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Faltering Thursday – Last Chance to Make Strong Bounces

INDU DAILYWe decided to give yesterday a pass.  

Though the indexes failed to hold our strong bounce lines (well, 3 of 5 did), we can blame Canada for that one as a gunman shot up Parliament yesterday afternoon and the "terrorist attack" news sent our markets lower.  Other than that (and these things are unavoidable when you sell 500M guns to 400M people in North America), it wasn't a bad day for the markets, so we're going to wait and see what actually sticks.  Our watch levels remain:

  • 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).

RUT WEEKLYSo the Dow fell almost exactly from it's strong bounce to it's weak bounce yesterday.  Aside from confirming the 5% Rule™ is firmly in charge, holding the weak bounce line is bullish – IF it holds.  The S&P and Nasdaq held their strong bounce lines (thanks to AAPL) while the NYSE stayed in it's range but the Russell was a big disappointment and failed the weak bounce – a very bad sign if they can't take it back today.  

We had a lot of fun playing the Russell Futures yesterday, starting with my too-early short call in our Live Trading Webinar on Tuesday afternoon.  At 2:36 am yesterday morning, we decided to stick with our shorts at /TF 1,113 and we caught a ride down to 1,107.50 (gain of $550 per contract) and then, at 9:59, in our Live Member Chat Room, I called another short as it re-tested 1,113.50.  

We played the Russell short all day and then got very lucky, which led to this $4,560 gain by 3pm when we finally decided to call it a day on that trade, back at 1,100.  That trade alone pays for our trips to Vegas, where we'll be having a Live Futures Trading Workshop along with many other of our top trading techniques

Sign up here for our $699 discount rate (ends Sunday) and join us for two days of trading lessons in Las Vegas, Nov. 9th and 10th!  

Traditionally, we pick a casino-themed trade for our Members each year that has a good chance of earning enough money to pay for our trip and this year we set up a spread in our Butterfly Portfolio before our last conference to try to pay for this one – that one has been phenomenally successful, generating $5,290 in profits.  So much so, that we already took it off the table back in August as it was miles ahead of goal.  

Speaking of Top Trading Techniques, our new Top Trades Alerts are now working, so Members should make sure they select them in their user preferences if they haven't already.  These are trades we will send out via text alert, in addition to appearing in our Basic and Premium Member Chat Rooms.

Members will notice a new "Top Trades" box on the top of our site and now we have a section where we keep track of those trades.  Our first alert went out on Monday and 4 of the first 6 stocks we identified have already taken off and our first featured trade (GSK) has already jumped 5% in 3 days, putting GSK more than 10% over our target price ($40) and right on track for our planned 26% gain.  Trade idea #2 came Tuesday and, sorry, if you are not a Top Trade Member – I can't tell you what it is but I can tell you I love that idea! 

I can tell you how we can set up another bullish trade on the Russell to help offset our bearish bets on the Nasdaq.  TNA is the 3x ultra-long Russell ETF and currently at $62 with the Russell at about 1,100 so it's not too ambitious to imagine the Russell can move up 2.5%, to 1,127.50 which, you will notice, just so happens to be our strong bounce line.  

A 2.5% move up in the Russell is a 7.5% move up in TNA to $66.65 and that means we can buy the Nov $63/67 bull call spread for $1.70 and that pays $4 if the Russell goes higher – up 135% in 30 days!  As I've said many times before, this is how we rich folks take advantage of the Fed's generosity:  If they are going to be handing out FREE MONEY – you need to know where to hold out your hand, right?  

We'll add 25 of those to our Short-Term Portfolio for $4,250 and they will pay $5,750 if the Russell pops and that will give us cash to roll our SQQQ protection.  If not, well that's why we have the SQQQs in the first place!  

 


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  1. Good morning!  

    But, then again, STUFF is nice too:


  2. yodi 
    October 23rd, 2014 at 8:15 am | Permalink | Tweet thisIgnore this user

    Das 'Manager Magazin' liefert nun einen anderen Erklärungsansatz für den Ausstieg: Daimler soll ein eigenes elektrisches Modell mit einer Reichweite von 400 Kilometern entwickeln – und damit den bisherigen Partner und sein Model S herausfordern. Das Modell solle mit einer E-Klasse oder S-Klasse vergleichbar sein, so das Magazin. Die endgültige Entscheidung des Vorstands stehe allerdings noch aus.

    For the once not reading German It looks like MBenz will bring out it's own electric model with a range of 400 Km. Will be a bit of a problem for TSLA in Europe I think.


  3. /CL- Wow, what a quick and violent move up and back down in the last 30 minutes. In the six months or so that I have been following these futures I have not seen the prices move that quickly as they did between 7:50 and 8:10 . It was unbelievable how fast they were flying up and down. It was a gift to me, as I had taken a long position yesterday prior to close hoping to catch the usual uptick before 2:30, and of course it went in the opposite direction very hard. I hung in there and slept with one eye open on my screen looking for and waiting for what happened at 8, and got out not at the top, but close enough to book a very healthy profit before it plunged right back down to low 81ish. Whew! Futures definitely not for the faint of heart or those who need to sleep at night!


  4. Oil Lines

    R3 – 85.47
    R2 – 84.31
    R1 – 82.37
    PP – 81.21
    S1 – 79.27
    S2 – 78.11
    S3 – 76.17


  5. From Bloomberg, Oct 23, 2014, 4:45:10 AM


    A pedestrian walks past mannequins as they stand in the window display of a store in London. U.K. consumer confidence weakened last month and households’ outlook for the economy also deteriorated, according to GfK NOP Ltd. Photographer: Chris Ratcliffe/Bloomberg

    U.K. retail sales fell more than economists forecast in September as warm weather led shoppers to delay purchases of autumn and winter clothing.

    To read the entire article, go to http://bloom.bg/1zlzp4J

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


  6. From Bloomberg, Oct 23, 2014, 5:04:42 AM


    Photographer: Eric Van Den Brulle/Getty Images

    For investors, the European Central Bank’s yearlong evaluation of the region’s banks isn’t just about who passes and who fails.

    To read the entire article, go to http://bloom.bg/1zlln31

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


  7. From Bloomberg, Oct 23, 2014, 8:26:47 AM


    Caterpillar had higher sales of construction machinery in North America, and of equipment for the oil and gas industry, in the third quarter. Photographer: Luke Sharrett/Bloomberg

    Caterpillar Inc. (CAT), the largest construction equipment maker, raised its full-year earnings forecast and said sales may gain in 2015 on an improvement in global economic growth.

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

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


  8. From Bloomberg, Oct 23, 2014, 8:16:47 AM

    General Motors Co. (GM) said third quarter profit rose 1 percent, less than a month after Chief Executive Officer Mary Barra told investors the automaker is pushing to boost performance.

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

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


  9. From Bloomberg, Oct 23, 2014, 5:37:23 AM

      A pedestrian passes jobseekers waiting outside an employment center before opening in Madrid. Joblessness fell to 23.7 percent in the three months through September from 24.5 percent in the previous quarter, Spain’s national statistics institute INE said in Madrid today. Photographer: Angel Navarrete/Bloomberg

    Spain’s unemployment rate fell to the lowest since the end of 2011 in the third quarter as its economy turned into one of the fastest-growing in the euro region.

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

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


  10. From Bloomberg, Oct 23, 2014, 8:20:30 AM


    Under Armour, led by Chief Executive Officer and founder Kevin Plank, seen here, has been seeking new avenues for growth after first gaining a reputation for football gear. Photographer: Jin Lee/Bloomberg

    Under Armour Inc. (UA), the second-largest U.S. athletic-apparel maker, declined as much as 5.7 percent in early trading after growth slowed last quarter, raising concerns that the company’s expansion is waning.

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

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


  11. From Bloomberg, Oct 23, 2014, 8:30:15 AM

    Saudi Arabia, the world’s biggest crude exporter, cut supply last month, according to a person familiar with the country’s oil policy. Brent crude rose as much as $1.59, or 1.9 percent, to $86.30 a barrel in London.

