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$2,100 Tuesday – Gasoline Futures Pay off Bigly (Again)

Yep, we did it again.

In yesterday's post, I noted that Gasoline Futures (/RB) were taking off, as they crossed the $1.35 mark and said our target was $1.45 and they already hit $1.40 during yesterday's session and it came so fast that we took the $2,100 profit per contract and ran, missing this morning's pop to $1.43 but hopefully we'll retest $1.40 for another entry (and another $2,100).  

We're now into real profits on Gasoline Futures as we clawed back from our intitial loss with huge wins on Monday (+$1,875 per contract), Tuesday (+$1,875 per contract) and Thursday (+$420 per contract), where I said in Friday Morning's post: "Hopefully we'll pop over $1.35 (from $1.33) and run up from there.  

We laid out our long premise for gasoline almost 3 weeks ago, right in the morning post:  

http://www.philstockworld.com/2016/11/04/non-farm-friday-is-america-working-12/

So more people working making more money means more driving yet Gasoline Futures (/RB) have plunged to $1.39 this morning because that pipeline fire that caused prices to spike (which we shorted) earlier in the week, is already fixed but now we like /RB long because more workers = more drivers and we have the Thanksgiving Holiday coming up and that's a big demand holiday.  We made a quick $500 yesterday on a pop off the $1.45 line so this, of course, is a much better entry but it's a scary, volatile contract that makes or loses $420 per penny move!

It's those boring FUNDAMENTALS that make plays like this possible and the next Funamental Issue we're tracking is the very low volume that this "rally" has been trading on and that means there's no real support for this sudden $5 TRILLION surge in market valuation so, when people do finally decide it's time to take profits – there won't be any buyers and we can drop back very, Very, VERY fast.  

How are we playing that?  Well we talked about it yesterday, so let's move along.  Early this morning I put out a new note for our Members with shorting lines for all of our futures plays, that was:

So I like these shorting lines at /ES 2,200, /YM 19,000, /NQ 4,875, /TF 1,325 and /NKD 18,200 – 3 of 5 rule applies, tight stops if any go back over so the rewards can outweigh the risk – NO BATHROOM BREAKS!  

It's a very dangerous time to short the markets but we're fairly certain there's a lot more downside potential than upside to the market at this point.  Electing Donald Trump President of the United States of America did not make all the World's problems go away and, frankly, with low unemployment – kicking out millions of people and "bringing back" millions of jobs would actually kick off a massive wave of inflation that would crush corporate profits.  

Regardless of whether Trump's policies are ultimately good or bad, change is disruptive – it's not automatically good, which is what the market is anticipating.  Also, a lot of the good consumer spending numbers we've been getting have been the result of lower oil prices and oil has jumped 15% since the election, which is a form of anti-stimulus.  

Ultimately, that $1.5Bn comes off the bottom line of other retailers and it's more like $3Bn with mark-ups at the pump and, even worse, it makes the consumer think things are getting more expensive, which can be a self-fulfilling prophesy.  As you can see from the chart above, it doesn't take much for inflation to begin to snowball and President Trump vows to cancel the Trans Pacific Partnership his first day in office – possibly sparking a trade war that will make everything more expensive.

The Agriculture ETF (DBA) has sugar, soybeans, coffee, corn, cattle, cocoa, hogs and wheat and makes a lovely play against food inflation.  Let's say, for example, you spend $100 a week on groceries, call it $5,000 a year and you want to protect yourself against a move higher than $5,500.  We could set up a trade like this:

  • Buy 5 DBA 2018 $19 calls for $2.20 ($1,100)
  • Sell 5 DBA 2018 $22 calls for 0.75 ($375)
  • Sell 5 DBA 2019 $19 puts for 0.85 ($425)

That spread is net $300 and DBA is currently at $20.34 so your 5 contracts for 500 shares are worth $670 – DOUBLE what you're paying for the spread.  The only way you will lose money on the spread is if food costs are more than 5% lower and that would save you $250 on your grocery bill to even out the $300 you paid for the spread – that's a good hedge!  

Worst case is DBA goes below $19 and you are forced to buy 500 shares at $19 ($9,500) but, for each $500 DBA loses, your grocery bill offsets the loss by $250 and you would still be paying less than $5,000 for food while holding a permanent hedge against inflation (which you could then sell calls against for income).

If DBA goes back to $22, your $300 cash outlay returns $1,500 on just a 10% rise in food costs for a $1,200 gain (400%) – enough to cover a 25% rise in food costs.

A very good way to plan for next Thanksgiving! 


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  1. looks like another all-time low on TZA…dangit!


  2.  

    Phil / DLTR – they had a strong quarter and provided strong guidance – GM has improved on improved logistics ( one of their strengths), SSS are up, as well as avg. tickets.   I believe this is a 100 to 110 dollar stock and have the following position.  My HOPE is that this pop is short lived and I can adjust the below and still keep a meaningful position.    This looks like it might be getting away from me.  Would like your help in adjusting the below:

    Long 1000 SH – 82/sh

    Short 10X the Dec '16 $90 Calls (.50)

    Short 5X the May '17 $90 Calls (1.8)

    Short 5x the May '17 $95 Calls  (1.5)

    Short 5X Jan '18 80 Puts (7)

    I'd like to stay in a bullish position on this position w/ my 100 to 110 price target…

    Thanks for your help 


  3. Phil have you shifted to the Feb RB contract yet? Looks like the trading is very thin now on the Dec contracts.


  4. Phil / DLTR correction on the Jan '18 I have 8X 80 puts instead of 5X…


  5. Good Morning.


  6. DLTR – ia m short 8X of Jan '18 puts ( 7) sorry for the confusion. too early in CA.


  7. Phil,  with oil and gasoline rising today, don't you think that may pull the markets up too?


  8. Had to draw some more lines – 20 and 22.5% on Nasdaq! To keep things in perspective, the Russell was at that -15% line back in February, a 25% move in 9 months. These are 3x ETF type moves. Insanity!


  9. FU stjeanluc!!!


  10. ;-)


  11. LOL Jabo!


  12. I don't think that the Trump infrastructure plan will help create many jobs – looks more like corporate graft at the moment. Once all these programs have been analyzed we can have a better idea of the impact on the economy. Right now, looks like few jobs and larger deficits:

    http://talkingpointsmemo.com/livewire/sanders-calls-trump-infrastructure-plan-a-scam

    A policy paper by Wilbur Ross and Peter Navarro published in October, when both men were senior advisers on the Trump campaign, suggested offering corporations tax breaks to partially cover the initial equity investments for infrastructure projects. Ronald A. Klain, who oversaw the team implementing the American Recovery and Renewal Act from 2009-2011, and advised Hillary Clinton during the 2016 campaign, wrote about that proposal on Friday in the Washington Post.

    “[T]he Trump plan would not be a reasonable compromise — acceptance of its huge tax breaks for construction investors and profits for contractors would be a wholesale concession,” Klain concluded.

    See what happened on NJ with that mega mall project there! Nothing good so far and very costly for the tax payers.


  13. How bad could it get in the bond markets:

    http://awealthofcommonsense.com/2016/11/how-bad-could-bond-market-losses-get/

    “The typical investor today has never experienced a sustained rising-rate environment and they are emotionally and historically unprepared for what happens when interest rates go up 3% or 5%,” he said in a telephone interview this week.
    Millions of Americans, he observed, “are engaging in a variety of risky behaviors, often without knowing what they’re doing. They’re setting themselves up to lose a lot of money over the next several years, perhaps as much as they lost in 2008 in stocks.”
    “You could see 20%, 30%, 40% losses in the bond market over the next several years,” he continued, “and the people who are most exposed to it are retirees trying to live on their income. The people who are the least able to handle it financially are the ones most likely to suffer.”


  14. There is an Italian Referendum on staying in the EU in 2 weeks.  Wonder how that will work out?


  15. Probably not well Pharm! Although the procedure to get out of Europe would be a lot more complicated for Italy because they are also using the Euro. At this point, probably nothing more than leverage to get a better deal from the rest of the countries. But should be interesting.


  16. Good morning!  

    That Big Chart will have to be renamed the More Bigly Chart…

    We had a little dip pre-market but it ended quickly.

    If I wasn't in the middle of my post, I could have made a quick $200 each on my 4 new contracts but still in them.  Just a bump at the open – people have to take profits into the weekend or they are crazy (but, then again, they voted for Trump, so anything can happen).

