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2,130 Tuesdsay – 5th Time’s a Charm?

Here we go again.

The S&P is testing that magical 2,130 line and let's pretend the last one didn't happen at the end of June, even though it was the same time of month at the same spot under the same conditions because THAT time we dropped 80 points (3.75%) over the next 30 days but THIS TIME is going to be different, right?  

Everything, is of course, AWESOME!  China – what?  Greece – where?  Australia – who?  Japan – are they still on this planet, I thought they left?  There is nothing to worry about when you don't worry about anything – just ask everyone whose ever been slaughtered anywhere, any time in history…

You see kids, Greece, China, Japan, Australia, the rest of the World… they don't matter because they are far away unless, of course, we plan to sell them stuff – then they are wonderful places where all our hopes and dreams will come true but, when their economies slow down, it doesn't affect us because – hey, look at that!  

This morning, you can buy 6 barrels of oil for a BitCoin.   What is a BitCoin, you may ask?  Well, a BitCoin is a virtual currency that didn't exist in 2008 and on May 22nd, 2010, 10,000 of them were traded for a pizza and now that pizza maker can trade his 10,000 BitCoins for $3M in cold, hard, cash at a BitCoin ATM.  

BitCoins are only one of hundreds of CryptoCurrencies that have popped up in the last few years and PSW now has a digital currency section to keep up and we've been buying GreenCoins, which we think may be the next big thing, but not ready for prime-time just yet.  Over $4Bn has been put into BitCoins already and that's enough to buy 80M barrels of oil – imagine how much money is being diverted just to this new segment!  

Perhaps that is why gold is losing it's luster.   Bitcoins surged to match an ounce of gold last year but, since then, BitCoins have lost ground faster and now buy just about 10 grams (1/3 ounce).  BitCoin's cache is similar to gold's – it's limited in quantity (21M possible coins), which already puts it miles above the Fiat Currencies we get shoved down our throats, and it's easy to transact – easier than gold, in fact, which has to be converted into Dollars to buy a pizza, though gold now has ATMs too…  

Nonetheless, we put our foot down on gold at $1,100 and the ETF (GLD) is at $105.70 and, if you want to make money betting gold will hold $1,100, then the GLD Aug $103.50 calls are $3.60 and the $105.50 calls are $2.35 and that's net $1.25 on the $2 spread that's already 100% in the money.  As long as gold stays over $1,100 for 31 days – you can make 0.75 (60%).  

Now, if gold drops to $1,000, that's 10% down or $95ish on GLD.  Let's say we REALLY want to own 1,000 shares of GLD at $95 ($95,000).  We could sell 10 of the Jan $95 puts for $1.85 and collect $1,850 in exchange for our promise to buy GLD at $95, $10.70 (10%) below the current price.  We can then use that $1,850 to buy 20 of the GLD Aug $103.50/105.50 bull call spreads ($2,500) and that's net $650 on $4,000 worth of spreads with a potential return on cash of $3,350 (515%) in 31 days.  

We also had a long trade idea for oil but we'll discuss that in today's Live Trading Webinar at 1pm (EST).  As to the rest, we're leaning short on the indexes and just shorted the Futures this morning in our Live Member Chat Room as they looked both toppy and weak (18,000 on /YM, 2,120 on /ES, 4,675 on /NQ for example) - especially when you look at yesterday's shockingly bad advance/decline ratios with declining volume outpacing advancers by more than 2:1!  

The indexes look flat because, as I said in yesterday's post, THEY ARE BEING MANIPULATED, with just a few headline stocks holding up the entire index so the Banksters who control them can sell off the bulk of their positions while forcing the bottom 99% (through 401Ks and IRAs that are forced to use index ETFs) to buy their crap which is attached to the rising indexes.  Yes people, that is the way things work.  The banks develop these ETF products so that they can CONTROL YOU and FORCE you to buy things like NFLX when you are really trying to buy AAPL in the QQQ because you're not allowed to invest in individual stocks in your retirement account. 

That means any crap they stick in the index with AAPL will get bought.  As noted by the WSJ this morning (via Deano), AAPL alone accounts for 12.5 points of the S&P 500s 72-point gain this year.  That's 17%!  AMZN was 7.5 points (10%), GOOG is in twice, DIS, FB, GILD, NFLX, JPM and PFE essentially made up the rest and EVERYTHING ELSE got dumped (relatively).  Is that a healthy market when 15 stocks gain while 485 lay flat?  

We're not going to worry about China or Australia (getting really bad now) or Japan or Greece or Brazil or Venezuela – we'll have plenty to worry about right here in the US come next week's Q2 GDP report which, if we're reading our data correctly, may give us a negative reading – again.  Two negative quarters in a row is called a recession – or it used to be before they outlawed the term and replaced it with MORE FREE MONEY!!!

It's hard to say, because now we have a category called "Intellectual Property," which was only added to our GDP last year and already is adding 0.5% to our numbers.  Since that number was -0.2% last quarter, we can figure that, without IP picking up the slack from fixed investment – we'd be in very sad shape. 

So hopefully Minions will save the economy from Recession next week because nothing funnels money more efficiently to the Top 1% than a blockbuster movie where millions of people bring their cash to thousands of theaters who send most of it out of town to Hollywood where they hire Korean cartoonists to make the next blockbuster.  Minions indeed!  


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  1. TSLA downgraded by UBS from neutral to sell and lowered PT from 220 to 210.

  2. Can some help me to understand how the EBAY/PAYPAL split impacted Ebay shareholders?  I had the Jan 65 Put and now something TOS labels EBAY 100 (PYPL 100) 45 Put.  Thanks

  3. AAPL / Phil – To follow up on last night conversation, your analysis is in line with what they are saying at EW. At this point, the iWatch is probably just an Apple fanboy fantasy. I don't know anyone who has one either and I have some big Apple fanboys in my circle. My kids who have iPhone 6's don't care for the watch. The fact that companies like Facebook have not bothered to develop anything for it is quite telling. Last week someone posted pictures of all the celebrities who bought the iWatch when it came out and none of them were wearing them anymore. Most people probably don't know what to do with it for the most part! 

    In the end, Apple is now riding the iPhone wave and the numbers will probably be very good. EW also expects the iPad numbers to be weak as the larger iPhone is taking sales away from the iPad Mini and I even read that Apple might not continue the Mini anyway. 

  4. I bought some UVXY calls and DIA puts yesterday.  I had that instinct feeling that this market is getting closer and closer to a big meltdown.  For some reason yesterday I really felt it.  I'm going to start doing the plan I spoke about on here on certain stocks, selling 2017 calls and buying puts on some of the momo's as I've seen this game a few times before and watched them dive 70% quickly.  Right now I can sell 10 170 NFLX calls (1190 on stock before split) and buy 5 91.43 puts (640 before split).  Think much better chance that it tests 640 before going to 1190 and can easily see the stock going to 400 (57.14) in a major correction if not lower.  Waiting on TSLA till earnings and pray that the idiots move this over 300 but have a feeling they will disappoint as they have last few quarters though market hasn't seem to cared.

  5. above play on NFLX was 2017 options

  6. I('m with you  Rustle, my feelings along with Phils is down we go. Playing ES sold 2 contracts at 2120.50 and not just a day trade this time – unless something drastic happens, looking for bigger score than just + $300 now.

  7. I should say, wil not take a loss and will be out before that happens

  8. Good morning! 

    Good money on /YM shorts at 17,900 – very tight stops.  /ES already bounced at 2,117.50, /NQ testing 4,670, /TF bounced of 1,255 yet again.  

    Oil hit $50.75 before stopping so wheeee! on that one.  /YM going nowhere at $1,103 with the Dollar at 97.92.  Silver $14.79 is a very dangerous spot, copper $2.48 is in bad shape below $2.50.  /RB back to $1.916 but rejected at $1.92 so far.  

    Europe's turned down about half a point.  GREK barely hanging on just under $10. FXI $42.97 and GLD $105.91 – those are our 3 short-term bull call spreads. 

  9. Phil – Very interesting hypothetical on ABX if gold goes to $250.  The same example could be used with oil companies if the price of oil goes to $20.  The fact that these companies might have huge oil reserves worth many times more than they owe doesn't help them if they are operating companies with a large amount of debt.   Your extreme example with ABX illustrates this point.  I doubt any of us think that gold will go down to $250 or that oil will go down to $20.

