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Whipsaw Wednesday – Market Manipulation Takes Center Stage

SPY  5  MINUTEWhat a crazy-assed market!  

With virtually NO volume at all, the S&P (along with the other indexes) gapped up 10 points at the open (0.5%) but then proceeded to sell off all day as the Fund Managers that manipulate the Futures trading sold their stocks to all the suckers who ran in to buy into the "rally" that the Media Puppets were applauding all morning.  

I know it sounds like a conspiracy theory when I tell you the markets are manipulated but, just yesterday, they accused a 36 year-old guy (31 at the time) with a very small trading firm ($5M) of crashing the Global Markets in the "Flash Crash" (May 6th, 2010).

Aside from the sad fact that it took them 5 years to find the culprit, it should scare the crap out of people that a single person, with no special equipment and a fairly ordinary margin broker account could knock $1Tn in value off of global equities in less than an hour.  If that's how easy it is to manipulate the entire market – how can you NOT believe that there are people manipulating individual stocks every day?

“Things like this don’t build a lot of confidence,” said Timothy Ghriskey, the chief investment officer at Solaris Asset Management LLC in New York.

“It’s ridiculous, it’s the government at its best — inept,” Rick Fier, director of equity trading at Conifer Securities LLC in New York, said in a phone interview. “It really is just another one of many things to deal with, it’s extremely frustrating. We’ve seen flash crashes and we’ll see them again and it’s definitely disconcerting.”

According to the government, Sarao had trading software altered to let him send and modify orders to sell stock futures thousands of times a day with virtually no risk they’d be filled. That was his goal: to make it seem like orders for futures were piling up so they’d fall and he could buy them on the cheap, the complaints say.  Oddly enough – I just pointed out that same activity going on in the Oil Futures during yesterday's Live Webinar.  

The allegation is that he was sending what are known as spoof orders to sell futures contracts in the US stock market. He would drive the price of the stock down - then withdraw the sell orders, but the price would already have fallen.  He would then buy the orders back and guarantee a profit for himself. According the charge sheet, he did this thousands and thousands of times over many years.

Sarao’s tactics, known as spoofing and dynamic layering, were “particularly intense” in the hours before the flash crash plunge that knocked the Dow Jones Industrial Average down about 1,000 points, the complaints alleged. Just before stocks went over the edge, his sell orders were nearly equivalent to all the buy orders in S&P 500 e-mini contracts, it said.  The activity created “persistent downward pressure” on the price of the contracts during a period when they fell more than 3.6%. 

Today, with no constraints placed on this kind of trading (also enabled by the CFMA we discussed yesterday), we don't think it's strange at all for the markets to go up 0.5% or even 1% in the Futures or to sell off and reverse suddenly during the day, also in 0.5% to 1% moves that, when you think about it, are changes of $500Bn in market value up or down in the average day.  

Here's a look at how the Russell, for example, has traded over the past two weeks.  Every 12-point move is 1% – I see 14 of them in 13 trading sessions – a roller coaster with this many dips and twists would snap your neck!  

As I was saying to our Members in yesterday's Live Webinar, we have plenty of fun taking advantage of these little twists and turns because we know HOW the game is played and we know how to play along with the manipulators.  During the seminar, we were able to make a quick $500 just trading oil contracts into the close because we know exactly how those work.

Still, the best way to make money in these crazy markets is the Warren Buffett way, which is also my way – keep your cash ready and buy good companies when they get cheap, don't be greedy and sell risk premium to others.  It's not complicated – it just takes a bit of discipline. 

You never know when the next flash crash will be but you do know that IBM will be in the computer business in 2030 so, if they come back to $155, they become a buy that we put in our Long-Term Portfolio (along with our hedges that give us a 15-20% discount, of course).  We do know LL is probably way too cheap at $33.36 and RIG is a bargain at $17 and LQMT is looking attractive again at 0.13.  

When we took our winners off the table in late March, I put out a Top Trade Alert that highlighted our remaining LTP positions saying:

Obviously, one thing they all have in common is they are low in their channels.  That's how we built the LTP in the first place – we bought stocks from our Buy List whenever they were low in their channels.  We also have a bit of diversity with ABX and CLF representing materials, UCO, USO, RIG and BHI representing the energy sector HOV and CIM are housing, MAT, LULU and LL are consumer (but we're short LULU) and GTAT represents penny stocks.  blush

I think pretty much all of these are on Jabob's FU list, so we're in excellent shape going forward.

 As I said to the HNW investors in Canada on Monday night, it's silly to try to guess which oil company will survive over time when we can simply pick up the UCO July $5/9 bull call spread at $1.70 and sell the $5 puts for 0.50 for net $1.20 on the $4 spread that's $2 in the money.  If oil is up in July, you make up to $2.80, which is 233% return on cash and, if you lose on the UCO play (break-even is $6.20, more than 10% below the current price and sub-$40 oil), then I'm very sure whatever oil or gas stocks you are thinking of buying now will be much, much cheaper!  

Those HNW Investors, as well as our Top Trade Alert Members and, of course, our Live Member Chat participants should all be pleased with that UCO trade.  It may not look like a big move on the chart but we bought when other people were selling and the July $5/9 spread is now net $2.80 and the short July $5 puts are 0.14 for net $2.66 – up 121% in a month, which is actually only "on track" for our goal of 231%.   

We didn't try to make 121% in a month.  We took a good, conservative position based on sound fundamentals and we happened to have good timing following our core strategies.  Try it some time – it's a good way to trade!  


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  1. Oil Lines

    R3 – 59.56
    R2 – 58.80
    R1 – 57.36
    PP – 56.60
    S1 – 55.16
    S2 – 54.40
    S3 – 52.96

  2. Good Morning!

  3. Brad DeLong says we should borrow more at these cheap interest rates:

    The interest rate that rich countries with super-safe debt (in the case of the eurozone, that means Germany but not Spain) pay is astonishingly low: lower than the growth rate of nominal gross domestic product (that is, GDP before subtracting inflation). In the U.S., the Treasury yield has gone from roughly equal to growth in nominal GDP in 2005 to 3 percentage points lower today.

    By Mr. DeLong’s reckoning, this means those countries are borrowing too little. Bond yields and prices move in opposite directions, so low government bond yields equate to very valuable government bonds. Mr. DeLong asks, “Isn’t the point of the market economy to make things that are valuable?” Since the debt of rich countries is “very cheap to make… shouldn’t we be making more of it?”

    How does that work? How much the government should borrow depends on whether the taxes required to pay off that borrowing in the future are greater, or less than, the benefits that borrowing yields, today or in the future. By Mr. DeLong’s reckoning, the huge gap between interest rates and nominal growth is a signal that the government could borrow a lot more today and make society better off.

    What should the government do with the money it borrows? Mr. DeLong’s frequent co-author Larry Summers has repeatedly urged governments to invest more in infrastructure. After all, whatever the return is on highways, airports, water treatment plants or education, it has to be higher than today’s rock-bottom governments bond yields.

  4. StJ:  Thanks for this graphic display on where our tax dollar went.

  5. Good morning!  

    Wow, that was huge fun in the Futures.  I'm scared to short after that performance but 2,100 is still a good line on /ES (tight stops over).  As is 4,440 on /NQ, as there are plenty of misses on the Nasdaq already. 

  6. IHS – Pretty scary to see how much money still goes on defense! Western Europe spends 1/2 of what we spend relative to GDP so about $0.13 less for us. I can imagine what we could do with that money – that's our interest on the debt so we could start paying it off! Or invest in better infrastructure!

  7. StJ – invest in infrastructure…that would mean paying > than minimum wage.  Why?  Top 0.1% can fly in a heli to get where they need to……

  8. If you want to see a manipulated stock, check out the chart on VLTC.  Insane.  Can't short it and they don't have any options.

  9. VLTC is a 97.64 RSI

  10. Rustle – And Icahn bought 4 million shares at $1.36 !

  11. I know, that was the reason it's up.  Icahn is probably out by now.

  12. Phil

    What do you think about /SI long at 15.90? 

