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Fedless Thursday – Can the Markets Survive Without Free Money?

It doesn't matter what the Fed did yesterday.  

Let's make that clear at the start.  The Fed has been tapering all year but what they have been tapering is their INCREASE in bond buying and thank God they have because the Fed balance sheet is now over $4,000,000,000,000.00 – that's a lot of money!  

As noted in the chart above, $4Tn is the entire GDP of Germany or Japan, the level of stimulus has added up to 22% of our GDP since 2009 or about 4% a year.  Our GDP is only 2.5% WITH the 4% added stimulus – what will it be without it?  Fortunately, we don't actually have to worry about that because the Fed will be rolling that $4Tn over, at a rate of roughly $800Bn a year to keep the party going forevermore.  

Screenshot 2014-10-20 12.59.16This is what is misunderstood by – well pretty much everybody.  The Fed is not cutting us off, they are just not adding to the already biblical levels of stimulus we've grown accustomed to.  

As each Fed bond or other asset is redeemed, the Fed will still buy a new one to replace it.  And, since our Nation's NEED for money has decreased by 2/3 – it means they are now buying a SURPLUS $300Bn or more of assets each year.  Hmmmm, now who will that be bailing out I wonder?  

That's right, the Fed will continue to pump $300Bn or more each year into the coiffers of our beloved Banksters for many years to come.  The more Obama reduces the deficit, the more money (our money) the Fed can funnel to their Bankster buddies – what a fantastic system – don't forget to vote for more of the same on Tuesday!  .  

On the whole, we don't really give a crap.  We pretty much cashed out our Member Portfolios with huge profits for the year and that leaves us free to have fun day-trading and playing the futures while we get ready to enjoy our holidays.

Just this morning, in fact, I put out an Alert to our Members (and even Tweeted it as a holiday gift to the cheapskates) at 4:51 am saying:

/ES (S&P Futures) just got rejected at 1,180 and that's still a bearish signal and we can short them below the line or be more aggressive shorting /TF (Russell Futures) at 1,145 — buy you know how scary that can be.  If /ES goes over 1,180 – GET OUT OF THE SHORT POSITION!  If /TF goes over 1,145 – GET OUT OF THE SHORT POSITION.

We caught a nice ride down to 1,132.50 – up $1,250 per contact and that's the line we just flipped long on, as well as some others I'm simply not going to discuss for free. devil  

Of course, that was nothing compared to the move we called in the FREE LIVE WEBINAR on Tuesday, where we laddered into a Russell short that gave us a $9,390 winner yesterday, surpassing last Wednesday's win from last Tuesday's Live Webinar (that one was Members only) of $4,560 – better than 100% improvement and WE GAVE IT AWAY!!!

So I feel that I've done my good deed for the month and I certainly think I've done all I can to show you why you MUST attend our Live Last Vegas Seminar which starts a week from Saturday, with a Member's dinner at Nobu in Caesar's Palace, followed by a poker tournament.  On Sunday we will discuss the economy, trading strategies and our top trade ideas for 2015 followed by a Live Futures Trading Workshop.  Monday we will do live trading all day.  

Welcome to Las Vegas!

Come join us – it will be fun… and profitable!  

Remember, we can only show you HOW to make money in the markets, we can't MAKE you make money – that's up to you!  For example, our Trade of the Year for 2014 was AAPL and our trade idea was selling 10 2016 $450 puts for $4,100 (pre-7:1 split) and buying 10 2016 $450/600 bull call spreads for $65,000 for net $24,000 with an upside profit potential of $126,000 at $600.  I even took the time to go on TV and tell people about it – BECAUSE IT WAS SO DAMNED GOOD!  

How good?  Well, AAPL is now at $107.34 and we multiply that by $7 and that translates to $751.38 which is already more than 20% over our target for a 525% profit just 7 months after I revealed our Trade of the Year on TV (our Members had it much cheaper at the Las Vegas Conference last November).  

Even if you weren't an options player and just bought the AAPL stock at $70 at the time, it's still a very nice 53% gain since my call – not bad for a year's hard work, right? 

So don't fear going back to CASH!!!  Cash is king in this economy and there are so many fun things we can do with cash – like last week's long calls in our Top Trade Alerts on HAS, IRBT, HOV, GSK and RRD – all up huge in just 10 days.

It's holiday season – let's enjoy the rest of our year! 

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  1. Good morning!  

    We had lots of productive Q&A early this morning with notes on Portfolio Balancing and such that I hope someone puts in the Wiki.  You might want to check it out.  There's so much going on right now that it doesn't all fit in a day's discussion!  

    155571 600 Boom cartoons

    155543 600 halloween voter cartoons

    155478 600 Globola cartoons

  2. "I don't consider myself an activist, but I realize how much I've benefited from the sacrifice of others"


  3. Nice lines forming up again but too in-between to play:  16,900, 1,970, 4,062.50 and 1,140 – you can short or long the laggard here but I'd rather see us get to the top (1,980) or bottom (1,960) of the channel to make a contrarian play.  

    Dollar off the highs at 86.27, oil $81.50 (as usual), gold $1,205 after tapping $1,200 (missed it), Silver $16.64 after tapping $16.60 (missed that too – good time to add SLW).  Copper weak back at $3.05,  nat gas back to strong at $3.83 with their inventories later and gasoline weak at $2.166.

  4. Fed/Phil

    Not that 4T isn't scary but I'm pretty sure the balance sheet is 4.7T.  If that doesn't really scare the shit out of you.  Their hope to unwind it is as interest rates start moving up that the private sector will start buying these bonds instead so they wouldn't have to repurchase them.  It might take 20 years but that's their great plan and who knows what will happen if you have a market crash or recession or two in between that.

  5. Good Morning!

  6. TEX/Phil.

    TEX getting nailed today after earnings.We have it in the Income portfolio.

    Can you have a look and maybe discuss a recovery play.Thanks

  7. Phil/SQQQ

    I have a Jan 40/50 BCS as a hedge, which I think we discussed holding onto until after the Fed yesterday.  It's been knocked back pretty well, do you think its a good time for a roll yet or continue to see how things play out here?

  8. $4.7Tn/Rustle – Really, am I that far behind?  $4Tn is so mind-boggling I didn't think it was too low.  That means my calculations are off and they are rolling $1Tn when only $500Bn or less is needed – that pours $500Bn into the banks!  They can unwind because, at $500Bn borrowed, demand for TBills certainly exceeds supply – that will keep rates low until we elect a Republican who blows up the debt again. cool

    Wow, big pop at the open, already back to 17,000 on /YM along with 1,975, 4,080 and 1,142.50 – those should be stops once we're over them.  

    Holy crap, V is adding 115 points to the Dow by itself – would be red otherwise – be VERY CAREFUL!!!  This is about China allowing more CC access (because their consumers are broke and can't spend) - no reason for a general rally.
    • Dow +0% to 17,005.50. S&P -0.28% to 1,976.80. Nasdaq -0.35% to 4,533.50.

      • Treasurys: 30-year +0.42%. 10-yr +0.12%. 5-yr +0.02%.
      • Commodities: Crude -0.97% to $81.40. Gold -1.68% to $1,204.30.
      • Currencies: Euro -0.25% vs. dollar. Yen +0.11%. Pound +0.05%.
    Better than expected GDP is good:  Q3 GDP +3.5%
    • GDP Q3: +3.5% vs. +3.0% estimate, 4.6% previous
    • Stock futures trade slightly lower, as this morning's stronger than expected report on advance U.S. GDP is "a development somewhat validating the hawkishness in yesterday's Fed statement" announcing the end of QE; S&P and Dow -0.1%, Nasdaq-0.2%.
    • Major European markets are broadly lower but have climbed off earlier lows, while the major Asian bourses finished mixed.
    • Visa +5.7% premarket after beating bottom-line estimates and announcing a $5B buyback; MasterCard +3.1% after also reporting better than expected Q3 results.
    • Brent crude drops below $87/bbl as Fed optimism lifts the dollar.
    • Treasury prices are rising, with the 10-year note climbing to a new high and pressuring its yield nearly 3 bps to 2.29%.

    Brazil up sharply after surprise rate hike

    • The central bank had been expected to leave policy unchanged, but instead last nighthiked the benchmark Selic rate by 25 bps to 11.25%. The move comes following the re-election of Dilma Rousseff, which rattled Brazilian markets.
    • "Very well done," says Goldman's Alberto Ramos. "This definitely is a great step forward to rebuild the credibility of the inflation-targeting regime … This is market friendly."
    • The Bovespa is higher by 2% in the early going. EWZ +3.2% premarket

    Vale swings to surprise loss, citing currency setbacks and low ore prices

    • Vale (NYSE:VALE) -6% premarket after reporting a surprising Q3 net loss due a sharp depreciation in the Brazilian real and the lowest iron ore prices since 2010.
    • Vale posted a $1.44B Q3 loss from a net profit of $3.5B a year earlier and analyst consensus expectations for a $1.49B net profit, hit by $2.68B in foreign exchange and monetary losses on debt and derivatives; EBITDA fell 48% Y/Y to $3B.
    • Vale’s average sales price for iron ore plunged 36% Y/Y to $68.02/ton from $109.93.
    • Produced a record 85.7M metric tons of iron ore but inventories rose by 9.3M tons, as protests that closed its main railroad in northern Brazil contributed to stockpiles.
    • Since ferrous metals, mostly iron ore, account for nearly two-thirds of Vale’s sales, Q3 net revenues sank 27% Y/Y to $9.06B, the company's lowest revenue since Q1 2010 and below expectations of $9.65B.
    • Says it completed construction of its 30M tons/year Teluk Rubiah distribution center in Malaysia, which will allow it to cut costs in Asia, and began operations from its Serra Leste iron ore plant at the Carajas complex in Brazil.

