outside of Pittsburgh and Philadelphia are not very sophisticated and are easily duped.

  28. In addition to taking $9 and running on the TNA Nov $56 calls in the STP, I do like shorting /TF at 1,100 with tight stops above.  

    Watch 16,400 on /YM, 1,917.50 on /ES and 3,915 on /NQ – all need to be below to confirm.  Dollar is 85.40 and needs to stay high too.  

    IRBT/Rookie – I assume you mean in the LTP.  IRBT is at $30.25 and the net on our spread was a credit so we risk nothing as long as they are over $30.  We bought the March $30 calls for $3.10 but the net of that spread was $1.90 and they are still at $3.50 so there's certainly no pressure to roll them right now.  Options only go out to June and, if IRBT goes lower, then our roll will get cheaper and if IRBT goes up – we don't need the roll – so why spend money now?  

    Germany/StJ – That's a fantastic program, I wish they did it here.  Rather than lay off 20% of your staff to cut costs, let the government subsidize them and they stay employed and you stay productive.  It's really the same money they'd collect for unemployment anyway.   Very scary though if other countries are doing it and they still have those horrific numbers.  

    IBM/Lance – As I said yesterday, I see no hurry on them as I don't think they'll pop back anytime soon but you can sell the 2017 $120 puts for $7 and that nets you in at $113 and – aw Hell, here's the quote:

    October 20th, 2014 at 9:37 am | (Unlocked) | Permalink

    IBM down 13 is 100 of the Dow points or pretty much all of them.  On the whole, the markets are fine this morning less IBM panic and, as I noted above – it's a one-time charge, not the end of the World.  IBM 2017 $120 puts can be sold for $7, that's low enough (net $113) for me to feel good about it but keep in mind that IBM could still fall to $140 and that would jam those puts up to maybe $20 so, unless you are willing to ride that out – don't get started!  

    You're welcome, Mck.

    True, StJ.  

    • Dow +0.43% to 16,471.00. S&P +0.68% to 1,916.90. Nasdaq +1% to 4,359.18.
    • Treasurys: 30-year -0.23%. 10-yr -0.14%. 5-yr -0.07%.
    • Commodities: Crude +1.01% to $82.74. Gold +0.59% to $1,252.00.
    • Currencies: Euro -0.42% vs. dollar. Yen -0.24%. Pound +0.05%.
    • Dow +0.42%.
    • 10-yr -0.18%.
    • Euro -0.5% vs. dollar.
    • Crude +0.94% to $82.68.
    • Gold +0.59% to $1,252.10.

    Existing-Home Sales Rebound in September

    • Redbook Chain Store Sales: +4.1% Y/Y vs. +3.8% last week.
    • The report notes that Halloween this year falls on a Friday which should give a boost to last minute holiday shopping although so far, this month is tracking flat to September.
    • ICSC Retail Store Sales: +2.1% Y/Y vs. +3.8% last week.
    • -0.3% W/W vs. -0.7% last week.
    • Last week's growth rates are the lowest since May. However, the reports cites strength in electronic and apparel stores based on low gasoline prices, a positive outlook for holiday spending.

  29. I think Pirateinvestor is the one who mentioned HOG last week. Sure would have been a good one to go long on as they seem to have posted some pretty good numbers. Americans continue to love their Harley's and they always seem to perform! 

  30. Phil / AAPL – Not the pop I expected after blow out earnings yesterday. Would this be a good chance to add to AAPL before any upgrades? What's your thought?

  31. TNA / Phil – that 56 call sale filled at 9.85!

  32. my bad – I had 55s

  33. Yes-Hog -they are doing great which I expected. The estimated earnings were less than 1/2 of last qtrs. earnings so I thought they would hit it. Also, the electric hog seemed to be getting attention. In rural areas we see droves of bike riders-they have clubs and go out every other week seeing the countryside. Not bad with the dividends either-I've been long on them for awhile-not the least surprised on MCD either, though I see lines going through the window  here at lunch time. We haven't touched the stuff in over 20 years. One son worked there & he said it was basically garbage. We got very ill eating it so..not surprising considering China, Russia etc.

  34. HOG – Nice move indeed.  Don't know if they are going ahead with plans to bring out an all electric bike.  Seems to be stalled.  Don't think it would be a big seller unless they simulate the sound of the current Hogs.  For all the Harley owners I know, it's all about the pipes and the VROOM, VROOM, VROOM ! ! !

  35. pfehl- If I may throw in what little I know having followed Apple for many years, I believe that for the next year we should see a steady rise in share price, perhaps up to 120. They should see a huge bump from roll out in China over the next 6 months and then there is ApplePay which I am reading is a real game changer. Every single article and story about it is positive and stating how easy it is to use, how the retailers are getting on board and how great a job Apple is doing educating the personnel at the retailers in using the product( which if you have ever dealt with behind the counter people, you know how hard it is to get them to do anything right). So, from all that I see Apple is still at a good entry point. Phil has been recommending the 2017 90/120 BCS. Not sure if that has changed, but I would guess it hasn't. 

  36. what a difference one week makes!  everything is right with the world again ..

    should have seen the sleepy, volume free surge back up courtesy of some well placed central bank chatter

  37. GPRO almost back in the 80's.  Would love to see this have a nice run into earnings so there's a short opportunity again.

  38. Corbett/Craigs – It makes me very nervous that I live less than 90 miles from you guys.  

    No luck so far on /TF but I'm willing to take another poke at 1,105 but, over that – we'd best give up.  

    HOG/Craigs – They launched a new line and sales were good but not sure if that's really a strong overall picture.  Expectations were too low and now shorts getting squeezed and, as I said last week, HOG is in their own World or, as I said when they dipped in Aug:

    HOG – got it's 12% drop..   "HOG/Scott – Last year they did $3.28 per share and traded at $57.50 average.  This year, they are on pace for over $4, which is 20% better so $69 is a fair estimate so BTFD makes sense on these guys but I wouldn't catch the knife.  See if they get a good downgrade and test $60 – don't forget -5% in a day is as low as we'd expect on one move ($63.50) but that doesn't mean the move is done.  Bounce from $70 I'd round to $1.50 at $65 (weak) and $66.50 (strong) so keep an eye on those but a 12% drop, to $61.50 is where it really becomes worth taking a chance (10% with a 20% overshoot).  From "

    Submitted on 2014/08/06 at 12:52 pm

    HOG/Scott – Good job keeping track.  This is where they get interesting but I still need to see overall bounces from the indexes before I would want to add another line item to our portfolios.  Conceptually, I do like selling the 2016 $50 puts for $3.30 and buying the $60/70 bull call spread for $3.90 so that's net 0.60 on the $10 spread and worst case is owning them at $50.60, another 20% off the current price.  You might do better by waiting but maybe not.  

    This is what I keep talking about – we don't care what the chart is doing.  HOG is WORTH $60+ so, when it gets down to $60, we want to buy it – and we use our option spreads to give ourselves a discounted entry (net $50.60 in the above example) that allows us to ride out further downside, which has nothing to do with our VALUE call but simply reflects the madness of the crowds.  

    AAPL/Pfehl – I think the low iPad sales make them vulnerable to attack from the bears but $100 should be the new floor and I still like our good old 2017 $90/120 bull call spread, now $12 and, if you pair that with the sale of the $75 puts at $6.25, that's net $3.75 on the $30 spread (700% potential upside) that's $12 in the money to start.  As noted above re. VALUE – I don't give a damn whether it's upgraded or downgraded or whatever – I KNOW what AAPL is worth.

    TNA/Mck – Nice but now we have to worry about those short calls with the RUT hitting 1,105.  We'll see what happens when Europe closes – they are up huge at the moment:

    Speaking of motorcycles – remember this one (8:45)?

    That was about the most American thing I've ever seen!  

  39. Phil- The DXD Jan 27 calls you recommended as a hedge into the weekend are down about 18% as of now. Do we keep them in case of another drop, or do we reset and rehedge if the news changes later? By the way I am thrilled to be down on these because I am way up overall!

  40. What is going on with TWTR? It does not move far from that 50 mark-must be hedge funds, or something holding it up/ Earnings 27th & est is .01? Hmmm, I made a lot on them last earnings, but can't make out what keeps them up. So they make .05 & it's a huge win? I think that is worth a bit of a hedge. My garage has 7 vintage bikes In my garage that my son has been picking up, not all hogs, but the prices on vintage bikes have skyrocketed. I have a friend who just bought one at auction & I about passed out when he said how much he paid. He remakes them for fun, like my son.

