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Faltering Thursday – CEOs Quit Trump, Markets Start Noticing the Mess

Wow, that was a fun day!  

After bragging about how easy it would be to replace departing CEOs, Trump ended up disbanding what was left of his Business Council as we finally found a group of people in America with the backbone to stand up to the President.  From our point of view, we don't care what news brought the market down, as long as the market goes down and, once again, our index shorts were big winners.  In fact, we made almost $1,000 for our Members in just over an hour during our Live Trading Webinar alone (you're welcome!). 

Our 5:49am call to short the Futures was linked pre-market in yesterday morning's PSW Report and now would be a good time to review the calls after the fact, so we can get an idea of how our 5% Rule™ operates in the wild:

The Dow had a 400-point run (1.8%) to 22,050 so 80-points back is 21,970 and then all the way back to 21,890 but I'm only expecting a weak retrace for now.  

As you can see, we pretty much nailed 21,970 (weak retrace).  90-pont drop from 22,000 (our shorting line) was good for gains of $450 per contract.

/ES had a 30-point run to 2,470 and that's 6-points back to 2,463 and then 2,457 if it's so inclined to fill that gap.  

Again we have the weak retrace and a 10-point dop on the S&P Futures (/ES) is good for gains of $500/contract.  What we're looking for this morning is simply whether we break back up (doubtful) or continue down to the strong retrace lines.  Even there, if they hold we're still on a bullish consolidation at the highs but, if they break down – we could be looking at a proper correction (see last week's hedging plays).  

In our Live Trading Webinar we stuck with our Dow (/YM) shorts (2) and cashed the others into the close (not wanting to leave $1,000 on the table).  This morning, we have tight stops at the retrace lines but, if there's no bounce, we can go right back to shorting using the same entry and exit rules we had yesterday – only now we use the retrace lines for our stops.  See – not hard at all!  

/NQ 5,940 is an air reject from 5,950 from 5,800 and, even though it's 150 points, the Nas loves those 25-point lines so we'll look for 5,925 and 5,900 and below 5,900 means the others are likely to at least do a strong retrace too.

We nailed our 5,950 target on the button and then a very rapid drop.  Nasdaq Futures (/NQ) pay $20 per point and this drop is now 50 points and good for gains of $1,000 per contract.

/TF 1,370 back to 1,400 was a narrow move (and we fell from 1,430 so it was a 50% bounce which failed at 1,400).  That was meant to retrace 6 and 12 points so 1,388 is the line to watch to see if we're really recovering and below that is a fail on the RUT.  In the bigger picture, 1,430 to 1,370 was a 60-point drop so 12-point bounces to 1,372 and 1,384 so that's our real zone of contention on /TF – between 1,384 and 1,388 and whichever way we break is likely to determine which way the market breaks.

We didn't get back to 1,400 but we used the 1,390 line and a 30-point drop on the Russell (/TF) is good for gains of $1,500 per contract – that's why it's our favorite short.  

That's the simple way we use our 5% Rule (see: "5% Rules! How Can We Be So Right?" and "Charts From the Future: 5% Rule Update" for some basic notes on using the Rule).  We can now apply the same rules to the 24-hour drop to see  what kind of bounces we expect this morning without breaking the downtrend, which also has the side-benefit of identifying potential re-entry points.  

For example, the Dow fell from 22,050 to 21,950 so a 100-point drop gives us 20-point (20% of the drop) bounces to 21,970 (weak) and 21,990 (strong) and failing the weak bounce is a bearish signal and failing the strong by the day's end is also bearish – indicating a continuation is likely to our strong retrace line (21,890) and, below that is a bearish signal on the bigger picture (so we zoom out to a bigger chart and apply our formulas).   Remember, the 5% Rule is NOT TA – it's just math!  

From a Fundamental standpoint, the Fed minutes left no doubt that these people don't have the balls to raise rates as they see a still-shakey economy (albeit with record market highs), low inflation and low wages – not exactly robust growth.  Despite the Atlanta Fed predicting 3.7% GDP growth, the reality is likely to be much closer to 3%, perhaps lower and the Fed won't tighten into that.  That caused the Dollar to take a 0.5% dive yesterday, which was a nice save or the market sell-off would have looked a lot worse.  

I was over at the Nasdaq yesterday morning, in fact, speaking to Jill Malandrino about how Central Bank buying is keeping a firm floor under the market as well as the algo-trading mechanisms that allow us to make our short-betting profits – even as the markets continue to climb higher.  


Would it be easier to just bet the market to go higher every day?  Of course it would but these shorts are HEDGES – we have 3 Member Portfolio that are stuffed full of bullish long-term trades – that's why we're always looking for short-term short opporunities.  Our long side is well-covered and we give up a little of the bullish profits to put in some bearish hedges.  That's why we love using the futures – we can make cash on these little pullbacks, even if it's not a proper correction.

A good example of our upside plays is from my May 15th Nasdaq appearance, where we discussed our core strategy and used Fiat/Chrysler (FCAU) as an example with the following trade idea:

  • Buy 10 FCAU 2019 $10 calls for $2.75 ($2,750)
  • Sell 10 FCAU 2019 $15 calls for $1.00 ($1,000) 
  • Sell 10 FCAU 2019 $7 puts for 0.75 ($750)

That was net $1,000 on the $5,000 potential spread and, though FCAU is only at $12.78 now, the $7 puts have fallen to 0.35 ($350) and the bull call spread is now net $2.70 ($2,700) for net $2,350 – up $1,350 (135%) in our first 3 months and that's right on track for our full expectation of a $4,000 (400%) gain in Jan 2019.  

As with many of our Member Trade Ideas in progress, even if you are a free reader you can still enter this spread for $2,350 and the upside is still $2,650 (112%) in 16 months.  

Our free leftover scraps are better than the best trade ideas you find in other newsletters!  


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  1. Riding these MAs for now!

  2. Companies are profitable:

    The fits and starts mostly cancel out, with total capital + labor shares humming along at roughly 87 percent, with a bit of a spike upward during the dotcom boom of the late 90s. But then they both tumble, with the aggregate of both shares falling from about 91 percent to 80 percent. This means that something else has gone up from 9 percent to 20 percent since 2000. What?

    The profit share. Companies have become immensely more profitable over the past two decades. But how has this happened? In a new paper, a pair of researchers painstakingly reconstruct the size of corporate markups, and they conclude that the average firm now charges 67 percent over its marginal cost compared to 18 percent in 1980:

    More charts at the link.

  3. TOS is having trouble loading /TF and /DX.  Anyone else having this issue?

  4. Good Morning.

  5. ~~ BABA -Alibaba beats by $0.24, beats on revs  

    ~~ AABA & SFTBY

    Altaba up 5% with Alibaba (BABA) up 6% at new highs following blowout Q1 results  (60.65)

    Softbank (SFTBY) owns 29.5% of BABA and AABA owns 15.2% of BABA



  6. got my answer:

    Unfortunately, do to some policy changes made by the ICE Exchange,
    we will begin to pass along exchange fees for data on ICE products within the next few weeks. The ice charges $110 per month, we're the last firm to get on board with this – others already pass it along,
    in an effort to save out client from paying the $110 we temporarily turned the quotes off until we are able to get appropriate communications out. You can use $DXY in substitute for /DX

    Symbols Effected

    On July 10th /TF returned to the CME and there will not be a charge for the new symbol. But, the new symbol will be /RTY

  7. I wanted to share some personal news.  I have relocated from Lexington, Kentucky to Augusta, Georgia.  My wife secured a position at the university here and we had to up and move within 6 weeks. Finally getting settled, but this change means I am able to focus more time on investing.

