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Force 3 Friday – Hurricane Harvey Throws Markets into Turmoil

Image result for hurricane harvey animated gifThis is a huge storm.

We haven't had a storm like this hit the land in over a decade and 2-3 FEET of rain are expected where Harvey hits land in the Gulf Basin.  That will take many refiners off-line and Gasoline (/RB) and that's already fantastic for our long Futures contracts, which we discussed during Wednesday's Live Trading Webinar (Oil, /CL too) and /RB is already up over $2,000 per contract at $1.725 while Oil is, so far, struggling to retake $48 but that's still good for $500 per contract every time we go from $47.50 (our long line) to $48.

Also, the Natural Gas (/NGZ7) long trade idea from Monday morning's PSW Report at $3.07 already popped 0.10 for an $1,000 per contract gain - you're welcome!  And, by the way, at the time (Monday morning) we were shorting oil at $50 so the trip down to $47.50 was a $2,500 per contract winner until we called for the turn – aren't Futures fun?  Speaking of fun, the Russell Futures (/TF) are back to our shorting line at 1,377.50 and closing in on the other lines we discussed in Wednesday morning's Report, which were:

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. 

That is the Russell chart from Tuesday morning's Report and, since then (when we were long), we have drifted back towards our shorting line at 1,377.50 but, to stay short, we need to see failure at Tuesday's opening lines (Dow 21,850, S&P 2,450 & Nasdaq 5,870) and it's tricky today as we have the hurricane boosting energy stocks (higher prices and repair work for OIH companies) but we think that will be temorary and, as we predicted in Monday's Report, Durable Goods is a total disaster, down 6.8% and ex-Transports were even worse as leading Economorons predicted a 0.5% increase and we're actually down 0.1% so a 120% miss by the kind of people the Fed relies on to make decisions.  

Speaking of the Fed – it's time for the Jackson Hole meeting and Bloomberg has a fun game of Jackson Hole Bingo we can all play to get ready.  Substitute shots for points and I think we may really be onto something!  

That's right, not even Bloomberg take the Fed seriously anymore because, clearly, they don't have a clue what they are doing.  While they will break their arms this weekend patting themselves on the back for staving off a financial crisis – who's to say we wouldn't have been much better off if they had left things alone?  We had a liquidity crisis because we had too much debt so the Fed stepped in and provided liquidity and now the World has twice as much debt as we had when the crisis began.  Things are not "fixed" – they are merely papered over (see yesterday morning's PSW Report).  

Not only are our Durable Goods numbers anemic but UK Consumer Spending is up just 0.1% with 0.3% GDP growth and NONE of the G7 have cracked 1% GDP growth so far this year yet the market continue on at RECORD HIGHS – deluded by the constant influx of FREE MONEY and promises of ever more by the Central Banksters, who have no other ideas for fixing the Global Economy other than more and more debt.     

The PBOC is an outlier at the moment as China has been pulling funds from the Financial System, pulling down $50Bn this week alone.  The withdrawals come at a challenging time for the money market, with banks traditionally hoarding cash to satisfy quarter-end regulatory checks. Some signs of stress are already beginning to show, with lenders being forced to pay the highest costs since 2014 for three-month funds and borrowing costs in Shanghai rising to 2.9% on Interbank Lending (3.68% for the 10-year).  

Venezuela, in case you didn't know, is now paying 32.43% on their 10-year bonds – that's worse than Greece at the height of the crisis in a country that is twice the size of Greece but, unlike Greece in Europe, like Mexico in the hurricane map above, Americans don't even care enough about their southern neighbors to even bother labeling their country!  

Rembmer when we didn't worry about Greece and I said we should but most people didn't and then the markets pulled back 20% in 2011?  Ah, good times!  

Have a nice weekend,

- Phil


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  1. Good luck to everybody on the Gulf Coast!

    Image result for airplane good luck animated gif

  2. Starting to get worried that September will get messy with the budget and debt ceiling votes! Trump still coming to grip with what Obama had to face for years – Senate rules! Legislating is hard work. So in the meantime, he is endangering any possible deal that could be made to raise the debt ceiling with a clean bill. Keep your hedges handy!

  3. How much did the bailout cost in different countries – apparently we made a profit here…

  4. GME down 8% pre market on what looks like a one penny earnings miss. But my scan of the call transcript doesn't raise any red flags and same store sales were up, margins were up. 

  5. Oil is turning lower. head fake or retesting the line?

  6. Good Morning.

  7. GNC I wasn't aware that they have 425 ATT branded cell phone stores and that they do a big business in phone trade-ins. They expect a big boost with the iPhone 8.

  8. GME not GNC 

  9. Sold another 1/4 UGA calls on open, up 65%. 

  10. Good morning!

    Still waiting for the same breakouts as yesterday on the Big Chart.

    August 24th, 2017 at 9:54 am | (Unlocked) | Permalink

    Oil took a nice, sharp dip after attempting $48.50 again – so internally weak.  

    /RB made it all the way to $1.65 and that's that for that play.

    Dow right at our shorting line (22,850) but need confirmation:

    2,450 is the /ES line.

    5,875 on /NQ

    1,375 on /ES 

    Dax over 12,250 is bullish so no bear plays if it's over:

    And Eurostock 3,460 (since 3,500 is not going to happen):

    Big Chart – RUT needs to get over 1,378.35 (200 dma) to prove things are turning up.   NYSE nees the 50 dma at 11,837 (20 away at the moment) and SPX needs 2,450 – same as the /ES line.  

