Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Faltering Friday – Market Finally Pulls Back on Day 2,003

DJIA2,002 trading days.

That's how long this bull market has been going on.  That is also exactly how long the 1920s bull market lasted so today is the great Crashiversary of that historic event – happy Black Friday to you all!

There is, of course, no reason to expect a significant correction today – we are simply passing a milestone that makes this the longest bull rally in history (assuming we survive the day). Of course, like many pre-crash markets, the volume sucks:

"For decades rising volumes have preceded a rise in prices in the stock market. Likewise, declining volume leads to a decline in prices,"Michael Paulenoff of Pattern Analytics said.

"Right now volumes are 50% lower in the S&P than they were in the weeks leading up to the November election when the markets saw a streak of declines," he added.  "The VIX is all messed up, we are somewhere around 11 and 12 when we should be at 8." 

Using Fibonacci levels, a technical analysis tool used by traders 'to identify strategic places for transactions to be placed, target prices or stop losses,' Raymond James identified the resistance point for traders to exit the market the S&P 500 at around 2,335, right above the current level of 2,349.  

For me, I don't buy into that technical mumbo-jumbo.  I think the market is going to pull back simply because it's ridiculously overvalued and is not taking into account all the potential negatives that lie ahead including Trade Wars, Currency Wars and Rate Hikes – among the things most likely to happen before Q1 ends in 45 more days. At which time we will have to face the reality of Q1 earnings – the ones that are supposed to be flying higher to justify these ridiculous valuations.  

By the way, you are welcome on oil – down another $500 per contract on /CL Futures and that's $2,000 worth of winning oil plays alone that we've given you this week so don't tell me you can't afford to subscribe you cheap bastard!  More to the point – can you afford not to in this trading environment?  

Our Russell (/TF) shorts are now paying off as well as we cross back below 1,390, those are up $250 per contract on the 5-point drop and we took $2,000 for 8 short contracts from our Wednesday Webinar play and ran – because $2,000 is good money and there is no sense risking it into the weekend.  We do still have the 2 short Nasdaq Futures (/NQ) at 5,300 – those each pay us $20 per point on the way down.

Click for
Current Session Prior Day Opt's
Open High Low Last Time Set Chg Vol Set Op Int
Mar'17 53.47 53.52 52.94 53.06 07:45
Feb 17


-0.30 31186 53.36 83114 Call Put
Apr'17 53.87 53.91 53.31 53.43 07:45
Feb 17


-0.32 91768 53.75 460679 Call Put
May'17 54.16 54.23 53.62 53.76 07:45
Feb 17


-0.31 10584 54.07 229654 Call Put
Jun'17 54.36 54.48 53.86 54.00 07:45
Feb 17


-0.33 7696 54.33 259521 Call Put
Jul'17 54.55 54.64 54.06 54.24 07:45
Feb 17


-0.28 2034 54.52 113314 Call Put
Aug'17 54.72 54.72 54.17 54.34 07:45
Feb 17


-0.30 1157 54.64 81400 Call Put

As you can see from the NYMEX chart, 245,000 fake, Fake, FAKE orders have been rolled out to other months to FAKE demand in those months too. In fact, there are now 127,000 MORE FAKE orders in the front 6 months than there were when we checked last Friday – indicating even more pain lies ahead for the oil bulls.  Last Friday there were 328,293 FAKE orders for March and 75% of them have been moved and the other 20% (yes, 95% fake) have to be moved today and Tuesday to complete the cycle.

There's a reason they can fake all these orders (and here's a great article on spoofing) month after month, year after year and no one gets arrested and no one goes to jail. Why? Because, in order to monitor $117Bn worth of Oil Trading at the NYMEX, which sets the prices every single American pays for this vital commodity, the Commodity Futures Trading Commission has ONE (1) enforcement officer. It's not really a regulation if there's no one to enforce it!  

We talked yesterday about the Trump Administration's move to outright elminate the EPA but it's just as effective to simply de-fund all the agencies that annoy your rich pals so they can run hog wild over the regulators. The SEC, for example, has a 1,400-man team and gets $1.8Bn in funding which is nowhere near enough to keep up with their case-work, cutting their budget is a de-facto cut in enforcement and assures those wealthy enough to lawyer up that they are very unlikely to be bothered by all those silly rules and regulations that affect the bottom 99%.  

That's how you can have a "society of laws" but the laws only apply to the lower classes while the elites are free to do whatever they want.  Hell, if you pay your $200,000 fee at Mar a Lago, you can tell the President about any laws that displease you and he can executive order them away from you as soon as he gets back to his Washington house.

13754503_1770139986589739_7000358614973327009_nOf course, $200,000 only buys you the ear of the President.  To get a law changed, you'll have to do some serious horse-trading but, with Billions on the line (Trillions in Commodities), I'm sure you and he can come to some reasonable accommodation. That is, after all, how politics work in America.  Paul Ryan is Speaker of the House, 3rd in line for the Presidency and it only cost $5.3M to get him flip his vote and fund the Import/Export Bank.  

What's shocking about US politicians is not that they can be bribed (Trump just removed the requirement that US companies disclose bribes made to foreign officials) but how CHEAPLY they can be bribed.  I think that politicians should be required to get at least 10% of what they are giving away – that way, maybe they will become rich enough that they aren't constantly looking for the next handout.  EXLM hands out BILLIONS of taxpayer Dollars to Top 1% Corporations – Ryan should have gotten at least $500M, not $5.3M!

Crony CapitalistIf Trump wants to make America great again, he should start by negotiating the bribes on behalf of these politicians – teach them how to sell out for real money.  Doubling the access fees at Mar a Largo to $200,000 for 500 Members put a quick $100 MILLION in the President's pocket (per year), which means that fee alone is worth $800M if he serves out two terms.  Now doesn't Ryan feel silly?  