    To read the entire article, go to http://bloom.bg/1zlV24R

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


  12. From Bloomberg, Oct 23, 2014, 6:00:39 AM

      Oct. 23 (Bloomberg) — Richard Lacaille, chief investment officer at State Street Global Advisors Inc, says he would like to see structural reform, fiscal expansion and quantitative easing in Europe. He speaks with Jonathan Ferro on Bloomberg Television’s “On the Move” after German manufacturing returned to growth this month, indicating Europe’s largest economy may avoid a deeper slump. (Source: Bloomberg)

    The euro-area economy may have moved one step away from another recession.

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

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


  13. From Bloomberg, Oct 23, 2014, 7:57:42 AM

    The European Central Bank bought at least 800 million euros ($1 billion) of covered bonds since starting an asset-purchase program on Monday, according to estimates from three traders familiar with the matter.

    To read the entire article, go to http://bloom.bg/1nAbV6q

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


  14. From Bloomberg, Oct 22, 2014, 11:51:08 PM

      

    Hedge fund operator Robert Mercer almost never talks about himself, and neither do the people who know him. Yet Mercer’s money is sure making a lot of noise on the campaign trail.

    To read the entire article, go to http://www.bloomberg.com/politics/articles/2014-10-23/the-man-who-outkoched-the-kochs

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


  15. From Bloomberg, Oct 23, 2014, 8:30:01 AM


    An employee assembles light louver in the sub-assembly area in Jessup, Maryland. Photographer: Andrew Harrer/Bloomberg

    Fewer Americans filed applications for unemployment benefits over the past month than at any time in 14 years as an improving economy prompted employers to hold on to staff.

    To read the entire article, go to http://bloom.bg/1uJTYj8

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


  16. Oil/Burr, Craigs – I prefer to play the bullish USO spread in the STP.  The early part of the new contract cycle is always very tough to call, we don't play much until two weeks in because you can get those crazy $1 moves up and down at any time for no reason.  On the whole, my leaning on oil is bullish back to $85 – especially if the stock indexes are holding up.  

    Mercedes/Yodi – That would suck for TSLA.  

    Also not for the feint of heart – In the Income Portfolio, I want to buy 8,000 shares of  GTATQ for $4,000 (0.50/share) and also in the Long-Term Portfolio.  We'll stop out at 0.30 for a $1,600 loss but my reading of their "settlement" with AAPL is they should come through this without a liquidation.  They may still dilute shareholders to raise capital, but I think there's a possibility they re-price to $2.

    GT Advanced Technologies Inc. Announces Settlement Agreement With Apple(R)

    8:07 am GT Advanced Tech. announces settlement agreement with Apple (


  17. Good Morning!


  18. Up 0.8% into the open – not bad but we need to see what holds up at end of day.  Europe still not all that strong.  Dollar rejected at 86.


  19. Nice addition of the top trades link Phil. Looks like GSK was the only trade idea, I guess the others are "watch for now?" For some reason I thought you had 2 or 3 other official trades.

    I always like your "pictures" in chat and I forward them to maybe change some minds. Living in Thailand you would think that most xpats would be more liberal but not the case as FOX is here and it is more entertaining than CNN. No CNBC either.


  20. Some one mentioned YELP yesterday down 14% today 


  21. Great, another day where all of the futures are already maxed out in the pre-market. No use in playing them when opening nearly 200 points above yesterday's close..


  22. Phil/CAT  More financial engineering than actual earnings?   Thanks.


  23. phil, morning

    tks for the simple and cogent explanation to julian z yesterday re irbt…..got a lot out of it this morning…

    at present irbt  im holding 10x mar 30 (rolled from 35 dec) and short the dec 45's 10x……

    question i had sold the dec 30 puts @3.47 and yesterday on the earnings bought back 5 (half) at .50…….thinking the other half would expire for net .25..good trade……….your thinking as you on occasion have asked why didnt i sell/ get out etc…….and would you let the 45 exp or roll to a more advantageous position…..tks


  24. My bet is AMZN disappoints today.  Now, in the past, the bigger the miss, the more the stock went up, this time, think they go into 200's.


  25. GTAT came in a 0.58 – that's OK because we're playing for $1

    Top Trades/Jomp – They are kind of replacing Stock World Weekly, since we don't get many subscribers to that.  I'll circle back on a weekly some other time but not worth the effort that it takes to put it out, unfortunately.  Keep in mind, those aren't the same as trades we put in the portfolios, they are just nice stand-alone trades I feel good about recommending.  Glad to help with visuals and don't worry, you are missing nothing not having CNBC. 

    Futures/Yo – I was liking /TF bullish over 1,100, that was still playable at 8:45, that's the whole point of the Futures, you don't have to wait for the market to open.  When you see any of the indexes flying pre-market, you just look for the laggard and play it long off a good line.  Also, when they all take off – often /NKD makes a good laggard.  

    CAT/1020 – Well revenue was flat so it was stock buybacks and cost-cutting driving the gains.  Still, impressive job by management – that is what you want a company to do with your money.  They bought back $4.2Bn worth (4.2%) of stock this year alone AND pay a 3% dividend ($2.80) – that's like a 7.2% return from financial engineering alone.  They are projecting earnings over $6 next year, for a p/e of 16 - there's no reason not to own this stock for the long term.  

    As a new trade on CAT, I'd sell the 2017 $80 puts for $7.30 for a very nice $72.70 net entry.  That's more than the $5.60 dividend you'd make owning the stock for 2 years and a 26% discount if put to you.  That's great as a stand-alone play or it can be paired with the $100/115 bull call spread at $5.50 and you still have a net $1.80 credit (so net $78.20 entry – 20% off) but 100% of the upside over $100 for the next two years.  

    That's going to be a Top Trade!  


  26. Phil looking at the CAT play above I general do not like to sell a put when a stock is making hights not saying CAT is at the top. I more inclined to sell a put on YELP for example which just dropped by 10$ Even the Vertical on CAT looks high to me. Am I seeing this wrong not criticizing your trade as such??


  27. IRBT/Mill – You're welcome.  That's one of the reasons I don't want chat to get too crowded, I like having time to get deeper into stuff like that.  Now, let's talk about your stuff.  You had bad Dec $35 calls and we WISELY invested more money to roll them to the March $30s when IRBT was low but now it popped up over 20% – AND YOU DIDN'T TAKE A PROFIT???  Shame on you!!!  

    A 20% move in a stock is HUGE – the whole premise of the 5% Rule is to teach you things like a 20% pop will almost certainly retrace 4% (weak) and maybe 8% (strong) – even if it does keep going.  Since that's the case – it's idiotic to hold long positions past a quick 20% gain because there's a very good chance the stock will be giving up 40% of your gains shortly.  

    In the 5% Rule, at 1.25%, 2.5%, 5%, 10% and 20%, the probability of a pullback increases at each level and MUCH MORE SO if the previous level was passed without a pullback.  That means, a quick pop of 20% without a pullback almost guarantees a pullback.  

    Here's the movement of the IRBT March $30 calls for the past two weeks – the low is $3.50 and the high is $7.50 – over 100% gain and now back to $6.  Again, if you don't have the discipline to take 100% gains off the table – what are you doing playing with options???

    • ALWAYS sell into the initial excitement!!!  
    • When in doubt – SELL HALF!!!

    The short Dec $45s are a non-issue and last traded at 0.12 so, even if you couldn't go naked short on them, you still needed to shut the trade down – if not at the opening pop, then at least before you gave back 20% of your gains.  As to the short puts – if you REALLY wanted to own IRBT at $30, then who cares about them.  The only reason to take them off is because you have something better to do with the margin (using $3K to make $500 is 16% in 60 days – not bad) than make 0.50 between now and Sept.  

    It breaks my heart that you worry about 0.50 there while you let $1.50 slip through your fingers on the call side.  broken heart  You must learn to take profits – how often do you really think people make 100% on a long call?  One 100% winner turns 4 other flat trades into a 20% average gain – THAT's VALUABLE!!!  

    AMZN/Rustle – They've missed over and over again – the question is whether traders are still  in a forgiving mood.  

    CAT/Yodi – I think $90-$120 is the new channel for them so selling the 2017 $80 puts doesn't seem like a big risk.  It's a valuation call based on earnings expectations over 2 years.  If they go lower, then we can get more aggressive and roll the $100s to lower strikes (at 0.50 per $1 or less).  


