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Which Way Wednesday – Testing the 50 DMAs from Above

Wheeee, that was fun!  

Huge fun, of course, for anyone who took our advice and shorted the Nasdaq Futures (/NQ) at 7,000 yesterday morning.  Those Nasdaq Futures pay $20 per point and the Nasdaq plunged 100 points to 6,900 for a $2,000 per contract gain on the day – you're welcome!  That was the same call I made the morning before at the Trader's Expo Live Trading Challenge – it just took longer than I thought for us to cash in!  

We also cashed in our 0.95 GE March $13.50 calls for $1.60 for a 0.65 (68%) gain on 100 contracts (up $6,500) – also from the Trading Challenge.  Gasoline (/RB) fell to $1.975 for gains of $500 per contract – also from the Trading Challenge and the the Dow dropped 200 points from our Trading Challenge entry (25,650) for gains of $1,000 per contract but, sadly, the challenge ended at 10:30 yesterday – so I still lost.  I'm just not a day-trader but the Fundamental picks tend to work out – eventually.  

Best of all, our Long-Term Portfolio finished the day at $551,871 (up 10.4%) which is up $1,008 (0.2%) on a bad day – so we know we're doing something right there while our Short-Term Portfolio, which hedges the LTP, did it's job and gained $6,600 (6.6%) on the market drop so, as we intended, we're very well-hedged for the coming market chop into the month's end.  It is ALL about balance in an uncertain market!  

What we're looking for, at the moment, is whether or not the indexes can hold their 50-day moving averages from above, which are (rounded) Dow 25,525, S&P 2,735, Nasdaq 6,680, NYSE 13,000 and Russell 1,550.  The NYSE and Russell are below and the others are above so it's simply a matter of whether the Russell breaks up or the S&P (closest) breaks down to confirm a rally.  Other than that, we're pretty agnostic today into day 2 of Powell's testimony (but no surprises expected):

As I said yesterday, we just have to go with the flow but I'll still take a short on the Futures at Dow (/YM) 25,500 with a tight stop above – there should be a bit of resistance there and, if they S&P can't hold that 2,750 line – next stop is 2,735 and below that is DOOM!!!

Enjoy your day…


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  1. Good Morning, All!

    Join us for our LIVE weekly webinar, today at 1pm!

  2. Charleston,  I really like the downtown Doubletree.  Neat rooms in an old building with some character.  Right next to an outdoor market the kids will love.  Lunch at the Low Country Bistro, dinner at Husk.  What’s better than that?

  3. Wilmington NC has a nice waterfront – and it forces you to take a more scenic state road instead of interstate to get back to 95.


    Also – St Augustine Florida – sounds like a tourist trap but it really is an amazing little city (I resisted going for years) but it was pretty cool.  We did a 'ghost tour' at night and it was great for adults and kids.  Plus close enough to Boca where its a relatively short drive when you wake up so you don't lose a whole day travelling.

  4. Good morning!  

    Sounds good Knight.  

    For those who didn't catch early morning chat:

    I'm thinking of driving to Florida with the kids for spring break – bad idea?  I think it would be a fun road trip but it's a lot of miles (1,200) but I figure leave Thurs pm, DC that night, Charleston Fri Night and we make Boca the next day.  Kids have never seen the country from the ground other than one trip to Toronto and our ski trips to Vermont. 

    Comments/Suggestions would be appreciated.

    Also, maybe a good alternate route for the trip home?

    Jackie, so far, has only demanded we have dinner at Roys in Orlando – I agree with her it was the best filet I ever tasted other than Wagyu, of course.  

    Top Japanese Wagyu Exporter Sees Sales Surging 16% to Record

  5. What a POS! Never fails to disappoint every quarter!

    FU FTR!!!!!!

  6. Phil/Road Trip

    Use waze for the maps. even if you know the route just put it on. it will alert you on cops which is a big plus and also few other things like car stopping or shoulder etc. It also adjusts the route real time with traffic.


  7. Interesting days ahead!

  8. Road trip / Phil – Used to do that every year when the kids were younger! Pile everybody in the van and drive straight through to Florida. We usually left around 5:00 PM and arrive in Florida the morning after. It didn't bother me too much then as the wife and daughters would sleep most of the time and I had the radio to myself! And in the Carolinas and Georgia you could drive 90 without any problems. Never got a ticket! But I can't drive 15 hours like I used to! I guess old age… 

    And I agree, Waze is pretty good to help with cops and other possible problems. But in some cases, too many alerts!

  9. Electricity / Phil – To follow up on your post from this morning, what we are seeing is insane. These utilities keep on building power plants when usage is down.

    And prices are down as well!

    The price of a kilowatt-hour of electricity has been dropping since about 2008. With demand flat and prices dropping, this means electric utilities are being squeezed. They make money by getting a regulated rate of return on new investment, but obviously they don’t need much new investment. They’ve squared this circle by simply building new capacity anyway. If they need to build more power plants in order to make money, then they’ll figure out some way to wheedle regulators into allowing them to build new power plants. 