Just yesterday, the President elminated the Stream Protection Rule, which demands that miners monitor the water quality downstream from their mines and keep the pollutants at acceptable levels and even (gasp!) requires them to restore the stream to it's original health once they close their mines and move on.  The cost of compliance with this regulation was $81M a year for the $100Bn US Mining Industry (0.08%) yet less than $8M (0.008%) was spent to get the regulation tossed out.  Well, that and a few dead Cub Scouts, of course.  

Have a great weekend, 

- Phil


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!

Comments (reverse order)

    You must be logged in to make a comment.
    You can sign up for a membership or log in

    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

    Click here to see some testimonials from our members!

  1. Did anyone get assigned DIA? Dividend is due and my spread of 10 got pulled apart 8 contracts assignment

  2. Good morning to all,

    Scott your NVO suggestion.

    I did have a closer look at the stock. Initially I noted that they big in insulin.

    As I was placed on the diabetic 2 list for many years, just using tablets only, I finally found a way to get that monkey of my back. Due to the road I have taking, with in not more than 10 weeks, I normalized my blood sugar, got down my weight and no more high blood pressure pills. So no more tablets on that end.

    The diabetic field is a super big market for the pharmaceutical industry, and with my way, they would not like to hear about it, somewhat similar like the Trump follower don’t see the king is naked.

    Coming back to the stock, the graph looks attractive, cash flow also positive, but it looks like they are involved in a class action lawsuit. Of all pharmaceutical companies, they are on the bottom of the list. I hold plays in at least 5 of that list, which do look much healthier than NVO.

    Finally their options go only up to September, so if you still think positive of this company, I could only suggest a BPS selling Sept. 30/27 put for .55, giving you a return of 3.2% per month, calculated on the max. loss you could accrue.

  3. Good morning! 

    Corporations paying fewer taxes

    That's a useful illustration.  Excise taxes are essentially a VAT tax and that's how we originally funded the Government with Individuals and Corporations then contributing equal shares.  Well, the Corporations would have none of that and, over the years, they reduced their burden to just 10.6% of all taxes while Individuals pay 80.2% through Income and Payroll Taxes with the Payroll Taxes, of course, being a disproportionate burden on the bottom 99% (as there's a cap at $100,000).  

    This, in a nutshell, is what's wrong with our system.  Had Corporations paid their fare share, not only would Government have always been fully funded but we would have a huge surplus vs a $20Tn deficit.

  4. Le Monde yesterday had an article that compared Trump's communication skills with kids in kindergarten. It's even worse I think because kids that age don't have learned to lie very well yet! 

    We are losing the respect of the entire world and he doesn't even realize it. We can't go another 4 years like this….

  5. Yodi, Aloha, like your call on JNJ !!  How do you calculate the number of calls to sell comparing it to the number of contracts you have on your spread? Mahalo!  I came to the same conclusion on NVO. So again, Thanks!!

  6. I read the entirety of President Trump's press conference transcript yesterday and I found that reading it really illustrates how poorly his thoughts are communicated. It's unfortunate. 

    Now to trading! I'm looking to short on a pop this morning if we get it. 

  7. Summary of yesterday's press conference – in case anyone missed the day America died.  

    Assignment/Latch – No biggie, just buy back or sell or whatever.  Presumably they took 800 shares from you to get the dividend so the sell-off this morning is bonus money as you buy them back with the cash that should be in your account from the short caller.  

    Big Chart – The move to watch is the RUT, from Must Hold at 1,200 to 1,400 is 200 points so 40-point retrace (weak) to 1,360 is what we'll be watching for.  Then we'll see how that holds up.  40 points is just over a 2.5% dip from 1,400.

    Yikes, looks like we're giving up already:

    Photo published for DARPA: We're Moving to Merge Humans and Machines

    • The U.S. Department of Defense is researching several ways to enhance humans using technology, from strength-enhancing exoskeletons to quick-processing brain implants.
    • With AI already proving more adept than humans at a number of tasks, merging biological and machine intelligence might be humanity's only hope of keeping up.

    Auto Bubble Burst Begins As Subprime Delinquencies Soar To 2009 Levels

    Fed President Admits US Banks Have Only "Half The Equity They Need"

    Don’t Wimp Out on ClimateIf Trump doesn’t dump the Paris accord, his economic agenda is in jeopardy.


    Conservative activists to mobilize amid anti-Trump protests

  8. $1.485 on /RB is the -2.5% line, could be good for a bounce.  Very tight stops below. 

  9. Shorted /TF at 1395, out for quick money. My omelette is paid for. 

  10. Short /NQ at 5300.

  11. newt,

    JNJ with any BCS always 1/2

  12. Dr.Phil/JO  Whats your short term outlook on JO?  I covered my jun 27 short calls so only have my SBUX puts and the jun 20 long calls.  I think I am going to roll the 20s to sept 21s for no cost.

  13. yodi    What did you do to get your blood sugar down in 10 weeks.  Was there anything else besides losing weight?

  14. Stockbern longer story come back to me on that not on witching Friday have to watch my cherries today

  15. ANET

    Big winner !   One of my falling knife purchases.  Own the stock and short puts.

    ~~Arista Networks target raised to $130 at Needham — 11th beat and raise, and this one was big  (100.17)

    Needham raises their ANET tgt to $130 from $110 after ANET "crushed" the CY4Q quarter, posting EPS 40% above our forecast, resulting in a sharp increase in estimates for CY17 and CY18.

  16. Nice job Albo

  17. Phil/JO I rolled my jun calls to sept 21s for .05 cost.  Seemed like a no brainer.  Will look to sell some calls short when it gets back to 22.

  18. Scaled in /NQ. Back to 1x at 5305 now

  19. Also in short /NQ…..Phil do we have a target on this?  Would 1580 be too much to hope for today? :)

  20. anyone remember the day the music died?

