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Which Way Wednesday – Super Mario to the Rescue?

Up and down we go.

Where we stop, no one seems to know.  Mario Draghi is speaking at 9 am this morning and, now that the Fed has put off their rate increase, the ball is in his court to do SOMETHING to stop the collapse of the European markets.  Not only have the indexes fallen 5% this week (and today bouncing the obligatory weak 1% ahead of Draghi's speech – as we predicted yesterday in "Back to Bouncing"), but the Euro has fallen 2.5% – leaving no escape for any asset class in Europe.  

Former Goldman Sachs Managing Director Draghi is already in the process of giving $1,300,000,000,000 to EU Banksters (including his alumni, of course) and, like Janet, they want more, More, MORE!  It's very possible yesterday's horrific 3% drop in the EU markets was nothing more than an engineered cry for help by the Banksters, giving Draghi the excuse he needs to enrich his friends further without too much public outcry. 

There's really nothing left to do but cry for European Citizens, who have seen Draghi devalue their life's savings by 25% since he took power in November of 2011.  And yet they are "puzzled" as to why there's no inflation when the buying power of every European has been reduced by an average of 6% a year for the last 4 years.  Hey, I know, let's give more money to rich people – that will fix everything! <end sarcasm font>

Somebody actually said to me on Seeking Alpha yesterday: "Trickle down works like this: the rich buy large houses, this puts carpenters to work, then they buy appliances/furniture, which helped to create Home Depot and Lowe's, they have landscapers, house cleaners, nannies, etc. – all created from their wealth."  

After I stopped laughing, I did try to point out that a lot more people are employed building 300 $330,000 homes than a single $100M home but our problem isn't the lone commenter on SA – it's the fact that ALL of our Governments are following this horribly flawed plan to "fix" the Global economy when all they are actually doing is upwardly distributing wealth and income UP to the rich and AWAY from the less rich (the bottom 6.4Bn).  

Another SA commenter said I should stop focusing on politics and inequality and just give people stock picks so the rich readers can get richer and pretend these problems don't exist.  Actually, I think it was the editor…  Anyway, as I noted this weekend, it IS part of my investing premise because the unequal distribution of wealth affects the spending power of the consumers in various classes which then affects the companies that are trying to do business with them – what can be more fundamental than that?

Focusing on inequality and Global politics is what led us to conclude the rally would collapse at just the right time and our paired Long-Term and Short-Term Portfolios are up 60% in this mess – again it's BECAUSE we keep our eye on the macro picture and we knew when to hold 'em and when to fold 'em.  Ignore politics at your peril folks!  

Speaking of politics that are being ignored, we're barreling ahead to another Government shut-down in just 7 days and, as usual, there's barely a mention of a GOP-engineered crisis in the MSM.  Oh, I know, to be "fair and balanced" we can pretend the Democrats are equally at fault but this time there's not even the hint of an issue that the Republican-controlled Congress or Republican-controlled Senate can blame on the Democrats – they are simply trying to wreck the economy ahead of the election so they can blame Obama next November.

Odds are currently running at 75% that our Government will grind to a halt next week as the GOP refuses to back off attaching a bill to defund Planned Parenthood to the Federal Budget.  This is DESPITE the fact that the hoopla that got the ball rolling on this issue has been proven to be FAKE: over and over and over again.  Rather than backing off though, GOP leaders have doubled down on this issue and are willing to hold the country hostage if they don't get their way.  

Do you think this doesn't affect your investments?  Just two years ago, the same GOP leaders closed down the government for nearly three weeks in an effort to defund the Affordable Care Act.  Although they were ultimately unsuccessful in that attempt, the shutdown shaved an estimated $24Bn off our GDP, directly costing every single American worker $250 per family.  How is this fiscal responsibility?  It also shut down our military and made us much less safe – but why bring logic into this, right?  

“I know Democrats have relied on Planned Parenthood as a political ally, but they must be moved by the horrifying images we’ve seen," McConnell said. "Can they not resolve to protect women’s health instead of powerful political friends?”

But the photos were FAKE!!!  McConnell knows they are fake but he said this yesterday, because he's a professional politician and he knows his constituency and he knows the chance of them actually reading a paper or watching anything other than Fox news is not even worth worrying about.  

Mitch's Kentucky is proudly #4 on the list of least-educated states (which is why he has to talk so slowly) but, with the education cutbacks he's proposing, they may be able to bump Mississippi from the #2 spot – even though they can't possibly spell it…

Anyway, once again this is why we are in CASH!!! and just watching this idiocy from the sidelines.  Fortunately, we went to cash at the tippy top of the market and now Harvard has joined us (albeit a bit late) in getting to the sidelines with their $38Bn endowment fund and is actively looking for fund managers with expertise as short-sellers for what they believe will be the bear market norm in 2016.

SPX WEEKLYBack on July 27th, in conjunction with our FREE Live Trading Webinar that week, we posted a FREE post over at Seeking Alpha titled: "Using Stock Futures To Hedge Against Market Correction" where we discussed my Twitter Alert that morning were shorting the Dow Futures (/YM) at 18,000, S&P (/ES) at 2,120 and Nasdaq (/NQ) at 4,675 and, as of this morning, those trade ideas are:

  • Dow Futures at 16,200 (down 10%) – up $9,000 per contract
  • S&P Futures at 1,930 (down 9%) - up $9,500 per contract
  • Nasdaq Futures at 4,267 (down 8.7%) – up $8,160 per contract

These are nice, quick ways to balance out your portfolio with quick protection, anytime day or night so Futures are something I would urge you to add to your trading toolbook, whether you learn it from our educational site or somewhere else.  We didn't like the weak bounce we saw in early September and I published "Hedging for Disaster," where we put up 3 great hedging ideas to protect your portfolio with options (for the Futures-challenged).  

I'm not going to do a victory dance on those just yet – we'll see what kind of bounce Draghi (today) and Yellen (tomorrow night) can engineer and we do have some longs left for balance but, on the whole, we're still very short-term bearish and no way will we get bullish again until the Government manages to go fund itself.  

 


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  1. The spread on the NAS 50 and 200 DMA's was +50 before the open on Monday. At the close yesterday we were less than +40. Unless something dramatic occurs we will have our last death cross late next week. Maybe it will coincide with the government shutdown!


  2. Good Morning===back in Cleveland  ( no comments please)  ;-)


  3. Good article about trickle down from back in June:

    http://qz.com/429487/a-new-imf-study-debunks-trickle-down-economics/

    Raising up the poor appears to have a dramatic effect: A 1% increase in the income share of the bottom quintile results in a 0.38% increase in GDP. Meanwhile, a 1% increase in the income share of the top 20% results in a 0.08% decrease in GDP growth.

    Of course, these are facts so they cannot be used in a discussion!


  4. And a good graphic that shows wealth trickling down to the top 0.01%:

    And look when it started…


  5. No extra QE now.  Draghi speech leaked.  


  6. Good Morning!


  7. With all the hoopla about drug pricing…let's get a few facts out.


  8. Phil,

    And the jack ass far right crap call this guy a muslim….God grant us more education and commonsense!!


