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Non-Farm Friday – Is our Economy Working?

Only 37% of NYSE stocks are over their 200-day moving average.  

Usually, that's the kind of statistic you see in a bear market but, miraculously, our masterfully manipulated markets don't need broad participation to make record highs because the Banksters have very good algorithms that tell them exactly which key stocks to buy to give them maximum leverage while putting as little money as possible into any given index.  

You would thing the money men would hate anything with the phrase "Al Gor" in it but algorithms are the unsung heroes of the rally, used to manipulate stocks, options, ETFs, commodities, currencies – you name it and they can make it dance!  They also cause very harsh market swings that we human traders are able to take advantage of and our 5% Rule™ at Philstockworld is designed to detect and predict algorithmic trading patterns so we can bet against them – or go along for the ride – depending on what makes the most sense at any given time.  

It's very profitable, too.  Just yesterday, our long /NG (Natural Gas Futures) trade made over $1,100 per contract as we ran up from $2.26 in the morning to $2.37 in the afternoon.  

This morning, we made the call at $2.26 again and we just got a $300 run back to $2.29 and we can do this over and over and over again because the machines running the program never get tired or running the same pattern.  We can even flip around and short under $2.40 (until it finally breaks) and take those rides down back to $2.26 (until that breaks) and, when our range fails us – we simply wait for the next predictable pattern to form and do it again.  

That's pretty much all there is to Futures trading these days.  While we do pay attention to the overriding Fundamentals that are driving the market (in the case of /NG, we lean bullish because it's getting cold in the winter – duh!), mostly we look for good, predictable patterns in the algos that show up on the charts which we can then take advantage of.  Much as we complain about how the markets are blatantly manipulated – we don't mind so much that we won't make a few bucks playing along!  

Take the major indexes, for example.  Yesterday, as you can see from the WSJ's Market Diary, the NYSE had almost 3 TIMES MORE SELLING than buying volume with 50% more individual stocks falling than advancing but the stocks that did advance carried more weight than the ones that declined and held the index relatively flat for the day – fooling traders into believing things were holding up well – even as 70% of the transactions were sales on the index.  

On the Nasdaq, it's very easy for Fund Managers and Banksters to manipulate the index as they only have to buy 4 or 5 of the key stocks (AAPL (14.6%), MSFT (7.4%), AMZN (3.8%), GOOG (3.5%), FB (3.4%), GILD (3.2%), INTC (3.1%), GOOGL (3%)) and they can make the entire index say anything they want to.  I wrote a similar post a couple of months ago showing how key S&P components are also manipulated to cover the tracks of hedge funds who want to quietly dump shares on the retail suckers they drive in to buy up their unwanted shares.  

Keeping the index headline high FORCES people who automatically buy through 401Ks or IRAs to buy at top dollar – even as the bulk of the shares in the index are being dumped.  Since the Top 1% have the algorithms that manipulate the indexes and ALSO control the algorithms that control the 401K, IRA and ETF buying programs – they literally cannot lose as they move money from their Bottom 99% customers life savings into their own trading accounts – AND THEY CHARGE YOU A FEE FOR THE "SERVICE"!!!  

You can't beat them – so we may as well join them in this game, right?  This morning we have our big data point for the week, Non-Farm Payrolls and we had a great number with 271,00 jobs added in October.  Unemployment is down to 5% and wages are up 2.5% for the year and you would think the markets would be happy but, of course, they are not because Corporations don't like paying people to work there and, even worse, this drastically increases the odds of a Fed rate hike in December.  

Wage inflation is the kind of inflation the Fed really tries to fight (though they never admit it) because the Fed does not work for you or our Government – the Federal Reserve is nothing more than a Banking Cartel that pushes the agenda of the Top 1% in a quasi-Government agency that President Wilson regretted creating almost as soon as it was formed and, in fact, said of his great mistake:

"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men." -Woodrow Wilson, after signing the Federal Reserve into existence

That was in 1919 and, of course, 10 years later the excesses of Capitalism led to the collapse of the Global Economy.  The Fed is still here, however – now a bit more restrained but in no real way changed from it's original mission – to make the banks as rich as possible.  The only difference is that now they try to do it without completely destroying the economy to make their numbers.  

As we expected yesterday, there is STILL no mention in the US media of last night's massive anti-Capitalism protests called the "Million Mask March".  You can see there was quite a riot in the UK but it won't even be on the last page of your morning paper because the people who own the press don't want you to question Capitalism in any way, shape or form and letting you know that some people are upset might give you ideas – they don't want you having any ideas…

Our trading ideas for the day were to short into the weekend.  Good or bad, the jobs numbers were not going to help and the very strong jobs number has popped the Dollar to 99.5, which is pushing down commodities (nice chance to go long on /NG at $2.33 again and gold (/YG) at $1,085 and silver (/SI) at $14.75).  The good report solidifies the Fed hike and, since the markets are all pumped up on a free money high – that's going to be bad news, especially considering earnings have been such a disaster so far this Q:

11-4-2015 5-59-33 PM

Nonetheless, 7 of 10 market sectors are ABOVE the August (pre-crash) highs so no thank you to chasing those.  We are, of course, very happily in CASH!!! and plan to remain mainly in cash into next quarter.  That doesn't stop us from doing a bit of bargain-hunting while we wait and, of course, we have our fun earnings plays, like the one I sent to our Members on Shake Shack (SHAK) yesterday afternoon:

SHACK/StJ – That's a tempting short.  You can sell 5 Nov $52.50 calls for $2.25 ($1,125) and buy 5 March $52.50 ($5.40)/57.50 ($3.70) bull call spreads for $1.70 ($850) and, if they miss, you get $275 + whatever is left on the long spread or, if they pop, you are protected up to over $57.50 with your $275 net credit plus the spread value.  

SHAK did better than we expected and will likely be about $53.50 at the open but we sold the $52.50 calls for $2.25, so anything under $54.75 is a win for us – and we'll see how it plays out.

Have a great weekend, 

- Phil


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  1. Wow, good news is bad news now and traders are scared by a tiny 0.25% rate increase….

  2. Looks like all the stats look pretty good in this report – job numbers, U6 and even hourly rate up 0.4%. Can't ask for a much better report…

  3. Incredible stats…

    Among Republicans, honesty is the exact inverse of popularity. Jeb Bush is the most honest, and he's got the lowest poll numbers among the serious candidates. Donald Trump and Ben Carson are the least honest by quite a bit, and they're also leading the field by quite a bit. Ted Cruz and Marco Rubio are in the middle on both honesty and popularity.

    I especially draw your attention to the last bullet. It's eerie. It's almost as if the Republican electorate wants to be lied to, and the more you lie, the more they like you. I'll hold off on guessing precisely what this means, but it might explain a lot about this year's GOP primary race.

  4. Commodities are getting smoked!  Banks are way up…..

  5. So… the most honest of the bunch registers much lower than "mostly true" or 4 points

    Sounds about right.

  6. Well, dollar is up over 1% so not helping markets or commodities!

  7. Happy unemployed Friday!  :)

  8. Although lumber is up 3% this morning – expecting newly employed people to buy houses soon?

  9. Watching MSNBC this morning a Stanford professor noted a study that teens spend 9 hours/day on media like facebook, etc than they do on sleeping. Many health problems in the future it looks like. Technology has been a + in many ways but comes with a big – also

  10. Dear Janet, quit putzing around, just go ahead and raise rates…now

  11. Maybe wages are just starting to move…

    To get an idea of the broader trend in average hourly earnings, we show the YoY change in AHE for the last 10 years. Total private wages are +2.48%, while production and nonsupervisory earnings are +2.22%.  The former is the best print of the recovery and a notable move above the range that had prevailed since the recovery began.  Production and Nonsupervisory wages are still underperforming, but the spread between the two YoY series moved from 0.32% in July to 0.26% this month, notable progress.