  28. phil, ……..what you said makes sense……….we are all trying to "get it" and it takes time and learning…..as irbt is the 'trade of the decade" and you have been ranting to others that why do they adjust positions on perfectly good trades………i figured i would let the 45 exp and or spread into something else with the 30's as a base.

    i see what you are saying but my approach to the irbt was hold on for it to lift into the future……i know there are very few rules of thumb…i.e. sell into the excitement etc ……….your thoughts on how do you square the circle of leaving things alone and taking advantage of pops…….tks


  29. Phil- I have the same question as Mill? I think what you are saying is to be patient on the ones that are down, but if we get that nice pop, to sell at least half and take some gains off the table to possibly reinvest when the excitement fades and the price retraces back? Do I maybe have that right? 


  30. Phil/SQQQ

    I have Jan 40-50 BCS as a hedge, and I'm not sure if I should roll now. We're still skeptical of the rally but since we're waiting to see if the bounce lines hold I've waited on rolling out further out and downward.  At the moment the long 40's are about 2.60 and a roll to a March 35/45 BCS would cost about the same.  If the bounce sticks then definitely roll right?  If not, then keep the Jan spread?  Or should I not be thinking of it that way and simply roll because the longs have already dropped passed the value of the spread as you've taught us several times before.

    Thanks


  31. @yodi

    Did you write any puts on YELP?  I personally wouldn't touch it unless it came down to around 50, then might write a put 7-10 points lower than that.



  32. Ugh…some bad grammar in my above post…sorry about that.


  33. rustle123

    At this stage I have still a very comfortable position in YELP The comments are not to good but in the past they always came out of the woods. I am still holding jan16 50 and 55 puts even 62.5 puts which I am not worried about at this stage. I felt only as new starter I would buy long calls and cover the cost with short puts all jan17 holding back on the short calls once the stock has recovered. This would be my reaction in this excitement. 


  34. Softy has been laying off employees like crazy-probably have good earnings. Alternately, amzn is always a good short. Both up after the bell, I think.


  35. rustle123

     YELP Putting your toe in the water buy Jan17 2x 45c for 22.30 and sell 4x jan17 50p @ 9.55 for starters


  36. PHIL/ARO

    I have 2016 3.5 – 5 BCS and 1/2 quantity 3 puts short. Also Jan 4.5 call short which I would like to roll. Any recommendation?


  37. Phil/GTATQ – If we see $1.00 should we take the money and run, or are you planning on holding on and hoping for $2.0 with the shares we bought this morning?  It already hit $0.80 this morning.


  38. 1,113.50 again on /TF!  

    IRBT/Mill – There are ways to stick with the trade and not stick with the risk.  Don't take this the wrong way, I just want you to learn to do these things better.  You had a March $30 call that went deep in the money and was offering you you $7.50 so you need to develop a REFLEX to take that off the table KNOWING there will probably be a pull back and, even if there isn't, the June $34/39 bull call spread is just $2 so you'd still have $3 more upside AND you take $5.50 off the table.  

    You are trying to apply "rules" to broad conditions that aren't the same as the ones we talked about yesterday.  You don't have a bull call spread that's only paying 60% of the full value.  You have a long call that is 100% valued vs a short call that is way out of the money.  That should call offers you no downside protection and it's not even worth discussing the odds of IRBT getting to $45 by Dec – if that were the case – even I would want to short it!  

    You have to have REALISTIC expectations for your positions.  Essentially what you are doing is hitting a home run and, instead of running it out – you are asking for another swing because you think you can do better – even though you now risk striking out with nothing to show for it.  If your style of play is to swing and swing and swing until you are out (never taking profits because you always think you can do better) then, over time, your average will end up at zero.

    So, to be very clear – having a naked call (because the short $45s are not real cover for a $7.50 long position) is NOT something you leave alone.  Having an in the money spread that you feel will stay in the money and, even if it doesn't you know how to roll out of trouble – THAT is something you leave alone!  

    Same thing/Craigs – No, it's not the same thing.  You are not comparing apples to apples, they are different kinds of spreads and, even when they are the same kind of spreads – you have to always be setting realistic expectations for what you expect the underlying stock to do over your holding period and you have to be VERY COMFORTABLE that you can make positive adjustments regardless of which way it goes and, if not – then step 1 is:  Take the Money and step 2 is: RUN!

    SQQQ/Jeff – In the STP we have the Jan $40/50 bull call spread and we paid net $3.15 for it and SQQQ is at $36.34 and the $40 calls are $2.60 – a little under what we netted in for.  

    SQQQ was at $46 a week ago and is now $36 so it's not inconceivable that it may go back to $45 in the next $85 days so, question 1 is – do we think the Nasdaq is going to stay over 4,000 and SQQQ will stay under $40 through Jan?  If so, then it's kind of silly to have these SQQQ calls, isn't it?  If that's the case, then it would also be silly to put more money into longer SQQQ positions, since they too will lose money between now and Jan (assuming we're right and the Nas never goes down again).  

    Question 2 then, is: What were you trying to accomplish in the first place?  In the case of our STP, we added the SQQQ spreads to protect our $500,000 Long-Term and Income Portfolios.  That has worked out great as the LTP rocketed back to 18.9% ($594,000) while the STP is still up 91% – so we're at a new record total for sure.  

    Since I still have a lot of money in the LTP and Income Portfolios to protect – I have no question at all that I still want the SQQQ protection and the Jan $40s ($2.60) can be rolled to the $34s ($4.60) for $2 – so that's one option and the March $37s are also $4.60, so probably one of those for a roll but certainly nothing I NEED to do at the moment because – either SQQQ goes down more and my rolls get cheaper or SQQQ pops back up and I didn't need to do the rolls in the first place.  Either way, by waiting another day, I get another day's worth of information, which will help me make better choices.  Also, the TNA spread we bought to offset the SQQQ losses is kicking ass!  

    Speaking of kicking ass – I will kick anyone's ass who didn't take 0.80 on GTATQ and run – even if you bought it for 0.60 this morning, that's still a quick $1,600 profit on the day!  That goes for both our portfolios.


  39. Phil,

      I have the TNA Nov $56/63 bull call spread. I was reluctant to sell the $56 calls and leave the $63s naked owing to the margin requirements as it would take about 1/2 of my remaining margin. Would you suggest adding the Nov $63/67 recommended earlier? Leave it alone? Another alternative? 

    TIA


  40. GTATQ I think Phil is playing poker today )8


  41. A/D line stronger today at ~2550/~450 than  can remember seeing in a long time.

    Not only AAPL, but FB also at all-time high.


  42. GTATQ – When we go into a trade HOPING to get to $1 and it pops to 0.80+ in one day, we don't take a chance on the second day – especially considering that we already have a bunch of short puts and long calls, etc.   This was just bonus money and we are thrilled to take it!  

    ARO/Zten – 2016 is a long way off and I like the target.  I'd wait until Jan and see how those short calls end up but, if you are determined to invest, the 2016 $3.50s are $0.70 and the 2017 $2s are $1.70 so $1 buys you $1.50 and puts you in the money with a better spread and more time.   

    GTAQ/Palotay – When I said $2 - I didn't mean today!  37% in one day is 9,800% a year (trading days) and, since I usually don't make 9,800% a year, this is bound to improve my overall percentage – BUT ONLY IF IT TAKE IT OFF THE TABLE!!!  I still think $2 is right but we risked $4,640 this morning at 0.58 (more than we wanted to pay) and now we can cash out for $6,400 – I have to call that a good day and leave it at that – especially as we have other bullish plays that are still on it.  What this did ($1,760) is knock off 20% of our loss on the play in a few hours.  

    TNA/Kevin – With TNA at $65, I'd take the Nov $56 calls ($10.40) and roll out to the Jan $65/75 bull call spread at $4 as that takes $6.40 off the table (your max profit on the spread) and leaves your short Nov $63s ($5.90) well-covered.  If that doesn't work margin-wise, then I'd go to the April $73s at $6.55 as that takes $3.85 off the table and lowers your delta (0.46) relative to the caller (0.63) and, of course, you have a huge time advantage.  It takes $10 in margin but you are putting $3.85 in pocket, which should cover most of it.

    Poker/Yodi – Trades like that are like getting a flush draw!  