  9. wow Il Papa wasted no time re climate change and immigration—what would the far right do now?     oh yes nothing


  10. Good Morning everyone!

    The webinar replay is now up on our YouTube channel here:

    https://youtu.be/gwOXSbBHgzE


  11. Good morning! 

    Obama welcoming the Pope but the anti-Pope spin machine is already starting from the right:

    As Pope Francis prepares to make his first official visit to the United States, Republicans are already up in arms over his message of economic justice and…
    OCCUPYDEMOCRATS.COM
     

     

    For example, Republican Catholic Congressman Rep. Paul Grossar (R-AZ), Tea Party darling (of course) and longtime anti-climate science crusader who once attempted to impeach the EPA Administrator, has boycotted the Pope’s address to Congress. He railed against the Pope’s message in a public complaint, whining that “this climate change talk has adopted all of the socialist talking points, wrapped false science and ideology into ‘climate justice’ and is being presented to guilt people into leftist policies.” He went so far as to declare an open season on the Pope and his progressive ideas: “When the Pope chooses to act and talk like a leftist politician, then he can expect to be treated like one.”

    Behind the scenes, the Koch Brothers, who worship naught but Mammon at the altar of greed, have begun coordinating a public smear campaign against the Pope. The director of the Heartland Institute, a “libertarian” pro-business “think tank” that is funded by the Kochs and works with ALEC to roll back renewable energy initiatives, decried the Pope in a recent speech as a “pagan” and a “communist”: “what is environmentalism but nature worship?” This is coming from the director of a group who compared climate change advocates to Osama Bin Laden and the Unabomber.

    It would be funny if not so sad.  It would be funnier if it were happening in Syria or somewhere where you expect idiocy like this.  The Pope is coming out swinging, talking about injustice and discrimination in his opening remarks.  He learned English just to be able to say this to the people directly.  

    Mr President, together with their fellow citizens, American Catholics are committed to building a society which is truly tolerant and inclusive, to safeguarding the rights of individuals and communities, and to rejecting every form of unjust discrimination.

    Wow, "Climate change is a problem that can no longer be left to future generations" "demands a serious response" Kochs won't like that one bit!  

    Nonetheless the sight of the moral leader of millions praising specific – and vexed – environmental regulations alongside Obama will be an uncomfortable one for many Republicans who had hoped there would be a less explicit political message … especially at a welcoming ceremony that is only a taste of what might be to come when Pope Francis addresses Congress on Thursday.

    "We have defaulted on our promissary note (to our poor) and now is the time to honor it"

    And I bet he's saving the really good stuff for Congress. 

    Nasdaq/Den – Well, we're down from a 100-point gap on 9/1 to 22 points today so 78 points closer in 3 weeks means we are less than 7 days away from a cross if the Nas stays below the 200 dma at 4,900.  Since we're only at 4,750 (and there goes the fake run-up already) and Draghi has already failed us – it's all up to Yellen or tomorrow night or we may have to add more QQQ shorts.

    Cleveland/Savi – No wonder you travel so much!  

    IMF/StJ – Thanks.

    Far right/Savi – Same guy on SA quoted me 

    Why keep comparing the distribution of wealth – for it is only out of jealously and envy. "Give us this day our daily bread"

    To which I replied:

    I have no idea what you think quoting the Bible can possibly accomplish when Jesus told you "It is easier for a camel to pass through the eye of a needle than for a rich man to enter the Kingdom of Heaven." Did you think he was joking?

     

    Luke said: "He has brought down the powerful from their thrones, and lifted up the lowly; he has filled the hungry with good things, and sent the rich away empty. " and "Give to everyone who begs from you; and if anyone takes away your goods, do not ask for them again.”

     

    John said: "“Whoever has two coats must share with anyone who has none; and whoever has food must do likewise.”

     

    And the Boss said: "“Take care! Be on your guard against all kinds of greed; for one’s life does not consist in the abundance of possessions.”

     

    So I hope you're not religious and just use those Bible quotes to bamboozle people because, if you actually read the thing – it's very, VERY against everything you're supporting.

    It drives me nuts when people only selectively read the Bible and pick out a dozen or so words out of context to try to prove their case and then say they are "God-fearing" and religious.

     


  12. Pharm/pricing  The eighties look far more reasonable than today……


  13. Nice net draw in petroleum but a little disappointing after an exciting API report (-3.7Mb last night).

    • EIA Petroleum Inventories:
    • Crude -1.9M barrels vs. -0.7M consensus, -2.1M last week.
    • Gasoline +1.4M barrels vs. +0.45M consensus, +2.8M last week.
    • Distillates -2.1barrels  vs. +1.25M consensus, +3.1M last week.
    • Futures +0.55% to $46.62.

    Should be good to re-test $47, then we'll see. 

    Can't imagine what gasoline is so happy about, tempting short at $1.44 but too dangerous – $1.45 would be a way better line, as would $47.50 on oil.


  14. Yay, they finally invalidated the copyright on Happy Birthday!  No more stupid clapping songs in restaurants… cheeky


  15. 1020….well, the only thing that can really change this is if the NIH and other institutions can patent … of which they are doing now.  BUT, the kickbacks need to be given to the research funds to fund future projects.  Much like big pharma does with profits…. :)


  16. S&P needs to break over 1950 and NYA ove 9950 or down we go again.l


  17. Good Morning –   that Carly Simon song  ' Anticipation ' seems like i feel – waiting for this market ….


  18. "Wow, "Climate change is a problem that can no longer be left to future generations" "demands a serious response" Kochs won't like that one bit!  "

    The Koch Brothers are extra sore this week because they gave $11 million to Scott Walker. Two hours' pay completely wasted!


  19. Dimon is such a jackass:

    http://www.bloombergview.com/articles/2015-09-23/jpmorgan-ceo-dimon-reduces-income-inequality

    Perhaps that's what JPMorgan Chase Chief Executive Officer Jamie Dimon was thinking when he in effect told the poor — Buck up! Things are much better than you realize. Dimon, a billionaire, was speaking at an event in Detroit last week when he noted the positive effects technology was having on inequality, even with wages stagnant for so many workers for so long. “It’s not right to say we’re worse off,'' he said. "If you go back 20 years ago, cars were worse, health was worse, you didn’t live as long, the air was worse. People didn’t have iPhones." [...]

    An easy way to identify a bad argument or investment thesis is to follow Charlie Munger’s exhortation: “Invert! Always invert!” Doing so with Dimon’s logic allows me to offer the following tongue-in-cheek suggestion: A new confiscatory 90 percent income tax on the top 1 percent would be fine because, after all, they would still be left with their iPhones, expensive luxury cars and the Hamptons weekend houses.

    This argument is just as terrible as the one Dimon is making. It is exactly the reason Cambridge economist Joan Robinson wrote: "The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.”



  20. Word of the day to help the people having trouble understanding the pope:

    fact-resistant
    adj. Impervious to reason, counterexamples, or data, especially when they contradict one’s opinions or values.


