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Which Way Wednesday – Pavlov’s Tax Cut

Image result for pavlov cartoonTrump will cut taxes!  

That's what took the Dow 200 points higher yesterday.  Have we heard that before?  Yes – for almost a year now, that's been driving the markets higher and any time the markets need a boost, they promise us tax cuts and, like well-trained dogs and, like I said in the title of yesterday's Morning Report: "Fools Rush Us Towards the Strong Bounce Lines."  

As we expected, we did hit our strong bounce lines on on the Futures in yesterday's action at Dow 21,800 (21,850), S&P 2,442.50 (2,450), Nasdaq 5,850 (5,870) but missed Russell 1,377.50 (1,372.50) so we shorted the Russell at the 1,370 line and, this morning, we're already up $250 per contract at 1,365.  That's exactly what we said we'd do – wait for the strong bounces and short them as they cross back under.  Now we're waiting to see if the other indexes cross back under or if the RUT comes up to join them and confirms a more bullish rally.  Dow (/YM) 21,850 is my next favorite short. 

Our long position on the Nikkei (/NKD) was good for gains of $500 per contract on the way up and yes, we could have made more money on the Dow or the Nasdaq – but we weren't that confident in the morning that the indexes wouldn't head further down and /NKD seemed like the safer bet.  We have a Live Trading Webinar at 1pm, EST and we'll look for some new opportunities this afternoon.  

We are back long on Coffee, using the /KCH8 (March) contracts.  I was encouraged by finding a bit of support at $130 ($133 in March), though below $130 we will stop out and wait for a better bottom.  Our long premise on coffee is that Global Warming will disrupt production and, right now, Italy is having a terrible grape season due to a drought (go long Italian Wine).  As noted by the Times:

The warming temperatures, shortening of the seasons and unseasonal storms brought on by global climate change are hastening the harvest of perhaps the most venerable crop of Western civilization.

Other studies have suggested that traditional wine-growing regions in Europe and around the world will become too hot for the berries traditionally linked to their earth and climate, or terroir, and will be forced to adopt varietals built for heat.

I almost hate to mention the Coffee ETF (JO) as it's been a frustrating play and we gave up on it in favor of the Futures contracts but it is at $16.80 and you can sell 5 March $15 puts for 0.50 ($250), which obligates you to own 500 shares at $15 and then use that $250 to help fund 10 $15 ($2.45)/17 ($1.35) bull call spreads at $1.10 ($1,100) for net $850 on the $2,000 spread that's starting off almost entirely in the money.  If JO finishes above $17 at March expirations (16th) you make $1,150 (135%).

Remember, we would not be surprised at all if coffee falls another 10% and tests the $120 line, so it's the kind of trade you need to have dry powder (and a strong stomach) for.  

Futures, on the other hand, are way more fun.  Even as I'm writing this the Russell (/TF) shorts are closing in on $1,500 profit for the day, with 3 of 4 stopping out on the bounce at 1,360 so far.  The way our system works is we cash out a nice winner like this one (locking in the gains) and then look for a "fresh horse" – an index that is lagging the others to the downside and, more importantly, is close to a nice upside resistance point we can stop out at with little damage which, as I mentioned above, is the Dow (/YM) at the moment.  

It's nice to make $1,500 before breakfast and then get back to cash and enjoy the rest of your day.  If you learn how to do that just 50 days a year, you pocked an extra $75,000 – don't you think that makes it worth learning how to trade futures?  Personally, that's all I'm going to do when I retire – wake up, make a few trades and, if I have a good day, I get  nice lunch and, if I have a bad day, I just go for a walk and have lunch at home.  Even in New York City, $1,500 buys you a very nice lunch!  

As I've mentioned before, we trade Futures for fun while we wait for our long-term trades to mature.  We end up talking about them more often because they trade every day but yesterday, in our Live Member Chat Room, we went over our Watch List which, in it's first 6 months, has 12 clear winners, 6 trades where the stock is flat (but our "Be the House" trading system makes them profitable anyway) and 6 that are even better entries than where we started in March (always look on the bright side).  

One of the stocks on our watch list that got cheaper is Limited Brands (LB) who we talked about on Benzinga's Pre-Market Prep on Monday as a contender for our Trade of the Year for 2018 (if it stays this cheap).  We think this year's 45% drop is way overdone due to several factors we have discussed before in our Live Member Chat Room (join the fun here) and the LB trade idea we has for Benzinga was:

  • Sell 5 LB 2019 $30 puts for $4.10 ($2,100) 
  • Buy 10 LB 2019 $35 calls for $6.20 ($6,200) 
  • Sell 10 LB 2019 $47.50 calls for $2.50 ($2,500)

That puts you into the $12,500 spread at net $1,600 (we did the math wrong on the radio) with $10,900 upside (681%) at $47.50.  The worst case is LB is below $30 (20% down from here) and you are forced to buy 500 shares for $30 plus the $1,600 you are out of pocket for so about $33 per share is still a 10% discount to the current prices as your worst case.  

