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Thursday Fervor – Draghi Catches the Markets as they Fall

SPX DAILY"Help me now I'm calling you

Catch me now I'm falling

I'm in your hands, it's up to you

Catch me now I'm falling
." – Kinks   

We told you we would be DOOMED!!! back on the 11th if the Russell were to fail 1,050.  That was 5% ago and we expected the S&P to follow to 1,890 (10% off 2,100) and we've overshot that to the downside, all the way to our major support line at 1,850 on the S&P 500, which lines up with:

  • 15,840 on the Dow (-10%)
  • 4,000 on the Nasdaq (Must Hold)
  • 9,350 on the NYSE (-15%)
  • 960 on the Russell (-20%)
  • 15,750 on the Nikkei (-25%)
  • 9,350 on the DAX (-15%)

So the Nasdaq and the S&P are the only major indexes not to have gone negative (so far) but both are on the edge and, if they fail to hold their Must Hold lines – there's no reason to think they aren't going to join their brother indexes in stock market Hell.  So, let's not cry about it but rather come up with some hedges that will pay BIG MONEY IFF that happens.

The S&P's ultra ETF (SDS) moves up twice as fast as the index moves down and is currently sitting at $24.  If we assume just another 5% drop in the S&P, that's a 10% pop in SDS to $26.50 and our worry window is short, so a trade we can protect ourselves with is:

  • Buy 50 SDS March $24 calls for $1.70 ($8,500) 
  • Sell 50 SDS March $27 calls for $1 ($5,000) 
  • Sell 3 AAPL 2018 $80 puts for $10 ($3,000) 

That net's just $500 in cash on $15,000 worth of spreads and you do have an obligation to buy 300 shares of Apple (AAPL) at $80 ($24,000) if it drops another 17% so you need to REALLY want to own AAPL if the market tanks but, of course, you'd also have your $14,500 gain on the spread to offset that purchase.  Ideally, AAPL never goes that low and you have free protection.

You can substitute any stock you REALLY want to own for AAPL or just take the net $3,500 spread as the upside at $27 is still $11,500, which is a nice 328% return on your insurance cash!

The other ultra-hedge we like is the Nasdaq's 3x Ultra-Short (SQQQ) and that's sitting at the $25 mark so would pop 15% to $28.75 if the Nasdaq falls another 5%.  It should be noted that we do NOT expect this to happen and we think 4,000 with hold and AAPL will go higher (which is why we like it for the offset) but – if we're wrong – this is where we'll feel the most pain.

  • Buy 20 March $20 calls for $5.50 ($11,000) 
  • Sell 20 March $25 calls for $3.90 ($7,800) 
  • Sell 3 BHI 2018 $40 puts for $9.50 ($2,850)

Here we have a $10,000 spread that is CURRENTLY IN THE MONEY and can only lose if the Nasdaq goes higher (which presumably would be a relief for your other positions).  The net cash outlay here is just $350 so net $9,650 profit (2,757%) if the Nasdaq is mean enough not to recover by March 18th (expiration day).  Keep in mind this is INSURANCE – we expect to lose this money if the markets go higher! 

I chose Baker Hughes (BHI) because we think oil has bottomed at $27.50 (see yesterday's post) and we think the buyout from Haliburton (HAL) will go through at $50+ for BHI.  If, however, it does not go through, HAL owes BHI a breakup fee of $3.5 BILLION – that would be 20% of BHI's $17Bn market cap or two years worth of earnings – making them attractive, even at $40 (now underpriced at $38.88).  There's a good article on the subject by Ari Papadatos over at Seeking Alpha if you are interested.  

Speaking of articles – I was interviewed by Forbes this week and we laid out our bullish play on oil, which we discussed in yesterday's Live Trading Webinar as well as some general investing tips.

Keep in mind that we are BULLISH on the market at these levels (the same drops we predicted 2 weeks ago) and now we're looking for at least a 2% bounce but it will take a 4% bounce before we get really bullish.  For now, we're just expecting a nice bottom where we can do a little fishing from our Buy List (Members Only) and, if our lines don't hold – we will be ready to slap on protective plays like the ones above to help buffer our long positions against the next leg down.

Hopefully Mario Draghi and the ECB will be able to save us this morning but, if not – it pays to be prepared!  

8:30 Update:  Draghi is doing his job and talking the markets higher – we'll see what sticks but, so far, no need for these hedges though we'll still be looking to add some protection on the way up since we have been adding longs that need some protecting, regardless of the bounce we're getting today. 

Unfortunately, Draghi's words will weaken the Euro and strengthen the Dollar (back to test 100), which will put a bit of early pressure on stocks and commodities but, if we can overcome that and make at least a 1% gain today (2% preferable), then we MIGHT not need those hedges!  


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  1. /si to 14. Hi ho silver!

  2. Having to add more line to the NYSE!

  3. Austerity hitting ISIS as well:

    On account of the exceptional circumstances the Islamic State is facing, it has been decided to reduce the salaries that are paid to all mujahideen by half, and it is not allowed for anyone to be exempted from this decision, whatever his position.

    Oil prices are doing damage everywhere… I wonder if they use ADP for their payroll. Recruitment will be harder.

  4. Good morning! 

    Barely holding green during Draghi conference.  We may need those hedges but Dollar at 99.75 and up 0.6% so we can afford to cut things a LITTLE slack into the bell.

    ISIS/StJ – I hear they're cutting down to 36 virgins but they have only themselves to blame for oversupplying martyrs in a low-virgin market…  cheeky

  5. Good China article from Martin Wolf:

    The reality is that the Chinese economy is not becoming consumption-led. Indeed, given the low share of households in GDP, it cannot be consumption-led. It continues to be heavily dependent on debt-financed investment. The authorities face a dilemma: either continue to drive wasteful growth or push through radical reforms that might be destabilising in the short term but fruitful in the long term.

    Whatever the rhetoric, the path chosen so far is the former, but that is also likely to be one of disappointing growth, soaring debt and even a financial shock. Chinese policymakers are unlikely to regain their reputations soon.

  6. Good Morning!

  7. Phil –  Is the /DX spike the reason for the /SI knife down?  

    Also, I'll admit, I know crap about econ and the dollar.  But when /DX hits 99.50 – 99.75, doesn't it look like a great place to go short /DX?  

  8. One good reason not to retire in a high-rise building:

    But among patients that were on the first or second floor of their house, townhouse, or apartment building at the time of their cardiac arrest—which accounted for about three-quarters of the 7,842 cases—about 4.2 percent survived. While those on or above the third floor had only a 2.6 percent survival rate.