    The problem is that ABX has $12 billion in long term debt.  When they shut down operations to wait for the price of gold to go back up, they can't service their debt.  When they can't service their debt, they are forced into bankruptcy, most likely Chapter 7.  Shareholders are wiped out.

    I'm afraid that's what will happen with a large number of E & P oil companies.

    I was probably very wrong in my investment thesis on XCO.  I took comfort from the fact that 3 very astute value investors had bought huge amounts of stock at $5.  Therefore, I figured selling the $3 puts was a good idea.  Unfortunately, what will most likely happen at this point is that the company will go bankrupt wiping out the shareholders.  The company will be then recapitalized with funds from these guys and others allowing the big boys to get their money back, but leaving us penniless.

    MY BAD !

  10. Good Morning everyone!

    We're back at it with a brand new webinar this week. (1 pm Eastern) Register here:

  11. ABX / Albo – That was a point that was just raised on something I heard yesterday. The issue with some gold miners is debt and currently ABX has one of the largest debt load so it could be an issue for them. As I said last week, hedging my bets with GDX instead. Might not pop as much if and when gold finally rises, but there is virtually no chance of GDX going BK (unless they all go BK) which is more than we can say for ABX. And I am not saying that they will, but the chances are not 0.

  12. What ?   Heresy ! !

    Tesla Motors downgrade details — to Sell at UBS; tgt lowered to $210  

  13. Cramer is beside himself that someone spoke poorly about NFLX.  I mean really, now people want them to make money too?  It's a car company, for goodness sake, it's not supposed to make money…  Oh wait, maybe it's a battery company?  Do they make money?  

    UBS expects Tesla's car and battery sales growth to disappoint

    Tesla Falls From 10-Month High On Target Worries

    EBAY/Options – As far as I know, if you had the $65 put, you now have a somehow (I have no idea how) adjusted EBAY put AND a PYPL put as well.  Generally, it was a split, now there are just two companies, where before there was one.  Anyway, you need to verify with your broker.

    AAPL/StJ – When the mini first came out, I thought if it had a phone I'd just use that and nothing else but I the plus is just too big – too big for most guys, I imagine, as it doesn't really fit in a pocket.  I still think they need a mini iPhone, like the IPod Mini, that has a simple display with a few functions but mostly is a very tiny phone with siri-driven web functions.  That's more like a watch at that point but with a phone, so it's actually useful.  

    My trip to Disney has proven to me that iWatches will work – just not this generation.  Later generations of watches that don't require phones and act as your entire wallet, car keys, house keys, etc and, if you lose it, it's disabled and the replacement downloads your preferences and you're as good as new.  Who won't want that?  

    Shorting Rustle – I feel it too (still).  

    ABX/Albo – But, even at $250, ABX still has $8.3Bn worth of gold and each year they would have to sell $600M of it to service the debt – that's not BK unless the lenders call it in, which would be foolish of them.  Even CZR got refi'd today (up 20%). 

    1:05 am Caesars Entertainment enters into a restructuring agreement with holders of a significant amount of CEOC's second-lien notes

    Caesars Debt Talks Ratcheting Up as Path From Bankruptcy Emerges

    Submitted on 2014/12/22 at 9:49 am

    CZR 2017 $8 puts can still be sold for $3.15!  

    XCO/Albo – If you are in at $3(ish) and the stock is now 0.70, I'd DD because then you're in for $1.85, which is a bit more realistic than a 300% move up you need to get to $3.  And, of course, even if you just get a 0.25 pop back to $1 and fail, you pocket the 0.25 by selling half and now you're down to $2.75 on the other batch and ready to DD again.  XCO just got upgraded by RBC (I know, what do they know, they busted themselves) on the 8th so I don't think they are that dire and is there really a point to just holding on if a small additional input of cash can vastly improve your basis?  

  14. Guys, I´ve recently moved to Spain and am going to have more free time to commit to PA trading. I am just wondering what other European traders preferred platforms are? I almost entirely trade US index futures and index options, but would like to get more involved in PSW's single-name option recommendations(if possible). 

    Thanks in advance.

  15. From Bloomberg, Jul 21, 2015, 5:16:42 AM

    He’s an excellent teacher.

    I’m worth $10 billion. There, I’ve said it and it feels good.

  16. From Bloomberg, Jul 21, 2015, 12:00:00 AM

    Some wear sunglasses indoors, apply cold vinegar compresses or chew on ginger. Others sit in the dark for days. But there’s one thing most migraine sufferers agree on: the pharma industry has failed them.

  17. From Bloomberg, Jul 20, 2015, 7:01:00 PM
      Banks are already preparing for the next reevaluation of oil and gas credit lines, reviews which typically take place twice a year in April and October.

    Halcon Resources Corp. almost ran into trouble with its banks in June 2013. And again in March 2014. And in February 2015.

  18. From Bloomberg, Jul 20, 2015, 7:01:01 PM
     July 21 — A Bloomberg survey of 34 economists found that 71 percent believe there is still a danger that Greece will be forced out of the euro region by the end of 2016. Seventy percent said they reckon Greece should be safe for the rest of 2015, though almost half said they thought the 86 billion-euro ($93 billion) bailout package Prime Minister Alexis Tsipras is targeting will prove to be too small.

    Don’t pack away the currency presses just yet, Greece’s euro exit may be back on the table next year.

  19. From Bloomberg, Jul 21, 2015, 9:50:16 AM
      2014 Harley-Davidson Ultra Limited motorcycles at a dealership in Ottawa, Illinois.

    Harley-Davidson, which typically clings to market share as damp leather clings to a middle-aged biker, said on Tuesday morning that it would continue to restrain motorcycle production while the dollar remains strong. This is an uncommon and prideful strategic turn, and it’s weighing on results.

  20. From Bloomberg, Jul 21, 2015, 7:37:16 AM

    July 21 — Bloomberg’s Scarlet Fu reports breaking news of continued scuffles in Hong Kong. She speaks on “Bloomberg Surveillance.”

    Verizon Communications Inc., the largest U.S. wireless carrier, topped analysts’ second-quarter profit estimates as tablet promotions lured new customers, and lowered its sales forecast for the year as it fights price cuts by smaller rivals.

  21. From Bloomberg, Jul 21, 2015, 4:33:01 AM

    The average number of days with temperatures higher than 95 degrees Fahrenheit (35 degrees Celsius) may double or even triple by the end of the century, threatening one of the world’s richest agricultural regions. Photographer: Fredric J. Brown/AFP/Getty Images

    Earth warmed to a record in the first half of the year, putting new pressure on nations from the U.S. to China to try to curb climate change at a United Nations summit in Paris this December.

  22. From Bloomberg, Jul 21, 2015, 7:00:03 AM
      Jeff Jetton (left) and Tyler Williams, co-founders of Jevo, at their office near Portland, Oregon.

    To Jeff Jetton, the four hours it takes to make Jello shots is an eternity—and an opportunity.

  23. XCO -Thanks, Phil.  Actually, since I sold the puts, my net cost is $2.30.

  24. From Bloomberg, Jul 21, 2015, 5:00:00 AM

    The white Ford van rumbled down Devonshire Street, past the green-trunked palo verde trees and graveled lawns of central Phoenix. Lasers up front mapped the road’s roughness, and high-definition cameras on spider-like arms in back recorded continuous images of cracked asphalt.

  25. Phil/CM – I am doing a buy write strategy as you suggested. I sold the Dec 75 calls at 3.90 trading now at 1.05. Would you buy these back and sell others or the expectation is to wait and hope they expire worthless?  This looks like a good time to close them out and sell new ones, just want your opinion. 


    Thanks again.

  26. From Bloomberg, Jul 20, 2015, 1:54:09 PM
      A worker opens a water pipe at an irrigation canal in Chainat, Thailand. Thailand’s key reservoirs have fallen to the lowest since 1987, and farmers have been warned to delay planting their rice.

    This is a new kind of heat. In more than 135 years of global temperature data, four of the five hottest months on record all happened in 2015: February, March, May, and now June. 

  27. From Bloomberg, Jul 21, 2015, 9:00:08 AM

    Planning for a pickup in sales, some small manufacturers borrowed money from their larger counterparts to ramp up production. Now, a growing number can’t pay for the investments as their forecasts aren’t panning out, with energy-related companies being among the hardest hit.