We also talked about low-volume moves and it doesn't get much lower than yesterday's 57.6M shares traded on the S&P ETF (SPY) in the "rally" compared to 128M and 136M in Thursday and Friday's down action.  So we dropped from 2,470 to 2,420 on 264M shares and then we recovered from 2,420 to 2,455 on barely 100M shares traded in the two subsequent days.  That's how we can short this bounce with confidence – there's no real base here – it's just a pump up to suck in the retail traders so the funds can dump their next round of stocks on.  

Do you really think it's a coincidence that the market is sliding and Trump wakes up and starts tweeting about tax cuts?  Of course, last night we got right back on the crazy train with Trump threatening to shut down the Government if he doesn't get his wall.  That sent the Dollar down half a point, back to 93 but recovering a bit this morning to 93.20 as most Congresspeople pointed out that lunatic doesn't have the power to shut down the Government.  Trump came down hard on the media – especially CNN, while his team was busy publishing fake photos of the crowd at his rally (they used the crowd from the Cavaliers 2016 Championship Parade and photoshopped it to boost the President's image).   Yes, things are that bat-shit crazy here in America!  

In reality, there was a massive crowd of protestors outside the arena, who clashed with the police and were tear-gassed, pepper sprayed and blinded with flash grenades.  Trump, who loves to have a scapegoat, blamed the media for – well for everything.  In last night's speech he:

  • Accused the media of turning “a blind eye" to gang violence
  • Accused the media of “trying to take away our history and heritage” (re: Confederate statues that states and cities are taking down after Charlottesville).
  • Accused the media of giving a platform to hate groups (“The only people giving the platform to these hate groups is the media itself.")
  • Called journalists “sick people”
  • Said this: “You would think they want to make our country great again. And I honestly believe they don't.”
  • Said the media is "the source of division in our country."
  • “If you want to discover the source of our division in the country, look no further than the fake news and the crooked media, which would rather get ratings and clicks than tell the truth,” he said.

Trump also said he would terminate NAFTA, which is something that would make the markets very nervous – if they took him seriously.  "Personally, I don't think we can make a deal because we have been so badly taken advantage of," Trump said during the rally.  "I think we'll end up probably terminating NAFTA at some point."  Officials from the U.S., Canada and Mexico met in Washington last week to officially start renegotiating NAFTA, the deal that has bound the three economies together since 1994.

Why do investors believe Trump when he says we're going to get a tax cut but then ignore him when he says he will terminate NAFTA?  Trump also had harsh words for GOP senators McCain and Flake, both from Arizona.  The crowd at the Phoenix Convention Center immediately began jeering McCain, a longtime Trump critic who delivered the tie-breaking vote that sank the Obamacare repeal bill.  Trump’s attacks on Flake, a vulnerable senator facing reelection in 2018, have infuriated senior Republicans, including Senate Majority Leader Mitch McConnell, who have vowed to defend him. In the days leading up to the rally, several of Flake’s Senate colleagues put out statements defending him, a not-so-subtle warning to the President not to go after the Arizona Republican. 

And you wonder why we're shorting the market?

Just be careful out there…



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  1. The only thing missing at Trump's rally last night were the brown shirts… The guy is unhinged – journalists should be scared. And it's mystery they didn't have all the local dogs running in with all the dog whistles! 

  2. Interesting figures:

    The biggest opponents of passive investing often come from active investment firms and you can see why from these revenue numbers. While passive funds account for 18% of assets, they earn just 6% of the fee revenue. It’s no wonder active firms are constantly bashing indexing and ETFs. They know a shift to lower cost products will put fee pressure on their margins.

  3. Is that a good indicator:

    One reason so many investors are nevertheless concerned: The Dow Jones Transportation Average DJT, +0.87%   has nose-dived and is now 7% below its all-time high from mid-July. In the words of Richard Moroney, editor of Dow Theory Forecasts: “Historically, the economically sensitive Transports have often served as a canary in the coal mine, warning investors of a deteriorating outlook for the economy and corporate profits.”

    Ominous though this sounds, however, Moroney and the other Dow Theorists I track are still bullish. That’s because the stock market must jump over three successive hurdles to generate a bear-market signal, and it hasn’t even cleared the first.

  4. Morning everyone!

    It's webinar day! Join us at 1pm eastern, here:

  5. ahh the mystery of it all.

  6. Just to be precise…….

    ~~ CTL – CenturyLink target lowered to $26 from $27 at Morgan Stanley.  

  7. Good Morning.

  8. Anyone else buy FTR at 12?

    Can I get a FU or two? Not terribly confident in the short term but I did cash my TNA calls yesterday and doubled my normal TZA calls as well as SQQQ calls… so I will be prepared to buy more razor sharp falling knives…

  9. FU TEVA!!!

    FU FTR!!!

    FU IMAX!!!!

  10. mkuc – did you sell or buy FTR calls?

  11. sold puts

  12. Got $3.80 for 2019 $10 puts on FTR

  13. Sept 15 is ex div date on FTR I believe, now paying over 20%

  14. seer--is there more bad news on TEVA today? Another 26 year low .. dangit!

  15. Good morning! 

    • Aug. U.S. PMI Composite56.0 vs. 54.3 consensus, 54.2 prior.
    • Services PMI 56.9 vs 54.8 consensus, 54.2 prior.
    • Manufacturing PMI 52.5 vs 53.2 consensus, 53.2 prior.

