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Toppy Tuesday – Back to our Shorting Line on the S&P 500


That's where we called the short on S&P (/ES) Futures last week and we fell back to 2,460 ($1,000 per contract gained!) and now we're back at 2,480 so what do you think we're doing?  I already put a note out to our Members this morning in our Live Chat Room, saying:

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.  

We're also shorting Oil (/CL) at $50 but long on Natural Gas (/NGZ7) at $3.07 and long on the Dollar (/DX) at $92.75 – all fun trades for a Tuesday morning.  We're waiting on Construction Sepdning and ISM at 10 am but we already had terrible Personal Income numbers (0% gain vs 0.3% expected by leading economorons) while spending went up 0.1% (more and more in debt) and PCE Prices were also flat – because consumers simply don't have any more money to spend.  We'll also get auto sales throughout the day and those are not likely to be very good.

Apple (AAPL) has earnings this evening and I don't see how they'll justify $150 since most people are probably waiting for the new iPhone at the moment.  Expectations may have gotten a bit ahead of themselves and Apple, unlike Tesla, isn't into self-promotion and tends to give conservative guidance estimates as well.  Apple, of course, is a huge mover of the Nasdaq, S&P and the Dow so big fireworks there if they disappoint.  

Tesla (TSLA) goes tomorrow night and this ought to be fun as they burned through $2,342,000,000 in the last two quarters alone and they finished Q1 with "just" $4.1Bn in cash – not enough to get through the year at their current pace and I'm betting they will have burned close to $2Bn last Q alone meaning they have just 3 months left to live without raising more capital.  No wonder Elon Musk put out a series of painfully introspective tweets, which have since been removed from his Twitter feed (can't have prospective investors reading those, can we?).

A company that is about to pass the hat for another $2Bn+ to keep them open for 6 more months can hardly afford to have their CEO seeming exhausted – let alone "bi-polar" – good job erasing the tweets guys – unfortunately, the Internet never forgets!  

Indeed the Tesla Model 3 does look like it was slapped together by an exhausted kid who finished the interior as an after-thought, probably working on it furiously in the back of the room while the other kids were walking up to hand in their projects.  The blank dashboard with a lone touch-screen sticking out of the middle is not "visionary" nor is it "minimalist" – it's simply sloppy.  People like information, they like things to look at on their dashboard.  Maybe I'm just old and my friends are old but compared to what other manufacturers are offering – Tesla's Model 3 seems to be just missing stuff.  

Nonetheless, we cashed in our Tesla shorts on the last big dip and they didn't go high enough for us to short them again so we're actually hoping for a big pop tomorrow – and then we'll short it!   Speaking of shorts – told you so on Amazon (AMZN) and they finished down at $987 yesterday and our short trade idea from last week was to buy the Jan $1,100 puts for $101.50 ($10,150) and sell the Jan $1,050 puts for $72.50 ($7,250) and sell the Jan $1,200 calls for $21.50 ($2,150) to drop the net of the trade to $7.50 ($750) and that spread will pay $5,000 if AMZN stays below $1,050 for a $4,250 (566%) gain and it's already netting $2,400 – up $1,650 (220%) in less than a weekyou're welcome!  

We'll see if AMZN gets a bounce off the $950 line but I am inclined to cash this one in early, especially if we're going to get back into shorting TSLA – as you don't want too many crazy momo plays running at once.  

We'll be through the bulk of earnings after this week and, so far, they've lived up to great expectations (if you ignore the financial engineering) with AAPL the last huge market-mover to report.  Now we get down to the smaller companies – which is why we like those Russell (/TF) shorts – everyone can't be making money on flat consumer spending and small-cap companies can't juggle their books like their bigger brothers.  

If AAPL does knock it out of the park, however, we could see 22,000 on the Dow and 6,000 on /NQ yet still we'll be shorting those lines.  The markets are overbought and I don't know what will trigger the sell-off but something will.  Last week we thought it would be collapsing oil prices but they've held up so far and the collapsing Dollar didn't bother anyone.  If anything – it chased more people INTO equities to protect their assets but that's an awful reason to give up your CASH!!! and we still love our CASH!!!

We're having a Live Trading Webinar this afternoon at 12:00, EST – you are welcome to tune in as we discuss a few good ways to hedge this market.  


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  1. Good morning, everyone! 

    The weekly webinar is TODAY at 12pm (Eastern). Join us here:

  2. My theory is that markets are up because the Mooch got canned yesterday. Not because they don't like him but maybe because they think that we now have an adult in charge in the White House. Someone who is not going to take crap from anyone including Trump and will attempt to right this sinking ship. Maybe they have a better chance of getting their agenda passed. Although without taking money from poor Medicaid recipients there will be less for tax cuts for rich people. But that's what deficits are for I guess. That and the magical supply-side fairy dust.