    DLTR/Batman – I'm not a fan of the Dollar stores in general and President Trump is not likely to be putting cash into the hands of Dollar-Tree shoppers.  Having fallen from $100 to $75 is $25 and that means a weak bounce is $5 to $80 and a strong bounce would be $10 to $85 or else it's just bouncing in a down-trend that seemed very well-deserved after August earnings.  

    So the trade set-up is WAY too aggressive for my tastes.  They make about $4 per $90 share and you'd have to spend quite a while explaining why I'm paying more than 20x earnings for a retail store.  Anyway, assuming $75 is the floor, I'd adjust your position as such:

    • Sell the stock – they don't pay you a dividend and you are up $8,000
    • Buy the 2019 $80 calls for $18 (and yes, it should be in the low end of the range and you're not in a hurry, so don't overpay).
    • Roll the 2018 $80 puts ($6) to the 2019 $75 puts ($7).

    If you buy 10 longs (you can get 15 if it makes you feel better) that's $18,000 vs the $90,000 you are cashing in and you have all the upside less $8 premium, which you'll work off with selling short calls.  If only 10 then tight stops on the Dec calls but they are just $2.30 so you are not in bad shape – maybe 1/2 at $3 and 1/2 at $4 would add net $3 to the cost of your longs (still $69,000 cash off the table) and leave you with the 2019 $80/May $92.5 spread at about $21 and if it goes lower you can sell more puts and roll because you wanted to own 1,000 shares anyway so what do you care if you are assigned at $75?

    If all goes well, you just keep rolling the May calls to higher, longer strikes until you have to be in the 2019 short calls and the May $90s are $6 and the 2019 $110s are $6 so you could end up with an $80/110 spread – even if DLTR does take off on you.  More likely the Mays expire worthless and you sell $2 3-4 more times to cut about half your long cost.

    /RB/Craigs – I got out yesterday but, if I get back in, I'd go Jan.

    DLTR/Batman – Same thing really.

    Rising/Craigs – The rally has already been led by energy stocks, how many times can they lift on the same news?   

    Infrastructure scam/StJ – It's horrible, they are going to subsidize corporations to take over public roads, etc and turn them into toll roads.  As I said a couple of weeks ago – it's like that scene from Popeye, where there will be not income tax for the rich but the poor will be nickle and dimed to death with fees and taxes that disproportionately affect them.  There was a good article yesterday on the subject – sickening!  

    Bonds/StJ – Very good point, people have so much money in bonds and don't understand they can lose 20-30% very quickly.  

    Italy/Pharm – Italy changes Governments like underwear, I think they average one a year.  I think though, for Italy, when push comes to shove, the Northerners want in and there's more of them and, if they are being realistic – the Lira was always a disaster and the Euro has made their businesses more stable overall and, of course, the UK's Brexit was scary enough to put people off doing the same so I think a narrow loss this time around.  


  17. Phil,

    What's your average on your /TF shorts?


  18. privatize/  my favorite quote is from (First) US Astronaut Alan Shepard:

    "When reporters asked Shepard what he thought about as he sat atop the Redstone rocket, waiting for liftoff, he had replied, 'The fact that every part of this ship was built by the lowest bidder.'[66]

    They privatized the Iraq War – now we have more military suicides each year than died in combat…

    Don't get me started.


  19. Phil

    i am looking for a 2017 trade on BHI

    Any suggestion?

    Thanks


  20. CLF – long and strong! 


  21. DOW….19K.  Congrats to all those that played. indecision


  22. BDC – Agreed !   CLF has been a good contributor in the last month.


  23. VXX  Doubling down on my VXX.  Working a losing position into a winning.


  24. CLF $8 – from my side, it's flirted with $8 too many times before – surely time to cover?


  25. i doubt the infrastructure buildout will be any different than when O proposed it 6 years ago..interesting no one is mentioning who had this idea originally (FDR) Obama.


  26. Phil/FCX  What do you think about buying back the short 8 puts for .60 and locking in $1 of profit?


  27. /TF/Japar – 1,320.50 on 10 shorts, down about $5K, looking for $20K at 1,300.

    Bidder/Rexx – Sadly true.  

    BHI/QC – Should be a good year for them but I'd still play conservative because, if OPEC fails to hold $45, we could have a really bad spring for oil.  

    Fortunately, BHI is very volatile and $50 should hold so I'd go with 2019 short $55 puts at $5, maybe 1/2 and then pick up the 2019 $50 ($14)/60 ($8.30) bull call spreads for $5.70 so net $2.85 per $10 spread and your worst case is owning 1/2x BHI at net $57.85.

    CLF/BDC – Might be a good time to at least do a 1/2 cover.

    VXX/Hanj – Should pay off one of these days.

    CLF/Winston – Yes!

    Obama/Angel – Trump will end up changing one or two things in Obamacare and call it TrumpCare and pretend he had to rebuild it from scratch.  His whole career is based on taking credit for anything that goes well and distancing himself from anything that goes wrong.

    FCX/Hanj – If it makes you feel better but I'm not worried, there WILL be infrastructure spending, probably globally.  Nothing wrong with a stop at 0.75 though.

    Wow, that was a good call!  An even better one when I featured it at the NY Trader's Expo in Feb!

    That's boosting the energy sector and giving a lift to the Energy Sector as well as the Banksters who loaned them money, of course.  I'll be appearing at the Traders Expo in NYC this afternoon, teaching people how to Be the House – NOT the Gambler and, very appropriately, one of my top picks for the show is Freeport McMoran (FCX) and a turnaround in materials this week is just what the doctor ordered for that beaten-down stock.  My notes from the PowerPoint slides are:

    •Freeport has a lot of debt ($19Bn) and that spooks investors, but there is something else FCX has a lot of – $300 BILLON WORTH OF RESOURCES!
    •While we’re comfortable buying this stock for $6.92 ($8.5Bn market cap) and waiting for gold, copper and oil to come back in price, it’s more fun to practice our core strategy of BEING THE HOUSE and selling risk by promising to buy FCX if it hits $5 by selling the 2018 $5 put for $2.16.
    •By itself, that sale either nets us into the stock at $2.84 (43% below the current price) or, if FCX does not go lower, the margin on the short sale is just 0.52, which makes the return on margin a very nice 415% in 20 months.

    We can make that a more aggressive trade by adding the Jan $5 ($3.15)/$10 ($1.25) bull call spread at $1.90 and let's say we do a 2:1 ratio making the trade look like this:

    • Sell 10 FCX 2018 $5 puts for $2.16 ($2,160) 
    • Buy 20 FCX Jan $5 calls for $3.15 ($6,300) 
    • Sell 20 FCX Jan $10 calls for $1.25 ($2,500) 

    That nets us into $10,000 worth of Jan spreads for $1,640 so the profit potential on this trade would be $8,360 for a 509% gain on cash.  You are obligating yourself to buy 1,000 shares of FCX for $5 ($5,000) if it slips below that line but we like putting our value foot down here ($6.92) and our worst case is owning it for net $6.64, so no worse than buying the stock but the reward potential is more than double what we'd make at $10 if we bought 1,000 shares AND we use far less of our cash to do it.  And that's the "aggressive" version of the play. Our conservative put-selling only approach simply gives us either a 40% discount or a 31% profit on FCX.  

    That's what BEING THE HOUSE is all about – let other people gamble – all we're doing is buying stocks for a discount to the current price and levering our upside potential by 100%.  If you did that with every stock you bought would you be doing better or worse than you are now?  

    There's a nice $8,360 profit in 9 months!  Really I do not understand why people fixate on short-term trading when you can do these all the time! 


  28. Phil--do you think there is a decent chance the RUT and mkt finally sell off today before the close?

    This nonstop rally is insane.

    Why is it up again today???


  29. Phil/VXX and FCX  Thanks!  I will look to resell FCX on mkt down.  VXX – yes, someday.  Now just managing the paper loss.


  30. GO LL! Housing numbers are exceeding expectations, so LL is up almost 8%. Nice.

    /RB- Phil this has been a great trade for a few days and today is no different. I am also in January now. Sorry if I said February earlier.

    CL has been moving with RB so this one has been making money too. Another great week and if TF ever does drop it will be a spectacular week. Thanks again Phil


  31. RUT/Jabob – This is a low-volume, BS week, nothing happening right now means anything.  I think someone should want to take profits ahead of the holiday but clearly other people are propping up any dip.

    VXX/Hanj – That's it's nature, it sits along the bottom for ages but then suddenly leaps higher.  The trick is to keep putting yourself in the right place while you wait for the right time though StJ and I prefer to short those rare pops and take advantage of the decay that's on our side.