    If anyone happens to be down in this area please let me know.  And no I don't have an in for Masters tickets just yet.  But from what I understand locals don't hang around.  It always coincides with the school spring breaks so people rent out their homes to the tune of $4,000-5,000 for the week and head elsewhere. 

  8. Morning all! 

    The webinar replay is now available!

  9. Phil – "I made the mistake of laying down and fell asleep on the couch…  I don't think it's a power nap when you sit on the couch to have some tea and then wake up an hour later thinking "WTF?"…. I'm not willing to head of to shady acres just yet but it does piss me off because I used to pull whole weeks like that without feeling tired.

    Who needs a vacation the most?  What is, the person who just returned from a vacation. Vacation's are hard work, but somebody has to do it.  :-)

  10. FU LB

  11. Phil – Altria – "MO/Naybob – I think they'll get into the pot biz once it's nationally legal."

    They have been quietly investing resources while patiently waiting. How long? Here's an indication, and as somebody walked out of the room with it,  I won't tell who did, and Out.

  12. Good morning!  

    Looks like Trump will have to close the military as his own Joint Chiefs are rebuking him:

    The nation’s top military officers issued public statements condemning racial bigotry and extremism, a rare foray into domestic politics that indicated deep unease Wednesday in the Pentagon with President Trump's views on race and underscored his growing isolation.


    The social media posts from the U.S. Joint Chiefs of Staff — the commanders of the Navy, Marine Corps, Army and Air Force — came amid a torrent of criticism of Trump as business executives abandoned his advisory councils, Republican elected officials distanced themselves from him and previously friendly foreign leaders criticized his comments suggesting an equivalence between neo-Nazi groups and their opponents.

    In a further sign of an administration in crisis, Vice President Mike Penceannounced he was cutting short a visit to South America to return to Washington a day early for meetings with Trump.

    The Army doesn't tolerate racism, extremism, or hatred in our ranks.— Gen. Mark Milley, chief of staff of the Army

    Events in Charlottesville unacceptable & musnt be tolerated @USNavy forever stands against intolerance & hatred… 

    Well, Trump has finally managed to unite the country — against him!  

    Big Chart – Watch the NYSE and that 11,835 line, probably a good bull/bear indicator but how could 1,375 (200 dma) not be bouncy on the RUT?  Anything less than strong bounces would be very bearish this morning. 

    Markups/StJ – That's definitely true.  Of course, when the market drives decisions and the market always wants more profits – what else is going to happen?  

    /TF/Rperi – No but I know there was some thing about having to pay for /TF not too long ago.  

    BABA/Albo – They are a juggernaut, up more than TCEHY this year.  

    CBI/Albo – WOW, failing $10 now.  This is relentless but, as I've said, the miscalculations were due to them taking on new areas of business (LNG) that they didn't have as much experience in and, going forward, they will know better.  They are being priced as if all of their projects can randomly blow up on them at any time – despite the 130-year history of that NOT happening. 

    This is not that different than the attack on LL over nothing that relentlessly drove them lower.  It's always possible for CBI to have cost overruns but it almost never happens because they are very good at their jobs in estimating projects.  Expansion into new lines of work has the risk of exactly what happened here and yes, there are a couple of pipeline projects that also may take hits but, LONG-TERM, they will get over this and get back to making $500M/yr, which is pretty good for a company you can now buy for $980M.  

    LB is another one that's silly as they discontinued lines that were not profitable and now they are being killed over the comp sales – despite the fact that profits are UP!  

    This specialty retailer of women’s intimate and other apparel reported net sales of $2,755 million, down 5% from $2,889.7 million in the prior-year quarter. The figure was also below the Zacks Consensus Estimate of $2,764 million. L Brands comparable sales (including direct sales) were down 8% during the quarter. Further, store only comps also decreased 6% year over year. During the quarter, the exit of the swim and apparel categories had an adverse impact of 6% and 9%, respectively to total company comps and Victoria’s Secret comps.

     I really can't decide which one I like better going forward…

    Renting/Rperi – Wise move!  I like Augusta, used to go down there when my cousin was at Emory.  Best wishes on your new place.  

    Vacation/Naybob – Yeah, it was all the catching up that killed me.  Even today, I'll be buried in portfolio updates all day long.  

    Your secret docs have expired, Naybob.

    Ouch, that little pop at the open died hard and fast.   Dow failed right at the weak bounce (see above), /ES right on the button, /TF made the best show of it but failed right at good old 1,385 again (where we stopped out yesterday).

  13. Damn! I had 2 short TF at 1378..watched it pop to 1384..sold  a 3rd… has my stop at bounce at 1380.2 as breakeven…and it just sliced thru…!  watched it go to 1374…whaaaaaaaa.   Well at least I did not lose. I usually hold one back in reserve but this is first time I did not. So I missed the drop completely.

  14. CTSH – what is the recommendation for the short $65 calls expiring tomorrow?

  15. Phil – You are so right that Trump has united the country – against him.  Last poll I saw, 40-42% were in favor of his impeachment.  Would think that it's more than 50% now.  Rooting for Mueller to dig up enough dirt to make that happen !

  16. Tangle The other day was recommended to roll to Sept 17 I would even go to sept 22 70 call

  17. Trump uniting the country….I am trying to figure out why 35% still give him a favorable approval rating.

  18. SYF / Phil,

    What are your thoughts on the GE spin off ? 



  19. Phil/advill/CC

    thank you for your inputs the other day for the purchase of the Green Coins. I haven't done it as I was waiting on BDC to provide more information. Seems little confusing on what to buy and what to transfer to get the Green coincs explicitly and not any other coin.


  20. …TF …and right back up to 1378.  will wait for 1380 ish ? to go short again

  21. Pharm shows you how many Kukux's? Clans there are still

  22. Phil – "Your secret docs have expired, Naybob."

    Indeed, like everything else in a world of social media white noise and MSM narrative, where by design, most can't afford to even pay attention, much less know the facts.  Stress, tension, boredom, depression… needful things.

    "We are in the business of relaxing people who are tense and providing a pick up for people who are bored or depressed. The human needs that our product fills WILL NOT GO AWAY. Thus, the only REAL THREAT to our business is that society will find OTHER MEANS of satisfying these needs.


    Despite their legal status rhetoric, they have had MJ and more, on their radar for over 50 years. Reading the rest of that one page memo is chilling and reminds one of this.  

    Perhaps Rump is the topic of discussion at the next meeting?  We should be so lucky, but the perfect Manchurian buffoon and our government by gridlock is going nowhere until the mid session elections.

    Pence, Ryan, Hatch or Tillerson would all pose a far graver danger to this country.  Imagine that? Time to burn one and Out.

  23. LB – sold some Jan 18 $35 puts for $3.50 for my next 25% allocation.  If assigned, will get a dividend yield of 8% and then continue to armchair(yodi TM) it.   

  24. Phil/FXP hedge - 

    I have a September 22/26 FXP position from the OOP – did a search and can't find any changes made to it (although I could be mistaken) – any adjustments since we are 30 days away and FXP is at 21.95?

  25. Learner LB Not for me the armchair is to uncomfortable!!!!

  26. Learner to many lose Bras flowting around

  27. Faang stocks plus tsla all down. Wonder if this will be the big correction? 10:30 dip then all up?

  28. Phil, anyone;

    what was the gas report like? missed it, witnessed the neck snapping reaction……

  29. Yodi -  lol -  Not forcing you, but LB has a great brand (and profitable as Phil mentioned) despite the declining comps, mind you the comps are getting less negative every month and once the discontinued lines fall off, this stock may recover – perhaps even earlier than that.  