    Strong volume boosts MasterCard

    • MasterCard (NYSE:MA): Q3 EPS of $0.89 beats by $0.11.
    • Revenue of $2.5B (+12.6% Y/Y) beats by $50M.
    • Shares +3.3% PM.
    • MasterCard (NYSE:MA) reports gross dollar volume processed in Q3 rose 12% to $1.2T.
    • Cross-border volume +15%.
    • Processed transactions +10% to 11B.
    • Operating expenses +12% to $1.08B as M&A and strategic partnership investments factored in.
    • MA +2.0% to $77.50 premarket.

    Las Vegas properties outperform Macau for MGM Resorts

    • MGM Resorts (NYSE:MGM) reports a 1.9% rise in revenue from domestic resorts in Q3which helped offset a slip at MGM China.
    • Casinos with improved revenue included Bellagio, Mandalay Bay, Luxor, and New York-New York.
    • RevPAR +6% at Las Vegas Strip casinos.

    More on Taser's Q3

    • TASER (NASDAQ:TASR): Q3 EPS of $0.14 beats by $0.05.
    • Revenue of $44.3M (+25.9% Y/Y) beats by $4.96M.
    • Press Release
    • Net income of $7.6M, or $0.14 per diluted share, vs. $5.1M, or $0.10 per diluted share in the third quarter of 2013.
    • Revenue by segment: Taser weapons: +26.5%; & video +21.5%.
    • The company completed $2.9M of stock repurchases during the quarter, purchasing approximately 0.2M shares for an average cost of $11.94 per share.
    • Q3 results
    • TASR +5.7% premarket

    More on World Wrestling Entertainment's Q3

    • World Wrestling Entertainment (NYSE:WWE): Q3 EPS of -$0.01 beats by $0.16.
    • Revenue of $120.2M (+6.1% Y/Y) misses by $13M.
    • World Wrestling Entertainment (NYSE:WWE) reports its WWE Network expanded to 731K subscribers in Q3.
    • 31K subscriber were added during the period – 3K in the U.S. and 28K international.
    • The company's media division increased revenue by 5.8% to $76.9M.
    • Live events revenue -13.1% to $21.8M.
    • Strategy: The company plans a new pricing plan of $9.99 per month beginning on November 1.
    • WWE +1.7% premarket.
    • How bad is the smog in Beijing?
    • The China Fashion Week show in the nation's capital included the introduction of new lines of face masks from well-known designers.
    • Twice this month smog in Beijing has soared past the 400 level on a pollution index which marks 300 as a hazardous level.
    • The worsening smog situation in China has led many cities to take new measures to support the electric vehicle industry.

  9. 100 DXD Nov $24 puts in the STP for 0.45 and 20 in the $25KP for a hold through election day.

  10. Good Morning.

    As you asked for  here is my question:

    Pwright:   Uff, luckly  is Phil who will answer you, I have the same  idea about the P/E levels, perhaps playing some sectors assuming they will restore historic  P/E levels is a good LT strategy.

    Enjoy your  "out of line"  travel.

  11. I loath election time here in the states and would cast a vote for ANYONE who is in favor of election reform.


    Any chance of my casting this vote in my lifetime?….. :(


    Oh, and Gov. Christy is an assh*le….. :)

  12. Phil:DXD


  13. Hi Phil and Advill, I realize I should have posted this in today's post instead of yesterday's, so here it is:

    ~~Good morning Phil, I hope you've been doing well.

    I've been scarce recently, because overseas for a lot of October, and also because I had gone to basically 100% cash at end of September.  I've got a few shorts on, which aren't performing (yet, anyway :) ), but what I wanted to ask is, in terms of the Fed, it's good that they have confidence in the economy, and I'm glad they ended QE (to the extent that the people of Earth may care a great deal about my opinion).  But now that they have taken these steps, is it possible to justify current valuations in an environment not being inflated by the Fed?

    I mean, if the ball bearing manufacturer is trading at 25 times forward earnings, and in his earnings report he shows a 2% increase in ball bearings sales and a $0.10 increase in earnings per share, is the market going to reward him with a PE of 28 or 30?  If he actually reports 3% and 0.15, does it really make all that much difference?  Or will the market decide that maybe 18 or 20 is more appropriate?  And if so, and if that happens often enough, is there enough leverage in the system to where that can lead to a bit of a panic?

    So that's why I'm in cash and short recently, as Bob Mould once said, "everything's so expensive !"  But the market has been making me look sort of dumb for the last couple of weeks.  Do you think the markets are fairly valued currently, or if not, around where would be fair value?  If possible to be bullish here, are there sectors you are focusing on?  I notice a lot of cyclicals / materials, CLF, ABX, etc., but jeez, those have been weak recently, I'm wondering if, with China rebalancing, commodities may be weak for some time to come.

    At any rate, let me know your thoughts when possible; whatever the case, hoping for better conditions coming up, looking forward to getting back in the game..


  14. phil,

    ok im going to cry uncle on gold and my positions and need your help on how to consol so that i can take advantage of the "eventual" ? if ever move in gold……


    -5 jan5 15 puts @2.65

    -10 jan6 15 puts @ 2.75

    10 jan6 bcs 13-20 @3.00

    since we were bullish on abx/gold thought i would hold on to my gld/gdx …bad move..

    1000 gdx @ 44

    600 gld @ 160…

    originally invested as a hedge …(way back) ..and kept waiting for gold to go back up…so that said ……i would appreciate a way to re position the overall holdings to be able to maybe get out even (big request no rush) if and when gold moves back up….tks…..

  15. DXD.  Buying puts for a hold (I think that means not a selloff)?  

    Doesn't that mean if we hold we lose 100% on the put buy?  We already have the TZA's right?

  16. Phil / BIDU – Looks like earnings didn't go our way, what's our plan with our BPS in BIDU?

  17. I'm confused.  I read this in the morning post " We pretty much cashed out our Member Portfolios "  

    but the last update that I'm following is from

    Which looks really for from a cash out.  Did I miss a post?

  18. Phil –  Regarding the $9K+ win you talk about in the morning post, how many contracts did you ladder into?  Was it 10?  What is the margin requirement for having that number open at TOS?  

  19. GILD 113+   It doesn't like respecting the channel.

  20. PWright-I'm with you. I've never seen such swings in the market as recently. That being said when I made profits I took them because in the next hour you can lose. After the big hit in gtat I thought this looks like a mirage similar to b-4 the crash in 2008 when I was telling EVERYONE to sell their residences, save $ & get out of the market. Of course no one listened & my kids, except one who sold in Calif, got burned and friends in the housing industry lost everything because "it was going to go on forever." People must have very short memories-things just keep going in circles. However, with due diligence you can garner your profits & RUN!

  21. No comments on TASR?  

    I'm adding to my 2016 -13P +15/17 bull call for 0.00.  You might even get better prices.  

  22. woohoo on TASR

  23. pirate: no doubt, I've made the mistake of sitting on things too long, and getting whipped in either direction.  But, I'm pretty new at this, making money is one thing, but first got to make sure I don't get taken to the cleaners.  I've learned a bit about what risk is, and I still have some money.  So there's that :)   But sure would be nice if I could just make some long term investments with any conviction.

  24. TASR/Burr – oh yeah. woo hoo. to busy looking at RGR though. boo hoo.

  25. TASR is a shining example of the value of NOT fiddling with long term positions that you believe in. I started with a 2016 13/20 bull call, and out of fear when TASR dove last Spring, took a loss to roll the position to 2016 10/15 bull call. These 2 year spreads give you lots of time to be right, but also lots of time to be wrong! Learning.

  26. P/E Levels/Advill – It's not a bad strategy but you have to consider the Fundamentals of the sectors, of course.  Bespoke puts up useful charts like that, we should look at them over the weekend.  

    Election reform/1020 – 90% of the incumbents get re-elected, who's going to vote to reform that?  

    DXD/STP, $25KP, DC – Holy Crap, I meant the calls!!!! ABORT THAT TRADE – still 0.45 fortunately.  Sorry about that.  

  27. Sorry, I totally spaced out.  In the STP, we want to get 100 DXD $24 calls at 0.65 and 20 in the $25KP but don't pay more – the only reason I like them is because the Dow is popping and they are cheap (they were $3.50 last Friday and our premise is that, after the election, there will be a sell-off. 

  28. Phil – Feel free to delete this post if you don't want it here, but I'd just like to point out another educational resource.  

    Dan Sheridan @Sheridanoptions

    Today on, Johnny will be joined by Tim Pierson, as he goes over his RUT Monthly Broken Wing Condor! Come LIVE at 1pm


    They do have good info about selling premium.

  29. Phil/90%  Term limits?…..right….


    Sucks for us.

  30. Sheridan/ Burrben:

    I've been in his mentoring program for a year and a half.  Good stuff!  A lot of management by the Greeks, defined risk trades, and risk management.

    I figure the more arrows in my quiver, the better.

  31. What a weird day. swing longs dead in water or premium spiked down. swing shorts not keeping up with the drop in the swing longs. hedges on idexes doing nothing, aging basked of miners walloped on the gold take-down. Damn, TASR is the only bright spot in my trading port today.

  32. Pwright-A couple of days ago Phil went into taking profits & I have made it my mantra. Don't get married to a stock=take profits! You can always buy it lower later. So, apparently it is one hard lesson to learn. I always ask ," Am I going to make 1k or whatever amount somewhere else today?" Then I don't hesitate to take the profits; anything over 40% is  suspect. Learning to ride the wave to resistance is learned as you go along. I have let things ride, but only if I can watch very closely to what is happening in the market. If I have to be away from the computer I try to keep things to a minimum. You get a feel for things after awhile & Phil's suggestions are usually right on.