    LL/Craigs – There's one we stuck with through thick and thin. 

    Feb/Craigs – I wondered why you picked those.  Glad the week is good – perfect timing into the holidays. 


  32. phil any thoughts on PDCO thanks


  33. thx Phil


  34. So Phil, what is the trade of the year for 2017 ????

    Sitting on a Southwest plane flying back from Universal in Orlando with th4e kids and wife…..  getting ready for what's next.

    Rick


  35. "Russell 2000 RUT, +0.45%  index of small-cap stocks. The index was on track for its 13th straight daily rise, which would be the longest such streak for the index since a 15-day stretch ending in February 1996."

    It has to be such a good short right now! Good luck Phil. Hopefully it drags ES all they way back with it.


  36. LL – I almost bailed several times on LL but Phil's conviction and patience is wearing off on me….   and I got in late to that party.

    Rick


  37. Rick/southwest 

    You're making million dollar trades here and still fly Southwest? Love it! 


  38. A penny saved….  I'm saving my money to invest in Phil's hedge fund 2017.  =)

    I did splurge and do the Universal VIP tour, well worth the money for the time saved NOT standing in line for anything.  Not sure what this is teaching the kids tho…  I remember well my 90 minute wait time for Pirates of the Caribbean at Disney.

    Rick


  39. Looks like the bailing has begun just in time for the holiday.


  40. NKD the laggard so far.


  41. /RB – dipping below 1.40  -- do we still think it goes up into the holiday???


  42. NG 3.01 !


  43. Phil / DLTR – thanks for the feedback…..  I sold the stock and closed out the 80 puts….  I'm still waiting to fill the 75 puts and the 80 calls…  hopefully it is overextended and the dec calls continue to drop and end worthless….  


  44. Rick, you're taching the kids dad's a freakin' hero! LOL


  45. PDCO/Selozi – Pharm knows about that space, I don't.  Never seemed exciting to me.

    You're welcome Jabob – let's cross our fingers that this drop sticks.

    Trade of the year/Rick – I still can't get past coffee from a certainty standpoint and yes, this is the time of year I'm supposed to start looking.  I guess I don't want it to be coffee so I keep looking for better things but too many stocks are too expensive and even our cheap favorites took off in this rally.

    Thanks Delboy. 

    LOL Rick, I do the same thing.  Seems idiotic to overpay for airfare but save me hours on line and my wallet's open!  Frankly it taught my kids (and we do Disney/Universal once a year, at least) to hate waiting in lines like I do and, when we don't have passes (usually) they just skip right past anything with an annoying line with no whining at all.  They've also become amazing at using Disney's fast-pass system to their advantage – I never do anything at Disney anymore, the kids set up a schedule and we skip every line.  

    I think getting a taste of the good life is good for kids.  When I was a kid, my Grandpa Max would always take us to the best hotels and the best restaurants but for ordinary stuff- he wouldn't pay retail for anything!   They say people are learning to value experiences over things these days but that's something my Grandfather taught me 50 years ago!  

    /NKD/Del – Good catch.  If 19,000 goes on /YM, 18,200 on /NKD should be right behind.  

    /RB/Jeff – I'd wait and see if we get a market pullback, might drag down /RB too.  As I said yesterday, $50 oil is not too realistic – pretty much 100% baked in on OPEC now, almost anything they do or say at this point is more likely to disappoint. 

    /NG/Rexx – At this point, knowing the weather will warm up next week – it's a tempting short! 

    DLTR/Batman – Good job, hopefully the broad sell-off will drag it lower for you.


  46. PDCO is a distribution company in the dental and animal health space.  It is more on the logistics side than on the discovery and development of new 'techologies' or medicines.  So, not much I can give on this.  Now, if anyone knows the CEO or upper management, have them get a hold of me.  I have a proposition!


  47. So many cheerleaders on CNBC…

    And they all LOVE the RUT..


  48. Phil,

    What's your overall take on the markets thru the end of the year? I'm nursing /YM and /TF shorts and getting killed. Thank god for /RB and /KC but it hasn't been enough given the relentless move on the indices. Thanks.


  49. That ABX trade yesterday:

    Sell 10 ABX 2019 $15 puts for $3.50 ($3,500) 

    Buy 20 ABX 2019 $13 calls for $5.25 ($10,500)

    Sell 20 ABX 2019 $20 calls for $3 ($6,000) 

    Filled the short puts and the long calls but not the short calls and they have moved further away.  Better to just keep waiting for the target, adjust the target some and keep waiting, or take the roughly 13% lower price to lock it in since the other side has filled?


  50. CLF

    The 2019 $10 calls can be sold for $2.50, to cover the $4 calls we bought for 2.50.

    Makes it a free $6 spread with 'infinite' return on cash with a zero net outlay.


  51. Phil

    This maybe the reason DEPO did not sell off

    Opiods/QC – Look at PCRX, DEPO and INSY.  INSY already got in trouble last year for oversubscribing (or pushing people to).  Of the 3 DEPO seems to be avoiding a sell-off so far – but there might be good reasons?

    DEPO

    Depomed remains an attractive buyout candidate, and the stock is now attractive on a standalone basis as well. I believe the latest developments have made a buyout more likely, and that management is probably pressured by Starboard to negotiate with potential suitors and "deliver significant shareholder value" as they said when the deal with Starboard was announced. Rumors surfaced last week that Mallinckrodt (NYSE:MNK) and Daiichi Sankyo (OTCPK:DSKYF) are considering making bids and that the deal value is $2.6 billion, which translates to around $28 per share. This is slightly below the lowest price I would now take ($29-30), but it is probably the new reality for Depomed considering the headwinds in the business. I remain bullish on Depomed as a standalone company and as a buyout target, and am a buyer at current or slightly lower levels.


  52. CONFERENCE/Vegas

    I have about 11 people express interest. We will need every one of those to commit in order to make it happen

    I am waiting for Greg in Admin to get back re weekend and the venue that was used last time…don't want to reinvent the wheel if I don't have to..

    If you are interested and have NOT emailed me yet, please do,so to express your interest in attending.

    My email: imcice@gmail.com

    Thanks!


  53. NUCYNTA is DEPO's money maker right now, as its efficacy is somewhere bewteen Tramadol and morphine with fewer side effects.  The abuse potential is there, but as I noted yesterday, opioids will continue to be prescribed, and this one could take market share away from Oxycontine.


  54. As a dentist I rarely use companies like Patterson( PDCO) or Henry Schein. I believe you pay a premium for the ' priviledge" of having a rep visit every two weeks. I use Safeco, direct order, next day delivery and I don't have to deal with a rep when I have my fingers in someone's pie hole.


  55. Last day to buy CTL and get 5 dividends in 13 months.  Stock goes ex-divd tomorrow by .54.  Could also sell Jul $26 calls for a nice premium. 


  56. JNJ – slapped down today, testing last swing low. next support…?


  57. CNBC/Jabob – They love whatever is winning at the moment.

    Markets/Japar – I don't see how this can keep going on real volume but the question is when will we see real volume again?   See, if you exchange 1.5Bn shares (avg volume) on the S&P at a $50 average, you need $75Bn in daily transactions and, if the S&P goes up to $55 but the volume drops to 1Bn, you only need $55Bn in transactions and people can "afford" to pay more but, if at $55, you go back to 1.5Bn shares – now you need to actually have $82.5Bn for transactions and, if that money hasn't actually been created to support the higher stock prices – you'll find out pretty quickly because either the volume or price have to go down.

    ABX/Tangled – Sure, we want to be bullish anyway so worst case is ABX drops $3 (20%) and you rooll the $13 calls ($5.20) to the $8 calls ($8.10) for maybe $2.50 and then sell the $15 calls ($4.15) for maybe $3 and then you net into the $10/17 spread for about $2.75.  Now, wouldn't you love to be in the $10/17 spread for $2.75?  That's the worst case taking a chance.

    CLF/Maya – Damn, when you put it that way, it's hard to turn down, right?  Actually, in the LTP, our position is 30 long 2019 $4 calls, now $5 (up 100%) and we sold 35 2018 $4 puts for $2.80, now 0.48 and this net $2,300  credit spread is now worth about $11,500 after a wild ride so let's not "adjust" it but take it off the table and make a new trade on CLF for the LTP, which will be:

    • Sell 20 CLF 2019 $7 puts for $2.25 ($4,500) 
    • Buy 40 CLF 2019 $5 calls at $4.60 ($18,400)
    • Sell 40 CLF 2019 $10 calls for $2.55 ($10,200)
    • Sell 10 CLF Jan $8 calls for $1.13 ($1,130) 

    So we're cashing in $11,500 and keeping the original $2,300 credit for a $13,800 profit and now we're putting $2,570 back to work with a $17,430 upside at $10 and we can sell more short calls along the way.  