  28. From Bloomberg, Jul 21, 2015, 8:55:25 AM

    Deutsche Bank chief global strategist Binky Chadha goes back to basics in an attempt to make sense of the market’s gyrations over the past 20 years.

  29. From Bloomberg, Jul 21, 2015, 7:10:10 AM

    Only twice in the past two decades has the second largest gas producer reported positive cash flow.

    Chesapeake Energy Corp. halted its quarterly dividend for the first time in 14 years as slumping energy prices crimped cash flow for the second-largest U.S. natural gas producer.

  30. From Bloomberg, Jul 21, 2015, 3:01:39 AM

    July 21 — Ask any president, running a country is no easy task. But how about starting one from scratch? That is exactly what Vit Jedlicka is trying to do on a small patch of unclaimed land between Croatia and Serbia. Bloomberg followed President Jedlicka as he attempts to establish the Free Republic of Liberland.

    Liberland, or the Free Republic of Liberland to give it its full title, is a would-be sovereign state founded April 13 by Vit Jedlicka and two fellow libertarians. Its total area of approximately seven square kilometers would make it the third smallest sovereign state in the world, after the Vatican and Monaco.

  31. From Bloomberg, Jul 21, 2015, 7:35:24 AM

    My two-fer-Tuesday morning train reads: 

  32. From Bloomberg, Jul 20, 2015, 5:29:20 PM

    Donald Trump leads poll of national Republicans with with 24%; next is Scott Walker, 13%; Jeb Bush, 12%; rest of GOP field in single digits, according to ABC News/Washington Post poll.

  33. SHAK is doing a secondary with none of the money going to the company, just shareholders getting out of 4mm, exactly the news that tanked LOCO which it never recovered from and yet SHAK is up today, ridiculous.  Good news is that the extra shares will put them above the amount needed to have options listed.

  34. Metals – at these prices, perhaps we'll get real copper in the penny again. The new aluminum(?) quarters and dimes feel -too light-.  I wonder how the changes in US coins are affecting demand for nickel, etc?

  35. Hello everybody – if you want to trade GreenCoin too, sign up for an account at Drop them a note that you want GreenCoin added. Cryptos sort of work by community referendum, so they need to know the interest is there. You could mention a few points such as: 

    - Other than bitcoin the only other coin you're interested in currently is GreenCoin, and is the reason why you signed up for an account at all

    - You appreciate how GreenCoin is different in that it has an actionable environmental imperative you feel is important, which is lacking in other coins

    - You plan on trading these coins on their site for an appreciable amount of time.

    Also, the Leader of Altcoin Exchanges in Cryptsy. With sites like Bittrex, you can trade BTC for other coins, but with Cryptsy you can deposit funds so it also services fiat. If you sign up feel free to drop them a note as well. With enough support we could be on two big exchanges.

  36. Here's your contrarian indicator from  Marketwatch


    Why gold prices are falling and won’t get up again

  37. IRBT – Just filled on the 2017 25/30 BCS for 2.70.  Returns around 85% in 18 months if IRBT stays above 30.  If it drops I will sell Puts to offset the cost of the trade.  It took about a week to get my fill.

  38. Your other contrarian indicator for gold is Dennis Gartman on CNBC saying that gold is not done going down a while… 

  39. Watch / Phil – We are many generations from that I believe. The biggest problem being batteries and interface. The current watch lasts less than 1 day and it doesn't do 1/10th of what the phone does. And they have to come up with new interface paradigm – typing is obviously not a good option and talking to the watch is, well… not always practical! A watch connected to something like Google Glass would be perfect if they can come up with something less geeky and less intrusive! You can then have virtual displays and virtual keyboards. 

  40. Dollar was tossed down to 97.4 and now climbing – things can get worse.  

    You're welcome Albo.

    CM/Eddie – Well the short $75s protected you from most of the fall to $70 and, if it were me and I had short puts, I'd roll to the short March $70s at $4 and pick up $3 more in protection.  If you didn't sell the puts, then I'd sell the March $70 puts for $4.50 too. 

    Keep in mind, it's all about that 0.88 per Q in dividends!  As a new trade, I do like CM at $70.50, selling the March $70 puts and calls for $8.50 for net $62/66, which makes the $3.52 dividend 5.6% while you wait.

    SHAK/Rustle – I don't approve of that at all!  Not a surprise though, their whole IPO was a pointless cash-out with no actual plan that made sense.  

    Nickel/Scott – Not good at all.  Would have been a good conclusion to make when we first heard they were changing the money:

    Bitcoin/BDC – It would be nice if people drop them a note even if they don't know that they will be trading!  Just in case…

    Gold/Stock – Interesting that the Dollar went from 98.30 at midnight to 97.40 at 11am and gold could only manage $5 – that's not encouraging. 

    IRBT/John – That's the way I like to play them!  

    IRBT is our Stock of the Century and we only have 10 short Jan $30 puts in the LTP (at $5, now $4.70) because we were waiting for a re-test of $30.   I'm watching the 2017 $28 ($7.20) /$35 ($4.80) bull call spread at $2.40 and we can get 20 of those to go with our bull call spread so no harm in making the offer!  Also good as a new trade – earnings are tonight!   

    5 companies that could cause the robot apocalypse

  41. Europe had a bad finish:

    Only one thing we can do:

  42. Glad I bought DIA puts yesterday though UVXY is flat.

  43. Here's an old favorite going on sale:  GLW!  Not only do they have Gorilla Glass (and don't forget Sapphire was a failure) but now they have anti-microbial Gorilla Glass because, apparently, it never occurs to people to clean their touch-screens and that is just nasty!   

    In the LTP, let's go for selling the 2017 $20 puts (aggressive) for $3.30 and we'll buy the $17/22 bull call spread at $3.25-$1.15 = $2.10 for a net $1.20 credit and we'll start with 10 and see how earnings go (28th).  If AAPL, for some crazy reason, sells less IPhones than we thought, this trade may not be smart. 

  44. scott, what new coins? can you link to an article, I can't find anything….

  45. NOW they are getting interesting:

    • Chesapeake Energy (CHK -5.9%) tumbles to new 52-week lows after suspending its quarterly dividend for the first time in 14 years, while most energy names are moving higher in today's trade as crude oil prices rebound.
    • "More bold actions like this are needed,” says Oppenheimer's Fadel Gheit, adding that CEO Doug Lawler "has to throw a lot of things overboard to save the ship."
    • The move is prudent to improve financial liquidity, RBC analysts say; Tudor Pickering echoes that view, adding that few investors buy CHK for its 3.4% dividend yield.
    • "Clearly, management believes that preservation of cash is more important than appeasing a beaten-down shareholder base’s desire for dividend income," says Sterne Agee CRT's Tim Rezvan, who also supports CHK's move; he recently upgraded CHK to Buy with a $13 price target.

    Wow, I'm actually starting to see things I like!  Did you know IGT pays a 5% dividend (0.87)?

    They just finished their merger with GTECH (EU gaming co) so the dividend is a bit theoretical until they officially announce it.  The combined company is almost big enough ($4Bn) to join the S&P 500 and it's very possible as one or two oil companies fall out.  IGT pretty much made slot machines but GTECH makes on-line gaming products (they bet in bars all over Europe).  It may take a while for the companies to work out their bugs but I like the idea of poker machines and such showing up in US bars down the road.  

    UNFORTUNATELY, they don't have clean options except the Jan 2016s but we can sell 10 of the $17.50 puts for $1.70 ($1,700) to remind us to keep track of them (and give ourselves another 10% discount on entry if they dip).    

    Looks like we're shakin' it off a bit – /TF back to 1,251.40.

    Thank you /NKD

  46. out ES + $725 at  2112.75

  47. IGT funny does not show a div at TOS but yes at Yahoo !!!! what gives ?

  48. IGT/Yodi – I think it's because the new, combined company has not officially announced dividends and YHOO is assuming that the dividends of the two companies will continue going forward. 

    Dollar diving to cover more market weakness (97.31) – these are not dips to be buying so far. 

    Webinar time!  