  41. AAPL/Phil – Have old Jan 2015 $570/$800 BCS for $100. What would you recommend doing with this position now? Hold, sell or let it expire? Thank You.

  42. StJ / looking up in Europe:  "Looking up"  seems to be a pretty scarce commodity right now.

      Let's see — Japan is tanking, Europe continues to tank [Germany having gone down with the EuroShip as well over recent months], China is tanking big time we read today, and commodity producers around the world [Brazil, Latam, SE Asia] continue to tank.

    Russia, aka "Upper Volta with missiles" , which produces and exports absolutely nothing of a value-added nature and relies entirely on oil exports, is tanking badly while killing top foreign oil executives with Speznaz-trained alcoholic snowplow drivers, while the U.S., bastion of political and economic freedom and stability, had its stock market felll off a cliff briefly and has been in high-alert-for-further-tanking-threat since mid-September, while the U.S. bond market yields dropped from 2.6 to  2.2 in the equivalent period…..and I'm still long equities?? 

    Changing diapers and mixing formula at 4:30 am is, admittedly, addling my brain somewhat but perhaps I should be selling the pops and buying canned food and ammo instead of equities.

  43. Difference/Toe – VIX down to 16.72 so all is well, I guess…

    GPRO/Rustle – Getting very tempting again.  

    DXD/Craigs – Well, they were a hedge in case we tanked, which we didn't.  If you need a long-term hedge, stick with them but they were more of a bet into the weekend.  In our portfolios, for example, the Income Portfolio has blasted 10% positive (but GTAT still not fixed) and the LTP is back to 17%, so up about $20K since Friday and we risked going shorter with TNA (we already have the Qs) to protect those $20K in gains so, if we lose $5K on them while the LTP and Income Portfolio gain another $20K – as you note about your overall picture – who cares?  Still, in the case of our TNA short calls – they are VERY AGGRESSIVE and, if we make and hold 3 of our 5 strong bounce lines – I'd be inclined to take the loss and we can always find another hedge if they fail later on.  

    TNA/STP – By the way, since we bought that spread for net $1.70 and we just sold the calls for $9, we're up $7.30 less the short Nov $63 calls, which are now $4.80 with TNA at $64 so that's + $2.50 at the moment, even if we close it down.  That means we don't get really upset until/unless those short calls are about $6 so we DON'T PANIC about a little move up in the Russell, right?  


    /TF took a nice dip back to 1,103 so back in the black on those and now we'll see if we can get another poke at shorting 1,105 or if 1,100 breaks.  

    TWTR/Pirate – don't forget they IPO'd at $45 not too long ago so a lot of interest in supporting that floor until lock-up expires.  They had fantastic numbers last time but it's a craps roll to me – who knows how their advertising is working out?  Making things rich people like to buy is a very good business these days.  

    AAPL/Hex – Really, and you don't know what that spread was changed to?  I imagine it's now the $81.43/114.29 spread and you are very, very, VERY lucky AAPL had good earnings or that spread would have flushed down the toilet.  If you spend $100, that's $14.28 and I would take the $81.43 calls ($20.75) and roll those out to the 2017 $90/120 bull call spreads at $12 and that leaves you with the naked short $114.29s (now 0.70), unless it's a margin issue and then you can just close them.  Either way, it's a nice profit and you can roll out your winnings to a spread that gives you continued upside if you want to stay with it.  

    Europe closing at day's highs – now we'll see if our indexes hold their gains.

  44. Pharm – I have a pile of bleeding hedges due to your EW crash charts, still fearful or have you / they capitulated?

  45. MrM – last stop is 1936.

  46. I had noted that 1900ish was the line to watch, and if it was lost, then it was time to lighten up (that was last week). I then said yesterday 1920 was the last one and it was lost today.  I am still short, but am watching and waiting to roll.  Not going to get in front of the steam roller.  This is all POMO and short covering.  Volume remains anemic. 

  47. "All it took for S&P to surge 100 points in past week was 2 hints of QE4, a GPIF rebalance leak, PBOC $ injection, and 2 ECB hail marys."

  48. is the ebola panic over already in the us?  that was fast .. havent seen quite the breakout predicted from the fear mongers. 

  49. pharm — very overbought in the near term now .. would suspect we would soon get atleast a back test of the 200dma .. agree?

  50. AAPL chart very pretty for bulls:

    Run from $72 consolidation (old $500) + 50% to $98 expects a pullback of $5.20 to $93 and $87.50(ish) and you can see we plowed right past $87.50 and only very briefly pulled back to $93 on the way over so that makes $98 the new Must Hold line and then 5% moves are $5 from there to $103 (being tested now), $108 and $118 (our goal).  Since it's a $20 move up, the weak retrace would be $114 and strong retrace $110 so there's going to be a very hard slog getting through $108-114 – even in the best case as we're constantly hitting resistance levels. 

    Meanwhile, $102.25 is up 2.5% for the day (from just under $100) and you really can't expect a $600Bn stock to move much more than that ($15Bn) in a single day and $103 is the 5% rule anyway so a pullback to $102 is weak and $101 is strong, which means any finish over $101 is bullish and over $102 – very bullish.  

    Ebola/Toe – What's that?  Was that a dance craze?  

  51. That Blues Bros half-time was great-thanks. Lock-up is over for twtr well over 180 days.

  52. toepull…IDK.  Stops have all been blown.  POMO ends soon.  Then we will see if the real market stands up. 

  53. TWTR/Pirate – Oh, silly me, I was thinking of someone else.  They came in a year ago…  Thanks.

    Script still being followed – not too much support at our highs as Europeans head out for dinner.  

  54. GT Advanced ‘on the cusp’ of settlement with Apple

    The parties claim to be on the cusp of a consensual global settlement and will require the extension to allow for continued discussions.

    Read more:

    Sent from the CNBC app. Available on the App Store

  55. Fed to big banks: Clean up your act or you’re done

    “The financial industry has largely lost the public trust,” New York Fed President William Dudley said.

    Read more:

    Sent from the CNBC app. Available on the App Store

  56. ‘Holy moley’-McD’s sales sink most in decade: Pro

    McDonald’s reports its worst monthly comparable sales decreases in the US and Europe since early 2003.

    Read more:

    Sent from the CNBC app. Available on the App Store

  57. Countering what these idiots on CNBC are saying – cheap oil might actually be good for the economy:

    Economists have been batting this issue back and forth as oil has slid lower for the last three weeks. The global economics team at Bank of America Merrill Lynch weighed in with the idea that a 25 dollar drop in US crude oil prices could be good for as much as 40 basis points worth of GDP growth over two years. That’s doesn’t sound like much – until you realize the global economy is bumping along at something like 2 percent annual growth these days (we’re looking 3ish while Europe looks 1ish).

    But bad for XOM though so when push come to shove, we'll pick big oil over the consumers!

  58. Officials: 500 million financial records hacked

    Federal officials warned companies that hackers have stolen more than 500 million financial records over the past 12 months. USA Today reports.

    Read more:

    Sent from the CNBC app. Available on the App Store

  59. Old-school industrials offer steely guidance

    A number of old-school industrial companies and and multi-industry conglomerates have given investors something to cheer about: an improved outlook on the future.

    Read more:

    Sent from the CNBC app. Available on the App Store

  60. Ocwen allegedly backdated thousands of letters: NY

    Ocwen Financial allegedly backdated thousands of time-sensitive letters to mortgage clients and did not take action to fix the issue despite repeated notices of concern.

    Read more:

    Sent from the CNBC app. Available on the App Store

  61. What will Mayer do with all that Alibaba cash?

    Yahoo’s CEO Marissa Mayer will have a lot of explaining to do after the company reports earnings after the closing bell on Tuesday.

    Read more:

    Sent from the CNBC app. Available on the App Store

  62. From Bloomberg, Oct 21, 2014, 10:43:50 AM

    Specialist David Haubner works with traders at his post on the floor of the New York Stock Exchange on Oct. 17, 2014. Photographer: Richard Drew/AP Photo

    U.S. stocks rose for a fourth day as investors speculated the European Central Bank will boost economic stimulus and Apple Inc. forecast record sales.