  3. That's just crazy:

    Almost 700 U.S. companies have reported quarterly results so far this earnings season, and the e-commerce titan’s name has popped up on roughly one of every 10 earnings conference calls so far. And the retailers whose lunch has long been eaten by Inc haven’t even reported yet.

    In all, Amazon has been raised either in passing or with some urgency on 75 calls hosted by corporate chieftains in the past several weeks, according to a Reuters analysis of call transcripts from components of the S&P 1500. That’s well more than twice as many mentions as Google or its parent Alphabet Inc and over three times as many as Apple Inc.

  4. Google looking to store more than just data and solving some real life problems:

    Storing the energy produced from renewable sources is a significant challenge, and one that a number of players, including Tesla, are looking to address. Add Alphabet’s X (formerly Google X) to the list of those making an attempt: Its new Malta project is focused on building storage facilities that can support full-scale power grids.

    The Malta project, described by Bloomberg, uses cold antifreeze and hot salt to store power, in a system designed to keep power in reserve for longer than lithium-ion batteries, which are what Tesla uses to keep its power using the commercial-scale Powerpack stations that populate installations like its Kauai-based facility.

    You just can't bet against these guys. Some of these moonshots will eventually pay off big.

  5. And this will not help Apple in China:

    How will Apple now argue against the Trump administration effectively, after cow-towing to China in this fashion?

    When next Apple must face-off with this intransigent White House over criminality or terrorism attacks at home, any protestations they make will be empty after their capitulation in China.

    There is really only one way out: Apple should have stood its ground. It should have relied on its standing in the market as the provider of the most sought after, premium, mobile device.

  6. Josh is looking for a lithium investment:

    Albemarle (ALB) might be the ideal pure play on lithium because it derives 25% of its revenues from the metal and almost 40% of its cash flow. That makes lithium sales more meaningful to the company than they are to FMC (which only derived 8% of its revenues last year from lithium). 

  7. LL roaring up on earnings pre market. I guess we're done with that one.

  8. UAA, the recurring nightmare. I am short 1 2019 30P at 5.5. Those will likely open at about 12 after another earnings and lower guide. Thinking of DD and dropping break even to around 22. Any thoughts? I am afraid this pig could go 15.

  9. Yodi – Thanks for the plays :)

  10. Good Morning.

  11. Phil – thanks for the commentary on gold/USD.  I differ on the 95 USD mark, mainly because it went that high and over based on confidence the FED was going to tighten and Trump was actually going to improve the economy.  I think neither will happen and the main reason the USD might have strength is because other countries are worse off in one way or another.

  12. Phil, I listen to Real Vision and some of their guests like the chart  $OEXA200R — 200 DMA.  Do you use it as an indicator?  Above 65 seems to be  an 'all clear' signal.$OEXA200R&id=p03949763672&a=168005049&listNum=77

  13. $OEXA200R / Latch – Generally a good indicator and used by other people as well. Below 50 is also generally a sign of weakness. You should add an S&P chart below that $OEXA200R  chart and look at the correlation. Mind you, this is not for day trading… 

  14. A scaramucci has to be added to the dictionaries as a measure of time. 

    "I will be there in a scaramucci."
    "Hurry up, our plane leaves in a scaramucci."
    "It will only take a scaramucci"

  15. Good morning and wheeeeee! already. 

    LOL, Futures didn't hold that pumped-up open.

    Here's some fun things to do in the summer:

    Oil back to $49.50, tight stops again (I guess I'll get even 0.50 at a time).  

    Big Chart – RUT back towards that 50 dma again.

    Mooch Markets/StJ – It's possible but that's a silly reason.  I think it was just a pre-market pump job to get retail suckers to buy into the institutional selling now that the month is over.  

    AMZN/StJ – Makes a good excuse for any retail CEO.

    Storage/StJ – I'm still a flywheel guy.  It's surprising how little mention the technology gets.   I think it's because the people building them aren't dreamers or mavericks, they are just engineers doing their jobs.

    Sad about AAPL, someone has to stand up to these Governments.  

    ALB/Stj – Looks very nice.  I'd like to find out where they get their lithium, as we don't know the yield of wherever they are mining it but, otherwise, I really like the way they look.    

    I'd like them more if they were cheaper, of course.  2019 $95 puts are $6.50 – that's a good way to start. 

    LL/Jet – Goodbye old friend:

    UAA/Kapella – Ugh, what a mess they are.  Still $7.5Bn at $18.50 and they only make $200M so p/e 35 if things are going well.  Can't even imagine what you saw in them at $30.  Your $30 puts are $12, which is fair and you can sell the $22.50 puts for $5.75 so I'd sell 1x of those and put a tight stop on the $30 puts and maybe you get lucky and they bounce a bit and then you can buy back half the $30s and sell more $22.50s until you complete a roll.  

