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Monday Market Maintenance – Dressing the Windows for One More Day

Image result for market contrarianRecord highs! 

That's what the Banksters want to print in their monthly reports to get their customers to pull their CASH!!! off the sidelines and put them into something that generates fees for the bank.  They don't give a crap whether you win or lose – as long as they get their fees.  

Morgan Stanley says "this time will be different" and that we shouldn't worry about Central Bank de-leveraging or China's Credit Collapse because (and these are their points, not me just making it sound absurd), although "global growth will moderate somewhat, and will remain above trend."  That would be great but the "trend" has been around 2% and global stocks are not priced for "above 2% growth" they are priced for 4% growth or 6% growth and we are miles away from that!

Goldman's Chief Equity Strategist, David Kostin says the company's HNW clients are "confused" by the lack of inflation (as that's what we expect in a great economy) and he ponts back to the disparity of measurement that we touched on last week.  

Like me, Kostin is recommending inflation hedges, urging his clients to ignore what the Fed is saying and pay attention to the evidence that's right in front of their eyes.  Zero Hedge does a very good job pointing out what's wrong with inflation measures as they note that: "A leading driver of disinflation has been the Video, Audio, and Computer category where prices dropped by 5% in 2015, by 10% in 2016, are declining at an average pace of 7% YTD."  This is one of the stupidest things the Government does when measuring inflation.  Basically, if you bought an IPhone last year for $1,000 and it had 64Gb or Ram and this year you spend $1,200 but it has 128Gb of ram, the Government says you are getting more for your money so that phone is counted as 40% CHEAPER than the one you bought last year.  

Of course it's a bit more complicated than that but processor speed per Dollar goes up too so yes, electronics are almost always a drag on inflation, as are appliances.  So take this chart with a Lot's wife-sized grain of salt:

In reality, rents are completely out of control – up 30% in the past five years and accelerating into 2017:

These are all-time highs yet real estate sales remain anemic, with most of the properties being snapped up by REITs, who now own 357,000 multi-family housing units that 111M Americans now live in – also a record.  Essentially, about 10% (30M) Americans lost their homes in the crash, never recovered and are now renters, paying record-high rates, which makes it even harder for them to get back on their feet. 

This matters a lot because it then affects Owner's Equivalent Rent (OER), which makes up 24.433% of the CPI and higher rents are calculated as a benefit to homeowners (2/3 of the population) while a detriment to renters but, since the owners outweight the renters, the higher POTENTIAL rental income for their homes is considered beneficial and artifically lowers the CPI.  24.433% – that is complete BS and that's why the CPI has no real connection with reality.

Why does the Government do this, because CPI is connected to Cost of Living Adjustments so a higher CPI means they have to admit that Seniors need more Social Security or that Union Workers deserve raises and nobody wants that, do they?  So they lie to us and they've lied to us for so long we don't even remember that their used to be a truth.

Logic is another thing that's gone out the window these days and our friends at Morgan Stanley would like us to believe that we shouldn't worry about the fact that the Central Reserve Banks, over the course of the next 2 years, are projected to go from injecting over $100Bn a month into the markets to REMOVING $100Bn a month unitl they pull back their $10 TRILLION in purchases (8 years).  What, us worry?  Of course not! 

As long as the cessation of stimulus doesn't bother us and then the reversal of stimulus doesn't bother us and then nothing bad happens for the next 8 years then sure, why not pay 25 times earnings for the average S&P stock?  After all, what could possibly go wrong?

JP Morgan's Quant Strategist, Marko Kolanovic, feels the market is a a "tipping point" and he noted last week:

"In what is akin to the law of ‘communicating vessels,’ once inflows in bonds stop, funds are likely to start leaving other risky assets as well, including equities. The FOMC statement yesterday alleviated immediate fears – normalization of balance sheet will start ‘relatively soon,’ but only if ‘the economy evolves broadly as anticipated.’ This reasonably dovish stance pushes this market risk out for a few weeks (the next ECB meeting is Sep 7th, Fed Sep 20th, BoJ Sep 21st). This gives volatility sellers and other levered investors a limited window to position for a seasonal pickup in volatility and central bank catalysts in September."