    When the researchers looked at apartment-dwellers alone—2,363 cases—they saw a larger gap. Of the first or second-floor apartment-dwellers, 5.2 percent survived. On the third floor and above, survival slipped to 2.7 percent.

    Above the 16th floor, survival rate plummeted to 0.9 percent. And of the 30 cases of cardiac arrest above the 25th floor, there were no survivors.

  9. ISIS / Phil – Are you suggesting the long virgin / short ISIS pair trade?

  10. stjeanluc: "Having to add more line to the NYSE!"  

    You're gonna need a bigger chart.  :)

  11. Phil – "I think, proving this out (20 years later) we should take another run at my original idea, which was to use old tankers as floats with a similar piston system and generate power as the tidal forces lift and drop the 100,000 ton ship. "

    What OPTT has is very interesting. Check your email.

  12. Consumption led/StJ – Same problem in this country!  Did you see the article from yesterday?  

    It’s easy to assume that workers earning less than $15 is a small subset of the workforce. But, in fact, 42% of all workers in the United States fit this bill. Just over half of all African Americans earn less than $15 an hour, and nearly 60% of Latinos make that hourly sum.

    The results of NELP’s report—that nearly half of all U.S. workers are making less than $15—”challenge us to think about the future of this country,” says Irene Tung, a senior policy researcher for NELP. Many of the jobs that pay $15 or less are not going away; they’re not going to be outsourced, Tung says. “So either we figure out how to raise wages—a cornerstone to rebuilding the middle class—or continue on the path that we’re heading down, where those workers are impoverished.”

    Dollar/Burr – I imagine so – also lack of fear with Draghi once again promising to backstop things so maybe back to $13.75.  And yes, I think 100 is toppy on the Dollar but such a dangerous trade I never play it.  

    LOL StJ!  Hey, my daughter's turning 16 – it's long virgin or else!  

    Bigger Chart/Tom – too true.  

    OPTT/Naybob – It's been 20 years but I'll talk to them.  Need a bit more than what you provided, of course.  Meanwhile, if it's the tanker idea you like – we shouldn't go to them because that's mine! 

  13. TASR making an early charge.

  14. Good Morning Everyone!

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

  15. I'm getting out of /RB here at 1.035 before EIA at 10.30.  In at 1.0012

    I'm have 1 /SI at 13.97.  I'll add another at 13.70.

  16. 16 / Phil – Long sleepless nights then…

  17. peter marrin @PeterMarrin

    .@EIAgov reports smaller-than-expected 178-Bcf #natgas storage withdrawal for week ended Jan. 15; #NYMEX February drops to $2.111/MMBtu

  18. EIA not until 11 today.

    Burr be careful with futures. I had great success for 8 months last year and got carried away playing too much too often. Have been struggling since July to get back to what made me succesful after getting into over trading which Phil kept warning me not to do. Just a little reality from one who went there after seeing you looking at every futures trade you can find.

  19. FU SCO!!!!

    Could oil ever be up for the day???

  20. NatGas came out at 10.30.  11am for the rest.

    Only really trading /SI and /RB now.  But doing lots and lots of paper trading, practicing my avg'ing down, and using the trading platforms to the max.  

    I have paper positions on /CL, /HG, /DX, and the SDS hedge.  Putting in my 10000 hours.

  21. TASR/GC – A long way to go.

    7:33 am TASER details recent large orders received, including those from Baltimore and Omaha

    Taser debuts updated consumer stun gun

    Only /NG inventory at 10:30, oil at 11.  Healthy draw in /NG but not enough to keep bulls happy:

    Sleepless/StJ – Don't even get me started!  

    Good advice, Craigs!  

    SCO/Jabob – That's why we didn't go short at $140!  

    Almost oil time.  

  22. SCO – We did say last week that it could go to $250… and almost got there yesterday. 

  23. Phil / AAPL – looking to adjust the following Positions on AAPL:

    60X Jan  '18 100 Calls ( avg cost 22.4)           

    10X '18 130 Calls (6.9)

    15X '18 135 Calls (7.7)

    10X '18 140 Calls (8.9)

    I also have 20X Jan '18 95 Calls ( 18.5) naked

    I was thinking of covering some of the 100 Calls w/ 2017 June or Jan 115 Calls, and the buying back the 35 short Calls and selling the 2018 125 Calls.  Would like your view on this.

    On the 95 Calls i was looking at covering these w/ '18 125 calls at about 8

    Thanks for your help on this.

    • EIA Petroleum Inventories:
    • Crude +4.0M barrels vs. +2.9M consensus, +0.2M last week.
    • Gasoline +4.6M barrels vs. +1.5M consensus, +8.4M last week.
    • Distillates -1M barrels vs. -0.5M consensus, +6.1M last week.
    • Futures +0.07% to $28.37

    Not good but doesn't matter, what matters is what holds up.





  24. Weird, no reaction.  /RB up.  /CL unch

  25. Phil, where would you take a /NG poke, and on which contract?

    /NGH6 (Mar) or /NGJ6 (Apr)

  26. die SCO!!!!

  27. Phil,

    Curious: oil inven rise above expectations and last week… and oil drops !! Any rational explanation in an seemoingly irrational mkt? Thx for your thoughts

  28. Phil,

    Typo. Sorry meant to type … and oil pr goes up!!!

  29. Reaction/Burr – It was in-line with API expectations.  

    /NG/Burr – On a cross over $2.20 is the only line I'm good with at the moment (/NGJ6) which is about $2.15 on /NG:

    So far – it hasn't been good for much of a pop though.  We have snow this week in northeast and then back to warming so not a solid play anymore until we get back on track with exports in March.  

    Oil/8800 – Nothing rational at all in oil.  It's too low so has to be constantly reinforced panic to keep it below $30 – hard to maintain.  

  30. Phil,

    Stopped in Sprouts (SFM) yes'd and was very impressed. Smaller than WFM, service almost as good as WFM but prices at least 40% less at SFM and quality at least as good as WFM. Qtrly eps have risen for past 4 qrtrs @ SFM; WFM missed last qtr.

     Checked on fin stats :

                             SFM         WFM

    PE                     30             20

    PEG                  1.7            2.6

    P/S                    1               .7

    EPS gr (ttm)       17             -4.5

    Rev gr (ttm)        20              8.4

    Prof mgn             31              33

    ROE                   16              14

    Dbt/Eq                 45               2

    SFM (PE) is pricier but growing faster AND prices are lower; 1/3 size of WFM

     Wanted your take on SFM for when mkt shows some stability and/or SFM sells off a bit (1/17 20 puts can be had for $2.40). Thanks in advance

  31. Phil, What do you think of writing some calls on TSLA Jan 17 @$270; given their production issues, petro. prices in the tank (pun intended), competition, (Chev Bolt) and market dynamics?  Thanks, I'm staying strong…trying not to trade, but the deals are out there. Mahalo!