    D.C. deregulation could lift bank profits by 20% – Bloomberg

    • JPMorgan (NYSE:JPM) and Morgan Stanley (NYSE:MS) are set to benefit the most from changes to post-crisis banking rules proposed by the president, according to a Bloomberg analysis. They'd see a pretax profit bump of 22%. Goldman Sachs (NYSE:GS) would gain the least at 16%. Somewhere in between are Citigroup (NYSE:C), Bank of America (NYSE:BAC), and Wells Fargo (NYSE:WFC).
    • In total, the six largest U.S. banks stand to reap an additional $27B of pretax profit. Breaking it down, about $10B would come from having cash and Treasury holdings exempted from leverage calculations, roughly $8B from munis now being considered a liquid asset, $5.5B from a softer bail-in requirement, and nearly $3B from lower compliance costs.
    • Eased capital rules mean more money is available for buybacks … a lot more. Bloomberg calculates banks could theoretically return another $63B to shareholders, or double the amount planned for the next four quarters.
    • Brace for more negative news from Wells Fargo (NYSE:WFC).
    • "The results of our [scandal] reviews will generate news headlines, but even as we face this renewed coverage, the best thing we can do is stay focused on fixing problems," CEO Timothy Sloan told employees.
    • Wells Fargo shares slipped 3% in extended trading on Tuesday before recovering.

    More on Exxon's climate problems

    • "ExxonMobil (NYSE:XOM) contributed to advancing climate science – by way of its scientists' academic publications – but promoted doubt about it in advertorials," Harvard University researchers wrote in the Environmental Research Letters journal.
    • "Given this discrepancy, we conclude that ExxonMobil misled the public."
    • The findings could add fuel to lawsuits brought against the world's largest oil explorer by market value.

    U.S. hospital operators to face soft admissions through next year – Reuters

    • Reuters reports that headwinds from weak patient admissions will continue to affect hospital groups through 2018, driven by soaring out-of-pocket costs and uncertainty surrounding Obamacare. High-deductible plans, which shift upfront costs to patients, have reduced demand for non-emergency surgeries.
    • HCA Healthcare (NYSE:HCA) and Tenet Healthcare (NYSE:THC) have cut their outlooks for the year. HCA expects a compound annual growth rate of 4.8% through year-end, down from 6.7% while THC expects its growth rate to drop to 0.2% from 21%.
    • Participation in high-deductible plans has risen 76% according to lobby group America's Health Insurance Plans.
    • Selected tickers: CYH LPNT QHC SEM UHS

    La-Z-Boy plunges after margins shrink

    • Shares of La-Z-Boy (NYSE:LZB) fall sharply after a painful drop in operating margin in Q2 to 8.5% from 11.4% a year ago.
    • The company saw a reduced level of sales leverage due to lower volume.
    • Stifel Nicolaus warns that the costs of adding new stores coudl continue to drag on margins.
    • The 18% drop in LZB in premarket trading erases a bulk of the gains built up since the middle part of June.

    Wal-Mart to offer voice-shopping

    • Wal-Mart (NYSE:WMT) is about to encroach even further on to Amazon's (NASDAQ:AMZN) turf, as it looks to to advance its e-commerce operations and stay competitive with Alexa.
    • The retailer will soon offer customers the ability to order "hundreds of thousands" of its products by voice through the help of the Google Assistant platform, Walmart's head of e-commerce, Marc Lore, wrote in a blog post.
    • Apple (NASDAQ:AAPL) is scaling back plans to build actual self-driving cars, and will instead focus on creating autonomous systems, NYT reports.
    • It follows complications over the last few years, including shifting priorities, unrealistic deadlines and lack of a clear vision for the end product.
    • In the meantime, Apple is focusing on a self-driving campus shuttle called PAIL – short for "Palo Alto to Infinite Loop."
    • Global smartphone sales to end users were up 6.7% in Q2 compared to the prior year’s quarter and increased 4G demand will drive 2H17, according to Gartner.
    • Q2 sales totaled 366.2M units with Android remaining the market leader with an 87.7% share and iOS holding onto 12.1% of the market.  
    • Samsung (OTC:SSNNFOTC:SSNLF) led vendors with a 22.5% market share and 82.5M shipped units, up 7.5% from the prior year’s quarter. The growth was Samsung’s first in nearly a year after the issues with the Galaxy Note 7.
    • Apple (NASDAQ:AAPL) sold 44.3M units, down slightly from the 44.4M in 2Q16. Apple shipments should pick up in Q4 as the iPhone 7S, 7S Plus, and 8 hit the market, though the latter could have a soft launch due to supply issues. 
    • Huawei rounds out the top three with nearly 36M units sold, up 17% on the year, and a 9.8% market share. 
    • Tailwind: Gartner research director Anshul Gupta says that 4G smartphone demand in emerging markets has created “higher demand for midpriced [$150 to $200] smartphones.” 
    • Headwind: Gupta notes that flash memory and OLED supply issues, expected to slow down the iPhone 8, will affect most premium smartphones in the second half. 
    • Previously: Bloomberg: iPhone 8 face recognition will unlock in "few hundred milliseconds" (Aug. 22)
    • Global mobile DRAM revenue rose 14.8% sequentially in Q2, according to TrendForce’s DRAMeXchange.
    • Samsung  (OTC:SSNLFOTC:SSNNF) topped the market with a nearly 62% share and $3.8B in revenue, up 20.7% on Q1. 
    • SK Hynix (OTC:HXSCFOTC:HXSCL) took second place with a 21.7% share and $1.35B in revenue, up only 4.3% on the quarter because of the company’s limited NAND Flash output that impacted eMCP and discrete product shipments. 
    • Micron (NASDAQ:MU) finished off the top three with a nearly 15% share and $925M in revenue, up 11.6%. Micron will have a tighter 2H due to July’s two-week fab shutdown that cost 50K wafers. 
    • DRAMeXchange: “Top three DRAM suppliers will see further increases in profits during third quarter as the recovery of the smartphone market leads to an uptick in contract prices.”       
    • Previously: DRAM stocks moving as Samsung prepares to raise Q4 prices (Aug. 14)
    • Apple (NASDAQ:AAPL) could announce the new iPhones and Watch on September 12, according to Mac4Ever cited by 9to5Mac.
    • Apple has reportedly told carriers to expect the event on that day. Mac4Ever has a decent track record, but always take this kind of thing with a grain of salt. 
    • More salt for the pile: 9to5Mac reports that Chinese leaker GeekBar, who also has a decent track record, says that the iPhone 8 will come in a 64 GB base model with a 256 GB mid tier option and a 512 GB high-end option. 
    • Apple shares are down 0.43% premarket. 