    ESR 3

  12. GC…look at that sell volume….

  13. Good morning!  

    Huge job gains are great for our long-term longs but, in the short run, they put the squeeze on margins heading into Q4.  Q3 earnings are already weaker than Q2, which were weaker than Q1 so when will it end?  I think we'll have that correction (one day) but then we're set up for a proper rally – very happy with our LTP positions and maybe we should press a few.

    Indexes have already reversed initial sell-off and the Dollar seems to have topped out at 99.50 for now (up 1.5%).  Gold is $1,086, silver $14.75 and I like those long, of course.  Copper is $2.25 and you'd think they'd be thrilled (/HG) about more people working – that's a serious long-term sign for economic growth, which is what copper is all about. 

    /NG is down 1.5% so all Dollar-related and I'm looking at /NGJ6 (Jan contracts) now as I'd like to start buying those at $2.425 (yesterday's low) instead of more /NGZ5s.  

    /CL held $44.55 and makes a nice long here ($44.85) but that's assuming they pop $49 so tight stops otherwise.  

    /NKD testing 19,500 and that's a short I love.

  14. Looks like SHAK will actually turn out to be a decent trade…. Hovering around 52 now.

  15. FXI down again this morning as well for those who are still holding the puts. 

  16. Bank stocks up sharply as Pharm said.

    Selected tech stocks also ripping, i.e. SWKS, QRVO, ANET, etc.

  17. /NGJ6 are Aprils, /NGF6 is January

  18. Phil/Rates,

    Since there is a chance of rate increase. Do you think commodities will still go down as the rate is actually increased sending dollar above 100? 



  19. /CL- Phil you said "/CL held $44.55 and makes a nice long here ($44.85) but that's assuming they pop $49 so tight stops otherwise.  " What are you referring to when you say popping $49? Is this a typo and you meant to say popping $46? If not what?

  20. I meant $45 not $46 on that previous post, but still asking.

  21. I'll have to wait a few days to get the BRCM trade

  22. Big Chart – That RUT 1,200 line is going to be tough to cross and NYSE is miles off our Must Hold line at 10,523.  DAX ripped over 11,000 on our jobs report – even though German Factory Orders were weak.  We'll see if they hold it today:

    Honesty/StJ – You can't handle the truth!  

    I don't see how people can be a member of the delusional party without wanting to be lied to – so they are appealing to their base.  

    Lumber/StJ – And our friends at LL!  

    Teens/Jomp – They don't sleep, they are all addicts to social media.  On the one hand, I know I used to stay up until 1am listening to west coast baseball games when I was a kid so I don't get on my daugthers' cases about yacking with their friends unless I see them looking tired but my kids have no sleep genes – I see some of their friends and they look like they just got out of bed in the middle of the afternoon.  

    Wages/StJ – Once you begin hiring 275,000 people a month, you HAVE to raise wages or you won't be hiring the best people you can.  As we finally begin to dry up the labor pool, the competition for quality workers intensifies and the bidding process begins.  Even worse for employers, underpaid employees begin to realize they can leave and get another job and then that's a waste of training.  HR departments are very thin and employee retention isn't something US companies have given much thought to in the past decade – so it's going to be very interesting to see the repercussions.  

    Also, LNKD makes it so much easier for people to network themselves into better jobs without having to be obvious about leaving the one they have now – we've never had that before to this extent.  With LNKD, you simply update your on-line resume and talk to people in your network and find out who's hiring and add the hiring people to your list – it's going to put a lot of pressure on management to hang onto tech-savvy employees (which is starting to be most of them) for less than top Dollar. 

    Oh, that's another thing, the taboo about comparing salaries has very much broken down.  It's just another thing people share now.  

    Gold/Pharm – Just an exact contrary move to the Dollar, though a very disappointing sell-off all month:

    SHAK/StJ – That's why I love those kind of trades.  Whenever you notice a disparity like that, please let us know!  

    FXI/CRS – Yep, very nice!  

    We never got the roll but our Jan $41 puts are back to $3.70. 

    Geez, already the indexes are heading back down.  

    /NG/Edro – OOPS!  Thanks.  Though, oddly, /NGF6 (Jan) is $2.495 and /NGJ6 (April) is $2.46.   I'm going to have to consider the overall strategy on that one as having more time is kind of a good thing but not if we move into backwardation (which this already is).  

    Click for
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Dec'15 2.364 2.393 2.319 2.332 09:48
    Nov 06


    -0.032 38030 2.364 274833 Call Put
    Jan'16 2.539 2.565 2.491 2.503 09:48
    Nov 06


    -0.036 11626 2.539 256511 Call Put
    Feb'16 2.561 2.584 2.513 2.526 09:48
    Nov 06


    -0.036 4710 2.562 65668 Call Put
    Mar'16 2.548 2.571 2.503 2.516 09:48
    Nov 06


    -0.035 4552 2.551 110371 Call Put
    Apr'16 2.495 2.514 2.463 2.474 09:48
    Nov 06


    -0.027 3659 2.501 89026 Call Put
    May'16 2.519 2.537 2.490 2.502 09:48
    Nov 06


    -0.026 821 2.528 37027 Call Put
    Jun'16 2.578 2.578 2.536 2.541 09:48
    Nov 06


    -0.031 447 2.572 27406 Call Put

    Commodities/Pat – Well the rate increase is because of strong jobs which, EVENTUALLY, should lead to actual demand for commodities so I look at this Dollar-related drop as a buying opportunity as currency effects tend to wash out over time. 

    /CL/Craigs – Sorry, meant $45!  

    Wheee on /NKD already!  Those are the kind of obvious calls we should always be ready to pounce on!  


    1,190 again on /TF but dangerous to short with /ES at 2,103 – we'll have to see.  /YM 17,853 and /NQ 4,274 are not that enthusiastic so far.  /NKD 19,360 but now that they're over 19,200, not as good of a short unless they test 19,500.  

  23. Don't mess with Oprah !    WTW up another 20%+.

  24. MNST up 13% you guys must be drinking a lot of this non German beer!

  25. Oprah / Albo – Apparently a much better investor than all these big hedge funds managers. Tripled her money in a couple of months! Take that Icahn and Ackman!

  26. Any one knows why SNH is in the trash can Has been always a good stock around 20 to 22 now trading at 14.50 so much for a good div stock at 10.7%

  27. Phil/GLL

    Back to 110!!


  28. Question on T is it really worth to hold that stock at even a div. of over 5% I have been buying shares since 2010 for 29, 30 and 32. Even played my short calls and put along the way, but surely that stock really goes nowhere. 

  29. CLF showing signs of life today for some reason up 15%!? 

  30. GLD/Phil, can roll the Jan 106-110 BCS to 104/108 for .50 – seems like a good deal

  31. How long can 'they' keep this up?  Those Indexes look held up by string.

  32. WTW/Albo – Must be nice, she's up about $100M in a week. 

    MNST/Yodi – Those are energy drinks.  Helps our kids stay up all night texting.  As you know, Budweiser invented beer – we only drink the best!  blush

    SNH/Yodi – Just down with all the REITs on fears of rate hikes.  That's why I only buy REITs when they are in the toilet – as they all tend to end up there eventually. 

    GLL/Pat – Yep, that's one crazy ride.  

    In the STP, we have 10 GLL Jan $100 puts at $3.25, now $2.70 and I'd love to pay $2.80 to roll them up to the Jan $110 puts at $5.50.  

    In the OOP, let's just add 5 GLL Jan $110 puts at $5.50.

  33. Phil// In the OOP, 5 GLL Jan $110 puts at $5.50 – Buying the puts? Thanks.

  34. GLL/Rookie – Yes, buying them.  GLL is an ultra-short ETF on gold so the puts make money when gold goes up.  

    Also in the STP, we still have 25 short GLD Nov $105.50 calls – let's buy those back and also let's buy back the Jan $110 calls at 0.86.