    To read the entire article, go to

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

  63. From Bloomberg, Oct 21, 2014, 11:44:26 AM

    Treasuries fell after a report showed existing home sales rose to their highest level in a year, indicating the U.S. economy is still improving amid slowing global growth.

    To read the entire article, go to

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

  64. McClellan Oscillator closed at 114.9 yesterday, after today we should be above +150 and considered overbought.

  65. From Bloomberg, Oct 21, 2014, 10:43:39 AM

    A man walks on dry, cracked earth where water usually stands at the Jaguari Reservoir, managed by Sabesp, near Santa Isabel, in the state of Sao Paulo, Brazil, on Friday, Feb. 7, 2014. The worst drought in eight decades is threatening drinking supplies in South America’s biggest metropolis, with 60 percent of residents saying their water supplies were restricted at least once in the past 30 days, according to a Datafolha poll published yesterday. Photographer: Paulo Fridman/Bloomberg

    Sao Paulo residents, half of whom are already complaining of hours-long water shortages, were warned by a top water regulator today to brace for more severe cutoffs.

    To read the entire article, go to

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

  66. From Bloomberg, Oct 21, 2014, 11:19:57 AM

    The euro declined against the dollar amid speculation the European Central Bank will expand stimulus to bolster growth in the 18-nation bloc.

    To read the entire article, go to

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

  67. From Bloomberg, Oct 21, 2014, 11:18:41 AM

    A man paralyzed from the chest down in a knife attack is walking again after undergoing surgery using cells responsible for the sense of smell, marking an advance in the search for treatments for spinal injuries.

    To read the entire article, go to

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

  68. From Bloomberg, Oct 21, 2014, 10:14:03 AM

    Coca-Cola Co. Chief Executive Officer Muhtar Kent. Photographer: Jin Lee/Bloomberg

    Coca-Cola Co. (KO) shares fell the most in six years after third-quarter sales missed estimates and a $3 billion cost-cutting plan announced by Chief Executive Officer Muhtar Kent failed to satisfy investors.

    To read the entire article, go to

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

  69. From Bloomberg, Oct 20, 2014, 7:01:03 PM

    An Ivorian police officer waits next to medical staff for the arrival of passengers travelling from Conakry in Guinea at the airport in Abidjan on Oct. 20, 2014 as Ivory Coast’s airline resumed flights to the three west African countries worst-hit by Ebola — Guinea, Liberia and Sierra Leone. Photographer: Issouf Sanogo/AFP via Getty Images

    Ebola’s economic effects in Africa are proving hard to quarantine even in the 49 of 54 countries that are untouched by the virus.

    To read the entire article, go to

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

  70. From Bloomberg, Oct 21, 2014, 7:03:18 AM

    Horizontal drilling through shale accounts for as much as 55 percent of U.S. production and just about all the growth, according to Bloomberg Intelligence. Photographer: Eddie Seal/Bloomberg

    The bear market in oil has analysts reassessing the U.S. shale boom after five years of historic growth.

    To read the entire article, go to

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

  71. From Bloomberg, Oct 20, 2014, 8:25:57 PM

    The Apple Pay mobile payment system at a Whole Foods store in Cupertino, Calif. on Oct. 17, 2014. Photographer: Eric Risberg/AP Photo

    Apple released a software update for the iPhone 6 today that activates Apple Pay. The feature is designed to let users pay for stuff in stores or online by tapping their phones and authenticating the transaction using a fingerprint. Since I own an iPhone 6, I decided to see if the future has arrived. Here’s what I found.

    To read the entire article, go to

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

  72. From Bloomberg, Oct 21, 2014, 11:11:26 AM

      A spot criticizing Kentucky’s Alison Lundergan Grimes replays President Barack Obama stating his middle name — Hussein — as he takes his oath of office. Democrat Grimes is challenging Senate Republican leader Mitch McConnell. Photographer: Luke Sharrett/Bloomberg

    More than in any election in the past decade, Republicans are counting on terrorism fears to win votes — especially in races against female Democrats.

    To read the entire article, go to

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

  73. From Bloomberg, Oct 21, 2014, 7:18:58 AM

    The central-bank put lives on.

    To read the entire article, go to

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

  74. From Bloomberg, Oct 21, 2014, 9:46:04 AM

      Oct. 21 (Bloomberg) — McDonald’s, the world’s largest restaurant chain, said third-quarter profit fell 30 percent as U.S. sales slumped for the fourth straight quarter. Bloomberg Businessweek’s Venessa Wong and Bloomberg’s Leslie Patton speak on “In The Loop.” (Source: Bloomberg)

    McDonald’s Corp. (MCD), the world’s largest restaurant chain, said third-quarter profit fell 30 percent as U.S. sales slumped for the fourth straight quarter.

    To read the entire article, go to

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

  75. Bastion/zero  – of course it is, ask any Proud American…

    Is America a Police State?

    The Broken State

  76. From Bloomberg, Oct 20, 2014, 3:11:01 PM

    Elizabeth Warren sounds like she's in the center of a national campaign as she fires up a crowd of more than 500 Democratic loyalists in an Iowa City ballroom.

    To read the entire article, go to

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



  77. From Bloomberg, Oct 21, 2014, 10:59:31 AM

      European Central Bank President Mario Draghi intends to expand the bank’s balance sheet by as much as 1 trillion euros to stave off deflation in the euro area. Photographer: Andrew Harrer/Bloomberg

    The European Central Bank bought Italian covered bonds as it returned to the market for a second day under its asset purchase program, according to two people familiar with the matter.

    To read the entire article, go to

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

  78. From Bloomberg, Oct 21, 2014, 5:52:47 AM

    Denmark, home to the world’s top-ranked pension system, will toughen oversight of the $500 billion industry after regulators observed a surge in risk-taking linked in part to more widespread use of hedge funds.

    To read the entire article, go to

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

  79. From Bloomberg, Oct 21, 2014, 4:50:35 AM

    Chancellor of the Exchequer George Osborne had been predicting about 7 percent more income tax this year. Between April and September, it rose just 0.1 percent, while NICs increased 1 percent. Photographer: Simon Dawson/Bloomberg

    Britain’s budget deficit widened in the first six months of the fiscal year, leaving Chancellor of the Exchequer George Osborne on course to overshoot his borrowing target.

    To read the entire article, go to

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

  80. From Bloomberg, Oct 20, 2014, 2:54:29 PM

    Oct. 13 (Bloomberg) — Simon Cox, investment strategist for Asia Pacific at BNY Mellon Investment Management, talks about protests in Hong Kong, the impact of Europe on global stocks, and China’s economic challenges. He speaks with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    China’s economic growth will slow to about 4 percent annually after 2020 following decades of rapid expansion, according to the Conference Board.

    To read the entire article, go to

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

  81. KO results don't seem to have spooked DPS (reports Thursday)

  82. From Bloomberg, Oct 21, 2014, 8:58:34 AM

    Marathon runners choked on Beijing’s air.

    When the starter’s gun sounded for the 34th annual Beijing International Marathon on Sunday, air pollution measured 20 times worse than what the World Health Organization considers safe to breathe. Anywhere else in the world, this would have been a scandal worthy of collective soul-searching. In Beijing, many of the roughly 26,000 runners donned anti-pollution face masks and gamely dashed through the hazy streets.

    To read the entire article, go to

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

  83. Phil / comments;

    As you imagine I´ll always congratulate for comments like your AAPL ´s  one at 11:46 am, clear, evident  straight

  84. Phil- I have a small ADP position and so got some info on their recent spinoff of the retail automotive IT/software/advertising business. Now trading as CDK (CDK Global Inc). If memory serves your brother in in the business? Perhaps he/you can provide some insight. 

    At first glance, they seem to be in good shape and is sometimes the case, spinoffs do well on their own so maybe worth a look. 

  85. 15 minutes until today's webinar!

  86. TNA/short calls – Phil, that was a great trade and really helped my portfolio come back quickly off the bottom.  I took profits on the whole spread in my IRA and I don't follow the whole STP due to time constraints.  So I'm feeling a little too bullish after taking profits and would like to add a different hedge instead of the short calls.  I'm thinking SQQQ, especially given what I'm holding in my portfolio (AAPL!).  What's best now (and no rush since I see the webinar getting ready and I have a 1 PM, so I will look later in the afternoon.)