  16. Jabo-no info on TEVA.  Guessing it's the selling pressure and decline in the market.  Don't have the figures, but I know there is a big short interest so there I buying pressure down here somewhere (wish I knew exactly where!).

  17. thanks seer…the selling pressure is never ending..for now

  18. Big Chart – Notice those descending tops – if that pattern holds, it's bearish. 

    Brown shirts/StJ – He was literally inciting violence against the press.  How long will it be before a reporter is attacked and then Trump and his people will say "we had nothing to do with it"?

    President Trump reignited his war against the news media at a major rally Tuesday evening, where attendees chanted "CNN sucks" and booed reporters in the crowd.

    "Honestly, these are really, really dishonest people and they're bad people. And I don't think they really like our country," Trump said of reporters. He described the media as an "elite" group of "sick people."

    Trump has got to quit stealing speeches!  

    Active investing/StJ – Very true, there's a huge propaganda campaign against passive investing.

    /TF hit 1,369 again so I'm using it for a short again.  

    New home sales for July down 9.4% – big drop!  Prices up 3% anyway due to high-end home sales.  

  19. SGYP    somebody sells 1000 Jan'19 $3 puts for $1.05

  20. EIA has 3.3Mb draw on oil, gasoline down 1.2Mb with distillates flat – better than API so $47.50 should hold and we're good for a holiday run to $50.

  21. Dollar heading lower (93.17), that's helping everything else.  

    /TF 1,370 yet again but getting scary to keep shorting.  

    Oil looking good over $48, /RB over $1.60 – easy money when you pay attention.

  22. They got CMG to $300  

    somebody buys a bear put spread- Oct. $310/285 for $11.70      over 1000 contracts

  23. Phil

     When there is a tax deal to bring back oversea tax monies

     Will that affect shares prices on the companies or is it priced in now

     Do you think there a trade on this event?

     Which companies APPL any others?


  24. CL/Phil


    So 50 is the 'target' for /CL — would you be going in and out along the way?  Like sell at 48.50 and hope for a pullback to re-enter?  Or since its a bit of a conviction play just hold for the target?



  25. You guys probably saw this.

    ~~ESPN removes Robert Lee from calling Virginia game in Charlottesville due to his name..

    Sorry, but this is just plain ridiculous !

  26. "Why do investors believe Trump when he says we're going to get a tax cut but then ignore him when he says he will terminate NAFTA?"

    There are anywhere from 45 to 350 billion reasons why… Drug Trade: Global $750B – The Americas $350B – Mexico $45B – 500K jobs.  Note to self: NAFTA facilitates a TWO WAY trafficking venue.

    The US is the largest market for illicit drugs such as cocaine, crack cocaine, marijuana, heroin, methamphetamines and non prescription oxycodone (Rush Limbaugh Chocks, a staple).

    150M vehicles cross the Mexican border each year, and southbound inspection resources are limited. To avoid financial institution laundering fees est. 15%, most drug profits are bulk shipped back to Mexico as cash. Thus, the main supplier of illicit weapons and money flowing to Mexico and Latin America continues to be the United States.  

    Anyone attempting to interfere with that $45B – $350B flow gets sanctioned.  Last POTUS sanctioned, JFK.  If your naive enough to ask why didn't Clinton, Shrub or Obama get sanctioned, those who cooperate don't.

    That's why so few pay attention when Trump talks NAFTA, its all bluster as they know he would be signing his own death warrant, and not even our nimrod in chief is that fucking stupid. Asked, answered and Out.

  27. CMG/Stock – And they did it without any more rat sightings.   CMG should start doing sushi burritos – they are huge in NY and CA and will likely spread around the country.  

