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Monday Market Movement

3-18-2016 3-44-33 PMYou missed the news.  

That's OK, I posted not one but two news reviews to our Twitter account, so you can get an idea of what goes on in our Live Member Chat Room during market hours (and before and after).  This morning there was so much to talk about we had to make two posts with big news from China and an examination of the Oil Market (contracts roll over tomorrow), Corporate Profits, a Chart Review and even some election news – it's all there for you on Twitter (6:30 am) – I'm not repeating myself.  

As you can see from the above chart, a month of Central Bank actions (12 of them) has bought our beloved S&P up from 1,850 all the way to 2,040, which is 190 points and just over the 10% line of 2,035, which is where we predicted we'd be on our Big Chart (see dozens of other posts).  As noted this morning, we expect to be rejected at 2,040 (/ES Futures), which lines up with 17,550 on the Dow (/YM Futures), 4,415 on the Nasdaq (/NQ Futures) and 1,100 on the Russell (/TF Futures) – so those are our shorting lines with very tight stops above – in case we're wrong and the rally has more legs.  

3-18-2016 3-44-05 PMThere's not much data this week but we do have the Chicago Fed this morning, PMI and the Richmond Fed tomorrow, Durable Goods on Thursday along with Consumer Comfort and then the 3rd adjustment to GDP on Friday along with an 8:30 peak at Corporate Profits which, by all accounts are shrinking rapidly!  

Are 12 rounds of stimulus/easing enough to ignore the 2.5% drop in earnings expectations in a $100Tn Global equity market?  Well, it wasn't $2.5Tn worth of stimulus so, no, it's not…  See, investing isn't hard – it's just math!  We do math all the time when we are evaluating companies so why not do it when we evaluate indexes as well?   

We did the math on the Dow back on Jan 14th, when the Dow was at 16,159 and we valued each component and that led us to make a bottom call, which is why we went bullish at 16,000 (the actual closing low was 15,766 a week later, on the 20th).  We had plenty of time to pick up more bullish positions and we were able to do it with confidence because we KNEW what a fair value was and that's the same way we KNOW that 10% above (17,600) is a bit too high without new FACTS to change our valuation.  

We talked about our hedges last week, so I'm not going to get into it here but clearly we had a huge pop last week from the Energy sector and the Financials, who thought they were all going to default on their loans and the REITs, who love the ever-low rate policy reiterated by the Fed so all is well and the Dow jumped 450 of those 1,500 points since Wednesday's Fed meeting.  

NDX WEEKLYUnfortunately, a good market rule of thumb is "what can easily be done can just as easily be undone," so we went into the weekend a bit bearish and we're shorting the Futures this morning – looking for at least a small pullback off those +10% lines (about 2.5% at least).  That would give us the following watch levels (and we are using our 5% Rule™ to plot non-spike consolidation points):

  • Dow 16,000 to 17,600 is a 10% move up (1,600) and that means a weak pullback would be -320 to 17,280 and another -320 would take us to 16,960 – below that is just bearish again. 
  • S&P 1,850 to 2,035 is a 10% move up (185) so we'll call it 35-point retraces to 2,000 (weak) and 1,965 (strong). 
  • Nasdaq has been very strong and 4,200 is already the +5% line on our Big Chart.  There's an Apple event today and we'll see if they can hit $110 but Valeant is killing the entire Pharma sector and that's holding the Nasdaq down a bit.  Still, they are at 4,400, which is a healthy 5% bump and puts them in-line with the S&P at the +10% line on our Big Chart.  Still, with the broader NYSE and the Russell dragging – there's not much hope the two sub-indexes will punch higher.  Anyway, so 200 point move up means 40-point retraces to 4,360 (weak) and 4,320 (strong).  
  • NYSE is, essentially, all stocks and all stocks are not doing well at 10,220, which is well below the -5% line at 10,450.  The NYSE bottomed out right at the 9,000 line and that's near 20% off the Must Hold line at 11,000, which it hasn't really held – ever.  So how can we be bullish if our broadest index isn't?  I'm going to ignore 9,000 and focus on the 10,175 line (-7.5%) and say that "must hold" for us to stay less than bearish.
  • RUT WEEKLYThe Russell is specifically small caps and specifically, unlike the S&P, who do 60% of their business overseas, the Russell companies do 80% of their business in the US.  Why then, are they underperforming if our economy is supposed to be the engine driving World growth?  Something is rotten but that's a different article and for now we'll concentrate on that 1,100 line and let's say that's up from 1,000 and that means 20-point retraces to 1,080 (weak) and 1,060 (strong) but, as you can see from Dave Fry's chart – technical resistance is more like 1,115, so any failing at 1,100 is not a good sign. 

That's more or less where we are but bear in mind there were three driving factors in this amazing 10% market run.  One was, of course, the Fed, along with ALL the other Central Banks, throwing another Trillion onto the fire to keep us warm for another month.  Two has been the Dollar, which fell 5%, from 100 to 95, where it now sits.   A 10% market rally is much less impressive when it's priced in Dollars that have dropped 5%.  Three is the price of oil, which is up 10% from it's bottom too and now, as we discussed in Member Chat, likely drifting into a new range:

There is NOTHING fundamental supporting the move in oil – just rumors that there will be supply cuts or, in the very least, production freezes at the upcoming OPEC/Russia meeting (4/17).  A LOT of eggs are going into that basket (see morning chat post) and, though we're generally bullish on oil into July, we may end up shorting it into the April meeting if we're still in the $40s.  

So, it's a meaningless Monday and this whole week promises to be meaningless as there's little data, little Fed speak and little earnings so it's all about spin and sentiment as we wait for the quarter to close a week from Thursday – THEN the fun can begin! 


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  1. Lots of news this morning on VRX, including their adding Bill Ackman to the board, resignations, and re-statements.   Thanks again Phil, Rustle and STJ for dampening my enthusiasm for this turkey.