  35. Phil as a German I take this as a joke!!!

    Budweiser invented beer – we only drink the best!  

  36. Yodi/T, I reviewed my holding on reading your question.  If nothing unexpected happens before Feb. 2016 I estimate I'll clear about 27% on this position over two years.  My position includes stock, covered calls and short puts.   While nothing to get too excited about, it has required very little attention and caused no stress, unlike most everything else I am holding.

  37. Phil,

    I just bought back (closed) the short GLD Nov $114 call from the butterfly portfolio for $0.03.  Would you have done that, or waited for the last 0.03?  At this point I plan to wait to sell another short dated call against that position.

  38. T/Yodi – One of the safest stocks you can own but it doesn't go anywhere.  Still, that's useful too as you can just sell puts and calls constantly while collecting your dividends.  At $32.99, you can sell the 2018 $32 calls for $2.85 and the $30 puts for $3.35 and that's net $26.79/28.40 and you collect your $1.88 dividend (7%) while you wait to see if you get a bonus $5.21 if called away at $32 and, if so, that's $5.21 + $1.88 + $1.88 = $8.97 in two years / $26.79 = 33% or 16.7% and you WORST CASE is owning T at net $28.40 (14% off), where you simply start the cycle again.  

    There's obviously a tremendous value in being able to make 16.7% a year in such a relatively safe manner – especially in a stock that's so liquid in options and equity that you can park over $10M in a position without worrying about making even a ripple in the overall trading.  Whenever I work with ultra-HNW traders, this is a cornerstone holding.  

    CLF/Craigs – Real job growth should be good for a lot of our material stocks.  

    GLD/Jomp – As you can see, I went a bit more aggressive.  

    Indexes/Malsg – Max manipulation today, they are selling to all comers and then popping the indexes to bring more dip-buyers in.  These retailers are trained like Pavlov dogs to buy dips at this point – ideal for people who want to dump large quantities of shares.  

    Joke/Yodi – Come on, we never joke about beer.  Americans are the well-known as the finest beer-makers on Earth.  Germany doesn't even make the top 10 and Snow is just Miller in a Chinese bottle!  

    See, Germany's beer is so tiny it can't even be seen on this map!  

    GLD/Csl – Not the $114s because they are so far away they would certainly (barring a miracle) expire worthless, so why give them even that?  Of course, if you want to re-sell and it's a potential margin issue, then of course it's a good move.  

  39. Mnst drink high in caffeine; actually has killed a few teenagers when it elevates heart rate too high. Forgot they had the "Coke" affiliation. Take a look at ABX the amount of calls are amazing. Buy out?

  40. Sibe  and Phil thanks for your comments you right in one thing there is not much to do than sell cherry calls and receive the div. Just hope it does not end up like WMT  and IBM even that they are very different cattle of fish.

  41. Phil / Housing – I was at a Moody's Economic conference this week and Zandi was very positive on housing, both single family but especially apartment construction.  His reasoning is wage growth will accelerate and help the basement dwelling Millennials move out but debt & down payment issues will have them renting for a while.  Any REITs you like that specialize in this area?  Or builders with apartment exposure?

  42. Quite a reversal in /NG.

  43. Well some people just do not have no taste for a good  beer what ever you my pull up as references!!!!!

  44. Pirate,  which ABX call and strike has the high volume your looking at

  45. And, by the way, Canada should be ashamed of themselves.  Bud is their top beer???  Holy crap, I go to Canada just to buy beer!   The only smart people in the World are the Irish (Guiness) and Nepal, where they realize Tuborg rocks.  I'd love to have a history lesson on how that ended up happening but Tuborg Gold is one of my favorite beers – just funny to see it adopted so far away from home.  Still, seriously Canada… Bud???  

    /NG has resumed it's march ($2.375) - that's a very good sign as the Dollar is still way up and oil is still down:

    This is why we kept a tight stop on /RB:

    WMT & IBM/Yodi – Over the long haul, they are also great stocks to hold onto.  When WMT is now is where they should be.  Where they were ($80+) was silly.  IBM also got ahead of itself but now right where they should be ($140).  We've just been in a silly, over-priced rally for so long that we've fooled ourselves into thinking that stocks should have been back at their all-time highs – even though those all-time highs were clearly BS in 2007 and the whole market collapsed 50% and stayed there as things unraveled.   Now we're back at the all-time highs and nothing to do but wait for the next unraveling. 

    Housing/EmailMike – Apartments are, for sure the new thing.  People simply can't afford homes anymore and, even if they can, the local Governments are taxing them out of them anyway.  EQR, AVB, PPS and MAA are all ones to look at in the apartment REIT space but all have gone up a lot and the dividends are not all that thrilling – though that's partly because the stock price gains have outpaced the dividend growth.  In other words, a very crowded trade.  

    I do like BXP, who have about 500 acres of really good land to build on.  Also, more apartments mean more city-dwellers and that makes their commercial space more valuable.  The timing isn't right yet but back at $110, they are a BUYBUYBUY.  

    /NG/Albo – That was another easy one as it was 100% due to the Dollar that they fell.  

    Beer/Yodi – You can't argue with an info-graphic!  devil

  46. Take a look at ABX 11x 8c & 6-6.5p's. 12x p are high but the  8 calls are huge. Something's going on.

  47. Jobs – good summary here:

    I wonder what it will be after revisions. Aug revision was up, Sept was revised down.

  48. Is there information missing on the T example of making money selling options?  I tried and failed to come up with a way to get the $26.79/28.40  and $5.21

  49. BHP – buy the dip?

  50. Obama making a case for why Keystone is being rejected.  Hard to argue with with oil at $44.44!  Still, he's talking about ZERO fossil fuels in the not too distant future.  Hard to see what they will do with all that leftover oil…

    What a perfect time for some Corporate Puppet to suck up to the energy lobby.  I wonder who will be first?  Oops, we already have a winner – he didn't even wait for Obama to stop talking:

    I think people who spread their thoughts across multiple tweets are very creepy…

    ABX/Pirate – Gold is going to explode at some point, don't know when.  ABX has 100M ounces in proven reserves and you can buy the whole company for $8.2Bn at $7.07 – that's about $82 an ounce for the gold + $12Bn ($120/ounce) to assume the debt but, without the debt – they'd be nice and profitable!  

    Jobs/Scott – No, Sep was revised UP to 149,000 from 118,000.  

    Key Factors

    • Nonfarm payrolls increased by 271,000 ( consensus 181,000). September nonfarm payrolls revised to 137,000 from 142,000. August nonfarm payrolls revised to 153,000 from 136,000.
    • Private sector payrolls increased by 268,000 ( consensus 160,000). September private sector payrolls revised to 149,000 from 118,000. August private sector payrolls revised to 125,000 from 100,000.
    • Unemployment rate was 5.0% ( consensus 5.1%) versus 5.1% in September.
    • The U6 unemployment rate, which accounts for the total unemployed plus persons marginally attached to the labor force and the underemployed, was 9.8% versus 10.0% in September.
    • Persons unemployed for 27 weeks or more accounted for 26.8% of the unemployed versus 26.6% in September.
    • Average hourly earnings increased 0.4% ( consensus 0.2%) after being unchanged in September.
    • Aggregate earnings increased 0.6%, which is a good portent for consumer spending potential.
    • Over the last 12 months, average hourly earnings have risen 2.5% versus 2.3% in September.
    • The average workweek was 34.5 hours ( consensus 34.5) versus 34.5 hours in September.
    • Manufacturing workweek increased 0.1 hours to 40.7 hours.
    • Factory overtime increased 0.1 hours to 3.3 hours.
    • The labor force participation rate was 62.4% versus 62.4% in September.