  13. Borrowing/StJ – It's not the borrowing that's the problem it's the fact that we don't do any infrastructure spending with the money.  If a Government can borrow $2Tn for 10 years at 0.2% and spend $100Bn a month for 2 years on infrastructure.  That's enough to create $50Bn/month worth of jobs (the rest for materials) or 1M new jobs and then, if you do it right, there's the lasting value of the improvements and even if we create just a 5% improvement in GDP, that's $1Tn/yr and we can use the addditional revenue (if we tax it properly at 25%) to pay back the debt ($250Bn/yr pays $2Tn back with interest in 8.5 years and then it's all profit).  

    We've spent $1Tn trying to rebuild Iraq and Afghanistan but $0 trying to fix Detroit or New Orleans – Madness!  There are 250,000 families left in Detroit (700K population) which means spending $25Bn would be enough to put $100,000 into each person's home/neighborhood - obviously way more than would be needed to completely upgrade the city.  New Orleans only has 400,000 people so another $15Bn and that's all fixed.  Next.  MAKE ME DICTATOR (I don't have the patience to be President) and I'll have this whole country fixed in 6 months!  

    Dollars/StJ – And that's at 2% interest on our debt.  4% rates and the Interest on our debt hits 30% – I wonder where they'll cut that extra 0.15?  This is why I'm BEARISH!!!  Reality will occur at some point.  I don't know when but it's going to suck when it does…

    Helicopter flying over Sao Paulo Heli/Pharm – That's actually what they do in Brazil (and NYC).  

    Sao Paulo's millionaires use helicopters to avoid traffic jams

    VLTC/Rustle – Still too scary to short. 

    Oh, this is NOT GOOD:

    • Caterpillar (CAT -0.4%) says its global sales of machines fell 12% for the three-month rolling period ending in March compared to the same period last year; the rolling period ending in February had dropped 11%.
    • Energy and transportation retail sales for the latest three-month rolling period fell 1% Y/Y after rising 17% in the three months ending in February.
    • Total machine sales rose 3% in North America but fell more than 15% in every other geographic region; worldwide sales in both the construction and resource industries fell 13% Y/Y.

    Barely moving the stock, though.  

    /SI/Jeff – I think things are a bit too crazy to play commodities or Futures at the moment.  Yes, I like Silver at $16 and $15.75 and $15.50 with tight stops at each level because, on the whole, I think $16 should hold up but that doesn't mean it can't drop a quick dime on you – and that's expensive with silver ($500/contract).  

    It's the Euro/Greece issue that worries me – that could spike the Dollar on bad news.  Of course, it's also what's keeping the Dollar up and Silver down so you could be optimisic and call it your entry but I'd feel better either at $15.75 or over $16 with a stop right below the line.  

    /ES done at 2,090 and /NQ done at 4,425 on those nice dips.   /TF can almost be played bullish off 1,255 but I'm just not feeling the bull at the moment.  

  14. Borrowing / Phil – That is obviously a political problem. Before 2009, all the borrowing was done to either pay for wars or to pay for tax cuts for the top 1%. When Obama tried to push a stimulus package, he had to compromise for less than he wanted and also for a mix of infrastructure and tax cuts again! Remove the political roadblocks and we might have a chance. But when the roadblock is financed by $1B from people who benefit from the tax cuts, it becomes almost impossible.

  15. Especially when the other side doesn't have $1Bn (and they never will if you keep decreasing their disposable income – see the strategy?).  

    Wow, now I am feeling a /TF long at 1,250!  That's a much better line to go long off (tight stops below).   

    Dollar 98.18, oil $56.15 (bounced at $55.75), gold $1,189, silver dove to $15.65 (see why it's dangerous?), copper $2.685, nat gas $2.597 and gasoline $1.89 and here's inventories:

    +5.3Mb oil.  -2.1Mb gasoline and +0.4 Distilatates.   That's not too bad but not too good.  Oil is jamming up but maybe it stops at $56.75 and reverses.  

  16. Nope – punched right over to $57.09 at the moment.  I really don't see too much to be excited about

    Imports were up 4.2M, that's a plus (rebound from last week's choke) 

    At 489.0 million barrels, U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years. 

  17. Negative breadth & TRIN at 0.47 = Algorithmic trading propping the market.

  18. Oil / Phil – Really proves that last week was an outlier…  Adding 5M barrels a week is not a good sign especially this time of year!

  19. Whipsaw it is.

  20. I have to get some dramamine, I am getting seasick watching /ES this morning!

  21. Oil $55 to $57.75 is 5% and 0.55 overshoot (20% of the run) is $58.30, so that's the expected top of the current range and the weak retrace is $57.20 and the strong retrace is $56.65 so that's got to hold or we look for the 2.5% line (50% retrace) at 56.37 and below that is DOOM – all the way back to $55, below which there is very little support.  

    Seasick/StJ, Den – Isn't CASH!!! relaxing at times like these?  cool

  22. CAT/Phil

    Have Jan 2017 $77.50/$90 BCS for $5. Would you recommend holding or selling now? If selling at what price. Thank You.

  23. TNA on the ConeyIsland coaster!  Phil is it still there?

    TNA 90 at 7 am,  92.29 at 9:30 open;  89.73 at 10:15  and back to 92 at 11 am.   Six point move in 4 hours.

  24. CAT/Hex – Already positive again – how can you sell anything in this market?  Everything goes up all the time – AWESOME!!!  

    I think, when QE clearly stops working, they will switch to some infrastructure spending.  Since you are in at net $82.50 and they are over (and your calls are $11.70), I really don't see the point in shutting it down.  On the whole, if you aren't looking forward to spending $5 more to roll down to the $65s (now $20) on a $10 dip, then I'd take the money back now and move on because you don't REALLY want to be in CAT long-term.  

    If a $10 dip is going to make you stop out (net delta is 0.2 so net $2) but a $10 move up won't have you cashing out at $7 out of $12.50 potential and the odds are 50/50 that either could happen – then your chance of taking a loss is much higher than your chance of taking a gain and it becomes a bad trade.  

    You have to consider these things BEFORE you enter a position, you should always have a plan for up or down 20% and if down 20% makes you stop out but up 20% doesn't get you happily cash in – chances are you will have more failures than wins, right?  

    TNA/Den – Crazy assed ETF for a crazy-assed market.  I don't mind playing TZA because it doesn't move very much but TZA moves 10x TZA – ouch!   That makes it very hard to work with.  

  25. From Briefing.  Wow the yield is all the way up to .16% !

    ~~ Note German 10-yr Bund yield now nearly 3 times where it was a few days ago

    Up to 0.16%. Moving in front of Euro area PMIs out tonight

  26. Good spitting cobra forming on oil.  I'm liking the short here ($56.85) with a stop at $57.05 ($200 loss) because we could easily see a $500 drop.  

    Watch Dollar (98.25) to confirm and /RB failing $1.92 would make me feel better.  

    LOL Albo – I guess those people who bought at 0.05% are feeling burned now…. blush

  27. Sorry, forgot oil chart:

  28. Nice on oil Phil!!  That was a quick $500!

  29. If 56.37 breaks, would you continue to short below?

  30. Hello All! Yesterday's webinar replay is now up on our YouTube channel here:


    Or downloadable from webex here:

  31. Good Afternoon

    Phil—walked in a few minutes ago and saw your call on oil—as usual amazing—hope I can act on the next call

  32. /CL- Phil I have the same question about 56.37 because we did hit 56.31. Also when you state that the range is 55-57.75, how did you come up with that? What determines the time frame for the range we are in? I often find that I don't know where to begin applying the 5% rule as I can't figure out where to begin. It doesn't look to me like we spent any significant time at 55, so why is that the bottom of the range?

  33. looks like 56.32 is the support line for now. i guess the answer to my question is that it's not an exact science and the support could be a few points off. right Jeffdoc?

  34. so now let's see how that theory holds up

  35. Absolutely Craigs.  I see 56.30 right now, but don't feel like that line is "broken".  Gonna watch this and see where it goes…

  36. Going back to yest MYL trade.  Would it make sense to buy July 2015 65/75 Call spread instead? Price seems maybe $0.25 higher. But that side is over in 3 months. ($10 Spread thats $9 in the money for 6.20)

  37. /CL  - Down we go..

  38. well now we see if 56.37 provides resistance the other way?

  39. Looks like it did…just rejected right at 56.37

  40. Oil/Jeff – Yep, loads of fun when it works.   And that's it for oil, folks, don't be greedy – it was a good set-up and now it's done right around the $56.37 mark we expected.  