    Jan is just a 60-day sale out of 787 days to long expiration so not even 10% and on just a 1/4 sale we're pulling down $1,130 – easy $10,000 of spare change in our pocket every couple of months is a Do Your Own Dividend kind of stock and, with over $11,000 in profits safely in our pocket, there's nothing scary about potentially being assigned 2,000 shares for $7 ($1,400).

    This is a good nutshell example of how our tree-planting system works.  This is year 3 of a trade we initiated with no money down, agreeing to buy $12,000 of CLF and now we've got $10,000 in our pockets, a slightly more aggressive trade (two years to get from $8 to $10) and a $500 monthly income.  Now that's INVESTING! 


  58. Phil/CLF

    THATS DEFINITELY worth more…a little more risk too


  59. Maybe, they could keep doing this without volume?

    Standing in front of this train has been very painful…TZA dangit!


  60. TSLA taking off.  let's see…closed SCTY acquisition.  and now the sum of two negatives is …a positive??!!!


  61. DEPO/QC – Thanks, that explains it.  Buyout fever is a powerful drug too! 

    Vegas/Maya – We usually do them on Veteran's day weekend (Nov) as that's usually a Monday people can skip at work.  There's plenty of days like that in the Spring.  We were at Ceasar's but not enough to get a conf room  For a crowd that small, we could get a suite for 2 days and they'll bring in chairs or maybe Nobu in Ceasar's has a small conf room if we all stay there or there's 4 Seasons or Mandarin Oriental who would certainly give us a Conf room if we book 10 rooms.  

    Also, the way we did it was have the first 10 people pay $1,000 to cover the majority of the $15,000 costs (we feed people too and internet is expensive) but then, when the next 10 come in, we refunded a portion back to the first 10.  That worked well.

    Gravity/Pstas – This market is nothing like the sham we had back in '07/'08 but it simply needs a good correction. However, the more it ignores that and keeps going up, the harder the fall is likely to be. 

    Good for you Tophy, I wish more people realized what a waste these middle-man companies are these days.

    JNJ/Scott – Lots of consolidation at $100 (18 months, not on this chart) and I'd call it a 20% move up to $120 so retraces are $4 at $116 and $112 so this is the strong retrace and, if they are still bullish – it should hold.

    TZA/Jabob – I bet if you got out of trades the first time you complained about them, you'd be a rich man now from all the money you'd save!  cheeky


  62. Great stuff, Maya & Phil !


  63. FU Phil!!!


  64. but you might be on to something ;-)


  65. A curious thing is happening to America’s struggling retailers: Shares in department stores and specialty retailers have bubbled up since Election …


  66. If you had to pick one tech company most at risk under Trump’s presidency, it would have to be Amazon.<p>Donald Trump and Amazon CEO Jeff Bezos constantly butted against each other throughout the campaign, with Trump once warning that the e-commerce company would face “problems” if he became the …


  67. <i>The following is adapted from remarks delivered to the China General Chamber of Commerce.</i><p>China is America’s largest trading partner, and the U.S. is the largest partner for China. And while it’s true that our two countries have differences, we know that when we work together, we can accomplish …


  68. President-elect Donald Trump’s charitable foundation engaged in self-dealing in 2015 and prior years, the foundation said in an Internal Revenue Service filing.<p>That self-dealing, which typically triggers additional taxes for anyone who got improper benefits, resulted from payments to “disqualified …


  69. Mexico is set to earn about $2.9 billion from its oil hedges for 2016, the second straight year where the insurance has reaped a windfall, according …


  70. Volvo Cars is testing a new smartphone app that would let owners order concierge services such as remote fuel delivery, valet car cleaning and Volvo maintenance while they’re working, traveling or even sleeping.<p>The idea is to make life more convenient for busy Volvo owners, said LexKerssemakers, …


  71. CARACAS (Reuters) – Venezuelan President Nicolas Maduro on Tuesday ordered state oil company PDVSA to look into legal action against JPMorgan Chase & Co after the U.S. investment bank reported delays in $404 million in bond interest payments.<p>PDVSA said on Monday it was using a 30-day grace period …


  72. Tesla is no longer just an automaker.<p>Although the company has always offered energy storage options, like its Powerwall and Powerpack, Tesla has officially solidified itself as a player in the energy space by acquiring SolarCity in a deal worth roughly $2 billion. Now Tesla will be responsible for …


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  74. Depending on your political preference, you either have to feel sorry for Saudi Arabia or savor the moment . The country’s four-decade run as global oil king is slipping through its fingers, and there’s not really much it can do to stop the slide. Sure, Saudi Arabia is still the world’s largest oil …


  75. • Says he was “never a fan of the Electoral College,” adds: “until now”<br>• Says Electoral College “gets you out to” see states you wouldn’t otherwise; “You …


  76. FTR

    Own 2m shares at an average cost of $3.56, did this purchase less than a month ago after they cratered in earnings and admittitly got in too early on the way down, but perfect timing was never my thing.  So here we are at $3.60 today.  Have sold 1/2 covered 2019 $4 calls at .40 cents, ex div paying $.105 a share happens in another few weeks.   Im determined to see this play through and not just quick sell for a small profit but rather use it as a longer term vehicle to put a stream of income into my pocket as I work my cost basis down to $0.  

    Rick 


  77. Phil.  I welcome any input into the above. =)


  78. CONFERENCE/ Phil

    All right, thanks for that info!

    I will wait for a weekend from you/Greg and will then start making phone calls to the hotels before pinning people down money…let me know!


  79. Goldman Sachs Group Inc. has quit the R3 CEV LLC blockchain group, and other banks may soon follow it out the door, said people familiar with the …


  80. Post-election rally pushes U.S. stocks to even more unrealistic valuations<p>The U.S. stock market has become even more overvalued in the two weeks since Donald Trump’s election as the next U.S. president.<p>And that’s saying something, since it was already hugely expensive.<p>The accompanying chart tells …


  81. With the November elections bringing the passage of five more soda taxes — San Francisco, Albany (CA), Oakland, Boulder and Cook County joined Philadelphia as cities with levies on sugar-sweetened drinks – the carbonated beverage environment has gotten even unfriendlier for soda purveyors like …


  82. The TPP trade pact was agreed by 12 countries in February and covers 40% of the global economy. But Donald Trump has said he will abandon it, leaving …


  83. JNJ/Phil – thanks, I would not have come up with 100-120 as the spread for the 5% rule.  I see the 100 as level for a base, but why not 124 as the clear top.. just rounding?


  84. Disney is looking to repeat the opening-weekend success of “The Force Awakens” with its first ever “Star Wars” standalone movie, “Rogue One: A Star Wars Story.”<p>The movie, opening December 16, is projected to earn over $130 million at the domestic box office its first weekend, according to The …


  85. Feeling Manic?

    We have been talking about how bullish the US stock market is. It has been bullish uninterrupted for most of 2016 and that includes the Brexit buying …


  86. (Reuters) – Soft-drinks maker Dr Pepper Snapple Group Inc (DPS.N) said it would buy Bai Brands LLC, a maker of antioxidant beverages, for $1.7 billion in cash.<p>The purchase price includes a tax benefit of about $400 million on a net present value basis, Dr Pepper Snapple said on Tuesday.<p>Dr Pepper …


  87. Farewell, America

    America died on Nov. 8, 2016, not with a bang or a whimper, but at its own hand via electoral suicide. We the people chose a man who has shredded our …


  88. Unsanitary conditions and substandard care.<p>President-elect Donald Trump’s upset election victory last week upended hopes from immigrant advocates …


  89. Brussels is to venture into the politically sensitive area of pan-European bankruptcy rules, saying the continent needs a version of the US Chapter …


  90. Shares in French construction company Vinci plummeted almost 19 per cent on Tuesday after a hoax press release said that it had fired its chief …


  91. Kara Waite, an English teacher at Bunker Hill Community College in Charlestown, Mass., made a rule for herself: For every political rant she posts on Facebook, she must pick up the phone and call a legislator.<p>“It’s kind of a swear jar for political action,” Ms. Waite said recently.<p>Ms. Waite, who …