    Taxes/QC – Anything like that is a boost but it really doesn't affect all that many companies (maybe 200). These are the top dogs:

    Image result for companies with the most cash overseas

    Image result for companies with the most cash overseas

    Image result for companies with the most cash overseas

    As you can see, figures are not accurate but you can get the idea of which names come up.

    /CL/Jeff – Yes, in and out constantly.  I'm out now in fact, as I hit $750 and figured we'd pull back from $48.50 anyway.  Concentrating on my /TF shorts at the moment.

    Lee/Albo – That's beyond ridiculous.  

  28. Phil – Hard to argue against that fellow's point in the video, but taking a broadcaster off a telecast because of his name is the height of absurdity.

  29. Phil – /TF  is it leading or lagging at 1372?  3 out of 4 rule.

  30. Phil--have you seen any reason why TEVA is down another 2.5% today?

  31. /TF/Latch – 21,850 is failing, 2,450 still below, 5,870 still below 1,372.50 were the morning line so as long as they are all below, I like my /TF shorts.  The breaks we're really looking for are in the post above so these are just pokes with very tight stops.

    TEVA/Jabob – Same reason every day, someone is selling 10% of their stock and it's a competitor who'd love to see TEVA fall out of favor, look risky, lose accounts…

    Powerball is a good bet at $700M tonight, odds are 1/192M so we just have to buy 192M tickets with every combination and we lock in the win!  

  32. Teva……also probably because of the class action lawsuit being filed.

  33. RGC… 6% dividend here

  34. VXX changed to  4-1 ? @ 48.4 

  35. Now the indexes are rolling over.  

    Webinar time!  

  36. powerball/Phil

    But if one other person wins it with you, you are down millions

  37. make that 100mm

  38. We have that conversation all the time but if we had done it every time the payoff was more than 2x ($400M), we'd be Billions ahead by now.  Don't forget, you win all the lower prizes too.

  39. Well mark me down for $5 on that powerball sure thing… Cmon peeps, who's with me?

  40. on powerball, that's not much.  Next best prize is 1mm and maybe you see at most 1mm more from everything else, but you'd invest 384mm and if one person hits it after tax you have about 130mm in lump sum.  Big hit.  Even if you were sole winner, after tax you would be down about 120mm in lump sum

  41. No tax, you expense the cost of tickets and it's only $192M or is Powerball $2?  That would be no good.

  42. Powerball is $2

  43. so ahead if you're sole winner but still down 170mm if you split with one person.

  44. Utility Guy – "Teva……also probably because of the class action lawsuit being filed."

    "The Complaint alleges that during the Class Period, defendants issued materially false and misleading statements and/or failed to disclose adverse information regarding Teva's business and outlook. Specifically, the Complaint alleges that the poor performance of its U.S. generics business resulted in Teva's recording a goodwill impairment charge related to the acquisition of Actavis Generics and was a key factor in cutting Teva's dividend by 75%."

    Everything I mentioned yesterday is coming home to roost and will come out in the wash. Who knew?

    Somebody has a hard on for TEVA, and wants to scoop it up uber cheap, TBD.  Will Mr. Stick come out and sweep this under the rug, with the suit probably settling for far less than value? TBD and Out.

  45. Nat--is it even possible to scoop them up uber cheap?

  46. Utility Guy – Who's Next? – Guidance, lack of organic growth, acquisition spree, increased competition, pricing, debt, free cash flow, see a pattern here? Not a bargain? Hint… ask you doctor if Humira is right for you and Out.

  47. Morgan Stanley

    Login to View

    Lowers Target

    Frontier Communications Corporation (FTR)

    Equal -> Weight



  48. Phil, is it time to jump into CMG yet?

  49. Powerball/Rustle – Well $2 is not worth it, no wonder the jackpot is so high.  That means we have to wait for at least $1.2Bn to risk playing.  Meanwhile, we'd better start filling out those little cards!  

    FTR/Jabob – $16?  We'll take it at this point!  

    CMG/JMD – I like them down here.  They are not cheap at $8.5Bn with $500M in profits (in an ordinary year, which this is not) so p/e about 17 is not a huge bargain but I like them for international expansion and also because they keep trying other franchise ideas and I think they'll hit one eventually and bump the value up 30% or more.  See the adjustments we made in the LTP review this weekend, we dropped to the 2019 $280/420 bull call spread but, from scratch, I'd go $280/350 and we sold the $350 puts because that's our 16-month target. 

  50. Court ruling could broaden U.S. environmental impact studies, analysts say

    • Regulators approving new gas pipelines must try to analyze potential effects on greenhouse gas emissions before approving them, the D.C. Circuit Court of Appeals court said in a ruling yesterday that could have far-reaching effects on infrastructure projects.
    • The court said that while approving three gas pipelines proposed by Duke Energy (NYSE:DUK), the FERC should have considered the environmental impact of the greenhouse gases likely to be emitted when the gas is transported.
    • While some experts say the ruling means little more than more paperwork for regulators, others believe it could change the way the U.S. government decides which issues to examine in environmental impact studies required under the National Environmental Policy Act.
    • Coal producers Murray Energy and Foresight Energy call for a formal proceeding against CSX (CSX -2.1%) at the U.S. Surface Transportation Board to address the railroad's "brazen refusal to meet the demands for coal transportation."
    • Murray and Foresight say CSX harbors an "open disregard for the coal industry" and allege the railroad has "cavalierly announced its intention to neglect the entire [coal] segment."
    • Murray has been particularly vocal against CSX delays (III) as the railroad continues its transition to a precision railroading model under new CEO Hunter Harrison.
    • WSJ yesterday ran a report critical of CSX's changes that have caused "a summer of woe in supply chains at farms, mines [and] manufacturers.