  43. A royal or a straight ?


  44. Great explanation for IRBT /  Mill ……but is great for me too!, thanks


  45. 9,800%/Phil – how did you calculate that from 37% in a day?


  46. scottmi – 365/7*5*37 = 9620 which is ~ 9800


  47. YELP/Yodi

    I wouldn't buy options that long out on YELP, too many things can happen.  If some real bad news hits the markets or a crash, this stock can be 30 or lower and would have to go so far out to adjust for that.  If I wrote a call, who knows if some idiot company buys them.  I've traded YELP successfully many times in the past but not more than 2 weeks ahead.  Too much can happen with momo's that it's very dangerous to go far out.  Right now, I'm happy with the GPRO 92 calls I wrote the other day at 1.60 for next week.


  48. Phil/SQQQ

    Thanks for the thorough explanation.


  49. Flush/Yodi – There you go getting greedy…

    9.800%/Scott – What Kwan said!  

    Dow needs to make the 16,750 line or it's still going to look like it's weakening.   This is why it's so important to make that recovery as fast as you drop – or you begin to look like a ball bouncing down stairs….

    All the other indexes are making nice "V" recoveries so just the Dow is an issue.  

    Dollar way up at 85.94 also underlies market strength (as it's not hurting things).  

    Hard to tell on this chart but Fat line on top is Nasdaq and main line is S&P and medium line (-3.13%) is the Russell with NYSE on bottom.

    So they are all about 4% off their highs which is a 5% drop and a weak bounce so far (if we throw out the quick V bottom, which we do in a weekly view as it's just one candle).    So, not quite impressed yet with this action but also not a rally we'd bet against at this point.  

    You're welcome Jeff.  


  50. Rustle 123 – I know that you are an experienced trader and know what you are doing, but I think your strategy of writing naked OTM calls against Momos is too dangerous for most on this board.  The risk/reward isn't there for the inexperienced trader.  As you know, the most you can make on the GPRO trade is $1.60.  Your risk is immeasurable.  Hypothetically, suppose some company decides to buy GPRO for $110.  I know it's almost too hard to believe that could happen, but it is possible.  In this case, the call you shorted at $1.60 would be worth $15.  In this case, you'd be losing $13.40 to gain $1.60.  I know this is an extreme example, but it points out the risk of selling naked calls.  I know those who have been on this board remember the angst that many went thru a few years ago trying that strategy.  It's all about risk vs. reward.

    That being said your calls using that strategy have been right on the money almost every time.


  51. @albo

    Your risk is immeasurable only if you see it going against you and you don't adjust, either converting to a credit spread or rolling it out to the next week or week after.  You do have to be nimble and you can reduce risk which I often do by buying a cheap call higher up as protection in case of something like a take over or if I'm going the opposite way, buying a put protecting short term loss in case of a market crash from a 9/11 event.


  52. Here's perspective for you:  This is what I mean by throwing out the V – see what it looks like in a 10-year chart:

    See – if you are going to look at charts, you have to put them into context of the bigger picture.  So far, we're forming good support around 1,900 on the S&P since June.  1,900 is the 2.5% line over our Must Hold at 1,850 and that kind of action is bullish and normal because markets are only supposed to go up 5-10% per year, not 20-30%!  

    And, realistically, going from 1,200 in 2004 to 1,800 in 2014 is 5% a year – just that we had a little bump in the road on the way there….


  53. phil, tks for the expanded explanation on the irbt/ and to craigs…….  it was very helpful esp the part about selling the long and repos in the new spread.  i guess the whole adjusting thing is very difficult for me to grasp…..and second nature to you……….with that tks for the added insight and thinking as always…i will keep plugging and looking for assistance as needed


  54. High for the day on /ym 16666 mark of lord blankfien lol


  55. Rustle123 – I know you know how to trade this way and do it very successfully.  But what happens if the company is acquired, and the stock opens up sharply ?   No time to adjust.  Then you are screwed.  I'm just saying that I don't like the risk/reward for most folks.


  56. @albo

    Read comment again, your loss would be limited by call you bought and you would either take limited loss in that case if you couldn't write any puts on it.  And I generally deal with stocks with low market caps where that could happen or would write very few options on it limiting loss, example would be yelp.  Most stock I write one sided, would be from extreme valuation concerns ex GPRO or very high RSI or I would do a credit spread.  Currently have a 580 put 642.50 call spread on CMG for 11/7.  If the stock breaks 580, will adjust lower but not worried because will think it's a good play below that anyway, if it breaks higher, it's very easy to roll 20 points up and rewrite puts for more premium considering other ones would be worthless.


  57. correction to above comment, I generally DON'T deal with companies with low market caps or share prices under 80


  58. rustle/AMZN

    Are you playing earnings short?  If so, how?


  59. nothing on the put side but wrote some 360 calls the other day for about $1.  There are many other plays you could get a nice bang on your buck for, but if I have leverage I'm not using, I think it's found money.  Now example, if I'm wrong and AMZN goes to 370 on great earning, I would write some puts for next week and roll the calls higher.  The premiums will be huge in first 30 minutes if it made a move like that and you can write 340 puts for a nice premium and your calls would be easy to roll up because they would have no time value since it's a Friday.  Always write half if not less of what you can do so you can adjust to double if need be.  Never ever go full out on initial position.  Better to make less and be prepared if things don't go your way else you are up shit's creek.


  60. Quote of the day:

    Michael Batnick, “Make no mistake that what we’re experiencing now has literally nothing to do with global growth, earnings or valuations. Psychology is driving this market and it is truly fascinating to watch.”  (The Irrelevant Investor)


  61. ~~ Right now, I'm happy with the GPRO 92 calls I wrote the other day at 1.60 for next week." 

    Rustle 123 – This was the trade I was referring to.  I assumed it was one-sided.  I agree with the extreme valuation on GPRO and the unlikelihood of it being acquired at a much higher price, but remember that wise man from "Dumb & Dumber ?"

    "So you're telling me there's a chance ?"


  62. that trade is one sided and I will be more than happy to roll those higher with no puts still if it did get up there.  Where I would adjust depends on number of days till expiration, if it was 90 tomorrow, might not take a chance with a week left and adjust higher 2 weeks out then.  If it was Thursday of next week, would wait till it was in money since 93.60 is my break even.  Also remember on GPRO, you are two months before a ton of shares hit the market.  Goodbye lock up.  Worst case I would adjust to Jan 130's, don't think there's a chance in hell it goes to 130 by then.  Actually wrote some close to 2 when the stock was in the 90's and covered them at .25.


  63. Earnings today:

    AMZN
    Consensus Earnings – (0.73)
    Whisper Number – N/A
    Average Move – 9.9%
    Priced into Options – 7.4%

    DECK
    Consensus Earnings – 1.01
    Whisper Number – 1.10
    Average Move – 9.3%
    Priced into Options – 8.7%

    JNPR
    Consensus Earnings – 0.36
    Whisper Number – 0.36
    Average Move – 7.7%
    Priced into Options – 6.3%

    MSFT
    Consensus Earnings – 0.48
    Whisper Number – 0.50
    Average Move – 4.5%
    Priced into Options – 3.2%

    P
    Consensus Earnings – 0.08
    Whisper Number – 0.09
    Average Move – 6.9%
    Priced into Options – 9.7%

    CLNE
    Consensus Earnings – (0.30)
    Whisper Number – (0.32)
    Average Move – 7.3%
    Priced into Options – 17.4% (Nov)

    Not much data on CLNE but options are pricing a big move it seems! The big one is AMZN.


  64. What a strange situation !

    GT Advanced Tech.: Apple (AAPL) to keep evaluating GTATQ relationship, according to reports out.

    Reuters Article


  65. Great premium content today – that's what we expect and pay for, amongst other things. Phil, looks like it's time to double the subscriptions again :)


  66. You're welcome Mill and, frankly, the level of conversations we get into now is already miles above where we were not even a year ago – you are learning quite a lot.  

    LOL Albo.  

    Insightful quote, StJ.  