  2. Good Morning!

  3. VRX / Albo – Also downgraded with new TP of $18 by Mizuho! Not sure what having Ackman on the board will do for the stock. Changing business model might be a good thing in the long run but most likely very painful in the short term. And the CEO leaving is not a good sign as far as financial releases are concerned I think – if things were getting better, why leave now?

  4. STJ – Well you know how Ackman masterfully guided JCP.

  5. Sold the IBB calls on this push.

  6. China / Phil

    Do you think the margin loan change in China will support any rally there? Thanks

  7. FU UNG!!!!!

  8. Good morning!  

    Al Franken pissed off at the Senate Judiciary nonsense.  

    Ouch, Home Sales off 7.1% – that's huge.  

    All those Futures shorts are available at the moment!  

    Big Chart – You can see the Dow and Nasdaq and RUT resistance lines right here – would be impressive if we popped right over and held it but I don't think so. 

    BHI/DC – Blah!  The good news is they are still working on it and oil over $40 should keep BHI and HAL up anyway.  

    VRX/Albo – Drowning men and life preservers.  Still, should be good for a pop but, keep in mind, they were are $31 on Friday morning so not too impressive to get back there on this big move.    

    AAPL just had a super-spike to $110 and now back to $107 – fun ride for the Nas 

    MAR ups their offer for HOT.  I hate to see them merge as I like HOT and I don't see MAR improving them.  

    China/Enfil – No, I don't see people running in to lever up again.  The margin changed forced people out at the bottom and now the big boys get to add a bit but the bottom was 2,600 and now 3,000 is not really that cheap.  Obviously, the Government wants to get back to 3,200, so I'd assume that's the goal (up 7%).

    UNG/Jabob – Are you kidding?  I'm out, I want to see a nice sell-off.  Interesting as it snowed yesterday too.  

  9. me too..


  10. All of these market gains over the past month or so and TLT is finally touching the 200 day just now

    Something seems off…

  11. UNG – I wouldn't give a "selloff" too much time. A few days pullback and then a push over the 50 day is likely. All over the world people are abandoning coal plants for NG and even at 42% efficiency, you can turn $2 worth of natural gas into $10 worth of electrical power (at 8 cents per kWh). And the east coast finally got some snow, and we are finally shipping NG to Europe where it trades for $6, and rigs all over the US drilling rigs are being shut down….

    Seems the shoe is on the other foot for energy price momentum. More upside than downside now.

  12. Bought some SQQQ.

  13.       Pre-market – For Monday – 3-21-2016

     Dr. John L. Faessel


    Commentary and Insights


     The worlds markets are reacting bullishly in a weak growth global backdrop to a surprisingly dovish 'hold' from the Federal Reserve where a fall in the U.S. dollar is boosting commodities. The dollar is now hovering around a five-month low as markets try to digest the Fed's pushing back of the expected path of rate increases.

     In what is the greatest ‘price fixing’ ever, the world’s central banks – Fed / ECU Bank of Japan – have and are setting the price of money and the market trusts / accepts this massive experiment (crap shoot) that’s now resulting in negative interest rates.  I believe that the USA alone will not be able pull a deflating and dead slow world out of this current mess. Prolong it for ‘how long’, but reverse it; without massive consequences; I think not. 

     Global debt of all types grew by $57 trillion from 2007 to 2014 to a total of $199 trillion, the McKinsey Global Institute reported in February last year. That’s 286% of global GDP compared with 269% in 2007. The current ratio is above 300%. The big boost came from governments. McKinsey noted that the debt load, “poses new risks to financial stability and may undermine global economic growth.”

     In what is a mindboggling / epic / stupendous credit bubble China continues to slow while cutting capacity in a move to stabilize in prices. China's exports fell a whopping 25.4% year–over–year in February, while imports declined 13.8%. This is a far bigger slide than analysts expected. Not going to end without a bumpy conclusion IMO.

     In an all-out try to rescue sagging Europe, the EU’s Mario Draghi kicked up (ink is cheap) the monthly QE up by another €20 billion a month on top of the €65 billion already.


  14. Out of SQQQ for now.  Bought it for a trade not a hedge.

  15. TLT/BDC – Lack of movement since the Fed bodes well for our shorts.  

    UNG/BDC – Well, we'll see if $1.85 firms up but, in the bigger picture, it's not real support.  

    VRX back to $28.80 already.  That was fun while it lasted.  

    US Alone/Rustle – ROFL!  We have a 1% GDP, we can't pull ourselves out, let alone the rest of the World.  If they don't start spending on infrastructure soon it will be too late and then we'll all go down the austerity path to DOOM!!!  How do you add $57Tn of debt in 7 years and not create jobs??  It's F'ing unbelievable!  $57,000,000,000,000.00 is a $57,000 job for A BILLION PEOPLE!!!  All we needed to do was put 50M people to work so let's say 57M people need to get jobs and $57TN is ONE MILLION DOLLARS for each and every one of them.  Do we really need more evidence than that that a crime has been committed?  

    You know, these numbers get so big they don't seem real and that's how the Top 0.01% are able to funnel it away.  By piling on $57Tn in debt, who's going to notice if a couple of Trillion finds it's way into their pockets.  It's like this show, The Knick, where the guy in charge of building the hospital is taking kickbacks from all the contractors and the costs keep skyrocketing and he purposely makes changes and causes delays so the money keeps rolling in.  At a certain point, the hospital is almost finished and he's run out of people to cut deals with – SO HE BURNS IT TO THE GROUND – so they have to start again and he can get more kickbacks.  Why does he do it – so he can afford to join a rich man's exclusive club.  

    These people set policies that are destructive to the World only because it creates an environment where they can get richer and there are thousands of well-placed, corrupt people in government who are happy to help them along for a slice.  