    That's a nice time-saver.

    Debt ceiling/StJ – I can't believe they would even entertain doing that again.  

    Bailouts/StJ – Well, for the US, at least, they are obviously ignoring the $3.5Tn (20% of GDP) that the Fed has kicked in through QE but of course the IMF wants to give people the impression that QE was a resounding success ahead of Jackson Hole (hey, let's do it again!).  

    GME/Jet – Not even a major quarter for them.  

    Back long on /CL at $47.50.  

    /TF hit shorting goal at 1,377.50 on the button.  Lined up with 21,840, 2,446.50 and 5,853 with the Dollar at 93.125

    GNC/Jet – I was going to say that's a surprise to me too!  

    Good job Albo.

  11. Bailout / Phil – Ignoring QE from everywhere in that chart! And no figures for China and Japan as they don't fit in the 100% scale!

  12. Here comes Janet !

  13. So, the markets like hurricanes… Got short the S&P at 2433, bring it on.

  14. I'm staying away from shorting the market coming into last week of the month and into a holiday weekend.  Market can easily be manipulated higher on low volume to paint the tape for the end of the month.

  15. Well Yellen didn't say anything too exciting.  That should be a top for this rally.

    • Fed Chair Janet Yellen's Jackson Hole speech sticks to its pre-announced subject matter: Financial stability is a good idea, and a defense of the post-crisis regulatory regime.
    • She doesn't comment on monetary policy, leaving folks guessing as to whether a September rate hike is coming.
    • She's not taking questions following the speech

    Bailout/StJ – Just a propaganda piece, on the whole.  

    Another 20% on GRNBF today!   I wish I were my kids – all my long-shots pay off in their accounts…  cheeky

    Shorts/Rustle – Well it's dangerous but, as I've been making the case for recently, I think the physics are finally kicking in at these levels.  Without MORE QE, etc., they just can't sustain this BS.  US consumers (durable goods) and UK consumers (retail sales) took July off already – how can you pay these record-high multiples for companies working in a stagnant or possibly even contracting economy?

  16. Phil/~~GRNBF

    Can we enter the trade now…off course for our kids


  17. bitcoin officially over 5000

    BTC 4384 + BCH 641 = 5025

  18. Speaking of penny stocks, Maddie asked for $1,600 worth of LQMT (10,000 shares at the time) for her 16th birthday last July.  It's been holding near a double for a while now, I think i might break higher again.  

    The Company will be hosting the public during the month of October to showcase its new, state of the art building. In particular, the Company has set aside October 17, 2017 as the date for its “Open House” specifically devoted to shareholders and investors. The Company will have further announcements with more details related to this event.

    “The Company has devoted much of 2017 to acquiring and building out its new manufacturing facility. Now that we are here, we are truly excited to share our continuing story as we begin manufacturing operations in our new building. I welcome our partners, shareholders and anyone interested in our technology to come join us in celebration of our accomplishments and to get a glimpse of what the future holds for Liquidmetal,” said Professor Li, Chairman and CEO.

    Someone should go check it out!  

    GRNBF/Pat – Realizing it's a total gamble but my attitude is take a chance with about $1,000/yr on speculative plays for my kids and that gives them 20 chances before they graduate college to hit the jackpot but, if they lose, they just end up with a cheaper car than the one I was going to give them.  I'm actually worried one or two will hit it big and they'll have a Million before they ever have a real job – they're never going to learn that way…

    Speaking of cars – I leased my last car with the intention of giving it to Maddie and now she doesn't want it!  She has Uber and spends maybe $250/month (30-40 trips) to go wherever she wants without paying for gas, insurance, parking, repairs, etc.  A lot of her friends are making the same decision and this trend will accelerate as I was an early adopter of Uber and very early in letting my kids use it (they are technically not supposed to under 18) and now it's spread and half the seniors use Uber instead of driving.

    $5,000/BDC – Holy crap!  

  19. Albo – Here's Janet!!! – You asked for it, here is an exclusive photo as Yellen entered the room in Jackson Hole and Out.

  20. NN – Hilarious !

  21. Phil, why the big hit to natural gas despite the hurricane?

  22. The only buyers? I would have thought it increased…geez.

    Teva Pharmaceutical Industries Ltd.’s (TEVA) short interest decreased to 41.93 million from the previous level of 45.91 million. Shares were trading at $16.50, in a 52-week range of $15.85 to $52.66.