  33. Thanks DC – good catch. 

    QE, etc./Pwright – Good time to take a break.  As noted in the above post, QE isn't over – it's just not expanding although it is really expanding because, 5 years ago, QE didn't cover the debt, so there was little extra for the Banks but now QE is 2x the debt so that leaves $500Bn that the banks get to sneak onto their balance sheet each year.  Does any of this help America?  Sure, when the banks have another Trillion or two in cash they'll push the Fed to raise rates so they can lend it out at high amounts and then, once they've lent out the money – they'll crash the economy again, foreclose on everyone and then beg for more QE and low rates until they are fat again – wash, rinse repeat – it's been going in since the Magna Carta was signed and the Lords realized the peasants would work their asses off if the Lords let them think they owned the land or had any control over their lives.  

    Still, from an investors standpoint, this bust in lending activity will turn into a boom and it's the E on P/E that is likely to improve and catch up to the price.  Don't forget earnings are a very marginal thing.  CLF sold $5.7Bn worth of "ball bearings" last year and made $384,000 and they are valued at $1.6Bn for a p/e of just over 4 at this price.  Though this year they are netting about $50,000 and the p/e is 32 – in 2011 they sold just $6.5Bn worth of ball bearings but made $1.6Bn – pretty much every penny of sales over a certain amount is profit for them because the AMOUNT of iron ore they ship is the same and their costs are the same – the variable is the PRICE they sell it for.  

    Obviously, we don't know whether CLF will make or lose $800M next year but we do know that if the demand comes back – it will probably be make and their p/e will go from 32 to 2 in 12 months.  The market "decides" on an average p/e – though that varies wildly by sector and that's driven by forward sentiment, not backward.  If you feel dumb by being in too much cash (we're 20-30% invested in our large portfolios despite our trepidations) there are still plenty of bargains on the Buy List because this is, so far, far from a broad-based rally and there are PLENTY of laggards – even in the blue chips. 

    Gold/Mill – Damn, failed $1,200 with silver $16.35 and oil $80.90.  Your time-frame on ABX was aggressive and GDX is always a nightmare (not that ABX is much better).  As I noted yesterday, if you move to Japan, gold will be up 10% for the year and you'll be much happier in Yen.  Since you invested in Dollars, the Dollar is outperforming gold and your investment looks bad.  

    ABX is at $12.34 and you are netting in around $12.50 with the short puts so you are break-even if you do nothing and gold stays where it is.  How low do you think gold will go and, if gold is that low – do you not want to buy it?  If not, plan on getting out in Jan but now is a lot of premium.   If you do REALLY want to own ABX, then the 2017 $13 puts are $2.75 and, if you wait for an even roll (when the premium expires) then you knock $2 off the net and you're in for $10.50 – if you don't REALLY want to own 1,500 shares of ABX for $10.50 – why they Hell haven't you liquidated this trade by now?  On the bull call spread, at least you can salvage the calls and leave the short calls open to balance the short puts somewhat – that you should have done at $3.  On the other hand, I think $1.55 for the 2016 $13s is insanely cheap and I'd spend $2.15 to roll to the 2017 $10s – but I REALLY do want to own ABX.

    GDX is $18.52 – I can't even comprehend that you own it from $44 and haven't done anything with it.  Please tell me that's not your net.  If so, use stops and hedges and you'll last a lot longer.


    GDX/Mill – I'd just keep in mind that you are in the position for net $1.80ish so your goal is simply to get the $1.80 back, then to make the $3.70 back for the put so you don't "need" it anymore as an offset so let's say you want to make $5.50 and you have 24 months so your goal is pretty much to sell .25 a month.  Since GDX is currently low in the channel, you don't want to sell much but it doesn't mean you can't sell anything.  Just selling 1/4 the Feb $46 calls for $1 gets you your .25 and you can keep a stop at $1.50 and then you'll sell 1/2 x the March whatevers are .75 (currently the $48.50s but should be the $50s by the time you have to stop out the Feb $46s).  By the time you would be worried about the March $50s, your long spread would be $5 in the money at 2x.  The key is to remember your job (make .25 per month per long) and to not be greedy.  It's a little dull but grinding out .25 24 times $6 a nice additional return if all goes well. 

    GDX/Mill – Probably nothing a whole lot of patience can't cure but, if it's oversized, it is a good idea to trim it down a bit.  

    Submitted on 2013/09/27 at 11:15 am

    GDX/Mill – GDX is an ultra-ETF that decays over time, we don't like to hold them long-term.  ABX is part of GDX and one of the best miners out there, at the moment struggling because they wrote down $8.5Bn on a mine in Chile that won't open for 2 more years and the price of the gold they are selling is about 20% below last years average but that's a much bigger chunk of the profits ($300 less per ounce) than 20%.  So, it's a long-term play but, whatever your loss is, it's a lot smarter to make it up by selling ABX puts (2015 $15 puts can be sold for $2.05 and they are a better than even roll to the 2016 $13 puts ($2.17) which is net $10.83 on ABX, 42% below the current price.  If you think owning ABX at net $10.83 is risky – why on earth would you be playing gold bullish at all?  

    GLD/Mill – Same issue really, I'd convert that $69,000 (down $27,000) to something more useful with the money – especially as it seems you may be too heavily invested in gold.  Maybe take some of the money to add some ABX longs but, unless you have millions invested, this is a Hell of a large exposure to something that is usually a small inflation hedge in a portfolio.  

    DXD/Burr – My bad, sorry.  

  34. Phil: DXD

    That's annoying because your first call is working out better!

  35. Yeah, gov't serviced debt is lower now than under Reagan.  So tell me, what is propping this market…??

  36. Phil: 

    So, are financials worth taking a look at since they will continue to benefit most from the FED's actions going into 2015?

  37. Jbur – How much does that cost per year?  Do you get his OptionNet software as well?

    If you don't want to answer here, you can email me at  

    I've been following him before the crash as he has lots of videos on the CBOE website.

  38. Thoughts on GTATQ?

  39. Phil/SQQQ

    I had posted this earlier this morning but I think it got lost in the mix…would you mind sharing some thoughts on it.


    I have a Jan 40/50 BCS as a hedge, which I think we discussed holding onto until after the Fed yesterday. It's been knocked back pretty well, do you think its a good time for a roll yet or continue to see how things play out here?

  40. Phil / BIDU – my comment may have got lost in the mix as well. If you could share your thoughts on BIDU as well now that earnings went against our position. Thanks!

  41. Phil you must be liking GMCR today up to 150.00 Strong coffee !!!

  42. Well, with today´s price of gold perhaps buying  some NUGT for a day could be ok…I know is not Phil´s favorite this gold 3X ETF´s   but  having TZA, TNA or others  I don´t see a good reason not to play this in the short term.

    Any opinion?.

  43. PSW // Prodigal Son

    I wanted to slip in during slow hours to checkin with you guys. I appreciate all the mails – I'm good. 

    My hiatus was actually a survival hail mary.

    Long story short. My port was unbalanced, overextended and too complicated. I simply can't function at the level Phil keeps his portfolios. I understand the ideas and theory – it's just too much for me to handle with multiple accounts, portfolios balancing portfolios.

    I was overweight in energy and a lot of our original picks from last year that I have nursed ( ABX, CLF, XCO, HOV, etc ) were simply killin me.

    Then GTAT hit ( one of my largest holdings ) KKR dumped along with the dip and I was facing some serious liquidity calls and losing my Portfolio Margin.

    I took stock ( pun intended ) in all the portfolios, went totally into cash.

    I re-watched webinars, focusing on futures and did some more research, worked on paper trading. I came up with my own style ( similar to a Martingale, but with modifications with a layer of prioritized 'flags'. It's basically momentum trading with a twist.

    Anywho, for those of you don't know I cleared 78K in 10 days, brought myself into positive territory and starting to rebuild.

    I can talk more to folks who are interested, but it's basically Phil's number theory, momentum studies and big picture resistance/support lines. I call it 'HoneyBadger' ; >

    The RUT explosion last week took about 80% of my profits so I have to put some guardrails on this and get less aggressive because there is no protection against a move like that ( although Phil's TNA Bull Spread idea seems like a very interesting hedge )


    Again – thanks for all the notes. Nice to be back.
    I think I share Phil's dream. Move to Southern France, wake up, read the papers, make a few future trades – call it day and head for the garden.

    The Fed was a nice test – up 28K.

  44. TEX/Phil.

    TEX down hard after earnings.We have it in the Income portfolio.

    Can you have a look and maybe discuss a recovery play.Thanks

  45. Sunil / GTATQ;   I think game is over for the next years, now that we know the terms of the problem is clear that losses will be very very important, they will dismantle what just build in May, there will be a glut of furnaces in the market, they are starting the cross of the desert…

  46. advill / NUGT

    Why go long on a 3xETF that loses with time versus short on an ETF (GLL) that gains with time?  You get the benefit of time while maintaining sensitivity to short term moves, AND benefit from ETF fees, with a GLL put where you lose value with time, have the same short term sensitivity, and lose to ETF fees with the call on NUGT?

  47. Wombat…


    Sorry to hear that, I suffered myself some heavy losses in / CL which I can´t recover yet, my day-trade portfolio  is at 20% of original amount, and trying now to recover.

    The last part of your comment is the the best one, I agree….keep it simple is the secret.

    Best for you.

  48. what an incredible move by es today — 25 points straight up in like 3 hours 

    this bull train is unstoppable!