  87. Starter ideas? – my 16 year old son just put $1000 into a TDA account and is looking for an initial investment or 3 to make. Currently not yet eligible for any option trades, but will get covered calls available soon.  Interested in dividend stocks so he can see the deposits. Anyone with ideas for $300-400 positions?

  88. Just bought some DIA puts for this week at 165

  89. Hooray! A webinar!

  90. Ideas- BRK/B- even just one or two shares. No dividend but about the easiest no-brainer call for the long term- especially on any weakness. 

  91. Overbought/Rustle – Yep, already these.  Here's where we left off yesterday:


    APPL Pay – Just saw a girl on Bloomberg take an ApplePay shopping spree – went to about 5 stores and the only problem was Uber but they put a patch out yesterday to fix it.  I think people are seriously underestimating the impact of this thing.  My kids (12-14) and their friends ALWAYS have a phone in their hands – ALWAYS and, frankly, if I can enable my phone to give them $20 to spend rather than cash – I'm 1,000% for that.  In either case, as that generation grows up – they're simply not even going to consider using credit cards and, at the moment, AAPL owns this space.

    Under deals reached with banks individually, Cupertino, California-based Apple will collect a fee for each transaction, said one of the people, who requested anonymity because terms aren’t public. While that gives the tech company a share of the more than $40 billion that banks generate annually from so-called swipe fees, lenders expect to benefit as consumers spend more of their money via mobile phones and other digital devices, the person said.

    “The timing is right with customer behavior, the customer experience is right, and elements have come together around how the ecosystem is evolving for this to be a game changer,” Gavin Michael, JPMorgan’s digital chief, said in an interview. “We’ve seen — certainly in our customer base — a drive to the mobile channel.”

    The mobile-payments market will probably more than quadruple to about $90 billion by 2017, according to Forrester Research. The people familiar with Apple Pay didn’t specify the size of the fee, which they said could vary, or whether it’s tied to the value of purchases.

    The arrangement builds on the existing fee structure for credit and debit cards in the U.S., according to the people. Merchants there typically pay fees totaling about 2 percent of the purchase price for credit-card transactions. The swipe fees, also known as interchange, help card-issuing banks cover fraud costs and fund reward programs.

    The one-time codes eliminate the need for merchants to receive sensitive customer account information. That makes the system less susceptible to fraud and hacker attacks. Visa, MasterCard and AmEx previously introduced industry standards for implementing the technology.

    “Having a partner like Apple really was like catching lightning in a bottle,” Jim McCarthy, head of innovation at Visa, said in a phone interview. “Given their ability to effectively manage their platform, and get folks across multiple industries, merchants, banks and networks to cooperate really was the thing that catalyzed the whole thing.”

    Police state/Scott – I think it's cute that people still think this is a Democracy. 

    Wow, Bloomberg goes a little crazy with their image sizes sometimes!  

    Thanks Advill.  

    CDK/Pstas – He's with AutoNation (AN) and they'r not using it – of course they have their own stuff.  Most dealers are still independent though and CDK is cheaper than doing it themselves but, as I understand it, they are the de facto system already – so I'm not where the growth is supposed to come from.  ADP had been rolling up all the independents for many years to build what is now CDK – I think they split it off to take advantage of a hot IPO market while they could, that's all.  Check out TRAK for comparison – they are similar and also underperforming, I think those two are going to kill each other margin-wise.  

    Webinar/Greg – Thanks for reminding me!  

    SQQQ/Rev  - In the STP above we have those two spreads.  I'd go 50/50 on those to hedge. 

    $1,000/Scott – I'd take $200 and buy 500 shares of GTAT.  Seriously, they may double if they settle well with AAPL.  LQMT also cheap again at 0.16 and, other wise, if he's trying to learn – best thing you can do is teach him to invest in what he knows.  Ask for 3-5 things he thinks are in an uptrend and then do the due diligence with him.  It's not about the $1,000 or what happens to it – it's about giving him a valuable skill he'll need for the rest of his life.  

    /TF coming down nicely now – 1,102.  That makes 1,102.50 the stop.  

    Webinar time!! 

  92. Scot I just recommended a play on a Reit stock the other day STWD. Obviously you could not enter with a 1000$ but just to buy 10 off would pay him a 8.6% P.A. with a capital outlay of 223$ for starters. 

  93. $1,000/Phil – thank you. Interesting re GTAT and LQMT… yes agree re what learns. Also, already does have Tier 2 option now, so covered calls, protective puts, and call and put buying available.  Working on an initial evaluation list..  Will be looking at ITM covered calls on dividend stocks, too.

  94. BRK/pstas – oh yeah! thanks, was totally off my radar.

  95. Phil/APPL Pay - plus from what I understand Apple never actually stores your card's info, so it comes down to a transaction between you and your bank (versus adding a 3rd party into the mix, which is how most web and store transactions are currently set up)

  96. STWD/yodi – will add to list.  will be working on screens with him too, but great to get this diversity of businesses that might not occur or be found on our own.. thank you!

  97. Video by Dr. Osterholm, John Hopkins School of Public Health, on Ebola:

  98. Scottmi – I'd buy him some DX and put it on divd reinvest.  Good way for him to learn about compound interest.

  99. DX/albo – thanks!  though this won't be me buying these for him (I have another account for that, and almost all positions are DRIP). This will be us working on evaluations, and my son placing the trades he ultimately selects. Idea is to be more of a trading account with a great deal of focus on risk management, sizing and exits…  

  100. Good plan.

  101. @Scottmi/16 year old - I bought CIM for my niece at a similar age.  

  102. Gold up but ABX down, strange.  I guess ABX is still a stock and it is doing its thing.

  103. Sewright – thanks! on the list too. I've been wanting to add some of that for myself, but just have to wait for another dip..

  104. ONTY – Buying 1000 shares.  $1.91

  105. Pharm – Do you still like CTIX?

  106. Wow, that went long.  Was a good Webinar, we covered a lot of stuff.  

    I'm left sitting on 10 short /TFs at about 1,106 – down $2K at 1,107 – we'll see what happens but my bad for not stopping out when I had the chance!  

    BRK.B/Pstas – I'd like to see them back near $130 for a nice bargain.  I would think getting hit on KO, MCD and IBM like this would have had more of an effect but I guess a little flight to safety is in them.  

    GTAT/Scott – Already took off:

    Why GT Advanced Technologies (GTATQ) Stock Is Soaring Today

    Learning/Scott – I think, at 16, if you could put $1,000 into a dividend stock like CIM or NLY and hedge it and tell him to leave it alone vs $1,000 he invests in things he thinks will do well that, a few years from now, that in itself will be a good lesson in investing.  

    AAPL/Kwan – Very clever system and less prone to theft, which is becoming rampant.  

    ABX/Rookie – Production issues:

    Barrick in the Australia Pacific: Why gold production is down

    Veladero mine: Barrick expects better production in 2014

    Lagunas Norte: Increasing Barrick’s cost per unit

    Pueblo Viejo mine: Ramped up to offset Barrick’s production dip

    Cortez: Production decreasing on falling grades

    This is just the normal stuff for them as people rip apart their annual report looking for weaknesses.  

    When gold is up, none of that stuff matters because who cares if it costs you $1,150 or $1,170 when gold is $1,500 but, when gold is $1,200, that $20 is 40% of your profits!  Think how tricky that is for the miners, who have to decide now whether to begin a 3-year project to open up a new shaft with all the unknowns that come with a new operation.  If gold is cheap, the new operation will be a waste of money but, if gold is expensive, then stockholders will be furious that they aren't producing enough to take advantage…

  107. Getting close to the strong bounce numbers – Dow just hitting its 200 DMA and having trouble getting over though. S&P and Nasdaq nicely above now. Their 50 DMA is also flattening. Russell and NYSE with the most work to be done.

  108. Hi Phil.  Been fortunate with AAPL.  Removed most of my hedges awhile ago.  Now long 175 calls Jan16 @avg 67.86, and short 35 calls Jan16 at 92.86.   Your thoughts on getting back into balance please.

  109. CTIX….? Don't remember liking them, sorry. They seem to be very broadly focused, and not something that I watch for in a biotech.  I will have to dig deeper into their portfolio.

    SPX, QQQs are nicely above thanks to the pre-market, low vol. pump job. Let's be real here.  The tape is the tape, but buying back shares to inflate your stock is what this is all about for these big companies.  IBM bought back $37B in shares….guess how much debt they issued? 