  23. I guess that info is 10 days old.. I can't imagine that it didn't increase since then.

  24. TEVA    June2018   5000 $12.50 puts trade today   a roll out from the Jan $15

    • Janet Yellen didn't touch on monetary policy at her Jackson Hole speech, but instead used the occasion to champion the post-crisis regulatory regime and warn against any significant rollback – both ideas squarely at odds with the GOP agenda.
    • At least a couple of analysts are saying the talk essentially takes her out of the running for a second term as Fed boss (her term ends in February).
    • Bank stocks are putting in a modest rally, roughly inline with the S&P 500's 0.35% gain.
    • Stocks start higher as White House economic adviser Gary Cohn says Pres. Trump is focused on achieving tax reform by year-end 2017; Dow +0.4%, S&P and Nasdaq +0.5%.
    • The market does not expect anything dramatic from today's Jackson Hole speeches by Fed Chair Yellen and ECB President Draghi – scheduled for 10 a.m. and 3:00 p.m. ET, respectively – but it will listen for clues as to the outlook for monetary policy.
    • European markets enjoy modest gains, with Germany's DAX, U.K.'s FTSE and France's CAC all +0.3%; in Asia, Japan's Nikkei closed +0.5% while China's Shanghai Composite surged +1.8%.
    • Among U.S. corporate earnings results, Ulta Beauty, Big Lots and Broadcom all trade lower despite beating Wall Street consensus.
    • All 11 S&P industry groups are higher, led by financials (+0.5%); Boeing (-0.2%) is the only Dow stock opening lower.
    • U.S. crude oil +0.3% at $47.60, little affected by Hurricane Harvey's buildup to become a Category 3 hurricane, making it potentially the biggest storm to hit the U.S. mainland in over a decade.
    • U.S. Treasury prices are little changed, with the benchmark 10-year yield up by a basis point at 2.20%.
    • "Starting next week, the president's agenda and calendar is going to revolve around tax reform," National Economic Council Director Gary Cohn told FT.
    • "He will start being on the road making major addresses justifying the reasoning for tax reform and why we need it in the U.S."
    • The current American tax system has remained largely unchanged for three decades.
    • As seemingly happens every few years, there's been plenty of chatter about the death of the mortgage interest deduction, but Trump's top economic adviser Gary Cohn says the coming tax plan won't touch it.
    • Alongside, the administration has no plans to end the charitable donation deduction, nor the tax benefit on retirement savings.
    • Previously: Major tax reform push coming up (Aug. 25)

    • Speaking to CNBC from Jackson Hole, Cleveland Fed President Loretta Mester says the central bank need not wait until inflation hits 2% to proceed with more rate hikes.
    • "We’ve learned over time we need to be preemptive."
    • Consistently a leading hawk on the FOMC, Mester's comments are of no surprise.
    • Investors pulled $2.6B from U.S. stock funds in the week ending Wednesday, according to BAML, with tech funds losing $600M – their largest weekly outflow in nearly one year. Since late June, a full $30B has been pulled from U.S. stocks, while $36B has poured into the rest of the globe.
    • U.S. crude oil prices tumbled 2% today to $47.43/bbl, as pressure from the risk of weaker energy demand in the wake of Hurricane Harvey outweighed the typical price gain associated with likely production disruptions in the region.
    • "It’s a new world since the last storm" a decade ago, says Bob Yawger, head of the futures division at Mizuho Securities; unlike Hurricane Ike in 2008, the worry today is about the facilities that refine the oil instead of pump it, since discoveries in U.S. shale have led to more production from locations further from the coast.
    • According to Commerzbank, the high level of refiner activity has been the sole contributor to the drop in crude storage, as U.S. production and imports have climbed; if refiners stop processing crude, it could lead to another build up in stockpiles, a bearish factor for the oil market.
    • Harvey’s threat to refinery activity pumped up gasoline futures prices, with September gasoline rising 2.8% to $1.664/gal.

    • The American steel industry is appealing directly to President Trump for immediate import restrictions, as a Commerce Department probe languishes and steel imports rise back to 2015 levels.
    • "The need for action is urgent. Since the 232 investigation was announced in April, imports have continued to surge," executives from companies including Nucor (NYSE:NUE) U.S. Steel (NYSE:X), ArcelorMittal (NYSE:MT) and Commercial Metals (NYSE:CMC) said in a letter.
    • Relevant tickers: AKSCLFWORRSSTLDSLX

    Chevy Bolt battery failures reported

    • General Motors (NYSE:GMnotified a couple hundred Chevy Bolt owners about a battery problem, according to
    • The limited issue is related to malfunctioning cells that could lead to a false dashboard reading on range.
    • Though the Bolt issue is minor in scale, the development cuts right into the tricky part of eliminating range anxiety with consumers as EVs are pushed to the mass market.

    And they are back!  Caesars Entertainment moves toward restructuring closing

    Related image
    • Caesars Entertainment  (NASDAQ:CZR) announces that the Nevada Gaming Commission granted the necessary regulatory approvals required for the merger of Caesars Acquisition Company into Caesars Entertainment and for the reorganization of CEOC.
    • "Gaining approval in our home state of Nevada is especially gratifying as we near the conclusion of CEOC's restructuring process," says Caesars CEO Mark Frissora.
    • Caesars Entertainment currently anticipates completing the merger and CEOC's restructuring in the first week of October.
    • Source: Press Release
    • Las Vegas bookmakers have had a difficult time balancing the books on the Floyd Mayweather-Conor McGregor fight even with large bets coming down on Mayweather over the last day and odds being reset.
    • The sizable action on the fight has seen the huge volume plays on strong underdog McGregor not completely offset by the "smart money" million dollar bets coming in on Money Mayweather. "You might want to have a heart monitor on me when the bell rings and Conor starts throwing wild lefts," says William Hill oddsmaker Nick Bogdanovich.
    • Long-shot bets on a McGregor knockout could lead to largest single-day loss ever by bookmakers in Vegas.
    • Despite the outcome of the fight, the Las Vegas Strip is expected to have a banner weekend. Room rate at the Aria, Mandalay Bay, Bellagio and MGM Grand are all 20% to 30% than for the same weekend last year. VIP interest is also sky-high, which bodes well for the table games hold and other revenue streams for casinos.