  32. CNBC slamming oil..of course

  33. TLT/Phil – still like as is? add or roll up?

  34. Phil,

    Europe close and the US express takes off! headfake or …..Dollar falling, oil up market up…Is one of them wrong? please comment

  35. Dollar made a nice dive and sparked a rally – finally! 

    Good time to long /SI

    Copper blasts back to the $2 line.  World is "all fixed"?

    SFM/8800 – Well the p/e is a big difference though SFM seems to be growing faster (because it's smaller).  I think it's fine for a flyer but WFM is a proven player at this price:

    On the whole, they tend to trade neck and neck anyway:

    TSLA/Newt – The trick to writing short calls is to do it when a stock is at the top of it's range so you benefit from a good premium.

    CNBC/Jabob – All of their hedge fund buddies aren't finished loading up yet.  

    TLT/Scott – Of course I still like it.  Stopped dead where we expected it to. 

    Italy closed up 4.2% by the way, rest of Europe up 2% (weak bounce), we're up 1.5% so far – all according to the 5% Rule's plan…

    Headfake/Jasu – See above.  +2% is what we expected (weak bounce) at a minimum off the -10% lows.  It's what happens next that matters.  

  36. Closing the short /DX trade.  Rode it from 99.75 to 99.35.  Only $400 though.

  37. Out of /HG at $2 from $1.997.

  38. Phil,

    Thx for the SFM/WFM thgts. I'm impressed with the significant pricing differential and its implications going forward. I realize WFM can respond by lowering its prices but at the expense of its btm line. 

    Thanks again.

  39. Interesting – why TSLA doesn't want dealerships:

    Your average dealership get most of its profit from repairs and service, Maron said, but, "We can't offer that to any franchised dealer, because we only profit in one way: new car sales and new car sales alone. We can't make money from service, because our cars have far less parts than gas-powered cars. There are no regular service visits for engine tune-ups and oil changes. We don't have an engine. We don't have oil." Plus, since Tesla sells its vehicles online, the dealer can't mark up the price of the vehicle. A franchise dealer would look at what Tesla is offering and just scratch his head, Maron said.

  40. This is the most craziest market I have seen for a long time. Yesterday they were throwing in the kitchen sink, today is buy buy buy. Can any one see here any normality? Not to get involved yesterday, I switched off the computer and read a book.

  41. Yodi – Buying? Not me…  "Bigger picture, the weight-of-the-evidence is suggesting that we are heading a lot lower."

  42. Phil –  Do you have any opinion on why /SI traded up to the 16's in Oct 2015 or the high 17's in May 2015? Just wondering and trying to understand the product better. 

  43. this bounce is mostly pathetic so far. Color me Worried.

  44. Looks like "N A V" caught up with "O I L" ….    L O L …..

  45. I have enough doubts here to take a small short position on the s&p. Not buying anything long yet.

  46. Phil – You might like this historical chart, because the more things change, the more they stay the same.

  47. hmmm sold TASR $18 Jan 2017 calls against my stock position and my maintenance margin increased? Does this make sense to anyone? I was under the impression this would have no margin impact?

    talking to support they say:  

    "Vincent P: Yes, margin requirement did increase. Formula is the following Initial Stock Margin Requirement + MAX((In the Money Amount),(MIN(price of the option),(price of the stock)))"

  48. Tidal power math:

    ,100,000 ton ship = 100,000,000 kg

    Energy(J) = mgh mass * height * earth gravitational constant

    Assume height is 10 m (tidal rise and drop).

    Energy = 1e8 * 10 * 10 = 1e10 J = 2.78 MWh, assuming 100% energy conversion efficiency. 50% is more likely (if that?) but tides move twice a day in some places so let's say 2.78 MWh/d.

    So that gives you about $500 worth of revenue per day. The power output will by sinusoidal of course, so some short term energy storage / grid smoothing is necessary (for larger systems, the grid can absorb small the variance in small systems). So you need to operate a 100k tonne device, out at see, and have a supporting multi-megawatt energy storage mechanism for less than $182K a year.

  49. Phil / AAPL – looking to adjust the following Positions on AAPL:

    60X Jan  '18 100 Calls ( avg cost 22.4)           

    10X '18 130 Calls (6.9)

    15X '18 135 Calls (7.7)

    10X '18 140 Calls (8.9)

    I also have 20X Jan '18 95 Calls ( 18.5) naked

    I was thinking of covering some of the 100 Calls w/ 2017 June or Jan 115 Calls, and the buying back the 35 short Calls and selling the 2018 125 Calls.  Would like your view on this.

    On the 95 Calls i was looking at covering these w/ '18 125 calls at about 8

    Thanks for your help on this.

  50. I sure wish we would get around to rebuilding our infrastructure rather than blow -trillions- on all these foreign entanglements. Sooner the better, too, before the whole country is like Detroit schools…  Wouldn't that turn around the S&P! #ListenUpDavos!

  51. Jabo/CNBC – hilarious. Imagine if they were bashing oil in July 2014? Now that would've been something. But they weren't. And here they are bashing oil, which is probably the best signal of a bottom I've seen yet (realistically, I haven't seen it anywhere else).

    What a bunch of fools.

  52. Draghi fever says given latest (additional) oil induced dis-inflation shock and notwithstanding the central bank's significant December measures, the ECB will review and "possibly reconsider" its monetary policy stance in March.  Somebody "thinks" this means more potential "easing", Euro dips, dollar at 99+.

    Meanwhile, EIA shows huge oil inventory build +4M oil +4.6M gasoline, Islamic State militants set fire to oil storage tanks in Libya's Ras Lanuf terminal,  production is still outstripping demand by 1-2mbpd, and oil bounces 6%; USO +4.5%; XLE +3%.  

    Shorts might be scrambling to cover.  How bad is it when broker house PR are shilling potential 50% oil price increase to keep the number of upcoming defaults down.

    Alrighty then, with the above and ES 1870, I would say that pump or short term bottom rally is officially underway and I think this is apropos.  Beware the trap.

  53. Out of /si @ 14.13. Nap time. 

  54. I went ahead and rolled my 2018 RIG $13 calls down to the $8's for $1.80, which seemed like a decent deal. I think(hope) that they survive this downturn, and buying $5 in position for $1.8 seemed like the right move.  