    This model needs to change!

  10. Alternate route for the way back – make your way over to I-81 by going through/near Atlanta/Knoxville (I-75 from Florida) or cross over in South Carolina (I-26) and up through Charlotte (1-77).  

    You see more of the Appalachain mountains and have hundreds of options along the way

  11. Good Morning.

  12. This gun culture is insane:

    The simple answer is that no government entity has the power to police defective firearms or ammunition in America—or even force gunmakers to warn consumers. The Consumer Product Safety Commission can order the recall and repair of thousands of things, from toasters to teddy bears. If a defective car needs fixing, the U.S. Department of Transportation can make it happen. The Food and Drug Administration deals with food, drugs, and cosmetics. Only one product is beyond the government’s reach when it comes to defects and safety: firearms. Not even the Bureau of Alcohol, Tobacco, Firearms and Explosives can get defective guns off the market. If a gunmaker chooses to ignore a safety concern, there’s no one to stop it.

    There is no liability anywhere, even for defective guns that do kill people!

  13. My Family allowed me to drive 13 hours. Only once. In a 40tf. Motorcoach. Pathetic huh?….. ;)

  14. Hi, I am a new guy here. Pleased to report that scooped up some FTR shares at 6.36 earlier this morning. Wondering if selling calls at this point would be wise or simply take the money and run ?


  15. FTR – first they went for loading up on debt, then they took the reverse split, then they came for the dividend cut. This kind of management tends to end badly for investors.

  16. hope you are pleased at the end of the day, stateahead!

  17. Phil/FTR calls

    When are you going to buy back the FTR calls in the LTP?



  18. State, welcome to the club! FTR selling Calls would be the worsed you could do. Now would be a better time to sell puts to get a lower entree if you like the stock.

  19. Starting to question it already and shifting my thoughts towards selling puts now.. My position is small and can be considered an entry.. Does seem wiserto see how it plays out at the end ..


  20. guess they didn't like IMAX earning either…dangit!

  21. Thanks Yodi., Yes, agreed..especially after I saw the drop below $7 while I was writing my first post.. Puts it is.. will let it a settle a bit I guess..

  22. State,  just to follow up on FTR. My five pennies are this is not a good stock to play with a company which pays 35.8% in div. is very very suspicious. You better gamble on any of the MO stocks like AMZN NFLX and TSLA. The other day I published some new armchair plays much more relaxing plays, but I am not sure what you are looking for. This club the house casino, not the gambler with long leap plays, even that some of us play the futures, but there again you need some 10,000 hours to start off with.

  23. Yodi/FTR

    Dividend was suspended yesterday

  24. Thanks Yodi, I thought they just cut the div. all together, hence my interest..thought it was a prudent move..

    As far as TSLA AMZN etc. I'd rather leave these to someone else..I have benn in teh market since 2009 when I just couldn't resist the lows so I have a few pennies to loose :) for example I am short June NQ with a 6800 put and ready and willing to double down . All meant as a hedge against a bunch of long positions I have been sitting on for a while..

  25. lala FTR even more my statement, this is not a serious stock to lose money with.

  26. yodi/FTR

    Why does your opinion contradicts with Phil? Phil is pretty confident about FTR and with dividend suspended there will be more better earnings and debt reduction.


  27. Greg/ Trip.

    I have been driving from South Texas to  Miami a few times and the most interesting part of the South U.S  is Ala. Lou. and  area, especially if you arrange your stops in a not so conventional way, there are many antebellum houses  (like Gone with the wind) B&B´s where you and your family will have memorable stays so, coming from the north  you will find interesting places in Fitzgerald, Waterboro etc.  the countryside on your way down  is full of old towns with places to be.

  28. To clarify, 6800 June NQ SHORT puts .together with a June NQ futures short at 6960.. 

  29. Yodi / FTR

    I´m with you…

  30. Nice little pop at the open and it's window-dressing day in a short month – so may as well be Monday for all it matters.  

    And, by the way Jabob – see how Monday reversed on Tuesday – that's why they don't matter!  

    It will be easy for oil/gasoline to beat low expectations at 10:30 – we'll have to wait and see what happens.  

    FTR/Jabob – That's why I said you can protect yourself if it was going to bother you.  We sold the 2020 $8 calls for $4 and might be able to buy them back for $1 already which would leave us in 1,500 shares with 15 short $8 puts at net $2.90 with no short calls.  If we are assigned at $8, our average on 3,000 shares will be $5.45 with no short puts or calls.  I really can't understand how that's disappointing on a $6.50 stock.

    Waze/Pat – Cop alerts would be helpful.  I wonder how reliable it is?

    Big Chart – As noted above, it's all about 1,550 on /TF today and, of course, /ES has to hold 2,735 but 2,760 at the moment makes that seem likely. 

