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Monday Market Movement – Countdown to June Swoon

Will this market ever go lower?

If not, it's very easy to make money in a never-ending bull market.  For instance, the S&P ETF (SPY) is currently at $244 with the S&P at 2,439, so they run pretty much neck and neck and, if we think the S&P isn't going lower, then the SPY Jan $236 ($14)/245 ($8.05) bull call spread is $5.95 and we can sell Jan $212 puts for $3 to net $2.95 on the $9 spread which will make $6.05 (205%) by January if SPY is over $245.  That's how easy it is to triple your money in a bullish market and, if you want to check out a dozen other examples of that technique working over the past 6 months, check out our Top Trade Review, with our first 14 trades (2 months) of 2017 netting $19,185 so far.  

Making money in a bull market is easy, the trick is not losing it when the market turns sour!  We only had 3 losing Top Trade Ideas (out of 14) in the first two months of 2017 and one of them was a Russell (TZA) hedge, which was SUPPOSED to lose money if the market went up.   By funneling a percentage of our profits into well-constructed hedges, we are able to lock in a substantial portion of our gains against a downturn.  We had that tested a few weeks ago when the market dipped and our portfolios passed with flying colors.  

In fact, we actually make more money on the way down than we do on the way up because we're tilting bearish with some highly-levered positions but we did have to adjust a few last week to reflect the possibility that this market is going to keep going higher and higher and never ever stop – because that's kind of how it feels at the moment.  

As I've noted before and as you can see on Doug Short's Equities/GDP chart (the Buffett Indicator), this market is getting a very 1999 vibe and only in 1999 has the market gone this insane with valuations.  Never before have so many people paid so much money for such little earnings!  

When the DotCom bubble burst in March of 2000, it wasn't so much a downturn in profits that killed the market – there weren't any profits in the first place.  What killed the market was a simple change in attitude, when people woke up from the frenzy of buying and suddenly began to realize that a pet food company with a sock puppet doesn't deserve a $1Bn valuation.  Will people wake up and realize a car company with a battery doesn't deserve a $60Bn valuation?   Will people wake up and realize a taxi company that doesn't own any taxis isn't worth $65Bn?  Will people wake up and realize a retailer that delivers from an on-line catalog at a 3% margin isn't worth $200Bn?  It's hard to say, people are pretty delusional (just look at who's President).  

Image result for most overvalued stocksSo we keep playing the bullish game and keep making bullish picks but ALWAYS with some hedges – just in case.  We're also keeping plenty of CASH!!! on the sidelinees – just in case – because history has a funny way of repeating itself, doesn't it?

Speaking of repeating – there was another terrorist attack in London this weekend with 7 dead and this morning, Saudi Arabia, Bahrain, Egypt and the UAE have cut ties with Qatar, sighting that nation's ties to terrorism.  To some extent, they may be using Qatar as a scapegoat (tensions are escalating to be sure) and also it might be good for the price of oil.  

We still like /CL long over $47.50 and the Oil ETF (USO) long over the $10 line into the July 4th weekend but, after that, we don't think $45 will hold, so just a fun, early summer play.  Similarly, Gasoline (/RB) Future are a good long above the $1.56 line (tight stops below) over the same period.  Also, Coffee (/KCU7) is back where we like playing it long at $128, that trade idea made just under $4,000 last Tuesday from our May 24th Webinar.  Of course these trades have already been discussed in our Live Member Chat Room – which you can join here if you'd like to know about these opportunities as they happen

On the Indexes, we still like our short calls from Friday, which were:

Nonetheless, the market marches onward to record highs with the S&P (/ES) Futures tapping 2,437 this morning and Russell Futures (/TF) back to 1,405, which we like for a short with tight stops above (see our 5% Rule™ discussion from our Live Member Chat Room, where we called this move yesterday).  Speaking of Futures, we went long on Oil (/CL) at $47 and Gasoline (/RB) at $1.56 early this morning, also in our Live Member Chat Room, taking advantage of the overnight weakness to re-load our oil longs. 

See how consistent we are!  Friday's job growth was anemic, there is more terrorism, the President is being investigated, housing is bubbly (especially in China and Australia) and Central Banksters now own more than 1/3 of all tradeable bonds on the planet – up from 15% in 2003 and 20% in 2009.  Now they all SAY they will be unwinding them but how and to who?

The issue here is that the Commercial Banks (who have kept their percentage steady) would not have added Trillions more in debt notes and no one else (widows, orphans) who owns bonds have the capacity to take even half the Fed's bonds off their hands – let alone all the Central Banks at once.  This is a guaranteed catastrophe in the making yet no one is paying attention – as if we can just keep rates unnaturally low forever with no consequences.  

Hey, it's worked so far – let's press our luck, right?  

It's a very boring trading week with no (none) Fed speak scheduled and not much data either:

As usual, Monday's are fairly meaningless (we didn't even trade last Monday and no one cared) so we'll watch and wait today and see if our index shorts pay off (tight stops above if they don't) and, if not, we'll try again at the next level because we can afford to lose $50-100 quite a few times against the thousands we'll make on another nice dip, right? 


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  1. Good Morning.

  2. Is it still terrorism if the people are not terrified? Or is it just suicide by cop now… We bomb them, they respond with low tech because that's all they have. Of course what we do isn't terrorism, is it? I don't know, I think drones dropping missiles on a daily basis must be pretty terrifying. We are the good guys though, aren't we? Endless war is so confusing…

  3. The word "terrorist" has jumped the shark….

  4. Kind of like "the beatings will continue until morale improves"

  5. ….in other words, it's overused and overplayed. Welcome to our new reality  :(

  6. mkucstars1 – Anyone can be 'terrorized' but it's rarely at the hands of a 'terrorist'….