  21. VW CEO resigns.  

    • Platinum prices slide to six-and-a-half-year lows on the London spot market, as the Volkswagen emissions scandal sparks concerns over European demand for diesel cars.
    • Platinum is used to make autocatalytic converters in diesel engine cars, and the scandal has led investors to rush to jettison some of their holdings.
    • "The growth story, if there was a growth story for diesel cars in the U.S., is dead for now, which is something that takes away some potential upside for platinum demand," says Julius Baer analyst Carsten Menke.

    It's funny how things are connected sometimes…

    • Fitch Ratings places Volkswagen (OTCQX:VLKAY) on a negative credit watch.
    • The ratings agency says the automaker's image and reputation will be "seriously undermined" by the emissions cheating scandal.
    • Fitch notes the financial structure at Volkswagen is sound, adding that it can absorb cash outflows of several billion euros without impacting its credit profile.
    • Shares of Volkswagen turned around today in Frankfurt, up 4.5% at last check.

    Boosting /RB:

    • Exxon Mobil (XOM +0.3%) has decided to abandon short-term repairs to its Torrance, Calif., refinery in favor of a longer-term approach that would bring the plant back to full capacity next February, oil industry analyst Bob van der Valk tells the Los Angeles Times.
    • XOM, still at odds with California air quality regulators over a short-term fix for the company's damaged refinery, appears poised to build a new pollution control system that meets anti-pollution specifications.
    • Since an explosion damaged the refinery last February, XOM has been proposing to use an old pollution control device, one that does not meet state air quality standards, to get the plant operating while it worked on a permanent repair.
    • A short-term fix could have helped lower gasoline prices in southern California to a level more in line with the lower cost in the rest of the U.S.; pump prices in the L.A. area average $3.19/gal vs. the nationwide average $2.28.
    • Activity in China's factory sector fell to the lowest level in over six years. The preliminary Caixin China manufacturing purchasing managers' index dropped to 47.0 in September, compared to the 47.5 reading expected by economists. The index came in at 47.3 in August.
    • The decline was led by a weak read for new orders and new export orders. Several investment firms lowered their estimates on China growth after factoring in the new manufacturing data.

    Eurozone PMI falls to 53.9

    • The Markit Eurozone Manufacturing PMI fell to 53.9 in September to miss the estimate of economists. The read on manufacturing was 40 basis points lower than the 54.3 mark in August, but roughly in line with activity over the last eight months.
    • Service sector growth outpaced manufacturing by a small margin. Growth of new orders hit a five-month high in a positive signal for steady expansion of the eurozone economy.
    • MBA Mortgage Applications
    • Composite Index: +13.9% vs. -7.0% last week.
    • Purchase Index: +9.0% vs. -4.0%.
    • Refinance Index:  +18.0% vs. -9.0%.
    • 30 year mortgage rate unchanged at 4.09%.

    Total to slash capex and operating expenses

    • Total (NYSE:TOT) said it will reduce capex to a range of $20-$21B in 2016 and $17-$19B a year beyond that as it adjusts to lowered expectations for growth. Operating expenses at Total will also be slashed.
    • The actions will help the French oil major cover its dividend, according to CFO Patrick de la Chevardiere.

    Boeing to sell 300 jets to China firms, set up China plant

    • Boeing (NYSE:BA) has signed deals to sell 300 aircraft potentially worth tens of billions of dollars to three Chinese firms, Reuters reports, in the largest order the aerospace firm has received from Chinese companies.
    • China's ICBC Financial Leasing separately confirms it will purchase 30 of Boeing's 737-800 jets, worth $2.88B at list prices.
    • Industry observers also say Boeing will build its first aircraft completion plant outside the U.S. in China, as anticipated.
    • Chinese president Xi Jinping began a U.S. state visit yesterday, and will visit Boeing's Seattle headquarters today.

    Fitch Ratings reels in expectations for Macau

    • Fitch Ratings revises a forecast on 2015 Macau revenue to a 33%-34% decline, lower than its prior view for a 29% drop.
    • The ratings agency weighed in on a number of factors in the region.
    • New properties: Estimates on the impact of added capacity (2015-2016) are taken lower due to lowered expectations on traffic.
    • Operating margins: Macau operators could get a lift as excess labor is shifted to new properties to help leverage some costs.
    • Visa restrictions: The government's decision to loosen rules around visas will provide a positive benefit.
    • 2016: Flat revenue growth in Macau is expected by Fitch next year.
    • Macau casino stocks: Wynn Macau (OTCPK:WYNMFOTCPK:WYNMY), Sands China (OTCPK:SCHYYOTCPK:SCHYF), MGM China (OTCPK:MCHVFOTCPK:MCHVY), Galaxy Entertainment (OTCPK:GXYEF), SJM Holdings (OTCPK:SJMHFOTCPK:SJMHY), Wynn Resorts (NASDAQ:WYNN), MGM Resorts (NYSE:MGM), Las Vegas Sands (NYSE:LVS).

    T-Mobile seeing heavy iPhone demand, pushing $5/month lease

    • A couple of days before iPhone 6s availability, T-Mobile (TMUS +1.4%) CEO John Legere is touting heavy demand for the phone and pushing yet another aggressive promotion.
    • Customer preorders for the iPhone were up more than 30% over last fall, he tweeted.
    • Meanwhile, subscribers of its Jump On Demand upgrade program are getting offers of a leased iPhone 6s for as little as $5/month if customers trade in their iPhone 6 (and $9/month for iPhone 6s Plus), or $10/month if trading an iPhone 5s.
    • Early this month, providers scrambled to sort out iPhone pricing as Apple unveiled its own financing plans to sell phones to subscribers starting at $32/month.
    • Previously: Wells Fargo: T-Mobile, Sprint get edge with new iPhone financing approach(Sep. 10 2015)


  22. China PMI / Phil – I have mentioned it before but how do we square a manufacturing PMI at 47 in China with 7% growth when manufacturing is such a large part of their GDP. It doesn't correlate exactly in a sense that a number below 50 while it denotes a contraction would not necessarily indicate a recession. But not a 7% growth. I don't see how that could work! Europe PMI is a 53 and they can't grow faster than 1.5%!


  23. I saw this today, re: Volkswager:  "….at the end of any cycle there are patterns of behavior and market responses that are, to an extent, timeless. We are reminded of John Kenneth Gailbraith’s classic passage from the Great Crash 1929, and feel something of a shudder:  – 'At any given time there exists an inventory of undiscovered embezzlement in—or more precisely not in—the country’s business and banks. This inventory—it should perhaps be called the bezzle—amounts at any moment to many millions of dollars. It also varies in size with the business cycle. In good times people are relaxed, trusting, and money is plentiful. But even though money is plentiful, there are always many people who need more. Under these circumstances the rate of embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly. In depression all this is reversed. Money is watched with a narrow, suspicious eye. The man who handles it is assumed to be dishonest until he proves himself otherwise. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks." 


  24. Phil,

    I emailed your Teaneck admin the REAL GDP jpeg file.