    Another failed attempt to punch over.  

  16. Phil   Is it time for an SCO play,perhaps 2-4 months out?

  17. DIS/Phil – I have some DIS July $100 calls bot at 7.10, now at 3.30. Considering double down OR roll down & add.  Thoughts?

  18. SCO/490 – Short on oil?  No way.  Oil should peak out in July/Aug but then, in the winter, it might be a short again.  

    Apple event is starting.  I'll take some notes.  

    DIS/Scott – Please STOP PAYING PREMIUMS!!!  PLEASE!!!  STOP!!!  Hopefully that was part of a bull spread but no, I would not throw more money at it unless you are moving to a sensible spread.  $100 is a very fair price and maybe $110 (see the very Dow notes I linked to this morning) but you paid $107.10 so the most you were likely to make was $2.90 if everything went perfectly (and it didn't).

    The July $100s are $3.30 and we think the market is pulling back so potential disaster if it does.   The Jan $90 ($12.50)/100 ($6.50) bull call spread is $6 so you can roll to that for + $2.70 and have a much better chance of getting back net $7.30 from that than you do of AAPL being at $107.30 come July expirations.  When you took the trade initially, what was better, paying $7.10 for a $100 call that had to be at $107.10 to break even of paying $6 for a $10 spread that had to be at $96?  

    If you are patient, you can go out to the 2018 $100 ($10.80)/$110 ($6.80) bull spread for $4 and that pays $6 at $110, which is twice as much as the call makes at the same price.  You can offset 10 of those ($4,000) with the sale of 5 short $80 puts at $5.60 ($2,800) for net just $1,200 on $10,000 worth of spreads and your break-even these is just $111.20 – doesn't that make more sense than spending money burning premium?  

  19. Phil

    Good morning to you! 

    I have T at $32 and sold the Jan $32 calls for $2.10, which are now $7.00.

    I did not expect this move in T from $32 to $38 in 6 weeks!

    However, what do you think of selling 2x the Jan 2018 $35 puts for $2.30, and paying $1 for 1x the Jan 2018  35/37 BCS TO EARN $2 more and I can also sell the Jan $37 calls for $2 to protect myself down to $36 again?







    2018 $35/37 BCS. That gets me $6.60 back, almost the entire $7.

    I can then sell the Jan $37 calls for 

  20. AAPL blah, blah, blah environmentally friendly BS so far.  No mention of the pollution output of the Chinese labor camps they make the phones in or who cleans the suicide nets they keep outside the building….

    It's their 40-year anniversary April 1st.  

    They have a robot named Liam that takes the old phones apart for recycling.  

    99% of Apple’s packaging is either recycled, or comes from sustainable forests. Will move to all paper packaging. – Lisa Jackson

    Apple's Singapore offices are 100% run on solar:

    OK, cynical though I may be, I like the fact that they have a chief renewable energy officer whose mission is to make the whole company 100% run on renewable energy by 2020.  

    Now talking Apple health.  

    • Williams says that Apple was able to help launch the largest Parkinson’s study in history within 24 hours with the help of ResearchKit.
    • Now we’re watching a video about ResearchKit, featuring testimonials from medical researchers and doctors talking about the way it has helped them diagnose and research illnesses and conditions.

    That's cool too!  Think about it, if you have a choice of robot hospitals to go to, don't you think you'll choose the iHospital?  

  21. T/Maya  - May all your problems be the stock you bought gained too much!  Hopefully, you have the stock so you have to consider that being called away in Jan is not the end of the World, don't go crazy adding risk.  Consider whether or not it's worth all that hassle just to avoid making a small profit.  

    You sold the Jan $32 calls, now $6.90 and you have the stock at $32 I take it so how about accept the fact that it's gone and just sell the 2018 $35 puts for $2.85 as that plus the $2.10 you collected nets you into T at $27.05 so you'll net $4.95 back if T is over $32 in Jan and then you can buy more stock and sell more calls or just wait for the short puts to expire and the worst thing that can happen is you end up owning T again for $32.15 (less your profit from the current sale and dividends).  

    To me, that's much simpler than messing around with a $2 bull call spread and more short calls.  Alternatively, you could roll the short calls to 1.5x the 2018 $35 calls ($4.40 = $6.60) for about even and just buy more stock at $39 so you'll average up to $34.33 less about $1.70 per share is $32.63 on 1.5x and you get 0.5x more dividend and called away with another $2.37 profit at $35.  Nope, I still like just the put sale better.  

  22. DIS/Phil – thanks – yes was a part of a bull call diagonal, and the short side had just expired offering a $6+ credit so net cost is more like $1.00 .. so i'm good!  But these remain and thinking about what to do with them next… expectation had been that DIS will be moving forward on all the star wars earnings, but… like you said, hasn't worked out quite that way yet…  

  23. DIS/Scott – Good that you sold premium too but the second you buy it back or it expires,  you have to remind yourself that your intention was not to have a naked call.  Same trade goes – you have a $2 profit but only if you take it and put it to better use than sitting in a low-probability long call.  

  24. VRX doing a triangle squeezy thing at $29.50 on the 5 min chart – about to pop one way or the other.  

  25. Oh I get it, AAPL talks all about how great it is to have all your medical information on your phone – UNLESS THE GOVERNMENT IS GRANTED ACCESS TO IT!!!  Very clever….

    • Cook is back out to talk Apple Watch.
    • Cook introduce a Space Black Milanese loop, new sport band colors and a woven nylon NATO style band.

    • Apple Watch has been price dropped to $299.
    • Cook quickly moves on to Apple TV and says that there are 5,000 apps on the App Store now.
    • Now Cook is talking about Siri on the Apple TV.
    • tvOS is getting some new features like folders, Siri for App Store, iCloud Photo Library, Live Photos and Dictation — allowing you to enter text like user names and passwords.
    • Cook essentially admitting that entering text sucks on the Apple TV by mentioning passwords and dictation.
    • Over 30 million people buy 4 inch iPhones, says Jos.