    Earnings/StJ – A couple of fun ones:

    • AMZN – Could go up or down 20% so not really worth guessing.  I hope they go up so we can get some shorts.  
    • DECK – That's a pretty fat premium but they've done nothing but surprise up this year so don't want to bet against them.  I do like selling the 2016 $65 puts for $5.20 because that's a net $64.80 entry (28% off) and free money otherwise.  If you consider it free money, then you can also take the Dec $85/92.50 bull call spread at $3.80 so you net a $1.40 credit with another $7.50 of upside at $92.50+
    • JNPR – Nice sale on these guys but the sector has been weak.  Still, nothing wrong with initiating a position by selling 2017 $18 puts for $3.10 for a net $14.90 entry (26% off).
    • MSFT – Too rough to call with a new CEO, sometimes they kitchen sink write-offs to clear the decks when a new guy takes over.
    • P – I don't like them, don't see the upside, even after they're down 50%.
    • CLNE – No idea what's going on with them.  Even with that wide spread it's too risky (but tempting).  

    GTATQ – Well, at least everyone got a chance to get out at 0.80 now.  


  67. Thanks Winston – I'll let Greg know you volunteered!  wink


  68. Trying to get the most out of the final rounds of QE (today and Monday).  I stand to the side until this non-sense ends.


  69. http://www.gurufocus.com/news/287061/druckenmiller-vs-buffett--john-mauldins-10th-man

    Last night Scottmi posted a very negative article on IBM penned by David Stockman.  Here is another piece:


  70. A little weakness in the afternoon.  Futures down to 16,635, 1,947, 4,006 and 1,114.50.  Keep in mind we need 1,113.50 to hold along with 4,000 on /NQ and 1,950 would have been nice on /ES but 1,940 would be a bad fail. 


  71. Ebola scare NYC.  Imagine how many people this doctor came in contact with…..

    http://nypost.com/2014/10/23/nyc-may-have-its-first-ebola-case/


  72. Phil T is this not a now stock buy to start a new play holding just back to sell a call ? paying 5.5 % interest Trading down today 33.50. Even that I purchased the stock at 29.10 in 2010, steady stock!


  73. 4479 is the Nasdaq's 50 DMA. That seems to be resistance at the moment. 1966 is the same for the S&P and we can't get over that. There has to be some technical sales there. I guess to be expected in an otherwise decent day with all the indices up over 1%.


  74. Options/Ebola doctor

    I don't understand why we don't have a mandatory quarantine for health care workers leaving West Africa.  Seems obvious that they are the highest risk for infection and to let them travel during the incubation period is just reckless.  Let alone letting them care for patients after they've potentially been exposed.  It would be a small cost to house/contain them for 21 days compared to the economic and real impact of the infection traveling around the world like this.  Just my 2c.


  75. jeffdoc – more americans have been married to Kim Kardashian than have died from ebola. Scientific fact.

    In all seriousness, I saw projections the other day that put a worst-case scenario of infections in the US at ~10K. I'll try to dig up the paper with the math if you're really interested, but I think I was on my phone when I read it.


  76. Sorry, it was 14K. Here's the link if you're interested.


  77. Kwan

    Sure, I agree.  10K is a small number BUT, we should have the abiltiy to control it much better than that with some pretty simple measures. No reason for 10000 people to get an infection when we know how its transmitted and where its coming from.  There is a very small number of people in the world currently that even have the potential to transmit or carry it…they should be isolated temporarily.  That's all I'm saying.


  78. jeffdoc – point taken. I agree the current protocols are "lacking" (putting it politely).


  79. Ebola has given me a great excuse to fist bump everyone after playing tennis.  

    I always used to hate shaking someone's sweaty hand.  


  80. I think that article is referring to the TOTAL number of cases worldwide.  Not in U.S. alone.

    To me it seems an odd phenomenon.  We isolate patients in the hospital for much less virulent problems than Ebola.  Yet, we haven't committed to isolating the healthcare workers who have for certain been in situations where they might have been exposed.  If this doctor IS infected and exposed patients to it and any of them get infected…you see where this goes.


  81. Ebola/Options – Or it could be the flu.  

    T/Yodi – They are having margin issues, not sure how long that will last but could drive them lower.  All-time high was $35.50, now $33.50 is not exactly a fire sale and, so far, only the 200 dma ($33.43) is stopping them from going lower.  

    Down around $30, I would love them again.  

    Wow, I'm really not liking this action now…

    Quarantine/Jeff – I agree with that, it's a "hot" zone and there need to be protocols.  I'm not for banning travel but those who do travel need protocols.  

    10K/Kwan – If 14,000 people in the US get Ebola, I'd be more worried about being trampled at a mall or movie theater if someone coughs!  This country would go absolutely insane if that many people got sick here.  

    LOL Burr.  I guess Howie Mandel doesn't look so crazy now?  

    Isolation/Jeff – I'm just amazed they can find people willing to do that work in the first place.  This would be a great time to re-release The Andromeda Strain:


  82. Kwan – I agree completely with Jeffdoc.  It may be a small number at this point, but is subject to spreading rapidly if the right steps aren't taken. Contracting Ebola is far worse than being married to Kim Kardashian.  ….at least I think it is. :-)


  83. Kim/Albo – I don't know, I don't think Ebola would make me want to shoot myself…


  84. Good point, Phil.


  85. Not sure when the last time any of you were inside Bellvue Hospital..the last time I was there I certainly wouldn't have said they were "ready" for something like Ebola.  Yikes!!  Let the hysteria begin if he really has it.


  86. albo – I'm not sure which is worse! And jeffdoc is right, that's cumulative worldwide (we're at 8400 so far). To confuse matters worse the actual paper that article references used a model based on an H1N1 outbreak in Nunavet, Canada which is a "reasonably isolated" population. So how that can translate to a global phenomena is beyond me. Nonetheless I found it interesting because it seems to be tracking well so far.


  87. Phil,

      I think I may have misunderstood your response regarding my former TNA $56/63 spread. I sold the Nov $56 calls for $10.30, so far so good, but rolling the sold $63 Nov calls to sold Apr $73 calls for a credit of $1 uses just about as much margin as when I had the Nov $63s naked. What am I not getting/doing wrong?


  88. STJ – Will be interesting to see what AMZN reports, and more importantly, what the market's reaction will be.  A little surprised that the stock usually moves almost 10%.  Short interest seems awfully low to me at only 1.9%.


  89. From Briefing Trader  :"Hearing that CNN reporting that potential Ebola patient took Uber to bowling alley. Trying to confirm, but market not liking this."


  90. TNA/Kevin – First of all, that's not a good enough price for the April $73s but that's because TNA is up another $3 today.  April $73s have been selling all over the place today – from $5.85 to $6.88 with the last at $6.84 so I don't know what $1 credit you are talking about as it should be about $4 credit.  If you have $4 more cash, that should give you $8 more margin (ordinary) and the margin between the short $63 calls and long $73 calls should be $10 (ordinary) and that's what I meant in that spread.  

    Ebola/Albo – Well it's a good thing he didn't take the subway then! 


  91. Easy AMZN money.  Knew they would disappoint.  Street isn't as forgiving anymore.


  92. Rustle123 – Nice call on AMZN.


  93. MSFT: .54 vs .49 est.


  94. Wow, AMZN loses money again.  People not happy, down $20 already.  

    LIVE: Amazon's Stock Falls On Disappointing Earnings


  95. Nice beat on revenues for MSFT


  96. Everyone is very happy Ballmer is now dealing with the Clippers instead.


  97. Phil,

      Moral of the story: ask first, act later. What I did was to roll the naked Nov 63 calls to naked Apr $73 calls, rather than BUYING the Apr $73 TNA calls to create a spread. Should I just keep the naked $73s for now and see what TNA does, or what would you suggest as a repair at this point? Just to be clear, my only current TNA position is 10 short Apr $73 calls.

    Thanks for your forbearance.


  98. Ebola – here's one of the best of several interviews with Peter Piot, who discovered and named Ebola. When I was in grad school at U Wash epidemiology department, Peter studied with us for a year or two, not sure, in the late 70s or early 80s. Very decent fellow, very sharp yet self-effacing. For some reason we lost track of him a few years ago and all of us were worried that he'd died of something horrible, but as you can see, he's still with us: http://www.bbc.com/news/magazine-28262541


  99. AMZN / Phil – Expected to lose money though, but worse than consensus estimate. On the other hand revenue is higher:

    Revenue for the quarter came in at $20.58 billion, against the comparable year-ago figure of $17.09 billion.