    $56.37/Jeff – I'd rather see $56.50 get rejected but yes, you can play below $57.37 but then with super-tight stops above (it should at least consolidate there before the next leg down).  I haven't seen any bullish news so this is all about digesting the inventories.  

    Oil/Savi – Don't worry, it comes around and around.  

    Range/Craigs – It's just the 5% Rule.  $55 was 10% up from $50 and we had consolidation there.  $57.75 is 5% up from $55 and that's a $2.75 move so 20% of that run (from $55) makes for retraces of 0.55 each so that's $57.20 (weak) and $56.75 (strong) and then the 50% line is obvious (I hope).  

    The reason we jumped on those numbers was BECAUSE we got a solid 5% move from a breakout at $55 (with some consolidation after failing the first attempt) right to $57.75 so it was a perfect 5% Rule move.  That means we could begin to slice and dice the retrace levels with confidence.  

    And, of course, the 50% retrace from $55 originally was $52.50 and see how we had nice consolidation there too – strong indicators that oil is following the 5% Rule.  

    Time for the range is consolidation to consolidation – it's not up to me.  Generally you expect your retraces in no more than the time it took for the primary move to be accomplished.  

    And why $55, because $50 was a multi-year target for the bottom of our range, so everything else works off that up to $100, which is the 100% move and unsustainable.  

    Exact Science/Craigs – Of course it's not exact and currency fluctuations would need to be taken into account as well (which no TA people do, which is why TA is ridiculous).  Also, in short-term trading, of course it's going to be up or down 0.25 at any given moment – you want to look for what center lines hold up.  

    MYL/Rex – It's probably fine except for how badly you get screwed if the deal fails.  

    Remember, the reason we were willing to go heavy on BHI was because of the massive ($1.5Bn) break-up fee that made us want them, even if HAL doesn't.  There's nothing like that for MYL (so far).  

  41. My CMG strangle is looking good.  I rolled the May 750 calls to the June 710 calls for about $3.00 and used the money to roll the June $600 Puts, down to the June $580 puts, just in case CMG keeps going down.

  42. CAT…earnings vs. buybacks….nicey nice.

  43. SCTY $60 ahead of TSLA battery announcement.  TSLA getting a nice pop too.  

  44. Phil or anybody….anybody know anything about VSLR in the solar space.   They are hittin the pavement in our area for residential solar systems.  Stock has had a nice run up

  45. CCJ breathing back to life…up 7% today

  46. TASR / Phil:

    Perhaps I´m cold of being out too much time but I can´t see your  TASR  BCS that gave us yesterday for LTP, don´t find  a value of TASR  Jan2016  at $3  is at 0.20  what I missed?

  47. you wrote this for TASR…

    As a new play on TASR, I'm warming up to the short 2016 $13 puts at $3.25, buying the $10/17 bull call spread for net $2 for a $1.25 credit on the $7 spread and worst case is we own 1x of TASR for net $11.75.  Figure doing 10 of those is nothing as our obligation is $11,750 of TASR and, even if they went to $5, we could buy 2,000 more for $10,000 and average $7.25 on 3,000 – no big crisis.  The upside is $8,250 on $2,500 in margin – very efficient.  

    OK, I talked myself into it!  Let's add 10 of these to the LTP and Income Portfolios! 

  48. MYL that's what I was guessing, thanks. 

  49. Advill:

    I think that was a July play that Phil referenced.

  50. VSLR / Willsons:


    I have them in the alarm side in my home, VERY EFFICIENT, they are door to door  and street by street, if you say OK, they do a quick verification and you have an intelligent system in your home running in the next 3 hours, phone service is good as far as today and they call asking to review this or that to recalibrate etc.

    Actually they are offering solar roof systems in the same fashion, but have no opinion about this new line, but seems is like  Solarcity. 

  51. I think that VSLR could be a good LTP investment…..what you think Phil?

  52. Advill TASR this quote is past history should have been a trade a year ago. Just not current !

  53. Thanks Advill!

  54. VSLR/Willsons – They are running #2 behind SCTY (4x bigger) and seem to be solid, running a similar model of install for free and sell the electricity.  I think it's a very high-growth space and it's going to be hard to be wrong long-term (NRG is another good one) and I'd take either one of them over high-priced SCTY and VSLR is the pure play.  

    I guess if I were going to chase them, I'd sell the Oct $11 puts for $1.10 to net $9.90 – that seems very reasonable.  If those expire, then you made 11% in 6 months and if VSLR pulls back, then you can add a bull call spread (the Oct $10/15 spread is currently $3, so getting the $8/13 spread (now $3.50) for that price would be nice).  

    CCJ/Jeff – On a tear since making deal to supply India.  Maybe Iran next!  

    TASR/Advill – That TASR play was from last July, when it was way cheaper – just an EXAMPLE.  That's why there's a date above the comment that shows you it was an old comment.   We already cashed them out – way ahead of schedule.  

    VSLR/Advill – If you had asked me at $8, I would have said yes.  A month later at $14 – sometimes it's best to just wave goodbye to the train that left the station, rather than running to try to catch it.  

  55. Yodi / TASR ;  uppss, I just read the blue paragraph as a new one!, thanks.


    How is your knee and your euro tour?

  56. Got 4,440 on /NQ again – worked well last time.  Just a bit under 2,100 on /ES (2,097.50 at the moment).  /CL going nowehere at $56.45 with Dollar at 98.14.  

  57. Advill Still lying low and nursing my Knee. Still very swollen and need attention. Hope one month from now I will try to move my RV south. Thanks for asking.

  58. Thanks Phil….VSLR  I might test drive them by buying stock and covering with Oct 15's and sell the Oct 11 Put….I will let you know how it turns out.  I don't like chasing them but i like what they are doing and who is behind them…Wish they had longer term options

  59. VSLR earnings are May 6   might wait to establish a position till after earnings..

  60. Google to sell wireless services – Service will work on Sprint/T-Mobile networks.  U guessed it, initially the service will work only with Nexus devices. No iPhones (at least for now)

  61. Doing that slow upward approach to the peak on that roller coaster again.

  62. Pharmboy 


    Spectrum Pharmaceuticals, Inc. (SPPI)

     Did they get there mojo back?

     Any interest?


  63. GOOG/Rookie – That's obnoxious.  

    Popping over this time on /ES and /NQ so not much to do but watch and see where we get to.  

    Oil finally broke lower, now $56.18 but easy money has been made for the day.  

    Gold found a bottom at $1,185 (so far) and silver at $15.79, nice pop off $15.75 but failed $15.80 so done there too.  

  64. CAKE/Phil

    Do you still like CAKE?  I can do a Bull Call May 43/48 for less than $4 yielding over 25% (Stock > $50)

  65. I recall there was some (very interesting) talk on this board a week or so back regarding an idea about having a battery that stores electricity for those who use solar panels which could be rigged up to sell back the power when rates were higher. 

    Just saw this and thought I would post it; is this along the lines of what was being talked about here?


    Also has anybody been looking into the original idea brought up on the board? I would be interested to look into it further. 


  66. From Bloomberg, Apr 22, 2015, 12:42:35 PM

    April 22 — Google unveiled a U.S. wireless service, called Project Fi, as the Internet giant looks for new ways to extend its reach in mobile. Bloomberg’s Brian Womack reports on “Bloomberg West.”

    Google Inc. unveiled a U.S. wireless service, called Project Fi, as the Internet giant looks for new ways to extend its reach in mobile.

    To read the entire article, go to

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

  67. Watch this video at

    How Will Google’s New Wireless Service Work?

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

  68. From Bloomberg, Apr 22, 2015, 7:50:37 AM

      Greek Finance Minister Yanis Varoufakis told reporters late on Tuesday that the country and its creditors are narrowing their differences, though the Latvian meeting is probably too soon to seal an agreement. Photographer: Andrew Harrer/Bloomberg

    The European Central Bank almost doubled an increase in emergency funding to Greek banks from last week, suggesting deposit flight is accelerating as bailout talks drag on.

    To read the entire article, go to

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

  69. From Bloomberg, Apr 22, 2015, 10:00:00 AM

    April 22 — Bloomberg’s Scarlet Fu reports on U.S. economic data including existing home sales. She speaks on Bloomberg Television’s “Market Makers.”