    • Airline stocks trade lower after pricing pressures resonate around the industry.
    • Iceland-based budget airline WOW Air announced service from four U.S. cities (Detroit, St. Louis, Cincinnati, Cleveland) in the Midwest today, while weak close-in business demand continues to chip away at unit revenue forecasts.
    • Notable decliners include Delta Air Lines (DAL -2.1%), American Airlines Group (AAL -3.1%), United Continental (UAL -2.8%), Alaska Air Group (ALK -3%), SkyWest (SKYW -2.1%), Southwest Airlines (LUV -3.1%), Spirit Airlines (SAVE -3.2%), Allegiant Travel (ALGT -1.4%) and JetBlue (JBLU -2.9%).

    Nordson upgraded to Buy at Gabelli, as selloff presents buying opportunity

    • Nordson (NDSN -1.9%) is lower despite winning an upgrade to Buy from Hold at Gabelli, which says the stock's post-earnings selloff presents a buying opportunity.
    • NDSN shares sold off by more than 10% after releasing strong FQ3 results with a soft FQ4 outlook, but Gabelli says the company shows no structural deterioration in fundamentals around growing end markets.
    • Gabelli considers NDSN a high-quality compounder with enduring competitive advantages in consumer-oriented end markets that offer better growth and profitability opportunities than those available to a typical industrial manufacturer, and is an excellent cash generator to boot.
    • American Eagle Outfitters (AEO +6.6%) rode the back of a 26% pop in comparable sales for the Aerie brand to a Q2 earnings beat. Despite a year-over-year drop in profit, analysts and investors are positive on the results.
    • "Cautious optimism as early signs suggest improving trends in 3Q," tweets Buckingham Research.
    • "We are particularly encouraged by the progress made in categories like jeans where more emphasis on features like style and fit have helped to boost sales and attract more customers," GlobalData Retail analyst Anthony Riva chimes in.
    • Sources: CNBC and Buckingham Research's Twitter feed
    • Shares of AEO popped their heads over the $12 level before dropping back again.
    • Previously: American Eagle Outfitters higher on earnings beat (Aug. 23)

    • The selling has intensified in PetMed Express (PETS -13.7%) on an 11x surge in volume. Shares have lost a third of their value since touching $50.90 on July 27.
    • Two articles were published today that are, no doubt, contributing to the selloff. The first, from Aurelius Value, claims the company's bullish results the past two quarters are due to its promotion of opioids to humans, not pets. The second, by Huffington Post, addresses the growing problem of pet owners procuring opioids from veterinarians.

    Google roundup: Cloud Platform gets service tiers, a look inside Waymo

    • Google (GOOGGOOGL) is offering Cloud Platform users two networking options: the higher cost Premium, which routes traffic over Google’s high-speed internet, and Standard, which routes traffic over the public internet.
    • The Standard tier costs about 24% to 33% lower than the Premium, though the pricing works differently. Premium is priced based on the distance between source and destination, while Standard prices only on the source.
    • Want a deeper look at Alphabet’s Waymo self-driving car unit? Check out Alexis C. Madrigal’s exclusive for The Atlantic
    • Madrigal reports on the self-driving software, nicknamed Carcraft, and the testing facilities Alphabet has built to make sure the tech is ready for any road condition.  
    • Previously: Google Home launches Wal-Mart shopping (Aug. 23)

  51. Opioids for animals. Why didn't I think of that? My dog has been selling his stash on the street, Sheesh.

  52. TEVA down 3% at a 26 year low. I can't believe this is because of the lawsuit? 

  53. BDC did you get my contact info/Greencoin login from Greg?

  54. BDC…….bought some Greencoin today.  We can get on with the rocket like upward trajectory on the value anytime now. :)  

  55. Getting a little push up into the close again.

    Dollar keeps getting driven lower, now 93.075

  56. BDC/Greencoin,

    There are 3 payment methods to buy the BDC, bank , paypal and credit card. Paypal is just to sell and Credit card is just to buy. I am little hesitant to provide the bank details since it is asking for the bank username and password while setting up the account. How have you done it? Can I do paypal and cc and then do the transactions?

    I am planning to put $1000 in the green coins.