    Old age/StJ – That's what I'm worried about.  I did Toronto and that was fine but this is triple that and I certainly can't say that, when I got to Toronto, that I was in the mood to do it again – twice!  In fact, on the way up, we stopped in Binghamton for the night (as I left after work though).

    Building plants/StJ – Yeah but is that net building or because they are replacing old ones and dirty ones?  Not sure how cut and dried the whole thing is.  Of course, if our Government were only a bit more Communist – we could just fix the grid ($1Tn), which leaks 50% of the generated electricity vs 12% in Europe.  It's way more cost-efficient than building new plants and it also elminates 35% of the greenhouse gases and saves consumers 35% of their bills (if the savings were passed along).  

    Unfortunately, it would cost the Kochs many Billions of Dollars – so it's a non-starter.  

    Atlanta/Jeff – That's not too crazy out of the way?  I'd like to go to Atlanta.  

    Drive/1020 – I plan to have Maddie drive some if I can get here to take her test.  She's had her permit since July but hasn't got enough interest in driving to close the deal. 

    FTR/State – Welcome!  Good job jumping in.  $6.90 already.  Here's what I would do:  I would sell the 2020 $5 calls at $3.10, which takes 1/2 your entry $$$ off the table(ish).  Then I'd sell the 2020 $5 puts for $1.70, which drops your net entry to $1.56 with a $3.44 profit if called away at $5 and you risk having 1x more put to you at $5 (if FTR is below) but then you'd have 2x the shares at net $6.56 or $3.28/share so about the same amount as you started with is your worst case or a gain of over 200% on cash if FTR holds $5.

    FTR/Winston – I think all their moves have been logical, not desperate.  

    FTR/Lala – Well, the $8 calls last went for $2.10 so I'd rather be patient though FTR is already over $7 now so we might end up just keeping the spread as is since we don't need to add risk and we make an incredible amount of money at $8.

    IMAX/Jabob – That's crazy!  CC must have went badly.  Probably they warned on China again.

    FTR/Yodi – They cut the dividend, that's why they fell.  Now it's just a $600M company that makes $700M a year and keeps it….  frown

    Good idea Advill.  

  31. Pat FTR Phil possible has a better nose than I have, I am just a pupil here but go to TOS chart and set it for a range of 2 years from 87 to 7 will tell you a lot. Contrary to this I always like to buy stocks when they are on the bottom of the scale, but on this one I have lost already too much money, same with GM I bought the stock when it was 5 $ sold it to a still bigger sucker for 2.5$ they went bang! And now they trading again like a super star.!!!

  32. ALB- Hmm can someone tell me why the market didnt like ALB's result? it's down >6%

  33. Stopped out of /NGV2 as it failed $2.82, we'll have to see if we get a good re-entry now, around $2.70 would be nice.   About $2.60 on the front month.

    GM/Yodi – Then you should be interested in F, which is strangely still down at $10.74 despite making $1.70 per share last year and down to $1.50s this year means $15 is still a bargain for them.

    Year End 31st Dec 2012 2013 2014 2015 2016 2017 2018E 2019E CAGR / Avg
    Revenue $m 133,559 146,917 144,077 149,558 151,800 156,776 147,191 146,257 +3.3%
    Operating Profit $m 5,799 12,791 200 6,982 5,741 4,813     -3.7%
    Net Profit $m 5,613 11,953 1,231 7,373 4,596 7,602 6,274 6,046 +6.3%
    EPS Reported $ 1.41 2.94 0.31 1.84 1.15 1.80     +5.0%
    EPS Normalised $ 1.57 1.87 -0.14 1.74 0.87 1.70 1.58 1.53 +1.6%
    EPS Growth % -68.2 +19.1     -50.2 +95.2 -6.96 -3.38  
    PE Ratio x           6.25 6.72 6.96  
    PEG x           n/a n/a 5.55

    Their 0.60 dividend is 5.5% but, in the LTP, we have this:

    F Ford Motor Co. 3000 2/6/2018 22 $31,350 $10.45 $0.27 $10.45     $10.72 $0.11 $810 2.6% $32,160
    Short Call 2020 17-JAN 9.87 CALL [F @ $10.72 $0.11] -15 2/6/2018 (688) $-2,625 $1.75 $0.00     $1.75 $0.05 $0 0.0% $-2,625
    Short Call 2020 17-JAN 11.87 CALL [F @ $10.72 $0.11] -15 2/6/2018 (688) $-1,500 $1.00 $-0.10     $0.90 $0.00 $150 10.0% $-1,350

    That's still playable as is and a great way to net in for $7.70, which makes the dividend 7.8% while you wait to see if you are called away at $11.87 with a $4.17 (37%) profit.  THAT is a relaxing way to make 25% a year!  