    • Pushing that rose gold (they must have bought a boat-load!).
    • Apple introduces the 4″ iPhone SE

    • The A9 includes the Hey Siri function because it also has the motion co-processor. 
    • Jos asks Siri about recycling, and it makes a joke about Liam, the disassembly robot. 

    I don't like the way cook runs the company – all these presenters are too relaxed.  When Jobs was watching them they used to be super-tense.

    Maddie (16) has been waiting a year for this thing – she doesn't want a bigger phone.  

    AAPL's auto partners – no way are they going into competition with them when they are all willing to integrate Apple Entertainment (car play) into their cars:

    Now a smaller IPad Pro (I like my giant one, thanks). 

    • Over 200M iPad 9.7″ devices have been sold. 
    • “The majority of iPad 9.7″ buyers come from a Windows machine,” says Schiller. 
    • Schiller announces 1M iPad apps.
    • Basically, says Schiller, Apple sees the iPad Pro as a transition device for Windows machine users. Many of those PC users are on machines 5 years old or older, he says – huge potential market.

    • Schiller says that the iPad Pro 9.7″ screen is 25% brighter, and is its least reflective screen.
    • Schiller announces the True Tone display which measures ambient color temperature and adjusts the screen to match. 
    • If the color in the room is cooler or warmer, it matches the ambient light, giving you a more accurate color rendition. 
    • This, btw, is a pretty big deal. Matching color temperature to your evaluation of color is something that artists and photographers have to worry about on a constant basis so that they’re making accurate color choices when correcting or designing (blue dress/gold dress).

    I notice this on mine, the difference is night and day and I don't even like my old IPad2 anymore, other than the fact that, now that I use the 12" Pro, my old iPad feels like a mini.  Also, I no longer worry about breaking it so I enjoy going out with it more – turns out it's really durable!  

  26. TSLA

    Market Cap 31.5BB

    P/E – none but if things go perfectly for 2016 it would be 179x at current price at 1.33 earnings est

    Revenue Est 8.55BB

    Cars it will sell on high end of estimate in 2016: 90,000

    Each car worth $95,000 to their market cap



    Market Cap 49.3BB

    P/E – 5.83 of 2016 est

    Earnings Est – 5.48

    Div of 1.52 (4.76%)

    Revenue Est 153.76BB

    Cars they will sold in 2015: 3.1MM (and is currently has the best growth of any car company with their full lines)

    Each car worth $15,903 to their market cap

    Will be first company to have affordable all electric car out on the road



    Market Cap 54.2BB

    P/E – 6.93 of 2016 Est

    Earnings Est – 1.97

    Div of .60 (4.4%)

    Revenue Est 146.2BB

    Cars they sold in 2015: 2.6MM

    Each car worth $20,846 to their market cap


    Guess which one is ridiculously priced yet has the best upside if you listen to analysts?

  27. syc·o·phant
    1. a person who acts obsequiously toward someone important in order to gain advantage.  a self-seeking, servile flatterer;

    I had to look that up as it's the first thing that crossed my mind when the audience applauded for a rose gold iPad (I told you they must have too much of it)!

    Oh yeah, the 4 speakers kick ass.  When I play Modern Combat, I can feel which way the shots are coming from from the vibrations of the individual speakers and now, when I go to hotels, I don't even need to take a speaker for music.  

    • The new iPad Pro comes in 32Gb for $599 and 128GB for $749 and for the first time, $899 for a 256GB in WiFi configurations. 

    The new campus is ready to launch – next year's event will be there:

    That's it though, not good for AAPL's stock, heading back to $105.  

    /NQ 4,409.25, still shortable with a stop over 4,410.  /YM short below 17,500 and /ES can be shorted below 2,040 – all with tight stops above.  

    VRX breaks DOWN!  $29.22, not so bad yet but the squeezy never lies.  

  28. big mistake, meant on TSLA 950,000 to their market cap for each car

  29. $950,000/Rustle – LOL, I thought $95,000 was too reasonable.  Totally out of control but, like the skimming scams I was talking about earlier, that's all TSLA is.  Musk was in dire straights when he started the company but he knew how to run an auto maker scam that would draw in investors and drop tens of Billions of Dollars into a company he could then skim a few Billion from.  This is a guy who rented a house in college and turned it into a night club, he's always been a scammer.  SpaceX is just a scam to get Billion Dollar Government contracts that he can also skim profits off of.  

    Anyway, not much worse than any other CEO except he actively manipulates his stock – that kind of annoys me.  

  30. If the average investor ever saw these comparisons and not listened to nonsense from analysts, think you would be looking at a different priced company.

  31. Phil – The other day, some "CAT people" were caterwauling on this forum, so I thought I would throw them a bone…  Out.  Smiley CAT Emoticon.

  32. TSLA – did I miss it or was there no Tesla featured on Apple's auto partner's slide?

  33. HAL    a trader sells 3000 Oct $31 puts for $1.54

    a small sign that the merger with BHI might go through as the EU collects more data

  34. GLW/Phil – Apple hasn't seemed to move GLW at all today. No implications for gorilla glass et al?

  35. Hi Phil.  Is it a good time for the UNG trade or wait until it firms up?  Please advise.

  36. Rustle/Phil – Tesla – So true, July 27th last year when Facebook surpassed GE,  I dissected Facebook vs GE, Tesla vs GM and Amazon vs Walmart.  On Feb 4th, I ranted about TSLA valuation vs F, FCAU, GM, Honda and Toyota vis. REAL car companies. What is truly amazing about these valuations is, does anyone even bother to look at the actual number of employees and economic impact GE, GM and Walmart bring to the table.  Yeah, I could go into the whole "what's good for GM was good for US, what's good for Megalomart is not" thing, but not today.  Out.