    Sales of previously owned homes jumped in March by the most in four years, putting the U.S. residential real estate market on firm footing heading into the busiest time of year.

    To read the entire article, go to

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

  70. From Bloomberg, Apr 22, 2015, 9:00:03 AM

    broken piggy bank

    If you want a consistent stream of income when you retire, you’ve probably heard about a few familiar investment strategies. A dividend-paying stock gets you a regular cash payout from a company while letting you participate in the stock market’s upside. Municipal bonds are safely backed by governments, and their income usually isn’t taxable.

    To read the entire article, go to

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

  71. Watch this video at

    U.S. Economy Not Working for Most of America: Stiglitz

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

  72. From Bloomberg, Apr 22, 2015, 8:06:22 AM

    Squeezing the 10-year German bond.

    The trade that George Soros and Stanley Druckenmiller pulled off in 1992 by betting against the British pound — and making $1 billion in the process — has gained legendary status. So when Bill Gross, the world’s best-known bond investor, tweeted yesterday from his current employer Janus Capital that betting against German government debt is the trade of a “lifetime,” he reached for that bit of history to benchmark the current opportunity:

    To read the entire article, go to

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

  73. From Bloomberg, Apr 21, 2015, 7:54:10 PM

      Traders work on the floor of the New York Stock Exchange in New York. Photographer: Craig Ruttle/Bloomberg

    It only took a spreadsheet souped up with custom enhancements to manipulate one of the world’s biggest markets with a strategy that on some days involved trading billions of dollars’ worth of stock-futures contracts.

    To read the entire article, go to

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

  74. From Bloomberg, Apr 22, 2015, 5:23:15 AM

    April 22 — Bloomberg’s Laura Keller reports on the Chinese economy and defaults. She speaks on “In The Loop.”

    China has a $28 trillion problem. That’s the country’s total government, corporate and household debt load as of mid-2014, according to McKinsey & Co. It’s equal to 282 percent of the country’s total annual economic output.

    To read the entire article, go to

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

  75. From Bloomberg, Apr 22, 2015, 8:06:22 AM

    April 22 — McDonald’s posted first-quarter profit that missed analysts’ estimates, hurt by its sixth straight quarter of declining U.S. sales. Bloomberg’s Scarlet Fu reports on “Bloomberg Surveillance.”

    McDonald’s Corp. Chief Executive Officer Steve Easterbrook promised to give details of his comeback plan for the struggling chain next month, following another quarter of declining sales and profit.

    To read the entire article, go to

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

  76. From Bloomberg, Apr 22, 2015, 2:38:11 PM

    Facebook Inc. is testing a new application that will act as a caller ID and allow users of the social network to block calls on their mobile phones.

    To read the entire article, go to

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

  77. From Bloomberg, Apr 22, 2015, 2:14:34 PM

      Muhtar Kent, chief executive officer of Coca-Cola Co. Photographer: Dario Pignatelli/Bloomberg

    A new Keurig single-serve soda maker due later this year may be a hotter item than the company’s dominant coffee brewer, Coca-Cola Co. Chief Executive Officer Muhtar Kent said.

    To read the entire article, go to

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

  78. From Bloomberg, Apr 22, 2015, 1:00:53 PM

      Lloyd Blankfein, chief executive officer of Goldman Sachs Group Inc., speaks during a Bloomberg Television interview on day three of the World Economic Forum in Davos, Switzerland, on Jan. 23, 2015. Photographer: Simon Dawson/Bloomberg

    Goldman Sachs Group Inc. Chief Executive Officer Lloyd C. Blankfein said an interest rate increase by the Federal Reserve in September is “unlikely, but possible” as policy makers grapple with a strengthening economy.

    To read the entire article, go to

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

  79. From Bloomberg, Apr 22, 2015, 1:00:00 PM

    Millennials are willing to spend more than 50 percent more for new technologies in automobiles than baby boomers, a J.D. Power survey found.

    To read the entire article, go to

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

  80. From Bloomberg, Apr 22, 2015, 12:47:52 PM

    April 22 — D.R. Horton said fiscal second-quarter earnings rose as sales increased in a sign of growing demand for new homes. Bloomberg Intelligence’s Drew Reading reports on U.S. housing on “In The Loop.”

    D.R. Horton Inc., the largest U.S. homebuilder by revenue, fell the most three months after saying its entry-level Express Homes division may make up a greater share of sales, putting pressure on profit margins.

    To read the entire article, go to

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

  81. Watch this video at$aCXG2DnM5HA

    Can Only One Trader Be Responsible for 2010 Flash Crash?

    April 22 — Eric Noll, chief executive officer at Convergex Group, and Bloomberg’s Keri Geiger discuss the 2010 flash crash and Navinder Singh Sarao, the futures trader arrested for alleged manipulation tied to the event. They speak on “Market Makers.”

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

  82. The 10 Most Important Facts About Google's Project Fi Wireless Service / by Dashiell Bennett

    Google just announced a new wireless phone service that puts them even deeper into the cellphone game. Here’s what you need to know. 1. It’s called Proj…

  83. / Christopher Helman

    The oil and gas industry is in crisis. But while $50 oil might be good for America, is there a chance that a fever in the oil patch could cause the rest…

  84. Bought a few AAPL 128 calls @ .93 for this week.  Fun trade only.

  85. Parasite Turns On Parasite: HFT Sues Other HFTs For "Egregious Manipulation" Of Treasury Securities

    There was a time when those who dared to call out the massive Libor manipulation conspiracy (such as what Zero Hedge did with one of its first posts in …

  86. A biotech startup is creating fake eyes to enhance human vision / ALEXANDRA OSSOLA, Popular Science

    Our eyes are such elegant, complex, specialized organs that their existence seems almost hard to believe--Darwin himself called their evolution “absurd….

  87. Sing LA LA LA and Pretend Housing Doesn't Count - That's How Conomists Ignore Inflation

    Share! In the hall of mirrors where conomists live, there’s no housing inflation. When the prices of consumption goods rise it’s “inflation.” But when h…

  88. So Bill Gross thinks that betting against German debt notes will be the "trade of a lifetime", and I hate to take part in the bond vulture mindset…but I'm inclined to think that he's right.

    Any ideas about how we might start to position ourselves to take part in this ceasar-stabbing opportunity (since its German, maybe we should call it a Kaiser-stabbing) say with the DSB:FP inverse 10yr Daily Double Bund ETF?

  89. Dear CFTC: This Is The Market Manipulating "Spoofing" Taking Place In The E-Mini Just Today

    Dear CFTC: Thank you! Thank you, because 6 years after we warned about the dangers from predatory HFT including such parasitic “strategies” as spoofing…

  90. Why does US healthcare cost so much? A Texas reporter takes a close look

    With what will be a yearlong, 13-part series called “Cost of Care,” the Dallas Morning News is the latest news outlet to take a long, hard look at thr…


    WASHINGTON (Reuters) – U.S. part-time employment is fast-approaching levels common since the 1970s in a sign that a key part of labor market slack may b…

  92. U.S. Treasury: Can This Bubble Ever Pop?

    By Lance Gaitan, Economy and Markets Guys like me who rely on volatility in U.S. Treasury prices have had a difficult time this past month. What’s usual…


    NEW YORK (Reuters) – Financial companies are among the standouts of the first-quarter earnings reporting season, but their dazzling profit growth has fa…

  94. Solar Summit Slide Show: The Evolution of Solar / Eric Wesoff

    Each year, Shayle Kann, SVP of Research at GTM, provides the solar industry equivalent of Mary Meeker’s internet trends slide deck — providing some con…

  95. / Laura Gottesdiener

    This story first appeared on the TomDispatch website. Unlike so many industrial innovations, the revolving door was not developed in Detroit. It took …

  96. Yo Mamma:

    German fund short candidates:

    BUNL Bond futures- No options

    EUFN- Banks will feel it first, options available. 

  97. Randers1 / Bund-Shorting Strategy -

    Thanks much!

  98. SPPI/qc – too much competition in the space.  They are toast as far as I am concerned.

  99. CAKE/Zten – Yes, I think they are a great operation.  Earnings are tonight and it might be tough for them to live up to expectations of a 15% improvement over last year since they missed the last 4 Qs (but still beat last year by 10%).  I'd do the bull spread if you intend to add a put or at least roll lower on an earnings miss but, otherwise, I'd wait and see as it's 50/50 you do better tomorrow.  