  34. Changing the subject.

    I am looking today for MO at 33.95 NLY for 10.05 and T for 36.65, after that I set up my armchair trades 1.5 to 2.5 % per month. I can sleep with that

  35. Ouch, HUGE builds in oil and gasoline send both down sharply.

    • EIA Petroleum Inventories: Crude +3.0M barrels vs. +2.4M consensus, -1.6M last week.
    • Gasoline +2.5M barrels vs. -0.2M consensus, +0.3M last week.
    • Distillates -1M barrels vs. -0.7M consensus, -2.4M last week.
    • Futures +0.13% to $63.09

    Now we'll see what holds up.

  36. Closed MO at 33.98 sold 65/62.5 Sep c/p for 7.03. Combined monthly return 1.93%

  37. I have a few FTR shares in a couple IRAs that I have been "hoping" would finally recover a little.

    There aren't enough to bother selling puts and calls but they are enough to be a big disappointment every time it runs up a little and I am too stupid to finally just dump them and move on.

    So yes it is disappointing when they never could get to double digits again.

    But not as disappointing as seeing IMAX down 1.75! WTF???

  38. FTR – if management run a company so badly that they find themselves in the position that the only next move is to do a reverse split, then I would suggest that although it may be perversely logic, it also indicates a certain desperation. There a very few examples of companies that carry out a reverse split and manage to attain their former glory. I thought the exchange rules which saw companies forced to delist when their share price fell below $5 for an extended period was much better for investors than the current system. Now companies with a pink sheet level of stock price flounder around waiting to be put out of their misery, all the while providing tantalising temptation for the unsuspecting bargain hunter (CHK and HOV also come to mind).

  39. Close the deal/Phil  My kids too!  They both have had their driving license for a month now and neither has driven solo, nor want to…. Christopher just recently 'Flew' solo on his way to his pilot license.

    Not much different from when we were kids… ;)

  40. Phil / F – is the $9.87 option a call or put? Think its supposed to be a put…

  41. Very nice, Yodi! 

    FTR presentation:

    I don't know how much clearer they can make it.  They expect to finish the VZ integration this year and FCF will pop over $1Bn AFTER paying off interest expenses.  They had been using half the money to pay dividends but people didn't like that so now they are using all the money to pay off debt and people don't like that either.  

    IMAX/Jabob – Well we get called away at $20 in 2 years so hard to worry at $21.80.  If you are just buying stocks and crossing your fingers then yes, a 7% dip is a concern. 

    Split/Winston – Who said they are reverse-splitting?  

    Different/1020 – I bought my first car for $800 2 months before my 15th birthday.  Very agonizing wait for my permit and I got my license just weeks after that.  That weekend, me and my friends drove to Boston.  Actually, this trip with my kids will be the 40th anniversary of that trip.

    F/Eric – Oops, I left out a leg.  In the LTP, we sold 2 sets of short calls (seen above) and we sold 20 of the $11.87 puts for $2.75.  Those are now $2.50.  The 2020 $9.87 puts are now $1.32, not $1.75 so the math is off a bit in the example if you do it that way.  

  42. Phil F I agree with you. This company was one of the only once which did not borrow money from the Government. Further they did not pull out of Europe, like GM.

    Just to top it I did buy still the other day the stock and sold the Sep 18 9.87/11.87 p/c just to receive the max

    being 1.43% per month

  43. Wow, oil dragging down the indexes now.  2nd time was a charm on /YM – always better to catch them on the way down.  

    There goes 2,750 on /ES so maybe we'll see 2,735 tested after all.  

    Oil failed $62.50.

    GMTA Yodi! 

  44. Any thoughts on AAOI and/or ACIA in the fiber-optic space.. to complement FNSR ? AAOI a potential buyout target may be ?

  45. Why 70% support isn’t enough to change gun laws

  46. F/Phil  Just so I'm clear on F,  for the LTP you bought 3000 shares, sold 15  11.87 p/c  and sold 20 9.87 p?


  47. Phil any advice on the following position would be appreciated:

    22,400 shares long at $8.71



    Sold 13 may 2018 $9.00 calls @ .90 (1170)

    Sold 30 may 2018 $10 calls @ $1.10 ($3300)

    Sold 50 aug 2018 $9.00 calls @ $1.22 (6100)

    Sold 70 Jan 2019 $10 calls @ $1.16 (8120)

    $195,104 -1170-3310-6100-8120 = $176,404 (ave 7.87 per share)

  48. US economic growth revised down slightly to 2.5 pct. in Q4

  49. Den name the mistery stock

  50. FTR

  51. Den I would do nothing and let them all expire

  52. Split – FTR fired the reverse split bullet a while back – July 2017

  53. Phil / LB – Any thoughts on earnings today?  I'm thinking of selling some Mar 16 55 calls for .6 to cover my March 16 47.5 Calls …   but I don't have a feel for earnings…. my gut tells me they should be positive, but think the outlook for '18 may still be a bit light ..


  54. Trip- I have done many thousands of miles on road trips having visited 49 states and several Canadian Provinces by car or motorcycle. My view is that the journey is the destination. Stay off the interstates and use the back roads. Detour to what ever seems of interest. You will get there when you get there so relax and enjoy. Lots to see and understand about non-urban America. 