  49. IBM 10$ down May I suggest to sell some Jan 17 150 puts.

  50. Been writing 170 Jan 17 calls and buying the Jan 17 94.29 puts on NFLX today.  Small positions but scaling in.

  51. Coins/BDC – just pick up any of the newest quarters/dimes/nickels/pennies. do they look/feel/sound the same to you? They don't to me… A quick search found the below link from the mint. Upon calling and inquiring the official line is "we haven't made any changes" but do your own comparison. I know a shopkeeper friend of mine a couple years ago was pulling out and keeping all the pre-2006 nickels he got in the registers ("design" change in 2006-2007) and it wasn't because the old ones were prettier… Last change to penny claimed to be 1982.

    They have been researching  "Alternative Metals":

    You can see what our seigniorage is for circulating coins in the annual reports:

    some historical comparisons:

  52. BDC – page 8 of the Dec 2014 Biennial Report says "The Mint determined that modified 80/20 alloy passed its Go/No-Go determination and, accordingly, it purchased additional quantities for pre-production testing."  It might be that testing finished and they have started "co-circulation" (discussed in appendix 4).

  53. just filled GLD 103.5/105.5 BCS Sept for 1.25

  54. Phil,

    Thanks on the webinar today….Light bulbs went off on the 1x2x4 scale in…

  55. IBM/Yodi – Kind of a falling knife today.  I'm inclined to let the downgrade police have at them first.  

    NFLX coming back a bit, unfortunately.  

    Light bulbs/Jasu – That's great, I wasn't sure if I was getting that across.  Maybe time to work on a new article/book chapter.  

    Meanwhile, with all the problems we had getting the Webinar started, I forgot to hit the record button so it's in the ether now.  frown

  56. Oh this was great (his show is usually great):

  57. There is some really juicy premium in LL.  You could sell the July 31st  $19  covered calls  (before earnings), or the covered 2017 $20 calls and $18 puts for 50 % off

  58. Dollar bottomed right at 1pm and back to 97.50 but indexes seem poised to recover a bit into the close.

    Poor gold back at $1,100, oil $50.83, silver $14.78, copper $2.47, gasoline $1.916 and nat gas $2.888

  59. look at LOCK

  60. LOCK/Stock – Well that's no surprise, what a scam.  

    Lifelock failed to protect customer data, FTC charges

    What's surprising is we have Government agencies actually regulating things again.  

  61. scott- LOLZ, not sure what the point of this conspiracy theory would be aside from the gov't is trying to save money on coinage? 

    The good thing about metals is they have properties only God can change, so with access to one of these and one of these. Hard data rules the roost. I use the zinc from a penny all the time in the lab. 

    Of course I have access to one of these. It's kinda hard, and one of these, oh, and one of these, so hard data versus "look/feel" and some guy who takes nickels from a drawer aside, I like hard data. Back in 2006 nickels had 10 cents worth of raw nickel in them (when nickel was $20/lb) but at $6 a pound they don't anymore. The coin hasn't changed though.

  62. AAPL time coming up (and less interestingly, yahoo)

  63. @BDC

    and CMG

  64. Betting on a failure, BIIB Aug 380/377.5 P spread for 85c.  Just a few…..just a few.  IV is low on these and will be out after tomorrow, as data release is in the a.m.

  65. GDX Jan 2016 19 calls for 40c.  Lots of them … lots.

  66. I wonder if the QQQ $114 weekly calls at 0.68 and the $113.50 weekly puts at 0.55 would be a good combo into AAPL earnings.  A 10% move on AAPL would be at least a 2% move on QQQ and figure the winner doubles and the loser still has half value for a 20-25% gain on any decent move…

    YHOO/BDC – Pretty solid trend they are in (and not a good one).  

    CMG/Rustle – I have to think that wages are going to bite them in the ass one day.

    Of course now they have Pizzeria Locale, which is a build your own pizza thing and that will cover up the failure of ChopHouse, which everyone seems to have just forgotten about.  I think I may want to take a short if they spike back to $750.  

  67. CMG / Pizza – an industry ripe for change. I thought the ChopHouse thing was stupid so I'm glad i was right and that died. But the pizza thing could be HUGE. I would LOVE to have a CMG-pizza place nearby. I love Seattle's local stalwart, Pagliacci, but honestly a CMG (or anyone, really) could disrupt every locally loved pizza place in 100 cities. (note that I don't consider the following to be pizza places, I consider them to be landfills that deliver garbage: Dominoes, Little Ceasars, Papa Johns. So I am only talking about real food here.)

  68. CHK: From over 30 to under 10 in a year. These companies are just TOXIC. It's like no one will ever use energy again for anything! Did NFLX invent cold fusion? Haha this is pathetic!

  69. BDC – cool tools :-)   I'd love to see your test results from the newest quarters.  A conspiracy? No.  'saving money on coinage'.. sure.  Why is it necessary to do so? No conspiracy there, just math!

  70. CHK    "they" expect more downside. Check out all of the August puts traded today compared to calls

  71. knew run up in CMG was cover for crap earnings.  Was short at 730 into earnings.

  72. CMG down hard to around $630, after a slight beat.


    Chipotle Mexican Grill beats by $0.01, misses on revenue

    Chipotle Mexican Grill (NYSE:CMG): Q2 EPS of $4.45 beats by $0.01.

    Revenue of $1.2B (+14.3% Y/Y) misses by $20M.


    iRobot beats by $0.18, beats on revenue

    iRobot (NASDAQ:IRBT): Q2 EPS of $0.24 beats by $0.18.

    Revenue of $148.79M (+6.4% Y/Y) beats by $4.19M.

    Shares +0.03%

  74. image




    Don't forget GPRO!  

    Image result for doc brown

    Pizza/BDC – I think make your own pizza (or point and get) is great.  How many times do you stare at those guys and thing "I hope he uses more sausage than that!"?  I'm just very dubious of fast-cooking pizzas, my innovation would be to have a line where you pick your pizza stuff and then move on to a salad/antipasto bar so you pay at the register, sit down with your appetizer and then they come when your pizza is ready.  

    I just ate in a place called Mellow Mushroom in Florida where they make custom personal pizzas – was very popular.  7 of us had 5 pizzas (4 small, one Med that was shared) and 1 sub (Jackie always has to be different) and it was very good.  Also they had 100 beers – big +.

    Fusion/BDC – Not NFLX but I'm sure Musk will hint at it shortly…

    A restaurant with just booths. It will be named "Just Booths." No one wants a table.

    Shazam for telling you what that noise is in the middle of the night.

    Seaweed based grass that allows vain Californians to water their lawn with saltwater.

    Dog toy with tiny internal 3D printer that rebuilds structure after being chewed on by your canine companion.

    Instead of adding a leap second we should be correcting the speed of the Earth's rotation. This is just laziness.

    Windshield that projects imaginary landscapes around you when driving through boring flyover states.

    Always a useful chart:

    Embedded image permalink

    Oops, CMG missed.  -6% already.

  75. GPRO beats but heading lower, doesn't make sense. 

    MSFT not thrilling people either.  

    On the whole, people seem less forgiving than they were last Q.  

    YHOO miss.  So sad…  Display adds improving though so some hope.  Plus BABA money still in play….

  76. Scott, so yeah my point is the coins have inside them exactly what's posted on the treasury website that you linked to. The fact the coins "feel different" is a good example of humans being human and subjecting some goal seeking into their "data." As far as testing for new metal combinations that's an on-going thing the gov has been doing forever. In 1974 they played with an aluminum penny (if you want to know how light an aluminum coins is, the Japanese 1 yen is 100% aluminum). Metallurgists work hard to get the same strike characteristics, lifetime, electrical and toxicity properties that exist now with cheaper and cheaper amalgams. 

    Inflation – exactly, which is why you STOP MAKING COINS of certain denominations. Some currencies have ceased making shorter-lifetime bills and added coins further up the value chain though they've never stopped making their respective 1/100th unit (even though they should!). The Euro makes a 1 and 2 euro coin and has a 5-dollar bill, as does Canada, Australia, and Japan effectively makes coins up to $5 and makes starts bills at $10. We should've stopped making pennies years ago but old crusty people would never allow it. I rounded everything down for customers to the nearest nickel when I worked at Citgo … in 1993. The result: it was so immaterial no one noticed. The only time the US stopped issuing a coin denomination completely was when the half-cent vanished in 1857 (worth 13.5 cents now). That means, compared to 1857, the quarter now is worth what the penny was back then.

    We should "make the dime the new penny" (or even the quarter) begin recording everything to one decimal-point instead of two and of course, bring back the McKinleys and the Clevelands!