    Hurricane Harvey to impact retail

    • Hurricane Harvey is expected to have an impact on the retail sector due to store closures in highly-populated areas of Texas.
    • Chain stores with a high percentage of locations in Texas include Stage Stores (NYSE:SSI) with 28%, Dillard's (NYSE:DDS) with 20%, Stein Mart (NASDAQ:SMRT) with 15% and Ross Stores (NASDAQ:ROST) with 15%, according to information compiled by Bloomberg Intelligence.
    • Restaurant companies with significant exposure include Jack In The Box (NASDAQ:JACK), Fiesta Restaurant (NASDAQ:FRGI), Sonic (NASDAQ:SONC) and Texas Roadhouse (NASDAQ:TXRH).
    • Home Depot (NYSE:HD) and Lowe's (NYSE:LOW) are on watch with Hurricane Harvey bearing down on Texas.
    • The home improvement retailers have seen a short-term trading bounce around slow-moving hurricanes in the past and in some cases management has cited enough extra storm-related sales to move the meter.
    • Previously: Hurricane Harvey spooks energy sector (Aug. 25)

    Related image
    • Mutual fund shop Lord Abbett filed suit against Valeant Pharmaceuticals (NYSE:VRX) yesterday in New Jersey accusing it of violating the state's racketeer influenced and corrupt organizations (RICO) law. By invoking RICO, Lord Abbett could seek an award of treble damages, outrageously expensive considering it claims $80B in investor losses.
    • Bloomberg reports that if other investors follow Lord Abbett's lead, the company's legal exposure (and costs) could skyrocket.
    • The company has already stated that it believes the class action lawsuits lack merit and will fight them. It has not commented specifically on the Lord Abbett litigation. In its last 10-Q, the company disclosed a $162M reserve for estimated legal expenses.
    • Shares are off a fraction premarket.

    Amazon announces new fulfillment center in Ohio

    • Amazon (NASDAQ:AMZN) announces a new fulfillment center coming to North Randall, Ohio near Cleveland.
    • The 855K square foot facility will employ 2K full-time associates.
    • The new center will mark Amazon’s third facility in Ohio with the other two already employing 4.5K employees. 
    • Press release 
    • Previously: Impinj shares up 11% on Amazon-Whole Foods news (Aug. 24)

  25. /NG/JMD – It already ran up and now, as they get a better track on the storm, they are better able to quantify just how much it's likely to affect output.   Seems like not as much as they thought.  

    That's why you take the money and run on a nice, short-term move.

    More sanctions against Venezuela.  US citizens/companies may not buy new debt from V.  US companies may not pay dividends to Venezuela (aimed at Citgo).  So now, when the country falls apart and there's chaos – we'll be the bad guys.  

    To Venezuelans, Rubio has become a patron saint — and he’s bringing along for the political ride other Florida Republicans, most notably Gov. Rick Scott, who is positioning himself to challenge Democratic Sen. Bill Nelson for his seat in 2018.

    Despite Trump’s antics — his comment on not ruling out an invasion didn’t go down well in a hemisphere weary of that kind of U.S. history — the Republicans aren’t stumbling on the Venezuelan issue. They’re savvy and coordinated, and without a minute to waste, are already hitting Nelson hard with a misleading ad linking him to Hugo Chávez and equating his support for President Barack Obama’s Cuba-engagement policy with support for the Castros.

    Nelson, a critic of Chávez, called in a Senate floor speech in July for harsher sanctions than the tough-talking Trump and Pence have delivered. “It’s time that we consider cutting imports of Venezuelan oil,” Nelson said. “We are now dealing with a Cuban-style dictator.”

  26. Here is the guy from CS..

    Hope he is proven wrong about TEVA…

    Geez 45%..almost as good as Gartman!

  27. Silver – Anyone notice the crazy moves in silver the last 2 days.  Not that I am a conspiracy theorist but often when it gets upward momentum it seems to get slammed down in a few minutes with outsized trades.  The past couple of days it has dropped quickly but has also quickly recovered which is often not the case. Maybe a precursor to a positive move. 

  28. Silver/Stu – Move was actually in-line with the Dollar but then the metal recovered and the Dollar didn't.  Things are just moving based on loose words at the Fed conference.  

  29. Phil – LQMT – that is intriguing and a nice move from June 2016 at 0.13 to 0.31.  If you like that, tell Maddie to do some research on ATI – Allegheny Technologies.  Under Businesses click on Specialty Alloys and Components.  

    ATI have three plants in the Lebanon – Albany Oregon area.  Those are the ONLY manufacturing sites in the US that can make certain critical Milspec and Aerospace components out of these exotics.  

    Due to national security reasons the military will NOT outsource those contract components overseas. Those three (formerly Oremet) plants are a license to print money.  

    This stock went from 46 to 8 and has rebounded to 20 since Jan 2016 and the Mar 2016 contract ratification that ended a nine month union lockout.  Which I mentioned in passing Dec 2015 here at PSW.  ATI warrants attention moving forward and Out.

  30. KMB a stock not of great excitement but do not shot me, I still have this stock in my port since 2014 at a price of 62$ So today at 122 it has dropped from its high of 132, possible less dippers sold!

    However I feel somewhat secure with more stable stock and add some more armchair trades to my existing position.