    Ma and Pa Kettle might be doing a better job?

  21. congrats Albo, big winner

  22. Now 1x at 5310

  23. AMZN back to all-time high… crazy

  24. Yodi,Newt – thx for comments on NVO. Yeah, not perfect, so is why down so much. 'Deep value' or dead? I think not the latter. JNJ too rich for me still! Going to look for it to spike down nearer 100.  TSM – no problem, entirely agree is not a 'tree planting' opportunity. It's a momentum play, and why i like the short term structure of the Jan/July calendar….with a stop! No i don't trust this high market, but the bears have been saying that for -years-, the IoT is not stopping and is only going to exponentially increase demand for TSMs service/products, TSM is almost entirely in Taiwan so US/China BS aside, rest of world not going to have any problem with them, nor US companies, and China? TSM speaks their language… Also like the low PE for TSM. They are not -overvalued- unlike most of market. They may be where more money goes for safety if comes out of domestic indexes--NOT SURE ABOUT THAT though. But still, not stupidly priced even here at all time high.  I'm going to follow them and still looking for entry… 

  25. Phil, thanks for the SCO play. I entered this play to "pay for" my LV conference, thinking if I could lock in a gain, I would justify in my own mind spending the $$. Well, if you recall, the play went against us at first and we had to roll the long calls down and create a new longer spread.  The short call expired worthless and locked in enough gain for me to go to the conference. Meanwhile, the new spread kept going up and I finally closed that one out today (60 contracts) for a $10K gain. Thanks for that great play and for keeping us in it!

  26. Phil, your thoughts on market still not selling off ahead of a long weekend?   Options expiry + long weekend.  hmm.. no risk reduction ..or ..calm before the storm ?


  27. Thanks, Hanj & Rustle.  These falling knives with gaps usually work out with good companies if you're patient. 

    Unfortunately, I am also in VRX & SHLD which could hardly be called good companies.  But with each, I think there is a value component not being recognized by the market.  Only time will tell.

  28. Big bounce in the indexes.  

    Oil giving us a reset at $53.30 to short again (/CLH7) - the gift that keeps on giving!  On /CLJ7 it's $54, which is why $53.30 keeps failing – the main resistance is on the April contracts now. 

    JO/Hanj – No idea short-term.  This is a climate change play, could take years to work – I just want to be in it when it does.  Between the uncertain timing and the lack of leaps – that's why JO was dropped from Trade of the Year consideration in the fall.  Yes on the roll, just the cost of doing business.  

    ANET/Albo – very nice recovery on them.  

    /NQ/Ult – I'm not big on targets.  If I make a couple of hundred bucks, I'm very anxious to lock in my gains.  A 25-point drop in the Nas is very reasonable on a bad day but, then again, what's a bad day?  

    I remember Angel:

    TGT/Hanj – Wow, way to show initiative!  cheeky

    Good job going with the flow on /NQ, Jeff.

    AMZN/Jabob – Such a tempting short.  

    SCO/Jet - Wow, $10K could have paid for all of our trips!  Glad it worked.

    Market/Learner – It's not like we're going to have a straight down 10% correction.  There's no panic, I just think we've reached the upper limits of reality and there is really no serious upside from here.  I thought the same thing at 2,100 though, that was 10% ago!  

    $53 hanging tough on oil.  

  29. Any trades that can be put on today?

  30. Ravi - 

    I got screwed by my /rb long. Dumped on me and wanted to get out with a 250 loss, but it dropped too fast. When I finally sold it, I sold two by accident and then it popped. Anyway it cost me 750. I made 500 on cl though. 

    Lesson, don't trade against algos in bed with a phone at 3am

  31. Trades/Torquio – For you, I will look!  

    Good lesson Burr. 

  32. NVO/Yodi -  insulin concerns noted. a lot of cash on hand, a lot of current income. I expect (like all the other pharmas, too) acquisitions. Debt is almost nothing — compare that and cash on hand to JNJ, PFE, LLY…  what puts them at the bottom of your list?

  33. Scott NVO it is not my list it is compared to a bunch of competitors.

  34. Company Notes Digest 2.17.17

    Inflation expectations have definitely risen

    “As we look forward into 2017, in the first half in particular, before we lap the inflation that we saw in 2016, we do expect to see a higher level of low single-digit inflation in commodities. And that combined with our annual pricing outlook will probably result in a bit of pressure on gross margins.” —Pepsi CFO Hugh Johnston (Beverage)

    “it appears, we’ve now reached the bottom on commodities and are likely to have to contend with commodity inflation beginning in Q1 of this year…in 2017, when we take a look at the spot and forward rates, we’re likely to see year-over-year inflation. And we’re already seeing that in cheese, coffee, bacon” —Kraft Heinz CFO Paulo Basilio (Packaged Foods)


    Yellen still sounds hesitant though

    “Right now, the Taylor rule would call for a short-term interest rate somewhere between 3.5 and 4%. Which is obviously a much higher value of the federal funds rate than the FOMC has deemed appropriate given the needs of the economy.” —Fed Chair Janet Yellen (Central Bank)


    Investing has gotten much harder over the years

    “In the old days, what we did was shoot fish in a barrel. It was so easy, we didn’t want to shoot fish while they were moving, so we waited until they slowed down and then we shot them with a shotgun. It was just that easy. It’s gotten harder and harder and harder…Think of the hooey we built up over the years: we don’t understand it, it’s outside our circle of competency, the worst business in the world is airlines – and what appears in the holdings? Apple and a bunch of airlines. Have we gone crazy? I think the answer is, we’re adapting reasonably to a business that’s gotten much more difficult…Things have gotten so difficult in the investment world that we have to be satisfied with the type of advantage we can get…Indexes have created absolute agony among investment professionals because 95% of people have no chance of beating it over time…most people handle that with denial…I think the people who are worried and fretful are absolutely right. I would hate to manage $1 trillion in the major indexes.” —Berkshire Vice Chair Charlie Munger (Buffett’s Partner)