  7. At least we're giving them freedom and democracy. As long as our government approves… right? I'm just trying to understand what we're trying to do over there and who we are trying to help. What exactly are we trying to accomplish? And when do we know we have succeeded? 

  8. /RB about to hit 1.55. Long there? Or game off and see where they end up since it's BELOW 1.56. Go long after they cross to the upside?

  9. Will have to add a 50% Up line for the Nasdaq. I doubt we will see 4000 again now! That would be one heck of a correction!

  10. If the SCOTUS approves the travel "ban" after all the morning tweets, we'll need to check for integrity. Spicer spends hours saying it's not a ban and Trump mentions ban 5 times… LOL!

  11. guess GNC isn't getting squeezed today..

  12. Good morning! 

    Good point by 1020 and Mkucs, if the purpose of terrorism is to terrify people, it's failing there.  More like it's galvanizing people and this morning's Qatar news, even if symbolic, is an example of that.  The Muslim World will have to take practical steps to put an end to these radicals or the rest of the World will end up doing it for them and, if so, there will be collateral damage as Westerners aren't so good at telling good Muslims from bad ones.  

    Qatar is a huge /NG exporter, by the way so /NGV7 at $3.05 is still a buy (hit $3 this morning).  

    /RB/Jeff – You can try every penny with tight stops but I think over $1.56 is bullish and under isn't, so that's my line.  /CL, on the other hand, I do like at $47 (tight stops!).  

    Big Chart – Sorry, ended up going away for the weekend so didn't set new levels yet.

    President on a rampage:

    Approval tweet is very funny as he just appointed a Supreme Court Judge after a year of Senate Obstruction.  Also, he can't even get his own party in line behind his insane choices for key positions.  I've never seen a President whose party controls both houses of Congress whine so much…

    The scariest thing is that Trump thinks he is currently being "politically correct" and intends to take the gloves off!  

    GNC/Jabob – Forming a base:

    Image result for gnc kiosk

  13. Trump / Phil – And comment about courts being slow and political is a step from the "Little Dictator Handbook". Scary…

  14. FU FTR!!!!

  15. Phil

    On the monthly chart it appears Dow is about to hit minor resistance line i.e. 21,269 which caused the market to drop in 2009  would like to know your thoughts about it or would you wait for Dow to hit a major resistance ?

    Thanks as always


  16. all is right in the world with Jabo's first FU of the week.

  17. Phil

    FTR are we waiting  for the split to sell call and put or are we selling now


  18. The tweet about the Mayor of London has really irritated Londoners as the 'don't be alarmed' statement from the Mayor was in relation to the increased presence of armed officers in the capital following the attack…. Mike Pence must literally be practising his inauguration speech in the mirror.

  19. Hmmm, have we sufficiently armed Qatar? Looks like they are going to need some defense pretty soon… another customer! So many jobs…

  20. ParkByte!

    we talked about it on May 2

  21. CLF is interesting here, strong support at $5.50, bottom of range? I bought some at $6.50, small position to average down on

  22. Dow/Pat – Well, as noted last week (and above) I'm for always finding an index short to play and taking small losses every day until we have a winner.  Today is was /TF and /ES (same as Friday) and if /YM looks toppier then it would be /YM – they are all going to drop together, more or less – the question is when.  

    Of course I lean towards the RUT because it has a tendency to make dramatic drops and I tend to stay away from shorting /NQ because it's simply unstoppable (other than that one pullback – that also didn't stop it). 

    FTR/QC – Yes, waiting for the split – we already have a bunch (6,000 in the OOP) so we'll end up with 400 at $19ish and another 400 would be $8,000 or maybe we'll just cover and sell aggressive puts – depends how the split is taken by investors.  Don't forget, my goal is to DD at 0.80 ($12), not $19 so F them!  

    Alarm/Malsg – Trump only reads the words he wants to hear, which is terrifying in a President.  As to Qatar, we have 2 bases in that country so it will be interesting.

    Good call on ParkByte BDC.  

    CLF/Mkucs – No immediate catalyst until China is sorted but good long-term.

  23. Phil – Maybe POTUS did an incredible Real Estate deal with the Saudis for the biggest bestest most gold military base ever in the history of forever.

    He is on a real Tweet fest today.  Mayor of London got two tweets … that State visit is going to be fun.

    Loving the coffee trade btw.

  24. Phil, what do you think of TBT here? Thanks. Strether.

  25. Phil – "when people woke up from the frenzy of buying and suddenly began to realize that a pet food company with a sock puppet doesn't deserve a $1Bn valuation.  Will people wake up and realize a car company with a battery doesn't deserve a $60Bn valuation?   Will people wake up and realize a taxi company that doesn't own any taxis isn't worth $65Bn?  Will people wake up and realize a retailer that delivers from an on-line catalog at a 3% margin isn't worth $200Bn?  It's hard to say, people are pretty delusional (just look at who's President). "

    Thank you for the reality check, moment of Zen and my ROFLMAO of the day.

  26. @DJT, well, 90 Americans will die today due to gun violence. So, yeah, it is interesting we aren't have a "gun debate"

  27. 5 people killed in Orlando shooting but just a home-grown gun-loving psychopath – "not a terrorist". 

    See, that's why I like shorting /TF the best!  

    TBT/Streth – Well, it's a 2x inverse of TLT and I think TLT drifts between 125 and 115 for the year so not too much action and likely decay.  The Fed's moves are very baked in at the moment so not sure what catalyst you see that makes TBT worth playing – in either direction.

    Zen/Naybob – It's all such obvious folly – after the fact.  