    • With rough earnings from WPP (WPPGY -11.5%) serving as a global advertising bellwether, rivals' stocks have declined today, along with many from complementary media companies.
    • Interpublic Group (NYSE:IPG) has slipped 6.1% to a near-two-year low. Omnicom (NYSE:OMC) is off 6.7% to a 52-week low. And Publicis Groupe (OTCQX:PUBGY) is 2.7% lower.
    • WPP is the world's largest advertising company, so its warnings about a potential sharp pullback in spending from advertisers (particularly in North America) are being heard by investors far and wide. Media stocks are generally lower as a sector.
    • In Europe, ITV declined (OTCPK:ITVPY is 2.4% lower in OTC trading). Sky (OTCQX:SKYAY) is 0.7% lower.
    • PetMed Express (PETS -7.1%) is down for the day on a 27x surge in volume, but the stock has bounced back over 15% from the intraday low of $31.92.
    • In a statement, it acknowledges that it sells opioid Tramadol and and anticonvulsant Gabapentin, but they account for less than 1% of annual revenue. It adds that it dispenses the medications for animals only under valid prescriptions and will defend itself "vigorously against these false allegations."
    • Previously: PetMed Express continues slide, down 14% (Aug. 23)
    • Baird calls out its prediction on restaurant survivors and losers amid the ongoing trend of slow mall traffic as the Amazon Effect continues to disrupt retail.
    • "We would expect the traffic impact from changing retail traffic patterns to be most pronounced for Cheesecake Factory (NASDAQ:CAKE) and BJ's Restaurants (NASDAQ:BJRI)," warns the analyst team.
    • Baird says the least pronounced impact should be on McDonald's (NYSE:MCD), Yum Brands (NYSE:YUM), El Pollo Loco (NASDAQ:LOCO) and Jack in the Box (NASDAQ:JACK).
    • Destination concepts Texas Roadhouse (NASDAQ:TXRH) and Wingstop (NASDAQ:WING) coud also be survivors.
    • Baird isn't the only smart cookie in the jar. Who sees a better restaurant stock play given the fall of the mall?
    • The global semiconductor market will increase 17% this year to $397B, according to World Semiconductor Trade Statistics estimates.
    • WSTS raises its guidance from the previous 11.5% increase based on rising chip average selling prices or ASPs.   
    • The firm expects memory sector revenue to grow more than 50% this year, up from its previous 30.4% increase.
    • The semiconductor outperformance could continue on into 2018 with revenues forecasted up 4.3% to $414B. 
    • Source: Digitimes 
    • The Philadelphia Semiconductor Index is trading up 0.41%.

  57.  That was an ugly finish, add to the bearish case.   

  58. Fall of the mall, CAKE – I saw that and immediately thought of the Cheesecake Factory place in old Pasadena, near where I live when not in Korea. A lot of US cities have these "old town" areas, I remember one in Chicago in the late 60s was a popular destination for Indianapolis college kids. Now Indianapolis has its own 'old town'. The point I'm circling around here is that a partial replacement for the disintegrating malls is the 'old town'.

  59. If ad agencies are seeing problems what does that mean for the likes of  FB , etc. ? 

  60. Speaking of FB – apparently not the thing for teens anymore:

    While a slowdown among a coveted, hard-to-please teen userbase is bad news, the flipside for Facebook is that they're turning to Instagram, which Facebook owns.

    They're also turning to Snapchat. eMarketer even predicted that Snapchat would overtake both Instagram and Facebook in terms of teen users by the end of 2017 — a first.

    Snapchat I don't get….

  61. Phil – Tax loss selling – Phil a lot of stocks are cheap that we follow TEVA, LB, FTR, CBI etc. I am not sure there is a near term turnaround for these in the next few months given the market in general and their specific lack of momentum.  What are your thoughts on establishing positions by buying Jan 2019 calls but selling Dec 17 calls that are in the money or close to the money and then in January after tax loss selling is done, selling 2019 calls.  Given the extent to which these are down and the fact that there may be reduced taxes on capital gains in 2018, doesn't it seem likely that there could be continued dumping of stocks that are down significantly (or at least a lack of short term momentum)?  Worst case to me you do Jan 2019/Dec 2017 vertical spreads you close out positions with a small gain in December if the stock goes up or roll out the Dec 2017 call.  If it goes down, you have lowered your cost base with the expiring December sold call and then can position once again later in January 2018 by selling 2019 calls as buyers appreciate how cheap these stocks have become.  As an example in your LB example sell some Nov 2015 $37.50 for $2.20 (December not available yest) as an alternative to Jan 2019 $47.50 for $2.50.   A combo of the two might be best.   

  62. pat / BTC-buying: I've been using coinbase pretty exclusively for a few years now and not sure about other methods.

    I googled for it and found this, but never have personally used it.

  63. tangledweb – sent email

  64. Since we throwing Hitler and Nazis terminology out there, lets not forget Stalin.

  65. Trump berated multiple GOP senators in phone calls

  66. LOLZWTF? @ latch this your response to a peaceful protester being murdered?

  67. BDC. A Sherlock Holmes you are not

  68. But I'll ask you. What's your response to the Missouri Senator who wants our President to be assasinated ? Our our police officers murdered by BLM supporter.

  69. Federal judge again throws out Texas voter ID law

  70. Stocks Perk Up Ahead of Jackson Hole Symposium

  71. Alaska’s Permafrost Is Thawing

  72. Good morning!

    Getting some movement up in the Futures with Europe up half a point.  Draghi made nice noises again so everyone is betting Jackson Hole will be a dove-fest.  Essentially, the message from the Central Banksters is "keep buying equities – we're ready to bail you out" – and the rally continues.