  49. Wombat – keep talkin'  we're always interested in what we find works. I still have some lflanman strategies/rules taped to the bottom of my monitor

  50. Oil and gold.. part of the siege of Putin.

  51. JPH1121/  NUGT 

    Well, the question is a good one….because  I was not aware of… I recognize that  ETF´s loss value on time ( However, I don´t know why), will take a look in GLL, thanks.

  52. The reason ETFs lose money is no matter what you do, the ETF fees eat into a small portion of the value of the investment.  Sure, it might be 0.05% but that is still slowly eating away guaranteeing that without inflow of new money, the value of the portfolio will approach zero.  Secondly, as the ETF churns contracts, there is always a loss of premium on the positions as time is purchased and near term contracts are closed.

    I'm not sure I'm willing to buy ETF calls anymore.

  53. DXD/DC – Well, at least it let us reverse without losing money and gave us an easy fill on the calls. 

    BIDU/STP, Pfehl – We paid net $11 for the March $220/185 bear put spread and the $220 puts are now $13.50 (the $185 puts are $4), so we can close for net $7 OR we can decide BIDU's earnings WERE good enough that we can risk owning 400 shares at net $182.50 (and no, I will not help people do the math!) by cashing the $220 puts and leaving the $185 puts naked.  Since the 2016 $135 puts are $4 too, I figure if we play it that way, we can always roll the short puts to them so really we're risking owning 400 shares of BIDU for $132.50 ($53K) and, since BIDU is $234 at the moment and since we can totally afford that in the LTP and, since we don't have a lot of web stocks (or China stocks) – it's a pretty attractive option.  

    Since they were $200 two weeks ago and since they are up on earnings excitement, I don't want to rush a decision on a March spread but that's the way I'm leaning.  

    Cash/Burr – The STP has $182,018.90 in cash and a net value (understated because of spreads) of $195,333.90 at the moment.  That's what I call pretty much cashed out.  The LTP has $637,800 cash on hand and is using $343,750 in margin on $600,610 worth of positions so about 30% margin used there.  

    The Income Portfolio is at $580,395 (but subtract $30K for GTAT bad balances) using just $174,500 (17.5%) in margin and the rest in cash.  Butterfly Portfolio is at $120,830 using $43,130 in margin (18%) with $77,700 cash and the $25KP is at $30,703 with $27,271 in cash and no margin used.  

    So that's what I mean by pretty much cashed out – we've been very lightly invested all year in our large portfolio and the recent pump and dump in the markets gave us a chance to cash out both sides of the STP and now we can comfortably wait for a strong signal, one way or the other.  

    Contracts/Burr – When /TF hit 1,150 I went to 20 (from 10) but then stopped out over the line and reduced and added until we finally got a move down but, of course, I didn't ride 20 down (with I did) because I kept taking more and more off the table on the way down and then, once past even, set stops to lighten up on each little bounce until we hit 1,140 and I killed the last few. 

    There's a point you hit in a ladder where you don't WANT to DD but you know you should.  Since the RUT tends to move in 5s, it was worth a short adding 10 at 1,150 with a 0.5 risk ($500) and then adding 10 again at 1,155 (if we got there, and we didn't) or 10 again at 1,150 with a 0.5 risk ($500) hoping to catch a good move down and pick up $1,000+ on a point move.  You have to think of the DD amount as a totally separate trade you are momentum trading (super-tight stops) – not a permanent part of your original position.  

    That way, if I have 10 at 1,142(ish) and I add 10 at 1,150, I have 20 at 1,146 but then we go higher and I stop out at 1,115.50 and now I'm back to 10 at 1,141.50 and then I add 10 again at 1,150 and now the basis is 1,145.75 and so, as soon as we hit that mark on the way down – I'm back to 10 at 1,145.75 – mission accomplished.  Of course, while 1,145.75 is the goal, we are THRILLED if we just make $1,000 and raise the basis of our 10 to 1,142.50 and then we'll try it again and again – attempting to raise the basis (on a short, of course) in tiny increments until it gets to our goal (within a weak retrace of wherever we are).  

    Good attitude Pirate.  

    TASR/Burr – Yay!  That's my comment.   I was hoping it would drop so we could add more.  

    TASR/Griffin – The trick is to invest in rolling just the long call and waiting another month to see if you HAVE to roll the short call.  The way I look at it, I'm going to invest $1.20 (guess) in the roll (and if I'm not willing to invest $1.20 – why am I in the position at all?) and the short $20s are still $2 (guess) and the $15s are $4.50 so it more than pays for the roll so why hurry it?  If I'm lucky, I never have to roll the short calls and, if not, I roll to the $15s for $1.50 or better and spend that to roll my $10s to the $8s or better and again, if I'm not willing to make the investment, then I should be stopping out, not rolling. 

    Sheridan/Burr, Jbur (interesting demographic he's capturing) - I don't fear my competition.  Actually, if you know the guy, I'd like to feature some of his stuff in our education section.  Perhaps you can point out things that would be good to put up to help others.  

    Term limits/1020 – Same problem, which one of those old farts is going to vote for term limits?  Back to Jefferson for the solution:

    Weird/Scott – It's the kind of days we get when we're seeing a manipulated top.  Tomorrow is end of month for window-dressing and, of course, the Plunge Protection Team needs to help Congress protect their phony-baloney jobs:

    Thanks Pirate and great point on taking profits.  

    Reagan/Pharm – Wow.  Still a long way to go before we get to Clinton levels but thank God we're not still at Bush levels (either one)!  

    Financials/DC – I suppose so.  As a bonus, they won't have all those massive fines and lawsuits going forward that have held them back (well, maybe not unless they make new ones).  

    Poor demand on 7-year note auction.  

    GTAQ/Sunilram – We played them off good news last week, no new catalyst that I see so leaving them alone (the fact that we are trapped in our fairly dead positions does not mean we like them).  

    SQQQ/STP, Jeff – Sorry, I do go in order so, if I skip you, feel free to repost anytime.  Imagine the chaos if I didn't go in order…  Anyway, that's one of our STP hedges and we were in at net $3.15 and now it's $1 so should have done something sooner but I was looking at the overall STP and not worried about that one thing (and we do need a hedge).  Good time to discuss hedging logic though:

    In the STP, we have 50 of the SQQQ Jan $40/50 bull call spreads that we bought for $3.15 ($15,750). It's not a stand-alone play, it's a hedge to protect our LTP or Income Portfolios in case we get a major failure over the holidays.  If we do not get a major failure, then our LTP and Income Portfolios, which are 100% bullish with lots of short premium sold, will make money – much more than $15,750.

    Nonetheless, that's no reason to let it expire worthless.  Since the Jan $40s are killed (down to $1.70) and since we know we will still want protection in March and June, we look to where we can now roll our protection to.  

    We already have the March $38/45 bull call spread and that was $2.20 and the March $38s are still $3.20 so let's sell the March $38s AND the Jan $40s ($2.45 average) and invest another $2.75 ($27,500) to roll to the June $35 calls ($5.20).  At the same time, we can offer to buy the Jan $50s for 0.70 ($3,500) and, once we do that, we can sell the June $48s for $3 ($15,000)

    That means we are now spending ($27,500 + $3,500 – $15,000) = $16,000 to have 100 SQQQ June $35 calls with 50 short June $48 calls and 50 short March $45 calls for net (ignoring the time factor) $115,000 of downside protection should SQQQ pop to $48 (where it just was), which is up $14 (40%) on a 3x ETF.  So a 13% drop in the Nasdaq (again, what we just recovered from) will add net $99,000 to the STP.

    That then allows us to buy more tech with confidence (and, in both portfolios, we're protecting large AAPL gains anyway) since we know we are well protected from a big drop and that's the way we cycle in the STP/LTP or STP/Income Portfolio process.  We're simply investing some of our LTP gains into more protection but, since the STP is bloated with cash – we don't need to transfer the funds – we just use some of what we already have.  

    PS, the way this market wiggles around, it's best to ask a good price for 10 of each leg (10-20% of whatever your goal is) and then see what fills.  The way we gyrate, you can often get a great price on every leg over the course of a few hours.  

  54. Has there been some kind of halt?  CAT, DIA, SPY?

  55. Phill, I just have the march sqqq spread 38/45  im not looking for as much cover… any suggestion there…tanx

  56. There Jeff, aren't you glad you asked?  cheeky  I am because I would have missed a nice opportunity to improve our hedges.  

    BIDU/Phel – No, in your case you were just impatient.  See above….  wink

    GMCR/Yodi – Such torture!  

    NUGT/Advill – It's a fun gamble and I really don't see a move below $1,150 as sustainable but there's no telling where panic can lead us – especially since lower gold forces the ETFs to liquidate positions and that then floods the market with physical gold some of the ETFs are required to hold and that makes things worse and causes more ETF liquidation (you know, from the kind of schmucks who play things like NUGT).   

    Great comeback Wombat, congrats!  Are you coming to Vegas, I'd love to go into details about what worked and what didn't.  

    Speaking of the Futures, /TF is back to yesterday's high at 1,152 BUT it's not attractive to play because the other indexes are HIGHER than yesterday's highs (think tug-boats), so /TF is actually lagging on the way up and, as Wombat notes, that TNA hedge begins to kick in!  

    We have 17,100, 1,990, 4,100 and 1,152.50 and they all look like tasty shorts but we did DXD and we just spent another $16K on SQQQ (and keep in mind, this is out of $800,000, so 3% ($26,000) spent to hedge a 10% ($70,000) rally) – ALWAYS MIND YOUR RATIOS.  A good rule of thumb is diverting 20-30% of your bullish profits into more hedges to lock in the 7% gains.  