    Batteries/Crs – Someone was talking about using NiFe for batteries and it's interesting (old tech put to modern usage) for home storage but, as you note, TSLA has a project and we should wait and see what they're doing and then cost-compare the two.  With TSLA raising awareness, I bet it wouldn't be too hard to get NiFe funded if we could make it work but we need someone with strong expertise and the ability to benchmark some prototypes.  

    AAPL/Albo – Nice call, just popped.  

    Notes/Yo – I think you can just as easily short TLT.  I don't know of a US-based one that has options so BUNL or the German one would be straight bets.  

    A little selling into the close.  

  100. Closed my eyes, held my nose, and sold some BTU 2017 $4 puts for $1.30.

  101. Albo – The AAPL weekly calls are a safe bet than these BTU puts me-think!

  102. STJ – Yeah, risk/reward on BTU might not be great.  Just a bet that BTU stays in business.  We'll see.

  103. Looks like they are doing the traditional decuple bottom right now! Very bullish usually once bankruptcy proceeding are over!

  104. Hummmmm

    We have mentioned the put/call ratio of open interest on S&P 100 (OEX) options a handful of times over the past 6 months or so. The reason is that this historically “smart money” indicator has been flashing warning signs off and on during that period. On March 3, we posted our most recent update on the indicator as it was on an unprecedented string of bearish readings. The stock market peaked simultaneously and has drifted sideways in the 6 or 7 weeks since. The bearish OEX put/call readings have not relented, however. In fact, the bearishness has accelerated. 

  105. BTU/Albo, StJ – So sad for them:

    Peabody Energy Executives to Take Temporary Pay Cuts

    No Respite for Peabody (BTU) from Soft Coal this Earnings? – Analyst Blog

    Peabody Energy (BTU) Stock Falls Today as Chinese Coal Demand Slows

    Coal’s Market Share Falls with Fall in Electricity Generation

    Earnings tomorrow will be interesting.  I'm very interested in how their financials are looking. 

    I like Albo's play.  Could be an instant winner and, if not, it's a bet they don't go BK.  

    Cash burn is actually very mild, considering and they could just cut dividends:

    All numbers in thousands
    Period Ending Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
    Net Income (777,300) (512,600) (575,100)
    Operating Activities, Cash Flows Provided By or Used In
    Depreciation 655,700   740,300   663,400  
    Adjustments To Net Income 309,800   364,200   1,056,100  
    Changes In Accounts Receivables (14,600) 179,800   160,300  
    Changes In Liabilities 71,200   12,700   39,300  
    Changes In Inventories 104,900   39,900   (112,900)
    Changes In Other Operating Activities (13,100) (101,900) 284,000  
    Total Cash Flow From Operating Activities 336,600   722,400   1,515,100  
    Investing Activities, Cash Flows Provided By or Used In
    Capital Expenditures (211,000) (449,100) (881,300)
    Investments (306,600) (288,800) (329,500)
    Other Cash flows from Investing Activities 203,100   222,200   118,700  
    Total Cash Flows From Investing Activities (314,500) (515,700) (1,092,100)
    Financing Activities, Cash Flows Provided By or Used In
    Dividends Paid (92,300) (91,700) (91,900)
    Sale Purchase of Stock -   -   (149,700)
    Net Borrowings (72,500) (225,000) (421,900)
    Other Cash Flows from Financing Activities (3,300) (4,800) 200  
    Total Cash Flows From Financing Activities (168,100) (321,500) (663,300)
    Effect Of Exchange Rate Changes -   -   -  
    Change In Cash and Cash Equivalents (146,000) (114,800) (240,300)

  106. Hummmmm indeed, Pharm.  

  107. Visa, MasterCard, and American Express are now welcome in China

    Selective enforcement:

    Embedded image permalink

    Wages are 3.1% lower in so-called “right to work” U.S. states, for union and nonunion workers alike

    Paging Mr Piketty: the enduring success of family firms is helping to perpetuate inequality

    Embedded image permalink

    Nasdaq 5K? Try Nasdaq 7K. To get to an inflation adjusted high, the Nasdaq would have to trade above 7,000.

  108. Phil/VXX

    Jun 21/23 BCS coupled with selling June 19 Puts? If "Sell in May" happens then it will be good return.


  109. Someone was pumping Apple on CNBC today saying that the Apple Pay app was going to be so big that in a few years we will look back and wonder how we didn't see how huge it would be. Paying for things by holding up your writst watch will replace money and plastic accordning to thios guy whose name I can't recall.

  110. That above graph is ridiculous.  Talk about risk.

  111. VXX/Pat – Still waiting for our last one to pay off.  

    AAPL/Craigs – I know it will be huge but, even if they captured ALL of V's money, it's only $5Bn a year in profit out of AAPL's $40Bn last year and $50Bn within 2 years.  So, at BEST (and they are NOT in the same game as V), we're adding 10%.    Sadly, guy whose name you can't recall has no concept of math. devil

    Risk/Pharm – What's that?  Fed says there is no risk in anything anymore.  

    Oops, T missed revs but earnings +0.01.  

    QCOM beat but guidance not good.  

  112. AAPL app/Craig, Phil. That is so embarrassing. Korea's had that for years. You can see it if you look up on the 2006 TV series, "Princess Hours" – young woman gets on a bus with BF, swings hip with phone in pocket at farebox, farebox dings. I've seen that in real life all the time. I have a t-money card in my travel wallet right now, and you can use almost anywhere except the traditional markets, and sometimes even there.

  113. what are your thoughts on nkd at 20270 or when it stops climbing

    thanks phil

  114. QCOM – Purchasing about $1B sh of stock / month…   Samsung loss is now being outlooked.  I think they are sandbagging their outlook for remainder of the yield.  Will need to listen to earnings call – want to understand any impact of the mfg agreement w/ SS has on product sales, along w/ China royalty payments…

  115. tommyt – when it stops climbing, it will go down!  cheeky

  116. Swipes/Snow – I know, it's not as revolutionary as US investors think it is (or as profitable).  Ideally, from AAPL's point of view, it will drive watch and phone sales.  

    /NKD/Tommy – We're shorting with EWJ, which is on it's 3rd non-working roll but yes, I like shorting the Futures at any 100 level (with tight stops).  One day, it will fall apart – probably not today.

    And what Pharm said.


    QCOM/Batman – BRCM is better…  blush

  117. LOL – Futures back to 2,100 and 4,440 again.  I knew those were good lines!  

  118. BRCM – Hit it out of the park…

  119. AAPL- Phil I think he was commenting on how many watches would be sold to make use of the Apple Pay. He was saying that all the people who are saying they won't buy or wear one will, just to pay for stuff and in a few years some form of the watch will be on everyone's wrist.

  120. Since I started really trading oil futures regularly last summer, I have never been as indecisive about how to play them than i am right now. I would be sure it was heading down tonight into tomorrow due to the rising inventory, but if it couldn't get below 56.10 today I just don't see how it will go lower. "they are really pulling out all the stops to keep it up now. I guess they have convinced traders that output here in the states is coming to a halt, even though it clearly isn't yet.  so I am out for now, but I keep feeling like I am going to miss a move down when everyone finally sees how much oil is in the tanks.

  121. VXX / Pat, Phil – I would never sell a naked put against VXX, ever! Actually, based on my backtesting so far, every day that the market is open, you should sell a VXX call. If you have enough margin (about $250K), just roll them every year and you'll have yourself close to a 100% return. Not quite, but there is nothing as certain as VXX going to zero and resetting! It has decayed $5 in April so far so by May it could be trading at $15! True, we might get a spike in between so you might get lucky, but as I told Phil, you need to cash in quickly because gravity takes over very rapidly!

  122. Stj, how do you typically gauge when to enter your VXX trade?

    wait for a spike and then buy puts or bear spreads; but how large of a spike do you look for to initiate a position? or do you only initiate after a reset / reverse split? 

    Also, do you have a method of choosing which puts to by when initiating a position?


  123. VXX / crs – What I have been doing so far is buying a long dated put when they reset VXX. Then it's a matter of choosing the best return on your money. The last reset, they had VXX at close to 50 and I bought a 25 put. But the time before, they reset to 40 only so I bought a 15 put. 