Taking into account the solid equity fundamentals, but increased risks that are building for September – we suggest investors hedge their long equity exposure. One can take advantage of two current extremes in the derivatives market: a record low level of option volatility, and nearly record high level of option ‘skew’ (relative price of out-of-the-money options). An equity hedge that incorporates these extremes is “1 by 2 put spreads.” Investors can buy one S&P 500 2450 strike put and sell two 2300 strike put options that expire in January 2018 at nearly no cost (~20bps cost). This gives protection if the market drops below ~2450 (but also commits investor to double down below ~2150).

Howard Marks has a "Bubble Check-List" and we, at PSW, have our SQQQ and TZA hedges, as well as a few other plays that benefit us if the market ever does decide to turn down for more than a few hours.  Over the weekend, in yet another note from JPM, this time from the bank's "flow" expert, Nikolaos Panigirtzoglou, he writes that none of the above should come as a surprise and that as a result, investors – both institutional  and retail – have started putting hedges against an equity crash.

Image result for put call ratio vixAmong the market feature he highlights is that the current put to call open interest ratio for S&P500 index options has been rising for most of this year, and that while this ratio had peaked in June and its current level is not extremely high, it nevertheless stands above its post 2014 average. What is more extreme, is the call to put open interest ratio for VIX options, which at almost 4.0, is close to historical highs. (Chart courtesy of Sentiment Signals -

Notice on the chart that, into last week, all the Sept VIX puts disapeared and a massive amount of calls were written.  At the same time, there have been several articles aimed at chasing retail investors out of VIX longs, presumably so the funds could free up shares and load up ahead of their expected correction (see our discussion in Member Chat).

It's going to be a meaningless Monday, we're just going to sit back and see how the month ends up but we'll certainly short the S&P again if we're back to 2,480 – along with the other shorting lines we were using last week.  

I'm on TV this morning, live from the Nasdaq () and our weekly webinar will be tomorrow at noon, not 1pm and not Wednesday!  

Be careful out there and have a good week, 

- Phil


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  1. Good Morning All.

    ~~~~Short selling/Pstas – That's true.  Despite the relentless up market, we've consistently made money shorting the indexes as they tested each new level.  Of course we could have made just as much going long but, if I get caught short, I have conviction to stick with it but, if I get caught with a long and the market tanks – I just feel like an idiot.

    Phil — THANK YOU for all ALL you do — this sums it up for me best

  2. Good morning! 

    You're welcome Latch, makes it all worth it to me if I can make other people's investing more profitable – and fun!  

    I'm in NYC and have my Nasdaq thing about 10:30 so back around noon.  Still holding my oil shorts (and big losses) and /NG is getting attractive again at $2.85 on the front month.  Obviously I still like shorting oil at $50 but $49.50 already so very tight stops over that line.

  3. Good Morning.

  4. Goodbye TSLA, an affordable car for the masses is not on average 45-55k.  And many will not get a tax credit for their car as it's only the first 200k produced by the company.  Musk also did some spinning as he said they had over 500,000 reservations for the car BUT these are not net reservations, just reservations that have been made in total.  It did not count refunded or requested to be refunded reservations.  Part of why in their earnings over the last year he never updated the current reservations total.  Musk usually isn't one to sit on good news.  Musk will be calling out all favors to get the stock pumped up into a most likely crappy earnings release.  They must raise money soon on a secondary.

  5. Phil / SGYP 

    Any idea what happened there today ? Looks like it is down over 8% 



  6. Venezuela Heads for Civil War


  8. I am not sure if you even read my early mornings earning plays but here is one more.

    PFE buy stock @ 33.26 and sell the Aug 33.5 call for .25 only .8% in 18 days but if you still can take the div. of tomorrow .32 you take home 1.7 % in 18 days.

  9. rustle – do you have already have a position in TSLA? or are you waiting for any earnings before you initiate?