  77. Republicans are about to lose their minds again:

    Embedded image permalink

    JUST IN: Chipotle sales trail estimates as price increases damp growth

    Very bad for CMG if they finally found the point at which people will no longer pay more for a burrito. (ps – this will happen to NFLX one day).  

    Cost of Living Summer 2015 Expatistan

  78. Brno –  wherever that is, $1 for 457 mL* of beer?!?!?!  I'm moving! 

    * 15.4 ounces for the Imperialists among us

  79. Thanks to Al Gore, who said "Hey, why don't we take one of those 1,000 satellites we have and take some pictures of our own planet?"

    The old picture (yes, we've been using the same one for 40 years!):

    There are not many photographs showing a fully illuminated Earth, because the camera has to be between the Earth and sun, while far enough away to capture the whole planet. Weather satellites in geosynchronous orbit can get a similar view, but not quite the entire hemisphere. Also, they are over a single location and the planet is partly in shadow most of the time.

    Now, the Deep Space Climate Observatory, or Dscovr for short, will be taking such photographs on a regular basis, always over the dayside of Earth. The first was released on Monday.

    The spacecraft started out as "Triana," a pet project of former Vice President Al Gore in 1998 who thought it would be inspirational and educational for a satellite to continually send back few of a changing Earth from almost a million miles away. Opponents derided it as "GoreSat," and the finished spacecraft was put in storage.

    It was resurrected by the National Oceanic and Atmospheric Administration to look the other way, at the sun, to serve as a sentinel of oncoming solar storms. But the Earth-facing camera is still there and now is finally taking pictures.

  80. IRBT – IB shows they've been halted .. anyone else seeing this and if so, why?

  81. AAPL missed -6%

  82. AAPL beats.  47.5M IPhones is mind-blowing.  10.9M IPads is good too.  Cook says watch exceeded expectations but AAPL down $10 at the moment – all this was baked in.  Glad we didn't sell puts yet.  

  83. AAPL down to 121 – getting earnings detail

  84. earnings out now – just beat on top and bottom… 1.84

    47.% phones, 4.8 mac, 10.9 pads ( -18% YOY units)

  85. IRBT/Jeddah – I'm not sure they trade much after hours.  

    Brno/BDC – Borneo?  

    LOL on AAPL, some people are never happy:

    Apple revenue rises 32.5 percent due to strong iPhone sales

    Guidance "only" $49-51Bn is disappointing.  Puts their p/e at 14.5!  

    Here's Apple's results versus analyst expectations (via the Bloomberg Terminal).

    • Revenue: $49.6 billion versus $49.4 billion
    • EPS: $1.85 versus $1.81
    • iPhone units: 47.5 million versus 48.8 million (whisper number was 50 million)
    • iPad units: TK million versus 10.9 million
    • Mac units: 4.8 million versus 4.9 million
    • Revenue guidance: $TK billion versus $51.06 billion

  86. Phil, LOL, no, it's one of these Eastern European we-dont-need-no-stinkin-extra-vowels places :P

  87. AAPL: this is sweet, perfect chance to enter long positions tomorrow!

  88. It's a tough crowd out there tonight! I guess if you don't lose money, investors are not interested… Profits are just so 1980's.

  89. I will be going long AAPL tomorrow.  Taking advantage of dip, hope it dives to 119 or lower.

  90. AAPL – interesting to hear what they say on call about  China / Watch, Phones 

    Nos. look fine, outlook is OK as usual.  Maybe Time to get some puts / more BCS on this…

  91. VMW also disappointing.  

    Wow, /NQ drops 40 (1%) very fast.  


    "Windows Phone revenue declined 68%"


    Brno/BDC – LOL.  Earlier today there was an article about some guy starting his own country around there.  

    Here's a great visual example of the 10,000 hour rule in practice:

  92. I'm glad I sold those calls on Apple yesterday….  Rinse/Repeat on the next spike up.

  93. As far as iPads are concerned, people don't replace their tablets like their phones. We are probably reaching close to saturation in that market. If Apple comes up with a new larger Pro tablet, it will make more sense for businesses and that might be a catalyst for upgrades.

  94. Do you guys know why we are getting real time option pricing updates within TOS on Apple options right now?  I don't think I have ever seen this before.   

  95. I'm not getting that Palotay!  That would be cool though.  

  96. Phil// based on today's Apple's earnings what are your thoughts and the price target for 2017?  Thanks

  97. API reporting a 2.3M barrel build in inventory! If EIA confirms something close tomorrow I would guess we will be seeing oil under $50 again. I am also noticing that the September number is of fake contracts to move in a month is well over 500M barrels.

  98. palotay /AAPL- I am getting AAPL real time pricing on my BCS, -7,000.00 worth of updating.

  99. AAPL Options / Palotay – Technically, they could easily calculate the theoretical values with that AH price and IV. 

  100. SQQQ- Glad I put on my protection before the close.

  101. Oil / Craig – Build in the middle of July is unusual I would think. That would certainly not be bullish…

  102. AAPL China up 119%, EU 19%, AMR 15%, JPN 9%, APAC 25% – nothing wrong with this, as long as they are not seeing slowdown in China early this QTR

  103. AAPL/Rookie – I need time to do more reading but solid $50Bn in earnings means 15 p/e = $850Bn = $145/share is conservative.  Then allow for an upside surprise or new product announcement and you're over $150 easily.  Downside would be rising costs, heavy competition with margin compression but nothing they haven't dealt with for the last 30 years.  AAPL car will be huge (interior audio/pc package add-on) and then AAPL TV remains to be seen and they are only just starting the audio service – what kind of fool would bet against that when their base is $50Bn in profits with $200Bn in the bank?  

    With TSLA at $32Bn, if AAPL ever decided to go for it, they could fund the purchase with 10% of their monthly profits over 10 years.  

    Oil/Craigs – I wouldn't go long, nor would I go short.  

    QQQ/John – I guess that short straddle would have worked.

    AAPL – Don't forget they were selling into a market collapse in China and slow in Japan and Europe.  Holy cow folks – BUYBUYBUY.  

    Gross margin on IPhones 39.7% and that's 60% of their business.  

  104. WAtch ASP did not go down QTR to QTR – this is key as this usually drops double digits each qtr – especially this long since announce…. they are killing high end sales

  105. Above comment should be Phone ASP ($ 659.9) did not go down

  106. Watch sales look to be low – if i'm doing my math right, would be between 1.8M and 2.2M Ish

  107. CMG     looked away and what did I miss?

  108. CMG back up to close….laughable. Must have blown through some buy stops.

  109. Phil  Bought the straddle just as the market closed.

    QQQ Jul 24 '15 $114 Call Executed @ $0.68

    QQQ Jul 24 '15 $113.50 Put Executed @ $0.54

    Looks like it will work out.

  110. cmg—-down 40 now up 2—pazzo!!!!!

  111. AAPL has a legion of branded nerds that need the watch but it is no where near mainstream yet. Everyone has an iphone even in the Congo.

    After reading about Phil's experience in DIS posted today and reading stuff like this I think wearables go nuts sometime and AAPL will lead us there but it'll take some time, and a killer app. The payment is probably such a killer app. Buying a coffee at starbucks with your watch via Apple Pay (either "traditional" bank enabled, or GreenCoin, oops, I mean Bitcoin blockchain enabled in the backend, doesn't matter) simply by flashing it within proximity of the scanner – that's the functionality you need to drive 100-1000x adoption.

    Plastic credit cards are already Dead Men Walking.

  112. GPRO now up after trading down and honestly, I think that camera on a stick keeps trading higher.  I wouldnt bet against it.

  113. yeah me too, I see GPRO at ATH's over 90 in 6-12 months (or less)

    … But I've been really wrong about some of my predictions before …

  114. CMG – people read our PSW pizza comments so the stock is back up 

  115. PHil / AAPL – My thoughts on quarter. would like your thoughts on my positions. sort of random.

    Went through numbers and conference call.  Phone Vols, China, and Watch, along w/ forward looking comps were the theme. 

    Tim made a comment related to watch – that it was  higher than iPad  / iPhone  in sales during announce qtr. with a lower number of points of sale.  Both of those products were severely supply constrained and i don't think they sold more than 1.6M units in the announce qtr.  He also said that sales in June were higher than Apr or May.  They caught up w/ demand in July and will begin rolling out to 22 countries by end of month ( form 9 at announce).  