  57. Halt  -  CTA and OPRA have reported issues dissmenating market data in US STOCK and OPTIONS.

  58. So what do the Chicago Transit Authority and Ms. Winfrey have to do with this halt?  Chicago anyone?

  59. Wombat/Futures – I'd be interested to hear more about that strategy

  60. Phil and Pirate, many thanks for your comments.

    I did put on some CLF yesterday, back in the ball bearings business :)


  61. Phill/SQQQ

    Thanks for the adjustment and yes, glad I asked.  No worries about being skipped over…

  62. Phil // Thanks
    It was ulcer city, so trying to back down, setting some rules, etc. I want to stress-test this in a few different scenarios.
    Love to do Vegas. Still working on the wife ( she travels a lot so I have the kids )

    For the TNA hedge ( probably wouldn't put it on today since everything already rocketed ) but say TNA is at 72 – where would you bracket the bull call spread ( whats the thought behind it ) ?

    I like this idea. The entire account is in cash, so I'm only keeping the hedge and the rest is margin for /TF
    ( I only play /TF and I only short )

  63. Wombat/Futures

    Agree, would be great to hear about your strategy.

  64. "Trapped in dead positions" – oh yeah, being Halloween and all, my dead/zombie/scary-ugly position to share is ABX.. a multi-year horror that I just can't possible close or dump at these levels.  A case of sold puts gone bad. Rawhide strategy seemed like such a good idea once upon a time… DOH! 

  65. ok guys.
    it may be a little rare, but i'll put something together in the next few days.
    for example, I only short and the RUT is up almost +9 points

    I'm up 3K

  66. CLF/pwright – the Jan2016 $10 buy/write is a fine, fine, setup! Was (a lot!) better at 9.50 a couple days ago, but to play today, buy CLF @  10.73, sell the $10 strike Jan2016 puts and calls for $6.15 and initial entry is $4.58, making the current dividend a 13% yield. If called away you make 118% gain not incl dividend. If put to you, your net on 2x is 7.29/share.  Even if they completely cancel the dividend, you're well covered.

  67. Greg // Tugboats
    Hey man – if everybody kicked in $10 – could you build a little app, or web based on your side with a static URL, of the '5 boats" that's interactive
    Then we could watch the indexes relative to each other in real time.

  68. TEX/Income Portfolio, DM – Damn, we cannot get a break in the Income Portfolio!  

    They are on track to make about $2.50 so p/e of 10 is no reason for me to sell.  Our spread is 15 2016 $28/37 bull call spreads and 10 short 2017 $30 puts that we bought for net $1.20 but we wisely expected a potential problem this year way back in May and sold 5 of the 2016 $40 calls for $7.05 ($3,525). Those are down to $1 and we're up $3,125 which knocks another $2 off the 15 spreads so net, net an 0.80 credit, which is net $29.20 and the stock is at $27 so certainly no time to panic and too early to know if the drop will stick, bounce or get worse so I'd say time is on our side and we should give them a week or two to play out before deciding what to do. 

    GTAT/Advill – The papers are a bitch to read but this is important:

    • GT will retain ownership of all production, ancillary and inventory assets located in Mesa and Apple is provided with a mechanism for recovering its $439 million pre-payment made to GT over a period of up to four years without interest, solely from a portion of the proceeds from ASF® sales.

    Forbes article makes it very clear why AAPL didn't want the terms released.  This will make any investor think twice before putting money into any company AAPL is working with.  ASF sales above are Advanced Sapphire Furnace Sales so that paragraph makes me think that both parties do expect that, down the road, there WILL be Sapphire sales and AAPL has bet $439M on that fact (not that they had much choice in bankruptcy court).  

    Unstoppable/Toe – You said it.  The end of QE is squeezing a lot of shorts today.  

    Good thing we didn't short /TF – 1,157.50 now!  Soooo tempting though.  

    ETFs/JPH – Good point, they all suck as long-term holds but ones like OIH or XLF not too much friction.  The ultras, though – fuggedaboutit.  

    Halt/Grant – Some kind of data issue affecting the markets.  I think they are rolling fixes, maybe causing halts here and there.  Means you can't really trust the action today.

    SQQQ/Tri – I still think it's a good idea to roll out to the June $35s (assuming you do want to have a hedge over the long run).  

    LOL Grant!  

    You're welcome Pwright.  

    You're welcome Jeff.  

    Wife/Wombat – Have you shown her a picture of the hotel?  My kids love Vegas, bring them all!  

    TNA/Wombat – We did that in Wednesday's post:

    We also found a nice, bullish hedge to play possible QInfinity by simply buying the TNA Nov $75/80 bull call spreads at $1.20, which pay $5 (up 316%)  at 1,173 on the Russell – which would only require a move equal to yesterday's over the next 3.5 weeks.  

    What I love about trades like that is that you can get a pop like this and the Nov $75s are already $2.35, so up almost 100% of the spread.  The $80s are 0.80 and you can cash out of the $75s and be bearish on the short $80s now and, if the RUT breaks over 1,160, you can always add the Jan $80/85 bull call spread at $1.30 to cover and you are back to the original $5 spread (albeit with the short call) at net 0.40.

    The key to those kinds of covers is that the cover pays 3:1 so, as long as you keep layering covers at 3:1 whenever the short calls go on the money (so at $65 you would add some $85/90 bull call spreads, etc), you stay ahead of the gains of the short calls and, since they are closer to the money and unhedged, they have much higher deltas (the short $80s are .31 and the Jan spread is net .12) you still make money on a pullback.  

    ABX/Scott – How deep are you in them?  

    RUT/Wombat – Fantastic!  That's a great indication you are getting in tune with the quick in and out strategy.  

    CLF/Scott – Excellent set-up.  

    Tugboats/Wombat – Greg is not a computer whiz.  He just knows a lot more than we do. Anyway, I just use the YHOO chart, very useful (but you do have to imagine the little boats at the end of the lines):

  69. Phil // Ect
    LVS > Yes, I've actually been IN those beds. Nice. If beds were the issue …
    Ticker Tugboats > ya, but I wanna see them MOVE !!! ; >  ( Im a visual guy )
    TNA > Thanks, I'm gonna have to read this a few times to digest.
    RUT > Wow. Another 4K on the retrace. I"m doin something right

  70. You're a braver man than I am Wombat, I took my morning profits and decided to chalk it up in the win column for the day.  

  71. Phil – Thanks for the CTA link.  I think I saw Christopher Walken in the shadows saying, "More cowbell!"

  72. phil, any clever earnings play on GPRO?  thinking just straight short $60 jan puts at $8.50.  plenty of rolling options.  i think they go up.

  73. phil………..tks re abx/gold

  74. ABX/Phil – the really ugly ones are the Jan15 $33 puts (only 2, but still) that were sold in Feb 2013 for  $7.06.  ABX Just. Never. Recovered.   Now i'm down to when I really must roll them, no premium left at all. I have other short puts (Jan16 $20, April 15 $14) that still have time and premium, but the Aprils will be rolling along soon too, if ABX continues to languish "forevermore." 

  75. ABX – oh, and those Jan15 $33 we're themselves rolled down and out from something previous, now long forgotten (suppressed). Oh the horror.

  76. Phil // TF
    Well, I guess if I'm positive I'm brave.
    If I'm negative, I'm an Idiot.
    I work the morning for my parents ( goal of 2K )
    then our port ( goal of 2K )
    Then I'm going to practice walking away.

    I always forget that the market will be there tomorrow.

  77. PHIL / GTAT , ETFs


    Thanks for  the info about GTAT  I follow your recommendation and sold remaining position  at 0.77, reading what you sent seems that it could be another LQMT  a zombie waiting in the future to become a Apple supplier.


    About ETFs….   If they are that way ( always losing value) selling LEAPS or 2 year puts could be a sure bet.

    I don´t know how to read your  "schmucks"… German or Yiddish.?

  78. I don´t know how to read your  "schmucks" = Yiddish.?

  79. DXD/Phil- I am confused. JPH is stating that buying calls on ETF's like DXD is a losing proposition, which you seemed to agree with in your reply to him, adding that the ultra's really suck, yet we have recommendations all the time to use these as hedges, with a call today to buy Nov. calls in DXD. Which is it, do they suck or should we be buying them? While I am asking that question, with the Nov. calls expiring in 24 days , what is the longest you wait for a pull back in the Dow before dumping these? Don't option values decay very quickly as we get this close to expiration, to the point that these won't go up in value much without a huge drop if it doesn't happen right away?

  80. ALL/ 10 GPRO Jan 16 40 puts (short) at $5.20.

  81. Wombat – I enjoyed your comments about walking away after a successful morning. My biggest losses in futures have been after a successful morning when I try for one more attempt to add some profit only to see it move strongly against me, I am not patient at these times and lose my discipline. I still get the urge to do it even after being burned more than once. Today was a good day though in oil for me. I was lucky and woke up to close out a short position from yesterday afternoon as the price dove down at 5am. I then played it a couple times during the day as it spiked up or down, between .50 lines from 81 to 81.50 and then 80.75 to 81.25. Got lucky that it didn't make any violent moves against me today.

  82. CTA/Grant – Yep, a long time since I thought of those guys.  

    GPRO/Lunar – Not with a p/e of 200.  I think earnings will be good but who knows how people will take it?

    You're welcome Mill.

    ABX/Scott – If you just concentrate on rolling the loss ($2,600) you can sell 2 or 4 of the 2017 $15 puts for $4 to get $800 or $1,600 back.  $1,600 is 60% of your loss recovered and the risk isn't much worse than where you are now (4x at $17ish vs 2x at $26ish).  

    Bravery/Wombat – Having those small goals and taking them and running is a very good thing.  I remember at one point we discussed how you had too many accounts.  Do you think the ability to focus is part of your improvement?  