  92. The U.S. Treasury Department has issued a license to France’s Airbus for the sale of 106 commercial planes to Iran Air, Iran’s flagship carrier, a source familiar with the matter said on Tuesday.<p>The Treasury’s Office of Foreign Assets Control issued the license on Monday, the source said on …


  93. 7 years ago AirBnB was still offering only airbeds and shared spaces to its users and was competing with couchsurfer.com. Since then the company, lately valued at $30B, has expanded to a variety of properties including entire homes and apartments, private rooms, castles, boats, manors, tree houses, …


  94. <i>This is part of our entry on global income inequality.<br>We have just updated our entry on income inequality that mostly looks at the distribution</i> …


  95. A raft of new state marijuana legalization laws presents employers with hazy challenges when it comes to workplace drug testing.<p>Companies that wish to maintain drug-free workplaces face a confusing patchwork of state and federal laws, and it is a gray area in some states whether employers can fire …


  96. First, these October existing home sales closed escrow before the recent increase in mortgage rates (rates started increasing after the election). …


  97. Ellyn Terry at the Atlanta Fed’s macroblog:<p>Outside Looking In: Why Has Labor Force Participation Increased?: The labor force participation rate …


  98. ‘Scary’ Arctic warming comes as 2016 is on track to be hottest year on record


  99. Our Favorite Gadgets: Best Tech Gifts 2016

    Advertisement<p>Go Gadget Shopping<p>WSJ’s Personal Tech columnists Geoffrey A. Fowler and Joanna Stern have reviewed hundreds of gadgets throughout the …


  100. Phil, Looks like the Pump team has arrived to launch /TF higher? Are you going to carry your shorts over the holiday? thanks as always…


  101. Ultra bullish outlook on oil by Raymond James :

    ~~"As mentioned, too, the fact that oil prices have remained relatively stable despite the recent strength in the dollar should be viewed as a favorable sign for the future price of the commodity. This resiliency is further evidence that we are in a completely different environment than in 2014-2015 when the combination of a surging dollar and tremendous oversupply led to oil prices collapsing, and, accordingly, our Raymond James energy team still expects crude to hit $60-70 in the next few months. A pause in the dollar, therefore, may be all that is required for oil to take yet another shot at getting and staying above the $50 mark."

    Sounds like they've been talking to T. Boone. 8-)


  102. Donald Trump’s victory in the U.S. presidential election this month – in particular, his winning a clear majority of the Electoral College vote …


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    Randgold Resources CEO Mark Bristow told Jim Cramer on Monday that he expects gold prices to shine in the long run.<p>”There are a lot of things …


  106. Officers douse pipeline protesters in subfreezing weather

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  108. INFN – bail or DD ??

    OK looking 10-year chart but grim last 6-12 months, oof


  109. In a storage box on an upper shelf in my office are thirteen charging cords for my iPhone (not including the 12 volt ones for my car), representing exactly how many times I’ve forgotten my power cord running out the door over the past year and half. The pure dollar value of the box burns me every …


  110. It’s back.<p>Neiman Marcus has released its 2016 Christmas Book, an annual collection of suggested gifts from the storied department store.<p>One highlight is its famous “Fantasy Gifts” section, which is packed with one-of-a-kind luxury items, travel packages, and experiences that will set you back …


  111. SolarCity, the company Tesla officially acquired on Monday, is powering nearly the entire island of Ta’u in American Samoa with solar power.<p>SolarCity developed a microgrid with 1.4 megawatts of solar generation capacity — enough to power nearly 100% of the island, according to a SolarCity blog …


  112. Marketers will come to understand our lack of rationality<p>Whenever I wish to scandalise people, I have a sentence which works every time: “I would prefer my daughters took up smoking than started cycling in London.”<p>My argument is as follows. If my daughters take up smoking and find it impossible to …


  113. Trump effect is working for me.  At a restaurant the waitress asked me how I was doing and I replied I still had post election blues and she gave me free pie.   America is great again.


  114. Pharm – There is an Italian Referendum on staying in the EU in 2 weeks.  Wonder how that will work out?

    The referendum has nothing to do with leaving the EU, that's what the MSM wants everyone to think. The ubiquitous they, or EER are trying to confuse and scare the Italians.


  115. StJL – Probably not well Pharm! Although the procedure to get out of Europe would be a lot more complicated for Italy because they are also using the Euro. At this point, probably nothing more than leverage to get a better deal from the rest of the countries. But should be interesting.

    If the referendum passes, Renzi and anyone else who comes into power could leverage it to those ends.  If it doesn't, its business as usual, changing underwear once a year.


  116. Phil – Italy changes Governments like underwear, I think they average one a year.  I think though, for Italy, when push comes to shove, the Northerners want in and there's more of them and, if they are being realistic – the Lira was always a disaster and the Euro has made their businesses more stable overall and, of course, the UK's Brexit was scary enough to put people off doing the same so I think a narrow loss this time around.  

    Italian governments change more often than the electorate changes their underwear. It's not Northerners that want to stay in the EU, its the rich people.  Much like all those who fell prey to the Euro fallacy, this has allowed the EER (Euro-peon Elitist Reich) to rob all of Europe, as well as Italy blind.  This time, no army, no guns, no invasions, just good propaganda, legislation, a suitcase and tie. 

    Without proper reciprocal monetary flows and transfer payments from a central government to member states, a single currency and monetary policy is pure folly.  Hot in Belgium, cold in Italy, same policy? No way, no how, never could work in a million years.  Anyone of sound mind and who really knows how banking works, knew this coming in. 


  117. Hi Phil,

    Question for you….been mostly out of the market since before the election….Since we are at nosebleed levels, I don't suppose I'm missing out on too much to wait until after the holidays to ease back in…Would you agree?


  118. I have to say, whenever I see Trump on TV I have a visceral reaction. I really hate the way he looks and talks. Having said that. I have had the most amazing run up in my portfolio since his election. I am up over 16% on my total portfolio in the last two weeks alone. Simply amazing.It could also be that as I have been saying, I finally have the hang of Phil's futures trading system. Made over 10k trading oil and gasoline in the last two days which is pretty darned remarkable. 


  119. Nattering…well, that's what Germany wanted…no guns, no tanks…just Central Banks.  

    Reminds me of this: The Great Deformation


  120. if you are a net payer in the EU why would you want to stay robbing peter to pay paul 

    paul digs the most..this exit chatter is frankly long overdue let's see where the UK is in a year

    and whether the Italians and Spanish will stick..Phil had a great screed a few years back about the Germans and the EU as a basket of jumbled interests..wish i had it handy..

    Market looks heavy 


  121. "Think of how stupid the average person is. Then realize half of them are stupider than that." – George Carlin


  122. I am loving the trump bump hopefully doesn't become the trump hump been long UK since i covered my shorts and ditto with the us..if he can do a tenth of what he MIGHT we could all be very happy.

    not needing to be happy needing to win w the hand we are dealt (who said that to me>)

    #nosafespacesinthismeatgrinder


  123. Phil – Italian Referendum Dec 4th – Let me set the record straight.  

    Simply put, a no vote maintains the status quo in senate power (upper house not elected by the people) , electoral process (gerrymandering and electoral college come to mind), and Renzi probably resigns. Leading to another government, probably Grillo, who would want out of the EU, but could never affect this under the current system, which is designed for divisive gridlock. Meet the new boss, same as the old boss. Sound familiar?

    A yes vote changes the status quo. allowing for a majority government with greater power to the Chamber of Deputies (lower house actually elected by the populace).  Renzi probably stays, but he doesn't really want out of the EU. Here's the catch, when Renzi's current term ends, odds are Grillo or another party wanting succession will be elected into power, and Italexit would occur.   

    Bottom line, with 13% advertised unemployment, 7% long term =  20% and 40% youth (15-24) unemployment, the disaffected are legion.  Anyone of sound mind knows those advertised numbers, much like our BS under 5% number, are NOT EVEN CLOSE to the real number.  Populism is rising and much like our recent election, will probably take the day in this referendum.  Again, anything can happen and we see no "surprises" coming here.


  124. PSW/Butterflies

    Since we've been hitting this topic a little bit lately I'm more interested in getting going with some butterfly type positions.  But, more learning to do.  

    A couple questions for anyone here:

    When establishing a position, I understand the basic idea of starting with a leap Bull call spread and leap bear put spread.  For the long calls/puts, we would start ATM or just ITM, should this start where the stock is currently trading ideally (ie we establish a starting position when the stock is trading at what we think is fair value)?