    Big Picture

    • After plenty of economic releases created doubts about the momentum of the US recovery, including the September employment report, the October employment report will solidify the view that the US economy is holding up just fine amid the stresses of economic slowdowns abroad.
    Category OCT SEP AUG JUL JUN
    Establishment Survey          
    Nonfarm Payrolls 271K 137K 153K 223K 245K
    Goods-Producing 27K -10K -21K 7K -3K
    Construction 31K 12K 8K 5K 1K
    Manufacturing 0K -9K -19K 11K 1K
    Service-Providing 241K 159K 146K 188K 221K
    Retail Trade 44K 6K 4K 29K 36K
    Financial 5K 0K 14K 15K 21K
    Business 78K 33K 35K 40K 68K
    Temporary help 25K 3K 6K -11K 20K
    Education/Health 57K 46K 56K 42K 61K
    Leisure/Hospitality 41K 51K 37K 32K 19K
    Government 3K -12K 28K 28K 27K
    Average Workweek 34.5 34.5 34.6 34.6 34.5
    Production Workweek 33.7 33.6 33.7 33.7 33.7
    Factory Overtime 4.3 4.2 4.3 4.3 4.4
    Aggregate Hours Index 0.3% -0.2% 0.1% 0.5% 0.2%
    Avg Hourly Earnings 0.4% 0.0% 0.4% 0.2% 0.0%
    Household Survey          
    Household Survey          
    Civilian Unemp. Rate 5.0% 5.1% 5.1% 5.3% 5.3%
    Civilian Labor Force 313K -350K -41K 69K -432K
    Civilian Employed 320K -236K 196K 101K -56K
    Civilian Unemployed -7K -114K -237K -33K -375K

    T/Tangled – Nope, nothing missing.  You buy the stock, sell the puts and calls – that's $26.79 and, if assigned another round at $30, the average is $28.40.  You sold the $32 calls so, if called away, $32-$26.79 = $5.21 and the rest is the $1.88 annual dividends.  

    BHP/Scott – Today they had a mine disaster in Brazil, lots of people dead – I'd wait for the dust to settle. 

    AMZN didn't go up today – the world must be ending!  

  51. Phil

     Do we have any positions in RIG in the portfolio?



  52. Doesn't the housing situation remind you of what George Bailey said in "It's a Wonderful Life"? Rich Mr. Potter keeping people poor and paying rent to him. I won't bore you with the whole speech but funny how things stay the same in the USA.

  53. FXE/  I have to start planning my European vacation

  54. Phil, GLL: when we are just buying puts or calls, and there's no spread, should we always use stops?

  55. TWI      boy its cheap

  56. Emerging Markets – Gimme Shelter Upcoming SlideShare Loading in…5 1 Like this presentation? Why not share! Recommended A particular slide catching your eye? Clipping is a handy way to collect important slides you want to go back to later. English…

  57. Nov 6th 2015, 10:51by The Data Team ONE of the countries most seriously affected by this year’s mighty Niño weather phenomenon is Indonesia. By the middle of October more than 20,000 firefighters were battling blazes across its jungles and peatland. More…

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  59. Square announced plans on Friday morning to price its IPO at $11 to $13 a share, meaning an IPO in that range would value the company at much less than the valuation it secured in its last round of private…

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  61. The Wall Street Examiner

    The Treasury will be paying down another huge slug of Treasury bills next week to avoid going over the debt ceiling. In the process, it will continue to draw down the massive cash hoard it built up over the past…

  62. By now it is common knowledge that over the past two years the primary source of stock buying have been corporations themselves (recall Goldman’s admission that “buybacks have been the largest source of overall US equity demand in recent years”)…

  63. Japan Post went public this week and managed to raise $12 billion, making a national mail carrier responsible for this year’s most successful initial public offering. That’s a lot of money at a time when mail is disappearing and the U.S.…

  64. In the OOP, let's just add 5 GLL Jan $110 puts at $5.50.

    Also in the STP, we still have 25 short GLD Nov $105.50 calls – let's buy those back and also let's buy back the Jan $110 calls at 0.86.

    GLD – OOP / Phil – just catching up on your earlier comments/trades. Are you saying to also buy back the "Jan 110 calls" in the OOP and replace them with the "5 GLL Jan $110 puts @ $5.50"? or simply add the GLL to the BCS? thx  PS – GLL trade uses $40k + of Margin!!!

  65. Who do billionaires turn to when they want to buy apartment complexes? The U.S. taxpayer.Barry Sternlicht’s Starwood Capital Group and Stephen Schwarzman’s Blackstone Group LP are in talks with Freddie Mac to finance two transactions totaling more than $10 billion,…

  66. 17862 8 by Elizabeth C. Economy November 4, 2015 A laborer works at a coking plant in Changzhi, north China’s Shanxi province, July 7, 2007. (Stringer/Reuters) It seems like a distant memory now, but just one month ago, the international…

  67. There were two huge developments today, both for the oil industry and the earth’s climate. New York’s top lawyer issued a subpoena to Exxon, seeking information on whether the world’s biggest oil explorer deceived the public for almost 40 years…

  68. Jim Chanos presented at Morgan Stanley’s secretive Miami conference, Lyford Cay, and his idea was to short Chinese internet retailer Alibaba. He also recommended going long its competitor, He cited “accounting concerns” in his Alibaba thesis, according to CNBC’s…

  69. > Companies > Industrials > Aerospace & Defence Register Subscribe Sign in Subscribe You are signed in Home UK World Companies Energy Energy› Mining Oil & Gas Utilities Financials Financials› Banks Insurance Property Financial Services Health Health› Health Care…

  70. At this moment, there are significant investing opportunities in healthcare, Jim Flynn of Deerfield Partners said at the Invest for Kids Conference in Chicago Wednesday. Yet Valeant Pharmaceuticals is not one of them, he emphatically asserted as he outlined a…

  71. It seems like all systems are go. The latest jobs report showed the US economy produced a whopping 271,000 jobs in October, much better than expected. The unemployment rate fell to 5%. The numbers were enough to convince the bond…

  72. wrote some LNKD calls at 260 for next week.  As long as it stays up here, will keep collecting.  Watching AMZN closely.

  73. Republic Airways, one of the largest players in the regional airline business, escaped a bankruptcy filing recently when its 2,100 pilots accepted a new three-year contract. Republic executives call that agreement a cornerstone of their effort to rebuild an airline decimated by…

  74. Craigs/Stockbern – It is Pottersville USA.  and…. Your gonna love the way you look…  George supported Maryjane long before it was chic to do so. Great guy, MW screwed him.

    Phil/Jobs Report – Manufacturing, Goods Producing, Construction, Leisure Hospitality all cratering and the participation rate -0.4%.  A cursory probe of the report finds an increasing work population, decreasing participation rate and 1 million added to the NILF category – they don't count anymore and we don't care.  Hardly good news for the dollar or the zombie economy.

    Was talking with a gent from Malta, intimate to the finance, banking and capital markets.  Long story short, we agreed on all fronts, his recommendation was CASH.  Phil's cashy and cautious is gonna pay off big time with the flexibility to be nimble.  Any investor stuck in the mire.. well, in my best Keith Jackson to describe them when the event horizon hits… He's as nervous as long-tailed cat in a room full of rockin chairs.  

    Next week the Treasury floats a bunch of cash to pay down UST's.  So they are essentially sticking a bunch of cash into primary dealers hands. Increasing the dollar float, that should do wonders for the stock market pump?  TBD.  Watch Gozer the Destroyer aka King Dollar, closely.  Out.

  75. airvine, how can buying $2500 worth of puts on GLL cost $40K in margin?