    Table 2: Victoria's Secret direct sales spread.


  30. Phil – Expired Link – Indeed the Philip Morris library links expire, here is a Google link to that 1st PDF document evidencing the investment of resources as early as 1968.  Please let me know if it works and Out.

  31. This country is going to sh*t so I'm looking at UFS  – Domtar, the nations leading manufacturer of adult diapers.  4% yield but options only go out till Jan

  32. Gary Cohn leaves, the market tanks and potus approval drops below 20%…..

  33. Table did not attach earlier… LB comp trends

    The spread provides an indication of the direct sales contribution to total company sales.

  34. ….and that's the name of that tune…. :)

  35. 1020…the PPT will not let this market go down.  There is a punch bowl full of money….it seems to be continually replenished.

  36. California really needs to become 'independent' …. then the dominoes fall.  

  37. Wow….

    In 1994 John Ehrlichman, Nixon’s domestic-policy adviser and a Watergate co-conspirator, confessed this to the author Dan Baum:

    “The Nixon campaign in 1968, and the Nixon White House after that, had two enemies: the antiwar left and black people. You understand what I’m saying? We knew we couldn’t make it illegal to be either against the war or blacks, but by getting the public to associate the hippies with marijuana and blacks with heroin, and then criminalizing both heavily, we could disrupt those communities. We could arrest their leaders, raid their homes, break up their meetings and vilify them night after night on the evening news. Did we know we were lying about the drugs? Of course we did.”

  38. ?Pharm – I'd say the folks at the PPT are not very happy either….California would be an awesome country…..

  39. …without question… ;)

  40. Stocky – "This country is going to sh*t so I'm looking at UFS  – Domtar, the nations leading manufacturer of adult diapers.  4% yield but options only go out till Jan"

    I concur, sound investing in needs that will not go away, we all come in wearing them, and many end up in them.  See here for the ecological footprint of diapers, it's insane.

  41. FU CA!

  42. pat_swap / green coins-

    BDC put together a write-up on how to set up a crypto account and then buy green coins.  I found it incredibly helpful (no chance I would have been able to figure this out on my own!)-

  43. mike -yes that was a good writeup.. thanks for bringing it back.  I need to print/save it

  44. Pharm – Ehrlichman's Confession – Nice to see someone discovering the divisive truth about the war on drugs. On July 12th, we Nattered about that inconvenient truth at PSW and at length here utilizing that very quote and Out.

  45. ?FU CA – Are we following a new stock?….. 

  46. 1020 – FU CA – I think Latch could be referring to something similar to this.

  47. 1020

    ~~ 11:21 – White House Official tells CNBC that Gary Cohn intends to remain in his position as NEC Director at the White House.

  48. Phil

     Did we double down on CHK


  49. Nice Natty!  I need to be on the board more often!  I guess the second mouse gets the crumbs, or at least a little bit.

    I would like to know the market cap order by state.  In other words, which state has the largest market cap on headquarters of companies.  Then also rank those states by GDP.

    FU CA is right.  It is a big chunk of America's might.  Thank you very much, and 'out'.

  50. Read somewhere that chk might be heading into BK? anyone see it?

  51. Phil, been waiting for LB earnings before making changes:  Short 5 puts Jan19 (basis $9), long 10 calls Jan19 (basis $10).  Closed out the 10 short 70 calls (+$4).  What now?  Thanks.

  52. Advill, Thinking of you, it has just been just reported a truck ran in to a crowd of people in the main shopping street in Barcelona, your home town. Hope you are OK yodi

  53. Pharm – Here is the market capitalization of housing 2015 – FU CA is #1

  54. Nice Nat – it's perhaps too obvious but I was more thinking of this   

  55. Pharm – Here is the map of the world if size were determined by market cap. US is #1.

  56. Now another van has run into people in Barcelona.  

    1,378/Latch – Don't worry, we'll test it again.  

    CTSH/Tangled – Well, we sold the Aug $65 calls for $5.50 and, at $72, we will owe them $7, so down $1.50.  crying  We are, however, doubled up on the 2019 $65 calls so those we can cash ($11,550) and flip to the $70 ($8.85)/$80 ($4.35) bull call spreads at $4.50 ($4,500) so that's $7K off the table less $1,500 paid back and now we can sell more puts and calls.  CTSH looks a bit stretched, so I'd just sell the Oct $70s for $2.90 and see how that goes before selling puts.  

    35%/Pharm – Don't forget what the IQ curve looks like:

    Image result for iq curve population

    That's 160M people with an IQ below 100, 16% (51M) below 85 and those are a lot of the same people who sit home all day and answer the phone for pollsters.  Frankly, I've spoken to a lot of phone pollers who seem to be calling from the left side of the chart.  

    Image result for iq curve population

    Image result for iq curve population

    Image result for iq curve population

    Image result for iq curve population

    Here's a good, quick IQ test – in case you want to know where to move…  I just got a 138 checking it, that's around where I usually test.  

    SYF/Pat – It's a good business and they are reasonably valued but I worry about mobile payments taking over down the road.  Actually, the tech is there for retailers to face ID you in their own database and auto-charge your account.  They'll have their own loyalty programs not so much tied to cards and the banks will begin to offer more direct services that private cards now offer but it's a next 10-year thing.  GE doesn't get rid of things they can grow.  

    Still, you can sell 2019 $28 puts for $3 to net in for $25 and leave it at that or add the $28 ($5.50)/$32 ($3.60) bull call spread for $1.90 and you still net in for $26.10 (14% off), worst case.  

    GreenCoins/Pat – You have to first get a bitcoin and then use those to get the greencoins.  We need to get the volume up consistently to get GreenCoin on a major coin exchange, that's why PSW is going to be the first retailer to accept them but getting that done is like pulling teeth with the programmers (the downside of being a pioneer).  

    /TF/Latch – I hope you caught it – good logic on the play.  

    Textbook weakening bounces on /ES:

    Memo/Naybob – Interesting but shows you how slow things are to change.  

    LB/Learner – I prefer to give it a few days after earnings but I think you'll end up very happy. 

    FXP/Jeff – I'm working on the OOP update now.  

    .BG/Jasu – A bit of a build but the effect of /NG reports is very random.

    UFS/Stock – Well it's a growth industry but thin margins (2.5%) makes them uninteresting to me.  Doesn't take much for a company like that to turn ugly.  

    Cohn/1020 – What I can't believe is how these supposedly sharp guys ever hitched their wagon to Trump in the first place.  It takes something this obvious for them to realize he's a lunatic or maybe it's just a good excuse for all the people who had a foot out the door anyway?  

    Thanks Learner, useful. 

    Ehrlichman/Pharm – Oh yeah, those were some horrible, horrible people but, then again, the batch that's there now are up to the same tricks – are we going to wait 30 years to go "wow" again?  

    CHK/QC – I don't think so, I don't like Qatar or all the shale drilling so it's not a place I'd put more money (but also not one I'd dump).

    CHK/Pirate – I don't think that's likely, they made $500M last Q and their market cap is $3.5Bn.  Lots of debt but they are servicing it.

    The interesting thing about these companies with debt (FTR) that they are killing is that the premise is rates will climb from 2-3% to 6-7% in a couple of years and their debt service costs will go through the roof long before the companies are able to pay it off.  That may be true but what then would happen to the US and their $20Tn worth of debt we service?  Even assuming a discount rate of 4%, that would be $800Bn a year just to make interest payments.  So, if people are going to punish CHK, FTR, etc. for their debts – why the hell would they be long any US company?  