    Based on above kibitizing, you should like Nimby's, Flippers and What Would Jesus Do?  and

    The Fed, QE and What Would Jesus Do? and this…

    In case you did not know, by way of logic, I am a Bitheistic Apostolic Deistic Atheistic Secular Sabellianist or B.A.D.A.S.S.  Our brand of Agnostic Atheism or AA (trademarked and patented) is the purest and therefore the one and only true atheism. Everyone has to believe to something, and we do not believe in anything other than having another drink. We do not smoke for enjoyment, we smoke to show our strength and proclaim our faith. Our nihilism views all other forms and practitioners of atheism and religion as blasphemous hedonistic infidel scum.  Intolerance of idiocy is our credo, CSI: Can't Stand Idiots our motto. A constant search for Truth and Atheism or quest for T&A our lifelong passion. But enough about this house of non worship…

    I will refer to a documented historical event.I do not present this event in a religious light; or in any manner other than for the purpose of demonstrating the effect that the "money shufflers" have.

    The money shufflers in the Temple Market of Jerusalem profited greatly from the exchange rates that they charged worshipers for shekels to pay the priests, and then from the priests to convert it back into Roman money. In effect, they were "double ending" every deal; and they also profited exorbitantly from 300% loans that they made.

    It was the sight of this Temple "Market" that triggered the only recorded incident in the lifetime of Jesus Christ in which, he reacted in a violent manner toward anyone.

    He overturned the tables of the money changers and the seats of those who sold pigeons; and He would not allow any one to carry anything through the Temple. And He taught, and said to them, "Is it not written, 'My house shall be called a house of prayer for all the nations'? But you have made it a den of robbers." (Mark 11:15-17)

    The Fed has made the "free market" a den of robbers. And maybe, within Christ's reaction lies a solution to our problem.


  25. Phil / IBM - 

    Long sold '17 130 puts @ 6.2 – now down.  Time to DD or Roll here?  Or possibly go to a BCS?

    Approaching a  low in Channel, although i think they have a long time to go to right the ship…

    Thoughts please


  26. Phil / IBM – on the above – i ask because the option is down about 70%, whoever the stock has not dropped by the 40% you advocate to get more aggressive on a position.


  27. China/StJ – There's no other logical conclusion but that the GDP numbers are fudged.  It's so hard to say what the truth is over there but the bottom line, the BOTTOM line is that companies doing business with China are seeing sales contract and Chinese companies are seeing sales contract and, unless China has some magical trade with another planet that we don't know about – that means their GDP is contracting, not growing and God help us all if that discrepancy is ever resolved.  

    Undiscovered embezzlement/ZZ – Great point.  Like the sub-prime fiasco – it's all fun and games until they get caught and then all those fake profits come off the balance sheet and suddenly you realize the p/e of the S&P 500 is double what you thought it was, which means you are getting half the value you thought you were and the market bubble collapses 50% to make up the gap.  It's never the same thing twice – it was dot.com in 2,000 and then sub-prime in 2007 and now it's companies spending all their cash and going into debt for buybacks to make earnings look better but their balance sheets now suck by comparison, which means when we do hit a downturn – they won't be able to ride it out and companies will start blowing up right and left.  

    That's a pretty strong correlation so this time better be different because the Shiller P/E Ratio is now 24.57, which is 15% higher than Jan 2013 and 40% higher than Jan 2009 (15) – now THAT was a dip we liked buying!  

    Real GDP/Naybob – Wow, after all that it's not a very exciting chart!  

    As to JC and the Banksters – it did not end well for him, or Kennedy, or Lincoln when they tried to take on the Banking Sector:

    Same as it ever was:

    IBM/Batman – IBM is at $142.78 and the short 2017 $130 puts are $11.  DD is rough with IBM at $14,278 per contract if assigned – depends how rich you are and how much you REALLY want to own IBM for net $123.80.  As a roll, the 2018 $110 puts are $8 so roll to those and you're still net $3.20 and you drop the 1x basis to net $106.80 if assigned, which is another 20% down from here so I'd keep an eye on that and do it if I had to but keep in mind the end game is owing IBM cheap.  If that's not what you REALLY want – then best to take a relatively small loss now and not tie up the margin.  

    As I keep saying with short puts – you are PLANNING to buy the stock cheaply. If you aren't ready, willing AND able to do so, then you can easily be forced to capitulate on a relatively small dip along the way.  In any 12-month period, any stock can go up or down 20% for no particular reason.  It makes no sense to sell puts you are going to stop out of (assuming the fundamentals don't change on the stock) as you turn a play that wins 80% of the time into a crap shoot. 

    Wheeeee on oil!  That was fun:

    Now we can start contemplating a long tomorrow.  /RB rejected too – as expected.  

    See, this stuff is not complicated folks.  


  28. One quarter of Americans who are registered Democrats or lean that way say Vice President Joe Biden is now their top choice for president. The findings of a national Bloomberg Politics poll released Wednesday represent a notable achievement for an as-yet undeclared candidate, suggest concerns about candidacy, and raise the prospect of a competitive three-way race for the Democratic presidential nomination. 


  29. Bill Gross said the Federal Reserve needs to raise interest rates as soon as possible, trading some near-term market losses for longer-term stability and a healthier financial system.


  30. In a 2007 purchase of medicines from Merck KGaA, drugmaker Mylan picked up a decades-old product, the EpiPen auto injector for food allergy and bee-sting emergencies. Management first thought to divest the aging device, which logged only $200 million in revenue. Then Heather Bresch, now Mylan’s chief executive officer, hit on the idea of using old-fashioned marketing in part to boost sales among concerned parents of children with allergies. That started EpiPen, which delivers about $1 worth of the hormone epinephrine, on a run that’s resulted in its becoming a $1 billion-a-year product that clobbers its rivals and provides about 40 percent of Mylan’s operating profits, says researcher ABR|Healthco. EpiPen margins were 55 percent in 2014, up from 9 percent in 2008, ABR|Healthco estimates.


  31. Across eastern Texas, parts of Louisiana and Mississippi the land went from moist to parched in a matter of weeks.


  32. Pope Francis plunged straight into the politically charged debate on climate change, using a celebratory welcome of pomp and bunting at the White House to declare support for President Barack Obama’s drive to cut fossil-fuel emissions.


  33. Mario Draghi said it’s too soon to say whether risks to the economic outlook warrant a step-up in the European Central Bank’s stimulus.


  34. Yogi Berra, the New York Yankees catcher who played in more World Series games than anyone and was enshrined in American pop culture for his homespun philosophy — “It ain’t over ’til it’s over” — and the head-scratching way he expressed it, has died. He was 90.


  35. The fingerprint records of about 5.6 million current and former federal workers, contractors and job applicants were stolen in the breach of the U.S. Office of Personnel Management’s computer system, up from an initial estimate of 1.1 million, the agency said Wednesday.


  36. Add Mario Draghi to the list of central bankers confusing the global financial markets.


  37. A private Chinese manufacturing gauge fell to the lowest in 6 1/2 years, underscoring challenges facing the economy as its old growth engines splutter.


  38. it appears that your 'Talk like a Pirate Day' is turning into  'Party Like a Pirate Week'… 


  39. Total SA scaled back the expansion strategy it pursued during the past decade of high oil prices, announcing a fresh round of investment cutbacks and project delays while reducing production targets.