  35. Trades for Torquio (also a good Watch List):

    AFL – I always forget to buy AFL.  Super-solid company that trades in a channel good enough for the Butterfly Portfolio and should do better as rates tick up (insurance companies have huge reserves they have to keep in "safe" accounts).  They have $102Bn in long-term investments (bonds) that are paying them nothing – a 1% rise in rates drops $1Bn to their bottom line ($2.50/share).  You only have to pay $70.67 for a stock that threw off $6.45/share last year (p/e 11) and though they project flat – flat is just fine when you are returning 9% a year.  They pay a 2.5% ($1.72) dividend while you wait but not worth owning the stock as we can sell the 2019 $65 puts for $5.50 and buy the $60 ($13.50)/70 ($7.10) bull call spread for $6.40 for net 0.90 on the $10 spread that's 100% in the money.  

    ESRX – Another beaten-down Pharma that is worth owning.  They made $2.5Bn last year, up from $2Bn the year before and they did $1.4Bn in the last two Qs so pacing towards $3Bn yet you can buy this company for $42Bn (trailing p/e 17) at $70.   We can promise to buy them for $65 and get paid $8 to do it, which is net $57 which is 18.5% off the current price.  In the LTP, I'm just going to do those but you can be aggressive and add the $60 ($17.50)/75 ($9) bull call spread for $8.50 and then it's net 0.50 for the $15 spread that's $10 in the money to start.  

    GILD – Still priced like they are going BK even though they made $18Bn last year and should make $13Bn this year but that's still cheap when the whole company is $91Bn (p/e 7).  This is a huge conglomerate with a 20-year pipeline and one drug went generic on them – there will be others.  Selling the 2019 $60 puts for $6.30 is like free money, netting you in for $53.70 (23% off) and the $62.50 ($13.20)/77.50 ($6.85) bull call spread is $6.35 so net a nickel for the $15 spread is a very nice upside potential of $14.95 if GILD simply makes $77.50 by Jan, 2019.

    HRB – Replacing their workers with Watson in the next few years, so a good long-term play.  Simplification of tax code may make them a good choice for more people (bad for accountants) and they are very cheap at $4.25Bn ($20.50) after dropping $400M to the bottom line in fiscal 2016.  Should be a bit lower this year (cost of IBM project) but, down the road – vroom!   2019 $18 puts can be sold for $2.75 and you can use those to fund the $18 ($4.20)/22 ($2.30) bull call spread at $1.90 so you still have a net 0.85 credit and your worst case is owning them at net $17.15 (17% off) and best case is making $4.85 on the robot revolution. 

    Image result for robot accountant 

    LB – Victoria's Secret, Pink, Bath and Body Works…  Girls need bras and they like candles and perfume too!  So, assuming there will be girls in our future, paying $16.2Bn for a company dropping $1.2Bn to the bottom line is a p/e of 13.5 for a company that historically has grown 20% a year (flat this year).  You can sell the 2019 $42.50 puts for $4 and that may as well be free money (net $38.50 entry is 25% off) so it can be paired with the $50 ($11.50)/$65 ($5) bull call spread and you know we must love this one because we're willing to pay net $2.50 for the $15 spread!  

    M – We like M for a recovery story and, if not, as a real estate story.  They have 900 big-box stores and a $9Bn market cap so $10M per store is not a lot to pay and, at $9Bn, it's a good size to be acquired by a foreign company looking to have a presence in the US.  Meanwhile, they made $1Bn last year and maybe $900M this year so not like SHLD, who are losing $1.5Bn a year AFTER selling off land and brands yet still, for some reason, hold a $1Bn valuation.  Anyway, back to M.  The 2019 $25 puts can be sold for $3.10 and the $28 ($6.70)/$35 ($3.85) bull call spread is $2.85 so a net 0.25 credit on the $7 spread is the way to go.  

    SVU – One we picked at the Seminar.  Supermarket profits are thin and they come and go – that's why you can buy a company that made $178M last year for $1Bn ($4) – that's just silly!  Even if they have a bad year, I'd be thrilled to catch 2 good years out of 5 and it's the bad years that are unusual.  You can sell the 2019 $3.50 puts for 0.70 and buy the $2.50 ($1.85)/$5 (0.70) bull call spread for $1.15 so net 0.45 on the $2.50 spread is a very exciting upside!  

    TGT – At $65.55 they earn $5+ per share so p/e about 13 is very reasonable.  Having trouble passing on inflationary prices but that's just a cyclical thing and this is a great opportunity to own them cheap.  The 2019 $55 puts can be sold for $5.20 – that's great as a stand-alone sale as it nets you in for 23% off.   You can pair it with the $60 ($10)/$72.50 ($5) bull call spread and the whole thing is net free(ish) with a nice $12.50 upside.  

    WFM – Nowhere near as cheap as SVU but WFM made $500M last year and is selling for $10Bn so p/e 20 but I like the fact that they are pushing into Europe and I like the rollout of their less-expensive 365 stores – though they are cannibalizing sales and eating into the bottom line for now.  Since it's a slow roll, I would just plant a stake by selling the 2019 $30 puts for $4.50 and see how things go with a break-even at $25.50. 



    XOM – Still cheap at $81.50.  You can sell the 2019 $80 puts for $9 and buy the $70 ($14.25)/85 ($5.75) bull call spread for net $8.50 and you get an 0.50 credit on the $15 spread that's $11.50 in the money to start.  

    So there's a good start to the 2017 Watch List from various sectors to fill in our portfolios.  IFF the market keeps going up, then every week we can add another from the list to offset our underperforming hedges.  