  110. Earnings tonight – sorry super busy today and didn't get a chance to post earlier:

    Consensus Estimate – 0.83
    Whisper Number – 0.86
    Average Move – 6.3%
    Priced into Options – 4.7%

    Consensus Estimate – 0.33
    Whisper Number – 0.30
    Average Move – 9.2%
    Priced into Options – 7.5%

    Consensus Estimate – 3.71
    Whisper Number – 3.84
    Average Move – 10.4%
    Priced into Options – 10.87% (Nov)

    Consensus Estimate – 0.33
    Whisper Number – 0.35
    Average Move – 12.9%
    Priced into Options – 13.31% (Nov)

    Consensus Estimate – 0.83
    Whisper Number – 0.84
    Average Move – 7.8%
    Priced into Options – 7.35%

    Consensus Estimate – 0.31
    Whisper Number – 0.30
    Average Move – 7.5%
    Priced into Options – 5.75%

    Expecting a big IRBT move it seems. CREE looks prime for a tumble but not making bets right now…

  111. Mark Cuban, like him or not, is a pretty smart guy.  He recently bought a slug of NFLX.  Here's his take :


  112. Couldn't resist temptation and took a 1/3 position of writing 92 calls on GPRO for next week at 1.30.

  113. Phil//TF

    Imissed the webinar but if you're now short x 10 contracts it sounds like you are playing it as a "conviction" short. Is that the case? 

  114. Bounces/StJ – Volume pretty good today, have to take these bounces seriously.  

    AAPL/Taihu – Well, you've got net $530,000ish on that spread and was it really your intention to have that much riding on AAPL or was it a $300,000 position that did well?  Let's say AAPL gains $20 from here ($120), you make about $350,000 but you lose $350,000 on a move down.   On the other hand, if you bought $240,000 of the 2017 $90/120 bull call spreads ($12 each), your upside at $120 is $360,000 and the spread has a delta of 0.25, so a $20 drop in AAPL would only cost you $5 ($100K) rather than $350,000.  So I'd move to that – assuming you want to stay so bullish on AAPL.  Then you can take the other $290,000 and do something fun with it – like buy me a NetJet card.  blush

    Earning/StJ – CREE is a serial disappointer and VMW is in a dead industry but I like all the others.  I think the winning play is our net $1.70 spread on YHOO from the STP (above) with the Apr $32/39 bull call spread at $4.70, selling the short $37 puts for $3.  That spread pays 300% in 6 months if YHOO just holds $40 – seems like a nice earnings play to me!  

  115. Thanks.  Aren't you getting tired of flying NetJet?

  116. Cuban/Albo – NFLX is not in any way, shape or form cheap for a media company.  I don't understand how he doesn't get this.  He keeps talking about market cap ($22Bn) as if that's relative to TWX ($65Bn) but it's apples and oranges – TWX MAKES MONEY – NFLX does not.  For NFLX to move to TWX's model – they will have to spend like TWX does and their p/e will never catch up, not for many years at least.  I'm surprised as I would think Cuban would understand this space better.  

    /TF/Jeff – Don't confuse "stuck with" for conviction.  I missed my opportunity to sell and it popped on me and now I'm going to see what happens with the evening's earnings but it's certainly not looking good.  Tomorrow we'll see how the strong bounce lines hold up but I'll be thrilled to get out at 1,107.50 at this point.  

    NetJet/Taihu – I don't indulge – that's why it makes such a good gift, it's the kind of things most people would want but wouldn't buy for themselves…

  117. YHOO earns 0.52 vs 0.30 expected.  Not sure how they got there but looking good for our spread!  

  118. Phil/TF

    Got it. I was confused, good thing I asked.  I stopped out for a small loss when it spiked up, just wasn't sure if you re-entered higher with the thought that the spike up was overdone. 

  119. WIN/Phil – paying 9.7% dividend. looking at a Jan16 buy write selling $10 puts and calls for net entry around $7.75. any thoughts on them?

  120. There is the IRBT we know and love!

  121. I'm holding naked March $30C on IRBT.  I'm trying to decide when to cover…with the huge bump after hours, I'd expect either profit taking first thing tomorrow or some momentum to push it up further.  What should I cover with and should I be in a hurry to do so?

  122. I do think it's overdone but you can't fight the tape when everyone is heading higher.  Keep in mind we're LOOKING for 1,128 on the RUT (strong bounce) and we stopped at 1,112.50, which is between the weak (1,104) and strong lines.  My short was meant to be below 1,105 and I caught that and we hit 1,102 but then the Webinar started and I failed to close out and then it was very suddenly too late as it went against me – that's the only reason I was still in it – once we popped 1,105 – as I had said earlier in the day, it's a dead trade until we see the strong bounce get tested, or at least 1,115 (halfway between).  

    WIN/Scott – We like them when they are cheap but they haven't been cheap for a while.  They were a favorite of ours back when they were around $7, that makes $10.20 hard to swallow, even though I still like them.  Of course, with 2017s out, you can sell the $10 puts for $2.40 and that pays more than the dividend so you net into the stock at $7.60 to the downside and, to the upside, $2.40 is 20% more than the dividend and you don't even have to own the stock (and you get the money up front).

    IRBT/RJ – It amazes me how people can so undervalue a perfectly good stock and then be completely shocked when they have earnings that simply confirm the trend they've been in for years.  Happens all the time thank goodness or I'd be out of a job!  cheeky

    Seriously, though – when you think of the armies of analysts and fund managers and pundits that are brought to bear examining every aspect of these companies – how can they be so clueless?  

    IRBT/JPH – You were naked shorting our Stock of the Century???  

    "I am pleased to report an outstanding third quarter, with results that exceeded our expectations, as a number of orders, in both Home and D&S, originally expected in Q4 were received and delivered in Q3," said Colin Angle, chairman and chief executive officer of iRobot. "Home Robot growth of 19 percent year-over-year drove total company revenue growth of 15 percent in Q3.  Revenue in our Defense & Security business exceeded our expectations for the third quarter, and we exited Q3 with $25 million in backlog.

    "Based on our visibility into the fourth quarter, we are maintaining our full-year revenue expectations and increasing our EPS and Adjusted EBITDA expectations. We continue to expect revenue to be $555 to $565 million. We now expect EPS of between $1.20 and $1.25 and Adjusted EBITDA of $77 to $80 million, or roughly 14 percent of revenue."

    Financial Results

    • Revenue for the third quarter of 2014 was $143.5 million, compared with $124.5 million for the same quarter one year ago.
    • Net income in the third quarter of 2014 was $14.6 million, compared with $7.8 million in the third quarter of 2013.
    • Quarterly earnings per share were $0.48 for the third quarter of 2014, compared with $0.26 in the third quarter last year.
    • Adjusted EBITDA for the third quarter of 2014 was $29.7 million, compared with $17.2 million in the third quarter of 2013.

    Business Highlights

    • Domestic growth of 31 percent, coupled with International revenue growth of 13 percent, fueled a 19 percent year-over-year increase in Home Robot revenue.
    • Defense & Security revenue was up six percent, and backlog was $25 million at the end of Q3 2014, providing us with increased confidence in delivering our full-year Defense & Security expectations.
    • Remote Presence sold eight Ava 500 robots to customers including AT&T, while additional robot trials are being conducted with a multinational law firm, manufacturing, pharmaceutical and financial services companies to enable remote collaboration, customer service and executive management.

    Not much to do, JPH, but wait for tomorrow and see what the damages look like.  With IRBT so low in the channel to start, a squeeze could cause some severe damage.  You could always buy the stock to cover – not sure what you sold calls for but say you buy at $35 and you sold the $30 calls for $2 so net $33 called away at $30 limits your loss to $3 (10%) and you can decide about selling puts or rolling the calls to offset that loss down the road.  

  123. Well, CREE didn't fail to disappoint. Was really tempted to short these guys but it's a bit too volatile for my blood pressure! 

  124. Recent notes on IRBT:

    Submitted on 2014/09/05 at 10:41 am

    As I am currently saying about IRBT, people only want to know about these ideas AFTER they pop.  While I'm calling them, you look at the chart and say "He's crazy, it looks like a classic head and shoulders pattern to me."