  55. I'm not happy that we're struggling to hold green on the RUT (and failing 1,000 on /TF).  

    Nice trades, Burr.  

    SFM/8800 – I don't think the average WFM shopper is very price-sensitive.  In any case, SFM only has 200 stores and WFM only 400 stores vs SVU or KR with 2,000 and 3,000 – so plenty of room for all flavors.  If you want the real money in the business, my brother had a 100% Organic Deli in Florida with a partner but sold it when the partner retired (couldn't find a good replacement to run it at the time, so he cashed out).  That thing made a friggin' fortune and the demand is surprisingly strong because neither WFM or SFM cut it with the real organic crowd – who pay top Dollar for the good stuff.  We've been talking about opening a bigger one in a better location with more prepared foods and maybe delivery.  

    TLSA/StJ – That all translates into "we don't want to give away a cut of our profits" – not that there are any profits, of course…  I mean, seriously, their business plan is to sell $100,000 cars on-line?  Hard to imagine how they are going to be seriously competing when there are 1M motivated salespeople working for their competition.  

    Book/Yodi – Wise move.  It's a crazy market, best to sit on the side with CASH!!!  

    /SI/Burr – You have to put things in perspective – all silver did in 2015 was blip higher on the way down:

    History/Naybob – Same as it ever was.

    Margin/Crs – Margins often don't make sense.  Possibly they didn't tie the two positions together.  Obviously should not have a margin impact, the answer was cut and paste from their manual.  

    Tide/BDC – You don't need the tide, the motion of the waves will make a platform move up and down all day long.  Twice a day… geeze!  

    AAPL/Batman – Wow, you are only long naked calls?  I certainly hope that's because you bought back the short calls and not because you gambled by buying tons of premium.  The 60 2018 $100s are $15.50 so $93,000 in just those + another $50K on the rest is $143,000 long AAPL at various strikes.  I'd consolidate (assuming you want to remain this heavy in AAPL) into 2018 $90 ($20)/120 ($9) bull call spreads at $11.  $143,000 would buy 130 of them and make $250,000(ish) if all goes well but you only need to make $143,000 back (ish) so I'd go with 1/2 and be happy to get even.  If anything, maybe sell 1/2 as many $80 puts for $10 for a bonus $30-40,000 and then plenty of firepower on the side in case things get worse and, if they don't get worse – nice to be even at this point!  

    Schools/Scott – I'd be way more worried about being like Flint water than Detroit schools.  

    Oil/Naybob – We already knew this build was coming.  Iran had 45Mb parked in tankers ready to roll the day they got the green light to sell.  That's what's forcing this bottom – nothing that we haven't known about for months.  

    Killing it today, Burr.  

    RIG/Palotay – Amazing how far it's fallen.  Now $3.4Bn for the whole company with $9Bn in revenues running at $1.2Bn in profit for the last two Qs.  

  56. Phil/TWTR

    Could I have your thoughts on this stock?  Is it a buyout candidate, or can they still be a viable player in their space.  Is bankruptcy a legitimate possibility?  I am holding 2018 sold $30 puts at $10.50. Trying to decide a roll.

  57. DB/Phil – heading toward inevitable < $5 and reverse split?

  58. Scottmi – I sure wish we would get around to rebuilding our infrastructure rather than blow -trillions- on all these foreign entanglements. Sooner the better, too, before the whole country is like Detroit schools… 

    My sources indicate… the only infrastructure or services they will allocate for which goes hand in hand with the new corporate insourcing initiative, is for prison system expansion and incarceration services. This is the cheaper, compliant American workforce of the future, that will drive those turncoat outsourcing firms under.  Formerly Wackenhut, GEO is a REIT at mid 2007 levels which is getting to nibble level, they specialize in our future growth industries corrections, detention and mental health treatment. For those of us who are married, what the hell, check it out, your already committed to an institution.  MCLOVIN IT.

    Phil – Gotta love those talking heads… There is water at the bottom of the ocean… You may find yourself in a beautiful house and you may ask yourself… same as it ever was.  OUT Sardonic Grin Emoticon

  59. Phil – Oil – On the physical market, Koch Brothers' Flint Hills Resources offered to pay just $1.50 for North Dakota Sour, a low quality grade of crude last Friday.  That Koch-to-pus, what a bottom feeder.

  60. TWTR/DC – I think they are worth more than $12Bn to a media conglomerate:

    They have 300M active users and it does keep growing.  If they charged $10/yr it would generate $3Bn or if they could get 0.03 per day, per eyeball (or pair, actually), that would be $3Bn too.   

    The problem is the same problem all mobile apps have – not enough space to advertise.  FB, by comparison, has 1.3Bn monthly users (4x) and, like TWTR, 85% are mobile but, unlike TWTR, they have figured out how to monetize mobile and 69% of their ad revenues come from mobile views.  FB has a market cap of $277Bn with $16Bn in sales and $3.5Bn in profits.   TWTR has a market cap of $12Bn (1/20th) with $1.5Bn in sales (1/10th) and no profits (0/100th).  So the trick is for TWTR to figure out how to drive more revenue in and show a profit.  In theory, they should be able to double sales and drive profits towards $1Bn, which means a $20Bn valuation (+50%) in about 2 years – IF they can figure out how to make it work. 

    DB/Scott – I don't keep track of them but that was a bad report today, though a lot of it due to restructuring issues that, hopefully, are behind it.  

    Deutsche Bank’s profits have been particularly hard hit by billions of dollars of impairment charges on account of firm-wide restructuring under the new senior management and high litigation costs of 5.2 billion euros in 2015. After the appointment of Co-CEO John Cryan, the bank is trying to restore investor confidence by overhauling the corporate structure to improve profitability. As part of the overhaul, the bank has decided to shrink its workforce by 26,000 by 2018, which represents 25% of the current workforce.

    Daniele Brupbacher, analyst at UBS Group AG in Zurich, said, “A real fresh start means even lower stated net profits for some time [and the condition of the bank in first quarter will possibly] remain challenging.”

    Not the kind of stock I would short (or long). 

    Kochs/Naybob – Well that is the way to go.  They've got CASH!!! and the bottom is in – may as well lock up as much as they can down here.  

  61. Tks Phil.  Pls keep on calling out the lines when you see them.  I'll keep watch.  

  62. Phil – and the bottom is in – careful that deflector shield might be operational, beware of the trap.

  63. CNBC slamming oil again.. a-holes keep saying that this is only short covering and that the fundamentals are horrible and oil will start going lower again soon.