    Purchase the stock for around 122 and sell the April18 125/120 Strangle for 10.70. It give me at the present rate of div. and option play a return of 1.37% per month. Not to exciting you will say but 16.44% P.A. is no really anything to sneeze at. Your lower protection runs at 115.72 and obviously the sky can be the limit, as the stock will always protect you for a runaway call option.

  31. ATI/Naybob – It's in the OOP since March.   I've always liked them when they are cheap and we went back in on the dip.  They are one of our old "Boeing Buddy" stocks from way back.  

    I'm liking /RB long again at $1.65 (tight stops).

    /NG bottoming too:

    Coffee finally made a move:

    See, that's why I always try to get back in – you never know when it will pop.

    KMB/Yodi – They're a good long-term play.

  32. Phil – RB RBV or RBU?

  33. Phil are you still long CL for the weekend? Also, looks like Rig count is down

  34. KMB yes Phil just boring, ZZZZZ that is why I call the armchair trades, not nerve racking enough for some members.

  35. Here a little exercise, especially for Newbies by looking at a runaway short call option.

    CM  against this stock I hold the Dec 80 caller. Stock is today trading at 85.20. The ITM Dec. caller has today a market value of 6.15. You may think the 80 caller plus the 6.15 premium makes up 86.15. I still have a comfortable extrinsic value of .95 cents. But hold it the company is paying a div. 1.03 on the 9/27. Now you see I am 8 cents above the fully blown ITM position. The only reason I am possible not called away yet, is, the div will be only paid on 9/27! It is my experience that the gamblers, who bought this call will just about wait till the last day or two before ex div date, which to my knowledge is 8/8/17. So possible they missed the boat, and I might be safe for another quarter. In this case I still hold my 4.61, original received by the gambler, who bought the call, and I still will receive my 1.03 as div.

  36. splitting BCH off from BTC is a pain in the ass. Does anyone else want help with this?

  37. BDC – that would be helpful…Thanks

  38. Yodi / CM – I see the div date as 10/27 and Ex Div Date 9/27 for the $1.0362 dividend payment. You have a few more weeks to wait and see….

  39. Long IBM, short private prisons:

    A study out of Cornell University from February suggests that, at least in decisions of whether or not to grant bail, AI may provide a significantly fairer alternative to human judges. In its machine-learning policy simulation, the Cornell team calculated that such systems can cut crime rates by 24.8 percent without increasing jailing rates by denying bail to the most dangerous offenders. Even more impressive, they may be able to reduce the US prison population by a whopping 42 percent without affecting the crime rate by releasing arrestees with minimal likelihood of committing more crimes. But the key is that these benefits would extend equally to blacks and Latinos as they do to whites. [...]

    Montgomery County Juvenile Court Judge Anthony Capizzi has teamed with IBM to adapt the company's Watson AI system to work within the judicial system. It's part of a pilot program aimed to help judges better understand the nuances of a kid's home life and, in turn, make better decisions in regard to his or her care.

  40. Yodi – Do you have a link to your Armchair trading strategy? Thanks

  41. Jabo – wow, that guy is more likely to be wrong than right…

  42. Eric, You right in this case and I will not be out of the woods. Still these gamblers wait to the last minute for calling for the stock. Thank for pointing this out. In principal the excercise is the same.

  43. Yes, I've been exercised on short calls a few times myself… and will be again in the future…

  44. Bulls,

    The plays are listed under members corner, sometimes hard to find!!! Phil is the expert in finding things!

    The Armchair Trader


    The Armchair Trader

    Updated 3-15-17

  45. Phil

     What do think of  Hormel Foods Corporation HRL ?

     After the earning miss?


  46. I hope so Ilene.

    But TEVA seems like the biggest POS in the market right now. 

    FTR is a close second.

    What's going to make these dogs recover Phil? 

  47. Jabo – Only a change in market sentiment towards these two will provide for a recovery. Once all the weak hands are out of the stocks, then some good news or lack of negative news will allow them to start drifting upwards. FTR may have already reached that point. FTR's volume has increased dramatically over the past six weeks, but hasn't fallen that much – relatively speaking. A neutral or positive earnings report could be the catalyst for the market to have a rethink about the companies prospects…. 

  48. FL   I'm cashing out my B/W and going to a spread. What J 19 spread do you suggest to salvage this position by selling monthlies?  buy the J 19 $35 C for 6.75 sell the $45 for 3. 25? Sell the Sept 36 for 1.10

  49. KMB play above has been closed Stock @ 122.13 and option play 10.70

  50. /RB/Bulls – I've got /RBV7 and /CLV7 (2 of each).

    Boring is good Yodi.

    AI/StJ – That's cool.  And speaking of IBM, we don't have any and they are cheap so let's sell 5 of the 2019 $135 puts for $10.20 ($5,100) in the LTP.  

    HRL/QC – Thjey don't actually have any growth so 20x earnings is not particularly cheap.  Can't imagine any prospects for growth either.  If they had longer options, I might like it for selling premium in a conservative spread but they don't and I don't think selling the March $30 puts for $1.35 is worth the risk of it falling 10% more as I wouldn't REALLY want to own them, even for $28.65.

    Recovery/Jabob – I don't see much hope for FTR or TEVA unless you capitulate.  That would probably get them to turn around.  cheeky

    And what Eric said.  I mean, really, are you actually going to do this for the next 18 months every single day?  