  76. Futures Now Futures Now Tutorials Blog Videos Jackie DeAngelis Disclaimer Peter Schiff on the Fed Peter Schiff of Euro Pacific Capital on why the Fed won’t raise rates in December or even the following year. The Grinch has nothing on…

  77. DES MOINES (The Borowitz Report)—New reports indicating that Ben Carson might not have actually stabbed anyone during his youth have sent the retired neurosurgeon plummeting in the latest Republican Presidential polls. Carson supporters, reeling from the news that their candidate’s…

  78. Over the last decade, Silicon Valley has become an extraordinary force in politics, but they’ve bewildered the DC establishment with their bizarre loyalties. Tech titans are the arch nemesis of labor unions on a series of fronts, from high-skilled immigration and…

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    To save articles or get newsletters, alerts or recommendations – all free. Don’t have an account yet?Create an account » Subscribed through iTunes and need an account?Learn more » Need to connect your Home Delivery subscription to your…

  80. VICE Media, which started as an alternative to traditional media outlets like TV channels and magazines, is quickly becoming the establishment it once sought to disrupt. The company’s market value has grown over the past year to more than $2.5…

  81. In an election where a billionaire demagogue can vault to first place in the polls by promising to deport millions of immigrants, it’s fair to wonder if the establishment favorite who once proposed a path to citizenship can beat him…

  82. Cdn. BEER / Phil – nobody I know drinks "Buttwiper", it's just that most Cdn's drink their local Craft Brews so they don't singularly add up to a large amount for each brew. Canned Bud is one of the cheaper beers in the Liquor Store therefore bought by, how shall we say this, the NOT 1%!!! CHEERS!!!

  83. Shares of TransCanada, the company behind the Keystone pipeline, are getting crushed. The stock fell by as much as 6% on Friday morning, following news that President Barack Obama was announcing his administration’s opposition to the cross-border-distribution pipeline. Shares were…

  84. by Katie Valentine Posted on March 16, 2015 at 2:07 pm “While We’ve Been Debating Keystone, The U.S. Has Grown Its Pipeline Network By Almost A Quarter” Share: CREDIT: Shutterstock Americans have been waiting for the federal government to come…

  85. A report leaked this past summer says that TSA agents failed to identify bombs and weapons 95 percent of the time, including once when a scanner missed a bomb taped to the middle of an undercover tester’s back. These recent…

  86. Submitted by Arthur Berman via, Only 1 percent of the Bakken Play area is commercial at current oil prices based on my analysis that follows. Only 4 percent of horizontal wells drilled since 2000 meet the EUR (estimated ultimate…

  87. We just had the jobs report of the year, exceeding all estimates in a Bloomberg survey of economists. The blockbuster edition of U.S. nonfarm payrolls left some on Wall Street feeling even more confident that the Federal Reserve’s tightening phase…

  88. tom_nj / margin – Sorry, you're correct! I was simulating the trade and I accidentally had it up as a sell. Thx for catching that! 

  89. In a nearly 30-minute interview on CNN’s “New Day,” Ben Carson repeatedly lashed out at recent inquiries into his violent childhood as “pathetic” and attacked host Alisyn Camerota Friday morning for pushing what he called a “smear campaign.”On Thursday, CNN revealed that it was…

  90. WTW/Phil stock is up 36%today on better than expected earnings.  If you owned this would you take some off the table if you were  up 30% overall? Or would you let Oprah work her magic and see if she could grow earnings even more? I would be inclined to take some off the table bu would love your opinion. 

  91. In Brazil, many captains of finance are unwilling to risk upsetting the government by expressing their concerns publicly about the country’s economic crisis.Don’t put Jose Olympio Pereira in that group.Just seconds into an interview in Sao Paulo last week, the…

  92. Nobel Laureate Paul Krugman doesn’t think the Federal Reserve should raise interest rates in December.  Writing on his blog at The New York Times on Friday, Krugman said that while it looks like the Fed will probably raise rates in…

  93. Economy by Judd Legum Nov 6, 2015 10:48am CREDIT: AP Photo/Charles Dharapak Republican presidential candidate, former Massachusetts Gov. Mitt Romney and his vice presidential running mate, Rep. Paul Ryan, R-Wis., get ready to order as they make an unscheduled stop…

  94. The World Architecture Festival — now in its eighth year — is the world’s largest annual celebration of architectural innovation.  This year, spectacular buildings across 15 separate categories were recognized for their impeccable design and daring originality.  The Festival’s committee also picked 12 winning…

  95. Submitted by Charles Hugh-Smith of OfTwoMinds blog, The ‘crapification’ of jobs is the direct result of the ‘crapification’ of the economy. Two recent articles shed light on the ‘crapification’ of jobs and the rise of income inequality: Martin Wolf on…

  96. Phil   re: silver futures /SI & /YI and gold futures /YG & /GC.  Each have about the price figure for both futures of the same metal.  The big difference is the margin amounts.  (expl: silver $6,600 & $1.100 margins).  I am sure there is much more to making the choice than is obvious to me.  Also, would it be wise to buy while low and hold thru the weekend?  (I bitterly remember holding /SI too long and loosing abt 19k.  Stjean suggested I probably stayed in too long and I'm sure that's right.  I certainly didn't know what I was doing then and I am asking for help now).  thanks   /YI is 14.672 now

  97. ST. LOUISDebate within the U.S. Federal Reserve will quickly turn to the appropriate pace of monetary policy tightening after an initial rate hike, a battle that may be fought in an environment of unexpectedly higher inflation, St. Louis Fed President…

  98. Sometimes you can tell a lot about a company by asking its employees how they feel about the direction of its business. According to new data from career website Glassdoor, these 10 companies are blowing past the competition when it comes to…

  99. There seems to be a disconnect between Americans’ perception of crime rates and the actual amount of crime in the United States. A new Gallup poll showed 70% of respondents believe crime has gone up since last year, when 63% said crime…

  100. Wow, stick a fork in Carson… This guy has to be biggest liar in politics since Nixon! There can only be so much that religion can offset I hope…

    Someone is already having fun with a Ben Carson Wikipedia hash tag:

  101. Did anyone mention the other Ben Carson lie, that he was offered a full scholarship to West Point after meeting with Gen Westmoreland which West Point has denied this ever happened.  I've said on the site before that he really is a sociopath.

  102. Speaking of liars – XOM might need to hire a few more lawyers. Although they probably have plenty on staff now. Big tobacco anyone…

    At its core, the probe is about determining whether the world's biggest oil exporter's own scientific research meshes with what the oil company has publicly said to investors—and the inquiry stretches back decades. The issue hearkens back to Big Tobacco's suppression of data about the health consequences linked to smoking. The legal action, moreover, comes in the wake of a series of reports by The Los Angeles Times alleging that, for decades, Exxon and its worldwide affiliates "were crafting a public policy position that sought to downplay the certainty of global warming."

  103. Naybob – Cashy and Cautious – moving paper positions to paper cash will only allow that paper cash to be invested in other paper positions. In the paper world 'Cashy and Cautious' can be invoked ad infinitum. As you know, the real world works somewhat differently. In the real world, being in cash from September 29th until a few days ago was a friggin' disaster. As mentioned before I was pretty full on invested during that period. I would think that missing out on October's stellar returns was regrettable – it was one of those critical periods when one needed to be invested. Moving to cash at the right time is a touch of genius as long as it is linked to the call to move out of cash and back to a more fully invested position at a specific time. I am happy to hear the bell being run at the top, but I would appreciate at least a nod and a wink when it is safe to let the blind horse out of the stable. Cashy and cautious is a valuable sentiment, it would be a shame if it becomes as devalued as the phrase 'past performance is no guarantee of future returns'. I think we are all intelligent enough on this board to know that being in cash at the ATH's of the market is the place to be and being fully invested at the bottom is no raw deal either. 