    Dollar/Latch – The Fed is going to tighten, it's just a question of when.  Trump certainly won't improve the economy – that's a joke.  I think there will be some sort of infrastructure announcement – that might help.  

    I agree, I don't find the Dollar exciting EXCEPT when compared to the other choices.  

    OEXA200R/Latch – When it's extreme it is a good indicator that it's time to get out or in.  Not sure what you mean by "all clear"  - to me, too many stocks over or under indicates a turn is likely (as there isn't much "good" technical news left). 

  16. To cheer Phil up and get him to move to Europe ;-)

  17. Dollar / Phil – When you look at that dollar chart, the Trump rally does look a lot less remarkable! 

  18. Phil/SJL -  thanks for comments.   

  19. ! LL

  20. phil, i'd appreciate your thoughts on TEVA.  i have some 2019 30/40 bull spreads and short 35 puts, for some time now.  just barely in the money but wondering if i should adjust.  earnings on 8/3.

  21. Phil, you said you don’t like most of the gold miners. What about CDE, which you recommended a while back? I’m sitting on a small profit on the 2019 short $8 put and 5/10 BCS. Thanks.

  22. Phil/mkts  Well, I just sold all of my FDN which i held since March – taking some risk off the table.  I think August could be very bad.

  23. Phil/VLO – Should we add some covers to the butterfly position?  You wanted to wait until after earnings.  

  24. Flywheels/Malsg – Nice.  I'm telling you, I looked into this years ago and really thought it was the best possible solution.

    Rally/StJ – That's what I was saying the other day, not all that impressive really.

    You're welcome Latch.

    LL/Rexx – I should dig up all the comments from back when people thought I was crazy on that one.  

    TEVA/Lunar – Well, we recently got more aggressive on them, buying back the short calls and adding more short puts on 6/16.  

    They have 1Bn shares so $32 is about $32Bn and they made $3Bn in 2014, $1.5Bn in 2015 and $330M last year but, going forward, they should be back on track as they just made $645M in Q1 (they are like AMZN, they can make money whenever they feel like it – except TEVA actually does feel like it sometimes) and if Q2 (8/3) proves Q1 wasn't a fluke (it wasn't), they should punch right over $35 so I wouldn't worry about your position.  In fact, I'd buy back the short $40s ($1.90) and then sell something else on the pop.  If they don't pop, then you can sell the $30s ($5.30) to some other sucker and use that money to roll to the $22.50s (now $10) so you'd be in a much lower spread for about the same money.

    As a new play on TEVA, I would sell 5 2019 $30 puts for $4.20 ($2,100) and buy 10 of the 2019 $32.50 ($4.20)/$40 ($1.90) bull call spreads for $2.30 ($2,300) which would put you in the $7,500 spread for net $200 and worst case is you own 500 shares of TEVA for net $32.90 while best case is up $7,300 (3,650%) in 18 months.  

    Let's add that to the OOP.

    CDE/Jet – Forgot about them, they are nice too.  That's the spread we have in the OOP except we sold the $7 puts.

    FDN/Hanj – Good call.  

    Wheeeeee! on Oil – Boy did I need that!

    VLO/Palotay – I'm glad I waited because I would have been inclined to sell the $67.50s and I still am, only now I can get a lot more for them!  

    In the Butterfly Portfolio, let's sell 15 (3/4) VLO Jan $67.50 calls for $4.50 ($6,750) and our goal on the other side is to sell 10 of the $62.50 puts, now $1.90 for $2.50 or better on a pullback for another $2,500.  

    Thanks BDC.

    Lawsuit/Rustle – Crazy.

  25. Well here's a nice way to head into lunch! 

    That was one frustrating trade!  

    Back to 5 short even now.  

  26. LL – a nice patience play paying off.

    Flywheels – they are a good short term solution (decays >2-5%+ per hour is non started for long storage). They also serve a smaller, non grid-sized market.

    StJ / Malta X – I saw this one earlier on. VC's passed on it – they can't figure out how it makes money. Separating hot/colds take size, and pumped hydro has the "size" storage cost-paradigm already won. Size = cost. 

  27. Malta / BDC – Google has the money to be patient I guess and see what shakes out. I don't think that they are jeopardizing the business with these small experiments. I still think it's good to see a company like them try different things.

  28. Flywheel/BDC – Best for storing peak solar energy and discharging overnight, not for long-term though they are working on super-conductor systems with very low drag.  

    Webinar time – almost.

  29. CL -Phil it amazes me how you call these right more often than not but that was indeed a rough ride. Thanks for reassuring yesterday so I could hang in for most of that ride. I stopped out at 48.90 with a nice profit as I just couldn't handle the thought of a quick spike up.