  37. STJ/UVXY – It is getting real tempting to start scaling into a UVXY long, probably with just stock, as the options premiums are nuts.  Am I crazy?

  38. VIX so low… feeling cheated on any prices to sell premium.  Not sure I want to buy back any to uncover longs,.. what's a guy to do? buy puts/hedges? so far, just sitting on hands..

  39. GE/Phil – back to pre-crash 2008 highs, and less than 20% away from all time high in 2000 tech boom days. Have uncovered stock with LT gain cost basis at $17.8 share. Not interested in closing the position, but… everything is awesome so will rock on still this year, right?

  40. Cat People/Naybob – Great movie, remake was good too.  

    TSLA/Scott – No because they have that big pad in the middle of their dashboard that's not, for some reason, an IPad.  

    The only function my cars' stereo has is to synch with my kid's phones so they can DJ trips on Apple Play.   We've finally gotten into a system where everyone takes a turn picking the next song – since it can play any song ever (rarely gets stumped) you can have a lot of fun with it.  Kept us entertained all the way to Boston last week – in fact, the kids were enjoying picking show tunes where the next song had something to do with something in the song before it that we had an argument when we hit Boston and I wanted to listen to the GPS!  Sure beats license plate bingo.  

    When Tina and I play, we play things like bands that have to be connected like Aerosmith, Beatles (Come Together), Eagles (Joe Walsh plays with Ringo in his band), Pink Floyd (Henley and Waters have a song together), Boomtown Rats (obvious), which leads to 100 people (we are the world) so maybe Blues Brothers, etc. The trick is to trip the other person up and groups that break into solos don't count and no same group twice!  And, of course, you only have until the end of the song to make the next connection or you're out…

    HAL/Stock – I don't see how they'd still be pursuing it if it wasn't going to go through but a merger this big (was much bigger when it began!), is going to go through regulatory BS and the EU is pack with SLB cronies who look for any excuse to cause HAL pain.  

    GLW/Scott – If anything it's bad for them to have AAPL push smaller phones (less glass).  No win for LQMT either, not even a watch…  frown  Anyway, what, you're not satisfied with the 25% run since Jan?

    VRX struggling to stay afloat but below $29 now.  Who will they add to the board tomorrow?  Maybe get Shkreli out of jail?  

    Image result for shkreli meme

    UNG/Taihu – Yes to UNG at $1.80 but no to /NG as it's still a bit scary.  UNG being a longer-term play, all we need is a downturn in sentiment to get a better price on long options but /NG is tricky as we could see $1.65 again.  I doubt it, but we could.  

    No matter how much you love something, when it's falling like that you wait for it to find a real floor – right Albo?  

    TSLA/Naybob – They were a big short for us when they first crossed $120 back in 2013 but they went all the way to $190 before coming back to $125, which was great for people who scaled in but terrible for people who stopped out so I've generally stayed away from big bets on them since as too many people follow it because it's popular but they aren't ready for that kind of volatility against them (even though we may love it as we scale in).  I am, however, warming up to the short side back around $240 as it's actually just a Spitting Cobra pattern which could resolve all the way down to $100:

    VIX/Scott – You don't see me making too many calls recently.  If you can't get good prices – just don't play. 

    I take that stuff very seriously.   It's not so much I copied his style as it is that his style is like my Grandfather's style and I grew up with it and I'm comfortable with it so, when I began reading Buffett, it all sounded very logical to me and he's pretty successful so why not take it to heart.  

    Some people are just going to be day traders – that can't be helped but even day traders learn to be patient – it's just that they wait an hour and it seems like a year to them!   But I love the days when there's nothing going on and I have time to read a hundred or so articles and I don't read lists of "the best stocks to buy" – I read the news and I see what's going on and then, when I see a trend, THEN I start looking at the relative benefits of stocks that might profit from the trend.  

    Sometimes, lots of time, there's no trend, so I don't play.  Like oil – it was interesting for a while and now it's not because it's no longer too expensive or too cheap so I would rather spend my time identifying something else that's cheap or expensive than trying to force a play on oil.  Right Craigs?  

    GE/Scott – You want me to certify your greed?  No thanks.  At $31, GE is very close to $300Bn AFTER they have sold off GE Capital to GS.  Some like the concentration but I'm not happy with the lack of diversification and integration which has done more good than harm over the years.  Even before the $7.5Bn write off from GE Capital, they are "only" making $10Bn a year vs AAPL at $586Bn (not even 2x) making $50Bn a year (5x). So, right away – I'm not loving GE because there are, I am sure, hundreds of good companies who's value falls between GE and AAPL which puts GE on the very high end of valuation at the moment.  

    You have a double and, in the very least, I'd sell 2018 $30 calls for $3.10 and the $28 puts for $2.30 to lock in 17.4% and, if you really think GE will be over $35, then sell $35 puts for $6.20 for another 10% and you get an 0.92 dividend (3%) so +6% to whichever you choose over 2 years.  Don't forget, you can always roll the short puts and calls and if you are so sure GE won't go down, there's no reason not to do a trade like that unless you are POSITIVE they will be over $35, in which case the 2018 $35 calls are only $1.10 (because most people don't think so) and you can take $30 off the table and still make everything but $5 of the move over $35 and I'm pretty sure you know how to make $5 putting $30 to work for 2 year (hint, not with a GE dividend!).  

  41. Phil – Good advice on falling knives. ;-)

  42. Phil – great comments, thanks..!

  43. UVXY / Palotay – It's been tempting all week last week, but wrong so far… The best play might be a way out of the money BCS. I am thinking a May 30/40 BCS for example at around $1.00. At $30, you double your money. At around $40, you are looking for 3-bagger. And May gives you some time to be right with a defined risk of $100 per contract. And if by May expiration, we are in the tank, you got a $10 spread for $1 so not a bad return…  But this market finds new legs every day!