    ETFs/Advill – That's what StJ does with VXX, which usually works very well.  A lot of 3x ETFs have horrible decay over time like TNA, FAS, GDX – just pick one where your Fundamental premise is there too.  Not a sure bet though – those things can rape you when there's a sustained move.  

    Schmucks/Yodi, Advill – Yiddish, of course.  Someone has to keep the language alive.  

    DXD/Craigs – Long-term, the decay kills you, short-term, not so terrible.  DXD is only a 2x ETF and, over a month or so, it is nearly perfect but, looking at the year chart, you can see the Dow up 10.12% and DXD down 24.11% (vs 20% expected) – that's your decay, about 4% over a year so the decay in a month is probably not even going to be half a percent (0.12).  DXD is a post-election play, if we're not selling off next Weds, we'll probably take the loss.  

    GPRO – Looks like they are pulling it out but not too exciting.  

    LNKD beats again, good company.  

  83. We seem to have gone from "Ridiculously Overbought Edition" to "bullish hedges", which sounds like an oxymoron to the uninitiated.  I've just gone to 65% + DXDs, to avoid going from hero to zero.  What is the election hypothesis?  That close to half the voters suffer disappointment, which is enough to trigger a selloff?

  84. Hi Phil.  Been trading GILD and done well.  Have 40 Jan15 short puts, 20 at 67.50  and 20 at 80.  Long 20 Jan15 75 calls (basis 14.65).  Somehow (?) have 20 Jan16 short calls @ $120 (basis 12.35) which have quickly deteriorated.  Still bullish on GILD.  Advice on moving forward please.

  85. My suggestion regarding DXD:

    Buy a bear put spread on DXD to go long DJIA

    Buy a bear put spread on DDM to go short DJIA

    The other thing to keep in mind is that these ETFs represent daily performance for the index they track.  If the DJIA were to simply gain 1% on every even day and lose 1% on every odd day, you'd be looking at a net decline in the value of your investment.

    There might be a simpler way to run the numbers, but I believe InitialValue*(0.99*((-1)^x)+1.01*((-1)^(x+1)))^x would simulate the gain and loss of 1% alternating every day.  My thought behind this is as follows:

    Day 1: Initial value= 100$

    Day 2: Gain 5%; Initial Value*1.05=105

    Day 3: Lose 5%: Previous Value * 0.95=99.75

    Day 4: Gain 5%: Previous Value * 1.05 = 104.7375

    Day 5: Lose 5%: Previous Value * 0.95 = *99.500625

    You can see how your 5% when you're gaining is ALWAYS worth less than 5% when you are losing.  When you factor in the loss of premiums in the churn and the fees, the deck is stacked in the favor of the short.  As a result, whatever your desired ends, you are better off buying the put side or selling the call side.

  86. Election/ZZ – Yes, that's what happens sometimes.  Hard to imagine people will be elated if Congress is re-elected so odds favor the short side.  Not to mention we're still really pushing overbought conditions at these levels.  Still, wouldn't make a big bet either way.  LTP finished at 19.8%, STP 92.2%, so we're essentially flat and waiting for the elections to resolve themselves.  

    GILD/Taihu – The short Jan puts are dead, so a non-issue.  That means you have 20 Jan $75/120 bull call spreads at net $2.30, less whatever you collected on the puts and GILD is at $114.  I'm not seeing a problem here.  If you want to take the $39 off the table on the long $75s, you can do that and leave the naked $120s ($4.80) with a stop at maybe $7 and that locks in $32 (up 1,200%) or maybe you net the whole $39 (up 1,700%).  

    If you want to remain bullish on GILD long-term, I'd remind you it's high in the channel and maybe you should wait for a pullback but the 2017 $100/130 bull call spread is just $12 – and that's without selling any puts (which you should really only do on a pullback).  

    People think it's not as good to do bull call spreads but here, like AAPL is a chance to turn $12 into $30 (150% in 2 years) and you are already $14 in the money so you make every penny GILD gains to $130 and, on the way down, your net delta is less than .20, so GILD can drop $10 and it would only cost you $2 – that's better than owning the stock in both directions!  

    The only disadvantage to owning the stock is GREED – you won't get to $140 or $150 or $200 (but you can always add more spreads).  That is a really stupid thing to be greedy about, isn't it?  If you like the stock THAT much, then you can sell the 2017 $87.50 puts for $11.50 and now you only have 0.50 in play and can make $29.50 more (5,900%) at $130.  If you bought the stock at $114, you'd need to get to $133.50 to make the same money but this way, you tie up just 0.4% of the money (and TOS says $7.60 in margin).  

    These are powerful tools and you have to watch your greed.  Don't treat it like 50 cents, treat is like you are buying GILD for $87.50 – how many shares do you REALLY want to own at that price. That should be your max on a trade like this.  Sure you can roll it and such but – GTAT!  You never know…  The main advantage is tying up far less cash, which then let's you keep a lot of dry powder margin, which lets you take advantage of sales that you would otherwise miss if you have $114 tied up in GTAT.  Just that fact that your net obligation is $88, even if you margined 100%, still means you have 23% more cash to spend.  

    While 23% doesn't sound like a huge amount of money to save, it only happens if GILD has a major sell-off and, every cycle (2 years here) we go through successfully and get a 23% discount, brings us one cycle closer to having zero cost basis on the stock.  So, if we save 23% every 2 years for 4 cycles – in 8 years our GILD position will be free (if it's ever assigned) and we would have 100% of that money in our pockets and will have doubled that allocation in 8 years.  Compound those returns over time and they can really add up (ask Warren Buffett).  

    DXD/JPH – Why buy a long and short on the Dow, they cancel each other out.  What you have is a kind of condor play – you just hope you end up somewhere in between and make your money.  When the VIX was in the 40s, we had fun shorting FAS and FAZ and TNA and TZA when they crossed at the same price – the theory was that they would both be subject to decay and that, over time, we had a good chance of winning on both.  That is what happened but, at some point in between, we had a relentless rally and it really distorted the longs and we were down a shocking amount on the pair because the losing side could only go to zero, but the winning side could go to INFINITY AND BEYOND!  

    Notice how they both suck and were both down 50% in 2011 – that was, fortunately, when we were lucky to escape with our lives.  Since then, FAS went totally ballistic and FAZ just dies (been reverse split to $15 but really would be maybe 0.75 if not for 2 reverses – down from $400 in 2010).  FAS has relatively gone from $25 to $109 in the same period.

  87. Oh wow, I didn't realize that what I wrote could be read that way…my actual point was:

    To go long on DJIA, buy a bear put spread on DXD

    To go short on DJIA, buy a bear put spread on DDM

    I didn't mean to suggest doing both…I meant to suggest what I believe is a better route to going either long or short…not both at the same time!

  88. Still at the conference so not much time for posting…

    ETF / Advill & Phil – Technically speaking, all these ETF do decay over time. However, due to the fact that the VIX usually doesn't have long term sustained moves, more like big spikes that calm down usually quickly, this accelerates the decay in VXX. Other 3x ETF like TNA, TZA and others can actually go up for sustained periods of time so you. Much longer than the LEAPS that you can buy today! IMHO, you need to go with market momentum and pick the opposite ETF. For example, shorting TZA (being long puts as you can't short TZA) over the last 3 years would have done very well. Shorting TNA would have killed you. You don't have to go full blown TA for that. Look for markets crossing a 200 DMA for example!

  89. Thanks Phil.  Great advice, it has been very good to me on APPL.  And, I too am a victim of GTAT, so lesson learned both directions.  However, I think you mis-read my position.  The 20 long 75 calls are Jan15 and the 20 short 120 calls are Jan16 (basis 12.75, today 16.40).  What is the remedy for that???

  90. These last 20 days or so have been nothing short of incredible – a close to 7.5% dip followed by a close to 7.5% recovery! Technically, the last 3 days have also been very strong. The laggard is the NYSE, stuck in between 2 DMA and having trouble getting over. But the other indices have cleared that hurdle and some. However, we are getting close to the September highs and are really overbought now. 

  91. Pharm – BMY popped on this today – is it legit and will the pop be sustained?

  92. Does long /si at 16.50 seam reasonable phil?


  93. Negative interest – well if this isn't good for gold and silver, should be good for the dollar and stocks.

    "Retail and business customers with over €500,000 on deposit as of November 1 will earn a “negative interest rate” of 0.25%. In less euphemistic terms, they have to pay 0.25% per annum to the bank for the privilege of handing the bank their hard-earned money or their business cash."

  94. Bless you guys who can have a open short /cl position overnight and get sleep.  I'd never be able to do it.  

  95. /CL @ 80.97.  Might be a good poke long if crossing 81.  

    (but i'm generally a costanza)

  96. Phil

    Good morning!

    I own 700 shares of Marriott at $50 cost and I also have 5 Marriott April 65 calls for $7.4, now about $11 ( I acquired the longs to protect the below shorts

    I am also short 3 Jan $65 calls at $3, now $11 (sold a long while back, against actual stock which I still own) and short 2 Jan $70 calls at $3, now $6.

    I would like your opinion on whether I should do anything right now, wait to roll the shorts to April or later to convert the longs into a BCS?

    I know what I should do but want your opinion to confirm

  97. BOJ!!

  98. Wow. BOJ opening up the easing spickets….

  99. Just a few points to the ath. Nice. 

  100. They made it… /ES at ATH

  101. Phil:  Xmas rally starting a little early!!!! Is this a blow off or for real?  Should we close out the DXD CALLS OR DOUBLE DOWN. thanks.