    Now that feels better :)

  104. Craigs –  You didn't ask me, and it's JMHO, but I think the latest moves in WTW are more the results of a major short squeeze than excitement over earnings.  Sales and earning peaked in 2012.

  105. BID – Nice move on BID today.

  106. Thanks Albo. Until they announce Oprahs role I would stay away anyway.

  107. Phil / Apartments – Thank you for the ideas I'll look into them.  Agreed it is a very crowded trade right now.  I'm in banking (NJ) and we've been financing several multi-family projects over the past year or so.  A lot of supply coming on line over the next couple of years.

  108. Winston,

    Well said ! The reality of making investment decisions with actual coin of the realm introduces the critical measure of discipline of tangible pleasure and pain (aka profit and loss) that is not present with paper trading.

  109. ACAD….back into the zone.  Sell Jan167 $30 Ps.  Just a few.  Going to wait a little for a BCS, and then we are going to buy into that as well.  June $35/40s are what I am watching.

  110. Hi Phil

    You still like /NKD short at 19500?

  111. Tell it like it is….

    The Federal Reserve has sold all its capital injections into banks at a profit, and made a positive return on its provision of liquidity to the financial system. Across the advanced economies, bailout and support costs will be, at most, 3 percent of gross domestic product. 

    The full economic cost is far bigger. Advanced economies' public debt on average increased by 34 percent of GDP between 2007 and 2014. More important, national incomes and living standards in many countries are 10 percent or more below where they could have been, and are likely to remain there in perpetuity.

  112. Beer:  Slovakia's Zlaty Bazant!!  (Golden Pheasant)

    T:  I've been playing T for awhile now.  Covered calls, short puts.  Collect the cash, dividend reinvest.  Very low maintenance!!

  113. PS on beer.  You will see a lot of the czech beer Pilsner Urquel in Eastern Europe too.  I'm not a fan.  I think it tastes like Iron City.  Blech.  Pilsner Urquel has a following though, you even see it here in Western PA.

  114. Pharm

     (CARA) Cara Therapeutics Inc.

    What do you think of this company?


  115. My mistake on the T trade was assuming the stock was already owned.   Thanks for clearing that up.  Still unclear how 1.88 dividend is 7% but maybe that is a typo?   But my real follow up question is why the choice of closer to the money options.  Going further out increases the odds of keeping all the premium without being called out or assigned and then easy repeat.   But of course less premium.  Is the answer there just deciding how you want to bias the trade?

  116. NN – Keith Jackson wasn't the first. 

    ~~The recording artist and television host Tennessee Ernie Ford (1919-1991) said in 1956, “He was nervous as a long-tailed cat in a roomful of rocking chairs.” The expression is still popular in Texas and other Southern states.

  117. Tang T net cost of stock is 26.79 * 7% = 1.875

  118. RIG/QC – In the LTP, We still have a 2017 13/20 bull call spread that we paid $2.25 for and we sold 2017 $27 puts for $8 and $15 puts for $4.95.  Now that 2018s are out and we're past earnings, I'm going to be inclined to roll the puts to a combined 2018 $17 short puts ($6.60 at the moment) but we'll see where we are in two weeks when it's time to make changes.  

    Rents/Craigs – It's been that way since the Magna Carta.  The nobles sell their land to the peasants at top Dollar and then they create an economic downturn that forces the peasants to sell at the bottom and the nobles buy back the land and create rental income streams that make the land "valuable" again and then, when the time is right – they unload the land at top Dollar again and the cycle repeats.  The Top 0.001% families that do this sort of thing work in generational time-frames – they love the economic cycles and take full advantage.  

    FXE/Stock – I know, too bad I'm already busy Christmas week.  

    GLL/Tom – Well, as a rule of thumb, if you make or lose a quick 20% you should be strongly reconsidering a position.  In the OOP, we have a $100,000 portfolio and it's a $2,500 position so half of a $5,000 allocation block.  We're not going to be too worried about losing $1 ($500) or even $2 ($1,000) and we do feel strongly that Gold will pop back up so I'm not sure I'd be quick to stop out – more likely I'd drop to April and roll up in strike if it went the wrong way.  I'd be pretty shocked if $1,050 on gold doesn't hold – even if the Dollar does hit 100.  

    TWI/Stock – Yeah, that's a tempting one!  

    Of course, if you look at what TYPES of jobs we created – it doesn't look like it's going to help Titan much. 

    GLD/Airvine – No, GLL and GLD are two different things!  We have a GLD $106/110 bull call spread and the $110 calls got cheap, so we are buying them back.  End of discussion on GLD.   GLL is then a brand new trade where we're adding the Jan $110 puts (now $5.60).  And no, the GLL trade can't possibly use ANY margin because we are BUYING the puts.  There is no margin to buy puts.  

    CASH!!!/Naybob – I just can't, in good conscience, get off that stance for now.  

    Bud/Airvine – Sorry, that's no excuse.  It shouldn't even be allowed to be sold, let alone be the top beer.  Also, how they Hell does it beat Molson anyway – they must have gone way downhill.  I suppose the craft thing did chop up the brand preferences but Bud?  That's just embarrassing.  Tell Trudeau, I bet he'll understand and ban them or something.  He doesn't want to show up at the G7 and have Merkel laugh at him because his country drinks Bud…

    WTW/Craigs – If I owned it I'd take the money and RUN!!!  EPS was 0.39, down 42% from last year so let's say Oprah doubles their revenues and they are back to last year – that was $20!  Now they're at $23.  Yes, they MIGHT go higher if all goes well but don't look a gift horse in the mouth.  If you can't stand the thought of missing something, you can still sell the 2018 $12 puts for $4, which is net $8 so, if you can't stand selling at $23 – you should love buying at $8 and, if we keep going higher – that's another $4 in your pocket so net $27 on the exit and, if you want to be greedier than that, you can waste the $4 on the 2017 $20 ($6.50)/30 ($3) bull call spread at $3.50 and then you have another $10 coming to you at $30 and still a net 0.50 credit on the $12 puts.  I'm not endorsing any of that, by the way – I'd just take the cash and find something that's actually cheap.  

    That's a good pair trade – CAKE makes them fat and WTW gets them skinny again!  cheeky

    Futures/Coke – On gold and silver, I think they are at a bottom here so it's not a day trade to me.  This is around where we like to get long on both and, if they go lower – we like them more. 

    Don't play the futures though if you are in any way concerned about margins.  You can just pick up a GLD bull call spread or the GLL puts or and SLW bull call spread – there's no reason to do a high-risk trade with volatile futures if there are any circumstances in which you would be forced to stop out.  Anything can happen over the short run – look at our /NG trade – it was down a ton at first, now moving up nicely.  

    Had we not PLANNED on starting off small and scaling in as we went lower, this trade would have stopped us out ages ago with a loss.  As it is, as planned we have a large position at what we HOPE is the bottom of the range.  

    Carson/StJ – I love the photos.  Notice how quickly he's being unwound – powers that be have decided it's time to flush him.  Trump may be next.  

    XOM/StJ – That's a really big deal and will set a precedent for all the oil companies.  Obama may as well balance the budget with a few hundred Billion in oil fines – it's not like they are supporting the Dems anyway…

    Cash/Winston – You do realize the Dollar has gone up 5% since late Sept, right?  How is that a disaster?  If you always look at the best performing things to see what you are "missing" then cash will always be a problem for you but cash is a perfectly valid position and, frankly, there's not a person in my family who doesn't have 90% cash at the moment and probably none of my friends either – only because people don't like me to cash out the "paper" portfolios completely do we have as many positions as we do but, HOPEFULLY, I manage to make my position clear despite the objections of people who feel it is too burdensome to move to almost all cash.  