  10. I had 380 short calls coming into today for this week and when stock went to 340, added additional 375 short calls for this week at 1.55.  Was thinking of covering all of them at average of .50 right now (got 1.45 for 380 calls last week), but highly doubt on their earnings, TSLA moves up 45 points.  Will wait to cover for now.

  11. I will be taking new positions after earnings.

  12. thanks rustle

  13. i hope it drops below 300 after earnings (or before) ;-)

  14. Hola people! 

    So, what's holding up the Dow (aside from the Dollar back at 92.95)?

    It's BA again, up another $4.31 with JNJ $1.38, MMM $1.77, CVX $1, HD $1 and the rest barely moving so there's $9.50 which is all of the Dow gains on those and 1/2 is BA (again).  

    Getting a lot of disparity with Europe now:

    That Trump is AMAZING!

    Oil rejected at $50 from $45 (using the main lines) would give us $49 but really from $42.50 so $7.50 run gives us $1.50 pullback to $48.50 – that's what I've been sticking it out for but the weak Dollar is not helping. 


    TSLA/Jabob – I need someone to explain to me why a Tesla 3 is better than a Prius Prime.  As I was saying on TV this morning, when we were in Europe, pretty much every Uber driver had a Prius and the Prime is a big step up.  It's the only logical car once people do the math.

    SGYP/Pat – ESRX won't pay for Trulance.   Would be bad if that spreads.

    I read them Yodi, thanks!

  15. Totally agree with you Phil.

    Only reason someone would pay up for the 3 is because it is a TSLA.

    But you have to be crazy to pay up for the 3 over the Toyota imo.

    more risks, more hassles, and more $$$ for the tesla.


  16. Phil; Thoughts on SLCA.  2019 18 Puts are $2.50.  Thx



  17. looking forward to seeing your Nasdaq interview Phil

  18. Phil, with Dow – YM at 21850, is it not lagging the rest of the indexes and a good short? 

  19. Thanks Phil 

    Does that change our thesis to stay long on SGYP ? 

  20. Is there a link to Phil on the nasdaq?

  21. LL earnings tomorrow, might be a recovery play.  Today a trader sells the Aug 4 $23 puts and buys the $26/$28 call spread for .14 debit      about 3500 contracts

  22. TSLA – By the way as I indicated last week, I put in a reservation for the Tesla Model 3 earlier.  Actually their site froze and it looked like it didn't go through so I ended up with 2 registrations (coincidence?).  I requested a refund for the second one a month ago and it still hasn't been acknowledged.  No email to me either after the launch event.  Seems like extremely weak marketing and basic operational capabilities that would be an embarrassment for any major credible company.  I reserved as much to test these aspects of Tesla but was also hoping the Model 3 would be more affordable than it appears to be as someone interested in electric vehicles.  I think they will have a slew of competition in 2019 at these price points.   Have a number of covered shorts (short the stock, selling puts) that will hopefully help fund one electric vehicle or another.   

  23. SLCA/Options – Should pick up with building but no pick up in building just yet.  My problem with them at $28.74, is that's $2.3Bn and, even in a good year, they're good for about $100M in profits (p/e 23) and last two years were net -$15M avg.  On the whole, I think a rebound is priced in as they are up from $15 last year and down from $60 was just Trump-induced idiocy that was never realistic in the first place.  Down around $20 I like them long-term;

    As to the $18 puts at $2.50 – it's a sensible way to play them if you want to take a poke.

    Dow/Latch – The Dollar is too weak to short the indexes and you have AAPL earnings tomorrow and 10 AAPL points can pop the Dow 80 so why risk it?  Nas will be crazy too so not really tempted unless we have 2,480 again to short or 1,450 on /TF or maybe 6,000 on /NQ – Dow would be my last choice. 

    SGYP/Pat – If it's just ESRX, not too bad but if it spreads then yes, need to get out.  ESRX attempts to drop lots of expensive drugs but then gets backlash and capitulates.  Sometimes though, others join in and drop a drug with them but there's no way to predict.