  30. Wow guess I gave up too quickly. Made a few bucks long NG from 3.07 and YM short from 21945 earlier. Fun when it goes right. 

  31. CL/ – yes Phil – although i bailed with a little bit of a loss on the entire trade from last week – I was holding out hope for 48.50 to get rid of my last contract and whew…

    I think I need a break from futures…

    Ok – that was long enough

  32. LOL Jeff!  

    Done with /CL at $48.50 as we KNOW it will bounce, so why ride it out?  Now we'll see what kind of bounce off the $1 fall, weak is $48.70 and strong $48.90 and we'll play it live in the Webinar. 

  33. Thanks for oil trade…crushed it 

  34. phil/SBUX  What do you think of a new SBUX spread down here?  I like the common here also as a core holding.

  35. Bitcoin splits in 2

  36. Hi Phil.  Holding bunch of naked AAPL calls:  25 Jan19 100 (basis 26.70); 20 Jan10 130 (23.60); and, 5Jan19 140/175 BCS (17.20).  Closed all the put sales.  Any advice going into tonight???  Thanks.

  37. super strong bounce in CL.

  38. Phil that was a nice little run up on CL at the 2:30 close. You said you wanted to wait and see the API numbers but you would be expecting a further drop after watching it reach the weak bounce of 48.90. Does the late run up change that and are you expecting a build or disappointing draw to be a catalyst for the continued drop along with all those fake contracts?

  39. Phil, I need your help in understanding why an apparently, fundamentally weak stock like TEVA is something we want to trade around.  What is it that you know that makes you think it is a stock that is worth "owning" — ?? I referred to Stockopedia and TEVA doesn't look promising…. Thanks in advance. 

  40. Oil hit our next goal at $49.20 (strong bounce).  I have to go 5 short again – tight stops!  

    SBUX/Hanj – The Tevana thing is bad but their food offerings are great and $80Bn ($55) not terrible when they are dropping $3.2Bn to the bottom line.  No major growth catalysts though so rangy at $55, not really a bargain.  

    As a new trade, I'd just sell a few 2019 $52.50 puts for $4.30 and see how they go.  If SBUX holds $55 (below it now) and gets back over $57.50, the current $55 ($4.80)/$62.50 ($2.10) bull call spread is $2.70 with a net delta of 0.20 so figure $3.50 for the spread if we move higher and still worth playing after we're sure this is a bottom.  I'd rather pay 0.60 more to be sure than jump in too early now.  

    AAPL/Taihu – I'd take them off the table (the naked long calls) and see what happens.  You have doubles on the $100s and that's $127K and the $130s are up a bit so why risk $70K there.  If it makes you feel better, the spreads are only $13.50 so buy more of those.  You can take $150K off the table and buy $37,000 worth of spreads ($20) and you still have $40,000 upside potential at $175, about half of what you have now but without all that additional risk.  

    As a new trade, I really love that AAPL 2019 $140 ($21.50)/$175 ($8) bull call spread for $13.50.  It's a great way to get into AAPL at $150.  If AAPL goes up, then you are on track to getting $35 back (+159%) and, if it goes down, then you can sell puts and widen the spread.  

    /CL/Latch – I take bounces into the NYMEX close (2:35) with a huge grain of salt.

    Oil/Craigs – I added 3 short already and I'm probably going to add the other 2 after API.  Strong bounce line was too good to pass up.  

    TEVA/Newt – Stockopedia is a thermometer – it doesn't tell you the health of the patient, only what the temperature is.  While TEVA has many issues – especially with weaker pricing for generics, more of the problem was their Actavis acquisition, which is the reason they have a lot of debt.  I don't expect them to get back to the $60s but there's no reason to think they should earn AT LEAST $2Bn a year and that makes $30Bn a stupidly low price for the stock – even if they had no upside at all.  In reality, they have a great pipeline with 300 drugs pending approval.  They've been aggressively expanding and the acquisition costs are now under control (see $600M profit last Q).  TEVA is still looking for a CEO, when they nail one down (there's a rumor it will be AZN's CEO) – they should pop.  

  41. Thanks Phil and well stated !!  By the way I really enjoyed the video on how to spend my summer.  I think I want to take up sky dividing — : )

  42. Trump saying "we're going to end job-killing regulations" which is great except they are doing that by allowing people-killing by unregulated businesses.  What if those people have jobs?  

    Sky diving/Newt – 15 years ago, I would have gotten one of those suits.  Don't think I can handle it now but I used to be perfectly happy skiing off cliffs so I'm pretty sure I would have loved sky diving in a flying suit.  I was never interested in just going down but this new stuff is amazing.  