    They are the poster child for losing money on every sale but making it up with volume! They could soon be the first company with $100B in revenues who doesn't make a dime. Truly astonishing…


  100. Now we have to hear the conference call with the master at the microphone. For all we know, they open 10% higher tomorrow!


  101. and that's why you can't write puts on AMZN at earnings.  They got killed last quarter also.


  102. And kudos to everybody who hung in there in the Ballmer years! Look at the performance over the last 1 1/2 years:

    Hard to imagine 5 years ago!


  103. AMZN BPS….I hope it comes to papa….weekly 300/290 for 2.60.  OH BOY – stay down doggie.

    So tell me, AMZN, WMT, McDs and the stall warts for the economy doing not so well on earnings.  TGT will be interesting.


  104. @Pharm

    There was one analyst on CNBC today who said yeah, those stocks didn't do well but look at AAPL, people bought iPhones so the economy is doing great.



  105. It looks like maybe some people are going to bail now though… That was a big loss! 


  106. These 50 DMA now acting as resistance – we need to get over them for a meaningful bullish move!


  107. AMZN- Reminds me of an old Jackie Mason joke. He talked about 3 old Jewish guys comparing their watches and what great deals they got, and the last one says "I got mine for below cost" and another say, "Below cost, how do they make money?" He answers, "VOLUME!" Who knew Jackie was on to something 30 years ago?

    Ebola- Maybe it's time we started emulating the Japanese custom of bowing instead of handshaking? Wasn't the handshake begun as a way to show you were not holding a weapon and could be trusted? Seems like it is outdated anyway now that we have handguns that can be concealed easily! I have always loved the idea of bowing and the more respect you have for the other person, the deeper you bow. 


  108. So, the doctor in NY is positive for Ebola.  That's not good.  


  109. Jeffdoc- Can ebola be detected before symptoms appear? I assume not, but I haven't really read enough beyond headlines yet. (spending too much time staring at PSW and stock charts) I don't understand how they could let a doctor who has been in an infected area return with no quarantine, or at the very least some kind of monitoring and limits to contact with others until he is cleared. Stupidity and incompetence is the biggest challenge we face as a nation and we keep cutting education budgets. Unfrigginbelievable on all counts.


  110. jeffdoc:  Guy rode the subway, an Uber taxi and went bowling in Williamsburg the day before apparently.  So avoid that area of Brooklyn for a few weeks.  I also wonder what kind of effect its going to have on Bellevue hospital… :/


  111. From Bloomberg, Oct 23, 2014, 8:09:33 PM

      Oct. 24 (Bloomberg) — Martin Lakos, a Sydney-based division director at Macquarie Private Wealth, talks about global financial markets and his investment strategy. Lakos also discusses the outlook for the Australian economy and central bank policy. He speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    Asian stocks rose, with the regional benchmark index extending its first weekly gain in seven weeks, after U.S. earnings beat estimates and data signaled stronger European growth.

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

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


  112. From Bloomberg, Oct 24, 2014, 12:01:00 AM


    Members of Bellevue Hospital staff wear protective clothing as they demonstrate how they would receive a suspected Ebola patient on Oct. 8, 2014 in New York City. Photographer: Spencer Platt/Getty Images

    Bellevue Hospital Center, the oldest continuously operating hospital in the U.S., will be put to a new test by a young doctor who now lies ill in one of its four isolation units, confirmed as having Ebola.

    To read the entire article, go to http://bloom.bg/1ozpCU7

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


  113. From Bloomberg, Oct 23, 2014, 7:01:00 PM


    A busker stands outside a branch of the Permanent TSB in Dublin, Ireland. Some banks are already said to have failed, such as Permanent TSB Group Holdings Plc, Ireland’s smallest state-owned bank, which fell short in the ECB’s adverse stress test, a gauge of resilience over three years after a hypothetical recession and bond-market collapse. Photographer: Aidan Crawley/Bloomberg

    For the European Central Bank, success as the euro area’s financial supervisor may begin this weekend with a few failures.

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

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


  114. From Bloomberg, Oct 23, 2014, 11:38:37 PM

    U.S. stock-index futures slid after a doctor in New York tested positive for Ebola, the first case of the deadly disease diagnosed in the most populous U.S. city.

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

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


  115. From Bloomberg, Oct 23, 2014, 4:30:45 PM


    A Petrochina Co. gas station in Hong Kong. Photographer: Brent Lewin/Bloomberg

    China is finding oil supplies 14,000 miles away, aided by the global rout in prices that’s left producers vying for new markets.

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

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


  116. From Bloomberg, Oct 23, 2014, 7:11:04 PM


    Photographer: Angel Navarrete/Bloomberg

    Amazon.com Inc. (AMZN) forecast sales and profit for the holiday quarter that missed analysts’ projections, underlining the limits to Chief Executive Officer Jeff Bezos’s strategy of spending big to fuel growth.

    To read the entire article, go to http://bloom.bg/1uLOYe1

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


  117. From Bloomberg, Oct 23, 2014, 8:56:02 PM

      Satya Nadella, chief executive officer of Microsoft Corp., speaks during a news conference in New Delhi, India, on Tuesday, Sept. 30, 2014. Photographer: Graham Crouch/Bloomberg

    Microsoft Corp. (MSFT)’s quarterly sales topped estimates on cloud-computing growth and recovering personal-computer sales, as Chief Executive Officer Satya Nadella shows progress in his effort to revive the company.

    To read the entire article, go to http://bloom.bg/1zmFIF9

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


  118. From Bloomberg, Oct 23, 2014, 9:15:58 PM


    Illuminated signboards light up a street in the evening in the Myeongdong district of Seoul, South Korea. Private consumption increased 1.1 percent from the April-June period when it shrank 0.3 percent, according to today’s statement. Photographer: SeongJoon Cho/Bloomberg

    South Korea’s growth picked up last quarter on public spending and revived consumption, a boost to President Park Geun Hye as policy makers try to spur the economy with fiscal and monetary stimulus.

    To read the entire article, go to http://bloom.bg/1ozex5v

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


  119. From Bloomberg, Oct 23, 2014, 10:30:26 PM


    Oct. 24 (Bloomberg) — Protesters blocking the roads at two main occupied sites in Hong Kong have the chance to appear in the High Court today for injunction hearings to defend their action as pressure mounts on them to clear out. Bloomberg’s Rosalind Chin reports on “First Up.” (Source: Bloomberg)

    Protesters blocking the roads at two main occupied sites in Hong Kong have the chance to appear in the High Court at 10 a.m. today for injunction hearings to defend their action as pressure mounts on them to clear out.

    To read the entire article, go to http://bloom.bg/1zmu6SC

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


  120. From Bloomberg, Oct 23, 2014, 5:03:58 PM

    Wall Street bond dealers cut their net high-yield bond holdings by 68 percent in the week ended Oct. 15 amid the biggest surge in volatility in more than a year.

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

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


  121. From Bloomberg, Oct 24, 2014, 12:01:00 AM


    Oct. 22 (Bloomberg) — President Barack Obama speaks about U.S. efforts to contain Ebola as more people who had contact with the first patient in the country show no signs of infection. Obama, speaking at the White House today after his first meeting with White House Ebola response coordinator Ron Klain, also comments on a shooting in downtown Ottawa. (Source: Bloomberg)

    Hours before Craig Spencer’s Ebola test came back positive, the “go” team at the U.S. Centers for Disease Control and Prevention was packing for New York.

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

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  122. From Bloomberg, Oct 24, 2014, 12:29:07 AM


    The Manhattan skyline is seen in the background as people relax in the Brooklyn Bridge Park in the Brooklyn borough of New York City. Photographer: Spencer Platt/Getty Images

    There are 8 million stories in the naked city and at the moment they’re all themed “Ebola.” Mayor Bill de Blasio, New York State Governor Andrew Cuomo and public health officials are trying to slim the number of stories down to one. It goes like this.