    IRBT March $30 puts can be sold for $3.10 and that money can be used to buy the $30/36 bull call spread for $2.70 for a net .40 credit on the $6 spread that's $2.63 (750%) in the money to start.  In fact, let's go for 10 of those in the LTP.

    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!).  

    Submitted on 2014/10/21 at 10:19 am

    IRBT/Rookie – I assume you mean in the LTP.  IRBT is at $30.25 and the net on our spread was a credit so we risk nothing as long as they are over $30.  We bought the March $30 calls for $3.10 but the net of that spread was $1.90 and they are still at $3.50 so there's certainly no pressure to roll them right now.  Options only go out to June and, if IRBT goes lower, then our roll will get cheaper and if IRBT goes up – we don't need the roll – so why spend money now?  

    And why IRBT is our Stock of the Century:

    Submitted on 2014/04/25 at 12:56 pm

    IRBT/Craigs – Century, TASR is the decade.  I did the math a while ago but short story is IRBT currently sells $500M worth of crap and makes $25M for a p/e of 20.  By next year, they should be up around $650M (+30%), with $35M in profits and a p/e of 18.5.  The military spends $700Bn a year on stuff, like $20Bn on F-35s that don't actually work.  A trained soldier in the field is a $2M/yr expense for the army and, at some point, some of those soldiers will be replaced by $500,000 robots. Not one, not two but thousands of them for Billions of Dollars.  IRBT has the inside track for those programs and already they are testing special-purpose robots like bomb-checkers and scouts – much cheaper to send a $50,000 camera-fitted robot to check out a building than a $2M soldier…  How many squads are there who will get a robot squad-mate in the future?  

    That's why I think IRBT is a very likely 10-bagger over the next decade or two.  They are profitable now, a single, Billion-Dollar annual contract from the military (and we aren't the only military) would probably drop 20% to the bottom line or $200M – up from $25M now.  They just have to hit the right mix.

    Also, this:

    Scott Hartley, one of the founders of 5D Robotics, recently had this to say at an Army demonstration at Fort Benning in Georgia: …”ten years from now, there will probably be one soldier for every 10 robots. Each soldier could have one or five robots flanking him, looking for enemies, scanning for land mines.”

    US Army robots will outnumber human soldiers 10 to 1 by 2023

    And destroying all humans!  cheeky

    Submitted on 2014/02/28 at 10:15 am

    IRBT/Jrom – Oh man, I wanna go!  The stuff I want to know is probably the stuff you won't be allowed to talk about but I very much see the future of that company as a massive military supplier so whatever you can share along those lines would be great.  

    Keep in mind folks, the reason IRBT is my stock of the century is because they currently are very attractive with $500M in sales and $25M in profits (p/e 20) with good growth (30%) and a $1.3Bn market cap but a single military contract to supply 1,000 $1M robots would triple their sale.  As far as I can tell, they are clearly one of the leaders in the field – they just haven't cracked the Government contract game yet.

    Tours like the one Jrom is going on are how they grease the wheels. 

  125. YHOO, BRCM, IRBT and ISRG looking good for tomorrow.

  126. Yeah, too bad we didn't look at them earlier…  surprise

  127. TSLA- breaking news that Daimler is selling it's small stake of 4%. I wonder if this is a clue that they don't believe in Musk, or just their plan all along to get out at a certain point?

  128. Phil / OIH

    Since we are starting to consider rolling our butterfly longs, how about the long OIH 2016 $60.00 call? It is only $0.55 and we can roll to the 2017’s. Maybe the 2017 $50.00 call for $4.00 (minus the $0.55 from the 2016’s it gets to $3.45), and we lower or basis by $10.00 and we get 12 more months to recover that $3.45. Or should we wait for another opportunity with a lower VIX?

  129. IRBT / Phil :


    A couple of comments around your stock of the century idea:


    1. IRBT is having a organic growth which, being important means also that multiple possibilities in a new field of technology will be out of their scope, in the other hand doing the opposite as DDD who is buying whatever seems could be a competitor creating a organizational mess, they are following the way of Apple at the beginning…and Apple almost got broke, it was because Microsoft decided to help them to avoid monopolistic demands that Apple is today what it is.

    2. There are giants in the field but are immersed in big corporations ( Honda, Raytheon, Lockheed etc), the robotic division of Honda in a spin of can be right now the biggest robot company in the world, if they are not selling Pentagon is because of political reasons.

    3. Robots will be a definitive technology if energy supply can be solve in a different way, fuel cells, laser plugs, lithium-air batteries or ultra capacitors ( remember the buzz around EEstor in 2008?), if this is not solved  the future of robots will be created around grids only, not small but will not be the same.

    You are right about IRBT being your century stock….end of the century, your grandchildren will greatly enjoy your stock.

    There is a very good report in the Economist about this theme

  130. Advill – Funny how people forget the good old Microsoft-Apple days:

    The news, coupled with Steve Jobs's announcements of new Apple board members, pushed the company's stock up more than 40 percent in morning trading. Apple gained more than 8 points in early trading over its closing price yesterday of 19-3/4.

    "It's very exciting to renew our commitment to Apple," Gates told attendees via satellite.
    Jobs, who took the stage to a standing ovation, said that the Microsoft investment cannot be sold for three years and covers non-voting shares in the company. "We have to let go of a few things here. We have to let go of the notion that for Apple to win, Microsoft has to lose," Jobs told the crowd soon after it reacted negatively to Gates's satellite appearance.

    Davis said the investment means that Apple will now toe Microsoft's line on Java. "If Java is a threat to Windows, and all operating systems, then it's a threat to Apple and the Mac OS."

    What saved Apple was actually not as much the money as the fact that MS agreed to keep developing Office for Mac. The anti-trust issue really entered into consideration then as Windows was just a juggernaut then.

    "Gates even suggested that Microsoft might produce the next version of Office first for the Mac. That's a notable commitment from Microsoft. If they withdrew Office support, that would have been the straw to break Apple's back."

  131. MSFT should probably have kept their shares of AAPL!

  132. These guys are just so out of touch:

    "I gotta tell you the truth, I'm tired of hearing about the minimum wage, I really am," Christie said during an event at the Chamber of Commerce in Washington, according to a recording of his remarks by the liberal opposition research group American Bridge.

    "I don't think there's a mother or father sitting around a kitchen table tonight in America who are saying, 'You know honey, if my son or daughter could just make a higher minimum wage, my God, all our dreams would be realized," he added. "Is that what parents aspire to for their children?"

    Like some people really have a choice… Maybe as Romney suggested, people should borrow money from their parents or trust funds to start businesses. I just don't know why everybody doesn't do that.

  133. This one is also good, there is one in Quaterly technology review also really good, 


  134. IRBT / I'm naked LONG the call, not short :) .  I was suggesting selling a short call to turn it into a bull call spread.

    Am I getting my terminology wrong?  I thought that was still called covering the position…?

  135. James Grant's Conference

    Everyone – If you re-log in to the site and scroll down you will find on the right side a link to the James Grant video conference.  James Grant is both one of the brightest minds I have ever been exposed to, and at the same time one of the most boring speakers of all times.  I have saved you all a great deal of time by slogging thru the video.  Skip to minute 59 where he recommends some income investments including ARCC,(my largest position in a BDC), GBDC, and our old friend NLY.  You can thank me later for doing the heavy lifting. 8-)

  136. Shale Oil/Phil – would you agree, and if so, any plays we should setup and/or get out of?

    "The oil price fell on its face so hard it crashed through the floorboards. One particular idiot at NPR wrote that this means peak oil was a hoax (Predictions Of ‘Peak Oil’ Production Prove Slippery). I guess she didn’t notice that the junk financing associated with shale oil capex is also dissolving like the poor late Thomas Eric Duncan’s circulatory system. That is, expect a whole lot less drilling in the Bakken and the Eagle Ford in the months ahead, and a substantial fall in production. Unless the US government finds a back door to shovel money at shale (a possibility considering the crucial myth of “Saudi America” to Wall Street psychology), the investment will not be there for the relentless drilling and re-drilling. As other savants on the web have pointed out, it’s not so much that the world is awash in surplus oil as the world is a’glut in people too broke to buy oil. And anyway, the shale oil companies have never made a buck at any price on anything but the real estate shenanigans entailed in their racket, buying and selling leases and so forth, just more paper games. In short, there is plenty of reason to believe that the shale endeavor may founder altogether at $80-a-barrel." 