  43. Still time to buy the AAPL stock and sell the Aug 150 call for 3.05 yesterday I sold the same for 3.60.

    It will pop one way or the other

  44. ADM poped INTC poped PFE OK will get the div. and in for a new round. AAPL even Steven now.

  45. Forgot CSCO looking good!!!

  46. Phil thanks for the CL update. So if API reports a big draw how will you manage your tight stops? Also will you bother or just figure that any move up is a temporary one regardless of the inventory reports? 

  47. Still 5 min time to collect that 3.10 from AAPL!!!

  48. Phil, I put myself through college working for the US Forest Service…fought forest fires, etc.  I was a smoke jumper out of Missoula, Montana and Grangeville, Idaho. We were "dropped" into certain areas of the forest and hike and back packed to the "smoke".   Back then the maps weren't complete and the forest's  were labeled "unmapped/primitive area" we had plenty of excitement coming down. Still have scars from some of them, and had great summers but I was so ready to get back to school. NO overtime and NO hazard pay.   What was I thinking—oh yes, they had me thinking I could walk on water and run up a mountain. PS, I am so happy with my AAPL positions and stock, thanks YODI and PHil !!

  49. API/Craigs – I'll probably add on the way up if it's not crazy big.  Even if we are getting strong summer demand, summer is over soon and then there's the open contracts on the NYMEX stacking up.  

    Jumping/Newt – Well God bless, you did something that benefits all of us and you risked your life at the perfect time – before you wised up!  

    Well, it's all up to AAPL now.  

    Dow only up 55 at the end in the Futures, 71 on the index.  

  50. thanks Yodi!

  51. Tomorrow I'm out about 1pm, working from Florida Thusday and Friday, which should be normal.  

    Next week I'll be on the Harmony of the Seas – supposed to be the biggest boat of them all.  Also supposed to have great wifi so I expect a normal week except on Weds, when I'll likely take off as I love St Martin and maybe another half day for a snorkel trip.  

  52. Well it's APPL up to the plate…..  this should be a very interesting call / earnings announce…. see how the inventory looks as well as sell through, and any hint on launch date best on next qtr revenue and outlook and margins..

    I think this upcoming announcement in the fall  will be split with the lower tiered phones available in the Sept Qtr and the higher / OLED phone available later.  

  53. ftr opinion?

    Frontier Communications Reports 2017 Second Quarter Results

    Font size: A | A | A


    4:11 PM ET 8/1/17 | BusinessWire

    --Consumer customer churn of 2.24%, down from 2.37% in Q1 2017, driven by CTF FiOS(R)

    --Commercial revenue stabilization, excluding recently sold partnerships business

    --Net loss of $662 million, principally driven by a $532 million (after tax) goodwill impairment charge

    --Adjusted EBITDA(1) of $906 million or 39.3% of total revenue, up from 39.2% in Q1 2017

    Frontier Communications Corporation (NASDAQ:FTR) today reported financial results for the second quarter ended June 30, 2017.

    "We were pleased with the progress we made during the second quarter as we executed well on a number of key initiatives stabilizing operations," said Dan McCarthy, President and CEO. "In particular, we improved churn in our California, Texas and Florida (CTF) market, saw progress in our commercial business, and continued to reduce costs, which resulted in increased adjusted EBITDA margins(2). Our commitment to enhancing the customer experience, further reducing churn, generating cash flow, and improving the balance sheet positions the Company to further stabilize the business and grow longer-term."

    Consolidated Results

    Consolidated revenues for the second quarter were $2.3 billion. Within consolidated revenue, consumer revenue was $1.12 billion, commercial revenue was $982 million and regulatory revenue was $198 million.

    Net loss for the second quarter of 2017 was $662 million, principally driven by a $532 million (after tax) goodwill impairment charge. Net loss attributable to common shares was $715 million or $9.21 per diluted share (based on 78 million weighted average diluted shares outstanding(3)), again driven principally by the $532 million ($6.82 per diluted share) goodwill impairment charge. Adjusted EBITDA(4) totaled $906 million or 39.3% of total revenue, an increase from 39.2% in the first quarter of 2017.

  54. ?

  55. Hummmm…

  56. FTR – CTF the customer churn is a big improvement, Also looks like they refinanced debt out to 2024 – this is very positive, (so retired the notes due 2020 ) ….  need to understand the details on impairment.  Very good progress on this one…

  57. FTR/Jabob – About what we expected for this Q.  They lowered interest significantly, which I'm really happy about:

    In order to reduce interest expense and extend maturities, Frontier obtained a $1.5 billion senior secured term loan B facility (Term Loan B) during the second quarter. The Term Loan B matures on June 15, 20247. As of June 30, 2017, the interest rate for this facility was LIBOR plus 3.75%. The determination of interest rates for the Term Loan B is based on margins over the Base Rate (as defined in the credit agreement) or LIBOR, at the election of Frontier.

    In June 2017, Frontier used cash proceeds from the Term Loan B offering to retire $763 million of 8.875% Notes due 2020 and $527 million of 8.500% Notes due 2020.