    He said they saw no slowdown in China  during Qtr and nothing since. Maybe a speed bump in the future he does not know – but is committed to investing there.  Thinks middle income people in China have little / concentrated money in market ( anecdotal ).  The comps for '16 are going to be tough, and nothing on this call indicated  they had a magic bullet on this.  Overall, i liked the Quarter and the outlook ( this may be low given the 600K inventory drain, 5 wks of phone inventory at end of qtr, and improved margins.

    Forex had a 8% impact to revenue growth ( think) and Phone ASP would have been 24 dollars higher ( from $630) without the impact of FX.   Those countries where they increased pricing due to exchange seemed to hold up well.

    Tim was optimistic on IPAD's future.  The larger iPad that is supposed to ship in Q1 coupled w/ focus on Enterprize, APS… could help – this is a much more likely to help comps next FY if they can get traction. Also, replacement cycle may kick in soon…

     I think analysts were forecasting the Watch to ramp higher ( maybe 4 to 6 M in first qtr) and then get to 25 to 45 cum by year end. This does not look to be the case.  the Phone was at 5 wks inventory ( vs. the normal 5 to  7 wks) 

    I was expecting stock to drop to 125 to 130 after announce based on smaller beat.  make money on the calls i sold (which i will)  then wait for a retrace to load up at 120.  Now i'm thinking this may drop into the 115 range, but i still think this should be a 145 to 150 stock.  

    I have

    7X 2017 120 / 140 BCS ( 13) – may need to roll these – would like your view on timing / spread.

    15X 2017 110/140 BCS ( 17)

    Short 5X of July 31 140 ( 1.25) covered by 5X 120 calls.

    short 100X July 139 calls ( 1.2) will close these out.

    Would like your view.


  116. Crap, bought back my ES short figuring AAPL would not get flushed.

  117. Good morning! 

    /RB really didn't like last night's API report:

    What is going on at 2am every day to knock metals down?  

    Asia Stocks Drop With Nasdaq Futures on Apple’s Miss; Oil SlidesAsian stocks retreated with Nasdaq 100 Index futures as Apple Inc. tumbled in after-hours trade and the dollar held Tuesday’s losses. Oil resumed its decline while wheat sank for a ninth straight day. The MSCI Asia Pacific Index dropped 0.9 percent by 10:36 a.m. in Tokyo, with a rebound in the yen sending Japan’s Topix index down 1 percent.

    Tech Rally Unravelling With Apple Poised for $50 Billion SlumpThe biggest technology rally since October was knocked cold, as disappointing earnings reports punished Microsoft Corp. and left Apple Inc. in danger of its worst-ever loss of market value. Five days after Google Inc.’s earnings sparked the largest one-day increase in market capitalization, computer and software shares are tumbling. Apple, Microsoft and Yahoo! Inc. retreated on disappointing results. Apple, the world’s most valuable company, dropped 6.7 percent, a slump that would wipe more than $50 billion from its value.

    • Apple Watch (NASDAQ:AAPL) accounted for well over 100% of the $952M in annual revenue growth seen by Apple's Other Products segment in FQ3, CFO Luca Maestri mentioned on the earnings call. Bloomberg observes Maestri's remarks point to 1.9M+ Watch sales, if one assumes a $499 ASP. (live blogs: WSJBI)
    • Tim Cook stated Watch sales were higher in June than in April or May. He once more declined to provide specific Watch revenue/unit figures, while asserting Apple has chosen not to do so to keep info out of competitors' hands.
    • He also once more defends the iPad (units -18% Y/Y to 10.9M), estimating Apple has 76% of the market for $200+ tablets and stating customer sell-through (11.2M) was better than sell-in thanks to a 300K-unit drop in channel inventories.
    • The iPhone (units +35% to 47.5M, but below a ~49M consensus) saw channel inventories fall by 600K Q/Q, bringing them to the low end of Apple's 5-7 week target range. Greater China iPhone sales were up 87% Y/Y and Mac sales 33%. 27% of iPhone users are said to have upgraded to a 6/6+.
    • Also: 1) A strong dollar had an 8% impact on revenue growth, and a $24 impact on iPhone ASP; the latter was still up $99 Y/Y, thanks in part to the 6+. 2) 89% of Apple's cash balance is offshore. 3) The retail store count is up to 456 (190 outside the U.S.). 4) 8,500 third-party Watch apps are now available.
    • AAPL -6.6% AH to $122.16.
    • FQ3 results/FQ4 guidancedetails

    Microsoft(MSFT) reports biggest-ever quarterly lossMicrosoft Corp. said its revenue fell 5.1% in its latest quarter, hurt by continued weak PC demand, and posted its biggest quarterly loss ever on a hefty write-down and other items related to the Nokia mobile-phone business acquired last year.

    Apple's(AAPL) real earnings problem: The forecast

    World’s Wildest Stock Market Submits to Communist Party RuleIt took three weeks of unprecedented government intervention, but Chinese authorities have finally managed to subdue the world’s wildest stock market. That’s the verdict from options traders, whose expectations of share-price swings on mainland exchanges have tumbled 48 percent since the end of June. In a market where daily fluctuations exceeding 3 percent had become the norm, this week’s moves of less than 1 percent in the Shanghai Composite Index have barely registered on the price charts. For bulls, the growing sense of calm is a key step toward restoring investor confidence after the Shanghai Composite lost as much as 32 percent from its June high. Bears point to the costs of intervention, including an exodus by international money managers and the moral hazard of backstopping one of the world’s most expensive stock markets. “The government has won the battle in terms of stemming the rout, but they’ve lost the war if you think of the bigger picture,” Megan Greene, the chief economist at Manulife Asset Management, whose parent company oversees about $648 billion worldwide, said in a Bloomberg Television interview in London. 

    Chinese Stocks in Hong Kong Fall to Extend World’s Worst LossesChinese stocks fell in Hong Kong trading, adding to losses for the benchmark index that have made it the world’s worst performer this month. Hong Kong’s Hang Seng China Enterprises Index retreated 1.5 percent to 11,692.13 at 10:03 a.m. local time, heading for the steepest loss in a week. China Railway Group Ltd., the nation’s biggest construction company by total assets, and China Telecom Corp. slid more than 2 percent. GF Securities Co. led declines among brokerages with a 1.5 percent drop. The H-shares gauge has fallen 9.9 percent in July, making it the worst performer among major global benchmarks tracked by Bloomberg, after Chinese policy makers introduced a spate of measures to prop up equities. ?

    China's Market Aftershock Felt in Global Earnings

    This is what I was talking about in yesterday's Webinar:  China's Record Dumping Of US Treasuries Leaves Goldman Speechless

    Wall Street Prepares To Reap Billions From Another Main Street Wipe Out

    A $4 Trillion Force From China That Helped the Euro Now Hurts ItFor almost a decade, China’s effort to diversify the world’s biggest foreign-exchange reserves supported the euro. Now, the almost $4 trillion force may be working against the single currency. China’s central bank depleted $299 billion of reserves in the year through June to keep the yuan from falling, offsetting the private sector’s sales of the currency for dollars amid a stock-market rout and faltering economy. The decline in reserves is the longest in People’s Bank of China data going back to 1993. It may mark the end of an era of accumulation that led the bank to buy euros as part of reducing reliance on the dollar.

    Hyundai Motor's First-Half China Sales Slump 8.5%. Hyundai Motor Co.’s deliveries in China slumped 8.5 percent in the first half of this year, the latest foreign carmaker to report slowing demand in the world’s largest vehicle market. The South Korean automaker sold 513,784 vehicles in China in the first six months of this year, according to an e-mail from the company. Excluding imports, sales last fell in the second half of 2007, when deliveries slumped 24 percent.

    Toyota is holding off building the Lexus brand in China because of the country's stalled auto market

    • Commodities are taking another beating, as anticipation of a Fed rate hike and the dollar's strength, as well as soft global growth and a supply glut weigh on demand for raw materials.
    • Gold fell on Wednesday for a seventh session in eight, reflecting sustained downwardpressure on the metal days after its steepest drop in almost two years. Gold -1% to 1092.80 an ounce.
    • Crude futures are also heading south, amid speculation weekly supply data due later in the session will show U.S. inventories rose unexpectedly last week. Crude futures -1.4%to 50.17/bbl.