    To read the entire article, go to http://bloom.bg/1xfHH8L

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  123. From Bloomberg, Oct 23, 2014, 11:01:00 AM


    Japan’s Prime Minister Shinzo Abe, center, poses for photos with new Economy, Trade and Industry Minister Yoichi Miyazawa, left, and new Justice Minister Yoko Kamikawa at Abe’s official residence in Tokyo. Photograph: Toru Hanai Pool via AP Photo

    Japan’s trade minister said he was ashamed to find out an aide spent political funds in a bondage bar in the latest scandal to hit Prime Minister Shinzo Abe’s cabinet after two resignations earlier in the week.

    To read the entire article, go to http://bloom.bg/1DD31sS

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  124. From Bloomberg, Oct 23, 2014, 9:52:44 PM

    At the start of this year, Beijing Tongtech Co. (300379) was the closest thing to a sure bet in China’s stock market.

    To read the entire article, go to http://bloom.bg/1oz5Mbt

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  125. From Bloomberg, Oct 23, 2014, 6:57:51 PM


    Photographer: Angel Navarrete/Bloomberg

    What Amazon has lacked in profit was usually made up for in revenue growth. But now investors are worried that may no longer be the case.

    To read the entire article, go to http://bloom.bg/1ozbF8H

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  126. From Bloomberg, Oct 23, 2014, 11:03:55 PM

      Oct. 24 (Bloomberg) — Jinsong Du, Hong Kong-based property analyst at Credit Suisse Group AG, talks about China’s housing market. China’s new-home prices fell in all but one city monitored by the government last month as easings of property curbs failed to stem a market downturn amid tight credit. Du speaks with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    China’s new-home prices fell in all but one city monitored by the government last month as the easing of property curbs failed to stem a market downturn amid tight credit.

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

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  127. From Bloomberg, Oct 23, 2014, 6:01:00 PM

      Workers are seen on the production line at the Daimler AG Mercedes-Benz factory in Sindelfingen. Photographer: Krisztian Bocsi/Bloomberg

    By Birgit Jennen and Dorothee Tschampa

      Labor Minister Andrea Nahles, whose Social Democratic Party is the junior partner in Chancellor Angela Merkel’s coalition government, has pledged to tighten rules regarding outsourced workers. Photographer: Thomas Trutschel/Photothek via Getty Images

    Oct. 24 (Bloomberg) –- Daimler AG is among German companies that have found a way to cut personnel costs in the high-wage country: buy labor like it’s paper clips.

    To read the entire article, go to http://bloom.bg/1oz3GZe

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  128. From Bloomberg, Oct 24, 2014, 12:03:27 AM

    Iron ore production in China has probably been contracting since April and further mine shutdowns in the largest importer are forecast as a global seaborne glut expands, according to Goldman Sachs Group Inc.

    To read the entire article, go to http://bloom.bg/1tnZbR2

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  129. From Bloomberg, Oct 23, 2014, 9:55:28 AM

    Yesterday, the robo-pollster SurveyUSA released a crop of fantastic numbers for Oregon’s Democrats. Senator Jeff Merkley, a first-termer who won a very close 2008 race, led his once-touted Republican opponent by 21 points. Ballot Measure 91, which would legalize marijuana in the state, was up by 11 points. And Governor John Kitzhaber, seeking a fourth term, appeared to have weathered the Danielle Steele-worthy scandals that had ensnared his fiancé Cynthia Hayes, everything from a secret green card marriage to her consulting work for a company that lobbied he governor. Kitzhaber’s lead over Dennis Richardson, a state representative widely viewed as too right-wing to compete, had actually grown from 12 to 13 points since the scandals emerged.

    To read the entire article, go to http://www.bloomberg.com/politics/articles/2014-10-23/pollster-finds-that-embattled-governor-leads-by-13-and-trails-by-17-in-the-same-poll

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  130. http://www.bloomberg.com/news/2014-10-23/cdc-s-ebola-go-team-sprints-to-new-york.html

    "The “go” squad is a new tactic by the Atlanta-based CDC to keep Ebola cases contained and avoid the kinds of mishaps that happened in Dallas, where two nurses caring for the first U.S.-diagnosed Ebola patient became infected. Even though the New York patient’s Ebola hadn’t yet been confirmed at that point, the CDC team was already in gear. The reason: Speed is an essential element to identify the web of potential contacts that might carry the disease once Ebola is confirmed.

    For any hospital, anywhere in the country that has a confirmed case of Ebola, we will put a team on the ground within hours, with some of the world’s leading experts in how to take care of and protect health care workers from Ebola,” CDC Director Tom Frieden said in a media call this month."

    So they are ready once a case is located, but why does the country have to bear the risks of catching the disease in the first place?! I know, we have only had a few cases, but what would you say if the case that might occur was someone you knew? Or god forbid a relative of yours. An innocent victim?

    Surely, there is more we can do to avoid putting the public at risk! This is not the flu, it kills most people that get it.


  131. From Bloomberg, Oct 23, 2014, 8:45:17 AM


    At Peabody Energy Corp.’s North Antelope Rochelle mine, which is the country’s most productive coal mine, a conveyor belt shuttles freshly mined coal to processing stations before it gets deposited in freight trains and shipped to power plants. The mine is located 65 miles south of Gillette, Wyoming. Photographer: Tim Loh/Bloomberg

    It’s boom times in Wyoming for embattled U.S. coal companies, where the mining industry is hiring workers while shedding them in Appalachia.

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

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  132. From Bloomberg, Oct 23, 2014, 6:13:32 PM

    The Federal Reserve said it will scrutinize how 31 large U.S. banks, including JPMorgan Chase & Co. and Citigroup Inc., would respond to a plunge in equity and housing prices and a sharp downturn in the global economy.

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

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  133. From Bloomberg, Oct 24, 2014, 12:00:01 AM


    Janet Yellen, chair of the U.S. Federal Reserve, opened the door to keeping a multi-trillion-dollar portfolio for years, saying a decision on when to stop reinvesting maturing bonds depends on financial conditions and the economic outlook. Photographer: Andrew Harrer/Bloomberg

    Quantitative easing may turn out to be a gift that keeps on giving for the U.S. economy.

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

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  134. From Bloomberg, Oct 23, 2014, 10:41:38 PM

    The drop in Saudi Arabian oil supply last month failed to sway analysts looking for signs OPEC’s biggest producer is seeking to bolster global prices.

    To read the entire article, go to http://bloom.bg/1wv8b85

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  135. From Bloomberg, Oct 23, 2014, 5:31:52 PM

      Larry Fink was fine with a little non-transparency.

    Classically an exchange-traded fund is a derivative: It’s a contract whose value is based on the value of a basket of underlying stocks. (Bonds, whatever.) The contract trades on an exchange — thus the name — and so it has a trading price, but it also has a value that you can calculate.1 You can replicate it by buying the underlying stocks, or hedge it by selling them. So the value of the ETF is very well defined and transparent, and its price should closely reflect that value. That’s nice!

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

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  136. From Bloomberg, Oct 23, 2014, 6:03:36 PM


    Japan isn’t focusing on the right things.

    It’s easy to see why Prime Minister Shinzo Abe wants Japan’s $1.2 trillion government pension fund to start buying more stocks: A mere rumor about the fund increasing its equity holdings sparked a market rally earlier this week. But attempts to game the stock market have failed to revive Japan in the past and are doomed to failure again, unless Abe puts more effort into the harder work of real reform.

    To read the entire article, go to http://bv.ms/1tmTe72

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  137. From Bloomberg, Oct 23, 2014, 4:47:48 PM


    That can’t be right …

    America needs more low-down-payment loans.

    To read the entire article, go to http://bv.ms/1oyOds5

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  138. From Bloomberg, Oct 23, 2014, 2:43:57 PM

    Natural gas could replace oil as the key energy source in the U.S. At least that’s what the chart below, from Torsten Slok, chief international economist for Deutsche Bank, seems to suggest.

    To read the entire article, go to http://bv.ms/1nAS8nw

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  139. From Bloomberg, Oct 23, 2014, 12:18:17 PM


    No more furniture, but plenty of debt.

    If you’re poor, you’re rarely going to get a great deal on anything you buy. Bad credit, no down payment, no place to put a bulk purchase — all of these mean that you end up paying more for something than everyone else. This situation attracts a lot of journalists writing articles about the desperate prices the working poor pay for everything from furniture to cars.