    As noted above, I'm inclined to add ESRX and sell 5 2019 $65 puts for $8 in the LTP and we'll consider some more next week.

  36. Phil – Good ideas.

    I really like AFL (Mostly because of the duck 8-)), but won't their huge bond portfolio take quite a hit if interest rates rise sharply ?   Hopefully they are layered.

  37. PGNX/Pharm – yesterday, did you say time to get out of PGNX?

  38. "Every day you are not selling an asset that's in your portfolio, you're choosing to buy it." – Sam Zell

  39. SPWR – don't know what, but something happing with them today.

  40. albo, check out SWKS today – no pullback for us yet.  Holding on to some of my old position.  They announced a China LTE wireless chipset. 

  41. Learner – I saw it !   I missed the boat on that one.  Still holding some, but not enough.  Looks like we'll have to wait for the pullback.

  42. Comment content omitted because it is too long.

  43. Good notes, Pstas. 

    AFL/Albo – They keep them rolling and insurance companies have lots of smart people managing their money – probably old-timers who know better than to get tied up in artificially cheap long-term bonds.  Check out the Cash Flow per share on these guys:

    That's the kind of stock you buy when you are 20 and retire on!  

    Good Zell point, Scott.  

    SPWR/Scott – Freaky!  Thanks Forbes:

    SunPower, the second largest U.S. solar panel manufacturer, published a relatively challenging set of fourth quarter 2016 results, posting a wider than expected net loss, while guiding lower than anticipated revenues for the first quarter of 2017, on account of oversupply and tough pricing conditions in the global solar market. As the company expects the pricing environment to remain extremely competitive through 2017, it has been shifting its focus away from lower-value products, while doubling down on its high-efficiency panels and integrated solutions to shore up margins. Below we review the key takeaways from the company’s earnings release and what lies ahead.

    We have a $10 price estimate for SunPower, which is roughly 30% ahead of the current market price.


  44. On /NQ if we break the all time high of 5317, would you stop out?  I have short from 5305 and I tend to play my index shorts poorly.

  45. Phil/weekend  Have a great one Phil and all.  I'm headed to the gun store with my daughter to check out a new target handgun.

  46. AFL

    65 puts are offered at 5.1 

    bid is 4.90

  47. LANTANA, Fla. (AP) — President Donald Trump wants small businesses to thrive, but his frequent Mar-a-Lago visits have flight schools and other companies at a nearby airport in a financial nosedive.<p>The Secret Service closed Lantana Airport on Friday for the third straight weekend because of the …

  48. CHEYENNE, Wyo. (AP) — A new supercomputer in Wyoming is carrying on modeling the effects of climate change, but scientists worry President Donald Trump could cut funding for such programs.<p>The $30 million National Center for Atmospheric Research supercomputer named Cheyenne got to work on several …

  49. Consumer prices surged 0.6% in January from December, double the consensus forecast of a 0.3% rise. The sharpest monthly increase since February 2013, according to the Bureau of Labor Statistics.<p>Energy prices jumped 4% month over month, including gasoline which jumped 7.8%. Food prices edged up …

  50. Antarctica’s rapidly melting Pine Island Glacier has shed an iceberg the size of Manhattan, the latest evidence of the ice shelf’s fragility.<p>Nasa released photographs showing the block of ice separating from the southwest coast of the continent taken between January 26 and January 31.<p>The sequence, …

  51. Kraft Heinz, the consumer giant backed by Brazilian billionaire Jorge Lehmann and Warren Buffett, has made an approach to combine forces with European peer Unilever.<p>Unilever has rejected the approach, but Kraft said in a statement that is is looking ” forward to working to reach agreement on the …

  52. President Trump was a big fan of leaked — even stolen — information on his campaign rivals during the 2016 election. He called the dump of Clinton campaign emails released by WikiLeaks “a treasure trove,” and cited them repeatedly on the campaign trail. And he urged Russia to look for more than …

  53. Jake Turx is a newly minted White House correspondent for a publication that has never before had a seat in the White House press corps: Ami Magazine, an Orthodox Jewish weekly based in Brooklyn. He is a singular presence in the briefing room: a young Hasidic Jew with side curls tucked behind his …

  54. Phil, recently paid 21.50 for a 2019 220/260 BCS in LMT, offset by short 200 puts.   Spread is now 25.30, puts are up $4.    LMT is 264.30.  Does it make sense to roll the short calls to 270 now?

  55. They're just relentless. Grinding us up slowly. I'm still short /NQ, now 2 at 5310. 

  56. Barack Obama has been whisked to a very good table at the club of former presidents, according to a C-SPAN survey of 91 presidential historians …

  57. The Trump administration is considering a proposal to mobilize as many as 100,000 National Guard troops to round up unauthorized immigrants, including millions living nowhere near the Mexico border, according to a draft memo obtained by The Associated Press.<p>The 11-page document calls for the …

  58. <i>Welcome to Best of Late Night, a</i> <i>rundown of</i> <i>the funniest jokes and videos and the sharpest monologues and parodies</i> <i>from the</i> <i>comedy shows. We’ve got your back: You need sleep, after all, and</i> <i>something</i> <i>to smile about, while</i> <i>we’re getting paid to watch late night,</i> <i>which is insane.</i><p><i>Do you like this feature? …

  59. The VIX… can't seem to be able to move higher..crazy

  60. I decided to bail on the /NQ short for this week @ 5310.50.  It feels like a slow melt up to me, and I doubt anything will happen interesting.  JM2C.  I'm going to watch netflix.