    Of course, a straight $30 call would do the job as well, but I would rather mitigate some of the decay with a short call in the meantime. You could also go with a calendar spread. I think that there are many possible cheap plays with options – cheaper than the stock itself I think.

  44. What happened to GTATQ?  I had some shares put to me when we all got into it a long time ago.  No listing today. 

  45. Phil/T

    Thanks for your thoughts.

    I had already sold $30 puts that are profitable already and I may do a combination strategy- ie sell some more, higher strike puts as well as higher strike calls, but nothing drastic..

  46. Phil – I have $10,000 in a separate account that I want put to work until the end of the year with the least amount of maintenance.  Any suggestions?

  47. Pharm / PETX

    Do you still like this company or is today's FDA approval announcement a chance to sell into the excitement?  Thanks!

  48. Interesting data:

    The student debt story is about what you'd expect: young consumers have more of it, but their total debt load is lower than it was in 2003 because they have lower mortgage debt. Basically, they're trading student debt for mortgage debt.

    But older age groups make up for it with higher debt than they had in 2003. This is especially true at age 65, where total debt is up by about a third over the past decade. So what does it all mean?

  49. Hey Phil – your girl Libby really told us what she thinks of Trump today:

    Not a fan…

  50. All these conservative guys losing their crap because of a drawing of Che in an Obama picture:

    Get a grip! Previous presidents dealt with murderous dictators in the past and none of these guys would object. Of course, most of these people don't know history much. They probably know Che because their liberal friends used to have his poster (or T-shirt) when they were growing up.

  51. StJ/Communist: Oh damn, check out this photo oh former Pres. George H. W. Bush worshipping at the altar of Mao Tze Dong

    George Bush Sr. – Mao supporter

  52. LOL, heres an even better one:

    St. Ronnie and Lenin: Best Friends Forever

  53. bulls4444   Excuse me for butting in.  Are you going to need the money for something else at the end of the year?

  54. LOL Kinki… Good ones! These guys are just such idiots. In the meantime Obama still got Raul Castro to answer some questions at a press conference. I predict that 10 years from now, some of these same conservatives might be vacationing in Cuba. Idiots…

  55. You're welcome Albo, Scott.  

    GTATQ/Grant – I do believe our shares have been extinguished in the bankruptcy.  

    Pursuant to the Plan, all outstanding equity interests of the Company, including but not limited to all outstanding shares of common stock, par value $0.01 per share (the "Existing Common Stock"), options and contractual or other rights to acquire any equity interests, will be cancelled and extinguished on the Effective DateHolders of Existing Common Stock and holders of Class 5 Subordinated Securities Claims (as defined in the Plan) will not receive any distributions under the Plan on account of such equity interests or claims. As of the date hereof, there were 137,662,024 shares of Existing Common Stock outstanding. GTATQ 8-K

    They screwed over the common shareholders big-time on that one!  For $13M (in new stock, not even cash), they could have thrown us a bone at 0.10/share and maybe we'd forgive them and buy new stock but this is the kind of management team you should never trust.  

    You're welcome Maya.  

    $10,000/Bulls – Aggressive or conservative.  Aggressive I still like UNG, conservative I'd have to look over the Watch List and see what's cheap so remind me tomorrow.  

    Young people/StJ – Sharing economy means less kids have cars and such and putting off housing much longer too.  That student debt is sickening – think how much that sets you back for life coming out of college $50,000 in debt.  

    Liz/StJ – Ah, my true love!  

    Che/StJ – Wow, they are reaching for anything these days.  

    Cuban President Fidel Castro (L) greets former US president Jimmy Carter (R) after Carter's speech in Havana 12 May 2002. Carter is the first US president in or out of office to visit Cuba under Castro's communist rule.

    Ah, good one Kinki!  

    Just keep these photos in mind when you listen to how outraged the Conservatives are.  The hypocrisy is so thick you can taste it!  

  56. "These gentlemen are the moral equivalents of America's founding fathers." — Ronald Reagan declared while introducing the Mujahideen leaders to media on the White house lawns (1985)

  57. Actually, I guess Reagan had a point:

  58. Apple has finally become an ordinary tech company.<p>That’s the overwhelming response to Apple’s annual spring press conference in which the company asked the world’s tech press and pundits to gather to see …<p>The iPhone SE, which features a 4-inch screen — the same size as the nearly four-year-old …

  59. Earlier today we wrote at length about the decline in US housing inventory being, in effect, the next crisis for the housing market.<p>With inventories down and supply tight — as of February the outstanding stock of existing homes would only last 4.4 months at the current selling rate — the lowest …

  60. The 4 rituals that will make you an expert at anything

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  61. PANAMA CITY BEACH, Fla. — The sun was sublime, the flour-soft sand could scarcely have been more tempting and the D.J. music thumped loudly enough to jiggle the beer cups resting on nearby tables. All that was missing were the throngs of booze-soaked, sunburned spring breakers who usually swarm …

  62. Marriott won over Starwood with a sweetened bid worth more than $14.4 billion just days after a Chinese insurance company appeared to steal it away from the hotel chain with a more lucrative offer.<p>The buyout, which may still be contested by China’s Anbang, would create the world’s biggest hotel …

  63. Smartphone cameras are so good these days it can seem almost churlish to yearn for improvements. And yet enhancements continue to shave away at imperfections as engineers turn the screw to optimize multiple aspects of image capture hardware and software.<p>To wit: U.K. based startup Spectral Edge has …

  64. The uncertain fate of Britain’s trade relationships in the event of Brexit could knock up to 5pc from the country’s GDP and leave us close to recession for several years, according to research commissioned by the CBI business group.<p>Even if the UK can secure a free trade agreement with Europe after …

  65. Feds move to cancel iPhone hearing

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  66. The Link Between Income Inequality and Physical Pain