    • Mallinckrodt (MNK -7.4%) slumps on a 40% spike in volume on the heels of a new report from short-seller Citron Research that says the company has been in cahoots with Express Scripts (ESRX +0.1%) to sell over-priced Acthar gel, but now the cat is out to bag after noted investor Jim Chanos described the relationship at the recent SALT conference.
    • Citron adds that ESRX has apparently reversed its position and will now be making a concerted effort to rein in the price of the medication.
    • Generic drug makers are also feeling MNK's pain. Almost all are down in early trading.
    • Selected tickers: (ANIP -3.1%)(ACRS -2.1%)(RDY -1.6%)(EGRX -0.6%)(IPXL -4.1%)(LCI -4%)(MYL -1.9%)(PRGO -5%)(TEVA -0.7%)(VRX -4.3%)
    • May ISM Non-Manufacturing Index56.9 vs. 57.0 expected, 57.5 prior.
    • Business activity 60.7% vs 62.4%.
    • New Orders 57.7% vs 63.2%.
    • Employment 57.8% vs 51.4%
    • Q1 Productivity and Costs: flat vs. -0.2% expected, -0.6% previous (revised).
    • Unit labor costs +2.2% vs. +2.5% expected, +3% previous.

    NY Post: Icahn wants to buy thousands more auto repair stores

    • AutoZone (AZO -1%), O’Reilly Automotive (ORLY -2.8%) and Advance Auto Parts (AAP -1.6%) are lower following a NY Post report that Carl Icahn is looking to buy thousands of auto repair shops, with the idea that they will buy products directly from his own AutoPlus distributor instead of the national car parts chains.
    • Icahn’s pitch is that the new arrangement would boost the profits of the repair shops that install auto parts, according to the report.
    • Icahn on Friday announced the purchase of Precision Auto Care’s 250 service locations, bringing the number of auto repair shops controlled by Icahn Automotive Group (IEP -0.5%) to more than 1K, but he reportedly "wants to do thousands” more acquisitions of small- and medium-size repair and installation chains.

    Dollar Express sues Dollar Tree for driving it out of business

    • Dollar Tree (DLTR -1.3%) opens lower after former rival discount retailer Dollar Express sues the company for allegedly driving it out of business.
    • Dollar Express was formed from stores that DLTR and Family Dollar sold to win approval for their takeover deal, and it accuses DLTR of using confidential information to open new stores near the divested locations as well as placing underqualified and inattentive store managers in divested stores.
    • Dollar Express says damages, which include the lost prospective value of the acquisition of the stores, may exceed $500M, with the ultimate amount of damages to be determined at trial.

    JinkoSolar -4% on Q1 earnings miss, declining margins

    • JinkoSolar (NYSE:JKS-3.9% premarket after reporting weaker than expected Q1 earnings and a 1% Y/Y drop in revenues.
    • JKS says Q1 gross margin was 11.2% compared with 14.3% in Q4 2016 and 20.5% in Q1 2016, citing slightly lower average selling prices of solar modules, higher silicon prices and material costs caused by a supply shortage; the company expects improved margins in Q2 and H2 as its mono wafer and PERC cell capacity increases and polysilicon prices stabilize.
    • Q1 solar module shipments totaled 2,068 MW, up 19.3% from 1,733 MW in Q4 and up 29.3% Y/Y from 1,600 MW.
    • JKS reaffirms FY 2017 guidance for total solar module shipments of 8.5-9.0 GW, and expects Q2 solar module shipments of 2.5-2.6 GW
    • Bank of America Merrill Lynch upgrades Yelp (NYSE:YELP) from Neutral to Buy.
    • In a note, analyst Justin Post cites the easy growth churn comps in the second quarter and expects things to get even easier by the fourth quarter. 
    • Post says that Yelp could better execute to push multiple closer to competitors but noted that the stock is currently trading at 10x EV/EBITDA versus Yelp’s average of 18x and the 14x average of competitors or peers. 
    • Price target: $37. 
    • Source: Bloomberg.
    • Yelp shares are up 2.64% premarket.
    • JPMorgan reduces Snap’s (NYSE:SNAP) price target from $20 to $18, citing concerns about the company’s ability to monetize and scale its ad business and Snap’s lack of profit.
    • Other Snap concerns include competition from the likes of Facebook and the company’s ability to continue adding new users.
    • JPMorgan is conservative on the future of the smart sunglasses Spectacles, dropping its original projection of 915,000 units with $119M in sales this year down to 429,000 and $56M.  
    • The analyst note also noted that a share lock-up on June 29 could create volatility as 70% to 80% of shares become available for sale. 
    • Snap shares are down 2.61% premarket.   

    Alphabet Class A shares pass $1K mark

    • Alphabet’s Class A (NASDAQ:GOOGL) shares join Amazon (NASDAQ:AMZN) in the $1K club as shares crept past the milestone mark this morning. 
    • The two companies were in a race to the top, but Amazon pulled off the victory last week.
    • Alphabet’s Class A shares are up nearly 1%.  
    • Previously: Amazon beats Alphabet to $1,000 (June 4)
    • A total of 24.7M wearable devices shipped in Q1, according to IDC, which represents a nearly 18% growth over the prior year’s quarter.
    • Xiaomi and Apple (NASDAQ:AAPL) led the market with 3.6M units shipped each with Xiaomi pulling slightly ahead with a 14.7% market share compared to Apple’s 14.6%. Xiaomi maintained strong sales even though its fitness trackers are primarily available in China while Apple benefitted from the improved Series 1 and 2 models of its Apple Watch.
    • Fitbit (NYSE:FIT) pulled in third with 3M units and a 12.3% share.
    • Samsung and Garmin rounded out the results with 1.4M and 1.1M units, respectively, and market shares of 5.5% and 4.6%. Others accounted for the remaining 11.9M units and 48.2% market share
    • Pacific Crest downgrades Apple (NASDAQ:AAPL) from Overweight to Sector Weight citing the overly optimistic sales forecasts for this year's iPhone. 
    • Pacific Crest sees investors expecting the 2017 iPhones to achieve a unit growth in the “mid-to-high teens” with a side of gross margin growth but says such increases are “extremely unlikely.” Notes that the iPhone 8 could face a soft launch and delays due to OLED supply issues.
    • Meanwhile, UBS cites “inconclusive” global smartphone survey results for Apple with positive signals including strong retention and Chinese rebound. Negative signals include weak purchase intentions outside the U.S. and some signs of brand erosion.
    • UBS predicts 80% retention rate with a 5% to 10% new user decline.
    • Source: Bloomberg
    • Apple shares are down 0.75% premarket.