    Image result for are we there yet

    FL/Tx – Well, if you are not really bullish on them then why not treat it more like a butterfly play?  You can sell the 2019 $30 puts for $4.30, let's say 5 ($2,150) and then buy 10 of the 2019 $40 ($4.80)/52.250 ($2) bull call spreads for $2.40 ($2,400) and you are in for net $250 on the $12,500 spread.  Then you can sell 5 (1/2) of the Oct $36 calls for $1.80 ($800) and that's 320% back on your money while you wait.  

    The roll down to the $35 calls ($6.75) would be about $2,000 so after 2 good sales, you could widen the spread if you wanted to reinvest but, either way, it's great for quarterly cash flow. 

    Your biggest danger is that it pops up on you, more than a 2x roll will fix so make sure you would be comfortable doubling up on the longs if you have to.

    /TF flew back up for another reload.  Last one was good for a 5-point drop ($250/contract)

  51. IMAX – nice move up today….  I covered my dec 17 15 calls ( 2.27) with the dec 17 22 calls ( .65). nice BE and hopefully it moves above that.

  52. Phil what price do you have on your 2 RB contracts and are you thinking they will appreciate over the weekend or just going to wait for the holiday pop? Always interested in your thinking on this. 

  53. Uber/Phil-seems like that works for a young person like Maddie, but would it work for you?  I don't live far from you, but wonder about doing things like getting groceries, going hiking, randomly spending time with local friends etc.  

  54. Jabob, If it makes you feel better FTR I am down on this sucker 24K However I did set up an Armchair trade on this one, returning 915$ a month, so if I can keep this up, I would be out of the wood in two years and a bit. Obviously provided they still stay alive with paying the div. Just sit back and smoke a sigar while you sit in your armchair, this one might be go up in smoke but on the other hand it might be working out.

  55. Jabob, also feeling some pain on FTR, down about $8K so far.  But I have faith in Phil and company analysis on this in the long term as it just makes sense, so I try not to watch it everyday.  Same goes for TEVA and CBI as I'm also in those, though just got into those recently so losses are small …… far. :) . Just leave it and forget about it for a while.  Either that or just capitulate and get out of it as it's not worth the stress.  Phil gives out good suggestions everyday on lots of different things where you could make up losses. 

  56. Meanwhile, does anyone think McGregor can win this fight?

    Image result for mayweather vs mcgregor fight

    Mayweather has been retired for 2 years but he's 49-0 in the ring.  McGregor has lost 3 fights (21/3) and has knocked out 18 guys but that's without gloves on.  

    "If people are overlooking my size, power and youth, they shouldn't be. I'm very confident in those attributes. I believe I'll knock him out early," McGregor said. "If you look at the way I fight, I am a fast starter. I come out and bang people right away. With eight-ounce gloves, I don't see him lasting more than one or two rounds. I am my own man and I feel I am superior to Floyd. When it comes to Saturday night, he will not be prepared for me.

    I've gotta say, I haven't been motivated to see a fight in a long time (everyone has been so dull since Tyson and Leonard) but this is going to be interesting.  

    Image result for floyd mayweather animated gif

    Image result for conor mcgregor animated gif

    I'm pretty sure MMA people will learn this weekend why boxers get the bigger paydays.

    IMAX/Batman – I wouldn't cover them, stupidly cheap under $20.

    /RB/Craigs – $1.5369 avg.  It's the same play we made on Weds for the same reason – only 0.05 higher.  The hurricane was just bonus money and the dip back was just a bonus opportunity to do it again and I didn't think we'd get all the way back to $1.60 (and happy to DD if we do) so I grabbed 2 for the weekend. 

    Uber/Seer – As a parent, I feel there's a certain value to having a car in my driveway but, if I were in NYC or even Hoboken (I used to live there), there's no way I could justify owning and paying to park a car vs using Uber.  I have contemplated it.  If I got a moped for errands and visits then I certainly wouldn't need to have 2 cars in my garage.  If you think about it, very wealthy people get chauffeurs and that's essentially what this is – except it costs a lot less.  It depends where you live, of course.  Where I am, it takes 5 mins to get picked up – hardly a major inconvenience.  In the city, it takes 15 mins to find a parking space and then you have to walk from there to where you're going (and pay $40, not to mention $15 toll in the tunnel) – so driving into the city makes little sense.  

    When I was in LA last summer, I didn't rent a car and used Uber for everything.  Most rides were $5 and I strained to spend $100 in 3 days vs the hassle of renting a car that would have been double that – plus $25/day parking at the hotel.  You talk about hiking but I actually like walking better with Uber because I don't have to come back to a spot – I just walk/explore until I am tired and then get a ride home.  Covers a lot more ground.  

    That's the right way to play FTR, Yodi!  

    Cuba/Latch – Yeah, that's messed up.

  57. Jabob TEVA My original comments were do not touch it!

  58. Jabo, it's as soon as I sell something that it turns around. I have a little bit of TEVA and am not yet worried – if I were selling it would be your signal to pile in. smiley 

    Seriously, I think it's hard to go against "the market" -- you need confidence in your own analysis vs. almost everyone else's. Look at this: 

  59. Here's why the market is up:

  60. Ilene, Hi, one of these 3 must be me!!!!

  61. Hi Yodi,

    You are the one of the four they forgot to mention! You and… 

  62. A little selling pressure brewing into the close. 

  63. Uber in Prague was great never waited more than 5 minutes and its was so easy, In the USA I use LYFT because its better for the driver.