    FU CNBC!!!!

  64. Hard to draw any market assumptions with the Dollar diving 1% from the highs today – just crazy.  

    Deflector/Naybob –  Come on Naybob, that wasn't even trying as a reference.  More like a Tholian Web, I think…  cheeky

    CNBC/Jabob – How dare you buy oil!  CNBC didn't say it was time to buy oil yet so oil is bad.  When oil is $90, THEN they will tell you to buy oil…

  65. hilarious…

    hasn't stjean been talking about rising inventories for the last 3 years?

    why does it matter so much now when nobody cared when it was over $100?

  66. Phil – Nice calls on /NGJ6 phil.  It's given us a triple chance to go long after 2.2. 7.40am, 11.40am, and 2pm. The sell point is 2.5 for me.  Now 2.221.

    I haven't been trading it, just watching and waiting until EIA and seeing what happens.

    I have a 2017 UNG spread though that's not doing well.  Short 12P, Long 9/14 bull call sp

    Sold for a credit of 0.56.  Now trading mid 3.87.

    How would you adjust ?

  67. TERP (one of SUNE's yield companies) is looking tempting at $8.82, with their $1.40 annual dividend.  Currently trading at 50% of book value.  You can sell the 2018 $7.50 calls for $2.8 or so, dropping your basis to $6, which would make the dividend 23% a year.  What am I missing?

  68. Inventories / Jabo – I guess it might matter now that they don't have tankers to fill because the Iranians are using them all or because the Chinese have filled up their SPR! They were hiding all the could in many places, but now it's down to the actual storage.

  69. Phil – Tholian Web – Classic, I guess they must have really spruced up those digital remasters with special effects cause I don't remember NCC 1701 looking that good.  But you gotta love the smirk on Darth Sidious craggy face and for now I'm stickin to this is a counter trend rally: "it might test 1930, depending on the gas in the tank 1955 and perhaps even 1990.  I dunno, but I'll tell ya. Beware the trap."  There is no lack of faith here.

  70. Thanks Burr, /NG is crazy choppy but you're getting used to it, which is great.  On the spread the 2017 $12 puts are $4.30 and the 2018 $8 puts are $2 so I'd do a 2x roll and that's a really comfortable target.  On the long side, the $9s are still 0.95 so you can salvage by rolling to the 2018 $8 ($2)/12 ($1) bull call spread and leave the short $14s.  

    TERP/Palotay – I don't like TERP for the same reason I don't like SUNE.  Who knows what's actually going on between those two?  

    Holding on to gains except the RUT so not so happy about the action but have to wait and see what sticks into the weekend.  No rest for the wicked! 

  71. Barely held most of your must hold lines.   Bloody claws clinging to the side of a steep rocky cliff come to mind….   Kinda looks like a pathetic adjustment before heading down again tomorrow.   Guess we'll see…..

  72. Thanks for the advanced ideas on good hedges in case we need to implement them if this thing turns south…..

  73. Was oil up today??? WTF???

  74. Phil/TWTR

    Thank you. I will digest tonight when I get a chance to catch up.  Is it sad that I miss this job more than I miss the "real" job that pays the bills?

  75. I do not understand how oil could be holding over 5% gains all day with another build in inventory and more coming? AS usual the action makes no sense compared to what it does on other days like this. I am guessing it will drop at some point in the next 24 hours, but then again it's a Friday so it could go up even more. Crazy is the only word.

  76. Phil/Waves – yeah I already considered that and didn't bother mentioning it because waves have several orders of magnitude less energy than tides. But to put some math to it, let's say you get some good size waves yielding 1000 kW per meter of crest length. Using the same formula from before E = mgh, E/s (energy per second, which is power) = mgh/s. Solving for h/s (how far up and down your vessel moves) = (E/s) / mg or W / mg because a W is a Joule (E) per second.

    So if your 100,000,000 kg vessel is huge, and has 100 meters of path length = 100,000 kW / (1,000,000 kg * 10) = 0.0001 meters per second of wave interaction. If the wave interacts with the system for about 3 seconds you'd get about 0.0003 meters of movement. The tide in my previous comment would lift the object 10 m or 33,000 times as much captured energy. I suppose a good open ocean wave period is about a minute so you'd get 1440 waves per day * 0.0003 = 0.4 m total height change versus 10 m for the tide, or 4% of the total energy. The tides are constant, and as they say, wait for no man, but waves are captured solar energy (via wind from preferential heating), and you don't always get nice big waves.

    So given 4% of the tidal energy on a good day and the fact it is horribly intermittent energy at best I didn't feel it was worth mentioning.

  77. BIO.Phil    wave machine on the pier Imperial Beach CA 1909. Wave machines tried as early as 1907. Maybe with new technology…..

    "To power the electric cars, six wave motors, designed by Charles E. Edward, were built on a dogleg extension at the end of the pier, and, so, for a period of time, the pier was called the Edwards’ Wave Motor Pier. The machines were used to power the electric train cars with excess electricity being sold to subscribers. Eventually these wave machines lost favor …."

    Who knows if the plan actually worked!


  78. \hi phil

    do you mind if I ask which website your global markets box comes from that you use in the early mornings now. I would like to use it.


  79. Phil / BDC / Waves&Tides

    I think you are debating obtaining energy from waves and swells (not tides) if its going to be collected on  some sort of floating object.    I like the idea…..

  80. Humanity’s future is in peril thanks to so-called advancements in science and technology, claims Professor Stephen Hawking, who cited “nuclear war,

  81. For one week a year, Davos is Switzerland is flooded with 2,500 of the most important and influential people from more than 100 countries.

    The World Economic Forum (WEF) Annual Meeting is basically an opportunity for the power brokers of the world to set the agenda.

    So as you can imagine, apart from …

  82. Oil prices have fallen by more than 70% since the summer of 2014. Right now, they’re about $26.40 a barrel.

    But according to IHS Insight’s chief economist, Dr. Nariman Behravesh, who oversees a team of more than 400 economists, worse is yet to come.

    “Is it feasible for oil to reach $20 per barrel in …

  83. Flint Mayor Says Water Crisis Wouldn’t Have Happened in Rich Suburb

    WASHINGTON — The crisis in Flint, Mich., a poor, mostly black city where lead has contaminated the drinking water, would not have been allowed to happen in a rich suburb, the city’s mayor said Wednesday.