  61. Smart move Burr. I'm ahead by a little but losing interest fast. 

  62. Yawn. Ok, some fun for the weekend. Bloopers at end good too!
    Danny MacAskill's Wee Day Out

  63. Taih, LMT the spread has two years to run! Let it take it's time nature and do nothing.

  64. Thanks Yodi.

  65. Taih, I actually have the same spread. You need to sell short month 1/2 calls against your leap to make extra income

  66. ERIC – looks like got a bit too ambitious yesterday, but moving up and increasing valume last couple days. another gap to fill (eventually).

  67. PGNX…if they failed to hold, yes, get out.  I would now…get out.  Then when the retest $9.50 mark, think about getting back in.

  68. NLY / Phil – What do you make of their last numbers? They seem to be beating estimates widely although there might be some special items there. They have taken off of course… But it seems that the dividend is well covered. I have been out of them for a while, but maybe they are OK. I still prefer STWD long term because they have lots of floating rates papers but options only go 9 months so more work!

  69. The Friday /RB scam continues. FYI over the last 5 Fridays if you bought RB at open and sold at close you made money, even more profitable if you have time to ride the waves. This little pop just now was good for $600.

  70. Phil,

    Wanted to get your current take on the ESRX LTP recommendation. I asked about ESRX a few mths back and you cited the $15 bn Anthem lawsuit (their customer) as a reason to hold off; they also have sizeable debt to refi this year. What changed your feelings about them?

    Thanks,as always

  71. Softbank….Sprint = Zoom zoom.

  72. Oil running up into 2:35 close, regardless. 

    VIX/Jaybob – That guy who said it seems broken may have a point. 

    NFLX/Burr – Good call though /RB is popping, finally.

    /NQ/Burr – I just have 2 short that are good through March so I'm going to hang on and see what happens.  

    LMT/Tai – Then you will have paid $26.50 for the $220/270 spread.  It's not that you're getting a bad price but where's the need to mess with this perfectly good trade?  You can't regret every cent you don't make – it's the path to madness!  Assuming you got more than $10 for the $200s, this is a net $7ish spread that will pay you $40 and you want to make it a next $12ish spread that pays you $50 but pays $50 on a higher strike.  Wouldn't it be better to find the next $7 that makes $40?

    NLY/StJ – Seem to be right on track with the numbers – ahead of estimates, yes, but the estimates were very doom and gloomy for REITs and they were wrong.  Kind of silly that NLY was being treated like crap when CIM (same management, similar strategies) has been going like gangbusters.  On the whole, I'd say NLY still underpriced – should be $12ish.

    /RB/MrM – It was good to wait and play that $1.50 line – you just have to be patient and pick your spots.  

    ESRX/8800 – Now that they've double-bottomed at $65, I feel better about the lower limit.  Not sure when you asked but this seems to be my most recent comment:

    Submitted on 2016/08/23 at 12:13 pm

    ESRX/Selozi – They had that big lawsuit issue with Anthem (ANTM), who were their biggest customer and, of course, going to court with your customers is a bit damaging to business.  So, if their p/e were 10, I'd love them as they still have a solid base but, at 19, they are priced for growth that I think will be hard to come by moving forward.  I'm not a big long-term fan of middle-man companies, especially when their customers (insurance companies) are highly sophisticated and always looking to cut costs.  

    That was at $75 and we've had two drops to $65 since and we're doing a small put sale that nets us in for $57 against $7 in projected earnings (which factors in the suit) so p/e 8 fits my criteria and allows for the settlement risk.  Ah, here's what I said to you:

    Submitted on 2016/05/24 at 1:42 pm

    Offsets/8800 – I like F, CAKE and CMG.  ESRX is also good but uncertainty into the election means you can expect a rough ride.  Other stocks that are good for put sales at the moment are MAR, TGT, WAG, AXP, BA, UTX, CAT, TXT, WFM, SVU, BBBY, HPQ, EBAY, AA and FTR – all of those are ones I'm watching for possible value plays. 

    They were $75 then too and, obviously, there were no 2-year, $8 puts to sell at the time.  Keep in mind ESRX was at $90 in 2015, before the lawsuit.  Though it's not settled, the parameters are now more known.

  73. Hmm… CL (use april contract) shaping up for another short.

  74. PGNX/Pharm – thx.

  75. Phil- ABX I have the following positions below and wanted to know if I should go ahead and make these adjustments to take some of my gains off the table while maximizing the BCS utilizing the current run up in the stock and deploy the capital elsewhere.


    12 Jan '19 13 Long Calls: $5.10 basis currently $8.73

    9 April '17 21 short calls: $.60 basis currently $.90

    6 Jan '19 15 short puts: $3.90 basis currently $1.78


    I was looking at rolling the short April 21 calls   currently at $.90 to  the Jan'19 22 calls at $4.20 and covering the 3 remaining long calls with these also so I would be in the $9 spread for a credit of $450 If I did my math correctly and still have potential to make $10,800 in a couple of years. Or should I do something else?

  76. MrM….whoa!  Where have you been?

  77. TEVA – is the bottom in?

  78. Yodi, I did sell the march 260 call at 6.60.  However, I still am confused about selling the near month calls, since they seem to be running away from me.  LMT is one example, also sold June AAPL 125s, same thing. Should I be writing further higher up or further out?    If they go underwater, do you roll them higher to the next month and when do you do that?  

  79. TEVA….I would not go near them just yet.  CELG has a new MS drug, another one has been approved….

    AMZN rumors to by COF… !!!!

  80. SLW – why rejected at their 200ma last week? why? /SI still going up…

  81. Greetings Pharm, I've missed the daily banter with you! I've three teens, three aging parents, and run a company so my PSW reading time has been mostly around midnight the past few years, am hoping to be here real-time more often this year.

    I took a huge blow when I didn't get out of ARIA before the last dump, you did warn me though.  I re-bought when it settled at $4 and made back half my losses on this ramp up to $24, but it took scaling and patience. My PLX stake is toast but PGNX has been a steady grower to offset it. Can't remember what else I own that we were riding together a few years back.