    Commodity Rout Extends to Currencies Led Lower by Kiwi to Loonie. Janet Yellen is breaking up the six-year-long party in the currencies of economies tied to commodities, with New Zealand’s dollar suffering the worst hangover. The Federal Reserve chair’s determination to raise U.S. interest rates this year has seen the currencies of New Zealand, Australia, Canada and Norway underperform their developed-market peers in the past three months. The kiwi has lost 14 percent in that time, or more than the other three combined. The currencies are under pressure as commodity-exporting nations cut interest rates to support growth after raw-materials prices plunged 45 percent from their 2011 highs. None, though, will ease as aggressively over the next year as New Zealand, according to market-implied policy rates. Its Reserve Bank will start by lowering rates for a second straight meeting on Thursday, economist forecasts compiled by Bloomberg show.

    Crude oil rail shipments are way off track

    Quick mine closures not expected despite gold's fall

    • Gold prices at five-year lows adds more pressure on an already stressed gold mining industry but mine closures are not expected to happen quickly as operators instead try to continue cutting costs, even as industry all-in costs already are expected to fall to an average of ~$1,335/oz. this year, down from nearly $1,700 in 2012.
    • Some significant mine closures could occur over time if gold stays near its current $1,100/oz. – as ~76% of producing gold mines are in the red at that price – but Goldcorp (NYSE:GG) CEO Chuck Jeannes says "I always warn people that [closures] are not going to happen as fast as you think they might because mine general managers are really good at keeping their mines alive."
    • With Newmont Mining (NYSE:NEM) kicking off earnings season for precious metals miners tomorrow, the current five-year compound return for mining equities is the lowest since the early 1980s; analysts are watching for potential dividend cuts at GG, Barrick Gold (NYSE:ABX), Centerra Gold (OTCPK:CAGDF) and Yamana Gold (NYSE:AUY).
    • Plenty of analysts are predicting further declines in gold's price; Goldman Sachs' Jeffrey Currie says the worst is yet to come, and that prices could fall below $1,000 for the first time since 2009.

    BHP(BHP) Fourth-Quarter Iron Ore Output Rises 6%BHP Billiton Ltd., the world’s biggest mining company, said fourth-quarter iron ore output rose 6 percent to beat analysts’ estimates. Production was 60 million metric tons in the three months ended June 30, from 56.6 million tons a year earlier, Melbourne-based BHP said Wednesday in a statement. That compares with the 58.9 million tons median estimate of six analysts surveyed by Bloomberg. Total output will rise 6 percent to 247 million tons fiscal 2016. Total output in the year to June 30 was 233 million tons, it said.

    • FedEx (NYSE:FDXagrees to buy 50 Boeing (NYSE:BA) 767 jet freighters with a list value of $10B to upgrade its fleet, with options for an additional 50 of the twin-engine planes.
    • FDX says its total capital spending for FY 2016 remains at $4.6B, and the impact to 2017 capital spending from the new order is immaterial.
    • With the order, FDX says it now holds a total of 106 firm orders for 767s from Boeing through FY 2023.

    Chipotle(CMG) sales miss

    • Chipotle (NYSE:CMG) management struck a confident tone during today's post-earnings call as the restaurant chain navigates around a few new challenges with sourcing and those gaudy comps from 2014.
    • July sales are comping at a low single-digit rate off of positive traffic.
    • Execs note the company has now lapped most of its 2014 price increases so comp growth is trickier to generate. A recent price hike on steak and barbacoa will help.
    • Labor costs rose 80 bps to 22.6% of sales in Q2 due to some labor disruptions on the operational side. Execs explained targeted menu price increases in markets with minimum wages are a possibility to help offset wage inflation.
    • Chipotle leaned conservative with FY15 guidance by not adding back in a huge benefit from the return of pork (carnitas) to stores.
    • A question on buybacks showed Chipotle isn't above some strategic market timing. "We think the best thing to do is buy in the corrections, " said CFO John Hartung.
    • Previously: Chipotle Mexican Grill beats by $0.01, misses on revenue (July 21)
    • Previously: Chipotle lower as comps cool off (July 21)
    • Chipotle earnings call 

    Deeper back-to-school discounts to hurt teen clothing retailers

    Intuitive Surgical(ISRG) posts 30 pct rise in profitRobotic surgical equipment maker Intuitive Surgical Inc reported a better-than-expected quarterly profit and forecast surgical procedures to grow 11 to 13 percent this year,sending its shares up 13 percent.

    • GoPro (NASDAQ:GPRO) guides on its Q2 CC (webcast) for Q3 revenue of $430M-$445M and EPS of $0.29-$0.32, above a consensus of $401.3M and $0.22.
    • GPRO +1.3% AH to $62.86, after initially trading lower in the wake of the company's Q2 beat.
    • In its earnings slides (.pdf), GoPro states its shipped 1.65M cameras in Q2, +22.7% Q/Q and +92.9% Y/Y. The Americas made up 50.5% of revenue, EMEA 32.7%, and Asia-Pac 16.8%. 47% of revenue was direct, and 53% via distributors. The company ended Q2 with $517M in cash/investments, and no debt.
    • Q2 resultsdetails

    DOJ approves massive AT&T, DirecTV merger

    • On Verizon's (VZ -2.4%) earnings call today, CFO Fran Shammo took the opportunity to play down expectations of a big lift coming from a new iPhone in the fall: "I just don't see that the next iconic device is going to be substantially different and therefore … I don't see the volume there in the fourth quarter that we had last year from a total iconic change of the 6 and the 6 Plus."
    • Mobile TV is coming this summer — but "late summer." Live events (pay-per-view) and highly targeted ads (thanks to AOL) will be the drivers of the service, he said, and it would include a sponsored data model to provide free content as well.
    • The company now sees full-year revenue growth of 3% rather than 4%, as the prevalence of industry discounts is throwing off forecasts, and phone financing is changing the mix: "Edge (the company's no-money-down option) is much higher than we anticipated, but the market has moved us there," says Shammo. "More people are selecting the new price plan when they get a new handset. Generates more equipment revenue and puts more pressure on the service revenue."
    • Meanwhile, some observers thought the mobile price war was cooling, but "Trends this quarter may prove disappointing on that front," says New Street's Jonathan Chaplin.
    • While the company agreed to sell wireline operations in three states to Frontier Communications, Shammo says FiOS divestitures aren't on the way: "The broadband connection to those [Eastern U.S.] homes along with our wireless product and the population of that segment is critical to us and it is a strategic asset for us."
    • Previously: Verizon -2.4% after Q2 revenues miss expectations (Jul. 21 2015)

    Higher costs to attract eyeballs weigh on Yahoo(YHOO) forecast. Yahoo Inc forecast lower-than-expected revenue for the current quarter as it struggles to revive its core online advertising business and spends more to attract users to its websites. Shares of Yahoo were marginally down at $39.34 in after-market trading.