    “It’s a minority community, it’s a poor community, and voices were not being heard,” Mayor Karen …

  84. The Rise And Fall Of America’s Unicorns

    It is no secret that the number of private companies with valuations in excess of one billion dollars has skyrocketed since the start of 2014. As shown in CBInsight’s chart below, the number of such “unicorns” created during the first half of 2014 was roughly equivalent to the number created during …

  85. East braces for wallop from powerful snowstorm

    Winter has finally arrived. An impending winter storm is headed for the east coast, with snowfall expected to begin Friday night through the weekend. Washington D.C. and Baltimore are predicted to get the worst of the storm, with meteorologist predic

    SILVER SPRING, Md. — More than 1,000 flights were …

  86. Business travelers increasingly are relying on Uber and other ride-hailing services, often more than car rentals or taxis, according to new data.

    Say you land at Chicago O’Hare International Airport. You’ve got a work meeting 20 minutes away. You might head to the rental desk to pick up a car. Or, …

  87. Southern California Edison, San Diego Gas & Electric and Pacific Gas & Electric are pushing back against a regulator proposal for new rules on compensating California homeowners and businesses for the solar power they produce.

    The three investor-owned utilities have united in an unusual …

  88. According to a new report out of app analytics company App Annie, Apple’s trend of bringing in more revenue via its App Store than Google does via the Play Store continued in 2015. Google, however, continued to see far more app downloads than Apple…

    The report claims that Google saw twice as many …

  89. Good morning! 

    Oil is off to the races, up 4.2% at $30.77 and, more importantly, the Futures are up 1% – even the Russell!

    This chart, by the way, Tommy – is from the WSJ's Markets Section.  

    So things are looking up to close the weak (so far) but it's just the 2% weak bounce we were looking for so far – so don't get too impressed just yet.  










    1-21-2016 2-46-47 PM.png uso

    Still a chance to play copper (/HG) on  cross over the $2 line.   

    Someone Is Trying To Corner The Copper Market. One company whose identity is unknown, is "hoarding as much as half the copper available in warehouses tracked by the London Metal Exchange."

    We've got a lot of data today and some big earnings reports so we'll see how things hold up into the weekend but this is enough to give us hope for next week.  As Dave Fry notes:

    Draghi made some vague comments regarding the March ECB meeting indicating policy revisions may be addressed then. Traders took that to mean more stimulus could be added. Sure, it’s a thin reed for prices to climb in reaction. But, markets are severely oversold and it doesn’t take much for the machines to push prices in a different direction.

    In China, blatant market manipulation has now become standard government policy. China’s Vice President Li stated in Davos that “China is willing to keep intervening in stock markets (anywhere?) to make sure that a few speculators don’t benefit at the expense of regular investors”. Put another way, China markets are no longer legitimate since trading will be controlled from on high. 

    One company bullish on China is General Electric (GE) but we must remember that this bullishness is compromised by all the Nuclear power plants the company has in the pipeline so…

    We'll be hearing more from GE this morning:

    Friday's economic calendar

    Philly Fed was a disaster yesterday at -3.5 and that's down from a sharply lower revision to last month at -10.2 (from -5.9) so Chicago Fed might be a bump in the road but you know these markets – once they get into a mood to rally – they can steamroll right over bad news. 

    The Markets Are Backing Central Bankers Into a CornerJust when central bankers thought they were headed out, they’re getting dragged back in. Even with their toolkits depleted, monetary policy makers are being pushed to gear up yet again to counter the disinflationary fallout from slumping commodities and China’s slowdown. That leaves investors increasingly predicting the Federal Reserve will slow its campaign to raise interest rates and that the European Central Bank and Bank of Japan will soon deploy more stimulus. “Markets are sitting there hoping central banks will solve all,” says Nikhil Srinivasan, chief investment officer at Italian insurer Generali, whose assets total 480 billion euros ($520 billion).

    Asian Stocks Rebound From Three-Year Low on Stimulus Speculation. Asian stocks rose, with the regional benchmark index rebounding from a three-year low, following a rally in U.S. shares and oil amid optimism that policy makers in Europe and Asia will step in with more stimulus measures. The MSCI Asia Pacific Index gained 1.6 percent to 116.33 as of 9:15 a.m. in Tokyo

    Speaking of manipulating the markets:  Yuan Short Sellers Are Paying Up as China Squeezes Their FundingBetting against the yuan is becoming more expensive. Implied yields on one-month non-deliverable forwards for the yuan, which reflect the costs of selling short the currency, jumped to an annualized 11.4 percent Thursday, from about 4 percent at the end of October, according  to data compiled by Bloomberg. That is the highest among the 31 most-traded currencies, except for the Brazilian real and Argentina’s peso. The cost to short the yuan increased as more traders sold the currency using the forward contracts, betting that capital outflows from China will to lead to a decline in value. Policy makers also drove up the costs for short sellers as they tightened restrictions on money flows, including reducing the yuan supply overseas and requiring banks to limit currency speculation.

    Speaking of currency speculators:  George Soros Says He Expects Hard Landing for China Economy

    EMERGING MARKETS-Brazil, Mexico currencies fall again despite market rise

    Junk Bond Market Braces for What Could Be a $117 Billion Logjam

    Thailand Auto Sales to Decline for Fourth Year on China Slowdown

    Battered Emerging Markets Race to Stem OutflowsSome are taking a risky approach to dealing with growing pressure on their currencies. A number of emerging markets are taking a risky approach to dealing with growing pressure on their currencies: They’re trying to ban it.

    U.K.'s Osborne Warns of 'Dangerous Cocktail' of Risks to Economy

    If This Isn't The Start Of The Crisis, Imagine How Bad The Real One Will Be?

    A recession is 'healthy and necessary'

    4 stocks to watch as American Express struggles. (videoAmerican Express reported earnings that topped expectations Thursday, but "Fast Money" traders remain skeptical of its battered stock. American Express shares fell about 4 percent in after-hours trading

    No end to oil rout as Saudi Arabia plays toughKingdom's oil chief says Saudis can withstand the price collapse, vowing to keep production at record levels.  

    Blame Canada for Making the Oil Glut Worse. (videoLegacy projects from the days of $100 barrels mean that two years of new production is still in the pipeline.

    Schlumberger(SLB) Fires 10,000 As It Announces A $10 Billion Stock Buyback

    Energy-Market Slump Weighs on Big RailroadsDrop in oil and coal prices drives Union Pacific, Canadian Pacific to cut jobs, post lower profits. The dismal energy market slammed two of North America’s biggest freight railroads in the fourth quarter, prompting them to slash jobs and driving profits below Wall Street’s expectations. 

    RAILROAD CEO: We're worried about the American consumer - While Americans were buying automobiles and unemployment numbers looked good, he said labor participation "is lackluster and consumers just don’t seem to be showing up to purchase goods and services."