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  67. The world’s largest oil driller is expecting the industry to worsen in the second half of the year.<p>Schlumberger CEO Paal Kibsgaard gave a presentation at an industry conference Monday, and much of his outlook was very bearish.<p>He started with the fact that the oil industry is in “the deepest …

  68. In a healthy capitalist system, if the thing you are doing is not adding value in the real economy, you should not be able to make money at it for very long.<p>Unfortunately, that’s not always how it works. But the implosion of Valeant Pharmaceuticals International — a company whose primary business …

  69. A group of 51 New York millionaires wants lawmakers to raise taxes — on New York millionaires.<p>In a letter addressed to Gov. Andrew Cuomo (D) and state legislators, the group — working in conjunction with the left-leaning Fiscal Policy Institute and Responsible Wealth project — called for a …

  70. Image source: General Electric Company.<p><b>Tesla Motors</b> may be overlooking the biggest market for its energy storage solution. While Elon Musk is pushing PowerWalls in the U.S., <b>General Electric</b> is exploring gigantic growth opportunities in India. Here’s what you need to know.<p><b>Exploring energy storage in</b> …

  71. Short interest is sky-high right now, although it may seem counterintuitive for it to be.<p>If you were a chef mixing up a batch of short interest, you certainly wouldn’t use these ingredients: a year-to-date increase in oil prices; a massive rally in high yield; a declining U.S. dollar; and a dovish …

  72. The oil output freeze is a huge red herring

    The way things are shaping up on the oil price panic barometer, 17 April is now a D-Day of sorts for the industry. It’s the day both OPEC and non-OPEC countries will sit down together in Doha, Qatar, to work towards an output freeze deal.<p>OPEC President Qatar will host the meeting as a follow-up to …

  73. Source: AMC Entertainment<p>Last year was a record setter for movie theaters all over the country. Ticket sales exceeded $11 billion as moviegoers flocked to see everything from dinosaurs to global espionage and fantastical sci-fi heroes.<p>The U.S. theater industry is dominated by three players: <b>Cinemark</b> …

  74. OTTAWA (Reuters) – Canada’s new Liberal government will try to revive a flagging economy by unveiling one of the country’s biggest deficits since the 2008 financial crisis in Tuesday’s federal budget, making it a rarity among Group of Seven peers more focused on austerity.<p>Prime Minister Justin …

  75. They say never to judge a book by its cover, or a bank’s balance sheet on the day it’s reported.<p>Research by Fitch Ratings Inc. suggests European banks are cosmetically reducing the part of their balance sheets dedicated to money-market dealing right before they report numbers to regulators every …

  76. The crazy news out of Valeant continued this morning with a wild press release announcing, among other things, that Chief Executive Officer J. Michael Pearson is going to leave, but not yet, and that the board asked former Chief Financial Officer Howard Schiller to resign from the board, “but Mr. …

  77. When Car2Go launched its car-sharing service in San Diego about five years ago, its entire fleet was composed of electric cars.<p>It was a move that made San Diego officials smile, as the city is undertaking an ambitious plan to cut carbon emissions.<p>But now Car2Go is withdrawing the fleet of Smart …

  78. Good morning (well, actually not).  

    More terror attacks – this time it's Brussels with 3 attacks hitting the Airport and Subways:

    More Than a Dozen Dead After Three Explosions Hit Brussels

    Several explosions rocked Brussels, hitting the international airport and a metro station near the European Union institutions, in a presumed terror attack that killed more than a dozen people and injured many more. 5010 minutes ago

    European Stocks Lower After Brussels Explosions

    European stocks fell and haven assets gained Tuesday as investors turned cautious following reports of explosions in Brussels.

    Possibly it's some kind of retribution as the Paris terrorist was captured in Brussels a few days ago but who knows with these people?  The airport bomb was the worst, injuring 100 people (12 or so killed) at the line of the security checkpoint.  That's bad at they are simply hitting the choke point in our security systems.  

    Amazingly (I'm amazed every time) the markets are generally shrugging it off with Europe down just 0.5% after maybe a 1% dip on the news.  Our Futures are also going back to flat but we're watching the same shorting lines as yesterday for now.

    The Dollar punched up on the terror attack but only to 95.75 and commodities have had little reaction so far.  

    The Nikkei has been having a wild ride:

    Watch that 10,000 line on the Dax for the big bull/bear signal.

    17,550 remains a good shorting line on the Dow (/YM) until it breaks.

    2,040 is our /ES shorting line:

    By the way, the attack was about 3am and the weakness was already there.  

    4,415 was just where we were in the morning for a short, 4,420 is the real line for calculation purposes (200 dma).  Being rejected there is a negative technical signal but only if strongly rejected.  As we expected, AAPL was no help yesterday.  

    The Russell was easy money and, as I keep saying, if you wait PATIENTLY for significant resistance – you will be rewarded.

    We'll see how well the markets can really shrug this off.  Don't forget how massively overbought we are so this is the perfect excuse to give us a little retrace. 