  28. Saw this today :


    Basic Phil concept

  29. /RB now 1.54.  I tried at 1.55 and stopped out quickly.  Waiting on this one. I have a couple /CL at 46.95 after some scaling in and out. Made some monday morning cash on /TF short as well – I'm stopped out of that one and will reshort on a bounce if it happens. 

  30. The cost of imprisoning each of California’s 130,000 inmates is expected to reach a record $75,560 in the next year<p>HOW MUCH?<p>More than tuition at Harvard University<p>That’s enough to cover the annual cost of attending Harvard University and still have plenty left over for pizza and beer<p>Gov. Jerry …

  31. Silicon Valley is by far the most successful tech hub on the planet.<p>However, European and Asian cities have started gaining on the startup mecca — so much so, that you could even say Europe has become better than SV.<p>But as we’ve pointed out, Europe isn’t one large monolithic block, each country and …

  32. Michael who?<p>Russian President Vladimir Putin claims that he had limited personal interaction with former U.S. National Security Adviser Michael Flynn, when asked by NBC’s Megyn Kelly in an exclusive interview about the nature of their relationship — and a widely circulated December, 2015 photo that …

  33. 5 people reported dead in Orlando workplace shooting

    <b>(CNN) —</b> <b>[Breaking news update at 11:29 a.m. ET]</b><p>A disgruntled former employee shot and killed multiple people at an Orlando, Florida, workplace Monday morning before killing himself, Orange County Sheriff Jerry Demings said.<p>Three men and a woman were killed by the shooter, who then shot himself, …

  34. WASHINGTON (Reuters) – The U.S. Supreme Court on Monday threw out a lower court ruling that required North Carolina to urgently redraw state legislative districts found to have been be mapped out in a way that diluted the electoral clout of black voters.<p>The high court, with no recorded dissents, …

  35. Let’s be honest: while planting your garden can be fun, weeding it usually isn’t. Not unless you enjoy crouching down for long stretches, anyway. You might not have to endure the drudgery for too much longer, though. Roomba co-creator Joe Jones and Franklin Robotics are launching Tertill, a robot …

  36. Images of the Beijing smog and millions of people wearing masks to be able to breathe are among the more dramatic depictions of air pollution caused by excessive industrialization. Now that China is turning away from industrial manufacturing and towards services, it is focusing on remedying some of …

  37. Updated 06/04/2017 12:00 PM EDT<p>Sen. Mark Warner declined to say Sunday whether allegations that President Donald Trump has attempted to influence the ongoing investigation into his campaign’s relationship with Russia could, if proved true, qualify as an obstruction of justice, but he said “it would …

  38. Monday kicks off Apple’s annual developer conference, WWDC, in San Jose, California. While meant for developers, Apple often announces big updates to its iPhone operating system and new products—which also get consumers excited. Will Apple follow along with the trends in technology? Or will they go …

  39. Two years after IBM created the world’s first 7 nanometer chip, the company said it has now developed a breakthrough process to build an even more densely-packed chip at 5nm.<p>The chip will pack 30 billion 5nm switches onto a chip the size of a fingernail. For context, IBM’s 7nm test chip packed 20 …

  40. Jeremy Corbyn and Tim Farron tell PM not to block inquiry thought to focus on Saudi Arabia, a major buyer of British weapons<p>Jeremy Corbyn and Tim Farron have challenged Theresa May over a long-delayed inquiry into foreign funding and support of jihadi groups in the UK, after the Home Office …

  41. Ahead of Apple’s Worldwide Developer Conference today, and the expected announcement of iOS 11, the company briefly removed older, 32-bit iOS applications from appearing in the App Store’s search results. The change, which appears to have been a short test on Sunday, could have impacted a sizable …

  42. The intense focus on Twitter’s pro-Trump bot scourge is an enticing but partial explanation for a far more difficult problem.<p>Originally posted on June 05, 2017, 00:02 GMT<p>Updated on June 05, 2017, 00:41 GMT<p>BuzzFeed News / Getty Images<p>On May 30th, Empty Lighthouse Magazine published an article with …

  43. While genetics and environmental factors such as diet both contribute to type 2 diabetes, the exact cause remains unknown. However, new research …

  44. Walt Disney’s <i>Pirates of the Caribbean: Dead Men Tell No Tales</i> took a hard 65% tumble in weekend two, earning $22 million over the Fri-Sun frame. That gives the Johnny Depp pirate adventure a $114.6m ten-day total. At this juncture, it may be on course for a $155-$165m domestic total, well below the …

  45. Much has been written about the demise of the traditional bricks-and-mortar retailer entering first-quarter earnings season. Results from some of the nation’s biggest chains this reporting period did little to assuage investors’ concerns about falling foot traffic and same-store sales.<p>Overall, …

  46. Riven by lawlessness, corruption and economic failure, the beleaguered country could fall back into civil war at any time<p>When he writes his court rulings, Justice Emile Dhekana buys his own paper, pens, staples and carbon-copy sheets. Then he asks for a cash payment from whichever side will win the …