    • Though Yahoo (NASDAQ:YHOO) slightly beat Q2 revenue estimates (while missing on EPS), it has guided in its earnings slides (.pdf) for Q3 revenue (ex-TAC) of $1B-$1.04B, below a $1.07B consensus. Op. income is expected to fall to $50M-$90M from Q3 2014's $156M.
    • Also drawing attention: Traffic acquisition costs (boosted by the Firefox search deal and mobile revenue-sharing) rose to $200M from Q1's $183M and Q2 2014's $44M. TAC is expected to rise to $230M-$270M in Q3.
    • Business performance (ex-TAC): Search revenue -3% Y/Y to $415M. Display revenue +3% to $407M. Other revenue +1% to $221M. Search paid clicks +13%, price per click +4% (offset by TAC growth and lower Microsoft revenue-sharing payments). Display ads sold +9%; price per ad +10% (offset by TAC growth). Americas revenue +5%; EMEA -17%; Asia-Pac -11%.
    • Financials: Non-GAAP operating expenses rose 10% Y/Y to $935M. Yahoo ended Q2 with $7B in cash/investments, and $1.2B in convertible debt. No buybacks occurred.
    • On the CC, CFO Ken Goldman states Yahoo is still figuring out what to do with its Yahoo Japan stake, and has no announcement to make yet.
    • YHOO -1% AH to $39.35. With the lion's share of Yahoo's equity value tied to its Alibaba/Yahoo Japan stakes, the results/guidance haven't yielded a major reaction.
    • Q2 resultsPR
    • Boosted by a recent stock surge, Facebook's (NASDAQ:FB) market capitalization has overtaken that of General Electric.
    • The social network's 26% climb this year has brought its market value to $275B, compared to GE's $273B.
    • Some are expressing concerns. GE racked up $149B in sales last year and employedmore than 300,000 people. Facebook reported $12.5B in sales and employed roughly 9,200.
    • Microsoft (NASDAQ:MSFT) guides on its FQ4 CC for its various reporting segments to collectively see FQ1 revenue of $20.7B-$21.3B, below a $22.8B consensus. The company has been guiding cautiously for several quarters.
    • Forex is expected to have a 5% impact on FQ1 and FQ2 sales growth. Microsoft promises "Windows 10 momentum" will provide a lift during the second half of FY16 (ends June '16), and that Bing (responsible for major losses in past years) will turn profitable during the year. In the wake of the company's latest job cut announcement, FY16 operating expense guidance has been cut to $32.1B-$32.4B. The tax rate is expected to be at 24% (+/- 1%).
    • Ahead of the job cuts and the related narrowing of Microsoft's phone efforts, phone revenue fell 38% Y/Y to $1.23B (feature phone decline), with a negative gross margin. Lumia units rose 10% to 8.4M, but Lumia revenue fell due to a lower ASP.
    • Also: 1) Though revenue fell 5% Y/Y, the unearned revenue balance rose 1% Y/Y to $25.3B, and the contracted but not billed balance rose by ~$500M to $24.5B. 2) Office 365 consumer subs rose by nearly 3M Q/Q to 15.2M; traditional Office consumer revenue fell 42%. 3) Xbox shipments rose 30% to 1.4M. 4) Azure revenue and compute usage rose by triple digits Y/Y, and enterprise mobility management (EMM) software customers rose by nearly 90% to 17K+. 5) FQ4 capex totaled $1.7B.
    • Microsoft is down to $45.38 in AH trading, maintaining the losses seen after the FQ4 report was published.
    • FQ4 resultsdetailsguidance (.ppt), earnings slides (.ppt)
    • Apple beat FQ3 estimates, but reported slightly below-consensus iPhone unit sales of 47.5M. In addition, FQ4 revenue guidance of $49B-$51B was below a $51.1B consensus. iPhone revenue was up 59% Y/Y, while iPad revenue fell 23%.
    • iPhone/iPad chip suppliers are selling off in response. Cirrus Logic (NASDAQ:CRUS)-5.6% AH. Skyworks (NASDAQ:SWKS) -6.8%. Qorvo (NASDAQ:QRVO) -6.4%. Avago (NASDAQ:AVGO) -3.8%. Broadcom (BRCM - merging with Avago) -1.3%.  InvenSense (NYSE:INVN) -4%. NXP (NASDAQ:NXPI) -3.4%.

    2016 presidential candidates are starting to talk about the $18.6 trillion national debt

    As to AAPL – Stop listening to the idiots on TV and the idiots with jobs at magazines and newspapers and other "analysts" and look at the actual numbers:

    This is not an unhealthy company.  AAPL had (and will have) a huge negative impact on currencies.  AAPL is selling to weak regions like China and Europe and just because Tim Cook thinks China sales are great and makes no excuses – maybe he's not a great economist and doesn't see that they would have been a lot greater if China wasn't such a mess.  

    What's really worrying investors is AAPL did not announce that they were buying back more shares.  Why?  For the same reason we're not buying more shares at $130 – they are not cheap!  All this iWatch speculation is idiotic – it's a small fraction of sales and will remain so until it's an independent unit.  Think of it as an iPhone accessory for now…  

    Also, SG&A was up 25%, which is + $700M and R&D was up 25%, which is + $500M – that's another 0.15 per share had they not ramped both up heavily.  I LIKE companies that invest in their own fututre…

  118. "News" without truth. A base that celebrates a clown. Tear the party down and start over — for the country's sake


    Jon Stewart discusses Donald Trump on 'The Daily Show' on July 20, 2015. [YouTube]

  119. The rapper says he's only worth $4.4 million.



    If you need any more proof that Bernie Sanders is being taken seriously as a candidate, look no farther than the scathing piece penned by Kevin Williamson in theNational Review.

    USA TODAY's photo.

    A proposal to divide California into six states has received enough signatures to make the November 2016 ballot. Here's how:


    Here's the Bills in numerical order. In short, the GOP has voted TO NOT SUPPORT THE TROOPS at least 7 times. I think that is sufficient to call the GOP House Hypocrites and Phonies. Bill's …

  120. Didn't 50cent make like 300 million on a beverage company sale a couple years ago? I think he may not be telling the truth here as difficult as that is to believe. 

    AAPL- After dropping to a low of 119.20 immediately after the earnings announcement, they went back up to almost 125 during the night and it is now at around 123. So, my question to Phil (and the gang at PSW) is do we wait to see if the price drops to add to our BCS or do we jump in at the open today in the belief that the price is going right back up when everyone decides this is a buybuybuy? What is the play? Also is the 120/160 BCS still the way to trade this and Phil will you be selling puts at this price or do you want to see if it drops further? I think 119 might have been as low as it will go and wish we could have bought options after hours, but I am usually wrong on this stuff, so perhaps it saved me from losses by not trading options after hours.

  121. Straddle/Den – I think sell the puts into the excitement (Qs look like $112.70, so maybe $1+) and then see if there's a bounce back for the calls.

    AAPL/BDC – Another big factor is AAPL still dominates in the key category of people who have money to spend on Apps.  



    Photo published for Apple headed to $145: Pro

    Apple Inc. – Earnings Surprise | FindTheCompany


    “Apple iPhone Sales, Up 35%, Disappoint Investors” —Wall Street Journal

    AAPL/Batman – Why is it so hard for people to format their positions correctly?  

    Do you have 7 2017 $120/140 bull call spreads at $13?  If so, they are not the sort of things you touch until 2016 except, perhaps, to roll the $120s lower to match your $110/140 spreads (15 @ $17?).

    As to the July whatever 5x.  It looks like a $140/120 bear call spread?  July options expired so that one may be in trouble but maybe you mean the weekly options, in which case you may have a winner but it's a tricky play as AAPL may bounce back.  

    Short 100 July $139 calls at $1.20?  That's a $120,000 short that paid off, so congrats (and I assume that was also some sort of weekly) and next time you ask me about a position I expect it to be in a hotel suite in Vegas you flew me to for the weekend!  

    50 Cent/Craigs – Actually a lot of people get into a trap because they shuffle their assets around to avoid taxes and then the last thing they can do is testify (or mention in any way) that they really have hundreds of millions of Dollars but it's well hidden.  That's why you see all these old celebrities around and you can't imagine how they still have money – it's the result of sound financial planning that was very popular in pre NSA/web days, when rich people would take a lot of trips with briefcases full of money or bearer bonds and stick them in the Caymans, Bermuda, Virgin Islands, Bahamas, Switzerland, Luxembourg, etc in numbered accounts with no names.  There are still ways to do it but it's getting trickier to stay ahead of The Man these days.  Why do you think those are the most popular cruise ship destinations?  Much easier to put a trunkful of money on a cruise ship…

    When I was in St Barts a few years ago, I couldn't believe how many people were there with their financial guys – that's a sure sign that the "vacation" is just a cover for some money transfers.  

    AAPL/Craigs – We came in around $123 so the only thing I was planning to do was sell puts if we get a good price (maybe $10 for the 2017 $100 puts) – otherwise, not very interested in doing anything.  Yes, I still like the $120/160 bull call spread we have in the LTP but I'll roll the $120s to $110s if we can do it for $4.50 or less.  

    Don't forget AAPL (and MSTF and IBM) may be the start of a disappointing earnings season and the Nas may pull back and take AAPL lower with it.  I'm in no hurry to toss cash in based on a single day of a single data-point – that's kind of irresponsible, don't you think? 

  122. Phil- Sometimes as you say often you have to take advantage of knee jerk reactions or excitement over a single announcement. My question was whether Apple earnings was one of those moments. I deduce from your answer that it was not in your mind. It will be interesting to see if the price goes up from here or if there is room for a bigger drop as the entire market corrects as you are expecting. I have been reading rumors of a new Apple TV service to compete with Netflix or a new Iphone coming in the fall. I don't think Apple usually announces that stuff during earnings calls do they? We will see,