    Another thought- on a couple of trips we splurged and rented a big-ass Lincoln Towncar so plenty of room to stretch out and even sleep. I have done the motorhome route and just too much hassle. I think one of those converted vans may be a good option if you can rent one. 

  55. Phil…I would also visit antebellum houses in the south for the history.  South Carolina, Mississippi on the way back are great places to visit these (plantations usually).  

    All, sorry, things are absolutely CRAZY at my new digs.  I am usually not even on the internet until late, and that is a cursory view of what the market is doing.  CELG screwed the pooch yesterday, but I would sell some puts in June/July in the $70s.  Otherwise, my little gem has data out in a few weeks….fingers and toes crossed.  

  56. Phil/trip

    If you have time to stop in Savannah on the way, check out Mrs. Wilkes house. Awesome southern food.

  57. F/Taihu -We sold 15 $11.87 calls and $15 $9.87 calls.  I guess I wanted to target $10.87 but there weren't any so I made them.  Then 20 short puts but, in the LTP, at the time, we sold $11.87 puts, now I would sell the $9.87 puts as they are paying good money and are $2 cheaper.

    FTR/Den – So messy!  Well I'd buy back all the short calls and, of course, you way oversold but it worked out (did you keep selling on the way down with stops on the previous sales?  That's smart – unless they pop, then you get screwed).  The May $9s are 0.35, $10s 0.25 (rip off), Aug $9s are 0.50 and the Jan $10s are 0.75, so you are up quite a bit as is (not doing the math), let's say $7,000 discount overall is $188,104/22,400 = $8.39 and then I'd sell 20 of the 2020 $8 puts for $3.50 ($70,000) and the $5 calls for $2.90 ($58,000) and that drops your net to $60,000 (less than $3) and, if re-assigned, then about $5.50 so basically the same amount you started with but 42,400 shares if FTR is below $5.

    Of course, if you feel over-exposed, there's little damage if you drop back to 10-15,000 shares first as you'd be taking a $1.40 loss on the half you cut and it only raises you total net by 0.70 if assigned in the worst case and $3.40 if called away in the best.  

    LB/Batman – Not sure which way they will go but hopefully lower so we can add them to the portfolios.  I wouldn't risk going naked – there's no telling what they did last Q.  Retailers have been all over the place and were you intending to gamble or invest?

    Detours/Pstas – That doesn't work when their Grandmother is calling every hour to see when you will be getting there.  And I though about a motorhome but I would rather give the Porsche a chance to hit the highways.  

    Webinar time!

  58. DF/Phil -  would you consider an entry here?

  59. Webinar time! While the cats away, the mice dance and play…..

    Phil – FLA Spring Break Vacation - Comments/Suggestions would be appreciated. Also, a "speed all you want" pass would be nice – if anyone has a CIA card or something…  

    You want to drive some-TEEN hours to FLA? For Spring Break? Wonder what other type of drivers will be on the road with you?  And what will John Law or LEO be doing in anticipation of their antics? Time, convenience, wear and tear, expense, tickets, safety, accidents, what's it worth?

    The no brainer is fly RT.  But if you insist on being Clark Griswald, take the train or what Ravi suggested with the Auto Train.  Besides, other than the signs of human habitation and commercialism along the road, and the age of the driver, not much has changed in all these years, has it? Oh, I'm sorry that I can't lend you my CIA card ol chum and Out.

  60. StJL -  What we are seeing is insane. These utilities keep on building power plants when usage is down. And prices are down as well! This model needs to change!!! 

    While companies are producing more clean power, we're consuming less. Household electricity consumption has started falling in Europe and the U.S. This is one of the reasons fossil power divisions, and a counterintuitive reason for wind and gas turbine divisions, at both GE and Siemens to have a tough go of it.

    BTW, if Tesla had his way, the grid we have, with all its unnecessary expense and inefficiency would not exist, and energy would be free to all.  Imagine what a world we would live in with free energy, where the money did not go to the energy barons, but for better societal causes.

    But NO said those greedy industrialist pigs JP Morgan and Thomas Edison, and we can all thank them for that.  So how do I really feel about it? 

    When I visit Cedar Hill Cemetery, Hartford, CT and Glenmont, Orange, New Jersey,  I make a point to spit on their graves.  If I could do otherwise [use your imagination] without getting caught, I would and Out.

  61. Phil – "Someone made a great point in Powell's testimony that the White House is crowing about $1,000 bonuses but the debt per family has gone up $23,500 under this tax plan – so it's costing people $23,500 to get those $1,000 bonuses. People are just idiots and the Republicans prey on that…"

    Not so for Brad Sherman, Rep for California's 30th congressional district within the San Fernando Valley, in Los Angeles County, whose most impressive economic oratory starts at 48:22 on this video  

    At 50:05 Sherman makes a cogent point about our illusory recovery and economy, that most miss, paraphrased: it doesn't matter what the rate of unemployment is (4% or ZERO), without meaningful jobs (not McJobs), a real labor shortage, and substantial wage increases (not minimum wage, but robust positive real after inflation wage growth) we aren't really in an expansionary economy.