  47. Texas Instruments’ revenue increased 13% YoY in Q1 2017.<p>One of the main profit drivers is the automotive segment.<p>Texas Instruments’ new product …

  48. Gilead: A Strong Bet For Income

    The company is not a value trap as it has too many growth triggers plus a pristine balance sheet. Furthermore the biotech sector will continue to …

  49. Mobile devices are actually showing signs of a turnaround.<p>The company is now cash flow positive and has an AMAZING balance sheet.<p>Infotainment systems …

  50. The iron ore price rout is over, at least in the interim.<p>Spot prices jumped on Friday while Chinese futures held onto earlier gains on Friday evening.<p>According to Metal Bulletin, the spot price for benchmark 62% fines jumped by 3.25% to $57.79 a tonne on Friday, partially reversing a 4.32% drop in …

  51. Currency traders continue to scale back bets looking for further US dollar strength, according to data released by the US Commodity Futures Trading Commission (CFTC) late last week.<p>This chart from the ANZ shows the recent reduction in net long US dollar positioning, particularly against the euro …

  52. Investors looking for a return of market volatility might see those chances increase this week, with geopolitical risks looming large.<p>The decision by …

  53. Hope you all are Starbuck-luvin the /KC right now!  I had 4 avg around 1.27 now 1.2935, hoping for 1.33!

  54. Blackberry Firing on All cylinders – I must be in 1995.

  55. ICE/Phil – unstoppable? breaking out today for new highs..

  56. FU TSLA AMZN!!!!!!

  57. Germany is pulling their jets out of Turkey, final decision on Wednesday

  58. MA, V/Phil – if rates going up, will they accelerate?

  59. Geez, I can hardly stand looking through the charts. all so damn HIGH! I'm seeing what I just can't buy at these prices, while at the same time seeing what I've missed with all these. Meanwhile, my 'value' plays still promise "even better entries.. "

  60. scottmi  +1

  61. gnc squeeze?

  62. @scottmi… could not agree more… MSFT has blown up my butterflies, I am hoping it will reverse at some point before July. All other FU stocks continue to FU.. Can't look at these screens anymore… who the F is buying at these insane levels and continue to prop up the markets.  A President under investigation, terror attacks, tepid macro indicators – pmi, consumer spending etc.   and the markets keep going up…  Patience…patience…patience

  63. Mandinka – ah… just hearing on the radio.. feels a good fit for this morning. Thank you, KEXP!

  64. PSEC down to weekly 50ma, offering 12% dividend at this level.

  65. Phil,

    What do you think about /RBN7 at these levels? Looking to playing into July 4th

  66. TSLA, the honey badger of the stock world.

  67. rustle--looks like another all-time high for tsla..dangit!

  68. RIG/Phil – existing position. dropped through my % loss line, now on the critical review list.. Add or Kill?

  69. Basic Income/Rperi – I don't see any other sensible solution down the road.

    /RB/Jeff – I have 2 long of each at the moment, more likely to DD than sell at this point ($47, $1.54). 

    /KC/Burr – Great fun when it works.  

    ICE/Scott – All the exchanges must be doing well with everything at record highs.  ICE is where most of the manipulation is, so extra-busy these days!  

    MA/Scott – People sure seem to think so but I think it's priced in by now as they are up 25% since the election:

    I've learned never to bet against MA or V but their p/e ratios are in the 30s at this point and that's historically ridiculous – so not something I'd buy. 

    Charts/Scott – It's hard to be a value investor in a runaway market.  No one wants the boring stuff we like so they sell off, no matter how good the fundamentals.  What matters is what can be extrapolated for high-potential stocks, whether or not that potential can ever be realized.  

    GNC/Jabob – Make up your mind. 

    Patience/Learner – So hard to master.  

    PSEC/Scott – Interesting looking. 

    They do have LEAPS so you can buy PSEC at $8 for the dividend (0.08/month) and sell the 2019 $7 calls for $1.15 and the 2019 $7 puts for $1.20 for a net $5.65/6.32 entry.  

    /RBN7/Japar – I just added regular /RB for $1.54 as I'm certainly not expecting to hold it for more than a few days.  With /RB, I take an 0.02 profit off the table very quickly and get back in – it's not the sort of thing I look to ride for a whole month.

    TSLA/Rustle – Not even the insurance news bothers them. 

    • National insurer AAA is raising its rates on Tesla (NASDAQ:TSLA) vehicles by ~30% based on data showing that the Model S and Model X had abnormally high claim frequencies and high costs of insurance claims compared with other cars in the same classes.
    • Tesla disputes the analysis: "This analysis is severely flawed and is not reflective of reality," it says. "Among other things, it compares Model S and X to cars that are not remotely peers, including even a Volvo station wagon."
    • Anthony Ptasznik, chief actuary of AAA, said the group noticed the anomaly in company data and then investigated other data sources, primarily relying on the Highway Loss Data Institute because of its scope, to confirm its analysis. "Looking at a much broader set of countrywide data, we saw the same patterns observed in our own data, and that gave us the confidence to change rates," he said.
    • Source: Automotive News

    RIG/Scott – We killed it ages ago, didn't see deepwater drilling coming back but, if you still have it at $9, this is about where I don't mind getting back in. 

  70. Muck – "I'm just trying to understand what we're trying to do over there and who we are trying to help. What exactly are we trying to accomplish? And when do we know we have succeeded? We are the good guys though, aren't we? Endless war is so confusing…"

    Oh boy, there is no confusion in these matters. In my best Joe Friday – Just the facts Ma'am.

    Obama carried on a long standing American tradition for Shrub, who carried on for Clinton, for Bush Sr, for Reagan, for Nixon, for Johnson. The last guy who bucked the trend? Both Kennedy's were going to pull the plug on Vietnam, so out with lead poisoning. 