  40. The dollar is overvalued and is unlikely to extend gains versus the euro and yen unless the Federal Reserve raises interest rates more than once, according to , which oversees about $1 trillion.


  41. The looming of a U.S. government shutdown threatens more than the normal functioning of federal agencies. It imperils everything the Republicans have been trying to accomplish since winning control of both houses of Congress last November. 


  42. In the 1980s, economist Robert Shiller shocked the world of academic finance with for which he would eventually win a Nobel Prize. He discovered that stock market returns are predictable. 


  43. Volkswagen AG’s crisis deepened, with Fitch announcing a possible ratings cut and an institutional investor reducing its holdings as investigations mount over revelations the German carmaker rigged diesel engines to pass U.S. pollution tests.


  44. Will Texas Senator Ted Cruz be the Grinch that stole the weekend again?


  45. “@FoxNews has been treating me very unfairly & I have therefore decided that I won’t be doing any more Fox shows for the foreseeable future,” Donald Trump writes in Twitter post.


  46. Among thousands of waving, cheering people lining Pope Francis’s route from the White House, the smallest celebrants drew the pontiff’s dearest attention.


  47. Total SA plans to invest $500 million a year in renewable energy, a step by Europe’s second-largest oil and gas company to expand in biofuels and solar.


  48. Investment bankers hoping for an imminent wave of mining consolidation will be disappointed by the guidance coming out of one of the gold industry’s biggest conferences this week.


  49. Remember the good old days of plus 8 percent growth in China?


  50. Lingering summer heat and a weather phenomenon that’s raising expectations of a mild winter have put natural gas bears in control of the market for the first time heading into the peak heating season.


  51. South Africa’s central bank kept its benchmark interest rate unchanged as lower oil prices gave it room to support an economy weighed down by power cuts and falling metal prices.


  52. Volkswagen agonistesIt is an ill wind indeed that blows no one good.  Looking around, I find the Toyota Motor ADR.  Worth a punt?


  53. Zero – Anyone not exposed to diesel might benefit from that. They seem to be looking at other manufacturers here in Europe now…


  54. I wonder what the stink is all about. I do have here a Chevy Captiva, you can switch to ECO drive possible less emission or normal more stink. Could be the Germans did not explain this to well, this would be my excuse.


  55. ARR/Phil – That's rrright, more easy money is like treasure to the REITs, who have already gone way down in anticipation of a hike:

    TM/ZZ – I like them as a long-term play but they were just $7 lower a month ago so I'm not sure that this ($117) is a firm enough floor to play off of.  

    When the 2018s come out on TM, I'd be willing to consider selling the $90 puts (2017 $90 puts are $4).

    F is back at $13.65 but also were lower just a month ago but I do think $13 is a fair floor and you can sell 2017 $13 puts for $1.60 and net in at $11.40 but also, better to wait for 2018. 

    Switching/Yodi – LOL, you should be the spokesman!  What a mess this thing is causing…

    And our indexes are struggling back to even.  Europe closed a bit green except for Spain (down 0.79%) with DAX at 9,612 – for what it's worth.

    Wow, CNBC is basically planning for the Government Shutdown already – listing all the reports that we won't be able to get and services that go off-line right away.  

    ARR/Phil – That's rrright, more easy money is like treasure to the REITs, who have already gone way down in anticipation of a hike:

    TM/ZZ – I like them as a long-term play but they were just $7 lower a month ago so I'm not sure that this ($117) is a firm enough floor to play off of.  

    When the 2018s come out on TM, I'd be willing to consider selling the $90 puts (2017 $90 puts are $4).

    F is back at $13.65 but also were lower just a month ago but I do think $13 is a fair floor and you can sell 2017 $13 puts for $1.60 and net in at $11.40 but also, better to wait for 2018. 

    Switching/Yodi – LOL, you should be the spokesman!  What a mess this thing is causing…

    And our indexes are struggling back to even.  Europe closed a bit green except for Spain (down 0.79%) with DAX at 9,612 – for what it's worth.

    PIMCO says 16-day shutdown only about 0.1% of GDP.   Last time is was Oct 1-16 of 2013 and it wasn't a very big deal market-wise (in fact, a good time to bottom-fish):

    So anticipation is worse than the actual event and a big celebration when it's all fixed. 


  56. Phil,

    Do you think its too late for ARR? I missed the original trade   Thx   


  57. ARR/Sun – Well at $21, if you sell the April $20 puts for $2 and the April $21 calls for $1 you net in for $17/18.50, which is lower than the low (so far) and they pay you 0.33 in Oct, Nov, Dec, Jan, Feb, March and April is $2.31, which is another 13.5% in 7 months while you wait to see if you get called away with another $4 (24%) gain.  If not out with +37.5% (5% per month), then you net into 2x at $16.19, which is 23% below the current price so yep, I still like it as a new trade!  

    Meanwhile, how shameful is it that BHI is at $54 when HAL is at $37.32?  The offer for BHI is 1.12 shares of HAL ($41.79 at current price) + $19 in cash is over $60, not $54 and that's with both companies down in the dumps at the moment.

    Baker Hughes

    The company agreed almost a year ago to the friendly merger with fellow oil-field giant Halliburton in a deal worth an astounding $34.6 billion. The tie-up between the two oil-field giants raised big questions about whether the takeover could survive antitrust scrutiny, given the level of consolidation that it promises within the oil production services business. Created in 1987 with the merger of Baker International and the Hughes Tool company, the company created innovative products like a rotary bit for drilling wells through rock.

    The long wait to get the deal done with Halliburton may be starting to grind on some, but the merger agreement does allow the two companies to extend the deal into 2016. The UBS team still thinks that there is a 90% chance the deal is completed, and while Halliburton has maintained it will close this year, they see a 2016 close more likely. They also think that additional assets could be sold by the company in an even greater effort to get approval.

    Baker Hughes investors are paid a 1.2% dividend. The UBS price target for the stock is $70. The Thomson/First Call consensus price target is $73.50. The stock closed Wednesday at $55.66.

    If the deal closes, we get paid early and the 2018 options are out and you can sell the $55 puts for $10, though they may be tough to fill (as anyone paying you $10 for those is nuts!).  If not, the 2017 $50 puts are selling for $5.50 and that's plenty of cash to buy the 2017 $45 calls ($11.35) and sell the 2017 $60 calls for $5 and that nets just 0.85 on the $15 spread that's $9 in the money to get you started. 

    • That one is so good that I want to sell 3 of the BHI 2017 $50 puts in the Options Opportunity Portfolio for $1,500.
    • Then we will buy 5 of the 2017 $45 calls for $5,675
    • Then we will sell 5 of the 2017 $60 calls for $2,500 

    That's net $1,675 and the 5 spreads will pay $7,500, which is a nice $5,825 profit (347%) if all goes well. Hopefully the deal will close this year or Q1 but TOS says just $2K net margin, so it's a very efficient trade.