    LB/Taihu – I'm contemplating.  If it wasn't rollovers I'd say wait and probably I'll stick with wait anyway.  

    Resign/Rustle – My bet is he resigns for "health reasons" in November or Jan.  I think part of his ridiculous behavior now is so that he can resign later and say that is wasn't for anything he did (will do then) because he can point back to this time and say that even this didn't make him resign so of course it's only his health that's causing him to step down.  His doctor (Vinny Boombatz, I think) will back him up. 

    And down we go!  

  57. rustle — start holding your breath

  58. Guys – I don't understand how  or why you think Trump would give up?  His brand would be destroyed and thus ego.   He'd rather lose the election or be shot then just quit. IMHO.. maybe that could be his 'health reason'? God forbid. 

  59. Phil – TF – thanks I am in at 2 short at 1380…I really want to hold on for a few days..looks like Vol is picking up again.. The next line is 1350?

  60. Phil – CBI recovery plan

    The other day you detailed a recovery plan for our  CBI position, what is your suggested timing.  Do we sell more puts now, wait for the 2020s or do nothing.  Thanks

  61. Latch – Californication – Indeed, control of the population. 

  62. Pharm – US States by GDP.

  63. Pharm – Sector map by market cap size.

  64. Pharm – Average income of top 1% by location.

  65. took one off the table at 1374. still have one short at 1380

  66. .Trump Resign scenario – follow up  -- What would the market reaction be? Initially down and the euphoric?

  67. Pharm – biggest non government employer in each state – It's the US of Walmart.

  68. Greencoin – I applied for producer membership but after 3 days still no contact from them to confirm my status.

  69. Pharm – Phil might like this one, 2017's most and least educated cities.

  70. Pharm – finally and mercifully the Fortune 500 by map.  FU CA is #1.

    Interesting codicil and separate study, if you want a profile of each states employment, click here.  On each states profile page scroll down to 50 largest employers to see who and how many.

    Time to burn another one and Out.

  71. Just cashed out my Jan callers on F with little value remaining.  I have 10 mm shares, good divvy.  Write Jan19 now?

  72. Tai, 

    10 million shares? 

  73. 10,000.  Million would be nice.

  74. Trump.  it's just some twisted version of "The Prodcucers" ..'Springtime for Bobbie Lee and the Confederacy…"

  75. Latch – I don't know why you feel quitting would hurt trumps brand, He's already done that!

    Donald was running to help his brand and then did what he did not expect… He Won!


    His brand sucks, it sucked before and it sucks now. Let me ask; would you have done business with this guy before he won the election?…. I didn't think so…. :(

  76. Phil,

    Shortable move up in /CL or only if it hits 47.50? 

  77. Jabob – Nice to see you back in the fray.

  78. albo--Phil was right. I was being an a-hole the other day.

    No excuse — Phil works hard.

    It isn't his fault I am too weighted down in the FU portfolio.

    Hopefully, they will recover in the near future.

    It seems like it has been a long time since they have had a good week. Sucks.

  79. A good topic for Naybob… Matt Taibbi tales on Libor:

    The FCA's Bailey put it this way (emphasis mine):
    "I don't rule out that you could have another benchmark that would measure what Libor is truly supposed to measure, which is bank credit risk in the funding market," he said. "But that would be – and I use this term carefully – a synthetic rate because there isn't a funding market."

    There isn't a funding market! This is absurdity beyond satire. It's Chris Morris' "Cake is a made-up drug!" routine, only in life. LIBOR is a made-up number!

    Think about this. Millions of people have been taking out mortgages and credit cards and auto loans, and countless towns and municipalities have all been buying swaps and other derivatives, all based on a promise buried in the fine print that the rate they will pay is based on reality.

  80. Options Opportunity Portfolio Update (OOP):  Well we're up $4,000 today so I guess we're still bearish.  Unfortunately we peaked out at $325,753 back on our July 18th review and now we're down to $311,063 (up 211%), which is down $14,690 for the month.  Unfortunately, our two new plays since then were LB and TEVA, both took big losses in the first round.  We'll be adding to both of those losers.

    For those who are new, we transitioned this portfolio to more of a long-term portfolio as our first few months (it's our 2-year anniversary, in fact!) made us realize most people were not able to follow active trading due to the platform restrictions at SA.  We've moved towards a hybrid portfolio that mirrors the style of PSW's Long-Term/Short-Term paired portfolios, which relies on long-term positions, short-term premium selling and hedging to create a steady income stream.  

    That's going very well, as we're up 211% in two years, so no reason to change things now, right.  It makes the portfolio less exciting but it's exciting to have money too – so we'll stick to the winning formula in year 3 ahead.  

    • CHL – We sell short puts mainly to generate a little cash (often to offset a bearish position) and also, as in this case, to put a placeholder down on a stock we'd really like to buy if it gets cheaper.  What's our buy signal?  When the short puts are losing lots of money!  Sadly, this one is up 59%, so it looks like we won't be getting to buy CHL cheaply this quarter.  
    • NLY – Another one we'd love to own if they get cheap.  In this case, it's our favorite REIT and, rather than buy the stock ($12.30) and then cover it with a call and hope it holds its value while waiting to collect a $1.20 dividend – we just sold the $12 puts for $2.75 (more than two years' worth of dividends) and our worst case is getting assigned the stock at net $9.25 (25% off).  That keeps $12,300 CASH!!! in our portfolio, which generates $24,600 of ordinary margin and the margin requirement on the short puts is just $1,300.  So, to summarize, use 1/10th the cash/margin we would have to buy the stock and collect more than the dividend with a 25% cushion should the stock fall.  THAT is how you buy a stock!  
    • WTW – We cashed out WTW positions twice already this year.  This is the leftover short put and we have no reason to buy it back early because we don't need the margin.  
    • FXP – Looks bad but China can fall fast – we'll just let it play out for now.  They have to deal with that psycho that has his finger on the nukes – as well as Kim Jong Un…

    • SQQQ – This is one of our primary hedges and it's right on the money.  Unlike the STP, the OOP doesn't seem to need to be more bearish.  If we consider it's a 3x ETF, then a 20% drop in the Nasdaq should pop it 60% from $28 to $45, so the spread is exactly what it should be and 50 x $18 is $90,000 worth of protection less the $15,000 current value so $75,000 of potential protection from this position.  I do want to make one change – let's roll the Jan $27 calls ($4.25) to the March $26 calls at $5.25 for $1 as we're buying $1 in position for a Dollar and the extra 2 months of protection is free.  
    • TZA – Our other main hedge.  This one is already $2.50 in the money and x 80 that's $20,000 and the net of the spread is $22,500 and the potential at $30 is $120,000 so almost $100,000 worth of protection here and TZA doesn't have March yet so we'll just let it stand.
    • SVXY – Our bet here was that, by Sept, the VIX would finally make a comeback and send SVXY lower.  While we've had a few spikes in the VIX, none have been sustained.  The Dec $90 ($20)/$80 ($15) bear put spread is $5 and I'm considering rolling to those but, for now, let's BUY 20 of those Dec $90/80 put spreads and keep what we have but our goal is to cash out our Sept $72.50 puts next week – hopefully at a better price.  After that, we'll hope SVXY holds $50 so the short puts expire worthless and we'll be in great shape.  

    F – No movement on the stock (good for a new trade) but we're in it for the dividends.  Also, we planned on getting called at $10 so it's a darned good thing we took a conservative entry at $11.03 with the low hedges.  