    If things do fall apart, they will likely fall hard and fast – especially if the Central Banks lose the ability to talk up the markets.  AFTER there is a nice panic, THEN I want to use CASH!!! to buy cheap stocks but I certainly don't think I'm missing anything because the S&P went from 1,950 to 2,100 (7.6%) this month.  If the rally is real, then 2,100 will be a new floor and we can buy 20 plays like the T play above and make 16% a year or more.  You seem to forget that the S&P was at 2,050 in Jan and has, on the whole, gone nowhere this year and we didn't call for CASH!!! in late Sept, we called for it in late May, at 2,100 and again in July, at 2,100 again so those of us who did get out missed nothing except the gut-wrenching August collapse – and that has value too!  

    BID/John – Well yesterday's sell-off was silly (as I said at the time).  

    Apartments/EmailMike – I think in 5 years the trend will be micro-homes and apartment owners are going to be very screwed over.  Actually, if any builders are going to be in DC next week, I have a very cool idea for a new building venture I'm dying to try.  

    /NKD/Sun – Well, this is the 2nd entry as we were below 19,400 and then stopped out earlier and then over 19,500 again and now riding back down.  

    Fed/Pharm – Very true and all that money has been transferred to the top 0.01%.  

    Beer/Sewright – I'm more of a stout guy.  

    Dividend/Tangled – No it's 7% of your net outlay, not the cost of the stock.  As to choice – I'd rather be safe than sorry.  If called away, there are 9,000 other stocks to pick from (or simply go back in T at higher levels).  If the stock goes down, I'd much rather have a cheaper net cost.  ANYTHING can happen in 2 years and if it's good – then you hit your goals but if it's BAD, then how many years will it take you to recover?  That's the biggest trap investors hit (Winston too in his cash aversion), when you LOSE money, the entire time you spend making it back is wasted.   Getting to cash or taking conservative positions that are less likely to lose can add YEARS of gains to your overall trading performance – but it's very hard to appreciate until you are tracking your performance over 20+ years. 

    So, in almost all cases, I'll go for the conservative long-term position as I'd rather be 85% sure I'll make 16% than 70% sure I'll make 25%.  

  119. Micro homes / Phil – my wife wants to build a village of those things.  She thinks that is a trend as well.  I'd like to see how people deal with living in one after a year or two before I wanted to be that deep in owning a bunch of tiny houses.

  120. There is more more benefit to cash.  You wouldn't have to be around here all day looking for a trade idea.  You could be working at something else , or doing something else that is way more fun.  Phil has to be here because that is his "job"

     Come to think if it, have a nice weekend all, I'm outta here. 

  121. I think in the right place, a village would go very well – near a college or a city where people tend to get entry-level jobs and don't want to over-commit but I've got a much better idea.  If you are in NJ, perhaps we can chat about it but it's not the kind of thing I can post yet.  

    LOL Stock – That's the spirit!  

  122. Phil, margin not a problem or being forced out, except I don't like to loose and jump to quick usually.  My big question was the difference in margin.  I know usually /SI and / GC with the higher margins would be your advice…is it also more profitible or do they move more?  (I'm just guessing the other two are more like grain or livestock futures in the way they are traded….more sporadic maybe or something like that?  I think I am asking a simple question…but, hey, not obvious to me!  ha ha

  123. Dax/Phil.

    Whats your opinion on the DAX up here Phil.Do you see it rejecting the 11000 again?

    Is it worth shorting here?


  124. Village- perhaps already been there, done that. It is called factory built housing (i.e., mobile homes)

    Mostly relegated to the fringes due to restrictive local codes.

  125. CARA/qc – opioid kappa agonist to relieve pain.  It is an IV drug for post operative pain, and data are encouraging.  I could go for them on a small scale.. Option prices are horrid though.


    factory built housing….no pstas…it's called tornado attractants!

  126. S&P 500 EPS as of 11/5 with 89% reporting

  127. I found Dr. Ben and Yellen….

  128. Micro homes – there's an interesting historic street of those near me. Take a look at Devonshire Lane off Mariposa in zip 91001.

  129. Margin/Coke – GC is $5,000 per contract in margin and it's $1 per penny, per contract.  /YG is $1,660 in margin and is 0.322 per penny, per contract so I never understand why anyone would ever play /GC.  

    /SI has a $6,600 margin per contract and is $50 per penny, per contract – very high-risk, which is why I very rarely make a call but below $15 is where I make those calls and that's the ONLY time I play /SI because I think $14.50 is an excellent Fundamental floor.  

    With Gold, I think $1,050 is about the cost floor and that's where I like to take a stand but I'm more inclined to scale into /YG positions than /SI positions as 10 of those contracts has you losing $500 per penny and you'll be joining the Hunt Brothers in obscurity if you have that many contracts and things collapse.  

    DAX/DM – Well 11,000 is our Must Hold Line on the DAX and I don't think it holds.  What do you use to short it?  

    Codes/Pstas – Ah, that's what I brilliantly solve!  

    CARA/Pharm – Very thinly traded but there's activity in Feb for whatever reason and you can sell the $15 puts for $3.20 and buy the $12.50/17.50 bull call spread for less than $2.50 and then you still have a net 0.70 credit on a $5 spread that's $2.50 in the money.  All they have to do is not screw up between now and then and you get paid. 

  130. Another tidbit on the debt article, since we are speaking of microhomes….

    …debt contracts also have adverse consequences: They're likely to be created in excessive quantities. And the more debt an economy assumes, the less stable that economy will be. The dangers of excessive debt creation are magnified by the existence of banks and the predominance of certain kinds of lending. Almost any economics or finance textbook will describe how banks take money from savers and lend it to borrowers, allocating money among investment options. This is dangerously fictitious because banks don't lend out  existing money. They create credit, money and purchasing power that didn't previously exist. And the vast majority of bank lending in advanced economies doesn't support new business investment but funds either increased consumption or the purchase of existing assets, in particular real estate. 

    As a result, unless tightly constrained by public policy, banks make economies unstable. Newly created credit and money increase purchasing power. But if the most desirable land in urban areas is in scarce supply, the result is not new investment but asset price increases, which induces yet more credit demand and yet more credit supply. 

    CARA — data are probably due in that range for a trial, and that is why things are heavily traded in there.  Chart looks like a bear flag, so I would advise to be very small on any investment in them.

  131. Go Markets (MT4)

  132. Codes- you will need a lot of bag men to pull that off.

  133. Phil, thanks, that makes so much sense to me.  I'm glad I asked and thanks for the answer….just might try both gold and silver on small scale with stops below (but not too tight because I want to stay in the game. But, I do have weak knees when I can't watch every minute.  Hope the weekend is good to us!

  134. Rents/apartments- ironic that rents are skyrocketing in two of , arguably, the most "progressive" cities – NY and SF. Of course, as our glorious socialist revolution rolls on, the state will step in. State provided housing has an enviable record in a lot of major cities not to mention the past glories of the Socialist Russia and present day utopian Cuba

  135. Phil and others regarding Tiny homes – have you guys seen the converted shipping container homes? essentially the shipping containers are repurposed and, insulation + wall material is added where needed. And you can easily cut doorways, holes in the sides, attach multiple containers together to increase space, stack containers to add a level, even have on container overhand another to produce a balcony area. 

    I imagine its beneficial as well because containers are of a standarized size that are easy to transport to whatever site you want it on! Not to mention cost effective and reused materials. 

    Plus if the global economy is really getting depressed and we're shippign less goods maybe theyre having a sale on unneeded containers somewhere! 

    I've seen some half-assed ones that look a bit shanty-ish, but ive also seen some with clever design that look really modern and i wouldnt hesitate to live in. If you google shipping container homes you can see the full gamut. 

    Have you guys seen them before, what do you think? 

  136. Phil

    Halliburton Company (HAL)

    Is there a trade on the BHI purchase, maybe a put spread?


  137. I saw a container used as travel camper at the camp ground. All metal sitting on the ground. I'd get claustrophobia..