    Nasdaq/Jabob – Here's the interview.  

    LL/Stock – Already long-recovered for us, not looking to go back to the well but I do still like them long-term.

    There is just no pleasing some people:

    • Facebook (FB -1.7%) is lower today amid a downgrade to Sell at Pivotal Research, which sees the rest of the Street underestimating risks including harbingers of ad spending slowdowns.
    • The stock is "simply too expensive," writes analyst Brian Wieser, who maintains a $140 price target, 17.5% lower than today's price.
    • Wieser points to a digital ad market nearing saturation, with a nod to top advertiser Procter & Gamble and its cutbacks tied to inappropriate placements. The fact that P&G said $140M in reductions didn't impact revenue growth suggests large brands (from which he estimates Facebook gets 30% of revenues) may be more discerning on digital ad spending.
    • Pivotal also says Europe's hard line on dominant companies like Facebook hints at more regulatory risk ahead, notably consumer privacy rules that take effect next spring
    • The Trump administration is considering imposing sanctions against Venezuela by targeting the country's oil industry, following yesterday's election that grants Pres. Maduro sweeping powers to rewrite the constitution in a vote denounced by the U.S. as a "sham."
    • .The measures are not expected to include a ban on Venezuelan oil shipments to the U.S. but could block sale of lighter U.S. crude that Venezuela mixes with its heavy crude and then exports.
    • U.S. refiners including Valero Energy (VLO +0.8%), Phillips 66 (PSX -0.4%), Marathon Petroleum (MPC -1.1%) and Chevron (CVX +3.2%) have lobbied strongly against a ban on Venezuelan oil imports, because refiners on the U.S. Gulf Coast rely on Venezuela for heavier grades of crude oil to convert into fuel.
    • "Even limited new U.S.-imposed sanctions or discussions of broader sanctions could be a catalyst for Venezuela defaulting on its upcoming debt payments,” Barclays says.

  24. /NG - wow, new 12 month low, should have had stops on this one.

  25. Bought some UGAZ, 3X Long NG, @ 10.52 for a scalp. 

  26. TSLA/Stu – Very interesting that they haven't marketed the crap out of you since they claim they will be delivering your car(s) within 12 months.  Strong indicator of what BS it is and Musk's strange tweets this weekend indicate, to me, he's running out of rope with investors (the real ones, not the retail idiots).  That's why the Model 3 has a slapped-together look – I don't think it was finished but he HAD to deliver a vehicle before they run completely out of money and they have to keep pretending everything is awesome ahead of the next capital raise.  The next telling sign would be if they go with different, less-known banks in this round of fundraising.  It would indicate MS et al are trying to distance themselves from a looming disaster.

    /NG/MrM – That's why we took the quick money last week – you can't trust that thing for more than a few days.  

    UGAZ/Albo – I like that idea.  

  27. why is USD so weak these days

  28. Rexx- dollar weak because we put a moron in the White House.

  29. Phil/CMG

    down today again. On my td ameritrade the only news that I can only see repeated news of class action suit. the lawyers are notifying it everyday….


  30. Phil / USO

    Do you like any put spread 3 to 6 months out?  Assuming $50 is the top / near top for this year I was looking to start building a short position.  Thanks-

  31. Dollar/Rexx – Same as Venezuela, corrupt leaders, questionable elections, dysfunctional government that's more interested in enriching themselves than the people – all destabilizing for a currency.

    CMG/Pat – I don't see anything specific either/  Have to just give them time. 

    Chipotle: Analysts’ Recommendations after Its 2Q17 Earnings

    USO/EMike – I think I'd go with SCO (2x ultra-short) with the Oct $37 ($4.00)/42 ($2.50) for net $1.50 on the $5 spread.  Shouldn't be hard to hit $42 if oil goes lower and the $1.50 shouldn't decay too fast (net delta is 0.17).

  32. Oil made a huge comeback:

  33. Phil – would really appreciate your help on managing a position which goes to show how difficult it is to play the momentum stocks, in this case – you guessed it – PCLN. I thought I could tame the beast but now it is becoming problematic. The current challenge is the covers on my spread are making me uncomfortable and closing out the position would be unfortunate.