    At 50:47 Sherman states: When we talk about some workers getting a $1K bonus, yeah a few have, but a family of fives share of the increase in the national debt from the tax bill is $26K. What greater proof do we need of the need for financial literacy in this country.  That some charlatan can say here's the deal, I'll give you $1K, it's money in your pocket, and we'll just slap a $26K mortgage on your future.

    On this version of the video from C-span you can scroll down to an index of each individuals comments. Try all of Maxine Waters snipets, as she drops the hammer big time on Kremlin Agent Orange, enjoy.

  62. Phil/AAPL-Have 10 of 2018-150 call and 5 of 2018-145 put. The short call never filled. What would you suggest? Thx

  63. Jabo – "hope you are pleased at the end of the day, stateahead!"

    Hath ye drank of the bitter waters at Marah, Dathan?

  64. AAXN
    Old favorite..

  65. Dave – ALB – see this from Monday chat.

  66. ALB   weak after earnings with lithium continuing to have supply/demand concerns. This afternoon, a trader sold 1,000 Jan. 2019 $80 at $3.90 down to $3.65 

  67. Phil – if you can go to Hominy Grill in Charlston and have the Nasty Biscuit and for desert the Humingbird Cake (if you like this sort of thing)


  68. ETSY – Closed out remaining position.

    Added a little more CTL here.  The stock goes ex-divd on Friday.  Purchases today and tomorrow will receive the .54 dividend.

  69. thoughts on NVDA , I have 93 Jun 2018 BCS 215/235 have sold 10 short $300 calls and 10 short $230 puts

  70. ALB/nay- Thanks, I saw the MS article but was just wondering why would people dump the stock even after a strong report. now down almost 9% :(

  71. Markets took an ugly turn.

    DF/Scott – I don't think they are cheap, just at a more realistic price. 

    Year End 31st Dec 2012 2013 2014 2015 2016 2017 2018E 2019E CAGR / Avg
    Revenue $m 9,275 9,016 9,503 8,122 7,710 7,795 7,373 7,237 -3.4%
    Operating Profit $m 260.7 67.4 7.12 49.8 263.7 83.3     -20.4%
    Net Profit $m 158.6 813.2 -20.3 -8.51 119.9 61.6 75.9 77.3 -17.2%
    EPS Reported $ 0.23 3.37 -0.21 -0.087 1.32 0.040     -29.4%
    EPS Normalised $ 0.62 4.28 -0.047 1.12 1.37 0.44 0.83 0.89 -6.8%
    EPS Growth %   +590.5     +22.6 -68.3 +91.1 +7.10  
    PE Ratio x           20.4 10.7 9.97  
    PEG x           0.22 1.50 2.93

     What should you pay for a stock with 7 years of declining sales and erratic profits that returned 0.44/share last year?  It's nice that they say they can make 0.83 on even less revenues in 2018 but evidence of 100,000 other companies' earnings reports make me skeptical – especially as they just missed the current Q by a wide margin.  I simply don't see any reason to take a chance on them.

    Trip/Naybob – Train costs as much as the plane so I don't see the point of that.  Plane we've done 1,000 times and, thank God, I'm nowhere near as old as you and still enjoy a nice road trip – especially with my girls!

    Sherman/Naybob – Thanks, that was him, he really nailed it.

    AAPL/Ravi – Not sure what the problem is – just sell the call you wanted to sell.  AAPL must be higher so all a benefit to you.

    AAXN/Randers – Goodbye old friend…

    Submitted on 2012/10/26 at 10:02 am

    TASR/Button – Sure, see above.  Me love them long time.  They were just $4 when I named them stock of the decade in the fall of '09 and have been below $4 plenty of times since.   That might be it though for cheap entries.  Here's my logic on TASR, long-term:  

    Police/B1 – They are specially made but we don’t even have an auto industry anymore so I guess they’ll have to be calling Toyota.  as to TASR, they are my stock of the DECADE, not the year.  My theory is that there will soon (2-3 years) be lawsuits from people who are shot with a gun when a TASR COULD have been used and that will flip the concerns of the police from being sued with the stun guns to being sued without the stun guns.  Also, they will be making some more advances in conjunction with battery tech that gives them some wireless options that will increase range substantially.  As I often say – can you imagine in Star Trek if they are in a phaser fight and one guy suddenly whips out a 44 magnum and blows some guy’s head "clean off"?  It would seem totally barbaric, right?   That’s the future – you can’t expect game-changing technology not to creep in over time.  In the history of weapons, when has that ever happened?  Arrows were much cheaper than guns yet, not surprisingly, eventually every king springs for the steel, didn’t they? 