    AAPL – The potential for this position is $180,000 and the current net is a net $2,800 credit so good for a new trade if you want to make $182,800 if AAPL Is over $170 in Jan 2019 (but not too far over or the short calls will hurt us).  The short Sept $140 calls are $19.50 and the Nov $145s are $17.25, so that's the roll we'll be looking at.  Once the premium wears off Sept, it should be an even roll.  Also, it's only a 2/3 cover, so nothing to worry about and I'm glad for the protection in case the market corrects and drags AAPL with it.  This trade alone could double our profits in 16 months!  

    AAXN – I can't see why Taser took a dive.  You would think the police would be stocking up for the coming riots.  We still love them and it's a long-term trade so we're going to take advantage of the dip and make these changes:  Roll 10 2019 $20 calls ($5) to $15 calls ($8) for net $3 ($3,000).  Sell 5 more 2019 $20 puts for $2.70 ($2,700).   So we've spent net $300 and added a potential $5,000 to the spread. 

    • ABX – Even though we are on track and up $4,000, it's still a nice trade at $5,000 net that returns $14,000 at 20 in 16 months for a $9,000 profit (180%).
    • ATI – Doing surprisingly well considering we didn't get our infrastructure bill.  I'd say on track, I'd be thrilled to own them if they went lower.  
    • CDE – I like them down here and we're still on track – once again saved because we took a conservative position on entry.  Greed kills!  

    • CHK – We just talked about them in Member Chat and I said that all that shale drilling + Qatar issues make me too nervous to add to CHK here.  On the other hand, I like the long-term LNG export story so I'm not willing to cut and run yet.  

    • CLF – All this tariff talk is good for them and they are on track so all good here.  
    • CSCO – They took a hit today but our long-term premise is the Internet of Things will need a lot of routers.  Too early to adjust though, we'll just watch and wait.
    • CSIQ – Boy did we back the right horse here!  Time to cash it in though.  I still like them but up 30% in two months is good enough for me.  

    • DBA – Our perennial inflation hedge.  Still not working!   We got a nice dip so let's buy back the short Jan $23 calls for 0.05 and roll the 10 Jan $21 put ($2.45) to 15 2019 $20 puts ($2), which drops $550 in our pocket.  Now we can roll our 10 2019 $17 calls ($2.75 = $2,750) to 20 2019 $15 calls $4.20 ($8,400) and sell 20 2019 $19 calls for $1.55 ($3,100).  That's net $2,000 spent plus the net $1,050 we spent in the first place is net net $3,050 on the $8,000 2019 $15/19 spreads with a $5,000 (ish), 160% (ish) upside potential.  Yeah, I like that adjustment.  
    • DIS – Right at our Jan target level.  
    • EWZ – That was a good call.  Potential is $10,000 and current net is $6,692 so about 45% to go if we hang on for 16 months.  We KNOW we can make more than that in 16 months and I'm a little worried our market tanks and drags Brazil with them and I'd say there's almost a 45% chance that another scandal drags their markets back down so let's take the money and run!    

    • FNSR – Back to where we came in.   Like CSCO, it's an IOT play and I think worth sticking with long-term and good for a new trade.  
    • FTR – Have they finally stopped going down?  Our net is $14,888/800 = $18.61/share so doubling down at $13.85 would be $16.23 – that's not worth doing.  So we'll just let it sit and see what happens for now.  
    • GE – When did they get toxic?  Right when we bought them, it looks like!  Anyway, it's GE, so let's take advantage of the dip to roll the 5 short 2019 $30 puts ($5.95) to 10 short 2019 $25 puts at $2.40 ($4,800) and that will cost us $1,950 of the $2,175 we originally collected so net about $0 and our break-even on the puts is now about $25.  We can also spend $1 to roll the 15 2019 $25 calls ($2.10) to 20 of the $23 calls ($3.20) for $1.10 (+ the extra 5 calls).    The new 5 are uncovered with more room to run.

    • GM – On track
    • IMAX – Ouch!  Way overdone sell-off so we'll take advantage buy buying back the short Dec $28 calls (0.10) and rolling the 10 $23 calls (0.45) to 20 of the March $15 ($4.70)/20 ($1.80) bull call spreads at $2.50 ($5,000).  That has $5,000 upside potential which will make up for losses on the call side but the 10 short Dec $29 puts ($10.30 = $10,300) will take some work, starting with rolling them to 20 March $22 puts at $4.30 ($8,600).   That's going to cost $1,700 to roll and we collected $3,150 when we sold the originals so still a $1,450 credit but that's not much (0.70/contract).  Still, it's an improvement and we don't try to win everything back at once – this would be a huge improvement by itself if $20 or better holds.  

    • JO – We can salvage $2.45 from the 15 Dec $15 calls ($3,675) and roll to 15 of the March $12 ($5.30)/$17 ($1.60) bull calls spreads at $3.70 ($5,550) so net $1,875 plus $2,175 we spent to start is $4,050 on the $7,500 spread that's 100% in the money.  The short puts are still an issue and we can roll the Dec $19 puts $2.30 to the March $18 puts at $1.90 for $600 – worth the cost to gain $1,500 in strike.  
    • LB – The thing to understand is LB discontinued swimwear and apparel this year so every quarter they are going to be missing 10% of last year's sales.  They cut the catagories because they weren't as profitable as the rest and the profits are on track so it's all working – yet people are freaking out because their sales are down from last year (not even 10%) and they think AMZN is taking over the panty and bra biz.  Investors are generally idiots, you know…   Anyway, their idiocy is our opportunity and we can roll the 5 short 2019 $40 puts ($9.60 = $4,800) to 10 short 2019 $32.50 puts ($5.40 = $5,400) and that adds $600 to our pocket.  Let's buy back short 2019 $50 calls ($1.90) and roll the $40 calls ($4.10) down to the $32.50 calls ($6.85) for net $2,750 and add 10 more ($6,850).  We'll stay uncovered until hopefully $45 and then turn it back into a very cheap spread.  

    • M – Another market overreaction but that's different than LB, where people clearly just have it wrong.  M I see as a long-term real estate value but we have to let that play out.  I'm not worried about $25 as the short put target but let's roll our 2019 $20 calls ($3.10) to the 2019 $18 calls ($3.85) as it's silly not to for 0.75 and let's buy 10 more for $3,850 while we're in the mood.  I don't want to buy back the short calls because $1.10 is a rip-off for the $28s (40% up from here) so we'll just let them clock out.  
    • SGYP – Big loss for us as they blew their drug trial.  There's another study coming early next year and we have time to hang on but more of a gamble now.  It would be silly not to roll the 2019 $3.50 calls ($1) down to the $1.50 calls ($1.90) for 0.90 ($3,600) and then recover that money by selling 40 $4 calls for 0.90 ($3,600) so now we're in the money again and we collect $10,000 at $4 if all goes well for a small net net profit.  Hopefully, the spread will protect us from taking too much more damage.  

    • SPWR – Another solar play, well on track.  
    • SVU – They did a reverse split but on track overall.  Good for a new trade, in fact.  
    • TEVA – Another awful sell-off.  Fortunately we started small but still down big as it dropped like a rock with a rock around its neck.  The 5 short 2019 $30 puts are $13 and we can roll those to 10 of the 2019 $22.50 puts at $7 and pocket $500.  We'll leave our long $32.50 calls (you never know) and buy back the short $40 calls (0.33) and set up 10 of the 2019 $15 ($4.80)/25 ($1.40) bull call spreads at $3.40 ($3,400) and they return $10,000 if things turn around, which would still be a nice profit despite the 50% drop as we started with a net credit.  