    To read the entire article, go to http://bv.ms/1z1jvuY

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  140. From Bloomberg, Oct 23, 2014, 9:27:11 AM


    Source: The Wall Street Journal

    My morning train reads:

    To read the entire article, go to http://bv.ms/1FIl4Qi

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  141. Good morning! 

    Futures down just a bit this morning, mostly flat overnight.  16,594, 1,941, 3,992 & 1,111.60 with the Dollar at 85.95, oil $81.21 and gold $1,232.50.  Silver is $17.22, nat gas $3.59 and gasoline failed $2.20, now $2.185.  

    I have CNBC on in my office and Bloomberg on in the living room and, as I go from room to room it's "Ebola, ebola, ebola, ebola…."  People are simply nuts over this thing.  

    New York Doctor Tests Positive for EbolaCraig Spencer Recently Returned to New York After Treating Ebola Patients in West Africa. A physician who had returned to New York City 10 days ago after treating Ebola patients in West Africa has tested positive for the disease, according to an official familiar with the findings. Craig Spencer, a 33-year-old physician who worked with Doctors Without Borders and lives in Upper Manhattan, is the fourth person to be diagnosed with the deadly disease in the U.S.

    NYC Doctor Confirmed Positive For Ebola; Contact With Girlfriend (Quarantine) & 3 Others; "Unlikely" Contagious On Subway

    • Mali has confirmed its first case of Ebola, becoming the sixth West African country to report a case of the virus.
    • The patient, a 2-year-old girl who had come from neighboring Guinea, was brought to a hospital in the Malian town of Kayes.
    • Mali is Africa’s third-largest gold producer.

    Asia was down a bit except Nikkie, up 1% – all finished at day's lows.

    China local debt fix hangs on Beijing's wishful thinkingChina is asserting control over once-chaotic local government financing by banning the use of opaque funding vehicles, but filling the gap with a huge expansion of the fledgling municipal bond market will raise a whole new set of problems. 

    • China's $50B Asian Infrastructure Investment Bank launched today, as the U.S. said it had concerns about the new rival to Western-dominated multilateral lenders, such as the World Bank.
    • The new infrastructure bank aims to give project loans to developing nations.
    • "We have concerns about the ambiguous nature of the AIIB proposal as it currently stands, that we have also expressed publicly," says State Department spokeswoman Jen Psaki.

    Europe opened low but came back a bit and now down 0.25%ish into lunch.  

    40% Of Eurozone Banks Are In Bad Shape

    SPY  5  MINUTEFriday's economic calendar

    Based on Ebola and the upcoming stress tests, I'd have to guess a sell-off is coming today.  Shorting /ES at 1,940 (tight stops, of course) and the Dow (/YM) at 16,600 are a lot safer than shorting /TF at 1,100 but all good lines to use and watch.  /NQ already failed 4,000.  
    • Thirty-one banks are set to participate in the Fed's 2015 stress tests, which will see how they can withstand pressures such as a spike in oil prices, a rise in the U.S. unemployment rate or an increase in risky corporate loans. The capital plans are due in January.
    • Among the bank's that failed last year's tests are Citigroup (NYSE:C), HSBC (NYSE:HSBC), Santander (NYSE:SAN) and RBS (NYSE:RBS).
    • Deutsche Bank (NYSE:DB) will participate for the first time, and has already felt pressure from the NY Fed, which has told it in a private letter that its regulatory reports were "low quality, inaccurate and unreliable".
    • This Sunday, the ECB will release results for stress tests of 130 eurozone banks amid a deteriorating economic outlook for the region.

    Van Hoisington And The Fed's Bubble: "Overtrading" And "Discredit" Always End In "Revulsion"

    A Furious Albert Edwards Lashes Out At Central Bankers: "Will These Morons Ever Learn?

    GM Financial receives second subpoena into subprime auto lendingGM Financial, the in-house financing arm of General Motors Co, said on Thursday it received subpoenas in September from state attorneys general and other authorities over its subprime auto lending and securitization practices.

    • Toyota (NYSE:TM) is now the next automaker to sell a stake in Tesla (NASDAQ:TSLA), although it did not disclose the timing or amount of the sale.
    • Daimler unloaded its remaining 4% stake in the electric car earlier in the week for $780M.
    • Toyota invested $50M in Tesla in May 2010 (giving it a 2.5% stake at the time), ahead of the company's IPO in June that year.

    Pfizer(PFE) Announces Eye-Popping $11 Billion Share Buyback Plan

    Lockheed receives $4B order for eighth batch of F-35s

    • Lockheed Martin (NYSE:LMT) and U.S. defense officials have reached agreement on the terms of a contract worth about $4B for an eighth batch of 43 F-35 fighter jets, Reuters reports.
    • The new contract lowers the cost of the jets by about 3%,
    • Both sides had expected to reach a deal early in the summer, but negotiations slowed after an engine failure in June grounded the entire F-35 fleet for weeks.
    • LMT +0.6% premarket

    Microsoft(MSFT) earnings beat, cloud business soars. (video) The tech firm handed in earnings of 54 cents per share on revenue of $23.20 billion, beating Wall Street estimates of 49 cents per share on revenue of $22.02 billion, according to a consensus estimate from Thomson Reuters.

    Wall Street may finally be giving up on Amazon(AMZN). (video) The company posted a huge earnings miss for its third quarter on Thursday, reporting a loss of 95 cents a share versus the street's estimate of 74 cents. And that big miss may be the last straw for investors, analysts said. ?

    Why Amazon Is Crashing: Jeff Bezos' Nightmare Quarters In Charts

    • "Can you tell us or remind us what financial measures are important to you guys … it's a little hard to see any of them making positive progress," asked Wolfe Research's Aram Rubinson during Amazon's (NASDAQ:AMZN) Q3 CC (transcript), just one of several pointed questions offered.
    • Bernstein's Carlos Kirjner asked about weak international margins – international op. loss rose to $224M from $28M a year ago – and why international's growth (14%) has fallen far behind North America's (25%). CFO Tom Szkutak (again) chalked up Amazon's losses to growth investments, and gave little detail about growth other than to state it "has been softer across a number of geographies."
    • BGC's Colin Gillis asked why North American media growth (+5%) was the lowest in years. Szkutak mentioned Amazon is seeing a demand shift from textbook purchases to rentals (could be a positive for CHGG), and that heavy discounting last year made for tough comps.
    • Total media revenue rose 4% to $5.2B vs. 10% in Q2, and total electronics/general merchandise revenue 26% to $14B vs. 27% in Q2. North American "Other" revenue (mostly AWS) rose 40% to $1.34B, and returned to positive Q/Q growth (15%) followinghuge price cuts earlier in 2014.
    • Other details: 1) $170M in charges were taken, largely related to the slumping Fire Phone. 2) Paid unit growth was 21% vs. 23% in Q2, and 3rd-party sellers made up 42% of units vs. 41%. 3) Gross margin rose 120 bps Y/Y to 28.9%. 4) Fulfillment, tech/content and marketing spend respectively rose to 12.4%, 10.8%, and 4.7% of revenue from 11.5%, 9.2%, and 3.9% a year ago.
    • Shares finished AH trading down 10.7%, making new 52-week lows along the way. Not factoring post-earnings estimate revisions, they now trade for 1.2x 2015E sales.
    • Q3 resultsguidance/detailsPR

    Here's the story of US Earnings in two charts:

    10-23-2014 7-48-35 PM C

    10-23-2014 7-51-11 PM C3


  142. The rational take on Ebola from the NYTimes:

    Embedded image permalink

    Imagine if we lose the NY Times – all we'll have left is this:

    102414front

    New Yorkers react to the news that Dr. Craig Spencer has been infected with the Ebola virus

    THE MAN WHO BROUGHT EBOLA TO NYC: Harlem doctor Craig Spencer tests positive for deadly virus after returning from humanitarian work in West Africa

    READ THEMNYers take to Twitter to ask why doctor went BOWLING while an Ebola risk

    Can you get Ebola on the subway? What you need to know about the virus in New York

    This is seriously what you see on every newsstand around New York – traders pass these by on the way to work – I doubt they'll be in much of a buying mood by the time they get there.  



  143. That was a classic.  

    Speaking of classics – easy money on those index shorts so far.