    Frontier’s leverage ratio8 was 4.20 for the second quarter of 2017 compared to 4.39 in the first quarter of 2017. The Company remains committed to deleveraging the business.

    Also, keep in mind they won't have to pay taxes for years now.  

  58. Looking like drek ah. Dang it!!!!

  59. FTR down 8.75% After hours!

  60. YODI – I'm looking to sell some Puts if this drops below 14….. 

  61. They seem to be doing the right things. But man are they hated. 

  62. batman,

    I still hold positions in FTR but do not like to tell you what I have lost in that stock NO THANKS

  63. AAPL 

  64. I see my AAPL stock has exploded???

  65. Apple(R) today announced financial results for its fiscal 2017 third quarter ended July 1, 2017. The Company posted quarterly revenue of $45.4 billion and quarterly earnings per diluted share of $1.67. These results compare to revenue of $42.4 billion and earnings per diluted share of $1.42 in the year-ago quarter. International sales accounted for 61 percent of the quarter's revenue.

    "With revenue up 7 percent year-over-year, we're happy to report our third consecutive quarter of accelerating growth and an all-time quarterly record for Services revenue," said Tim Cook, Apple's CEO. "We hosted an incredibly successful Worldwide Developers Conference in June, and we're very excited about the advances in iOS, macOS, watchOS and tvOS coming this fall."

    "We reported unit and revenue growth in all our product categories in the June quarter, driving 17 percent growth in earnings per share," said Luca Maestri, Apple's CFO. "We also returned $11.7 billion to investors during the quarter, bringing cumulative capital returns under our program to almost $223 billion."

    Apple is providing the following guidance for its fiscal 2017 fourth quarter:

    ? revenue between $49 billion and $52 billion ? gross margin between 37.5 percent and 38 percent ? operating expenses between $6.7 billion and $6.8 billion ? other income/(expense) of $500 million ? tax rate of 25.5 percent

  66. AAPL beats again.  $1.67, revenues $45.4Bn, both 5% beats.  Looks like $155, which is up 5% so all making sense.  

    Oil with a nice dive back to $48.60, good for $1,500!  That was perfect use of the 5% Rule to make a re-entry on the bounce.  

    Now I can go have a nice dinner! 

  67. some crazy s#()&#& on CL.. I amhappy though

  68. Apple heading to 160

  69. DRYS with a huge pop.  That is one crazy-assed stock.

  70. Guess hoping FTR would do a GNC squeeze was too much to ask for. What a pos

  71. AAPL I am sadly to say I will only walk out with the 150 caller!!!!

  72. YODI – AAPL – that was a good call…. and a quick turn.   I Almost pulled the trigger but chickened out….


    I did have about 70X 140 Naked calls that should have a nice pop in the AM… may take some of those off the table.  Hopefully nothing bad is said on the concall about to start

  73. AAPL = 15 % growth in IPAD that's the first unit growth in years.

  74. Yodi I always ;ove your suggestions. I just haven't got the guts to pull the trigger. I , of course , cashed out my Apple at 151 because I was worried that no one was replacing Iphones with a new on coming. As usual, I was wrong. I can enlist my services as the Gartman of PSW if you all want me to.

  75. yodi    thanks for your posts

  76. Kelly is the third general with close access to Trump.  Don't we need civilian oversight of our military ?

    Just food for thought.

  77. AAPL = just go off conceal – They've outlooked revenue a bit higher, and margins on the low side ( citing memory pricing pressure and product transition.)… looks like product transition is on track.  So at a minimum the lower end SKUs come out strong, and the higher end SKU will at a minimum be production at her volumes  if not shipping.   GREAT outlook…  

  78. Generals / albo – At this point it looks like some military discipline is needed there. And who would you rather have with Trump when a real crisis starts – Kelly or the Mooch?

  79. good point SJL! and don't forget Bannon….but I still say Hillary is more of a Neocon than Trump.  Hope we can get a solution to NKorea that does not involve us having to nuke them first.

  80. Phil what did you say during the webinar about where you think oil could fall to ? I know it was based on 5% rule but can't remember how you got there. API reports a 1.8 million barrel build in crude but also a 4.8 m barrel draw in gasoline and 1.2m drop in distillate inventory. Looks like a 4.2 million barrel draw all together, so why the huge drop, and could this be a setup to catch us shorting when they pop the price later? We've seen them do that before. Thanks as always for your reply. I really needed that considerable win today and I don't want to overtrade and screw it up but I would love to catch any additional chances tomorrow and want to try to understand your process for nailing it today. Thanks 

  81. Latch the biggest difference between Hillary and Trump is intelligence. She has some and he clearly does not. The guy is a huckster and promoter extraordinaire, but lacking in intellectual curiosity and doesn't care if he doesn't know what he is talking about. 