    Hope all is well with you.

  82. Members of Congress expressed alarm that all undocumented immigrants in the U.S. are at risk of deportation. They said this was made clear to them in a meeting Thursday with a top Immigration and Customs Enforcement official.<p>There are approximately 11 million unauthorized immigrants in the …

  83. Mexico’s attempts to diversify its supplies of corn could threaten a crucial market for U.S. farmers who are increasingly dependent on exports to …

  84. Pontiff tells activists he supports their fight against ‘gutting of democracies’ in letter that appears to take aim at US president<p>Pope Francis has offered his unequivocal support to grassroots organisers and activists who are fighting for social justice, migrants, and environmentalism, saying he …

  85. For seven years after the financial crisis, it was all about Davos Man.<p>The Davos Man was at the World Economic Forum in Davos, Switzerland, the annual global meeting of minds with the mission of improving the state of the world through global partnership.<p>Now, in the wake of the election of Donald …

  86. The founders of Snap Inc. want to take the company public. But that doesn’t mean they want to run a public company.<p>Public companies, after all, have to deal with shareholders who don’t like the way the company is being run. They have to ask shareholders whether they are paying executives too much. …

  87. PLX….yeah…don't remind me….

    PGNX is doing ok.

    You should have made oooodles on GILD.  You were in them on the way down to 20…!

    I am with you on the kid front, and parents, and job….very very hard to keep up unless you are Phil with a full time gig.  Not sure who else is here from 2008, but it has been a long time!!!!!!!!!

  88. Phil,

    Thx for the thorough response to my ESRX question. Understood. Paying 57 for a $69 stk provides a cushion against a certain amt of possible negative developments (debt issues, adverse legal action). The fact that their biggest customer is suing them does give me pause. Not sure that would necessarily lead to loss of Anthem's biz but it does raise a question. In that Rx retail space, WBA is your favorite but high in their channel; CVS is lower in their channel but one that you consider second string. Interesting to see how it plays out.

    Thanks again

  89. Home Depot, the largest do-it-yourself retailer has logged 15 straight quarters of growth in revenues and earnings, and is expected to make it 16 …

  90. ‘ProtectPax’ is an innovative screen protector that works on glass surfaces like smartphones, tablets and glasses.<p>It uses liquid glass – a silicon dioxide coating that bonds with a given surface and significantly hardens it.

  91. Atmospheric river storms are drought busters in California, dumping huge amounts of rain in narrow corridors within short periods of time. The ongoing storm slamming Los Angeles, the nation’s second-largest city, as well as San Diego on Friday brings with it potentially historic amounts of rain, …

  92. <b>Mexico City (CNN) —</b> Mexico has a clear message for President Trump: Don’t try tariffs. We’ll retaliate.<p>”From Mexico’s point of view, opening tariffs will be a big mistake,” Mexico’s economic minister, Ildefonso Guajardo, told CNN’s Richard Quest on Friday. “It will be a step backwards, not a step …

  93. In the populist age of President Donald Trump – when CEOs are routinely hauled to Washington and browbeaten on live television over an America-first jobs agenda – it makes perfect sense for Kraft Heinz to shock Wall Street and take its ruthless deal-making abroad.<p>On Friday morning, Kraft Heinz said …

  94. The Russian ruble is tumbling

    The Russian ruble is tumbling.<p>The petro-currency is down by 1.0% at 58.1678 per dollar as of 8:06 a.m. ET.<p>Earlier, data showed that Russian PPI rose by 12.7% year-over-year in January, marking the highest inflation since November 2015. It followed the 7.4% increase in December.<p>Moreover, Brent crude …

  95. Republican governors said they have “serious concerns” over an Associated Press report that said the Department of Homeland Security was seeking to mobilize as many as 100,000 National Guard troops to round up and deport immigrants living in the US illegally.<p>The draft memo, tweeted by the …

  96. GILD – ha, it's always the ones I don't keep that go up, surely you remember that I was Phil's favorite contrary indicator for a time, selling at the bottom, buying at the top.

  97. TEVA/Pharm – thx.

  98. mrm – good to know you are still around!

  99. Taih I sometimes wish members would sometimes read my articles. I generally do not hold a record of comments as Phil does, but Ilene was so kind to publish the play on GIS in member’s corner.

    So please study it in Member’s corner and you will find most answer to your questions.

    Coming to your LMT 260 Mar the option has still 1.30 premium to burn, so wait until we get to Mar. Stocks go up and down and we could get every day a dip in the market, so why panic now that the stock is only 4$ over your strike price?

    The AAPL Jun 125 again still has 2.27 in premium and 4 month to go, who guaranties AAPL will stay at 135? So always be patient and do not panic in option trading!

  100. Americans love <b>JetBlue Airways</b> (NASDAQ: JBLU). The low-cost carrier known for comfortable leather seats with free, live television topped J.D. Power’s 2016 North America Airline Satisfaction Study, beating low-cost rival <b>Southwest</b> (NYSE: LUV) for the top spot.<p>The annual report measures passenger …

  101. Billionaire investor Warren Buffett is putting his longtime California beach house on the market for $11 million.<p>If it sells anywhere near its asking price, Mr. Buffett will score a decent return: He bought the Laguna Beach home in 1971 for $150,000. Mr. Buffett said he bought the house because his …

  102. Global bond markets trade on variables such as currency valuations, global fund flows, inflation expectations and monetary policy that can determine the level of interest-rate differentials. Recently these differentials have widened dramatically, specifically in developed markets such as Japan, the …

  103. In today’s difficult economic landscape we have witnessed some of the most notable and long standing institutions fall by the wayside. Institutions …

  104. COF up $1….since the AMZN dejour!


  105. Fiber Optic stocks generally strong except FNSR, as a result of the analyst's comments which I posted earlier.  Even FNSR is up substantially off today's bottom.