  79. The numbers suggest the Republicans’ competitive primary will weaken rather than strengthen the eventual nominee<p>THE 2016 presidential primaries have …

  80. Economic sentiment soured further in the eurozone’s largest economy in March, as pessimism over global financial markets in the first two months of …

  81. BBC News

    Two explosions have been reported in the departure hall of Brussels airport, injuring several people.<p>Images shared on social media showed smoke rising from the terminal building and significant damage inside.<p>The blasts come four days after the arrest in Brussels of a suspected Paris attacker Salah …

  82. It’s true, Fox has a right-wing news-satire show. They’re so proud of it that it runs at 3 a.m. It’s got Bee wrong<p>Since the debut of her new TBS show, “Full Frontal,” Samantha Bee has been stirring things up. From her first episode she hit the ground running, leading many to wonder why she hadn’t …

  83. NEW YORK/SAO PAULO (Reuters) – Brazil’s state-run oil company Petroleo Brasileiro SA<p>reported a fourth-quarter loss of 36.9 billion reais ($10.2 billion), according to a securities filing.<p>Net sales, or total sales minus sales taxes, was 85.1 billion reais in the quarter and adjusted earnings before …

  84. The world’s largest cruise line is about to make some history.<br>On Monday, <b>Carnival Corp.</b>announced that Cuba has agreed to let the company begin cruises …

  85. On Wednesday, Fox News announced that it would be canceling a Republican presidential debate, scheduled for Monday, March 21 in Salt Lake City, due to the withdrawals of Donald Trump and then John Kasich. “We had hoped to contrast Governor Kasich’s positive inclusive approach to problem solving …

  86. Former Federal Reserve Chairman Alan Greenspan discusses congressional oversight of the Fed. He speaks on “Bloomberg ‹GO›.” (Source: Bloomberg)

  87. Andrew Rhomberg wants to be the Billy Beane of the book world.<p>Mr. Beane used analytics to transform baseball, famously recounted in “Moneyball,” a book by Michael Lewis. Now Mr. Rhomberg wants to use data about people’s reading habits to radically reshape how publishers acquire, edit and market …

  88. The PE of the Russell 2000 is now negative, and the as-reported earnings of the S&P 500 is now a very expensive 23.61 vs. the fluff operating …

  89. Posted Under<p>Think Tank<p>Previous Post<p>Just Some Immigrant from Hungary . . .<p>Sign Up for My Newsletter<p>Get subscriber-only insights and news delivered by …

  90. The nations of the world agreed years ago to try to limit global warming to a level they hoped would prove somewhat tolerable. But a group of leading climate scientists warned on Tuesday that permitting a warming of that magnitude would actually be highly dangerous.<p>The likely consequences would …

  91. Moves by 73% state-owned bank brings its closer to resuming dividends for ordinary shareholders<p>LONDON—Royal Bank of Scotland Group PLC has repaid £1.19 billion ($1.71 billion) to the British government and will retire the bank’s so-called dividend access share, taking the 73% state-owned lender one …

  92. No cause of death was immediately disclosed; Grove successfully fought prostate cancer and had suffered from Parkinson’s disease in recent years<p>Andy Grove, former CEO of Intel Corp., during an interview in his office in Los Altos, Calif., on July 8, 2008. The Hungarian-born executive helped Intel …

  93. On a typical weekday, hundreds of heavy trucks arrive at the Chempark Leverkusen, a sprawling complex of refineries flanking the Rhine River in …

  94. Increasingly, central bankers, economists and market watchers are discussing the pros and cons of what’s called helicopter money, a 47-year old idea that posits a way to kickstart an economy through dropping money on its citizens. Peter Praet of the European Central Bank, for example, said in an …

  95. Who’d have thought Pat Robertson’s ideas about sex and relationships are totally backward. Oh right, everyone<p>We may have survived yet another war on Christmas. But we must remain vigilant. For the very same secularist, Muslim, homosexualist, communist, atheist freedom-haters who try to take the …

  96. For oil companies, the legacy of $100 crude is starting to run dry.<p>A wave of projects approved at the start of the decade, when oil traded near $100 …

  97. Shanghai Composite Index finishes session below key 3000 level<p>China’s main stock market tumbled Tuesday below the psychologically important 3000 level, snapping a seven-day winning streak.<p>The Shanghai Composite Index fell 0.6% to close at 2999.36. The smaller Shenzhen Composite Index ended down …

  98. <i>This is a syndicated repost courtesy of Money Morning – We Make Investing Profitable. To view original, click here.</i> Reposted with …

  99. An elementary school girl was reportedly handcuffed under the stairs to “be taught a lesson”<p>Elementary school student, Madisyn Moore was reportedly handcuffed for stealing candy from a teacher’s desk while at school on Monday, NBC Chicago Reports.<p>The 6-year-old who attends Fernwood Elementary in …

  100. Reaganomics killed America’s middle class

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  101. The Most Expensive Home Listing in Every State 2016

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  102. Wall Street’s Pile of Unwanted Treasuries Exposes Market Cracks

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  103. Japan Yields Extend Record Lows as Scarcity of Debt Fuels Rally

    Japan’s long-term bond yields extended their push to record lows, driven by a shortage as the central bank buys record amounts of …

  104. “The beautiful wall” is the GOP front-runner’s one serious plan. John Oliver lays out what it would actually cost<p>“Last Week Tonight” host John Oliver returned to Donald Trump last night — specifically to dive deep into his plans for a “beautiful wall” along the U.S.-Mexico border.<p>“The border wall …

  105. It’s simple: Imagine a capsule filled with people, hovering inside a tube, moving faster than a jet. Vancouver to Toronto in about three hours. …

  106. The European Central Bank began charging banks interest on deposits in June 2014 to encourage them to lend more to companies and consumers. It hasn’t …

  107. Want to understand the failures of the “free market” and the key to getting a decent wage? Here’s the real story<p>Let me tell you the story of an “unskilled” worker in America who lived better than most of today’s college graduates. In the winter of 1965, Rob Stanley graduated from Chicago Vocational …

  108. Cash-strapped Atlantic City will shut down all nonessential services starting April 8 unless it receives a financial bailout from New Jersey, the mayor said Monday.<p>Municipal government would remain closed until at least May 2 when the city receives its quarterly tax payments, according to a …

  109. The National Football League, trying to increase its presence outside of the U.S., is fiddling with the idea of playing a game in China as early as 2018.<p>NFL executive Mark Waller, who is heading the league’s international effort, said the league wants to stage a contest in a part of the world where …

  110. OPEC expects oil prices to rebound to a “moderate” level even if Iran doesn’t join other producers in an agreement to freeze production.<p>About 15 or …