  82. Latch – I don't know that we can say that Hillary is more if a neocon than Trump because he doesn't have any set political philosophy. Put him in a room full of neocons and he'll be the biggest of them all…

  83. That's funny craigsa620. Trump borrowed $1M from his old man and turned it into an empire. To say he is not "intelligent" is absurd. Hillary, like most great criminals, is no dummy but her life accomplishments are what? She did manage to somehow make $100M+ while working for the government. That is certainly saying something. But her legacy will clearly be losing an unloseable election :)

  84. Markets Are Virtually Risk-Free

  85. Kapella, I listen to him speak and his vocabulary is very limited. Also there are countless stories of his limited attention span and aversion to reading. He did not build an empire with a $1 million loan. That you believe that is part of his great promotional ability which I acknowledge. I am talking about more than being a shill and salesman. I will not defend Hillary but she clearly is a woman of great intellect and has the academic resume to prove it. I don't want to waste time arguing this though. We will never convince each other     that you are wrong (kidding) so I don't do this anymore.

  86. STJ – Agreed on the discipline.  But the military has a different mind set on how to settle situations.  We need the balance.  Why should have to settle for less ?  Trump needs to go.  And as you know, I'm pretty conservative.

  87. The Tesla Model 3 Is No Ford Model T

  88. Pot is the new alcohol

  89. Apple Poised to Carry Dow Past 22000 Wednesday

  90. Commodity Futures Manipulation: How Bad Did It Get? Still Ongoing?

  91. Pstas – I just saw Hussman's activity in the second quarter.  As would be expected, he sold a number of positions and reduced quite a few more.  He added to positions in  gold stocks, NEM, ABX, AEM, AU, SBGL, WPM, & GOLD. He was also active in fiber optic stocks, buying or adding to OCLR, IIVI, & FNSR.

    SBGL might be interesting.  He bought it for $7.  Closed today at 5.31 and yields 6%.   

  92. AAPL $160 a bit high for our short calls but at least we only sold 1/2.  Amazing earnings and $260 BILLION in cash!  So you are buying the company for $750Bn and 1/3 of it is cash and they are making $50Bn a year.  

    Generals/Albo – I say surround Trump with generals at all times.  We need guys who are able to keep him under control…  30-40 years in the military, I doubt their loyalty goes to the rich draft-dodger sitting in the President's chair over the best interests of our country.  

    Oil/Craigs – We topped out at $50.50 so look for a 10% correction to $45.50(ish) if we can fall back below the 2.5% line ($49.25).  We bottomed out at $48.50 so far so that's a $2 drop and we get 0.40 bounces to $48.90 (weak) and $49.30 (strong).

    See how perfectly that works?  I called those lines during the Webinar and that's exactly what happened and I re-shorted /CL at the strong bounce line with tight stops over (never happened) and now my stop would be the weak bounce line at $48.90 but it's only 3 contracts so I'm happy to go in vaca with those open. 

    Trump/Kapella – Actually it was $100M or more – another Trump lie designed to impress you that he's more than he really is.  Trump's Dad funneled money to Trumps casino to keep it afloat by "gambling" away another $3.5M (an illegal transfer, of course).  Trump ran his father's company until he was 40, did not start his own from scratch.  It has been said that had Trump just taken his fathers money and put it into SPY, he'd be worth a lot more today than he is now.  

    Moreover, Trump’s claim that he built a real-estate fortune out of a “small” $1 million loan is simply not credible. He benefited from numerous loans and loan guarantees, as well as his father’s connections, to make the move into Manhattan. His father also set up lucrative trusts to provide steady income. When Donald Trump became overextended in the casino business, his father bailed him out with a shady casino-chip loan—and Trump also borrowed $9 million against his future inheritance. While Trump asserts “it has not been easy for me,” he glosses over the fact that his father paved the way for his success — and that his father bailed him out when he got into trouble.

    And, OMG, do not read this if you want to sleep tonight (or ever again):

    The Uninhabitable Earth

    Famine, economic collapse, a sun that cooks us: What climate change could wreak — sooner than you think.

  93. A good morning to all who are still awake in the US. It is 7 AM in good old Europe!

    I am pleased some of you did read my in the earning plays, and I hope some of you did follow. I see some chickened out.

    AAPL was a one day play for a gain of 3.60 this morning, nothing more. This is always the outcome when you cap your play. In this case we bought the stock at 150 or some better and sold the Aug, 150 caller for 3.60. Here you forefoot the stock and keep the gains of the option. But here it the question, would you like to be greedy and make some more money? Or can you do better with the returned to you 15,000 from your AAPL stock? How about another 16.9 % in 18 month? You might say not even 1% per month? Sometimes a bird in the hand is better than 6 in the bush.