  58. CCJ – as low as it gets.. and going lower?


  59. Great…. Thanks….


  60. SUNE is vexing me. I'm not holding much right now (cash!) but I did hold SUNE


  61. Phil

    BHI  the 2017 45C are 11.50/15.20   the 47C are 10.05/13.80 your above quote looks like the 47's


  62. In the LTP, we have BHI and I want to roll our 2017 $50 calls ($10.35) to the $45 calls ($13.27) because it's just a free $2 ($4,000) if BHI is called away on us.  Our short puts are the $55s and I'm comfortable with those and our short calls are the $70s, which are higher than they need to be but I'll be damned if I'd pay $2.59 to buy them back!  We could roll them down to the $60s ($5) and pay for the roll down but there is a chance we net out at $65 and then we'd be wasting $10,000 in gains just to avoid spending $6,000 now which we'll almost certainly get back anyway.  

    CCJ/Scott – Damn, and we were doing so well but I still like them:

    Why uranium prices are poised to rebound

    In our 5% Portfolio, let's buy back the 10 CCJ Dec $14 calls (0.35) to clear the deck and we can roll our March $11 calls ($2.10) to the 2017 $10 calls ($3.30) for net $1.20 and we'll get that money back by rolling our Jan $12 puts (0.95) to the 2017 $13 puts ($2.75) so we'll put net 0.25 ($250) in our pocket for all these adjustments.  


  63. Any opinion on BEN (Franklin Resources) ?


  64. SUNE/BDC – Rising rates not good for them as well as tighter environmental issues and consumers using less power against regulated rates.  

    BHI/Doro – I'd rather pay the extra $1,000 ($6,650) for the 5 long $45s at $13.30 than the $47s, which do look like $11.35 at the moment.


  65. Phil BHI Jan 18 is out and I set for 45/57.5 BCS  6.73 and sell the Jan18 put for 5.80


  66. RJET meeting with the government mediators and union… worth a poke here?


  67. BEN//Pstas – We played them back in the crash when they were crazy cheap at $15 but then they popped over $50 and I totally lost interest.  Even $37.50 is hard for me to swallow after having them for so much less but I guess they've grown into the price with $2.4Bn in profit on $8.5Bn in sales against a $23Bn market cap (p/e <10).  That's way too cheap for a nice, steady grower but it doesn't mean they can't get cheaper – keep that in mind.  

    That is one ugly chart but we can't argue with their strategy – because it's our strategy too:

    Franklin Income Fund doubles down on soured energy bets

    Rumors are they are over-extended and, if not true, they'll pop back to $45 over time so no need to risk a put sale so early and I'd just start with a 2018 $30 ($10.75)/40 ($5.20) bull call spread at $5.55 and be happy to make 80% in two years if they jump up and, if not, THEN you can sell $25 puts (now $1.65) for $5 (the price of the $35 puts) and spend that to roll the $30s to the $20s (now $18.80).  On the whole, though, I'd be patient and see if they hold $37.50 because, if not, it's all on sale anyway.  

    BHI/Yodi – Let me know when that fills – I'm wondering if any of those offers are real.  


  68. RJET/Mkucs – We already have 10 of the Feb $2.50/4 bull call spreads in the OOP that we paid net 0.45 for back on 9/2.  Looks like about 0.40 now and I still like it.  

    Dribbling into the close all red but the Nas, which is barely flat.  Yet another day we could have skipped except for those inventory trades, which made the day worthwhile.  


  69. BHI they put up the BCS from my offer of 6.80 to 7.57 So I wait and see


  70. Thx, Phil .

    Was considering the same spread. Will watch for now. Good solid company looks cheap to me but you are right, may get cheaper. 

    Assembling a shopping list. 


  71. /CL- Phil, since we went from near the top of our trading range all the way to the bottom in the span of a couple of hours today, it seems like it might be a good time to ask your opinion again on oil. So, with the build in oil, even though disappointing compared to API, and the signs of production slowing I am thinking that 44.50 is a great spot to go long, but demand and China are seemingly worrisome, so do you think we stay in our range and bounce from here or are we going to test $40 now in your opinion? The signs are a bit conflicted and I gam guessing to will really depend on how things go in China now. So another question is where do you get real time charts on China?


  72. FLR/Phil – would you put these guys on a new entry watch list?


  73. SWFT – interesting.. looks like some 'player' sold 15,000 Nov $23 puts on 3/31 when stock was around $26 for about $1.71 per contract. . then sold another 11,000 on 6/16 with stock at ~$23 for about 1.98 per contract.  Covered with 25,750 Nov $22 puts on 7/9 with stock just failing $23 for about 1.75 per contact, locking in about $250,000 gain worst case.  Looks like worst case will be the case with stock now at $17.25.  Nice way to cover your losses..!


  74. Brokers / I know the majority of folks here use TOS.  Anyone trade with TradeStation?  


  75. I use tradestation and a Canadian version of tos but permissions for various options trading much easier to get for tradestation.

    tom


  76. When TOTE Inc., a shipper that operates between the U.S. and the Caribbean, launched its latest container ship last month, the 760-foot craft carried a certain distinction: It’s only the second of the massive vessels worldwide fueled by liquefied natural gas.


  77. Add diesel to the commodities flooding global markets from China.


  78. Phil,

    Mornin to ya…another BADASS day…and what would Jesus do? HA!!!

    4AM EST Thu Sept 24th

    Hang Seng -0.83%

    Shanghai +0.86%

    Nikkei -2.76%

    CAC -0.56%

    FTSE/DAX level too early

    SP500 Futures open 1932 - low 1930 – high 1939 – current 1937

    DXY 96.25 -0.16% but trade weighted its knocking the crap out of everything else

    1.11 vs Euro 120 vs Yen

    UST 10yr yield 2.155 +0.51%

    Brent 47.99 +0.23%

    All at 4:10AM EST

    See ya!


  79. The haze from Indonesian forest fires pushed Singapore’s air quality closer to the “hazardous” range, covering the city-state with a layer of smog as the government warned of a worsening condition over the public holiday.


  80. SoftBank Group Corp. dropped to the lowest in two years as the market values of its biggest U.S. holdings, Alibaba Group Holding Ltd. and Sprint Corp., plunged.


  81. Sharp Corp. will miss its first-half profit forecast and is poised to lower its target for the full year as rising competition among suppliers of liquid-crystal displays pushes down prices, a person familiar with the matter said. Its shares fell the most in more than four months.


  82. Phil,

    SP500 futures spiked from 4AM – 4:15 1933 to 1944.5


  83. Xi Jinping may govern one-fifth of humanity, yet when the Chinese President arrives in Washington he risks being upstaged by the leader of another billion-strong flock: Pope Francis.


  84. Cheating reflects badly, first and foremost, on the cheater — and so it is with Volkswagen, whose of U.S. emissions tests continues to exact a price in , and . At the same time, it’s not unreasonable to ask how the cheating happened in the first place, and that question implicates more than just Volkswagen.


  85. Brazil is experiencing a repeat of the kind of emerging-market that many hoped it had left behind in the 1980s and early 2000s. If unchecked by a circuit breaker, this self-sustaining cycle could gather further momentum, exposing the country to economic shocks that would hit the poor particularly hard and add to the political dysfunction.