  64. Phil I can not make a living here in Germany if you keep on dropping the dollar! Hamburgers get more expencive

  65. Yodi/Phil:  What is your "armchair trade" on FTR?  I'm down over 65K on it.  I got in too big when Phil first recommended it long ago, and have increased my holdings as it has dropped, including recently at $12.  Unfortunately, every time it seemed to be bottoming, I increased my position, and it dropped further. My breakeven on the stock is still very high, around $36.  Plus, I have a lot of pre-split short puts at what seem now like terrifyingly high prices.  Any input would be appreciated from you and Phil, too.  Thanks.

  66. Dollar/Yodi – Yeah, sorry about that.  For whatever reason they considered Yellen's lack of specifics to be doveish and Draghi's lack of specifics to be hawkish.  

    FTR/John – Wow, I'm getting worried that we're the only shareholders!  Your real question is how do you make $65,000 on FTR, right?  Well, you can cash out the losing trades and sell 50 of the 2019 $10 puts for $3.40 ($17,000) and buy 100 of the $10 ($3)/$15 ($1.25) bull call spreads at $1.75 ($17,500) and that returns +$49,500 at $15 instead of hoping they get back to $36 with what you have.  The net obligation is $50,000 for 5,000 shares to the downside, probably not worse than where you are now. 

    Have a great weekend everyone, 

    - Phil

  67. By the way, John, it would be a shame to be long 100 FTR spreads and not sell short calls.  I'd sell 30 of the Oct $13s for 0.80 and put $2,400 in pocket.  Should be easy enough to roll higher and, if you can collect $1,000/month in premiums, that's a bonus $16,000 while you wait.

  68. John, For starters in this game do not bat more than you are willing to lose. FTR was a profitable stock in the past and went sour as far as I am concerned.

    I am not a great player as far as doubling down plays.

    I am willing to write off my 24K and set aside a play buy the stock today at 12.78. I did buy it at 13.51. so you see it went further down, but this does not mean very much in an Armchair trade.

    Sell the Feb 12/13 strangle for 3.75. At this point with an interest rate of 18.78% you can expect a return of 84.32. On 1000 shares you make up 843.20 per month That is the best what I do expect. From the other side you may say I am throwing good money after bade money. You are the one who makes the final decision.

  69. Phil/Yodi:  Thanks for the responses — especially so late in the day.  I'll think through what you've written and may follow-up on Monday if I have any questions.  I appreciate the feedback from both of you.  Thanks!

  70. John not to gloomy but come back if you have more questions.

  71. Here still a bed time story.

    I put my wife on a flight to Mexico to visit her family. Due to all the good memories there, I prefer to stay in Europe. The day she boarded the flight, Business class ticket, Air Berlin, the plane she was booked on, second largest carrier in Germany, declared Bankruptcy. After two hours delay they took off. German Government lent them 150 Million € to bring the passengers home. Will she still make it back on her return ticket? God only knows. I looked already for another carrier for the return flight.

    Moral of the story, like the option trading, you cannot win them all.

  72. Anyone got good advice on Martinique?

    Curious about taking a trip….

  73. FTR  I am not sure what I have any more. I sold 150 of the old Jan $1.50 puts for $.40, now $.60. I am down about $5,250. I think I should roll to something in Jan 18, but not sure what. I figure my break even now should be $16.50, which is still not too bad but five months isnt much time. Also, how liquid are the pre-split options? The bid/asks seem high. Not sure what to do. 

  74. I meant rolling to something in Jan 19.

  75. Martinique / BDC – How's your French?

  76. Phil / IMAX – covered 1/3…. been burned so many times on this…  

  77. Thanks Yodi!

  78. Force Four Friday. Shoulda forecasted it Phil :)

  79. John/FTR/65k – you do not necessarily have to make the $65k on FTR and you do not have to make it back in one go. Change the target to finding plays that would deliver roughly $20k a year over the next three years. Alternatively split the FTR beast in two – split your position in two – use Phil's suggestions on 50% and then 50% on other plays (there are plenty of trade ideas as you know). We are also moving into a seasonally weak period so you don't have to go all in right away. But of course, there are no guaranteed ways to make $65k!

  80. StJL – "AI may provide a significantly fairer alternative to human judges."

    Can AI be bribed or will it vote along party lines? Turning Watson into a judge would be an improvement. Judges commit egregious errors, apply inconsistent logic and make unfair rulings on a daily basis, while judicial corruption and party cronyism have plagued our judicial system since its inception. 

    "But the key is that these benefits would extend equally to blacks and Latinos as they do to whites. [...]"

    In Dred Scott 1857, SCOTUS decided that black people were chattel (property), not people, so they had no rights; because that is something only a person has.  153 years later, in Citizens United 2010, SCOTUS decided that corporations, which are property, have rights and can exercise them under the 1st amendment.

    Those two decisions spanning 15 decades clearly demonstrate that our judicial branch is inhabited by prostitutes as corrupt and morally bankrupt, as our executive and legislative branches are. Only the rich can afford Lady Justice because shes nothing more than a big fat whore for sale and Out.