  137. We have to pause sometimes – we are up 5% in 5 days. These are indices, not 3x ETF!

  138. From Bloomberg, Oct 21, 2014, 8:27:25 PM

      A control officer monitors the flow of iron ore from pit-to-port at BHP Billiton Ltd.’s Integrated Remote Operations Center in Perth, Australia. The company said iron-ore output in the first quarter rose 17 percent to 57.1 million metric tons, just above the 56.5 million ton median estimate of five analysts surveyed by Bloomberg. Photographer: Sergio Dionisio/Bloomberg

    Asian stocks rose, with Japanese and South Korea shares erasing yesterday’s losses as speculation Europe will expand its economic stimulus fueled a global equity rebound. Australian bonds declined before an inflation report, while wheat extended its advance.

    To read the entire article, go to

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

  139. From Bloomberg, Oct 21, 2014, 8:10:58 PM

    Japan’s exports climbed the most in seven months in September, supporting a rebound in the economy as Prime Minister Shinzo Abe weighs another sales-tax increase.

    To read the entire article, go to

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

  140. From Bloomberg, Oct 21, 2014, 7:54:09 PM

      Oct. 21 (Bloomberg) — Full episode of “Bloomberg West.” Guests: Chase Digital’s Avin Arumugam, Miami University Augmented Reality Center’s Dr. Bo Brinkman and Vonage’s Jeff Pulver. (Source: Bloomberg)

    Yahoo! Inc. (YHOO) Chief Executive Officer Marissa Mayer has a message for investors: We hear you.

    To read the entire article, go to

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

  141. From Bloomberg, Oct 21, 2014, 3:40:20 PM

      An eligible bachelor.

    Lumbering tech giants like Hewlett-Packard, SAP and, most recently, IBM have all finally admitted that they have a problem. After years of hemming and hawing about “the cloud” — techspeak for software and services that customers rent instead of buy — the trend got away from them and it’s hurting their bottom lines.

    To read the entire article, go to

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

  142. From Bloomberg, Oct 21, 2014, 5:00:03 PM

      Jamie Dimon, Chief Executive Officer of JPMorgan Chase & Co. Photographer: Andrew Harrer/Bloomberg

    Jamie Dimon, the chief executive officer of JPMorgan Chase & Co. (JPM), said the U.S financial system has recovered, while Europe is “the sick one.”

    To read the entire article, go to

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

  143. From Bloomberg, Oct 21, 2014, 4:40:33 PM

      Genworth Financial Inc. Chief Executive Officer Tom McInerney signaled last month that he was open to considering a split of the global mortgage-guarantee operations from the business selling life and long-term care coverage in the U.S, once the two businesses are financially capable of standing on their own, possibly as soon as 2016. Photograph: Victor J. Blue/Bloomberg

    Perhaps one breakup leads to another. Insurer Genworth Financial Inc. (GNW) could reap $4 billion for shareholders by splitting up a decade after General Electric Co. (GE) pushed it out on its own.

    To read the entire article, go to

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

  144. From Bloomberg, Oct 21, 2014, 12:01:00 PM

    Oct. 21 (Bloomberg) — Leland Miller, president of China Beige Book International, talks about the country’s economy and government policy. China’s economic growth will slow to about 4 percent annually after 2020 following decades of rapid expansion, according to the Conference Board. Miller speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    Chinese Premier Li Keqiang has an insider’s knowledge on the strength of the world’s second-largest economy that helps him determine when stimulus is needed. He’s about to share part of the secret.

    To read the entire article, go to

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

  145. From Bloomberg, Oct 21, 2014, 8:01:00 PM

    A health worker takes a baby from his mother to a re-opened Ebola holding center in the West Point neighborhood in Monrovia, Liberia, on Oct. 17, 2014. Photographer: John Moore/Getty Images

    Amie Subah spends her days feeding Ebola patients, giving them medicine and changing children’s diapers at a treatment center in Liberia.

    To read the entire article, go to

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

  146. From Bloomberg, Oct 21, 2014, 3:18:56 PM

      The Novartis AG’s headquarters in Basel, Switzerland. Photographer: Gianluca Colla/Bloomberg

    The number of companies lobbying the U.S. government on tax inversions more than doubled in the quarter ended Sept. 30, as they sought to prevent Congress and the Obama administration from imposing new restrictions.

    To read the entire article, go to

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

  147. From Bloomberg, Oct 21, 2014, 3:20:51 PM

    Storage tanks an oil refinery in New Brunswick, Canada. Photographer: Aaron McKenzie Fraser/Bloomberg

    Investors are putting money into funds that track oil prices at the fastest rate in two years, betting that crude will rebound from a bear market.

    To read the entire article, go to

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

  148. From Bloomberg, Oct 21, 2014, 5:34:05 PM

      Chris Christie, governor of New Jersey, speaks during a Legal Reform Summit at the U.S. Chamber of Commerce in Washington, D.C., U.S., on Tuesday, Oct. 21, 2014. Christie, the New Jersey governor who seems a likely addition to the 2016 presidential primary roster, has been traveling the country doing what he’s supposed to do as chairman of the Republican Governors Association: raising as much money and publicity as he can to help his party’s incumbents and candidates ahead of the Nov. 4 elections. Photographer: Andrew Harrer/Bloomberg via Getty Images

    Has any politician in recent memory been as tired as often as New Jersey Governor Chris Christie? That’s not to say that the prospective 2016 candidate for president suffers from narcolepsy; rather, he often finds himself expressing how fed up he is on a wide-ranging number of issues. 

    To read the entire article, go to

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

  149. From Bloomberg, Oct 21, 2014, 1:05:16 AM

    Liberals live on Mars and conservatives on Venus when comes to getting news about politics and government, and there’s little overlap in the sources they turn to and trust, a study released Tuesday by the Washington-based Pew Research Center shows.

    To read the entire article, go to

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

  150. From Bloomberg, Oct 21, 2014, 1:14:29 PM

    About 1.5 billion people, or 22 percent of the world’s population, lives in 600 cities. They account for an outsized portion of global wealth.

    To read the entire article, go to

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

  151. Apparently AAPL values the secrecy of his deals with vendors more that hundreds of millions:

    Today, synthetic sapphire manufacturer GT Advanced Technologies (GTAT) and Apple announced their agreement [PDF] to dissolve their partnership amicably after GTAT filed a surprising bankruptcy claim earlier this month. The proceedings threatened to expose information about Apple's dealings with GTAT, something Apple desperately wanted to hide, as evidenced by court filings from Apple asking that its objection to GTAT's Chapter 11 proceedings be submitted in secret.

    Now it seems that GTAT and Apple may be able to keep the terms of their relationship private indefinitely. As the Wall Street Journal reported, “GT Advanced and Apple have agreed to file a revised explanation for GT Advanced’s surprise bankruptcy filing as part of the pact and ultimately erase from the public record the court papers that set out what went wrong in the relationship between the two companies.”

    Apparently some investors are curious about that though….

  152. Or should I say a nice little video depicting the truth about healthcare…

  153. Wow, Jeffdoc!!!  I don't live in the U.S. — I live in a poor country with universally available and very cheap healthcare, although the standard may not measure up to the U.S. level.  But on a cost/benefit basis, it surely does.  But within six months, I'll be back in the U.S.A. permanently with a family of 6.  Any suggestions?  Seriously.  Is Obamacare….what is Obamacare, anyway?  I'm really on square one, aren't I?

  154. Good morning!  

    Nice video, Jeff, sums things up very well.  

    Obamacare/ZZ – Essentially it's just a system of guaranteeing that people can get private insurance – it's not insurance itself.  The problem was, in the US, that if you lost your company health plan, it was very hard to get another one and the new plan could exclude any "pre-exisiting conditions", which becomes quite a list as you age.  While it's kept costs somewhat down, they are still ridiculous.  You might want to start with Consumer Reports – they do a good job of ranking insurance companies in various states.  

    Meanwhile, our Futures are flattish with the Nikkei up 2.6% (15,200) but Hang Seng is selling off after lunch (still up 1%) and Shanghai dropped like a rock and turned red (down 0.3%), 1% off the highs so far.  Not sure what went wrong in China yet.  India and Singapore seem not to care, both up 0.6%.