    That's not stopping me from having 2 /TF shorts at 1,371 though – more fun to bet the bear side.  

    Once again, if we're going to be bullish and the Dollar stays green, /NKD is fun but I'm not feeling it this morning.  

    /KC tried to shake out the weak hands before turning higher:

    This is why I don't set stops.

    Of course, on /SI, a stop would have been useful but that's why I don't go long up in a channel:

    Don't blame the Dollar:

  73. CS downgrade 3 weeks ago and cut their price from 39 to 25.

    Today they downgrade them again and cut from 25 to 13?


  74. Downgrade/Jabo –  How often are they correct? and, are the alway close to target?  thanks

  75. don't know how often but i wish i would have sold when they ALL started cutting them 3 weeks ago. 

    would have saved me a ton of $$

    instead, i bought more of this falling knife and added to the mounting losses…

    FU ME!!!!!

  76. Old town/Snow – You can't get kids to go anywhere is the problem.  We were watching Amadeus last weekend and we were talking about why music/theater was so important back then – as it was essentially the only entertainment people had.  To them, it's a nightmare world they can barely imagine as they are used to being entertained every waking moment of their lives.  They don't see the point in local theater or bar bands as there are much better bands in their hands and, if someone is good, they'll be a YouTube star in no time – so no sense seeking them out in a club and risking wasting time on sub-par bands.  Also, B sides don't exist anymore – they want the hits and that's that.  

    If I were going to design a mall, I'd have plenty of restaurants and lots of hanging out nooks where groups of kids can sit and charge their phones.  SBUX is a must, of course.  I'd have a cat cafe and a dog cafe and a Dave and Busters (PLAY), a high-tech bowling alley and, of course, movies.  BKS is surprisingly popular around here, ice skating would be nice too and maybe some mini golf.  That's what malls need to do – they need to be places where people can hang out for various reasons and, if they accomplish that – then some of those people will be in the mood to shop.  TGT would be good to have as a major store – another destination store for kids.  

    Design-wise I'd love to try a pyramid, like the Luxor in Vegas, with parking at the bottom and a deluxe restaurant at the top with a rope and climbing course in the middle of the upper floors and maybe some zip-lines across the lower floors and big glass elevators going up the middle so you can see all the stores at every floor on the way up with a great view of the main floor and all the activities from balconies at every level.  

    Image result for luxor vegas

    The Luxor, by the way, is the best cheap hotel in Vegas.

    Ads/Pstas – Well I imagine FB is one of their problems.  Companies don't tend to use agencies to place social media buys though the ad firms are trying hard to capture it.  

    FB/StJ – Yep, kids don't like it but then they get old and set up accounts anyway.  It's all about SnapChat with kids – they live and die by the "streaks".

    Some of your friends on Snapchat may have an emoji next to their name. You can read more about those here. Curious about the ???? emoji in particular? Read on!

    Q: What does the ???? even mean? 

    A: You and your friend are on a Snapstreak - meaning you and your friend have Snapped each other (not chatted) within 24 hours for more than three consecutive days. 

    Q: What does the number next to the ???? mean?

    A: The number next to the ???? tells you how many days you've been on a Snapstreak. For example, if you have an '8' next to the ????, it means you both have Snapped (not chatted) back and forth with this friend for '8' days. (Pretty impressive we might add!)

    Q: How do I keep a Snapstreak going?

    A: To keep a Snapstreak going, both Snapchatters must send a Snap (not Chat) back and forth to each other within a 24 hour window. 

    Q: How do I know if my Snapstreak is going to end soon?

    A: You'll see a ?? next to a friend's name if your Snapstreak with them is about to expire.

    Jackie had friends manning her account while we were in Europe in case she found herself unable to connect for fear of losing her streaks.  An experience isn't real to these kids until they share it with their friends.  

    Tax losses/Stu – Well there's always talk of that towards the end of a year.  Your logic is sound but I don't think I'd go full cover – just in case.  

    CNN/Latch – Well context does matter.  That was a panel of TRUMP SUPPORTERS and CNN was pointing out how fanatical their support of Trump was and how these "actual people" believed the kind of BS the conservatives were spinning.  Hard to imagine a rational person would fall for that sort of thing, right?  Don't you wonder why the articles using this clip only show this out of context segment?  

    By the way, here's a real account of what happened in Charlottesville.  Team Trump is spinning AnitFa as some sort of radical group but that's now how witnesses saw the events. 

    There's a lot of fine people marching here:

    Participants in the Charlottesville planning chat were often identified by their group affiliation. Over Discord, neo-Nazi groups including Identity Europa, the Traditionalist Worker Party, and Vanguard America coordinated together on a daily basis.

    They collaborated with other white supremacist groups such as League of the South to coordinate carpools, security, intelligence operations, discuss potential use of weapons, share talking points, and exchange racist comments.

    Senator/Latch – She was immediately censured by her own party and stripped of all of her committee assignments.  What actions did the Conservatives take to crack down on their radicals?  

    I'm sure you genuinely don't remember any of this stuff because of willful blindness so I won't call you a hypocrite…