    Eisenhower saw what happened with Truman and Korea, and was misled into Vietnam for Gulf of Tonkin oil rights, hence his warning.  Don't bring up peanut head Carter, the destruction and genocide (Zaire, Guatemala, East Timor, Angola, Afghanistan, El Salvador) he sanctioned would qualify him for Nuremberg provisions. 

    The reality is that Obama holds these records for US Presidents: most bombs dropped, having been at war for the entirety of his eight year tenure, and the biggest military budget in history. Don't forget who was Secretary of State for this military industrial complex munitions fest – Hillary Clinton.

    And yet, Trump claims the military is under funded? Like the Fourth of July, just continuing in our rich tradition. All right in front of an ever increasingly insular populace which should be indicted for thinking Carter was a pacifist and Obama a humanist.  Grow a pair and get real.

    BTW, there are no goods guys, that's a jingoistic fairy tale for brainwashed flag waving morons who eat their parrot food. We are not there for any other reason than the brokers, dealers (The Dogs of War), and any asset of value we can leverage and extract.

    The measure of success is not public debt, or human lives, but corporate profits and some jobs for consumerism.  We leave when we have to, or are damn ready to, and always follow the money.  Questions asked, answered, it's Reali-Tea-kill-ya time. Thank You (Falettinme Be Mice Elf Agin) and Out.

  71. Jeff where are you shorting TF again? What was Phils shorting line today? 

  72. new all-time highs for tsla and amzn…wtf!

  73. Jabob – Yes, these two juggernauts keep rolling on.  And yes, they are at ridiculous prices, but trying to short on valuation and trying to pick tops is difficult to pull off.  Better to wait until the weekly charts turn down, IMHO.

    Meanwhile selling puts on AMZN and rolling them up has proved very profitable.

  74. albo/excellent comment.  Yes yes and yes.  Fundamentals can often take years to affect the stock price of a momo stock.  Trying to call a top is futile.

  75. Learner – insanity. Count me in. At these nosebleed levels, it may just be the kind of environment where a call ratio spread comes into its own. I picked up the LMT September 17, 1 x long 260 call ($17) 2 x short 275 call ($7.50) – net $2 on the spread which is 100% ITM with LMT @ $281. Makes for an easy roll and works well if LMT pulls back.

    On the classic BCS strategy, last month I cashed out the BA Jan 2019 130/150 BCS when it reached 75% of max profit. I reinvested some of the profits back into the BA Jan 2019 170/190 BCS for $10.50, which given the recent momentum has now moved in less than a month to almost 100% ITM.

    I do not want to sell puts in this environment – but rather save that option until the momentum falls away and BA moves down. In that case I will cash out the long calls when they reach a price equal to $15.50 (in order to exit at break even) and seek to re-enter a new spread at a much lower price and potentially then sell puts to offset the cost of the spread. I would love the price of LMT and BA to shoot past the price of the short calls. Then I would layer on more spreads, knowing I have plenty of fire power to roll the short calls. 

    As you mention, it is difficult to find value in this market – so no need to force that particular stock picking strategy. The tape is telling a story and it probably pays to listen. When it signals the inevitable turn, then will be the time to take advantage of more appropriate strategies (which for sure will not be ratio or bull call spreads).

    But as always, it is horses for courses – Phil loves value plays and he is very successful at it. My psyche has never been comfortable cheering on price decreases in assets I own (humor attempt).

  76. Phil / GNC

    I have the following 5 contract Jan19 trade on GNC

    - 7.5Put is even

    +5 call is down 22.5%/$543

    -7.5call is up 28%/$475

    With GNC now at $8, would you reccommend adjusting the trade?  Should I close out the short 7.5calls and sell a higher strike to capture more premium?  Also, if I want to add another 5 contracts, is this a good time?

    The whole trade is back to about breakeven.

  77. From Value Walk :

    ~~When President Donald Trump last week withdrew the United States, the world’s second-largest emitter of greenhouse gases, from commitments made at the COP21 climate agreement in 2015, it sparked global outrage, and much hand-wringing at home, too. Led by former New York Governor Mike Bloomberg, at least 30 mayors of U.S. cities, three governors, more than 80 university presidents and more than 100 businesses have pledged to maintain their individual commitments to combat climate change, regardless of Federal policy.

    Governor Bloomberg ? ? ?

  78. GNC/Burr – Why adjust the trade?  You are in the money and should collect $250 per contract and net $1,250, currently the net is $63 which is what I would call "good for a new trade" in a review.  So now would be a good time to repeat the trade, only $63 worse than the price you got before.

    Governor/Albo – Close enough.

  79. Phil with gold at 1281 ABX seems to be languishing a bit at just over $16? Doesn't this usually move up and down with the price of gold? Does this seem like it may be a good time to get into this top trade pick from earlier in the year or is the price action telling us something here?

  80. tsla going to 350 today? Dangit!

  81. ABX/Criags – Yes, strange that there's no action there, you'd think they'd be thrilled.  I guess they are too much of a value stock to go up in this MoMo market.  

    TSLA/Jabob – Wow, that's crazy. 

    Tesla cries foul as AAA raises insurance rates on Model S, Model X

    Toyota Cuts Ties With Tesla

    Nothing matters with them.

  82. How about president Bloomberg! Maybe we can have a real billionaire in the White House with a successful business experience for a change.

  83. Hi Phil, While we are on the topic of gold, would you mind taking a look at the /GC futures?  I noticed the large run up on Friday and was wondering if there might be an interesting entry to short.  I am still learning the 5% rule, looks like $1050 (rounded) was a 5 year bottom, so 20% is 1260, but this current run up seems to have gone well past the 20% overshoot that we would be expecting, more like a 60% overshoot at around 1280.  If I am looking at this wrong would you please correct / clarify?  Thanks in advance.