    Here is what you still could do if you wish to hold on the 150$ stock, roll your Aug caller to Jan19 165 for an additional 6.70 if it is not already assigned this morning. This gives you a total of 10.30 in your pocket and a gain of 15$ in your stock you purchased at 150$ and ist caped now at 165.

    But may I say, this is only an after hour calculation and may change greatly when the gates are open tomorrow morning.

    During the 18 month, the market may go up or down and AAPL will follow, you even will have the opportunity to roll to the next leap year.

    Obviously you will still enjoy AAPL’s div. of 3.78 over the 18 month as long as you can hold on to the stock! But O NO this could turn up my return to 19.3% vala over the 1% per month mark! How 10.30 + 3.78 + stock gain 15 = 29.08 X 100 / 150. Crazy what you can do with numbers!!!

  94. Yodi  good morning I am in Prague

  95. Very good Yodi and congratulations to all the long players of AAPL. I decided to close out my large AAPL position yesterday, before earnings. It was profitable, and would have made a fortune if AAPL ended at $160 on Jan 18, 2019. That fortune would have got less and less as AAPL went higher and hiher and was well covered to the downside. I had the feeling that for this quarter, things were quieter for AAPL due to the new iPhone coming out. It seemed too much of a binary event (this quarter) and with large positions that can be a real issue. I remember when we had a price target for AAPL of $120, then $130 (would never likely see $100 again) and then the last target I remember was $160. 

    You are right to have suggested a small dose of AAPL. Covered call strategies on dividend paying stocks are great until the underlying collapses – of course that does not happen in this market. In fact this market resembles more and more a casino. Different rules appear to apply and those rules are not necessarily as obvious as we think.

    Happy Prague day Qcmike.

  96. Phil / Oncee again thanks for the help on my PCLN trade, I made the rolls, so now in the Jan 19 2000/2200 BCS with short Jan 18 2000 calls. It worked well on providing a clear path forward and certainly reduced the margin of the overall position significantly.

    Before selling the puts, I wanted to wait for AAPL's earnings. My view before earnings was that if the market receives them well, as they did, and the price advances significantly, then I view that as a bullish environment for PCLN to announce results next week. That sounds the caution warning bells.

    I wanted to be more cautious with the exposure on the short calls. Whilst a 20% move is unthinkable, the unthinkable seems to be happening to me more and more these days! I was thinking about using the premium generated now, by the sale of the Jan 1850 puts ($50), to purchase the Jan 18 2200 long ($60) calls to cover the upside exposure. If there was a dramatic move upwards then capping that upside exposure would be very good – and the long calls could be used to roll the Jan 19 2000 short calls up and out to June 18. Point to note is that I also have to manage through the November quarterly earnings.

    I know that if there is a big down move then a lot of that premium on the Jan 18 2200 will have been wasted, but I look at it as a kind of insurance. I could always close those long calls on a big move down.

    I understand completely why you suggested selling the puts and then waiting to deploy that cash to further rolls – but I do not really want to start doubling my exposure on short side if PCLN does 'explode' upwards.

    It may sound overcautious – but my instincts tell me that, for moment, that is the place to be.

    A crazy move – or something that works? Thanks.

  97. PCLN ($2024) expected move on earnings (08/08). I use the calculation of the price of the ATM current month straddle – the August 2000 which is priced at $100.

  98. Good morning!  

    If AAPL is at $160, that's 85 Dow points but Dow Futures (/YM) are only up 47 and Europe is down 0.25% – not quite what we'd expect.  I imagine people are taking advantage of AAPL holding up the indexes to sell everything else.  

    Notice AAPL was heading to $160 anyway, before it was attacked in mid-June and held back into earnings:

    Fortunately, we were able to take advantage and lighten up on our short calls but they'll still be painful until the next dip.  $160 is still a retracement zone anyway.  $120-$160 was $40 so -$8 was $152 and -$16 was $144 and you can see how those worked so the next retrace, if it only goes to $152, will indicate AAPL is ready to break over $160. 

    If this can't get us to Nas 6,000, nothing will!  

    /NG not looking pretty.

    They offered me a lot of money to come up to Canada, but then I realized it was only Canadian money:

    That's how weak the Loonie is compared to the Dollar – imagine how weak it looks compared to a currency from a country that is competently governed…

    PCLN/Winston – I would suggest focusing on mitigating the possible damage, not trying to cover it all.  You don't want to overinsure, only to find it all wasted and leaving you less room to adjust.

  99. Phil – point taken.

  100. Uninhabitable/Phil - 

    Well then, children, might as well just give up any hope for the future and any joy in the now… "It's game over man!" ( )



    "But the many sober-minded scientists I interviewed over the past several months…have quietly reached an apocalyptic conclusion, too: No plausible program of emissions reductions alone can prevent climate disaster."