  86. Norway’s central bank cut interest rates to an all-time low and said it may reduce rates further as it seeks to rescue an expansion in western Europe’s biggest petroleum producer amid a plunge in oil prices.


  87. Pope Francis will preach to a less-than-harmonious congregation when he faces a U.S. Congress riven by disputes over issues closest to his heart: income inequality, immigration and climate change.


  88. Carly Fiorina’s challenge to Hillary Clinton and President Obama is itself being challenged. 


  89. Hokkaido Electric Power Co., a power utility serving the northernmost of Japan’s four main islands, said it has no definite plans on when it can resume operations at its Tomari nuclear power plant, delaying a restart it had originally planned for later this year.


  90. Alibaba Group Holding Ltd. will set its main health care and movie businesses in Beijing, designating China’s capital its second headquarters to speed up an expansion into the country’s less-affluent north.


  91. European stocks declined as investors considered global growth prospects before a speech by Federal Reserve Chair Janet Yellen that may further clarify the central bank’s thinking on a U.S. rate increase this year.


  92. Hennes & Mauritz AB, Europe’s second-biggest clothing retailer, reported stagnant third-quarter profit as the strength of the dollar raised garment costs and drove the gross margin to the lowest in 11 years.


  93. India’s rupee headed for its biggest weekly decline in a month as local stocks retreated amid concern over Asia’s growth outlook and as the Federal Reserve kept investors guessing as to when it will raise interest rates.


  94. Australia’s  record-low interest rates are having limited impact on firms’ investment decisions and unemployment will remain stable until economic growth accelerates “significantly,” central bank official Alexandra Heath said.


  95. China’s top prosecutor pledged to speed up the pursuit of criminal cases related to a $5 trillion stock market rout, after a surge in the number of prosecutions for financial crimes during the first half of the year.


  96. Denying women full participation in the global economy is costly. McKinsey & Co. has now calculated by just how much.


  97. IBM’s Watson will be a “huge engine” for the business going forward, according to John Kelly, the company’s senior vice president for solutions portfolio and research.


  98. The yuan rose the most in a week as the central bank’s daily fixing spurred speculation that it wants the currency to be stable during President  Xi Jinping’s first state visit to the U.S.


  99. Taiwan’s dollar forwards slumped to a six-year low as policy makers weighed whether to cut interest rates at a quarterly meeting.


  100. Copper will slump as the U.S. Federal Reserve starts to raise interest rates, demand growth stalls in China and stockpiles surge, according to Goldman Sachs Group Inc., which stood by a year-end forecast that signals the biggest annual drop since the global financial crisis.


  101. Chinese companies’ yuan notes are starting to look too expensive. That’s the assessment from money manager First State Cinda Fund Management Co., who says credit spreads aren’t sufficient to cover risks.


  102. China’s central bank stepped up cash injections as a benchmark money-market rate climbed the most in seven weeks in the run-up to a weeklong holiday.


  103. Further losses by Chinese stocks are limited after leveraged traders cut $218 billion of positions, according to HSBC Holdings Plc.


  104. The  won declined for a fourth day as global funds pulled money from local stocks amid concern that a deepening slowdown in China, South Korea’s biggest export market, will hurt the economy.


  105. Five-year Treasury notes are near the most expensive level in 18 months relative to two- and 10-year securities as investors pared back their bets for the Federal Reserve’s first interest rate increase since 2006 amid low inflation.






  106. Good morning!  

    Things are all over the place today.  Now rumors BMW may have issues with their diesel engines.  Somebody dropped a $40Bn damage estimate on VW too!  

    We're gyrating around with Europe.  There was an initial pop as Norway dropped rates but then people realized that the reason they are dropping rates is that the EU economy is in big trouble.  

    You can see the stick save in Shanghai – otherwise they'd be red too.  It's all such nonsense now with manipulation getting to frenzy levels.  Banksters and Governments are freaking out and all these plates they are spinning are getting wobbly for sure. 

    Oil came right to $44.50, which is where we talked about going long in the Webinar but already back to almost $45 but you can still play over $45 with tight stops.  /RB $1.385 is also a line that can CAREFULLY be played bullish with tight stops because it is Thursday and early in the contract cycle (so easier to manipulate). Still, it's all going to hit the fan this month as they have 800,000 open contracts and Dec is already stuffed.

    Click for
    Chart
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Nov'15 44.62 45.13 44.54 44.97 06:09
    Sep 24


    -

    0.49 29452 44.48 453476 Call Put
    Dec'15 45.23 45.74 45.16 45.56 06:09
    Sep 24


    -

    0.46 3841 45.10 254190 Call Put
    Jan'16 45.99 46.44 45.99 46.29 06:09
    Sep 24


    -

    0.47 1009 45.82 110935 Call Put
    Feb'16 46.78 47.02 46.78 46.92 06:09
    Sep 24


    -

    0.38 268 46.54 76146 Call Put
    Mar'16 47.38 47.74 47.38 47.70 06:09
    Sep 24


    -

    0.49 303 47.21 98542 Call Put
    Apr'16 47.97 48.11 47.97 48.11 06:09
    Sep 24


    -

    0.35 140 47.76 33814 Call Put
    May'16 48.44 48.44 48.44 48.44 06:09
    Sep 24


    -

    0.24 153 48.20 25175 Call Put
    Jun'16 48.63 49.05 48.63 48.88 06:09
    Sep 24


    -

    0.32 337 48.56 108443 Call Put

     

    You put aside about $8,000 for the margin on the contract and control $40,000 in oil and figure your worst case is $20 for a $20,000 loss (where you can DD and roll) but your best case could be $100 for a $60,000 gain – that's pretty good risk/reward and you can even buy 5 longs and sell 1 front month because you're well-covered and, if you get blown out to the upside, you end up with 4 naked longs at a higher price – so still all good.  

    If I buy 5 for $40K in margin and I sell one front-month any time I'm worried abotu a downturn, I'll pick up $500 here and there along the way to cover my tied up margin and if oil is at $80 in 2019, when my current car lease runs out – I'll be getting a convertible Bentley with the profits!  

    Oil/Craigs – It's just what we expected to happen on Tuesday afternoon (1:00 in the Webinar).  

    I said we'd sell off into the 2:35 close as the contract dumped out (check) and I said we'd then pop back into inventories (check) which would be disappointing (check) and lead to a drop (check) which we could then go long on into the weekend (that's where we are now).  $44.50 has been good support and, if that failed, then a quick stop and try again at $44, etc.  It's nothing different than we've been doing.  At 1:04 in the webinar I said we want to go long at $44.50 into Thursday - that doesn't change because my targets are FUNDAMENTAL – not technical.  I don't change my mind unless the facts change.  

    Keep in mind you're still playing with fire because we're probably going to have a big sell-off unless OPEC steps in within two weeks but, if they do step in, you can get your face ripped off if you're short.  

    FLR/Scott – They're going to be down with the commodities for a while.  Revenues are in steady decline and, if they hadn't spent $1Bn (half their cash) buying back their own stock (15% this year), they would not be looking pretty at all. They just missed Q2 and lowered guidance so I assume this is one of those stocks where you're looking at a chart and assuming what goes down must come up???  They will earn $4 a share, which doesn't suck at $41.70 but they might only earn $3 next year because last year they earned $5 and things are getting worse, not better, in that sector.  

