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Friday, March 31, 2023


Trendless Tuesday – A Pause in the News Cycle

Not much is going on.

If I were lazy, I'd stop right there and that would be the morning report.  Even Trump hasn't done anything new to piss me off this morning.  He even confirmed yesterday's rant on Kushner's Saudi agenda by saying about the arrested Saudi Princes that "Some of those they are harshly treating have been 'milking' their country for years." 

I have great confidence in King Salman and the Crown Prince of Saudi Arabia, they know exactly what they are doing….

One of those princes, keep in mind, is Rupert Murdoch's partner, Alwaleed Talal, who went against Trump during the election, tweeting:


You are a disgrace not only to the GOP but to all America.

Withdraw from the U.S presidential race as you will never win.

Well ha, ha, ha Alwaleed – now Trump is President and you are in jail and we are selling a ton of military equipment to your rivals in Saudi Arabia – how's that for petty vengeance?  Do you think Putin is the only person who can interfere in foreign elections?  NO ONE interferes with other countries like America – we are number one!

This is indeed a new era in politics as we used to keep it a secret when we used our influence overseas to elminate our enemies – now we tweet about and get 93,000 likes…  Are we great yet?  Trump also did not hold back while in Japan, shown here at his high-level meeting with Shinzo Abe but, right after the game, Trump lashed out at Japan's trade policies, saying:

“We want fair and open trade. But right now, our trade with Japan is not fair and it’s not open. The US has suffered massive trade deficits with Japan for many, many years.

Our Trade Deficit with Japan last year was $69Bn but we're 4 times bigger than they are yet we "only" buy twice as much of their stuff as they do of ours, economically, how do we make that "fair"?  Should Japan buy 4x more stuff from the US and dump all their other Trading Partners or should we buy 3/4 less stuff and maybe ban Toyota and Sony in the US?  As Trump said:

“Many millions of cars are sold by Japan into the United States, whereas virtually no cars go from the US into Japan…Try building your cars in the United States instead of shipping them over. That’s not too much to ask. Is that rude to ask?

Image result for us japan tradeOf course, that statement was factless as Japanese automakers manufactured 4.2M cars and 4.5M engines in the US last year and Toyota (2.6M), Honda (1.6M) and Nissan (1.5M) combined sold 5.7M cars total so, essentially, they already build the vast majority of their cars in the US – about 50 times more than Tesla (TSLA) makes!  

In truth, the whole thing is really a ploy to get Japan to buy more US Military equipment – that's what Trump is really there to sell and Military equipment is something Japan doesn't currently buy much of so they can "fix" the trade imbalance by arming up.  

Trump is in Seoul today, less than 100 miles from Kim Jung Un and I can't wait to hear what nuggets come in today's speeches.  Tomorrow he's off to Beijing, where I'm sure he will fix China's Trade Deficit too and then it's off to Da Nang and then Hanoi – for some reason spending two days in a country he worked hard not to visit when he was younger.  Trump's trip concludes on Sunay in Manilla and then it's Mueller time next Monday…

Meanwhile, when the news is dull we play the technicals and, this morning, my note to our Members was:

Europe trending down since the open, /NKD rejected harshly at 23,000 (22,880 now) despite the strong Dollar (94.98) and that makes Dow (/YM) a fun short at the 23,500 line with VERY TIGHT STOPS ABOVE.  Oil $57.50 is another fun short and /RB is already pulling back to $1.818 while /NG is rejected at $3.15.

We'll see what happens today but yesterday's BS story about Disney (DIS) buying Fox (FOXA) was typical of the M&A rumors that mark a market top – as fund managers try to stir up excitement in the sectors they are trying to dump.  

Be careful out there.



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Phil/TEVA-the company has $4.2B in term loans outstanding ytd with pricing grids that are affected by any downgrade.  The TLs will likely get paid down first, but that leaves them with about $8.2B in front-end bond maturities they will need to refinance over the next 6-18 months ($2.3 in '18, $3.2 in '19, $2.7 in '20).

NGL – Up big on good quarterly results.  Stock still yielding almost 13%.

Went ex-divd Friday by .39.

Fiji calls for urgency in talks to implement climate accord

RUT has flatlined since Oct first. Phil what do you make of this?

NGL – Phil, Speculative for sure with that high yield.

~~FWIW – This was my play on Aug 22.

Bought 1k shares at $9.45

Sold 10 April 10 calls for $.88.

Sold 10 April 7.5 puts for .75.

Will look to roll the calls up and out.

Using DWT/DGAZ for CL/NG play.  Up some but watching oil  and nat. gas closely.  What do you think?


Have you had a chance to look at SKT?

You just have to love these mofo momos! PCLN earnings last night, with strong results, but light(er) guidance and the stock responded somewhat more volatile than usual post earnings with a drop of just under $200 to $1715.

Phil – you had been helping me out on managing a PCLN position – and we agreed to touch base after earnings.

My current position is a Jan 19, 2000/2200 BCS (10 contracts) with a half cover of Jan 18, short 2000 calls (5). Your recommendation was to cash out the Jan 19 $2000 long calls of the BCS (currently at $100) to finance the purchase of a Jan 20 1750/1950 BCS (currently at $85) and leave the Jan 19 2200 short calls naked – with a tight stop at $100.

There may be more interesting BCS combinations given this drop:

The current short covers, Jan 18 2000 calls are now down to $3.50 so probably worth closing out.

Jan 20 1600/1800 for $100

Jan 20 1540/1740 for $107

Jan 20 1640/1840 for $100

Any of these are financed by the sale of the long call leg (Jan 19, $2000). 

I would end up, for example, with the following combination:

Short 10 Jan 19, $2200 calls (these roll to the Jan 20, $2500 calls)

Long 10 Jan 20, $1600/1800 BCS

A few questions:

Would you consider the Jan 19, 2200 as a full cover, so therefore too much risk to start selling additional short call covers?

Are the Jan 19, 2200 covers so far out of the money, that it would be better to cash them out and roll to something like the Mar 18, $1900 short calls which can be sold for $30? 

M under 18 WTF?

These FU stocks are brutal. 

Phil, PCLN down a further 10%. Wonder why. Strether

PCLN -Started a deep OTM short put position by selling 2 Apr 2018 1300 puts for $9.


a guy from rs energy on bnn just used your bathtub analogy to explain the market for natural gas

they praised him for such a descriptive analogy he didnt take credit he said he heard it from a client


what was the bathtub analogy for NG, think i missed that one? 

Phil I never got the fill on the short CL call. when did you get the fill? when did it cross 57.50?

NGL – Great idea !

Thanks, Phil.

DF/albo – for a glorious few minutes, there was some actual optimism…  but you can get a credit of .22 for each June 9/10 put/call combo now.

Scott – Interesting.  Thanks.

Phil – you understood correctly – and thanks for the suggestions. Seems like a very good plan. But as you say, better to see where the knife falls before making any adjustment.

But selling PCLN puts is like taking amphetamines as a night cap!

Winston – LOL

But, no different than selling OTM naked calls.

At least I have a 375 point cushion, and the opportunity to manage the trade. 🙂

PCLN put selling/Winston

Do it in very small doses, carefully and the amphetamines will be hardly noticeable by the brain!

I had sold a single $1700 put for $140..(could not resist) .so, I am down after yesterday but not so bad unless it decides to test $1500

Maya – Small doses is indeed the key. 

But putting on a trade like that just before earnings is doubly risky.

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