    I have been rolling and rolling and now I have come to the point where I don’t know what the best way is to manage further upside momentum – and as earnings are next week – I do not really want to be caught offside.

    PCLN is currently @ $2024. The position after much rolling is Jan 19 BCS 1760/1860 (10 contracts) which is worth about $65k – with 5, Jan 19 2000 short calls. The price of those 2000 short calls is $270 (and they are only $24 ITM!!!!!). And important to note, as I have rolled so much, I certainly did not sell those for $270!!!!!!

    Way back I thought that $2000 had to be some kind of resistance level, but I need to manage the possibility that it powers through onwards and upwards. Obviously that kind of exposure could be catastrophic, and the biggest challenge is that while the long BCS has a max profit of $100 (and is 100% ITM) – the short 2000 calls are only $24 ITM but will cost $135 to close out (5 contracts). I do not want to be the ‘sucker’ who buy that premium – although I realise I am the ‘sucker’ who put on the trade.

    While I really do believe this market cannot go up forever, I want to reduce the risk, especially as earnings are next week and we know how PCLN’s volatility on earnings. I have tried to think through multiple scenarios – absent closing out the trade at a significant loss. I realise it may be the only option but hoping you can think through alternatives.

    After all the scenarios, I came up with closing out the 1760/1860 BCS and buying a Jan 19, 1900/2100 BCS for $105, which gives a $100 more wiggle room.

    Is there any sensible way to hedge this position, in way that I can be manage the hedge in a smart way if my premise that the market will eventually go down? I normally feel uncomfortable at a market top – and I don’t want to capitulate.

    My thinking and where it has ended up should be a warning to those who have not heeded your admonitions to stay away from these momentum stocks. It started off as a Jan 18 trade, but with the momentum I had to continue to use all the time available – hence now the Jan 19 trade – and obviously giving PCLN all this time is not where I want to be. When Jan 20 LEAPs appear, that may give opportunities – but that gives even more time for PCLN to move against me.

    Selling puts is also obviously out of the question.

    A big mea culpa from my side, but your advice is always helpful at moments like this.

  34. ROFL – the Mooch is fired already!  

  35. Unreal !

  36. Mooch – while I don't have a high regard for him…. the firing is scary…. there is clearly a lack of any sort of thought process at the top.

  37. Phil with the dollar so weak and that big move up are you sticking with your oil shorts? I am just wondering if the dollar weakness is shaking your premise or do you feel pretty good about it still? What would make you capitulate from here? 

  38. Mooch – gotta be a record

  39. PCLN/Winston – That's the problem with such expensive stocks, they can break the bank hard and fast.  

    The premium is kind of crazy on the short calls so let's think about the position.  First of all, PCLN is making like $75/share, so $2,027 is not that crazy (27x) and at $1,500 I'd be buying the crap out of them but I'm cheap so let's assume $1,750 would be the best possible case and 30x ($2,150) should be a top.

    I assume you had a bull call spread way back when and no short puts and sold the short calls and then it got away from you.   

    The asset you have is the $1,760/1,860 bull call spread and, as you say, $65,000 and your liability is the 5 short $2,000 calls so I would flip to 5 of the 2019 $2,000 ($270)/$2,200 ($185) bull call spreads at $85 ($42,500) because I do think there will be a pullback so why have 10.  

    Then I would take the 5 short $2,000 calls ($275) and roll them to 5 short Jan $2,000 calls at $145 and sell 5 short $1,850 puts for $50 so net $195 on the new set means $80 x 5 out of pocked ($40,000) but now you have a manageable set to deal with (and less overall margin).  If PCLN goes down, then the 2019 $1,500 puts are $50 so that's the roll and, if it goes up, the puts are worthless so you can push $50 more into the next roll and, of course, you have $115 headroom on the long spread.  