  84. Max after watching gold for a while now, this one is less likely to follow the 5% rule because it seems to move more on news and dollar action than bot programed trading. Just my quick take. 

  85. phil are you still holding CL and RB or did you stop out already?

  86. Nat I find it hard to believe that Obama dropped the most bombs of any president in our history. Seems like we were not as actively dropping them as Nixon or FDR had to during their years. Curious where that fact came from? 

  87. Winston – thanks, I hear you on the risk of selling puts in this environment.  I have used weekly put sales only to salvage some of the losses on my bearish momo trades TSLA, NFLX.   My other bcs bets continue to do fine.  Not yet reached the 70-75% profit lines where I should consider rolling to the next level like Phil and you have done.  Waiting for now…  

  88. Gold/Max – I sure wouldn't be shorting gold.  While it's off a nice run , it can go against you by quite a lot – see last June in fact.  Perhaps at the $1,300 line you can play for a pullback but I'd keep very tight stops above.  We've already tested $1,300 so $1,260 has already proven to be no real resistance and I'd argue that $1,200 is the real base line and the move down to $1,050 (from $1,800) was the overshoot.

    In a run from $400 to $1,800 ($1,200) pullbacks of $250 (weak) and $500 (strong) are to be expected and that takes you to $1,300 and then $250 more is $1,050 so back over $1,300 and we could have some real upside fireworks on gold. 

    That does make ABX a bit silly down at $16, doesn't it?  In the LTP we have the Jan $12/20 bull call spread at $3.15 (25) and I say we buy back the short Jan $20s (0.62) and leave the $12s but add 50 2019 $13s at $4.75 ($23,750) and sell 50 2019 $20s for $1.80 ($9,000) and sell 25 2019 $15 puts for $2 ($5,000) for net $9,750 on the $35,000 spread with $25,250 (258%) upside potential at $20 not including the fact that we're already up a few thousand on the original spread.  

    /CL/Criags – Still in both, looking for a better move than this.  

    Bombs/Craigs – Came from the far right side of the media, skipping past all fact-checking or reason.  I don't know the numbers but I do know Obama dropped 20,000 ish bombs in 2016 (personally, of course) which was probably a slow day in WW11, when we LOST 12,000 bombers and 100,000 bomber crew and a single B17 carried 4 tons of bombs, which is probably a few so I'd have to guess 40,000 planes running 80 bombs (50 pounds each?)  per mission even for a few days would blow away Obma's total and anyone who takes 2 seconds to think about it would immediately know that statements to the contrary were complete BS.

    Nice dip in /TF into the close!  

  89. Bombs:  So the best president is the one who dropped the least bombs? Probably Lincoln I would guess with Washington a close second.  Obama did accelerate the drone program which goes every day it's Sunny. Folks in these regions pray for cloudy days.  I agree with the early AM statement that both sides are terrorizing.  That usually doesn't end well

  90. Craig's //TF

    Sorry for the late reply. I never got back in the short unfortunately. I was looking to get back in at 1405, same as Friday. I had that x2 this morning and made nice cash at 1400 and then stopped out. 

    I do have 1 /RBN7 at 1.54

  91. I just don't see why we have to make friends with people who threaten our entire electoral system:

    Unless of course, you are the beneficiary… Putin might have wanted more than just a thank you note.

  92. Fireworks for the opening weekend of the Bon Marche at Northgate Mall in Seattle, Washington, on April 30, 1950. Macy’s is now where the Bon Marche<p>As one of the first postwar suburban shopping centers in the US, the Northgate Mall in northern Seattle defines classic mall …

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    Most of us regard self-driving cars, voice assistants, and other artificially intelligent technologies as revolutionary. For the next generation, however, these wonders will have always existed. AI for them will be more than a tool; in many cases, AI will be their co-worker and a ubiquitous part of …

  96. Apple introduces iOS 11

    iOS 11 was the least surprising announcement of WWDC. Apple has announced new versions of its mobile operating system at its developer conference for years. While the final version of iOS 11 won’t be available until September, here’s what Apple has in store for you with iOS 11.<p>Apple CEO Tim Cook …

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  98. After Bob Dylan was named the winner of the Nobel Prize in Literature last October, the literary commentariat wrestled with a fundamental question: Can song lyrics be literature? For some, the thought carried an unkind implication: Does something from the galaxy of pop music belong anywhere near …

  99. Apparently Apple knows Siri kinda sucks, because it was the last thing mentioned in the unveiling of the new HomePod speaker. That’s why it’s dumpily named as a successor to the iPod, not Apple’s old-but-unwise voice assistant.<p>The $349 HomePod Wi-Fi speaker has seven beam-forming tweeters, a custom …

  100. But many are pessimistic about children’s future<p>Nearly a decade after the worst economic downturn since the Great Depression, economic spirits are …

  101. Bulls sitting on major gains in RH

    Furniture company RH plummeted more than 25 percent the end of last week, but quick option traders have already booked large profits on upside …

  102. Apple’s app store downloads are soaring

    As Apple’s iPhone sales growth leveled off in recent years, management has been attempting to shift investor attention toward the tech giant’s rapidly growing services segment. The segment offers continued growth prospects and a more reliable revenue stream than Apple’s more volatile hardware sales.<p>…

  103. It’s like the rally never happened.<p>Bank stocks are now cheaper, relative to the market, than they were before the election, as investor giddiness over tax reform and financial deregulation hits a political reality in which neither seems all that likely.<p>The KBW Nasdaq Bank Index is trading at a …

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  105. UK regulators would be wrong to give in to lobbying and give Aramco fast-track entry to the FTSE 100<p>Roll up, roll up, who wants some lovely Saudi dosh that would arrive with a stock market listing in London of Saudi Aramco, the enormous state-owned national oil company? Almost every investment …