  138. "They" are doing whatever it takes to get the RUT to 1200!

  139. Rents/Pstas – Actually what's happening in NY is that old rent-control apartment rules are expiring and that's causing the average prices to skyrocket.  Not sure if SF enacted theirs at the same time as NY but in NY, that's what this is all about.  Cities that don't plan to make themselves livable for the people who need to service the cities end up in big trouble – especially when they lack good mass transportation to get workers in from less expensive areas.  

    Containers/CRS – Yep, it shows what lengths people are willing to go to, if nothing else.  Anyway, it's all what you get used to – in many parts of the World, a shipping container would be luxury housing!  

    BHI/QC – From Wednesday:

    BHI/Tangled – Well, since a buyout closes all options, I'd sell the 2018 $50 puts for $7 and buy the 2017 $45 calls for $11.65 (to have a low premium) and sell the 2018 $57.50 calls for $6 and you net a $1.35 credit so your worst case is owning BHI for net $48.65 (5% off) and your upside is $8.85 at $57.50 or higher.  

    Containers/Pirate – Here's a SBUX made out of shipping containers:

  140. Not bad, but I'll bet they are prime to topple in high winds or tornados. Wonder if they are anchored like mobile's, hopefully in cement.

  141.   Sectors down all day, now in the green. Day traders dream.

  142. Rentals/Rexx – If you are going to find a $2,000 rental in NYC, you need to add in the cost of a gun!  

    Well, despite all the excitement, we're finishing the week below Monday's close and way below Tuesday's high.  We were at 2,105 Tuesday morning, now 2,096 so we'll just have to wait and see but at least there wasn't a sharp sell-off this weekend.  

    Have a good one, 

    - Phil

  143. Phil-you definitely don't want to carry in NYC. The cops shoot unarmed people, with a gun your committing suicide.

  144. LOL.  4 stocks caused 20% of the S&P rally from the summer bottom….


  145. Phil - "CASH!!!/Naybob – I just can't, in good conscience, get off that stance for now."

    I could not agree more, and Winston also has a cash "aversion" opinion…

    Glad to hear you feel better now. Some like cash, some like gold, but diamonds… not what you thought?

    Albos – Keith Jackson – Where did I say he was the first?  I just like the way he said it.

    In my best Keith Jackson – there's a whole lotta presumption goin on out there.

  146. F35 shenanigans. My wife (who is Korean) is incensed over the news that, as Canada has turned down the F35 sale, Korea is now being forced to pick up the tab for the planes Canada originally ordered. She saw this on Korean TV news, but I haven't managed to confirm it. Here's a link:

    She's taking this as a problem with Korean stubborness in thinking they can handle international negotiations like this without having native English speaker lawyer consultants, and I think she sees part of the problem, anyway, as what she heard on the news was that the US was citing some law and/or a piece of the contract that allow them to force this down Korea's throat. I'll keep on eye it and see if I see more.

    As royalty, she takes things like this very personally, even though she doesn't run the country and has limited ability to do anything about it (although she did warn the president, but it sounded like her hands were tied). Anyway, that's US arms dealers for you. 

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  155. Phil/Cash – thanks, a great answer. I know I get rather cartesian about these things, but I always like to connect the dots between the various nuggets of wisdom you dispense. 'Cashy and Cautious' also seemed like it was turning into a catchphrase. I was always left wondering "How much cash? and how much caution?" Well you've answered that one – starting the 2015 year with 90% cash and 10% of cautious investments was a very sensible approach, particularly given the market returns experienced since the 2008/2009 financial crisis. Anyone who wanted to ensure that most of those gains were protected, and was willing to take the risk of sacrificing further gains obviously made a good call. Nevertheless, the signal generation machine needs to be working continuously to tell those investors when it is safe to change the ratio (cash to invested positions) to 80/20, 70/30 and so on. For the PSW board I know the recommendation is a default 50/50 stance.

    As for the paper money portfolios on the board, I never really followed them. I thought it placed unfair pressure on your good self to keep a performance record which you would be forced to defend year in year out. It is a useful tool to attract new members and certainly is a great learning tool. However, I have always benefitted from your insights on repairing trades that I have placed and that I can't see a way to exit with limited damage. That 'preventing myself from my own stupidity' use of your time has paid off handsomely.

    However, I did detect from many members comments when you closed out the paper portfolios, that they saw a missed opportunity to learn how to manage a portfolio through 'stormy weather' and how to remain invested and still play the gain. The expectations of valuable lessons in repairing trades. Of course, the wise man says make sure you never have any trades that need repairing – but those wise men never traded options in the markets.

    Having experienced a couple of decades of investing while the markets ebbed and flowed, during good periods and bad – I knew I had to find an approach, recognizing it is akin to finding the Holy Grail, which generated outsize investment returns and protected capital to the greatest extent possible. That was a long search and buying the map cost me a lot of money. There are a lot of places on that map, and I have visited many, but I have never stayed so long in one place as I have at the spot marked PSW. I won't be moving on anytime soon.

  156. Winston, I second that and agree whole heartedly with your conclusion. I've tried many services, this is the only one I've ever renewed. Most were canceled within the trial period.

    Phil, I'm a bit of a gold bug, but I haven't shared your recent bullishness. I was into silver miners after you went to cash in May but sold them (for a nice profit) a while back (10/23, which in hindsight was a pretty good trade) when I saw money flowing out of emerging markets and into the dollar. Could you explain your rationale for precious metals? The two miners I was playing have reached my trigger point (AG under $3 and HL under $2) but I hesitate watching the dollar climb. Do you think that rally is peaking? What other factors are you looking at? I also went into natural gas based solely on your enthusiastic recommendation (I take full responsibility for doing so) and I'm wondering what kind of target (time/price) you have for the trade?

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  190. F35s/Snow – That's some crazy stuff!  Great for LMT, though.

    Cash/Winston – Per your note, I do see a need to somehow reiterate our stance on a regular basis.  I'm not sure if it's clear to people that we are, indeed, keeping a lot of positions more for educational purposes than as something I'd strongly get behind in this kind of market.  While learning to repair trades is certainly important, what I have been trying to stress is the importance of NOT trading sometimes.  As I noted in the 5% Portfolio Review (OOP), we can do great things with cash – we don't need to keep a lot of money in play.  

    Rentals/Mkucs – Yep, it's going to be a big trend.  It's been in Japan for decades and no reason our kids can't adapt as well.  Interestingly, we end up ceding more space to the Top 1%, who spread out, while the bottom 90% learn to live with much less of a footprint so all this really does is add another layer to inequality.  One summer in Tokyo, I stayed at the apartment of the President of Union Carbide in Asia, who had a whole floor of a building to himself and his wife.  When I would invite Japanese people over, they would walk in the door and be amazed at what a big apartment he had – and then I would have to explain they were just in the foyer!  Talking them through the actual apartment blew their minds….

    It's all what you get used to. 

    Miners/Mkucs – As you know, I only like ABX.  GG not so bad, HMY as a junior (but SA is a disaster at the moment) and NAK as a speculative long-shot.  For silver I like SLW.  Companies like AG or HL dilute or borrow to keep themselves afloat while ABX or GG sell off assets.  Not really saying one is better than the other but ABX, for example, sold off 40M ounces of gold reserves for about $8Bn in the past year – that's why I like them, because they have that choice (and still 100M ounces left).  As to nat gas – 1) It gets cold in the Winter, 2) A Gulf Hurricane can send prices flying up 3) We're below the cost of production for probably 1/3 of the wells and 4) LNG export terminals are coming on-line.  I don't know WHEN /NG will finally pop back to $2.50-3 but I have a hard time seeing why it won't happen over the next 4 months.  

    /NKD still a short at 19,500 (now).

    Moving comments on to new post, please.