    This is why we like to start with small positions.   You always have to expect a stock to go 40% against you and have a plan for what you will do if it does.  Markets don't need good reasons to discount your stocks but smart shoppers keep their heads – and plenty of CASH!!! (have I mentioned how much I like CASH!!! lately?) on hand so that, when the sale comes (and they always do), they will be BUYERS and not panic sellers.

    We don't knee-jerk buy everything that goes down but, when we think the move is overdone, having a small start makes it not at all painful to take advantage and pick up a bigger position at better prices.  TEVA started with a $950 credit and we hoped to make $3,750 more at $40.  They went the WRONG way by a mile but now we're spending just $3,065 to put ourselves in a $10,000 spread that pays off at $25 – that's 23% lower than where we came in!  

    If you begin with sensible portions in positions that you would HAPPILY double down – even twice – then you will be able to ride out even the harshest of corrections.  

    • TGT – Our faith was rewarded and they are making a comeback.  
    • TWTR – On track.
    • UNG – More nat gas.  Well, we want the short Jan calls to go worthless and plenty of time to adjust the short puts.  A hurricane could put us right in the money. 
    • WPM – Our Trade of the Year.  Halfway to goal with 16 months left – looks good to me!  
    • XOM – Oops, we were supposed to dump them.  Let's dump them.  

    A lot of adjusting work this month but I'm very pleased with the overall portfolio – which is really great on a down 200 day and best of all, the Portfolio is rock-steady.  If the AAPL trade works, the rest are just window-dressing anyway!  

  81. Jabob – The important part is moving forward from here.  And hopefully, we've all learned a hard lesson about position sizing, one of the most important aspects of trading and investing.  And I would also add the benefit of using stop loss orders at about 20%.  If you're down 20 % it only takes 25% recovery to get back to even.  If you let the loss go to 50% it takes 100% to get even.  And beyond that, it just gets worse.  That requires a lot of rolling and adjusting of the position.   

  82. good point Albo — I need to practice that

  83. IQ Test – 130, and they tell me that I am in the top 3% of all people.  Hilarious – ???????? 

    While I don't have a lot of confidence in this information, it sure did make me feel good.  Since studying Options/Futures makes me feel incompetent at this point in my studies.    

    Jabob, I feel your pain!  I tried using the Paper Trading and couldn't motivate myself to look at it much.  So, I used my IRA, without reading much about scaling, position sizing, etc. and sadly, most of my positions (m, ftr, gnc, teva, imax, f, chl, vz, and twtr) are in your list.  However, it has been one of the best parts of this journey, cos, I am in the process of salvaging two trades (vz, f) into the Win column, VZ this month when the CALL expires and F is on track to be green in October.  Had, I just bought the stock — I would be FU for sure.  

    At the end of the day, you will have one of the best portfolio's, once the FU ride is over.  

    Remind me.. didn't you make a wager of kissing someone's rear-end?  ????    

  84. StJL – "A good topic for Naybob… Matt Taibbi tales on Libor"

    What about our good friend, "disposable income is rising" who appears to have become a tool?  I am saddened.  The root of all evil is not money, but ignorance and Out.

  85. joseph—gladly…

    but those FU stocks are going to need a miracle for me to lose that wager.

    they are probably down another 10-50% since then.

  86. Albo – "And hopefully, we've all learned a hard lesson about position sizing, one of the most important aspects… requires a lot of rolling and adjusting of the position."

    In the days of yore, a spry young woman on the Cote D'Azur, armed with the Kama Sutra, said the same exact thing and Out.

  87. I have 50 of TZA $17 sept calls…when would you look to sell? TZA 20? 25?

  88. How high can TZA really go if we take a dip??

  89. Damn, that was a lot of work!  

    Thank goodness we're already short or this would be stressful.  

    /TF/Latch – 1,350 would be a foolish place not to take money and run but you are up plenty now – why be greedy (unless you need the hedge).  Tomorrow is Friday and Friday's can be crazy and when's the last time we had a sell-off that lasted?  

    Speaking of which, check out /RB doing it's Thursday thing regardless of what else is happening.

    Brent bounced off $50 so that's the key watch line now.

    Bigger picture is a $3 fall to $50 gives up 0.60 bounces to $50.60 and $51.20 (strong) so that's the line to watch and should be tough to get over as NYMEX still has 161,000 open contracts as of this morning with 4 days to trade, so still 40,000/day is too much downside pressure and I bet today less than 40,000 were ditched (because we went up in price).  So over 120,000 contracts tomorrow will make for an interesting session.

    CBI/Edro – Yeah, we have to add that to the OOP!  $9.59 at the moment.  In the LTP, we have 15 short $25 puts we sold for $5.20 so net $20 and the stock is down 50% and we want to DD at $10 and average $15, right.  If that's the case, wouldn't I RATHER triple down at $5 and average $10?  It would be the same out of pocket but I'd have 1,500 more shares than I thought I could afford at $10.  That's why I do not get panicky when a stock I still want to buy sells off on me.  

    So, it would be nice if they go to 5 and we can buy 3,000 shares (or some option variation) for $15,000 instead of 1,500 shares for $10 BUT, if the stock doesn't go down and goes up to $15, then I don't get my gigantic amount of shares but, as a consolation prize – I do shave off half my losses without taking any cash off the sidelines.  So, either way, we win by waiting!  

    Trump/Latch – If he resigns then Pence is in (he seems clean of Russia) and the policies are the same because the Koch brothers have their hands right up his ass too.  I do think there will be a relief rally but I'd short it because the rest of the clown car would still be in Congress.  

    Education/Naybob – What is going on in Ann Arbor?  

    F/Taihu – $100M worth of Ford?  Damn, you could have bought the whole company for that much 7 years ago!  While I THINK they are cheap here, the auto industry faces turmoil and I'd do my job and sell premium like I'm supposed to.  The 2019 $10 calls are $1.35 and the $100 puts are $1.15 so that's $2.50 back is 25% cushion and another 0.90 of dividends (6) and now it's about 33% in 16 months on a conservative spread – why take risks when you can do that?  

    Welcome back Jabob – See Portfolio changes and be sure to ask for any specifics.  I know it's a rough ride, it will be very telling how they perform against the market during a sell-off.  

    Oil/Japar — I was looking for $48, under $47.50 is a bit low for shorting, especially into the weekend.  

    Good point Albo.  

    Options/Joseph – Hey, I know for a fact I'm smart but I look at coding these days and my head starts swimming.   It seems like there's no way I'm going to learn that.  I'm sure I could if I really HAD to and I had thousands of hours to study but I don't – so I'll have to keep hiring guys who can code for me.  You don't have to know everything, just the things that matter to you.  I know some academics who are incredibly smart – about the one thing they do – otherwise, they are kind of idiots.  I'm more of a generalist and I wouldn't even call myself a top expert in options because I'm not an options technician – I simply use them to take advantage of my fundamental trading ideas.  You'll get there.  Go back to 2007 and read Yodi's comments – it's amazing how much he learned starting from scratch (and he's no spring chicken either!). 

    TZA/Millard – Well I don't know if you are up or down but if I have a big win in a close month, I like to cash it in and move about 1/2 the money to a longer-term bull call spread (if I'm worried I'll miss something).  Even if we're going lower, 1,350 should be bouncy on /TF and that's off a fall from 1,450 so 100 points is 20-point bounces to 1,370 (weak) or 1,390 (strong) and I think it could be argued that we already did the strong bounce test and failed right at 1,390 so what's really key is whether 1,370 fails on the next bounce.  I'd set a stop over there for now.  We worked out in the STP review that a 20% drop in the RUT should take TZA to $27.