  102. SPX WEEKLYGood morning and WTF????

    Futures are up 1% thanks to BOJ raising their asset purchase target to 80 TRILLION YEN – TRIPLING their purchases of stock and property funds.  WTF???

    Japan’s Inflation, Job Creation Slowdown a Blow to AbenomicsJapan’s inflation rate fell to its lowest in nearly a year and a measure of job creation worsened for the first time in more than three years, highlighting the divergence between developments in the economy and policy makers’ optimistic projections.

    FXY WEEKLYThat announcement shot the Nikkei up 5%, yes 5% (there should be a rule about that) in a single session!  That's 16,665 on /NK – the mark of the Blankfein!  All I can say is WOW!  Also, what a great example of how you should never leave Futures trades overnight (or unattended) as this move came so quick – there was no way out.  

    Tempting though it may be to knee-jerk go short here (17,227, 2,007, 4,141 and 1,163) – those moves are coming against a Dollar that just flew up to 86.70 (0.5%) so best to stick to our plan and stay neutral for the moment.  

    Perhaps we will have an opportunity to buy out some SQQQ or DXD short callers to lean a bit more bearish into the weekend – we'll have to see.  

    It's now 110 Yen to the Dollar so 80Tn Yen ain't what it used to be ($727) and it's "only" a $15Tn Yen ($136Bn) increase from their previous target but all the papers are headlining 80Tn and that is just a stunning-looking amount of money – especially with the huge boost towards the markets and not bonds.  On the whole, they raised the stock-buying portion of the 80Tn from 8% to 25% so the real impact to stocks is 17% of $727Bn or $124Bn so, essentially, the entirety of the boost is directed at the market.  

    NYMO  DAILYSo, if you are caught too short, not much to do but ride it out.   This is like a huge wave hitting your ship, unless you are very unbalanced, you may tilt but hopefully you won't capsize and this too shall pass.  

    Along with Japan's 5% pop (and they closed there so maybe more to come on Monday), the rest of Asia was up 1.25%

    Oil, meanwhile, dove to $80.50 on the strong Dollar with gold $1,175, silver $16.05 (and  I like a long on /SI off the $16 line with tight stops below), copper $3.08, nat gas $3.88 and gasoline also diving to $2.14 and I like /RB long over that line too.  See, there's always something to play…

    Another stock exchange glitch, but no trading halt

    Fed Exit Could Spark Slump in All Markets, ATP CEO SaysThe head of Denmark’s biggest pension fund says his main concern now is how to ride out what may turn into a simultaneous slump across asset classes as central bank liquidity is withdrawn.

    Jim Grant On Complexity: The Hidden Cost Of Central Bank Actions

    Goldman(GS) Warns Midterm Elections Raise Risk Around Fiscal Deadlines

    Cash-Strapped Americans Are An Ominous Threat To Retailers

    Shadow Banking Assets Increase By $5 Trillion To Record $75 Trillion, 120% Of Global GDP

    US-based stock funds attract $8.8 bln over week, all in ETFs

    Big Banks Brace for Penalties in ProbesCiti Restates Earnings as It and Other Lenders Reserve Cash for Deal in Forex Investigation. Big banks in the U.S. and Europe are stockpiling billions to pay for a potential trans-Atlantic settlement of allegations that they manipulated foreign-exchange rates as talks heat up with regulators on both continents.

    Algos Please Ignore: Citi(C) Slashes Previously Reported Net Income Due To "Legal Investigations" Over FX Rigging Probe

    OPEC Boosts Oil Output as Prices Slide to Four-Year Low. OPEC countries boosted oil output to a 14-month high in October as crude futures sank into a bear market, a Bloomberg survey showed yesterday. Production by the 12-member Organization of Petroleum Exporting Countries climbed by 53,000 barrels a day to 30.974 million, led by gains in Iraq, Saudi Arabia and Libya, according to the survey of oil companies, producers and analysts. Last month’s total was revised 14,000 barrels a day lower to 30.921 million because of changes to the Iraqi, Kuwaiti, Nigerian and Qatari estimates.

    Emerging-Market Currencies Hurt by Oil, Metals: Chart of the Day

    ConocoPhillips(COP) Becomes First to Cut Spending on Lower OilConocoPhillips became the first major oil company to announce plans to reduce spending due to falling crude prices as drilling in some emerging North American fields becomes less profitable. The third-largest U.S. energy producer can meet its target to boost production by as much as 5 percent a year even as it reduces annual spending to below $16 billion, Chairman and Chief Executive Officer Ryan Lance told investors today. U.S. oil prices have declined 24 percent from a high of $107.26 a barrel in June because of increased North American supplies and reduced global demand forecasts.

    Iron ore price forecast to fall to $US75/tonneAnalysts at research house Morningstar have become the latest to significantly lower their iron ore forecasts with more pain to come for local miners.

    Starbucks(SBUX) Tumbles After Reporting Weak Earnings

    LinkedIn(LNKD) revenue jumps 45 pct as companies hire moreCorporate networking site LinkedIn Corp reported a 45 percent rise in quarterly revenue as more businesses used its services to hire staff.


    Obamacare Faces New Threat as Supreme Court Weighs AppealThe fate of President Barack Obama’s health-care law is again in the hands of the U.S. Supreme Court. Two years after upholding the law by a single vote, the justices are weighing whether to hear a Republican-backed appeal that would block people in 36 states from getting tax subsidies to buy insurance. The justices are scheduled to discuss the matter tomorrow, with an announcement coming as soon as Nov. 3. ?

    Chinese Authorities Are Shocked By The Results Of The Relaxed 'One Child' PolicyFar fewer Chinese couples applied to have a second child than expected after a relaxation of the country's "one child" policy, state-run media reported Thursday, highlighting the ageing nation's demographic challenges.

    Merkel Downplays Incursions as Russia Probes NATO DefenseGerman Chancellor Angela Merkel played down the significance of incursions by Russian jets as Vladimir Putin probed Europe’s air defenses for a third day. “In the last few months I’ve seen very robust exercises with the Russian army, but I’m not acutely concerned about grave airspace violations,” Merkel said at a press conference in Berlin yesterday. Allied jets tracked Russian fighter aircraft along Europe’s fringes, bringing the number of interceptions so far in 2014 to 100, three times last year’s total, the North Atlantic Treaty Organization said in a statement.

    Russia Weaponizes The Arctic: Will Build 13 Airfields And 10 Radar Stations To Meet "Unwelcome Guests"

    Russia Agrees to Terms With Ukraine Over Gas SupplyRussia agreed to terms for restoring natural-gas exports to Ukraine, laying the groundwork to prevent residents going without heat as temperatures drop. The gas negotiations, brokered by the European Union, came as pro-Russian rebels stepped up attacks on Kiev government forces. European leaders said they hoped the deal would help improve ties between the two countries. 

    Poland Is Preparing For A Potential Russian Invasion


    Russia Seen Raising Rates as Ruble Plunge Feeds Inflation. Russia’s central bank will probably increase its benchmark interest rate for the fourth time this year, bringing it to the highest level since it was introduced 13 months ago, to halt a currency run that’s stoking inflation. The Bank of Russia will raise its key rate to 8.5 percent from 8 percent, according to 22 of 31 economists surveyed by Bloomberg. Two predict a move to 9 percent, with increases of a quarter-point and 75 basis points forecast by one analyst each. Five economists see no change. The central bank will announce its decision at about 1:30 p.m. in Moscow today. ?

    Here's a great photo for those of you who don't believe in evolution:

    98% genetic match to humans!  

  103. LOL Japanese monkeys always getting the cutting edge technology first.

  104. Notice it's not a Sony!

  105. From Bloomberg, Oct 31, 2014, 5:28:43 AM

    European stocks rose to a three-week high amid optimism the Bank of Japan’s stimulus will fill some of the gap left by the end of Federal Reserve bond buying. U.S. index futures and Asian shares also rallied,

    To read the entire article, go to

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

  106. From Bloomberg, Oct 31, 2014, 12:04:28 AM

    Yes, Prime Minister, we know you’re upset.

    Quarrels over European Union budget policy don’t amount to much in themselves. Yet they demonstrate a pathology whose importance is hard to exaggerate. If growth in the euro area is not restored, the future of the union itself will be in jeopardy. Instead of grappling with this, however, Europe’s leaders are endlessly engaged with trivialities.

    To read the entire article, go to

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

  107. From Bloomberg, Oct 31, 2014, 2:01:46 AM

    Construction at Cheniere Energy Inc.’s liquified natural gas (LNG) terminal is seen in this aerial photograph taken in Sabine Pass, Louisiana, U.S., on Dec. 2013. Source: Cheniere Energy via Bloomberg

    Oil’s collapse is eroding the appeal of potential U.S. LNG exports to Asia as it cuts the cost of competing supplies linked to the price of crude.

    To read the entire article, go to

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

  108. From Bloomberg, Oct 31, 2014, 4:51:20 AM

    The yen weakened beyond 111 per dollar for the first time in more than six years after the Bank of Japan unexpectedly increased monetary stimulus.

    To read the entire article, go to

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

  109. From Bloomberg, Oct 31, 2014, 12:01:00 AM

      The way stock venues design orders has received some of the harshest scorn from critics of modern trading. Three months ago, Jeffrey Sprecher, chief executive officer of Intercontinental Exchange Inc., pledged to pare them back because they add to complexity and encourage needless buying and selling. Photographer: Andrew Harrer/Bloomberg

    Securities professionals around the country endured a rough few minutes yesterday as a feed for carrying prices and quotes for thousands of stocks on the oldest American equity exchange misfired.