    Second, once you set up the leap spreads, you then sell front month or near dated calls to collect additional premium.  When doing this, shouldn't that result in use of significant margin as your longs are already covered?  Or do you half cover with long dated calls/puts and sell the remaining half in the front months?

    Third, one of you said an alternative was to buy out of the money calls and puts as the long position to minimize margin requirements and provide protection in case of a wild swing outside of the trading range you expected.  When do you use this strategy vs the one above?  When doing this you are essentially setting up a bear call spread and a bull put spread by selling ATM or near the money puts and calls correct?

    I have more questions, but let's start with that. 

    Thanks all!!


  125. Addition to the second question…you'd sell near dated calls AND puts that are out of the money – correct?


  126. Great questions Jeff, Im also interested in butterflies and ive asked about them periodically before and seem to pick up a bit of a better understanding each time but still dont feel I have a full grasp of the startegy as a whole (i.e. not just set up but how to adjust in various scenarios). 

    Im never able to make the live webinars due to work, but if there's enough interest it would be great if Phil did an in depth webinar on Butterflies specifically, maybe going over several butterfly positions (one that worked out perfectly without adjustment, and maybe some other cases where the stock moved heavily and adjustments were required). 

    Just my two cents!


  127. I've spent some time studying over Phil's virtual butterfly portfolio and can see that many of the positions are different due to adjustments as well as picking a direction with the trades on some of them (the butterfly looks like it lost a wing).  I understand that gives a better return as you don't have the long put or call fighting the gains on the other side. 

    This type of investing would work nicely for me…I too have to work, and can't be glued to the screen forever. I have gotten the hang of some futures trading, but do that on a limited basis at this point.  I want to move on and add the next tool to my toolbox. 


  128. One of the challenges with the butterfly portfolio is that there are few "pure play" positions left in the portfolio--too many adjustments to follow what went on.


  129. I've picked that up Jet, it's hard to tell where those started – at least for me.


  130. Phil you said earlier that you were out of RB. Was it because you were hoping to catch another pullback or because the trade is done going into a short day tomorrow. I have done really well, so I am fine with being done, but if you still think it could somehow go all the way to 1.45 still, I would hate to miss that. Still have to learn when the trade is over. Was today the best shot at reaching that 1.45 or is there still trading to be done into tomorrow? I'm currently out but wondering if the pullback from 1.425 down to 1.41 is opportunity or trap. It kind of feels like a trap where they sucker you back in to drop it hard in the last few hours before the holiday, so I am looking for your take. Thanks


  131. Seeing Jeff's question on butterflys, I ask my self why the hell do I spend time going to details explaning a butterfly and why does Ilene even puts it in to members corner????????????????????


  132. Ooph…geez Yodi. Didn't mean to offend you, I read your comments.  Is it still ok for me to ask a few questions and try to learn???  


  133. Never mind, looks like it (RB) is already heading north again answering my question. Serious volatility. 

    What a shock that Trump isn't going to investigate HRC, since he knows there was nothing there and he would look foolish coming up empty . What a crock that whole this was and I would like to see Comey investigated for his role in "rigging" the election.


  134. It appears to be official, the market will never go down again. How's that for an investing premise?


  135. hey whatever Trumps motives were he came to a correct decision that spares the country further crap and i applaud it..i stayed with my RB and CL longs sold them into the little lift it was not worth the stress


  136. No problem Jeff due you mind me asking: do you always drive on the left side of the road?


  137. International parcel post – the US Postal Service has a new policy now… just went down to mail a package to inlaws in UK and… now, instead of just  a written list of every item and its individual weight and value itemized, it must also be typed into the computer (either by you, beforehand, and obtain some kind of label or number) or the post office does it… Our post office person says takes up to 30 minutes per package due to slow/clunky system they have to use.   Way to go, fight against…whatever the hell is being fought. International mailing has been devolving rapidly in the last few years, while the costs have been rocketing up.  I don't call this progress.  


  138. But coming back to butterflies if you do have a BCS you wisely sell only 1/2 the short month calls. However if you just have long leap calls you can sell the same amount of short month calls than the leap calls


  139. yodi, question for you..advie actually?

    i have a variety of bull call spreads for GILD

    2019 60/75 combined delta for spread 0.341

    2018 70/90 combined delta for spread 0.199

    would you bother cleaning this up  by getting rid of one or the other?  TIA


  140. yodi,   that was "advice"….that is, i am looking for advice.  thanks.


  141. Yodi/Road

    I'm pretty sure that comment isn't necessary.  

    Back to butterflies – Thanks.


  142. yodi,  oops, i mixed up the delta.  the 2019 60/75 is 0.199 and the 2018 70/90 is .341.  thanks.


  143. tangledweb – lol – see? everything is better already! :P


  144. FTR/Rick – Good plan.  People these days have no patience for telcos, that go through heavy CapEx cycles that lead to inconsistent profits.  We've been in FTR for years and the often go on sale because people don't like the numbers and we just buy more and sell puts and, when it goes up, we sell calls.

    Still, I'd rather have 1M at $3.56 and sell 10,000 2019 $3.50 puts for $1.10 so my next 1M comes in at net $2.40 (because I love saving $1M whenever I can) and you can sell the 2019 $4 calls for 0.50 and now your net on 1M is $1.96/2.73 so, rather than tying up $7M now to make $2M at $4.50, this trade uses just $2M in cash makes $2M more at just $4 and your worst case is owning $2M for $5.5M and saving $1.5M (less the $100,000 NetJet card you give me as a thank you present!) and you still get 1/2 the dividends ($420,000 x 2 years) while you wait and, because you discounted yourself by 50%, your dividend yield is over 20%.

    JNJ/Scott – Because what is the OVERSHOOT we expect off a $20 move up?

    Speaking of overshoots – I hope that's all the RUT is doing.  Should have taken that move down to 1,324 as a good cash out!  Why didn't Jabobo remind me???

    Shorts/Jasu – Grinning and bearing at the moment.  We'll see how tomorrow looks but it's my intention to keep my RUT shorts over the weekend.

    RJ/Albo – Must have been some gasoline in the Kool-Aid they're drinking.

    INFN/BDC – They don't make any money but I like them down here. 

    Pie/Tangled – Hey that is a good benefit.  Of course now you're just another liberal expecting a handout…  cheeky

    EU/Naybob – Yep, was a bad idea from day one and got worse as they refined it.  Economic hit men made a fortune for their masters and now it's unwinding, with or without Italy.

    Waiting/Sun – I strongly agree.  Enjoy your holidays without the stress – there's always something to buy.

    $10K/Craigs – Well Happy Thanksgiving to you!

    Referendum/Naybob – Well if it's a referendum to have a referendum, then that will likely pass.

    Butterfly/Jeff – There's no hard and fast rule for that.  The idea is to determine a range and then cover that range as cheaply as you can stand it with long puts and calls.  Then, closer to the money, you sell monthly or quarterly puts that are as close to the money as you think is safe based on where you think the stock will be on your expiration date.  If you are very confident – do a full sale, if not so confidend – sell half or less.  

    As to margin, if you have PM, the potential profits of a bull call spread would be taken into account and, if you don't have PM, then don't do a long-term bull call spread and just stick to long puts and calls.  As it stands though, even using ordinary margin, the requirement is minimal in the Butterfly Portfolio.

    Your option 3 is the normal strategy, the others are adaptations we do depending on conditions and forward expectations. 

    As to following a position – in Jan remind me and we'll add two new ones and you can follow all the moves through the year but, if we do it right – it's not very exciting.

    /RB/Craigs – It's because we hit $1.40 yesterday and I expected a pullback so why stay in overnight?  As it turned out, I missed the pullback to $1.385 so I'm simply not in the trade now.   I don't have this burning need to be in a trade like you do.  I made money and I'm out – I'm not motivated to get back in unless I get a good entry – even though I still think we hit $1.45.  Though it was done painfully, I ended up making as much at $1.40 as I thought I would at $1.45 when I started the trade (with just 2 contracts) and making a few more bucks on another 2 contracts vs. just relaxing down in Florida isn't a good trade-off for me.  The volume is too thin and the volatility is high and I'd feel like a real idiot if it goes the wrong way and blows my gains and I hate it when that happens so better not to play.

    And what Angel said! 

    LOL Yodi – Welcome to my world! 

    Comey/Craigs – Oh come on, Hoover used to help Nixon do dirty tricks and Bush WAS the CIA – not the first or last election to be rigged by our intelligence agencies but, so far, the most blatant.