    You could time that with spikes actually, but the problem I have is that the premiums are just crazy if you wait too long after the reset. For example, now you could buy a Jan 17 put on a spike, but even a 15 put which is 25% out of the money is over $3.00. So you need VXX at 12 to start making money, which it probably will, but there has to be faster ways!

    On the other hand, if you sell calls on spikes, you can make some very quick 20-30%! But you need to have the margin and be willing accept some good paper losses! What I mentioned the other day was to sell one call at the end of the day if VXX is up and bullish on an indicator of your choice. Could be as simple as a moving average. For example, VXX crosses over a 20 DMA on a up day. Then sell a call each up day that VXX is above that average. It's basically a mechnical DD when you already know the final price of the instrument because VXX will be at zero no matter what. You might end with a little as 1 contracts and as many as 10. But spikes don't last long so you can offload your most expensive calls quickly. Back in December and January, we had 4 spikes in a row, but in between each of them VXX lost 10-20%. So you have an opportunity to lighten up if you are short on margin. And it's been pretty much downhill since then so all the short calls are doing great. I said that I was going to backtest and publish but I have been busy with my real job! BTW, UVXY works well too. And seems to decay even faster than VXX. Might not be as liquid though.

  124. Great post STJ.  Thanks a lot for sharing your thoughts!  I'm going to try your call selling strategy next time the VIX spikes (seems safer than every day at this point, while I'm a little margin constrained).

  125. Palotay – If you use TOS, you can backtest it over a long period and see what happens. At least get an equity curve. Also, you need to sell long dated calls, not something for next month or so because back in 2011, we had a long period (over 3 months) when the VIX was elevated and that could have been a problem! And just lighten up as you go along and not get greedy… Back in December we had that big spike  up to 35 and it took all the way to February to stay below $30 but after each big spike you could have closed a couple of contracts for a decent return (annualized) and make sure you didn't end up with 20 contracts! But that's an extreme example going back 3 years!

    If you are the patient type, you can wait until they reset and then sell a bunch of calls at 1 standard deviation above the price that day and let it rest. For example, back on 11/11/2013, VXX had just reset and was trading at $48. One standard deviation for the Jan 15 calls was $95. Sell 10 of these calls for about $5.00 and 6 months later they had decayed by 90%! Margin on that is probably around $5K (or less with PM) so close to a 100% in 6 months. And you know for a fact that unless Manhattan gets hit by a nuclear weapon on Jan 15, VXX will not be at $95 or even close to that. Besides, you should close that trade way before that to avoid a black swan event once you have made the profit you are looking for. You could also have waited until 11/18 to sell the Jan 16 calls. By then, 1 standard deviation was $72. The 75 calls traded for $12 and by September (10 months later) they were trading for $2 so $10K against less than that in margin. There were some drawdown in February when we had a big VIX spike, but if you have the margin, you just add to the position with similar rules. When calls sell for over what you sold the original ones, you can sell more. Once again, not without risk, but I can't think of anything else that has much less risk than that for the potential return. UVXY should reset soon, so I might just try that myself.

  126. To say the market is rigged is an understatement. After over 30 years of trading commodities I will flat out state without any reservations that lies and manipulation run rampant. If you think anyone is looking out for the small independent trader you are wrong. An unholy alliance of the Federal Reserve, the government, and the too big to fail has left the rest of us in a precarious position.

    For the big boys, its insider information and computer trading, this includes computing patterns that exploit where stops are placed, this improves their ability to wash the weak out of their positions. The bottom-line is that the higher the market goes the more vulnerable it becomes to a major collapse and sudden downward move. More on this subject in the article below.

  127. Good post on zero hedge today on layering on the /ES between 11-12 today:

  128. Good morning!

    Down we go again on weak China PMI (as usual) and poor numbers out of Europe as well.  Poof goes yesterday's gains….

  129. From Bloomberg, Apr 23, 2015, 4:00:00 AM


    Growth in euro-area manufacturing and services slowed in April in a sign that bond purchases by the European Central Bank will take time to revive a fragile recovery.

    To read the entire article, go to

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  130. Watch this video at

    How Spoofing May Have Caused the 2010 Flash Crash

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

  131. From Bloomberg, Apr 22, 2015, 7:00:00 PM

      Combine harvesters operate on a wheat field during harvest on a farm in Vargany, near Nizhny Novgorod. Photographer: Andrey Rudakov/Bloomberg

    Vladimir Putin is determined to make sure that Russians don’t run out of affordable bread, even if it means a few bankrupt farmers and a disrupted grain market.

    To read the entire article, go to

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

  132. From Bloomberg, Apr 22, 2015, 11:06:36 PM


    Garrett Camp made a fortune helping people navigate the digital world, then a far larger fortune helping them ­navigate the physical one. The Canadian-born Camp co-founded StumbleUpon, the early online links hub, in 2002, sold it to eBay for $75?million in 2007, and bought it back for 40?percent less in 2009. That same year, it occurred to him that many taxi drivers tooling around in search of their next fares had smartphones in their pockets and could be easily summoned by an app that made use of GPS data. The idea became Uber, and co-founder Camp is now worth an estimated $5.3?billion. As Uber’s ­chairman, he doesn’t have an operational role at the company, so he had enough time last year to found the tech industry incubator Expa, spread lavishly across the 27th floor of a ­downtown San?Francisco office tower.

    To read the entire article, go to

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  133. From Bloomberg, Apr 22, 2015, 10:46:11 PM

      Cash is pouring into China to profit from economic growth that’s averaged more than 10 percent for the past five years and accelerating yuan gains following the end in June of a two-year peg. Photographer: Qilai Shen/Bloomberg

    The People’s Bank of China lowered banks’ required reserve ratios on Monday, making the largest cut since Nov. 2008. Even so, they still have about 23 trillion yuan ($3.7 trillion) to lock away, begging the question: how much will be allowed to flow into the nation’s slowing economy and boost lending?

    To read the entire article, go to

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  134. From Bloomberg, Apr 22, 2015, 9:59:58 PM


    Mark Zuckerberg is going to need to find some more pinball machines and rock-climbing walls. The social networking company, known for its many perks that make it a regular on the hottest-places-to-work lists, is increasing headcount at an incredible pace.

    To read the entire article, go to

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

  135. From Bloomberg, Apr 22, 2015, 8:51:44 PM


    Toyota Motor has made its view loud and clear: Hydrogen-powered cars are the future. That’s why the world’s largest automaker pulled the plug last year on the all-electric RAV4 EV crossover it developed with Tesla Motors. China, the world’s largest auto market, isn’t listening.

    To read the entire article, go to

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

  136. From Bloomberg, Apr 22, 2015, 12:00:01 PM

    April 22 — Credit Agricole’s Dariusz Kowalczyk discusses the outlook for China’s economy on “Asia Edge.”

    The true cost of the debt that China’s real estate developers peddled to eager international investors during a five-year property boom is now becoming clear.

    To read the entire article, go to

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

  137. From Bloomberg, Apr 22, 2015, 6:32:09 PM

      A magnifying glass is held over a 50 subject one dollar note sheet after being printed by an intaglio printing press in this arranged photograph at the U.S. Bureau of Engraving and Printing in Washington, D.C., U.S., on Tuesday, April 14, 2015. Republican efforts to pass a fiscal year 2016 budget cleared another hurdle as the House named its members to a conference committee and Senate Majority Leader Mitch McConnell pledged to do the same by the end of the week. Photographer: Andrew Harrer/Bloomberg

    Inflation continues to underwhelm the Federal Reserve’s 2 percent target, with the overall personal consumption expenditures price index picking up just 0.3 percent for the year ending February. Even so, New York Fed President William Dudley said Monday he expects inflation to “begin to firm later this year.” Fed officials say they won’t raise interest rates until they are  ”reasonably confident” that inflation is heading up.

    To read the entire article, go to

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

  138. From Bloomberg, Apr 22, 2015, 6:51:11 PM


    Brazil’s national oil company said a graft scandal cost it 6.2 billion reais ($2.1 billion) after a five-month internal debate that shut off access to bond markets, cost the chief executive her job and destabilized the country’s politics.

    To read the entire article, go to

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  139. From Bloomberg, Apr 22, 2015, 12:21:43 PM


    Half of the 41 fracking companies operating in the U.S. will be dead or sold by year-end because of slashed spending by oil companies, an executive with Weatherford International Plc said.