    Europe is up a bit pre-market.  Oil $82.50, gold $1,250, Dollar 85.37, silver $17.45, copper $3.016, nat gas $3.69 and gasoline $2.205.  

    The fact that gold, copper, silver, oil and gas were dead in the water kept me from selling my short /TFs – even though they popped to 1,114.  Back below 1,112 at the moment but didn't get to 1,115, where I was going to add one more round (though I'd be just as happy to get all out at 1,110 with a small loss).  

    If it's a real rally, why no participation from materials?  Also this:


    We CAN get more overbought, but we rarely do.  

  155. SPX WEEKLYBig Chart – Watch that 1,942.50 line (5% up) on /ES and the S&P – that's a critical line.  We came right up from the Must Hold so an exact 5% move means we expect a 1% pullback (weak) in the very least and that's 18.5 back to 1,924 and another 18.5 down (strong retrace) takes us right to the 200 dma at 1,906, which we blew right over yesterday.  If the S&P does get over the line though – we could easily see another 1% move up, which would be a 20% overshoot of the 5% move – not too unusual given the sharp sell-off but still a bullish sign.  

    The Dow is shy of a 5% move and needs to get to 16,720, NYSE made a 5% move and 1% more takes it to the 200 dma (10,620) Nasdaq is hitting a 7.5% move up with a 50% retrace of the 15% drop so looking strong (and 50% is 40% strong bounce with the 20% overshoot) and the RUT is up 5% from 1,050 at 1,102.5 and 1,113 is up 6% – so we'll watch that closely too.  

    This doesn't change the bounce lines, which are drawn for a bigger picture – just some levels to watch intra-day for Futures betting.  





















  156. 1,110 on /TF – that's a relief!  

  157. TSLA/Craigs – Daimler made $800M on that sale, maybe they needed it to boost their profits for the Q?  

    OIH/Akad – Generally, that's what we like to do with our rolls but we have to be sure we like the position enough to buy another year.  OIH is new, so hard to tell – so far, it's about even:

    10 OIH 2015 17-JAN 50.00 PUT SP $ 6,100.00 9/17/2014 $ 1,850.00   35
    $ -4,250.00 -229.7 %
    10 OIH 2015 17-JAN 52.00 CALL SC $ 200.00 9/17/2014 $ 2,250.00 10/15/2014 28
    $ 2,050.00 91.1 %
    10 OIH 2014 20-SEP 55.00 CALL SC $ 0.00 8/11/2014 $ 1,200.00 9/19/2014 39
    $ 1,200.00 100 %
    10 OIH 2014 20-SEP 53.00 PUT SP $ 900.00 8/11/2014 $ 880.00 9/19/2014 39
    $ -20.00 -2.3 %
    10 OIH 2016 15-JAN 48.00 PUT LP $ 3,520.00 8/11/2014 $ 7,100.00   72
    $ 3,580.00 101.7 %
    10 OIH 2016 15-JAN 60.00 CALL LC $ 2,780.00 8/11/2014 $ 400.00   72
    $ -2,380.00 -85.6 %
    Total Gain/Loss for OIH
    $ 180.00 1.3 %

    The reason we took the $60 calls on 8/11 were because we thought OIH would go down – so no reason to spend a lot of money protecting the upside.  That's why we spent more on the puts (thank goodness).  So we don't just roll because we can, we roll because it makes sense to do so given our outlook.  We're not trying to "win" with our longs – they are simply to stop a disaster from happening – as you can see with the $3,580 gain on our long puts partially offsetting the $4,250 loss on our short Jan puts – That's all they are for, just to keep us out of trouble if something goes badly wrong.  

    Also, you have to consider how much we can realistically make in a year.  We sold Jan puts and calls for $4,100 and, at the moment, we're down about net $350 on that sale.  Figure if this is a bad Q, we should certainly be able to make $2,000 in a good one and figure half will be good so $4K a year we can "count" on in revenues means spending $4K to make a roll is a bit excessive - especially considering we only bought the original long calls for $2,780.  Your proposal would drive up the cost of our backstop to $6,230 plus the long puts at $3,520 means we'd have spent $9,750 on longs that we don't even want on a position that, after 10 weeks, hasn't made us a dime so far.  

    You have to look at these positions like businesses and figure out your P&L and make some realistic projections as to your potential returns.  When we first open up – it's an experiment and, if it goes well – THEN we can commit more resources to expand our business (like WMT) but, if it's going poorly, like OIH – then maybe we should just keep watching it another Q to see if it turns profitable before plowing more money into it.  

    IRBT/Advill – As you say, the advantage of being a US company and the ADVANTAGE of being so small that a relatively small order can send the stock flying.  We like LMT too, but they are not likely to double up if they get the go-ahead to build some killer robots for the army.  As noted in the article – it's GOING to happen and, if this is a horse-race, I'm just betting on my company to go around the track with the big boys – he doesn't have to come in first because the pay-off for show is tremendous.  

    MSFT/StJ – That was Aug 1997, when AAPL was a relative 0.75 per share so MSFT's $150M would be 150x = $22.5Bn.  Not bad at all!  

    Christie/StJ – The Republicans are betting the farm that minimum wage workers don't vote (or are REALLY stupid).  

    Collaboration/Advill – Can a workplace romance be far behind?

    IRBT/JPH – Well I feel much better about that.  We don't usually refer to a long as naked.  So, if you are long, no worries and we'll just have to see how you're doing when the prices come out.  I don't think it's an unwarranted pop so I don't think the gain will erase very quickly but, of course, you do want to sell short call premium while it's trending up.

    Grant/Albo – I like his newsletter. 

    Shale/Scott – I never liked shale plays in the first place.  Same reason I don't like Canadian oil sands – why would you invest in the most expensive version of production when XOM, for example, produces 10% of the World's oil at an average of $50 per barrel?  We took a flyer on XCO and look how that's turning out.  Long-term (if they survive), it will come back but, for now, they are F'd – no question about it. 

  158. Phil;

    You  falled from bed!..

  159. Europe mostly flat now and our Futures are 16,525, 1,934.5, 3,968 and 1,111.5.  Oil still 82.50, gold $1,248.20 with Dollar 85.46.

    Industry group the American Petroleum Institute reported yesterday that crude oil supplies jumped by 1.2 million barrels last week, while the two refined product categories both marked withdrawals. Gasoline stocks decreased by 532 000 barrels, while distillate fuel inventories shed 822 000 barrels.

    API’s data, however, is deemed less popular as it is based on voluntary data provided by operators of pipelines, refineries and bulk terminals, while the government requires reports be filed with the Energy Information Administration.

    So net neutral on API and I think anything other than a draw is going to send oil back to $80 but I wouldn't bet on it as we're just starting a new contract so, easy to manipulate. 

    Click for
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Dec'14 82.55 82.87 82.34 82.82 03:53
    Oct 22


    0.33 8233 82.49 341033 Call Put
    Jan'15 82.17 82.35 81.86 82.34 03:53
    Oct 22


    0.38 850 81.96 160879 Call Put
    Feb'15 81.88 81.88 81.43 81.61 03:53
    Oct 22


    0.14 484 81.47 58903 Call Put
    Mar'15 81.29 81.50 81.04 81.50 03:53
    Oct 22


    0.45 368 81.05 110723 Call Put

    Not even 600K in the front 3 months – not much pressure with 30 days to roll.

  160. Good morning Advill.  

  161. IRBT  / Phil:

    The best  scenario for me could be a association between Apple and IRBT, but I think military side of the business is not in Apple philosophy, but that kind of deal could let you ( not your grandchildren )  enjoy the growth of the stock. jajaja


    I don´t get it with the collaborative romance…??

  162. I mean between the men and the machines they work with per that article.  

  163. IRBT / Phil

    I have the Dec 30/35 BCS and am short the March2015 33 Put.

    Just wondering if I should be rolling the Dec BCS – any recommendations?- TIA

  164. It depends what the action is off those earnings.  If IRBT is at $35+, then you are right on track and there's nothing to do but wait, unless you now want to up the ante.  Once we can see the new prices, then we can see what the options are.  

  165. Oh my God we're old!  This was the time on the time machine from "Back to the Future":

  166. At least we can get our hoverboards:

  167. Phil / Back to the Future.


    Are you in a hurry? we "still" have 1 year ahead!,  jaja!


    Hover board is a prank guys…

  169. Of course it's a prank!  Because… physics!