    Never down/Mkucs – If that's true, we'll be voting for Trump in 2020 so we can hold on to our piles of money…

    Post Office/Scott – What's that?  I think I remember going to one when I was a kid.

    GILD/Lunar – I'd clean it up.  2018 $70s are $10.60 and 2019 $60s are $19.40 but the $75s are $12 so $7.40 means you can roll the $70s to the same number of spreads and pocket $3.20 and you can leave the short $90s naked (but double covered by the longs) or pay $2.80 to buy back maybe half if you are worried about them (or put a stop on 1/2 at $3.50 and the only reason you'd bee stopping out is because your longs $15 spreads are over 100% in the money).

    Wow, time sure flies!


  145. that LL re-load was a good call. going to 25


  146. INFN – YoY rev growth looks good though.. if they keep this up I see the stock back in the mid teens to low 20's on its next cycle up (whenever that is!)


  147. Overshoot/Phil – ah!  thank you, sensei.


  148. Phil, thank you, as always!  Good play.

    Rick


  149. Lunar well Phil is always a fast pocker player. I do have a good amount of plays on GILD and by being patient and doing very little on my long plays I turned a -12K in to a 7.5K plus  today between the last dip and now. GILD is trading at 74 today and there is still a long way to 2018. But Phil's suggestion is sound as well, but as always you hold the card in your own hands.


  150. Jeff sorry I have offended you but in your place I would have answered " YES I LIVE IN ENGLAND"


  151. We sometimes do have to lighten the place up a bit, but Jeff you always welcome to ask questions, this is the best way to learn.


  152. Yodi…not offended. More like confused. Appreciate your efforts here on the site.  I too am an educator, and while its tedious/challenging at times, its equally if not more rewarding to help someone achieve something independently.  I am grateful for all of the education I've recieved here to date…its time for me to add more. 

    On that note, I think I'll try to set up some paper trades myself, perhaps over a shorter timeline to see how things fall out…standby for more questions!!


  153. you welcome just go ahead and let us see your trade ideas Good night it is 11PM for me




  154. Hi All -

    In case you missed these: We have two very helpful new posts in the Members' Corner about Butterflies. Yodi's Butterfly Plays and Clay's Butterfly Evaluator. 


  155. Nov 23 (Reuters) – Euro zone business expanded at the fastest rate this year in November, thanks to strong activity at manufacturers and a spike in new orders, even as firms generally held prices steady, a survey showed on Wednesday.<p>The strong run of data offers some hope that the economy may be at …


  156. Q&A With Jack Bogle: ‘We’re in the Middle of a Revolution’<p>By Michael Regan | November 23, 2016<p>Photographs by Larry Fink<p>From<p><b>John “Jack” Bogle</b> wrote …


  157. by williambanzai7 – Nov 22, 2016 11:11 AM<p>BANZAI7 FOOD AND BEVERAGE WARNING<p>Public solutions will always invite further abuse.<p>by Sprott Money – Nov 22, …


  158. Oil prices fell in Asian trade on Wednesday, reversing earlier gains, as doubts re-emerged over whether OPEC would agree to a crude oil production cut at a ministerial meeting next week.<p>A strong dollar, which traded near the 13 1/2-year peak hit last week, also weighed on prices amid thin trading …


  159. Financial markets showed the diverging path of U.S. and euro zone monetary policy on Wednesday with Wall Street breaking new ground and the dollar perched near a 14-year high, as German bond yields plumbed new record lows.<p>World stocks edged up and the Dow closed above 19,000 for the first time with …


  160. <b>Billionaire US President-elect Donald Trump has said he is not obliged to cut ties to his business empire when he takes office on 20 January.</b><p>A …


  161. The South Koran headquarters of Samsung Group have been raided by prosecuters along with the offices of country’s National Pension Service (NPS).<p>It’s said to be in connection with the influence-peddling scandal embroiling the country’s president and her top advisors.<p>The NPS is being investigated …


  162. While democrats are still reeling from the shocking outcome of the US presidential elections, some experts are questioning whether Trump actually won fair and square.<p>Their concerns focus on the fact that the majority of votes cast this year relied on computer systems which could have fallen prey to …


  163. SEATTLE (AP) — Eight children asked a judge to find Washington in contempt for failing to adequately protect them and future generations from the harmful effects of climate change, part of a nationwide effort by young people to try to force action on global warming.<p>The petitioners, between 12 and …


  164. <b>London (CNN) —</b> <b>1. Stocks reach for new records:</b> Wall Street enthusiasm keeps building after Donald Trump’s victory in the U.S. presidential election.<p>The Dow Jones industrial average closed above 19,000 for the first time ever on Tuesday, while the S&P 500 and Nasdaq each hit new record highs.<p>U.S. …


  165. BRUSSELS (Reuters) – The European Commission proposed new rules for banks on Wednesday in line with capital requirements agreed by global regulators – but with some tweaks, in a sign of a growing fragmentation of international financial controls.<p>Unveiling a large legislative package, the EU …


  166. Forget Trump’s anti-corruption rhetoric — he’s out to stack the courts with judges who love money in politics<p>One of the most alarming aspects of the Roberts Court, at least when Justice Antonin Scalia was alive, was the way in which a 5-man conservative majority seemed ready, eager even, to …


  167. <i>I want to read 52 books in 52 weeks. Which books changed your life? originally appeared on Quora – the knowledge sharing network where compelling</i> …


  168. (Reuters) – At Global Geophysical Services LLC headquarters in a Houston suburb, a few employees are winding down what is left of an oil and gas industry data provider that only three years ago had a staff of more than 1,000 and offices around the world.<p>Global Geophysical is a “Chapter 22″ company …


  169. Oil and gas companies operating in Norway, western Europe’s biggest producer, cut investment forecasts for 2017 as they continue to wrestle with a …


  170. Bad Outcome at OPEC Could Derail Saudi Stock Rally

    A burst of bullishness in Saudi Arabian stocks is on a collision course with OPEC.<p>Saudi Arabia’s benchmark Tadawul stock-market index has gained more than 20% since the kingdom issued a record $17.5 billion of bonds last month. The strong international appetite for Saudi Arabia’s bond sale assured …


  171. Gold demand plummets as central banks, consumers hold off — WGC

    Global gold demand dropped by 10% to 992.8 tonnes in the third quarter of 2016 as central banks and jewellery buyers held off on purchases during the …


  172. Image source: Getty Images.<p><b>What happened</b><p>Metal mining companies and steel stocks surged Tuesday after analysts at investment bank <b>Goldman Sachs</b> turned bullish on the sector. Leading the way were<b>U.S. Steel</b> (NYSE: X), <b>AK Steel</b> (NYSE: AKS), <b>Cliffs Natural Resources</b> (NYSE: CLF), <b>Teck Resources</b> (NYSE: TCK), …



  173. Good morning! 

    We had a big pop in the Futures but all gone now as Europe led us lower from the open:

    Europe is selling for the same reason we're likely to – profit taking into the weekend.  They have two more days to sell while we're mostly closed!

    So our shorting lines are, of course, the same as yesterday:

    So I like these shorting lines at /ES 2,200, /YM 19,000, /NQ 4,875, /TF 1,325 and /NKD 18,200 – 3 of 5 rule applies, tight stops if any go back over so the rewards can outweigh the risk – NO BATHROOM BREAKS!  

    If you learn the discipline AND PATIENCE of the 3 of 5 rule, you can make really good money trading futures. 

    API reports small decline in crude inventories

    • Crude inventories fell 1.28M barrels last week, according to the API.
    • Distillates fell 350K barrels, and gasoline supplies rose 2.68M barrels – the largest weekly gain since February.
    • The EIA publishes its data tomorrow and expectations are for a 1M barrel add to crude stockpiles.
    • Oil is quiet in late trade at $47.91 per barrel.

    Oil Slides After Bigger Than Expected Gasoline Build

    Where all 14 OPEC members stand ahead of November's crucial meeting

    Busy day today – they are trying to get everything done ahead of the holidays – including Fed Minutes:

    Wednesday's economic calendar

    Wall Street Is Betting $2.1 Trillion That U.S. Rates Will RiseInvestors believe a Trump presidency will mean higher growth, higher inflation and higher interest rates.