    OCLR and AAOI at new highs.

  106. Mrmocha, I remember you well.  Good to hear from you.

  107. unreal /ES is turning green

  108. Market is simply….bananas…

  109. Yodi's GIS article in member's corner:

    Note: By having trades such as these mapped out in their own posts, we can have discussions in the comments without them getting missed in the everyday chat/comments. 

  110. A while back one members was very worried about the DIS Feb. 110 caller. I think he wanted to roll already in Dec. We calmed him down. Look at DIS now 109.88 that is what you call patient. Will it hold for 15 minutes?

  111. Thanks Ilene

  112. Well, now I'm short 2 /CLJ7 at $53.69 avg – didn't want to miss it if we never hit $54 again.  That's one I'll hold over the weekend.  

    ABX/Calch – Well, ABX is at $20 so you are simply on track for $21.  You only have a 3/4 cover but still, very tedious to me.  As a new spread, I like the short $17 puts ($2.55) paying towards the $15 ($7.25)/25 ($3.25) bull call spread at $4 so net $1.45 on that $10 spread vs you tying up $7.83 to make $8 in the bull spread.  Even at $21, that spread returns $4 on $1.45, which is more than the 0.17 you can make holding on until April on the 9 covers.  $2.55 over 24 months is 0.10/month so 0.30 between now and April with my one-time spread instead of you going in and out 8 times in two years.  Yes, you can make more if you play it well – but the difference isn't enough to make the hassle worthwhile to me.

    Hola MrM!    

    SLW/Scott- Bots gotta sell. 

    So we fall from $30 to $17 is $13 and weak bounce is $2.60 and strong bounce is $5.20 and what's $5.20 + $17?  See how easy this stuff is?  'Tain't nothin' but a bot thang!  

    Image result for bender stock robot

    Oil/Latch – Damn, I could have written that!  Not hitting $70 this year at all.  

    That sums it up 8800. 

    Good advice, Yodi. 

    Image result for keep calm options

    COF/Pharm – I don't see the logic other than Bezos needs a big distraction to keep people from focusing on the fact that they don't actually make money in the retail biz.  

    Yep/ES is green again.  What correction?  This market doesn't correct…

    I love that CNBC has deleted this video (July 30th, 2008):

    If you thought you heard Cramer call a bottom during Tuesday’s Mad Money, you were right.

    “It smells to me like something, in fact many things,” he said, “have at last changed for the better.”

    “I am indeed sticking my neck out right here, right now,” Cramer continued, “declaring emphatically that I believe the market will not revisit the panicked lows it hit on July 15. And I think anyone out there who’s waiting for that low to be breached is in for a big disappointment, and [they’re] missing a great deal of upside.”

    If you thought you heard Cramer call a bottom during Tuesday’s Mad Money, you were right.

    “It smells to me like something, in fact many things,” he said, “have at last changed for the better.”

    “I am indeed sticking my neck out right here, right now,” Cramer continued, “declaring emphatically that I believe the market will not revisit the panicked lows it hit on July 15. And I think anyone out there who’s waiting for that low to be breached is in for a big disappointment, and [they’re] missing a great deal of upside.”

    "Stop waiting,” he said, and “buy the next dip because I think it might be the last big one.”


    “My bottom call isn’t gutsy,” Cramer said. “I think it’s just a smart call that all the evidence points toward.”

    “Bye, bye, bear market,” he said. “Say hello to the bull, and don’t let the door hit you on the way out.”


  113. Thanks Ilene and Yodi.

  114. CRIS/Pharm – would you keep/add/dump here?

  115. Phil – CL  fair enough but we know better right? :)   I did like this part…. Comparative inventory analysis suggests that the current ~$53 per barrel WTI oil price is at least $6 per barrel too high. Don’t hold your breath for $70 oil prices.

  116. CRIS…scott…holding.  Trying to sell $5 calls for 15c.

  117. SPY 235….pin…nice.  Have a good weekend all.

  118. All green at the close!  

    Have a great weekend everyone, 

    - Phil

  119. and another <1% day for the markets…. have a great long weekend all!

  120. "They" wont let these indices correct – especially NQ.  Have a great long weekend all.

  121. dollar made good progress…up by ~0.50.

    another 0.50 and i'll be in good shape!  hopefully by end of next week.

  122. Yw and thank you, Yodi. Please – all – send me material, trades, articles you write, which you would like posted in your own separate post. Send to: 

  123. Hmmm… reminds me of other regimes. Just can't recall which one just yet, but that will come back to me.

  124. Go Donald go; Making America great again after having 8 wasted years with O"bummer.

  125. I'm not betting long, but I will bet that /CL will hit 55 before it expires.  

  126. MrMocha – With /RB if you bought at today Open, which was Thur @ 6pm EST, you bought @ 1.525 and it closed at 1.511.  I guess it depends when you define "The open".  If you mean @ 9.30am EST then yes it has been a great trade.  

  127. These guys are completely delusional:

    What’s unusual about the administration’s forecasts isn’t just their relative optimism but also the process by which they were derived. Normally, the executive branch starts with a baseline forecast prepared by career staff of the CEA….Discussions for the Trump administration unfolded differently, with transition officials telling the CEA staff the growth targets that their budget would produce and asking them to backfill other estimates off those figures.

    Forget about forecasting, they have decided what growth will be already and are planning taxes and budgets around these alternative facts! And that's an administration run by a CEO! What kind of company runs like that. Oh yes, scams!

  128. SAINTY making up data! finally!! we can be like china which we have been mewling about fake data least the markets will zoom! maybe chanos will brilliantly short the us market as he did china 20 years about credibility melt

    as far as Trump goes its not going to be as bad as half the country thinks or as good as the other half thinks