  90. This is the kind of chart that can precede a massive upside explosion:

    LOL – Lots of worried guys being interviewed on CNBC. 

  91. Phil – You and the family missed a great show…..


    Dunkirk was great as well… IMAX Baby!

  92. Oh this guy is a f'ing LOON!  

    SHAME on those of you who voted him into office – SHAME!!!

    Image result for shame animated gif

  93. Oh sorry, in case you don't know, Trump is talking about a fake news story Conservatives love to send out that Gen Pershing had his troops dip their bullets in pigs blood when executing Muslim prisoners so they would be damned as they died.  That's our POTUS folks!  

  94. Phil – I'm in SVXY with you.  But I'm only short.  Has been a tough index to trade because it seems to have a bullish bias.  Maybe that's about to change.  Good move today.

  95. StJL – Libor – that article nailed it.  It's like Fed Funds rate, an imaginary line in the sand, designed to "manage expectations".  Do you think banks borrow at FF?  Never.  They borrow from FHLB's and the GSE's for far less and Out.

    Phil – "Damn, that was a lot of work!  Thank goodness we're already short or this would be stressful."  

    Knew you would be knee deep. Tried to assist with interesting links.  Don't try current Altria products to reduce that stress and Out.

  96. Phil/VXX

    tomorrow 13 Put or 15 Call? I know you do not like these but how would you play if you want to for a crap roll.


  97. Albo/SVXY

    what is your trade setup?


  98. Pat – I'm simply short the SVXY index.  Actually today, the inverse index to SVXY, UVXY is up almost twice as much percentage wise as SVXY is down.

  99. I wonder if Trump will talk about the Dow in his next tweets!

  100. TF —wow Phil going to see 1350 — nice call…wish I had the balls to hang but alas did not.

  101. I didn't think that I would get another chance to short UVXY so soon, but tomorrow might be a good opportunity again. Up 33% today. The Jan 19 75 calls are close to $19 now. Another nice push tomorrow and we'll be over $20 again.

  102. SVXY / Albo – A bullish bias? What gives you that impression?

    SVXY ProShares Short VIX Short-Term Futures ETF monthly Stock Chart

    Good for a trade on the downside, but the bias is certainly bullish no matter what. Even with that big dip this month, it's up 1000% in about 5 years. As long as the VIX reverts to normal, this will always go up long term. The drawdown can be quite dramatic though but short lived. But years like 2007/2008 would have been rough although you would not have lost money if you stayed long. As opposed to UVXY where they have to keep resetting, SVXY has to be split from time to time. That's an indicator there.


    It’s interesting that an investment structurally a winner albeit with occasional setbacks is not as popular as a fund like VXX that’s structurally a loser, but holds out the promise of an occasional big win.

    It seems that people would rather bet on a correction, rather than the slow grind of contango.

  104. SVXY/Albo – I thought there would be more decay but it holds up well.

    VXX/Pat – History says the short is the play to make but could go either way on a Friday.  

    1,350/Latch – Don't worry, there will always be new opportunities.  

    Terrible finish for the indexes and, guess what?

    Date Open High Low Close* Adj Close** Volume
    Aug 17, 2017 246.24 246.60 243.10 243.14 243.14 115,406,631
    Aug 16, 2017 247.11 247.57 246.45 246.94 246.94 55,201,400
    Aug 15, 2017 246.98 247.00 246.16 246.51 246.51 55,242,700
    Aug 14, 2017 245.59 246.79 245.55 246.54 246.54 72,139,000
    Aug 11, 2017 244.02 244.80 243.75 244.12 244.12 74,869,900

    Not that 115M is much but it's way more than we've been getting this summer.  

    Good note, StJ.  

  105. LOL – OOP finished at 215% (not including changes).  I knew we were properly hedged there.  

    LTP dropped about $10K to $1,466,221 and STP gained $20K to $518,310 (not including changes) so all is well in portfolio land.  

    Even the Butterfly held on to $337,577.  

    Days like these are the best times to get those real-life checks on how well-balanced your porfolios are.  If you are out of balance, try to ask me overnight or early tomorrow as the day's trading session may be a bit hectic.  

  106. What the tax cuts and spending cuts will do to your income:

    Very different from previous GOP proposals!

  107. Ru-ro!

    This chart shows the damage done to German savers. Real yields negative since QE. Avg real yield since the 1970s is 3.3%.

    President Trump will not move forward with a planned Advisory Council on Infrastructure, source says

    Hospitals in Trump country suffer as Muslim doctors are denied visas to the U.S.

    A study finds the president's toxicity trickles down to office life

    The Trump administration’s hateful rhetoric toward racial, religious and other vulnerable groups is directly related to a documented rise in violent hate crimes. Emboldened by Trump, white nationalist groups have proliferated since last year. A Buzzfeed review of bullying incidents in elementary, middle and high schools around the country found a pattern of “white students using the president’s words and slogans to bully Latino, Middle Eastern, black, Asian, and Jewish classmates.”

    Despite touting himself as the savior of business, Trump’s toxicity incurs all kinds of costs to companies. There’s the obvious human cost of having people feel unwelcome and even unsafe at work. But the problem also affects efficiency, which directly impacts the bottom line.

    “The time it takes to address those situations takes away from other work to move strategic initiatives forward,” Robert Farmer, a member of the Society for Human Resource Management, told White. “From there, it’s going to start to impact productivity and performance.”



  108. Tax cuts/StJ – Hey, I'm liking this Trump guy!  cheeky

  109. The ship is sinking:

    The Cleveland Clinic, a nonprofit health care network, announced on Thursday that it no longer plans to hold a 2018 fundraising gala at Mar-a-Lago, President Donald Trump’s exclusive Palm Beach, Florida club.

    “After careful consideration, Cleveland Clinic has decided that it will not hold a Florida fundraiser at Mar-a-Lago in 2018. We thank the staff of Mar-a-Lago for their service over the years,” the clinic said in a statement.

  110. Protestors line up to be arrested in solidarity with those jailed for toppling Confederate statue

    "He has not demonstrated that he understands what has made this nation great," Corker questions Trump's competence

    Statement from IBM CEO Ginni Rometty to employees makes clear CEOs chose to disband the President's Strategy and Policy Forum, not Trump.

    This is absolutely chilling from Charlottesville synagogue… the US in 2017. Read it.

    Are we great again yet?

    Just for the record: The counter protesters in DID HAVE a protest permit….

    DOE-funded study finds solar and wind power are literally life-saving

    Nearly all men can stand adversity, but if you want to test a man's character, give him power. —Abraham Lincoln







    According to Bank of Americabased on the 20 most widely used valuation metrics, the S&P remains substantially overvalued on 18 of 20 valuation metrics, 

    Don't be shocked if consumers run out of spending money

    From June: U.S. Image Suffers as Publics Around World Question Trump’s Leadership

    Missouri nixes a $2.5 billion line to bring wind power to the Midwest

  111. Phil just  to clarify you think there is the potential for a big move up from here in the indexes? And you won't short oil under 47.50 but  you think there is the potential for a sell off due to the contract situation ? So if CL should pop to 48 you might short and is there a price where you might go long if it drops?

  112. Was the big move you were talking about for the VIX?

  113. Never mind, I see now that you meant the VIX could have the big upside and you think I indices could fail after a weak bounce. Got it.

  114. Wisconsin Assembly passes $3 billion for Foxconn

  115. There is a big sign oil is heading for a rebound

  116. Trump’s NAFTA Agenda—Annotated and Explained

  117. Good morning! 

    Europe is down 0.5-1% but they are just following us.  On the whole, things seem to have stabilized a bit.