    Haven't We Done This Before

    Stocks Have Priced In Nirvana Where Debt Doesn't Matter… Best Of Luck With That

    Deutsche Bank Warns "The Plate-Spinning Era" Is Over

    Putting a percentage to Black Swans

    • Societe Generale Cross Asset Research is talking Black Swans with the Dow, S&P 500 and Nasdaq all at or just off record highs.
    • A chart from the research firm assigns a risk percentage to various scenarios — including political uncertainty (30%), sharp increase in bond yields (25%), a China hard landing (20%) and isolationism/trade wars (15%).
    • The list from the French investment banking giant doesn't include one-time events such as natural disasters, terrorism or a major hacking incident.
    • Some don't like the term Black Swan, so if there's a market correction event  missing from Societe Generale's analysis add it to the comment stream.
    • SG Swan Chart

    Goldman's list of stock longs mattering most to hedge funds

    • Looking at the top 50 hedge fund hotels, it's probably little surprise that Amazon (NASDAQ:AMZN) and Facebook (NASDAQ:FB) top the list, with Amazon making for a top 10 holding in 61 funds, and Facebook in 57.
    • Rounding out the top 10 are Charter Communications (NASDAQ:CHTR), Alphabet (GOOGGOOGL), Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Yahoo (NASDAQ:YHOO), Allergan (NYSE:AGN), Bank of America (NYSE:BAC), and Priceline (NASDAQ:PCLN).
    • Looking at another gauge – the percent of market cap owned by hedge funds – shows CommScope (NASDAQ:COMM) leading the way, with hedge funds owning 37%. Next is Dell Technologies (NYSE:DVMT) and Expedia (NASDAQ:EXPE) at 30%, and after that: Liberty Broadband (NASDAQ:LBRDK) at 24%, LinkedIn (NYSE:LNKD) at 21%, Constellation Brands (NYSE:STZ) at 20%, and Humana (NYSE:HUM) and WhiteWave Foods (NYSE:WWAV) at 19%.

    Goldman's list of shorts mattering most to hedge funds

    • With $4.5B of short interest, Exxon Mobil (NYSE:XOM) leads the way, followed by IBMat $3.7B. Rounding out the top ten: AT&T (NYSE:T), Caterpillar (NYSE:CAT), Chevron (NYSE:CVX), Boeing (NYSE:BA), GE, Procter & Gamble (NYSE:PG), Abbot Labs (NYSE:ABT) and Disney (NYSE:DIS).
    • Most interesting from that list are Cat, Boeing, and Abbot Labs as their market caps are significantly smaller than the other seven.
    • Of the top 50 short positions, there are two names in which the short interest rises to as high as 10% of the market cap: Freeport-McMoRan (NYSE:FCX) and Digital Realty Trust (NYSE:DLR).

    Steel stocks smash through 52-week highs

    • U.S. Steel (X +11.4%), AK Steel (AKS +10.7%), Steel Dynamics (STLD +4.1%), Nucor (NUE +4.4%) and Commercial Metals (CMC +4.7%) all surge to 52-week highs, extending their Trump-fueled rally as trade protectionist talk suggests that higher than usual premiums can be achieved for steel mills.
    • BofA Merrill Lynch raises its 2017 average price estimate for U.S. hot-rolled coil to $650/short ton vs. its prior view of $535, as rising global prices and more protectionism should fuel strong steel prices into 2017 (SLX +5.8%).
    • Bloomberg reports BofA boosted its stock price targets for Buy-rated AKS to $12 from $7, STLD to $37 from $30, CMC to $24 from $20, NUE to $65 from $57, and Allegheny Tech (ATI +7.5%) to $20 from $19; the firm remains Neutral on X and Reliant Steel (RS+6.1%).
    • Also sharply higher today: MT +8.3%CLF +13.8%WOR +5.3%RIO +4.1%BHP+5.2%VALE +7.8%.

     

    Hewlett Packard Enterprise Q4 revenues broadly lower; -1.6% after hours

    • Results – revenue $12.5B (-7% Y/Y, consensus $12.85B), EPS $0.61 ($0.01 above estimates), cash flow from operations $2.2B (+44% Y/Y)
    • Segment revenues – Enterprise Group $6.7B (-9% Y/Y), Enterprise Services $4.7B (-6% Y/Y), Software $903M (-6% Y/Y), Financial Services $814M (+2% Y/Y)
    • Q1 projections – EPS $0.42-$0.46 (consensus $0.46)
    • FY 2017 projections – EPS $2.00-$2.10 (consensus $2.06)
    • Hewlett Packard Enterprise (NYSE:HPE) president and CEO Meg Whitman: "FY16 was a historic year for Hewlett Packard Enterprise. During our first year as a standalone company, HPE delivered the business performance we promised, fulfilled our commitment to introduce groundbreaking innovation, and began to transform the company through strategic changes designed to enable even better financial performance."
    • Prior quarters overview
    • Earnings summary
    • Conference call
    • Press release
    • 8-K

    Tenet Healthcare leads rough session for hospital operators

    • "Tenet Healthcare (THC -5.1%) presents a problem because of its high leverage," says Mizuho's Sheryl Skolnick in this morning's downgrade of the stock to Underperform. Even at her price target of $13, she says, the shares still wouldn't be terribly cheap.
    • At $17 (the price before today's open), Tenet trades at a premium to HCA Holdings (HCA-3.9%) – not fair, she says, as HCA has free cash flow, and Tenet doesn't.
    • Others: Community Health Systems (CYH -1.4%), LifePoint Health (LPNT -2.5%), Quorum Health (QHC -4.1%)

    We were just talking about these guys yesterday: Patterson plunges 17% after guidance cut, no Amazon pact

    • Patterson Companies (NASDAQ:PDCO) plunged to a new 52-week low before settling 17% lower after missing Q2 earnings expectations, cutting 2017 guidance and failing to announce an expected distribution deal with Amazon.com.
    • PDCO now sees FY 2017 EPS of $2.25-$2.35, vs. an earlier outlook of $2.60-$2.70 and well below the $2.64 analyst consensus estimate, citing softness in the U.S. dental market and challenges with branded pharma companies in the animal health business.
    • Although PDCO did not announce a distribution agreement with Amazon, Baird analyst Jeff Johnson still thinks the deal will happen even though he has some misgivings, saying it would cut PDCO’s distribution costs and additional wiggle room to pursue DSO deals but also serve as a stark admission that the others are good at the company’s core business and would weigh on other firms such as Henry Schein (NASDAQ:HSIC).

    Facebook claimed to develop experimental censorship feature in consideration of China re-entry

    • The New York Times, citing current and former employees, reports the company has built an internal tool enabling suppression of posts within specific geographic regions.
    • The alleged software is said to allow certain third parties the capacity to control visibility and monitor stories and topics. The report does, however, note the software is one of several ideas the company is experimenting with regarding China and is not in live use and may never become so.
    • Several employees involved with the project are nonetheless asserted to have consequently left the company due to expressed concern.
    • Access to Facebook (NASDAQ:FB) has been actively blocked in China, a nation of 1.3B+ people, since 2009.

    What this country needs is LESS regulation because we can always trust our great corporations to do what's best for the people if we just get out of their way:

    Bloomberg reports aloe vera gel scam

    • If you use aloe vera gel from Walmart (NYSE:WMT), Target (NYSE:TGT) or CVS, you might be soothing burns with sugar rather than extract from a plant.
    • According to Bloomberg, multiple lab tests of the retailer's store-brand gel showed no traces of aloe vera, even though it's listed as the first or second ingredient in every case.
    • How could this happen? The FDA doesn't approve cosmetics before they hit store shelves, so it's up to suppliers to make good on their promises.

    U.S. Steel to pay $2.2M to settle pollution lawsuit

    • U.S. Steel (NYSE:Xagrees to reduce pollution at plants in Granite City, Ill., Gary, Ind. and Ecorse, Mich., and pay a $2.2M civil penalty to resolve a Clean Air Act lawsuit by the U.S. government and three states, the Justice Department says.
    • The company also will conduct environmental projects costing $1.9M to protect health and the environment in the affected communities and spend $800K for a project to remove contaminated transformers at the Gary and Ecorse facilities.

    But we can't complain (literally):

    New college professor 'watchlist' aims to expose professors who 'advance leftist propaganda'A new website is asking students and others to “expose and document” professors who “discriminate against conservative students, promote anti-American values and advance leftist propaganda in the classroom.


  174.  

    Market pretty overbought here


  175. tried pasting the McClellan Oscillator in to the above comment but I dont seem to be able to. Were bumping up against post Brexit rally levels.


  176. Conservative sites/Winston – I was just reading a Chinese Paper and was mortified to see, on the front page, that they are quoting an article from the Drudge Report as if it's real news.  This madness has to stop! 

    Good article Del.  Try posting the link to the image and then I can post it.