    To read the entire article, go to

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

  110. From Bloomberg, Oct 31, 2014, 12:01:00 AM

      The way stock venues design orders has received some of the harshest scorn from critics of modern trading. Three months ago, Jeffrey Sprecher, chief executive officer of Intercontinental Exchange Inc., pledged to pare them back because they add to complexity and encourage needless buying and selling. Photographer: Andrew Harrer/Bloomberg

    Securities professionals around the country endured a rough few minutes yesterday as a feed for carrying prices and quotes for thousands of stocks on the oldest American equity exchange misfired.

    To read the entire article, go to

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

  111. From Bloomberg, Oct 31, 2014, 12:00:01 AM

    As the U.S. powers the global economic expansion in its fifth year, the world’s rich are counting on American companies to help increase their fortunes.

    To read the entire article, go to

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

  112. Watch this video at

    Why Starbucks’ Fiscal 4th-Qtr Sales Trailed Estimates

    Oct. 30 (Bloomberg) — Estimize CEO Leigh Drogen takes a look at Starbucks’ fiscal fourth-quarter performance. He speaks with Bloomberg’s Trish Regan on “Street Smart.” (Source: Bloomberg)

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

  113. Watch this video at

    World’s First High-Tech ‘Smart Ship’ Sets Sail

    Oct. 30 (Bloomberg) — Royal Caribbean Cruises Chief Executive Officer Richard Fain discusses the impact of Ebola on leisure travel and their introduction of the “smart ship” Quantum of the Sea. He speaks with Francine Lacqua on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)

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

  114. Watch this video at

    Will the Global Slowdown Catch Up to the U.S.?

    Oct. 30 (Bloomberg) — Citigroup’s Benjamin Mandel and OppenheimerFunds’ Krishna Memani discuss the Fed’s decision to end QE and the outlook for the U.S. economy. They speak with Bloomberg’s Trish Regan and Matt Miller on “Street Smart.” (Source: Bloomberg)

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

  115. Watch this video at

    Goldman Says Core Europe Growth May Prompt ECB QE

    Oct. 28 (Bloomberg) — Francesco Garzarelli, co-head of macro and markets research at Goldman Sachs Group Inc., says the European Central Bank may only buy sovereign bonds if growth in Europe’s biggest economies “is going nowhere.”
    He talks with Jonathan Ferro on Bloomberg Television’s “On the Move.”

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

  116. Well perhaps Blood Sweat and Tears was wrong, but I still believe: What goes up, must come down, spinning wheel got to go round! 

  117. From Bloomberg, Oct 31, 2014, 6:11:32 AM

      Haruhiko Kuroda, governor of the Bank of Japan, speaks during a news conference at the central bank’s headquarters in Tokyo, on Oct. 31, 2014. Photographer: Tomohiro Ohsumi/Bloomberg

    Today’s decision to expand Japan’s monetary stimulus may be regarded as shock treatment in the central bank’s effort to affect confidence levels.

    To read the entire article, go to

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

  118. From Bloomberg, Oct 31, 2014, 12:01:01 AM

    Jeff Hulbert of Annapolis, Maryland, holds up a sign in front of the White House on October 24, 2014 in Washington, D.C. Hulbert is protesting for a mandatory quarantine for people that have returned from Ebola affected countries. Photographer: Mark Wilson/Getty Images

    A Connecticut third-grader who was barred from school because of Ebola fears after her family traveled to Nigeria will be able to return to her classes as part of an agreement settling the family’s lawsuit.

    To read the entire article, go to

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

  119. From Bloomberg, Oct 31, 2014, 6:10:50 AM

    Euro-area inflation accelerated from a five-year low in October, offering some reprieve to European Central Bank policy makers struggling to prevent a spiral of price declines.

    To read the entire article, go to

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

  120. From Bloomberg, Oct 31, 2014, 4:18:12 AM

    Gold and silver slumped to the lowest level since 2010 as the dollar strengthened after the Bank of Japan unexpectedly boosted unprecedented stimulus and the Federal Reserve ended asset purchases.

    To read the entire article, go to

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

  121. From Bloomberg, Oct 30, 2014, 6:29:38 PM


    Sitting just inches from his Democratic counterpart, Republican strategist Rob Collins bragged Thursday about two of his party’s recent opposition research hits on Senate candidates, and in the process offered a glimpse on how a couple of political scoops came to be published.  

    To read the entire article, go to

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

  122. From Bloomberg, Oct 30, 2014, 6:48:47 AM

      WASHINGTON, DC – MAY 20: Senate Judiciary Committee member Sen. Lindsey Graham (R-SC) (C) reacts to a note from Sen. Amy Klobuchar (D-MN) during a markup session for the immigration reform legislation in the Hart Senate Office Building on Capitol Hill May 20, 2013 in Washington, DC. The Judiciary Committee is hoping to wrap up work on the landmark immigration reform bill this week after wading through the 300 amendments that were filed to the bipartisan bill. (Photo by Chip Somodevilla/Getty Images)

    South Carolina Senator Lindsey Graham recently joked about how “white men who are in male-only clubs” would thrive with him as the president, according to a tape unearthed by Democrats and sent to CNN.

    To read the entire article, go to

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

  123. From Bloomberg, Oct 29, 2014, 8:00:00 PM

      Leihulu Greene, from left, Sabina Greene, Regina Greene and Dave Greene stand for a photograph next to the solar system in the backyard of their house in Honolulu, Hawaii. Source: Dave Greene via Bloomberg

    David Greene woke up one day and fired his power company. It wasn’t that hard to do.

    To read the entire article, go to

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

  124. From Bloomberg, Oct 30, 2014, 8:05:00 PM

      With a national election due in May, Prime Minister David Cameron is counting on the recovery to lift consumers’ mood even as sluggish wage growth persists. Photographer: Chris Ratcliffe/Bloomberg

    U.K. consumer confidence weakened this month as Britons’ outlook for the economy deteriorated, according to GfK NOP Ltd.

    To read the entire article, go to

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

  125. From Bloomberg, Oct 30, 2014, 8:55:12 PM

    A staff from local heath department seals tainted oil products by Chang Guann Co. in Changhwa County, Taiwan, on Sept. 5, 2014. Source: ChinaFotoPress via Getty Images

    Taiwan’s economy grew at a slower pace than expected last quarter as concern over food safety damped spending at restaurants.

    To read the entire article, go to

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

  126. From Bloomberg, Oct 30, 2014, 4:49:02 PM

    Tower, this is Vladimir requesting a flyby.

    In a single 24-hour period this week, Russia dispatched 19 combat aircraft — including “Bear” strategic bombers — to probe North Atlantic Treaty Organization air defenses. It also test-launched a ballistic missile in the Barents Sea, north of Sweden, that hit a target in Kamchatka in Russia’s Far East.

    To read the entire article, go to

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

  127. From Bloomberg, Oct 31, 2014, 5:18:39 AM


    As Shinzo Abe looks for new growth engines to reinvigorate Japan, he’s ignoring the most obvious one.

    To read the entire article, go to

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

  128. Blood/Craigs – This is bat-shit crazy now.  Check out the news and try to reconcile it with this market movement.  It's ALL about stimulus.  

    In fact, German Retail Sales were TERRIBLE just now plunging 3.2% in September, the worst monthly drop since May of 2007.  THAT's what's REAL in the economy – it's just being masked by endless stimulus.

    This all follows the grim news earlier in October that the country's industrial sector seems to be grinding to a halt. There's no doubt that this data point is going in the pile suggesting that Germany might be about to fall into recession.

    The plunge in German retail sales, the biggest drop since May 2007, indicates that the German economy was very close to a technical recession in Q2 and Q3.Retail sales were on track for a decent quarterly expansion before September data, but today’s data are bad enough to indicate that retail sales fell back to a modest contraction in Q3.

    The Analyst Who Predicted Germany's Horrible Industrial Numbers Has Another Terrifying Forecast

    Jakobsen has not changed his stance, telling Business Insider about his extremely bleak outlook for the currency union: "The end game is that Germany is very likely to be in recession — that will bring the rest of the eurozone into recession. I think that will be in the first quarter of next year."

    It's sooooooooooo tempting to short the Futures here with /YM 17,300, /ES 2,010, /NQ 4,150 and /TF 1,169 – I think I like /NQ and /TF best but a stop if ANY tow of them are over those lines.  It just doesn't seem likely we'll have another upside shock but you never know.  

  129. That was the best line I've heard in a long time: "Democrats in Texas are like the drunk guy sitting at the bar who won't stop hitting on a girl, even though he knows she's a lesbian."  

  130. Phil – I have 35 of the TZA Nov17's short and 35 of the TZA Jan15 13's long.  Seems like today might be a good day to close out the 17's and roll the 13's down at least.  Maybe even sell some too…


    On another note, this is REALLY going to help race relations here in FL (the most racially charged state I've ever lived)

  131. CNBC this morning they were interviewing the guy who owns the Milwaukee Bucks (sorry I can't remember his name) and the discussion was about how much he has made with the all the free money that has come his way. I think he is also in the business of financing, which may have influenced what came next: They asked him how the average investor can join the party and he basically said,"they can't, not without having the huge amount of capital he and others like him have". They then just yukked it up as though they weren't insulting most of America. It was a weird moment, I thought. 

  132. levels holding …. wow.
    mr. rothstein is waiting, watching.

  133. go rangers, now now now

  134. and …. again.

  135. so, since everyones still sleeping.
    Made $500 on the first drop – got out on a MACD cross
    second call went against me, so I let it run until I get another cross with confirmations from /YM, /NQ and /ES ( I use 2 out 3, with /ES weighted )
    check for any major lines or numbers
    then X2
    rinse, repeat.

  136. bam. 4K day.
    I'm done.
    gonna take my little girl to a Halloween parade.

  137. Great TED Talk on decision making: