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TGIF – Markets End Wild Week on a Sour Note

Better late than never.

As noted in yesterday's Report, I was on Money Talk Wednesday night (adding a big hedge to that portfolio) and I said my biggest concerns were Japanese Debt and China's Bad Loans and that the market was due for another 2.5% to the downside and yesterday I titled the morning Report: "Thursday Failure – Fed and Trump Fail to Boost the Markets" and I looked a little silly at yesterday's open as we popped back to 2,840 but not so much by the day's end, when we were back to 2,820 and not at all silly now as we're bouncing off the 2,800 line.

As I said yesterday in a post that Seeking Alpha refused to publish because "…there are just too many references to your non-SA subscription service here. (This includes links that go to sign-up pages, which we don't allow authors to use.)", which is ridiculous as the fact that they don't consistently publish my posts FORCES me to provide links back to Philstockworld so people can read what I wrote and, if readers don't sign up, they have no way to access the full post! 

Anyway, where was I?  Oh yes, so yesterday in the (REDACTED FOR SA), I said:

We have plenty of longs and the thing that is most likely to wreck the market this week is disappointing FANG results so that Nasdaq (SQQQ) hedge (see: "Top Trades for Sun, 28 Jan 2018 19:53 – Money Talk Portfolio") or the Dow (DIA) hedge we dicussed in yesterday's report (see "Which Way Wednesday – Fed Edition") are good ways to protect yourself into earnings this evening and NFP tomorrow.   

Image result for censorshipFYI, Wednesday's post was rejected by Seeking Alpha because: "There's just too many references to trade ideas that were not available to our Seeking Alpha readers yesterday, Phil." which means obviously I have to refer back to the article on PSW because SA never published it.  REALLY CAN THEY BE THAT STUPID???  I'm sorry, not stupid, I'm sure they were only following orders and SA readers don't complain about what they are missing, so I shouldn't either.

First they came for the Technical Analysts, and I did not speak out—
Because I do not follow Technical Analysts.

Then they came for the Future Traders, and I did not speak out— 
Because I was do not follow Futures Traders.

Then they came for the Chartists, and I did not speak out— 
Because I do not follow Chartists.

Then they came for my Favorite Author — and there was no one left to speak for my Favorite Author.

It's a real shame because Wednesday's post featured our STRONGLY recommended Dow (DIA) hedge which is right on track to make a profit of $17,800 (80%) as the Dow falls but, becuase it wasn't the only trade we discussed (we discussed Futures trades that were part of a discussion about techniques for trading the Futures, which is hard to have without examples and SA doesn't have a live trading room to draw examples from like we do at WWW.PHILSTOCKWORLD.COM, which you can SIGN UP FOR at this link to get uncensored, up to the minute access to all of our trade ideas.  

As much as I dread referring to it, I did say in yesterday's PSW Report (in an article that was EXCLUSIVELY available at though not by my intention):

Meanwhile, we're not there yet as the fall in the S&P from 2,870 to 2,820 is only 1.7% so, as Robert Frost said "Miles to go before I sleep."  In fact, now it's 8:50 and the indexes have continued lower without a bounce so double those gains on our Futures shorts (you're welcome) and now the play is tight stops on 1/2 and looser stops (weak bounce lines) on the other half – in case we get a really nice sell-off today.  

As I said to our Members on Tuesday as we hit Dow 26,000 – "another 600 points to go to complete this drop cycle".  In fact, the Dow Futures (/YM) are just now crossing back below 26,000 (up $1,000 per contract on our shorts!) so a move down to 25,400 would make another $3,000 per contract if it happens so great for a new trade, right now, with tight stops above 26,000 means you risk losing $5 per point before you stop out vs potential $3,000 gains – THAT IS HOW YOU HEDGE WITH THE FUTURES!  

As noted above, we were interrupted by the ridiculous over-reaction to Boeing's earnings (and they are buying back $9Bn worth of stock, which is 5% of the company) but, other than that, the market action was weak and we'll see how the next couple of days go but, so far, we've failed those weak bounce lines I laid out for you yesterday – and that's the bearish signal we've been looking for to indicate we've got another leg down to go from here.

Anyway, we have our hedges and we're well-positioned for a drop and we'll play our Futures shorts as well if we fail to make weak bounces off this morning's Futures dips (see this week's censored posts for educational and informative notes on how to play the Futures and how to calculate bounce lines) and, other than that, we'll watch and wait.

We're still adding longs, we found 4 bank stocks we liked yesterday – we're just making sure we're well-hedged for the correction.

Have a great weekend, 

- Phil


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  1. qqq barely down? amzn?

  2. Good Morning.

  3. Phil, in regards to no more Mondays, please remind me when that begins and if that means no morning post and/or no expectation you will participate in chat.  Thanks

  4. Nothing to worry at all, I am sure that the GOP congress would take action to rein in Trump:

    The White House has grown frustrated in recent weeks by what it considers the Pentagon’s reluctance to provide President Trump with options for a military strike against North Korea, according to officials, the latest sign of a deepening split in the administration over how to confront the nuclear-armed regime of Kim Jong-un….The Pentagon, they say, is worried that the White House is moving too hastily toward military action on the Korean Peninsula that could escalate catastrophically. Giving the president too many options, the officials said, could increase the odds that he will act.

    I remembers members saying not to worry, everything will be fine in the long run… So far, not looking too good.

  5. Jabo – here is your AMZN analysis on Simple WallStreet:

  6. Phil / AAPL – follow up to my earlier post.  Below are my current positions.  Iv’e have a negative slant to my positions because I was expecting a pull back…. I’d like to flip more bullish now, and get good balanced positions.   Prices shown are my costs.  I’d like to balance out the 160 / 200 BCS, as well as close out the 10X ’20 200 short calls and start a new position.  Your advice and counsel would be appreciated.  Note my target prices are as follows – 

    2019 price target 195 ish

    2020 price target 215 ish


    20X Long  Jan ’20 160 Call ($30.75) 

    50X Short  Jan ‘20 190 Call ( 20)


    15X Short  Apr ’18 195 Call ( 1.9)

    10X Short  Jun ’18 190 Call (7.7)


    10X Short Jan ’20 150 Put (13.2)

    5X Short  Jan ’19 155 Put (10.4)


    10X short Jan ’20 200 Call ( 10)

    Thanks for your help  

  7. Phil – Any thoughts on FN? They look cheap now and the balance sheet seems clean. They have been beaten down lately. Just don't know much about them.

  8. AAPL dropping in pre market – looking to pick some up….   have seen mostly good updates.  Morgan stanly, Baird, Piper  and Canaccord all have target at 200 ish. 

  9. These guys missed buying TEVA so trying to bring it down.

    BTIG turns bearish on Teva, cuts to Sell; shares down 2% premarket

    Teva Pharmaceutical Industries (NYSE:TEVA) slips 2% premarket on increased volume on the heels of a downgrade to SELL with a $17 (20% downside risk) at BTIG Research. Analyst Timothy Chiang cites continued pressure on its U.S. generics business and expected sales declines for top-seller Copaxone.

    For good measure, he also says the company will face higher borrowing costs considering the rising interest rate environment and recent credit downgrade. He sees its debt/EBITDA ratio rising to ~5.9x despite the $700M payment from Allergan.

    Source: Bloomberg

  10. Batman,

    AAPL possible I do not understand your positions. But it looks to me like a bunch of naked calls you have against you 20 long Jan 20 calls. absolutely irresponsible. BCS should be at least matching 1to 1 and short calls only half of you BCS.

  11. Phil    I know you have REITs that you like but I can't call them up with the search function using just reit.  Can you let me know which ones so I can research.  I think they may get attractive with the interest rate discussions. 



  12. FU AMZN!!!!!!!!!!

  13. Phil,  thoughts on /SI at this level?  


  14. Phil, 

    Butterfly trades -  do you think PG is a good candidate for the new portfolio? currently at the low end of its recent channel.  

  15. Good morning!

    Bounces were weak and are failing already – not good! 

    Big Chart – Dow 25% line at 26,250 and Nas 27.5% line at 6,885 are the key lines for the the day but not really bullish unless NYSE can beat that 5% line at 13,440 (now 13,271) so figure it needs about 200 Dow points (Dow green) to be back over.

    Mondays/Mike – The main reasons I'm quitting Mondays (as of April 2nd) are:

    • A) So I'm not so pressured to rush home from travel weekends (much cheaper and more relaxing to come home during the day on a Monday than Sunday night) 
    • 2) So I can have one day a week to schedule meetings with people who have normal jobs and schedules (something that's necessary as PSW Investments works with more and more companies) 
    • 3) Because some of our PSW Investment companies require a bit of my time during the week and we need a day they can count on
    • D) Because Mondays are usually a waste of time in the markets and then I'm in a bad mood on Tuesday after wasting a day staring at the screen for no reason.

    Meanwhile, I will always have a phone and almost always have an IPad wherever I am and, if anything exciting happens, I'll certainly jump into the chat room and weigh in and yes, there will be a post – usually.  On the whole though, expect much less participation in chat from me on Mondays but I'll still catch up when I do have the chance.  

    On the whole though, I encourage everyone to take Monday's off.  If you have well-balanced portfolios, you shouldn't need to stare at the markets every day anyway.  I teach a lot of things and, at 55 (as of 3/29), I've decided I want to teach people to take control of their lives and reassert command over their personal time.  

    Clearly, with 10s of Millions of jobs about to be eliminated by robots – we're all going to have to learn to live with more free time and, if we could get a movement going to cut the workweek (for humans) down to 4 days – that would be a nice start!  5 more years and I quit Fridays too and, by 65, I expect to be working Tuesdays and Thursdays only - be forewarned!  

    /RB with a big dive!  

    Korea/StJ – A nuclear war would be a nice distraction from the Meuller probe…

    AMZN/StJ – Would be the short of a lifetime in a rational World.  Nope, still TSLA, then AMZN, then NFLX…

    Just on principle I want to sell the March $1,600 calls for $18 but, up $105 at the open so who knows what madness may happen next?  With their market cap at $700Bn at $1,450 though, I'd say 43% more, which gets them to $1Tn has GOT to cause a pullback so that's $2,073 so, when we hit that – I'll be shorting with Jabob for sure!  cheeky

    AAPL/Batman – If the whole market is collapsing, AAPL will not be immune.  Looks like you have, for some reason, a crazy amount uncovered short 2020 $190s – especially for someone with a $215 price target.  Then you are short 25 more calls with 25 short puts.  It's kind of a mess and I'd start by cleaning up.

    I think the 2020 $160s are a good base and the $190s are a good short call there and currently $28/17 for net $11 is a good price on the $30 spread.  I'd just add 30 of the bottoms to balance and, since you sold 50 of the $190s at $20, it's only net $8 for the next 30 spreads.

    Oops, or make it 60 and roll the short 2020 $200s to the $190s to clean it up or just buy back the short $200s as why have such a mess for no reason?  

    Now you have 50 2020 $160/190 bull call spreads and you sold 10 June $190 calls, which are now $2 so why keep them open and the short April $195s are 0.50 and again, what's the point?  

    Now you have 50 2020 $160/190 bull call spreads and you sold 10 June $190 calls, which are now $2 so why keep them open and the short April $195s are 0.50 and again, what's the point?  

    The short puts are fine but, again, it's my nature to clean them up and go with the 2020 $145 puts, which are $14.

    So now it's 50 2020 $160/190 bull call spreads with 25 short 2020 $145 puts and the ONLY thing you need to worry about going forward, while you wait to collect $150,000 is what calls to sell going forward and we just had earnings but you can sell 10 March $165 calls for $4.70 and, if we fail to hold $155, then you can sell 10 or 15 of the $155 calls, now $10.79 and, at $145, you can sell 10 of the $145 calls, now $19 so that's $4,700 now and maybe $15,000 more protection over $42 days to the downside on a net $50,000 spread (not even counting the short puts) seems like plenty because you have $3 per long call to roll them down to a $5 lower strike and widen the spread any time AAPL does take a dip and, when it doesn't take a dip, you roll up the 10 short calls (because you wouldn't need to sell more) to the next strike and month and DD if you have to while your $150,000 spread goes deeper in the money.  Since you have 714 days to sell, even at JUST $4,700 every 45 days that's 16 sales (and earnings get premiums) for $75,200 so that's a 50% profit on the $50,000 you lay out for the spread before you even get the $150,000 for the spread (and we're still not counting the short puts).  

    Why on earth would anyone need to play more aggressively than that?

    FN/StJ – I don't follow them but they look nice.  Remind me on the weekend as I'd like to read up on them.

    Bouncing off the same lines as before – still playable to the upside until they break.

    We're hitting 25,900, 2,800, 6,850 and 1,560 so exciting new lines to test but they should be weak bouncy in the very least and probably strong bouncy into the open.  

  16. ABX taking another hit. Looking quickly I don’t see why. 

  17. REITs I like/Tx – ARR, AGNC, NLY, CIM, SKT, STWD and CLNS. 

    /SI/Grass – $16.50 is where I usually take a poke but $16 is where I take a stand.  Certainly not catching any knives today though.  Dollr back over 89 is hurting (but I have 8 long /DX so not complaining).  

    PG/Learner – Not a bad one as it's volatile but stays within a broader channel, which is what we like for a Butterfly play. 

    What we would like is to see them hold $85 and move back towards $87.50 where we could establish a position because, in the Butterfly, it's not about us getting in with a good price – it's about getting in when the long puts and calls are cheap and the short options are paying well.

    ABX/Jeff – Gold coming down hard and fast is why.

  18. Mueller distraction/StJ, Phil – yeah, and if it's only Koreans and old codgers like Snow getting killed, no biggie – except, ooops, there's a bunch of US troops in Korea, too…..

  19. F/ would someone please tell me the latest recommendation on F. Thanks.

  20. Snow – Better stock up on iodine tablets! Good luck….

  21. No tweet about the "beautiful markets" today!

  22. Phil – AAPL got it thanks  Balanced to the 160/190- and sold out of short 200's.   need to reposition my short term short calls.

  23. Street fighter Trump is using blunt force against Mueller

  24. German Beer Sales Are Falling

  25. Emails show Carson family fingerprints at HUD despite warnings

  26. FN has some interesting products…. Guys, valentines day is just around the corner…. ;)

  27. Different FN 1020 :-)

  28. Bond Selloff Sends Ripples Through Corporate-Debt Market

  29. Alphabet shares fall as rising costs, margin pressure roil investors

  30. Genes – I think CRISP editing is fascinating, but there's this whole area of gene synthesis that I knew very little about, and sounds even more fascinating:

  31. US Troops/Snow – What???  Why didn't you say so?  I don't think Trump really cares how many people die or who they are if it can save his ass.  

    F/Taihu – Watch and wait is the latest play.   Still looking for a floor.

    Sounds good Batman.  I love that trade. 

    CRISP/Snow – It's going to be amazing but still not too practical/investable.  Kind of like 3D printing, which we're still waiting to commercialize.  Of course, combine 3D printing and gene editing and we'll be cranking out customized humans in no time!  

    Related image

  32. I like a poke at /RB long at $1.85 for the weekend push – tight stops below.

  33. StJean – I see your FN has a slightly different business model than my FN…… ;)

  34. FTR up sharply.

  35. 1020 – Although you know I love the smell of gun oil and gunpowder in the morning of Valentine's Day! Wakes up all kind of romantic feelings.

  36. Trump declassifies Memo, is on TV calling it " a disgrace" and says "what a terrible thing is happening to our country", "they should be ashamed of themselves".  What disgusting behavior by the "President" or, more accurately, "The Accused." 

    This is not going to end over the weekend, it's going to get worse and Nunes will be investigated and the whole memo will likely end up being considered obstruction down the road.  

    AAPL $163!  

    Just gotta let all this dust settle into next week.  

    $1.8550 is the stop on /RB now

  37. Bad reason for FTR to be up:

    • Frontier Communications (NYSE:FTR) is considering a sale of the landline assets it bought from Verizon, according to a Bloomberg headline.
    • The stock has spiked 6.4% on the news.
    • Frontier has wrestled mightily with integrating the networks it bought in California, Texas and Florida, doing a poor job with bringing FiOS operations on board, and has struggled with customer numbers as it migrates away from video services.

    Exxon -6%, Chevron -4% as both companies shock with earnings shortfalls

    • Exxon Mobil (XOM -5.8%) and Chevron (CVX -3.5%) shares plunge following their Q4 earnings reports (III), as cost cuts and rising oil prices failed to offset weakness in international refining operations.
    • Especially for XOM, the size of the share price drop is striking, on pace for the biggest decline in seven years; shares are up just 4% over the past six months while crude prices have climbed 34%.
    • “It was a pair of disappointing results from both companies,” says Edward Jones oil analyst Brian Youngberg. “Is refining something to be concerned about as we move through 2018? Will that be an offset to those higher oil prices?”
    • The XOM and CVX results also were in contrast to big oil rivals ConocoPhillips and Royal Dutch Shell (RDS.ARDS.B); the latter overtook XOM’s annual cash generation for the first time, producing ~6% more cash last year than XOM’s $33.2B in 2017.
    • XOM's total production fell by 130K bbl/day and reported a $1.3B charge on its natural gas properties, the second straight year the company has needed to recognize the declining value of certain prospects.
    • Production declines are a continuing challenge" for XOM, says Youngberg. "They need to jump-start the growth for investors to get excited again.”

    Apple down more than 2% as results/guidance digested

    • Apple (NASDAQ:AAPL) initially slipped last night following a decline in iPhone shipments and sluggish guidance. It later rallied to a 3.5% gain as investors liked what they heard on the earnings call.
    • What's the sell-side up to? Keybanc's Andy Hargreaves downgrades to Sector Weight from Overweight, as does Bernstein.
    • Citigroup, meanwhile, adds Apple to its Focus List, with $200 price target, and Needham lifts its price target to $210 from $200.
    • The Street's Eric Jhonsa says not to overlook CFO Luca Maestri's conference call comment about the company becoming "cash neutral" over time. It's a big deal, says Jhonsa, noting $163B currently in net cash and annual free cash flow of $50B and growing.
    • It sets the stage for giant capital returns, says Jhonsa, and don't rule out a major acquisition.
    • Conference call transcript
    • Shares are currently down 2.35%, and off nearly 10% since topping out in the middle of January.
    • Previously: Apple -1% on Q1 unit sales drop, downside guidance (Feb. 1)

  38. Look at these bitcoin moves – up and down 20% in a day. Insane… It's now just a day trading instrument it seems.

  39. Memo / Phil – How can the markets not discount the assault on the rule of law in this country. Sure, tax cuts are great but everybody needs legal protection eventually and it's being eroded!

  40. Required reading for the weekend – The Stock Market Parachute - it's a classic from from March 2007! Worthwhile digging into the comments as there is a lot of discussion on layering on DIA puts and managing covers.

    It would be good to know from Phil if he still feels comfortable from what was written way back then, or would any of the approaches to the mattress plays need updating to current market conditions?

  41. Still selling far OTM AMZN calls/  Chickens way to play. 

    Making far less than I should be.

  42. $1.865 is up $630 per contract on /RB.  Just greedy if you don't take it and run on at least half!

    Law/StJ – Not much of a smoking gun in either direction 

    Parachute/Winston – Sure, that's how we're protecting the STP/LTP now.  I think I just referenced that article when we added to the STP.

    AMZN/Albo – Still too scary for me!  

  43. phil—no guts!!!! ;-)

  44. Jabob -  – I'm chicken too.  Now short the Jan 2019 puts.

  45. Trying not to be too complex but I ran the bounce lines to see what should hold if we're having a mild 5% pullback.  If that's the case, we would expect good support at 2,794, which just failed, and then support at 2,772, which is the weak bounce line.  If the weak bounce line is not support on the way down – then that line won't hold and notice 2,772 is both the weak bounce off the 25% line and the strong pullback from the 30% line – so it should be very significant if we're going to see 30% again in the near future.

    Failing that, we have to start looking all the way down to the 20% line at 2,640 and, though it's only erasing the silly gains we started the year with – people would freak out if we tested it.  

    But, assuming the 5% pullback holds, we should very much slow our drop by 2,772 and then, of course, re-consolidate at 2,750 for another try at the 30% line.

  46. Unfortunately, since we're resting on S2 on all 4 indexes, it seems more likely we're going to punch down to 2,750 at the close and, next week, we'll continue town to a 10% correction.  

  47. That's what the DAX did:

    Keep in mind folks – we're having a Constitutional Crisis at the moment.  I know it's hardly being discussed or, if it is being discussed – it comes off as partisan bickering but it's not – this is a huge thing, looking a lot like Watergate, which derailed the economy and led to years of hyperinflation and economic stagnation (Stagflation, in fact).

    Image result for whip inflation now ford

    Image result for whip inflation now ford

  48. Jabob -I forgot to say that I'm short the Jan 900 puts.

  49. NLY/Phil – now reflecting an ~11.5% dividend yield.  Not ready to grab at this falling knife yet, but sure keeping an eye on it. Do you have any opinion on if they hold their dividend?

  50. Rig count went down, that gave /RB and /CL another leg up:

    • The U.S. rig count fell by 1 to 946 following last week's increase of 11, according to Baker Hughes' latest weekly survey.
    • The number of  active oil rigs rose by 6 to 765 while gas rigs declined by 7 to 181.
    • It's a broad market selloff today, but the energy sector (XLE -3.7%) is being hit hardest – not because the price of oil is plunging, but thanks to roughly 5% post-earnings selloffs for Exxon and Chevron.
    • Previously: Exxon -6%, Chevron -4% as both companies shock with earnings shortfalls (Feb. 2)
    • That, in turn, has the Dow as the worst-performing of the major averages, down 1.5%. The S&P 500 is off 1.2% and the Nasdaq 1%.
    • What's working? There aren't any sectors in the green, but healthcare is lower by just 0.5%, and Amazon is an outlier in tech/consumer with a 5.5% gain.

    Dollar surges on strong jobs report

    • The headlines in the January jobs numbers were roughly inline with expectations, but perky wage growth (2.9% Y/Y) is beginning to catch the eye of markets and FOMC members.
    • Uber-dove Neel Kashkari was on the tape this morning saying a continuation of the wage trend could mean higher rates than he expects, and the 10-year Treasury yield has blasted through 2.80%.
    • The dollar (UUPUDN) is having its best day in months, up about 0.6% depending on what index one looks at.
    • Commodity currencies – think loonie (NYSEARCA:FXC) and aussie (NYSEARCA:FXA) – are being hit the hardest as gold and oil each slump about 1%.
    • Panicky selling this morning has brought in the dip-buyers. with Bitcoin moments ago going green and rising above $9.1K. It fell as low as $7.7K a couple of hours ago.
    • OTCQX:GBTC is lower by 2.05%.
    • A check of the top 30 or so cryptocurrencies finds about one-third now positive on the session.
    • Previously: Crypto crash continues; Bitcoin plunges below $8K (Feb. 2)

    • Passive investing fans took it up a few notches to start the year, pouring more than $100B into passive mutual funds and ETFs, according to Bloomberg. That's more than $5B per day (when stripping out weekends).
    • It's also way more than the record monthly pace seen throughout most of 2017.

    Alphabet on biggest drop in almost two years as analysts react to Q4

    • Alphabet (GOOG -4.1%GOOGL -5%) is seeing its biggest intraday drop in nearly two years after last night's miss in Q4 profits, and with analysts trimming estimates and ratings accordingly.
    • Many analysts are holding on to Buy ratings, but Stifel Nicolaus has cut its rating to Hold on valuation. presents multiple headwinds, with a growing position in product searches hitting Google's retail search revenue, and a longer-term threat from Amazon Web Services. (h/t Bloomberg)
    • Traffic acquisition costs threaten to go higher, says analyst Scott Devitt. (In yesterday's report, the company noted TAC was up 33% to $6.45B, above analyst expectations for $6.27B.) He has a price target of $1,150, implying just 2.4% upside for GOOGL.
    • Cowen raised its price target to $1,300 from $1,230 and held its Outperform rating, "founded on Google successfully extending its dominant desktop advertising position to mobile."
    • "Digital advertising is in the midst of a structural shift with traffic migrating from desktop to mobile devices; we expect ad dollars to soon follow," and Google is the best-positioned mobile ad company, says analyst John Blackledge.
    • Morgan Stanley trimmed its price target to $1,200, and while there's improvement needed for example at YouTube (revenue growth slowing to 25% from last quarter's 30%), the company should see less incremental TAC pressure this year.

    NB: Warrant on Carter Page was renewed THREE times after initial issuance, for which the @FBI would have had to show to judge it was getting valuable intelligence Page was acting as agent of foreign Govt.


    HUH? Nunes doesnt say the dossier was false, or that Steele knew who was paying for it or really anything else. Is Nunes nuts? R's look like clowns. Again.

    And she's a conservative! 

    As I have said repeatedly, I also remain 100 percent confident in Special Counsel Robert Mueller. The contents of this memo do not – in any way – discredit his investigation.

    That’s it? Dishonest and misleading memo wrecked the House intel committee, destroyed trust with Intelligence Community, damaged relationship with FISA court, and inexcusably exposed classified investigation of an American citizen. For what? DOJ & FBI must keep doing their jobs.

    Devin Nunes memo is released, and it instantly blows up in Donald Trump’s face

    Fact-checking the GOP Russia memo

    Nice fact takedown on SOTU from Bernie's office.  

  51. Yikes, sadly I was right about that breakdown…

  52. NLY/Scott – I don't see why not, the cash-flow is there and, historically, they haven't trimmed it. 

  53. Wow, the memo itself contradicts the point they are making… This is so weak:

    Republicans have repeatedly argued that the Dossier triggered the opening of the investigation. The memo states the contrary explicitly: it was the Papadopoulos report that triggered the investigation. That’s on page 4.

  54. The beautiful market down 500 points today – still no tweet!

  55. No fear in this market. P

    Put/call ratio under 1 today.

  56. STJ – SVXY at 107. 

    Getting tempted ?

  57. I wish the VIX could make a run at 20 or more! 

  58. SVXY / Albo – Getting there but I think that there is more to come on the downside. The clown show in DC will open some eyes!

  59. ABX

    You would think with all that is happening gold would be moving up and ABX as well – but no….

  60. As we were expecting a 10-20% decline in the markets, we should be taking today very much in our stride. 

  61. No one has mentioned tax selling? Did that disappear as a possible catalyst for selling pressure? 

  62. Good points Winston – From the peak, we are only down 4.5% so far on the SPY … lot more fall ahead.

  63. The market can go down? When did they reinstitute that rule?

  64. Not many buyers stepping up so far. We had an attempt around lunch but it's been downhill since then. I imagine that we get some follow through in the rest of the world Monday.

  65. With the collapse of crypto,  I dont understand why gold is not starting to make a comeback yet.  As real rates or expectations thereof increase, it should start moving up. ABX positions are a psuedo hedge in that way.

  66. learner – I agree…  gold not making sense at the moment….  abx either.

  67. where's Phil…last comment I could see was 2:12 pm

    Wanted your take on ETF ROBO? it has around 80 companies which are investing in robotics

    thanks as always

  68. Phil/ CIM    Would you buy and sell Sept $16 or $17 puts and calls now?

  69. Well here's our 600-point drop – what a day!

    VIX peaked out so far at 16.75 on this chart and about 18 on the futures.

    Gold/Batman, Learner - Dollar finally stronger (just under 89) so not today but another day like this and people will buy gold.

    When/Dsheara – I know, I was starting to think maybe I was just crazy to believe corrections could happen.

    ROBOP/Pat – Well I'd say remind me on the weekend but it's the weekend – I'll try to take a look and see but 80 companies is a lot – I'd rather pick a couple myself than shotgun start-ups.

  70. Just wiped out 1/2 of 2018 gains! I am guessing we are saving the rest for next week.

  71. CIM/Taihu – What's your hurry?  Let it find a bottom.  

    At this point, I'd be more inclined to just buy the stock (when it looks bottomy) and not sell calls at all and hope to get a nice bounce.  More likely though, I'd start by just selling the Sept $17 puts (now $1.50) as the dividends are only 0.50 to be paid March, June and Sept (but after expiration) so I'd collect the same $1.50 whether I tied up $16.71 in the stock and hedged it (Sept $16 calls are $1.05, $17s are 0.55) or whether I just sell the puts and risk owning them for net $15.50 – why own the stock when all I really want is the dividend?

    Holy cow, looks like 700 points now!

    Well, have a great weekend folks, 

    This is a Monday worth showing up for!

    - Phil

  72. It's amazing how much speed this is picking up in the last 15 minutes.

  73. AMZN is still up $40 – that thing just cannot die!

    So many cheap things for Bezos to buy with his $120Bn…

  74. Thanks Phil.

  75. Dow down 666!

  76. Also the 2.5% Rule on the button.

  77. ROBO/Pat – I've looked at it, max single co. holding is 2%, no one company is going to move the needle significantly on this thing, maybe check out BOTZ as a more focused ETF alternative still with reasonable diversification, IMHO.        Let me know what you think. Thx

  78. Remember what I was saying about accelerating declines?  Good lesson in using the 5% Rule:

    Submitted on 2018/01/30 at 2:23 pm

    The S&P and Nas are over their weak bounce lines so we can stay bullish until/unless they break.  We were looking for Dow 26,080, S&P 2,826, Nas 6,935 and Rut 1,585.  

    Next goals are strong bounce lines at 26,160, 2,832, 6,950 and 1,588.50.

    Above those lines erases the likelihood we'll follow through down tomorrow below the weak bounce lines again indicates very likely we fall further.  

    Since today is an accelerating loss day, tomorrow could be worse but huge wildcards from Trump tonight and Fed tomorrow. 

    Dow down 150 yesterday and 300 today means 600 possible tomorrow if weak bounces fail tonight – just a heads up!  

    And then, as I noted the next day, BA's huge move up screwed up the pattern but, taking it into account, we were still trending lower so we continued to expect the follow-through 600-point sell-off.  

    Of course, the bad news is that it's not at all likely we simply bounce here and most likely we decelerate to 50% of today's drop (350 points) at best and follow through down to the 22.5% line on /ES over a couple of days, which is 2,700.

    2.5% lower on the Dow from 25,400 (we nailed that move on Tuesday!) is 24,765 so another 700ish points to drop – at least.

    But, of course, that's in a vaccum – we'll see who says what over the weekend.

  79. airvine/ROBO

    thanks airvine for the feedback. I will defn look at ~~BOTZ


  80. Just so we know it REALLY did happen:

    I don't know what the dates are for, maybe Futures expirations.  Percentage wasn't terrible but points were 2nd worst all-time:

    And this streak finally ends:

    Both the U.S. dollar and U.S. Treasuries are plunging together. This is an ominous sign for a nation completely dependent on borrowed money and cheap imports. The lack of concern is amazing.

    On Tuesday Trump calls for unity. Three days later he's authorized the release of a cherry-picked document intended to foment more distrust in our institutions and divide the nation even further.

    Still not oversold!

    House Democrats release response exposing fraudulent Devin Nunes memo

    Santander to Roll Out Ripple-Powered App in 4 Countries – CoinDesk

  81. Phil – "There's just too many references to trade ideas that were not available to our Seeking Alpha readers yesterday, Phil." which means obviously I have to refer back to the article on PSW because SA never published it.  REALLY CAN THEY BE THAT STUPID???"

    REALLY? The brain dead at SA are legion, whose told me, crowd sourcing and crypto currencies were not liquid nor actionable investments. Yes, REALLY. Actionable to SA is dealing with ham fisted editors who couldn't succeed at being a CFA or investing, much less anything else in real life, and are now pretending to be financial editors or experts in a field, they cannot fathom. This is descriptive…

    Freedom, Truth, Honour — you could rattle off a hundred such words and behind every one of them would gather a thousand punks, pompous little farts, waving the banner with one hand and reaching under the table with the other. – Hunter S. Thompson

    Barry Ritholtz sent me a cogent email regarding SA and the above:  "unfortunately your work is not available to the public."  When he's on, he's on.  Due to a collective flatline EEG, SA would not know actionable, if it hit them square in the face. Partisan censorship, inability to understand basic concepts, investing, how markets work, much less English, these are the reasons why I no longer contribute there. Good luck with those pompous farts, little punks and jack offs. Out.

  82. November 2018 will be a beautiful thing people. The biggest. So beautiful. Much bigness like, believe me, the biggest most beautiful November you've ever seen. There's may be one or two Novembers like it, maybe Washington and Lincoln, but no other, or maybe even this one is the biggest one.

  83. BDC – Big and beautiful, Channeling T-Rump, thank you for my LMAO of the day.

  84. Phil – "This is not going to end over the weekend, it's going to get worse"

    Mui. El idiota está terminado.

  85. BDC – That's if Trump doesn't decide to start a war with Korea between now and November!

  86. Black Monday coming?

  87. Natt N   thank you for the Hunter Thompson quote! Best speaker at my college EVER, many years ago!!!

  88. Doro – "thank you for the Hunter Thompson quote!"

    Your welcome, Gonzo and Out.

  89. I like low 7's as a possible bottom on GBTC. No rush, this crypto bear market could last 18 months like the last one.

  90. As I was saying – it seems that Trump is itching to start a war to help the mid-term elections:

    Indeed, White House National Security Council senior director for Asian affairs Matthew Pottinger was reported as saying in a recent closed-door meeting with US experts on Korean Peninsula issues that a limited strike on the North “might help in the midterm elections.”

    Would that be so transparent that it would backfire?

  91. StJ – scary indeed. At least with Iraq they didn't actually have any WMDs (and they knew it of course). NK could let questionably-ready, but known to exist, nuclear missiles fly. It's the equivalent of a cat-burglar breaking into an empty home and one with a waiting-in-hiding gun owner. One of those ends very badly.

    Considering this absolutely ridiculous "memo" nonsense, and how far the political discourse has de-railed, a Carrington-sized Event at this point is almost inevitable: they have no shred of credibility left whatsoever, at least none based in any context of reason or accountability. Really, the question is: what will this event actually be?

  92. Phil-- what is your bet for Monday?
    Continued weakness or was Friday another BTFD opportunity?

  93. Texas officials allegedly engaged in bribes and kickbacks to make millions while building Trump’s border wall

  94. The American way of healthcare

  95. Pennsylvania Congressional Map Faces Supreme Court Call

  96. Phil – coming back on the recent mattress play in the STP:

    We can do something similar with the Dow for the STP in something we used to call a Mattress Play.  

    Buy 20 DIA June $280 puts for $21.50 ($43,000) 

    Sell 20 DIA June $260 puts for $8.20 ($16,400)

    Sell 10 DIA Feb $257 puts for $2.05 ($2,050) 

    As you are selling more puts than you are buying, you are actually skewing slightly long – I would have that that is contrary to what you want to do?

    ?I was curious as to the comparison of a previous mattress play early in Feb 2017 where instead of a Bear Put spread and selling shorter term put covers (as above) you went for a pure diagonal play that was completely covered.The example with SPX trading at $2365 on Feb 21, 2017 was:

    SPX/Taihu – Well the max premium is going to be the 2,365 puts, so you want to sell those.  I'd do a Mattress Play, which is something we used to do in 2007/8 when we expected a drop that never came.  You need to establish a long, in the money put with low premium and sell short-term premium to cover it so, if we sell the SPX April 2,365 puts for $40.50, you can buy the Sept 2,425 puts for $125.  That way, most of your premium is paid for by your first sale, your net is $85 and the spread is $60 so not likely you get burned to the downside.

    Obviously, if SPX goes down, you simply roll the short puts to longer, lower strikes (the Sept 2,150 puts are $40.50 so you'd have a $300 spread for $85).  The more important thing is, if SPX doesn't go down or goes down less than $40.50, then you can use that money to pay to roll your long calls up (in strike) and out (in time) - always keeping them in a good position so you can once again sell at the money puts. 

    With any luck you have a very low maintenance cost (providing SPX doesn't gain more than 2% per month) and it becomes a very cheap hedge over time.  The same can be applied to SPY or DIA or whatever.


  97. Another 0.5% lower at the open, but not too much damage so far.

    Enjoy the Super Bowl 

  98. Wow…what a game!

  99. I think the Eagles are toast

  100. I LOVE TOAST!!!!!!

  101. That was fun.  

  102. Wow, big defensive struggle… So much for that Patriots bend but don’t break defense. I don’t think that there was one punt the entire game.

  103. DAX down 1% at opening this Monday morning

  104. Here’s a look at the best and the worst Super Bowl ads

  105. Veteran who served two tours in Afghanistan could be deported

  106. Good morning!

    Things are not looking pretty but we expected follow-through and the best we could hope for is a 50% reduction in the rate of the fall so holding -350 would be good for the day and a lot better than -1,500 if the drop were accelerating into a real crisis.

    The problem is, people are so used to instant reversals that even this little correction is freaking them out and we could get some panic selling.

    /KC back at magic $120!

    6,700 on /NQ should be bouncy and it's lined up with 25,100, 2,740 and 1,530 and I'd rather see 25,000 tested but it's only going to happen if 6,700 fails so /NQ long here with tight stops below is the current play.

    Monday/Jabob – I think we'll open lower!  cheeky

    Mattress/Winston – Remind me during chat and we'll work with real numbers.  

  107. me2 ;-)