    Submitted on 2013/02/25 at 3:00 pm

    TASR/Scott – Expectations were clearly ahead of reality as they actually beat top and bottom but got slammed down 20% for their troubles.  That was a 51% increase in revenues so I  don't know what people were expecting but I think the real point is to focus on the .07 profit and assume it's .30 next year, which means $7 is still 23x earnings and not terribly cheap but I think, long-term, we're very lucky to see the 200 dma again so I'm all for very simply buying the stock for $7.05 and selling the Sept $7.50 puts and calls for $2 for a net $5.05/6.28 entry as a nice way to establish a long-term position in a stock I'm pretty sure will be more like $30 at the end of the decade (earning $1.50+ per share).  In fact, this is a good time to add 1,000 shares and the spread to the Income Portfolio.  

    Submitted on 2017/08/22 at 2:27 pm

    AAXN (was TASR) (3/5) – Our Stock of the Decade has pulled back to only 350% above our $5 entry so we're interested again.  A combination of widespread civil unrest and too many cameras (which TASR sells too) makes it impolitic to shoot protestors (though beating grannies seems fine).  There's a lot of competition in the body camera biz but TASR owns the stun gun market and those relationships give them a big advantage over the competition.  Sales are not a problem for TASR – camera sales were up 150% from last year with overall growth at 46% – it's a margin issue ("only" 60%) and margins can be fixed quickly in electronics.   This one is a buy for us as we took $29 and ran last year and now, getting back in is a must near $22.  We already have 5 short 2019 $20 puts in the OOP at $3.20 and they are still $3.20 so now is the time to double those down to 10 and add 10 2019 $18 calls ($7.50) and sell 10 2019 $27 calls ($3.30) for net $4.20 less $3.20 is $1 per $9 spread.  

    LMT is our stock of the next decade, by the way (fusion) but haven't been cheap again since we picked them early last year.  

    ALB/Stock, Naybob – There's talk of non-lithium batteries coming sooner than we thought.  That's hurting prospects. 

    NVDA/Millard – Seems pricey to me.  

  72. LOL, ES came right to the 2,735 line.  5% Rule RULES!!!!

  73. Springbreak Roadtrip:

    if you can arrange your itinerary to visit Atlanta, several noteworthy hotels in center city (Peachtree Plaza, Westin), historic Stone Mountain, Aquarium is worth a visit, plus best Sunday brunch south of DC's (Watergate) at Ray's On The River (which will be on me). Added attraction – Roy Moore is just 30 minutes away in Gadsden, AL !!


  74. Getting crushed into the close, last hour /ES from 2757.50 now 2730 with 6 minutes to go.

  75. sold FTR march $7 puts for $0.55.  might end up buying at net $6.45, or settle for 8% profit in two weeks.

  76. LVVV- Lordy, Lordy, what a spectacular speculation this has been :)

  77. Phil,  if you stop in Charleston, I would recommend staying downtown near the Battery.  My best recommendation for dinner would be Hall's Chophouse.  And Hyman's She Crab Soup is a must.

  78. VRX is getting hammered.  Back in some puts for the 4th time.  Sold some Jan 2019 15 puts.  "The stock that keeps on giving."

    Will add more on further weakness.

  79. DF/Phil – thanks…

  80. ALB/Phil I got the LTP's ALB trade, do you recon some adjustments or wait for the dust to settle.

  81. Trump just said gun-free zones are the most dangerous places to be.  

    Worse and worse on this sell-off.

    Altanta/8800 – Nice itinerary but I'm trying to get back to NY, not move to Atlanta!   It is possible we'll look to stop there on the way home but it would be hotel for sleeping, breakfast and get going.  I't got to be 8 hours to Atlanta and still 14 hours to drive the next day.  Actually, that might not be a good plan…

    As we thought in the Webinar, /NQ came down hard and fast to catch up to the others.  

    Good sale, Lunar.  

    LVVV/Pstas – Great call, congrats (and thanks!)!  

    LVVV- this MJ related stock has been on a tear the past week. I took a small speculative position  some months back and my cost basis is $.0025. Sold some today at $.012 which took my initial investment off the table so now it's house money. This play was/is a pure crap shoot and I rolled the dice simply because I knew some folks involved in the venture. They have a good story. 

    There is no recent news to account for the run up. My guess is this is just more speculation of the pending Jan. CA recreational pot legalization. 

    LVVV- posted on this MJ stock earlier this week. All of the CA based MJ stocks are catching bids anticipating CA recreational legalization come 18-Jan. 

    Sold 1/2 of my position to lock in  a very nice profit; will let the balance ride. 

    Running up again this morning. 

    Pstas Submitted on 2017/12/28 at 12:29 pm

    Ultyguy- LVVV- As I stated in my post earlier this week, this is a speculative crap shoot play on the cannabis industry in general and the CA recreational legalization coming in Jan. I know some folks involved including a sizable investor. The company is focused on infused edibles and plant clones. Pot will be essentially a commodity product and wholesale prices already are beginning to reflect that reality. There is a lot of money sloshing around this business and thus some profit to be had. IMO, it will be niche and value-added players that will reap the benefit. In the mean time, speculative fever abounds so sell peanuts while the circus is in town. 