    Starbucks(SBUX) Blames Paris Terror Attacks for Hurting Sales

    Old favorite:  Intuitive Surgical(ISRG) fourth-quarter profit tops expectationsIntuitive shares were up nearly 1 percent at $559.90 in extended trading from their Nasdaq close at $555.60.

    Bernie Sanders just vaulted into the lead over Hillary Clinton a new Iowa poll

    National Review aims to take down TrumpThe influential magazine turns to conservative leaders to make the anti-Trump case.

  90. Do you have a target for /Hg?  

    Also, is this a play you'd dd on at 1.90 or stop out early?

  91. Strange. 2.57 Phils post comes out. Copper spikes to 2.012 at 3am now back at 2. 

    I wonder if there is a content scraper active?  

  92. Love my Bernie!  



    This is how Bernie will get it done

    Posted by American Reformers on Thursday, January 21, 2016

    "It's like she's a malfunctioning robot": Trevor Noah continues his glorious assault on Sarah Palin's bizarre endorsement speech

    Good notes on the widening wealth gap:

    The biggest reason the rich are getting richer while the poor are getting poorer—and wages for the middle-class in countries like the U.S. have stagnated in recent decades—is because investments have been rewarded, but not labor. “One of the key trends underlying this huge concentration of wealth and incomes is the increasing return to capital versus labour,” the report said. “In almost all rich countries and in most developing countries, the share of national income going to workers has been falling.”

    “This means workers are capturing less and less of the gains from growth,” they explained. “In contrast, the owners of capital have seen their capital consistently grow (through interest payments, dividends, or retained profits) faster than the rate the economy has been growing. Tax avoidance by the owners of capital, and governments reducing taxes on capital gains have further added to these returns.”

    We NEED Bernie Sanders to just put a dent in this problem!  

    Meanwhile, back with the Top .01%:

    Held in a private apartment far up in the mountains, over-looking the town of Davos in the valley below, it raged until two in the morning.


  93. Copper/Burr – Well it doesn't take much to move the Futures this time of day but let's just enjoy the double dip and go long again on /HG at $2!  

    And no, I don't have a target, I just think $2 is bouncy and $1.995 would be my stop with a $125 loss, not $1.90 with a $2,500 loss! 

  94. Right. I meant 1.990. Missed a decimal. 

  95. Oil/Craigs – I don't know what "market action" you're looking for but we knew all week that the rollover was forcing a false bottom and all the media jackals were simply doing their masters' bidding and scaring the weak hands out of oil with their ridiculous projections so the big boys could jump back in at the bottom before they let prices rise again.  There's nothing at all surprising about this – it's the same manipulated BS every time.

    Waves/BDC – Here are the numbers:

    In deep water where the water depth is larger than half the wavelength, the wave energy flux is[a]

    <br />
  P = \frac{\rho g^2}{64\pi} H_{m0}^2 T_e<br />
    \approx \left(0.5 \frac{\text{kW}}{\text{m}^3 \cdot \text{s}} \right) H_{m0}^2\; T_e,<br />

    with P the wave energy flux per unit of wave-crest length, Hm0 the significant wave heightTe the wave energy periodρ the water density and g the acceleration by gravity. The above formula states that wave power is proportional to the wave energy period and to the square of the wave height. When the significant wave height is given in metres, and the wave period in seconds, the result is the wave power in kilowatts (kW) per metre of wavefront length.[7][8][9][10]

    Example: Consider moderate ocean swells, in deep water, a few km off a coastline, with a wave height of 3 m and a wave energy period of 8 seconds. Using the formula to solve for power, we get

    <br />
  P \approx 0.5 \frac{\text{kW}}{\text{m}^3 \cdot \text{s}} (3 \cdot \text{m})^2 (8 \cdot \text{s}) \approx 36 \frac{\text{kW}}{\text{m}},<br />

    meaning there are 36 kilowatts of power potential per meter of wave crest.

    In major storms, the largest waves offshore are about 15 meters high and have a period of about 15 seconds. According to the above formula, such waves carry about 1.7 MW of power across each metre of wavefront.

    An effective wave power device captures as much as possible of the wave energy flux. As a result, the waves will be of lower height in the region behind the wave power device.

    In a sea state, the average(mean) energy density per unit area of gravity waves on the water surface is proportional to the wave height squared, according to linear wave theory:[6][11]

    E=\frac{1}{8}\rho g H_{m0}^2, [b][12]

    where E is the mean wave energy density per unit horizontal area (J/m2), the sum of kinetic and potential energy density per unit horizontal area. The potential energy density is equal to the kinetic energy,[6] both contributing half to the wave energy density E, as can be expected from the equipartition theorem. In ocean waves, surface tension effects are negligible for wavelengths above a few decimetres.

    As the waves propagate, their energy is transported. The energy transport velocity is the group velocity. As a result, the wave energy flux, through a vertical plane of unit width perpendicular to the wave propagation direction, is equal to:[13][6]

    P = E\, c_g, \, \

    with cg the group velocity (m/s). Due to the dispersion relation for water waves under the action of gravity, the group velocity depends on the wavelength λ, or equivalently, on the wave period T. Further, the dispersion relation is a function of the water depth h. As a result, the group velocity behaves differently in the limits of deep and shallow water, and at intermediate depths:[6][11]


     Here, the factor for random waves is 116, as opposed to 18 for periodic waves – as explained hereafter. For a small-amplitude sinusoidal wave \scriptstyle \eta=a\,\cos\, 2\pi\left(\frac{x}{\lambda}-\frac{t}{T}\right) with wave amplitude \scriptstyle a,\, the wave energy density per unit horizontal area is \scriptstyle E=\frac{1}{2}\rho g a^2, or \scriptstyle E=\frac{1}{8}\rho g H^2 using the wave height \scriptstyle H\,=\,2\,a\, for sinusoidal waves. In terms of the variance of the surface elevation \scriptstyle m_0=\sigma_\eta^2=\overline{(\eta-\bar\eta)^2}=\frac{1}{2}a^2, the energy density is \scriptstyle E=\rho g m_0\,. Turning to random waves, the last formulation of the wave energy equation in terms of \scriptstyle m_0\, is also valid (Holthuijsen, 2007, p. 40), due to Parseval's theorem. Further, the significant wave height is defined as \scriptstyle H_{m0}=4\sqrt{m_0}, leading to the factor 116 in the wave energy density per unit horizontal area.