    To read the entire article, go to

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  140. From Bloomberg, Apr 23, 2015, 1:20:54 AM


    Apple Inc.’s iOS operating system contains a bug that lets attackers crash iPhones and iPads within range of a wireless hotspot, security company Skycure Ltd. said.

    To read the entire article, go to

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

  141. From Bloomberg, Apr 22, 2015, 9:45:00 PM

    Workers manufacture cotton yarn at a factory in Dali county, Shaanxi province, China. Premier Li Keqiang has flagged the labor market as key, pledging last month to step in to support the economy if the slowdown hurts jobs and wages. Photographer: Nelson Ching/Bloomberg

    A Chinese manufacturing gauge fell to a 12-month low in April, suggesting government efforts to cushion a slowdown are yet to revive the nation’s factories.

    To read the entire article, go to

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

  142. From Bloomberg, Apr 23, 2015, 12:01:03 AM


    Spending three weeks touring the world’s wonders and staying in four-star hotels is better by private jet—right?

    To read the entire article, go to

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  143. From Bloomberg, Apr 23, 2015, 2:07:42 AM


    European stocks declined as data showed euro-area output expanded at a slower pace in April, and Ericsson AB led technology shares lower.

    To read the entire article, go to

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  144. From Bloomberg, Apr 23, 2015, 4:30:20 AM


    U.K. retail sales unexpectedly fell in March and the government undershot its borrowing forecasts in the latest fiscal year, providing a mixed set of data as parties spar over the economy in the final days of the election campaign.

    To read the entire article, go to

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  145. From Bloomberg, Apr 22, 2015, 7:00:01 PM


    Switzerland is running out of ammunition to fight the global currency wars.

    To read the entire article, go to

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

  146. From Bloomberg, Apr 22, 2015, 12:37:18 PM


    Sweden’s government targets introducing an investment program for infrastructure projects as early as next year as part of its plan to cut the nation’s jobless rate to the lowest in the European Union by 2020.

    To read the entire article, go to

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

  147. From Bloomberg, Apr 22, 2015, 8:00:00 PM

      Ghana’s farmers are bracing for the smallest harvest in six years because of poor weather and an outbreak of a killer fungus, according to analysts and grinders. Photographer: Jane Hahn/Bloomberg

    Gabriel Kwesi Enoku rakes the dried cocoa beans with his hands. He doesn’t have enough to fill a 64-kilogram (141 pounds) sack on his farm in western Ghana.

    To read the entire article, go to

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  148. From Bloomberg, Apr 22, 2015, 7:01:00 PM


    For Tom Kelly, a 68-year-old living in a wealthy neighborhood on the south Dublin coast, the world’s hottest property market is cooling at the worst time.

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  149. From Bloomberg, Apr 23, 2015, 2:00:03 AM


    Going for lunch at the House of Lords is like taking a stroll through history—in terms of food as well as architecture.

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  150. From Bloomberg, Apr 23, 2015, 2:28:11 AM


    Prices in Israel are too high as far as newly re-elected Prime Minister Benjamin Netanyahu is concerned.  For the central bank, they’re not rising fast enough.

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  151. From Bloomberg, Apr 22, 2015, 4:08:59 PM


    AT&T Inc., the second-largest U.S. wireless carrier, posted profit that topped analysts’ estimates as the company added more tablet customers even as discounting by smaller rivals made subscriber growth challenging.

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  152. From Bloomberg, Apr 21, 2015, 4:42:22 PM


    This week the luxury French chocolate company Valrhona opened a new school and hub for their brand in the U.S., L’École Valrhona Brooklyn. Though the school has hosted a couple of confectionery classes already, this week it hosted a two-day conference with parties for visiting chefs and a ribbon-cutting ceremony for the school.

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  153. From Bloomberg, Apr 22, 2015, 4:22:04 PM


    EBay Inc. is on track for a “smooth separation” of its PayPal business in the third quarter as profit growth recovers after the company cut costs in preparation for the split.

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  154. From Bloomberg, Apr 22, 2015, 7:11:26 PM


    Google Inc.’s new mobile phone service has features, such as low price and credits for unused data, that will ratchet up pressure for market leaders Verizon Communications Inc. and AT&T Inc.

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  155. From Bloomberg, Apr 22, 2015, 8:12:33 PM

    Lyft Inc. hired two vice presidents with experience at consumer giants Facebook Inc. and Nike Inc., doubling the ride-sharing startup’s executive team in six months as it mounts a challenge to Uber Technologies Inc.

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  156. From Bloomberg, Apr 22, 2015, 5:26:30 PM

    Everyone wants to know what he’s thinking.

    Is it better to follow the strict letter of the law or to adjust it where appropriate to produce a more equitable result? This is one of the oldest questions in legal thought, one that can be traced back at least to Aristotle — and on Wednesday the U.S. Supreme Court weighed in, 5-4, on the side of equity, with Justice Anthony Kennedy providing the deciding vote.

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  157. From Bloomberg, Apr 22, 2015, 5:12:58 PM

    Someone to watch over me? Please?

    Last week I wrote about free-range parenting and the madness of declaring the streets off-limits to unaccompanied children until they’re old enough to run for Congress. This morning, I wrote about the pernicious effects of child support, and how the government, in attempting to fill the roles that were once taken care of by communities, can end up making matters worse, often with the tragic result that poor people who can’t make their payments are punished so severely that their earning power is further eroded.

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  158. From Bloomberg, Apr 22, 2015, 4:30:10 PM

    Seoul needs a time out.

    As South Korea slides toward deflation, officials in Seoul seem mostly interested in pointing fingers at one another. Central bank chief Lee Ju Yeol says the government should boost spending and implement structural reforms. President Park Geun Hye’s team thinks lower interest rates are the answer. Until they resolve their differences, 50 million Koreans will be forced to suffer an underperforming economy.

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  159. From Bloomberg, Apr 22, 2015, 4:30:02 PM

    Step away from the bottle.

    Two years ago, the British medical journal the Lancet published a study arguing that higher rates of exclusive breastfeeding could be even more effective than improved sanitation at preventing “a large proportion of child deaths and disease” in developing countries. It’s unclear whether Chinese officials ever saw that research, but they seem to have arrived at the same conclusions.  

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  160. From Bloomberg, Apr 22, 2015, 3:27:12 PM


    A week after a Florida man illegally landed his gyrocopter at the U.S. Capitol to deliver a message on the need for campaign finance reform, U.S. House Democrats on Wednesday announced the “relaunch” of a task force to push toward that same goal.

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  161. From Bloomberg, Apr 22, 2015, 9:12:10 AM


    The Republican megadonor brothers Charles and David Koch have identified five presidential contenders who may receive their support in the primary, Charles Koch told USA Today in an interview published Tuesday.

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  162. From Bloomberg, Apr 23, 2015, 5:33:08 AM

    Allianz SE, Europe’s biggest insurer and asset manager, warned that stock-market turmoil may follow a recent rally.

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  163. From Bloomberg, Apr 23, 2015, 5:25:33 AM

    The pound declined and U.K. 10-year government bond yields pared their biggest increase in almost two years as a report showed retail sales unexpectedly fell in March.

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  164. From Bloomberg, Apr 23, 2015, 5:15:59 AM

    De Beers, the world’s biggest diamond producer, cut its output target for the year as demand for the gems weakens and prices fell for a second quarter.

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  165. From Bloomberg, Apr 23, 2015, 4:25:31 AM


    Citigroup Inc. economist Ebrahim Rahbari is again trying his hand at etymology.

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  166. From Bloomberg, Apr 23, 2015, 4:29:16 AM

    German government bonds rose for the first time in three days as a report showing euro-area manufacturing and services growth unexpectedly slowed this month heightened concern over the pace of the economic recovery.

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  167. From Bloomberg, Apr 23, 2015, 4:23:03 AM

      Traders are pushing back forecasts for the Federal Reserve to raise interest rates because of the uneven performance of the U.S. economy, undermining support for the greenback. Dollar bulls say the rally is just pausing. Photographer: Andrew Harrer/Bloomberg

    Treasuries advanced, halting a three-day decline, as signs that growth is slowing in China and Europe boosted demand for the safest assets.