    Of course, today is expiration day, so it's crazy to guess what will happen though I'm certainly glad I told Latch not to be greedy and take /TF off the table at 1,350 – hopefully he listened.

    August 17th, 2017 at 3:27 pm | (Unlocked) | Permalink

    /TF/Latch – 1,350 would be a foolish place not to take money and run but you are up plenty now – why be greedy (unless you need the hedge).  Tomorrow is Friday and Friday's can be crazy and when's the last time we had a sell-off that lasted?  

    This is the whole point of the 5% Rule, we KNOW where the bounce lines are likely to be and, therefore, we know where it's a good idea to set our stops.  It doesn't work every time but it's a great guideline and the rest is simply learning to control your own greed and realize a 1.25% correction for one day in an index is a lot and 2.5% is highly unlikely and 2%, as the RUT was down yesterday, is the weak bounce line from a 2.5% drop (that didn't happen yet), so of course it's going to be some kind of support – especially if it's held up for a while.  

    So, for the day, the RUT was down 2% at 1,350 from 1,380 and the -2.5% line is 1,345(.50).  

    The 2.5% drop is 35 points so 7-point bounces to 1,352 and 1,360 (round to whole numbers if reasonable).

    1,350 is already a firm long-term support, so it's very unlikely we break it without a bounce first.  

     1,380-1,350 was a 30-point drop so the weak bounce there is 1,356, which is right between 1,352 and 1,360 so clearly that is the zone of contention we will pay attention to today.  

    Keeping in mind that 1,360 is the strong bounce, if our theory that we're still on the way to the 2.5% line is correct, then 1,360 should absolutely fail today.  Unfortunately, it's expiration day and the trade action will be very manipulated which means it will be hard to take a breakout seriously but a failure – especially if it looks like they were trying – would be significant.

    Anyway, from a getting back short perspective, if we cross back below 1,350 we get back in with tight stops at 1,352 (the long-term weak bounce), if we fail at 1,356 we get back in with very tight stops OR we can play for the $400 loss with conviction up to 1,360 but super tight stops above that.  

    Oil/Craigs – Unplayable in the middle of a channel dude! 

  118. I just noticed that Nov/Dec is essentially a gap up on the monthly chart.  If we do fail at 1,350 we only have support at 1,300 and, below that, back to 1,200 – undoing the entire Trump bump.  

    I mean, really, did the economy actually double since 2007 or will we, perhaps, have a pretty big correction at some point?

    1996 3.8% $10.561 Welfarereform.
    1997 4.5% $11.035  
    1998 4.5% $11.526 LTCM crisis.
    1999 4.7% $12.066 Glass-Steagall repealed.
    2000 4.1% $12.560 Tech bubble burst.
    2001 1.0% $12.682 9/11 attacks.
    2002 1.8% $12.909 War on Terror.
    2003 2.8% $13.271 Iraq WarJGTRRA.
    2004 3.8% $13.774  
    2005 3.3% $14.234 KatrinaBankruptcy Act.
    2006 2.7% $14.614 Fed raised rates.
    2007 1.8% $14.874 Bank crisis.
    2008 -0.3% $14.830 Financial crisis.
    2009 -2.8% $14.419 Stimulus Act.
    2010 2.5% $14.784 ACADodd-Frank.
    2011 1.6% $15.021 Japan earthquake.
    2012 2.2% $15.355 Fiscal cliff.
    2013 1.7% $15.612 Sequestration.
    2014 2.6% $16.013 QE ends.
    2015 2.9% $16.472 TPPIran deal.
    2016 1.5% $16.716 Presidential race

    That's the change in GDP – everything else is just you overpaying for stocks!  

  119. Also, going forward, what do we know for a fact?

    • Global populations are aging, driving up health care and retirement costs.
    • Those programs are underfunded world-wide.
    • Individual retirement accounts are underfunded world-wide.
    • Government debts are running 100-200% of GDP around the World.  That makes debt service 2-4% of GDP (our $320Bn cost in right on target) 
    • Corporate debt is also at an all-time high with China way out in space somewhere.
    • Rates are being artificially depressed by Central Banks 
    • Blame it on what you want but the climate is changing and change like that costs many hundreds of Billions in damage.

    We have to consider these factors when making our long-term investments.  Pricing the market where it is right now ignores these undeniable macros because the price is based on long-term projected earnings expansion at rates we're simply not seeing now.  

    If we do expand at rates to justify the multiples, then we have inflation and rising rates and the Debt blows up – we can't have it both ways – yet the Central Banks have been giving it to us both ways for years now – so long that we don't even know what the economy would look like if they stopped boosting it.  

    Meanwhile, the CBs keep running up their own balance sheets – this is brand new debt that never existed before – well over $20Tn including the BOE, Swiss, etc.

    Where is the market taking this stuff into account?  That's why I can't, in good conscience, be gung-ho bullish in our portfolios.  Just like 1998-99, it's a great party as long as it lasts but you'd damned well better be ready for the day the music stops.  Maybe everything goes great and our hedges are a waste of money and maybe I shouldn't be investing in defensive stocks but, having gone through 1999 and 2008 and seeing how many people got wiped out – I'm always going to be the cautious one in the room.  

    I'd rather make 20-40% consistently and lock it in than make 60% one year and lose 40% the next.  Keep in mind, that 40% is over EVERYTHING, not just the 60% you made.  So 100, 160, 256 if you make 60% two years in a row (or weeks if you trade short-term) and then a 40% drop takes you back to 154.  If you make 25% a year and don't blow it on a downturn, it's 100, 125, 156, 195.  In reality, making 60% in a year is very hard but making 25% is something we can do very, very consistently.

  120. Barcelona attack,   

    34 nacionalities of the victims, 5 children, 14 dead, 3 different actions one blowed up accidentally and decided to attack before being discovered, I was in Barcelona square today , 100, 000 shouting   "we are not afraid", life and businesses as usual, bars, restaurants and stores open, tourists filling all places at this moment.

    I can't attach videos. Regards 

  121. Hi Advill Nice to hear from you, I sent you a message yesterday after the attack, glade to see you are OK.

  122. Funny walk that street only in April with some other camer friends,

    ISIS that would be a good point for Trump the clown to flex his mussle or may I say his big mouth?

  123. Yodi Sorry I didn't see it,  thanks for your wishes.

  124. Advill in deed it makes me sick to see what is happening in Europe, I am sorry to say but if I see a woman with her head covered, it makes me shiver. Last year, when I set in a street side café on the champs Elise in Paris, I saw many of them walking around with paper cups in there hand. Thirty Years ago same place I enjoyed pretty dressed ladies walking the same street. Hell what a change!

  125. Blowback is a bitch.

  126. Yodi, Europe is the retort of what the world will be, I know what you mean… but is what it is.

  127. Some additional comments to my armchair trades.

    After the dip of yesterday my overall down turn on all my port were 1.2%. However, looking at the total value of stock used for my armchair trades, the value was still relative higher than the value when I purchased the stock.

    Meanwhile, for those who ask what will I do if a put is assigned to me, I received an assignment of XOM this morning, my Sept 82 put was assigned.

    Here my action, for the amount of stock assigned 200 off, my new horse has to work. By selling 2x Jan18 77.5/75 strangles for 5.25. So we see how this works out. I received the stock now 76.40 and if  the 77.5 caller will be called for, well it is a 1$ more in stock value, than today. Meanwhile this horse will produce every month.