    So your instincts are right, I just prefer to lower the cash and margin requirement and that way it's on the sidelines for later adjustments.  Even if PCLN goes up 10% to $2,200 – you could still add 5 $2,200 ($185)/2,400 ($118) bull call spreads for $67 ($33,500) and then you could 2x the short calls (and sell more puts) if it came to that.  

    Hope that helps – from here forward, I strongly suggest evaluating any $100 move (5%) it makes together.

    Mooch/Batman – The funny thing is Trump was tweeting this weekend how things are under control now.  Apparently not.  

    Guy on CNBC makes a good point, the problem isn't the staff, it's the President of the United States that's out of control.

    Oil/Craigs – The move is essentially dollar-driven so my oil premise hasn't changed.  The Dollar is down 0.4% and oil is up 1% which sucks but that's the usual 2:1 relationship.  I did stop out at $49.50, of course but I'm back in at $50 and still down a lot (about $20K) on the overall position (15 short at the moment so I need $48.50ish).  I'd capitulate if I thought something actually changed in the oil fundies. 

  40. thanks Phil

  41. Mooch — I think is a great call – should not have been hired in the first place. Maybe Trump is starting to listen to others?

  42. Phil, any last minute AAPL earnings play?

  43. AAPL/Lunar – Could go 10% either way.  Not sure why sales would be good with everyone waiting to buy new IPhone and indications that China slowed down a bit.   Still, this market is crazy so too hard to predict.  I'm hoping they screw up and drop 20% so we can buy some more.  THAT's a play I can get behind! 

    Well, I'm going to head out soon – want to get ahead of the traffic.

  44. Latch – Maybe when a four-star speaks, even the Donald listens.

  45. Phil – I would never have gone on my options journey without you to help me. You are a priceless resource, and I know that everyone knows that on this board.

    Thanks so much for the salient advice – makes a lot of sense. I was thrashing around that area but far from your 'solution'.

  46. UGA!

  47. Well things seem calm enough so later all.

    Any time Winston, glad I could help.  Hard to step back when it's your trade and you get in deep. 

    FTR/Jabob – Holding $15 pretty well.

    I'd rather have them build a nice base than take off and zig zag up and down.

  48. me2!

  49. Winston,

    I feel for you. Hope it works. Closing the show now would set you back some 72K.

  50. UGAZ – Sold 1/3 up .22 just to ring the cash register.  Stop up to entry on balance.

  51. Phil,

    Are you out of /CL

  52. AAPL still feel comfortable with my this mornings play, as Phil says one way or the other.

  53. Yodi – thanks for the empathy – appreciated. I'm always cautious of selling puts on PCLN but there is a plan.

  54. USO / SCO idea-  Thanks Phil much appreciated

  55. Winston PCLN looks very high to me, not a good time to thinking of selling puts, they might be in for a humpty dumpty fall!!!!

  56. Mooch needs to go spend time with his divorce. If there's one thing the current WH know quite a bit about, divorce is it.

  57. UGAZ – Sold another 1/3 up .38.

    Stop up to 10.68 on last 1/3.

  58. "why is USD so weak these days"

    OMGWTF? The destruction of the United States of America from a traitor and his minions, that um, what, strikes you as a good think for a currency?

    I really just don't get it. How do questions like this even get asked?

  59. BDC – well I did point it out the same thing in the Webinar last week, but to be fair its a lot more complicated..$20Trillion debt,and the Fed starting to back track etc….ps:you sound a little hysterical, which may explain why you don't get it.

  60. PFE announcing earnings before open tomorrow.  Anybody in PFE positions, butterfly or spreads?  

  61. FB – would not be surprised if the Barron's article calling for $200 actually marked the top. 

  62. Learner, I'm in a butterfly position on PFE, currently short September 33/34 strangle, against a 2019 spread and short puts. Sitting on $4-5k gains YTD. Holding tight.  

  63. @Palotay – PFE: nice.  What would you recommend if I wanted to start a short strangle now?  The stock usually holds around $33-$34 but I have seen some dips to $ 31.  Thinking just selling calls might be better right now and wait to see if the market declines before selling the put arm.   your thoughts?  Thanks!