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  168. From Bloomberg, Apr 23, 2015, 4:15:29 AM

    U.K. stocks fell for a second day as commodity producers retreated.

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  169. From Bloomberg, Apr 23, 2015, 4:15:06 AM

    There’s a 30 percent chance Greece ends up dropping out of the euro area by accident and if it does then that might make Italian and Spanish debt a good buy, according to the manager of the world’s biggest bond fund.

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  170. From Bloomberg, Apr 23, 2015, 4:00:01 AM

    A credit-rating downgrade will increase South Africa’s funding costs, put pressure on the rand and undermine financial stability, the Reserve Bank said.

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  171. Phil- I am just curious about something I see on the commitment of traders chart you post as oil contracts are rolling over, I am looking at it now and see the usual numbers in the front months with declining amounts as we move out. Howerver I am noting a large number of open contracts in Dec. 2015 compared to the surrounding months. Is this unusual and does it have any meaning? I can't remember if this is the way it always looks or not. 

  172. /ES, 2100 is a good line indeed Phil. Shorted there for 2 contracts and took a nice 500 per contract at 2090. I'll do it again if they give it to us. 

  173. Phil, what do you think about /TF short at 1260. I know it's not the top of the range (1270) but I'm seeing it as a very weak line in the last few days. I'm thinking to short there with conviction up to 1270 if we get pumped up. Stupid idea???

  174. December/Craigs – There are tax implications to rolling to the next year so contracts tend to bunch up in December.  

    2,100/Jeff – Those lines are great when we find them.  Then they work until they don't – the trick is to remember that last part!  1,260 has not been a reliable short but 1,270 has, so I'd rather wait and see.  1,265 maybbe as that stopped us yesterday and below 1,260 you can play it with that as the stop and you seem to be getting good at this so I can tell you that but make sure you remember it's a loss over 1,260, not conviction. 

  175. Got it. I'll wait then. Totally understand the "works until it doesn't" part. I've certainly been humbled a few times I the not so distant past where that would've been the best way to describe it. But, trying to really iron out some discipline and kill any remaining emotion regarding futures trading. I'm trying to turn myself into a bot…they seem to be doing so well for themselves lately, so why not follow their lead…thanks for the guidance!!

  176. Jeffdoc/emotions

    That is truelly one the hardest parts of trading futures

  177. TWTR- Phil you mentioned an earnings play on TWTR in this week's webinar I think. Can you repeat that for us? Also, on that subject, I was reading an article that mentioned how ridiculous Twitter's executive compensation is. Particularly their stock compensation which was an unbelievable 47% of revenues in qtr 3 and 37% in qtr 4 and was the main reason they lost money. According to this article, they rank second in non cash executive compensation among S&P 500 companies. So, while we think they are doing well and growing, do we have some concern that they are a bit shareholder unfriendly with so much of their revenue earmarked for executive compensation. They just gave 74 million to their CFO for 5 months of work!

  178. Bert/emotion

    Yup, for me its been the troubling feeling of wanting to make back a particular loss.  I start forcing trades and it just spirals.  Also, expecting too much out of a single trade and not cutting a loser off before it really causes some damage.  Those two behaviors have cost me more than anything else I'm doing.  I took a little break and after regrouping mentally and getting some serious control I'm seeing success again with patience.  Not easy to do though.  Just have to remember…there's always a better trade around the corner if you're patient and not greedy.  Small wins really add up, and its extremely gratifying to do it correctly.

  179. STJ;  What do you mean by a reset of the VXX?  Also, in your backtesting, how do you define a spike?


  180. VXX / Options – I mean when they do a reverse-split. This has happened 3 times already. They usually do it when VXX gets to around 10 or so.

    As for spikes, as I explained in my post, you can choose different indicators. I pointed out that you can use a 20 DMA for example and a spike would be when VXX crosses over that 20 DMA. You can choose different periods or other indicators. 

  181. LOL, true Jeff.  The key is to not make a trade unless you have at least two other confirming lines you can watch and then use a strict 2/3 or 3/4 rule to get out of your trade – no matter how you feel about it.  Of course, I still keep my ears open and sometimes if the reason my lines break is because the Dollar moved and the Dollar moved because of something silly I just heard that people are misinterpreting (like our short on oil yesterday after inventories) – then I'll hang on with a bit of conviction but always recognizing that my odds have certainly dropped to 50/50 because the TA is against me and knowing full well I could quickly lose whatever I have on the table.  As long as you can easily afford that then, sure, take a chance but, otherwise, stick to the rules!  

    I may be wrong but BRCM looks like it's going to open LOWER than the earnings pop ($47 from $44), maybe $45.  Please remind me if that's the case as that seems beyond idiotic to me.  

    Again, this is why I love CASH!!! during earnings time.  You never know when they are going to shower you with gifts…

    AAPL/Craigs – But if all you need is a swipe of your wrist to buy something then someone can mug you and go on a quick shopping spree, can't they?  I LIKE the idea of my phone with my fingerprint being a shopping tool but not so willd about but a watch has to have more security than being waved at a POP.  

    Indecisive/Craigs – I feel the same way.  We had a strong bear premise since July and it's paid off and then we hit $45 and went bullish (after being wrong at $55) and that paid off and then oil went to near $60 too fast and our bear premise paid off.  Now it's in between but we expected $60s in July and it's almost May so, unless oil goes back to $50, it's going to be hard to be bullish again and it's already hard to be bearish so maybe we don't play for a few months.  Better than losing by forcing bets.  

    VXX/StJ – I would short-term.  I think there's a short-term lower limit.  The decay is a longer-term thing that grinds it down but, when it's this low, I don't mind betting it won't stay that way.  Over time, though, your strategy is golden.  

    Good post B Wilds.  

    Big Chart – Looks like we are making a triangle sqeezy thing but above the 50 dma gives us a good chance of rocketing higher though a massive failure is possible if it breaks too.  Either way, it's going to be exciting and CASH!!! is a good thing to have.  

    SPY  5  MINUTE



    This is totally F'd up.  TOTALLY!  

    4-22-2015 6-00-43 PM cATERPILLAR

    4-22-2015 6-01-20 PM cATERPILLAR 2


    Layering/Eddie – Yep, this poor guy in England is just a scapegoat so no one looks at JPM, GS, et al.  

    NeFi/Malsg – Thanks.  Of course, Wired finds someone who looks at everything.  Power your IPhone with poop?  Sure!   That being said. I'm a huge fan of nanotubes and buckyballs and I do think these are some very promising applications.  

    TWTR/Craigs – LOL, as if I'm going to remember that!  I remember it was a bit complicated, setting up a bull call spread and a bear put spread and selling May or June puts and calls on the premise they don't actually move much on earnings but I sure can't remember what it was (check the replay).  Yes, the compensation is ridiculous but, one would hope, it reigns in over time and turns to profits.  

    Well said Jeff.  

    Market madness contines with Futures pumped back off the lows, now down about 0.25% across the board and not playable.  Oil popping back to – yep, you guessed it – $56.37. 

    Cold and misty morning, I heard a warning borne in the air
    About an age of power where no one had an hour to spare,
    Where the seeds have withered, silent children shivered, in the cold
    Now their faces captured in the lenses of the jackals for gold.
    I'll be there
    I'll be there
    I will be there.

  182. Dollar down from 98.60 to 98 so we're weaker than we look in indexes and commodities.  

  183. Procter & Gamble Hurt by Strong Dollar

    Procter & Gamble reported that quarterly sales fell 7.6% because of the strong dollar, which also pushed down volume.

  184. Both BTU and TXN missed big….

  185. Craigs,

    On TWTR  If this helps I hold still the long Jan17 35 put and play monthly short puts against it Just closed the Sep 37 putter for which I received 4.85 now paid .75 cents and rolled to Dec 45 p for 3.77 So building up cash even that your long put is slowly losing money. 

  186. TXN/Akad – That's why we rolled our short $55 calls in the Butterfly Portfolio.  They were way ahead of themselves.  As to BTU, no big surprise.  I'll be very happy if $4.50 stick on bad news.  

  187. Phil / CIM – I remember you are keeping your eye out to add CIM to the LTP and it appears to be low in the channel again. Maybe a good time to add?

  188. Buckyballs – Phil – now you are taking me back to my Chemistry college days ..  love it!

  189. Ah crap .. my phone ran outta … :-)