    You can do the math but I had the idea simply because I watched a tanker rise and fall with each passing wave, over and over again and it occurred to me that something that heavy coming down could be converted to energy (possibly captured with fluid compression rather than turbines).   

    Waves/Gerry – What OPTT is doing is very cool but small-scale.  I think it can just be done bigger.  

    Decimal/Burr – That can be a very expensive decimal!  Anyway, I just play for Egg McMuffin money in the mornings.  If I make an extra $100 – $500 every day, that's about $40,000 a year (not counting the occasional lucky runs) so why stress out going for bigger gains?  

  96. Phil/Ilene/StJL – This is worthy. I don't know if you can get to it, so I am just going to fetch it and post. Thinking a bit differently… by Cathal Rabbitte FIA

    George Kennan knew a thing or two about overreach. His specialty was Korea but he could just as well have been talking about Wall St today. One of his best insights was “that there is more respect to be won…by a resolute and courageous liquidation of unsound positions than by the most stubborn pursuit of extravagant or unpromising objectives.” 

    If we continue on our current path there won't be any economic growth anywhere for the next 10 years. I know the quant wallas think differently but the past is not prologue, dudes. Not now. The foundations of modern economics have rotted away. Capitalism without growth is incoherent. Even Bernie Sanders would agree.

    The orgy of debt in the financial system is going to crash anyway and it will take Too Big to Fail down with it. The fall of the House of Morgan will be a real rubberneckers dream.  But it is not fated to happen. It can still be avoided.

     Is there any way to delever without blowing up the world economy ?  The sun will rise on Monday regardless.

    CNBC might have to be decommissioned. Journalists might have to learn how to think for themselves rather than slavering over the worlds of bankers.The right to create money might have to be taken off the hands of the banks.

    There are  still loads of investment opportunities out there. The US's infrastructure is 40 years old. We have to get set for climate change. It's just that we don't need to include venal buybacks when money is invested. We can do things differently. It might piss off the Kochs and their friends but these guys have driven the economy into the ditch anyway.

  97. CHICAGO — Fallout from the drinking water crisis in Flint, Mich., continued on Thursday as a high-ranking federal regulator announced her resignation, a congresswoman said she expected a hearing on the lead-tainted water, and President Obama promised more money for Michigan’s water systems.

    “Our …

  98. In November 2014, just after OPEC officially died with the 2014 Thanksgiving massacre which was the first oil-crushing catalyst that has led to …

  99. WASHINGTON — It’s been a truism of the American economy for decades: When oil prices rise, the economy suffers; when they fall, growth improves.

    But the decline of oil prices over the last two years has failed to deliver the economic benefits widely predicted, leaving experts scratching their …

  100. Submitted by Mike Krieger via Liberty Blitzkrieg blog,DAVOS MAN: “A soulless man, technocratic, nationless and cultureless, severed from reality. The

  101. It’s been really ugly in the markets this year.

    On Wednesday, markets saw yet another chaotic day as stocks ultimately finished lower but way, way higher than their worst levels of the day.

    But as interesting as it is to track the play-by-plays day after day, it’s also worth taking a gander at how …

  102. The oil crash is killing the NHL

    With oil prices dipping below $30 and dire forecasts for the already-low Canadian dollar, the National Hockey League (NHL) is taking a hit that would normally lead to a mass exodus of players to Russia—if the ruble wasn’t tanking as well.

    The NHL’s revenue depends on the Canadian dollar, which in …

  103. WSJ comments on yesterdays "rally… “I don’t think the downside is done,” said Peter Tuchman, floor broker for Quattro M. Securities. “The market just cannot sustain a rally.

    Meanwhile… "China has given the world cheap labor and cheap goods, as well as cheap capital via export of excess savings. Over the last 15 years, it gave Asia and Latin America a massive demand shock for their raw materials. Those days are gone. Vale, BHP, Rio Tinto shares will never see the $20s again. China accounts for about 60% of iron ore production and imports nearly half of it. It also accounts for about 40% of crude steel production.

    Around 25% of South Korea’s total exports go to China. Venezuela is being held together by string, duct tape and a China fund of about $5 billion. Unless oil and metals start going the other way, Barclays Capital forecasts that it will be the first sovereign to default in 2016

    Exposure to China’s companies through debt ranges from a low of 0.1% of bank assets in Italy to a high of 3% in the U.K. primarily driven by HSBC and Standard Chartered"  - Forbes, Who's Crying Next?

  104. There’s always been plenty of speculation around how much Google pays Apple to include its search services inside iOS devices, and we finally have some clarity over that figure. Information raised as part of an ongoing legal case between Oracle and Google shows the search firm compensated Apple to …

  105. Phil, Your call from days/weeks ago for a bottom on oil at $27.50 missed by 0.06.  Not bad.  I am confident that one of these times you are really going to nail it.

  106. Gracias on /Hg. Maybe another cash register?

    /ngj6 below 2.2. With oil and gas up I'm long 1

  107. Phil / AAPL – the 100 naked calls were the results of uncovering spreads ( a bit early) and the 95 calls were  accumulated in that last 2 wks,  so i've made up some losses already…  I'm rolling the 100 down to 90, but on the 95 will hold off and cover these at 120 or 125.  I sold some 100s off yesterday and bought some 90's, now need to cover up as you suggested.  Also i do have 5X each  Jan '18 puts – 90 ( 15.5) and 95 ( 14.5), so hopefully this is free money ….


    Thank you for your help. 

  108. Good job on Hg. Helping me fund my daughters school!

    Now /ngj6 below 2.2. With cl and rb up, poking long at 2.199

  109. Thanks Sibe, I appreciate the confidence!  cool

    /HG/Burr – One time thing at $2 in a global bounce as far as I'm concerned – that thing is just way too dangerous to play on the average (and out, of course as $2.02 was rejected).  

    AAPL/Batman – Glad it was from uncovering!  That being the case I'd suggest treating the short call sales like stops – sell more calls each time AAPL tops out on the way up and set stop lines (tight) where you cover more and more until fully covered.  

    So today, for example, AAPL will be back over $98 so of course you want to go into the weekend at least 1/3 covered so tight stops to cover 1/3 but then you can keep that $98 line to cover the next 1/3 and keep raising the bar 0.50 for each $1 AAPL climbs but then jumping to $105 when $105 is crossed and to $110 when $110 is crossed.  That should help you take best advantage of a move up.  Consider the Aug recovery your best-case scenario.

    You're welcome Burr!  

  110. /NG/Burr – It has not performed well when oil and the markets were up.

  111. Phil / AAPL – got it 98 100 105…..  looking to sell some calls this am