  81. Hurricane Harvey Makes Landfall Near Corpus Christi, Tex.

  82. Trump setting new records for low presidential approval

  83. Draghi urges cooperation to combat anti-globalization

  84. ‘Dark DNA’ could change how we think about evolution

  85. Is the Universe Conscious?

  86. A Canary in the Wall Street Coal Mine

    A retired hedge fund manager explains why he’s short Tesla.

    Only time will tell if earnings guesses by bullish analysts prove accurate. So far, the facts have consistently forced them to cut near-term estimates. There is little room for error now. After the last bond offering, there is nearly $10 billion of long-term debt against $5 billion in equity for a company burning through billions of dollars each year. The number of shares outstanding rose to 165 million this past June, from 140 million a year earlier.

    Some of Tesla’s strongest supporters seem to have recognized these problems. A recent SEC report showed that T. Rowe Price halved its holdings in the second quarter and that Fidelity, the largest holder, also sold millions of shares in that period. The unkindest cut came from Morgan Stanley: Despite its analyst’s optimism, the firm cut its stake by 60%. A more realistic appraisal of Tesla’s value should soon be at hand. 

  87. Phil – any interest at looking at TSLA short again? my scars are not fresh but the desire to battle again is.

  88. BDC – Martinique – I loved it, more modern infrastructure, cleaner, Fort De France. Take the plunge.

  89. StJ – Once in Provence I successfully asked for bacon:

    "Je voudrais acheter le jabon pour les petit dejouner…"

    And then my two years of painful middle school french was about tapped out… 

  90. Dash -- 375! holy shit! Held 14 coins at one point, probably paid all of $28 for them. Lost 4 to "cryptsy", an early popular altcoin exchange where the founder ran off with everything. This is just pure laziness – there is zero excuse for letting a thrid party hold your coins instead of yourself. So live and learn right (after losing 6.5 bitcoins in MtGox – buh bye $33,000!).

    Sold the other 10 at 70 because I listen to others who are WRONG calling "crypto bubble!" this and "game credits!" that, left and right all day long.

    1) hold your own coins

    2) never listen to anyone else, ever

    Seems simply enough, and yet, I pretty much need to learn it lesson over and over and over…. 

    Kiss another 14 * 375= $5,250 goodbye (less 700 I suppose….)

  91. OK, maybe FTR is leveling off. Long term I just bought 25 2019 10 call and sold 25 2019 13 puts. Now I want to buy 2500 shares for the 0.60 per share dividend (5% for one quarter) – ex dividend 9/14. Suggestions?  Will this payout looming, I'd like to think that the stock will rise over the next two weeks. Is there logic in selling an out of the money Sept15 put now then buy it back and sell  an out of the money call on Sept 13?

  92. First let me say that I am so sorry for the poor folks in Texas , but happy that I finally got a futures trade right in a big way, having bought RB V7 at 1.545 on Friday and stopping out tonight at 1.613. Phil I am now going to wait and see or look for anything you might say about the subject into this week. 

  93. Good morning!

    Ended up having a beach weekend but very nice to come back to a nice pop in /RBV7 (Oct), now $1.60 and up $2,700 per contract. /RB (Sept) is hit $1.77 and now $1.76 because there will actually be shortages of front-month gas now.

  94. Phil – RB – Does Oct contract catches up to where Sept contract is?

  95. I'm going to bed so I'll take my /RB profits but I'd stay long over $1.60 and use it as a re-entry point with tight stops below.  Depending on how long the refineries will be out, we begin to impact Oct deliveries too.  

    The way to play on stocks is to figure out which refiners have the least exposure in Texas and they should do well for the next month.

    Not much of a move in oil but I'm keeping my long /CLs at $47.50 as I think deliveries may be impacted AND we have the holiday weekend.  

    Indexes down just a touch, more when I wake up!  

    /RB/Bulls – This is kind of unique as there were a limited amount of open contracts for Sept delivery and now deliveries will be tight, which makes those contracts more valuable.  There's also a fine line because you can have a disaster but if it's too big, then they declare force majeure and invalidate the contracts!   As it stands, it looks like the contracts will be honored.  Still, if by Oct, the shortage is worked out – then the Oct delivery contracts won't be as valuable as the Sep ones were (unless we have more storms – which is very possible as this one was only H(arvey) and last time we had a bad season, we got hit with an R(ita).  

    Anyway, bottom line is Oct conditions are not Sept conditions so we have the unusual spread but still, a very nice pop in Oct and getting a quick 0.05 win on gasoline is fantastic – no need to be greedy.

  96. Thanks Phil!

  97. Good morning again!

    Futures are ticking back up as Europe bounces off lows.

    How much is /RB up?  5% of course! 

    /CL to /BZ gap now over $5 – so crazy!

    /NG apparently not too affected but I like it over the $2.90 line with tight stops below.

    Coffee held their Friday gains so far:

    Metals making highs too:

    Still too cheap:

  98. Hurricane - Phil, with all this damage and flooding in the area…. does this mean stocks like Home Depot/Lowes, etc will see a tick up as well?   Why didn't we see an increase in /NG?  

    As of Friday, the U.S. Bureau of Safety and Environmental Enforcement said workers had been removed from 86 of the 737 manned platforms used to pump oil and gas from beneath the Gulf.

    The agency estimated that platforms accounting for about 22 percent of oil production and 23 percent of natural gas output in the Gulf had been shut down.


    Dallas News

    List of Refiners

    EIA Texas#