    SWFT/Scott – Much nicer, steadier play but will still trade down with the market.  No compelling reason to get in but good value down here.  

    Woops, now we're selling off in the Futures. 

    TradeStation/JJ – They have really good stuff in their platform but I haven't traded with them.  We have a rep with them (Mike Anton) – I can dig up his number if you want.  

    I like you Naybob – you're like me, too exciting to sleep in with all these things going on.  

    StJ up and at 'em too (but of course it's lunch for him).   Hope you're enjoying France!  

    Big Chart – Strong Bounce lines failing, weak bounce lines now being tested – easy summary:

    • Dow 16,200 (weak) and 16,650 (strong) 
    • S&P 1,900 (weak) and 1,950 (strong) 
    • Nasdaq 4,550 (weak) and 4,700 (strong)
    • NYSE 10,050 (weak) and 10,300 (strong)
    • Russell 1,130 (weak) and 1,160 (strong). 

    So far, we've only lost the Dow since Tuesday morning.  Watch the Nas, giving up 4,700 will be a bad sign and then RUT should go red at 1,130 and then S&P at 1,900 and then we're in real trouble (but Yellen can still save us tonight).  


  107. Phil- I wish I had been able to listen to the entire webinar, but was interrupted by my son, I was with you all the way until the inventory came out. I misread that as not disappointing when there was still a draw of some significance. So, I didn't see the price dropping all the way from 47 to 44.50 and I went long too early because of that draw of almost 2 million barrels which triggered a rally last week on nearly the same number with worse builds on the other products . Anyway I thank you for your answer and now know that I will hang in long for now into the weekend and then be careful about playing this while looking for a potential drop but keeping OPEC in mind. When is OPEC scheduled to meet again? Do we have a date when they could potentially rip our faces off on a short? Also with China having a weeklong holiday will that affect our markets or will we just shift negative focus elsewhere? Thanks for all the info Phil


  108. Phil I should add that I didn't see your post inventory comments in chat, which would have saved me from going long too early, until after I had made my foolish long bet at 45.50 thinking it was going to bounce from there as it dropped from 47. Like I said, I read the inventory as bullish enough to keep it from dropping all the way to 44.50. As it kept dropping I could hear you in my head telling me to have waited for the right price in our trading range, so you don't have to repeat your admonishments as I have spent the night kicking myself for being impatient after what had been a good few days because I had been patiently waiting for the right entries. Oh well, now I just have to get back to being patient about it again. Just out of curiosity do you have a call for where you think prices could go today or tomorrow on the long side? In other words where would you stop out on the current long bet?


  109. Phil you made a comment about a trade right after talking about oil that you didn't identify what exactly you are trading here. What contract are you referring to here? I must have missed something that indicated exactly what it is. Can you repeat what contract you are suggesting?

    You put aside about $8,000 for the margin on the contract and control $40,000 in oil and figure your worst case is $20 for a $20,000 loss (where you can DD and roll) but your best case could be $100 for a $60,000 gain – that's pretty good risk/reward and you can even buy 5 longs and sell 1 front month because you're well-covered and, if you get blown out to the upside, you end up with 4 naked longs at a higher price – so still all good.  

    If I buy 5 for $40K in margin and I sell one front-month any time I'm worried abotu a downturn, I'll pick up $500 here and there along the way to cover my tied up margin and if oil is at $80 in 2019, when my current car lease runs out – I'll be getting a convertible Bentley with the profits!  


  110. OPEC/Craigs – I don't think they meet until Nov but they could put out statements any time.  They're not the Fed – the whole point of the organization is to manipulate markets.  Wait, maybe they are the Fed… surprise

    So you went long in the part of the range I said not to play into the part of the range where we like to go short and you were "surprised" it went against you?  Really?  Which of these lines is the confusing one?  

    I made this chart specially for you and I put it up like 5 different times since then – also for you and I'm really running out of ways to tell you that you don't go long above $45 and you don't go short below $45 and you just wait PATIENTLY (pacientemente, patiemment, pazientemente – are any of these words familiar to you) for a high-probability trade near the top (where you go short) or bottom (where you go long) of the channel.  Otherwise – YOU DON'T PLAY.  If you are playing in the middle you are GAMBLING – not investing.  You are flipping a coin on a totally random event and just as likely to lose as win and, unless you have INCREDIBLE cash management skills, the laws of statistics coupled with your finite amount of money means you will eventually have a streak of bad luck that will wipe you out.  

    And it's much, much worse than that if you trade DESPITE knowing that you have incomplete info: "I wish I had been able to listen to the entire webinar, but was interrupted by my son, I was with you all the way until the inventory came out."  An INVESTOR takes a situation like that and says "I don't know with 90% certainty what's going to happen – so I won't play" only a gambler makes a bet anyway (and I don't mean a cool gambler, I mean the guys you see at the track every day, wearing the same clothes). 

    Admonishments/Craigs – Oops, too late.  Clearly that voice in your head is nowhere near loud enough.  As to stopping out, I'll say again, NO CONVICTION HERE but $44.50 is a high-percentage play for a bounce into the weekend but, at $44.45, I'd get out and see if $44 holds or get back in over $44.50 with another $50 stop-loss.  If I make $100-200, I'd be thrilled and GET BACK TO CASH – because I have NO CONVICTION to go long at $45 – NONE.  

    Oil contract – oops, they didn't print – I meant these:

    Feb'19

    -

    -

    -

    38.85 * 17:36
    Sep 23

    -

    -

    -

    56.59 4 Call Put
    Mar'19

    -

    -

    -

    39.28 * 17:36
    Sep 23

    -

    -

    -

    56.71 454 Call Put

    Last trades under $40 yesterday – that's what I'd like for a long. 

    Don't forget though, if oil goes down to $20 then instead of a Bentley I'll be getting a Prius (because I would have bought an $90K Range Rover anyway, so I'll save $65K of the $100K I lose on a bad bet and we won't take a cruise that year and I'll stay at the Rio instead of Nobu in Vegas – things like that until I recoup my loss) - but that's the only effect the bet would have on my life.  Another important aspect of not being a gambler is having a realistic idea of how the risks you are taking will affect your future and NOT doing anything that can compromise your long-term investing goals!  


  111. It's called protocols, Albo, we respect the culture of visiting dignitaries.  But sure, let your Corporate Masters work you up into a frenzy over something inconsequential to further the anti-Obama narrative – you're a good little Conservative soldier…  

    OMG – You are right though, he's definitely some kind of Muslim terrorist:


  112. Because, you know…. if you bow, you lose.  Forget the 240-year history of your country and it's historic relations, forget your military might and your economic power – it all comes down to how you tilt your head when you meet someone!   I mean, wow, can Conservatives be more shallow and superficial to even THINK this is a thing?  


  113. Good stuff ! ! !   You are unbelievably quick ! ! ! :-)

    Got me again !


  114. That's some funny sh*t Phil…. :)