  106. A recovery in Macau suggests brighter skies ahead.<p>You might think that Las Vegas is the gambling capital of the world, but it’s not. Macau, a special …

  107. The leading theme-park operator rolls out a premium-priced parking offering at Disney Springs.<p>It’s not just perpetually rising ticket prices that …

  108. June is among the weakest months for stocks<p>The stock market could face its most turbulent week of trading so far this year, with a trio of potentially destabilizing events on deck: former FBI director James Comey’s testimony, the U.K. election, and the ECB monetary-policy meeting. The trifecta, …

  109. Gold and the related precious metals appear to have turned a corner based on bullish price action in recent trading sessions. Commodities of all …

  110. Apple shares are down about 1% today to $154 in a lackluster market largely due to Pacific Crest’s Apple analyst, Andy Hargreaves, downgrading Apple to Sector Weight and recommending investors trim their positions. With all the reports of the upcoming iPhone 8 Hargreaves believes that investors are …

  111. <b>CHAPEL HILL, N.C. (MarketWatch) —</b> Financial planners have an even harder job than we thought when trying to persuade their clients to invest in, and then stick with, the stock market.<p>And that’s really saying something, since we already knew their job was difficult.<p>That’s the clear — and sobering — …

  112. Costco: Why Shares Will Disappoint

    Costco shares are trading at a premium to already elevated average price to earnings multiples (both trailing and forward).<p>Analysts expect earnings …

  113. The fear of industry disruption from a changing content distribution model has turned AMC into a favorable upside opportunity in addition to …

  114. /RB 1.525, /CL back to 47(ish) and /DX headed down – yikes! 

    I'll likely stop out if we dip below 1.52 and try again at 1.50. I may dd at 1.50 to avg 1.52 on 2x but I'm not a huge fan of sleeping on these things anymore. If I take my loss on the 1x (.02) and try again at 1.50 then I'm in 1x at 1.52, and I can play off the 1.50 line assuming it holds to get my basis down with 1 more rather than having to do that holding 4x. I like that better…

  115. Oh Lordy! Vin starts of snarky, then moves to good on the way to sublime.  Phil, this is "the other perspective" let loose. I approve of the characterizations of Schumer et al.

  116. Posting the lines tonight as I will be in Washington tomorrow making a presentation to one of the big international finance organization. Should be fun…

  117. Good point here re: PayPal. Besides being long Apple, is there a short trade on paypal here? 

    They've been on a tear from $40, at $54 they might be in trouble with this new apple payment in iMessage.

    Phil, what do you think of the 2019 60/50 bear put spread. Buy the 60's for 9.25 and sell the 50's for $5. $10 spread that's     $6 in the money to start. 

  118. Phil, still looking for  some oversold stocks, a couple for your evaluation.

    CINR,  8% dividend yield

    DIN   8.4%  "

    I like CINR  basically because is a big integrated player in a stable commodity but can´t find options in it.

  119. and….


    USAC,   an oil field services  with 13% yield and a few contracts available….

  120. Costco: Why Shares Will Disappoint

  121. Bulls sitting on major gains in RH

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  123. How to Prepare the Next Generation for Jobs in the AI Economy

  124. Apple introduces iOS 11

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  126. Gilead: A Strong Bet For Income

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  129. Senate GOP aims for June vote on Obamacare repeal

  130. Oil Slides on Supply Glut

  131. TILLERSON: Trump’s ‘been clear to me’ that I should rebuild ties with Russia

  132. Good morning – especially for those /TF shorts!  

    /RB/Jeff – That's good, you have to find your own comfort zone and play in it.  I was talking about that in last week's webinar – scaling into Futures is certainly not for everybody.  The main reason I stick with conviction plays is I simply don't have time to watch the positions all day (or all night) so I'm either going to play with conviction or not at all.  

    Snarky/Scott – That hate-filled vile, cartoonish, one-sided, fact-free diatribe is what you think is clever?

    Good luck with the presentation, StJ.  

    PYPL/Jeff – It's hard to short any stock in this market (see TSLA, AMZN, NFLX).   I think it's like trying to short a crypto or cloud company – there's too much growth in the sector for the entry of one player to hurt the others – if anything, it just grows the pie for now.   PYPL's Venmo grew revenues 114% last Q and AAPL can't sell IPhones fast enough to cut into that market and do near-term damage.  The spread makes sense if that's how you want to play it but I think this is a huge growth area for all.

    CINR/Advill – They are nice but, as noted, no options so no interest from me.  DIN is in a tricky space given the declining traffic issues but mostly IHOP and AppleBees is pretty solid and the 50% sell-off is a bit silly and they do have options so I like selling the Dec $45 puts for $4.30, which nets you in at $40.70 if they go lower or pays way more than the $3.88 dividend if they don't.  Let's sell 10 of those in the LTP to keep an eye on them.

    USAC/Advill – They keep missing estimates so hard to love and $1Bn market cap on $13M in earnings is a bit rich for my tastes and there's nothing in the quarterly trends to suggest they'll be doubling up anytime soon to $25M, which would still be a 40 p/e if they ever get there.  Dividends are $29M and they've sold $80M (10%) worth of stock to cover it, which then means they have to pay out $32M next year that also is not even close to being covered by cash flow.  

  133. It's looking like another dip! Why do they bother? Well, I guess we can't buy the dip unless we have one… dip on! I bought a few more IWM puts while they were on sale…

  134. Natter, I was trying to inspire, you did not disapoint :) we are of the same mind, but I already knew that…

  135. Truth is treason in an empire of lies…

    Ron Paul

  136. Phil,

    What's your target for /CL by July 4?