  64. Phil — I know you are not a gold bug, (I am) however with the USD breaking down for a variety of reasons, is it time to review its consequences not only on gold but commodities as well. Yes, we have ABX, Freeport etc but what do you think its effect on the futures? Silver, Gold, Oil, NG?  This chart on gold is getting alot of attention.. We make actually be on the verge of getting over 1320 and staying…if it gets to 1400 I would say the FED's credibility has been seriously dented.  

    I am so overweight in physical and miners its stupid, not to mention very painful. So there is no need for me to do more, (except maybe take a long on GC  :) )    So I am wondering what your take is on the macro with respect to USD vs Commodities.. Are you still long USD?  Thanks

  65. Phil / GNC - my estimates are that they have turned the corner on SSS and next quarter should be slightly positive. Revenue while still be decreasing but may lesson it's slope.  The next two quarters being a seasonally low …..
    I'm modeling at EPS of .35 and .32 for Q3 / Q4 respectively which get it to a yearly eps of 1.45 to maybe 1.5. With and 8 multiple I get to about 12 and maybe stretch to 13, a low case at 1.29 EPS with a 9 to 10 price. In '18 I'm struggling to get them over 1.6.  Am I missing something here.   I've assumed they close the revolver in '17 and are left with LT Debt only….  Can you provide your assumption and price target ?



  66. hysterical, perhaps a little, but I'm mostly joking about politics on PSW…

    However, I do like gold right now as well. Some of the thing we are seeing in the WH are a little crazy and you will admit that. Gold – I think we push past August 2011 highs in the next 24 months and I'm in on the miners, looking to accumulate more. I also like silver but it's more because I enjoy coin collecting and the physical coins and numismatics of it. I don't think Ag is as good as an investment as Au straight up (past manipulation seemed to be a pretty legit conspiracy, so that hangs on silver a bit).

  67. Learner,

    Sometimes I wonder if it is worth mentioning some plays at all. Did you see my PFE or AAPL play?

    I will let you know tomorrow the results.

  68. Yodi, thank you for the PFE trade, and the others as well

  69. Yodi, apologies – I did see your PFE play.  I was already in a butterfly position when you posted your play and was trying to get a sense of the best trade for me in PFE going forward.  Please continue to post your suggestions and plays…Much appreciated. 

  70. Good morning! 

    Markets blasting up yet again for no particular reason.  Now I like /YM short at 21,950 with tight stops but then again at 22,000, /NQ 5,900 is good as well and you know 2,480 was my target short on /ES and that's lined up with 1,430 on /TF – definitely a short the laggard day.  

    LTP is hanging at $1.6M, STP took a $14,000 hit at $446 but anything over $2M combined is good.

    Oil hit $50.43 but back below $50 now.  I regret missing my chance to add 5 more but was greedy waiting for $50.45 and missed the drop – so still at 15 with b/e around $48.50. 

    /NG seems to have found a bottom, was $3.07 on /NGZ7 and now $3.10 so good line to play with tight stop below.

    PFE/Learner – I missed the dip to $30 in Nov, that's where we usually buy them so hopefully they miss.  Great stock in general to play flat, we don't butterfly it because it's so placid that it doesn't pay well for front-month sales.

    If you buy PFE for $33.16 and sell the $30s for $4 and the $30 puts for $1.62, that's net $27.54/28.77 and you get the $1.28 dividend times 1.5 so $1.92 drops your net net to $25.62/27.81, which is a fantastic entry.  Even if you are called away at $30 it's a net $4.38 (17%) gain in 18 months.

    After earnings, we should add them to the LTP – that's a very nice stock for the long-term!  

    Barron's/Scott – It often does. 

    Gold/Latch – I think the Dollar decline is overblown if our economy stays on track.  Under 95 is silly and, frankly, gold has not been that impressive considering the Dollar drop.  

    I am long-term long on gold as an inflation story, of course but not too enthusiastic about risking short-term plays in the Futures (though we did call a long at $1,200 a few weeks ago).  Not from $72 over my last call, in the very least.  As to the Dollar, I took the gain off that spike last week and haven't gotten back in yet, but only because I was already short a lot of oil and it was a proxy for the Dollar anyway.  You need to be careful because if you are already heavy on miners, betting gold up and the dollar down only makes your heavier.  Dollar up may be a good hedge for you.  Also, you know there's only 3 gold miners I endorse (ABX, HMY & NAK)  - the rest are crap, except GG, who I do kind of like.

    Other than that I like FCX and our Stock of the Year:

    GNC/Batman – Less than that in Dec.  Anything over 0.25 would be great.  I think $1.30ish is safe and, at $10.18, that's plenty for me as they certainly deserve $13 at least.  As you say, the reduction in debt alone should improve their multiplier.

    Again though, I hope you are not missing the point, this is our GNC trade in the LTP:

    I don't give a crap if they earn $1.30 or $1.20 or $1.50 or $1.10 – as long as they are over $7.50 next year, we get paid back 6,000 x $7.50 = $45,500 on our net $16,200 outlay for a $29,300 (180%) profit.  One of the main things I like about this kind of trade is I DON"T have to worry about it as long as GNC stays over their low because we get net $21,000 back at $6 and that's still a profit.

    People seem to be betting on GNC to make some fantastic recovery and that was never our bet – we simply bet it wouldn't go much lower than it was back in February.  We get paid 180% for calling a bottom – why on Earth would we want to risk a penny with higher targets?  

    LOL Yodi!  It's very hard to gain an audience, let along get them to engage.  We have 500 people logging into this chat room yet we only hear from about 50 of them.

    Gas/Malsg – That's rough.  Nat gas got cheaper too.  

  71. Ok Ok Guys it some times feels like the song "I talk to the trees but they don't listen to me"

    Mostly I publish plays I enter myself, as you know no one has always a cristal ball in it's hand, so you always have to make the final decision.

  72. Phil have to shake them up sometimes, you can not spoon feed all the time. I feel it is important that we also learn from our mistakes as well not being shy to publish your rongs like Winston yesterday.

  73. Hey Yodi, I read all your plays and take a second look at most of them.  Thanks.

  74. Lunar we all hear to learn and hopefully gain from experiences publish by others, so it always nice to hear from more members, especially from new once, do not be shy to ask questions, Phil even answers them at 1AM!!!!

  75. Pfizer Q2 revenues down 2%; earnings up 50%; non-GAAP EPS up 5%

    Pfizer (PFE) Q2 results: Revenues: $12,896M (-1.9%); Innovative Health: $7,671M (+8.0%); Essential Health: $5,226M (-13.5%).

    Internal Medicine: $2,412M (+10.1%); Vaccines: $1,270M (-7.0%); Oncology: $1,589M (+44.3%); Inflammation & Immunology: $992M (-0.7%); Rare Disease: $562M (-8.5%); Consumer Healthcare: $846M (+1.1%).

    Legacy Established Product: $2,707M (-5%); Sterile Injectable Pharmaceuticals: $1,444M (-4%); Peri-LOE Product: $782M (-30%); Biosimilars: $121M (+55%); CentreOne: $171M (-13%).

    Net Income: $3,073M (+50.1%); Non-GAAP Net Income: $4,063M (+3.4%); EPS: $0.51 (+54.5%); Non-GAAP EPS: $0.67 (+4.7%).

    2017 Guidance: Total Revenues: $52B – 54B; Non-GAAP EPS: $2.54 – 2.60.

    Shares are up 1% premarket.

  76. Yodi….I read them.  rgds.

  77. Advil

    Hot enough in Barcelona?

  78. Yodi

    I also watch your plays. I like your plays look at  all and enter some. So keep it up!


  79. Yodi – I'm one of your readers. It's good to share ideas and issues. Keep 'em coming.

  80. Hi…humidity is near 100% today…


    Best for you both.

  81. Yodi – love your posts, and wouldn't miss them, even whilst on the Isle of Mull..!