    Talking about scalping- LVVV- bought some more when it traded down to $.01. Sold today at $.018. 

    ALB/Dave – LTP trade is net even so we have the luxury of waiting and seeing.  

    VRX/Albo – Where there's smoke, there's more smoke…

    Terrible, terrible day but pretty much what we expected as we as still consolidating for a 10% move lower.  Remember, you have to burn dip buyers 3 times for them to learn their lesson. 

  82. Pstas – LVVV – you might already know, this guy and this guy specialize in MJ. Like Phil said, where there's smoke, there's more smoke. Time to burn one, then watch the smoke signals and Out.

  83. My note to Reuters on CRM:

    CRM made 0.35/share vs 0.33 expected so a nice beat and revenues at $2.85Bn vs $2.81Bn expected.

    That's popping them towards $120, which is over an $85Bn market cap and you would think SOMEONE would take a beat there and consider that there are about 700M shares so and we're talking $245M here, not $2Bn and, even if they continued this for 4 quarters (they won't as this is their big Q), that's $1.2Bn and the forward p/e would be about 70 times earnings.

    So, despite nice growth and all, I still have trouble getting behind a company that will take 70 years to make back the money I give them.  Even a 3% bond doubles my money in 33 years!  Is there such a thing as a "law of large numbers" for CRM?   They were $75 last year and earnings are up from 0.28, so 25% gain in earnings and a 60% gain in price.  Is that really sustainable? 

  84. Are we looking at the second stage of the blow-off phase:

    Related image

    The charts sure look like that. That would be a very compressed schedule though!

  85. CRM / Phil – I don't know about others, but I hate their app. Every time someone tried to implement it where I work, we ended up switching because no one wants to use their bloated app! I guess people keep on subscribing because you can't go wrong with the market leader attitude from the IBM days! 

  86. Alb/Phil- I’ve sold 5 100 puts, bought 10 110 calls and short 10 130calls. (In fact bought 5 lesser calls). My TOS is showing the trade ytd lost 1.7k. I would imagine if I had 15 110calls, the lost will be higher. How did you get net even? (Newbie here, still learning Everyday)

  87. speaking of apps, the starbucks one is great. Starbucks around here are more crowded than ever, and they're opening them on top of each other. 

    I hope I can get Mr. Wonderful to pass on my new company:

  88. LB L Brands beats by $0.06, beats on revs; guides Q1 EPS below consensus; guides FY19 EPS below consensus

    Reports Q4 (Jan) earnings of $2.11 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus of $2.05; revenues rose 7.4% year/year to $4.82 bln vs the $4.72 bln Capital IQ Consensus.Comps +2%; VS -1% and B&BW +6%Co issues downside guidance for Q1, sees EPS of $0.15-0.20 vs. $0.31 Capital IQ Consensus Estimate. Co issues downside guidance for FY19, sees EPS of $2.95-3.25 vs. $3.43 Capital IQ Consensus Estimate.

  89. LB – Wow next years estimate is way low…. earnings call not till tomorrow AM…  pulling report now

  90. batman – re: LB -  this is great, now this might be a good opportunity to set up a nice 2020 spread!.  If it goes back to the high 30s, looks very enticing. 

  91. albo – VRX – another opportunity setting up for VRX… I am joining you there.. 

  92. Learner – Good.  This is my 4th time to the well.

  93. Learner / LB – I'm in the 40 / 50 20 BCS for about 1/4 a position (closed out 1/4 on the on run up for a gain yesterday and sold some short calls – march 50s ). this will make it a bit less painful….   I'm up for reloading I think it will hold 40 for sure and maybe even 45.   The concall is in the AM – their release was pretty clean.  However they did mention salaries and restructure costs next year… I  had them pegged at 3.35 to 3.45 next year so this is a bit off. 

    On VRX what are you looking at on this one?  the '19 15 puts?

  94. Costly dollar hedges tarnish U.S. bonds for overseas investors

  95. Walmart and Dick’s Raise Minimum Age for Gun Buyers to 21

  96. Senior Executives Get More Sleep Than Everyone Else

  97. Can Trump Really Appoint His Personal Pilot as FAA Administrator?

  98. Trump’s plan to ease climate change rules riles Californians

  99. Good morning!  

    Markets down a bit more so far.  Now Europe is taking us seriously, down 1-1.5% into lunch.  

    CRM/StJ – I never could get the hang of it.  Sometimes we'd hire sales guys and they'd want to use it and we'd indulge them but I didn't see them performing better than guys I trained the old-fashioned way (know your product, build relationships, make sales).  All the tracking and mailing crap is done better by other, cheaper systems.

    I think it plays into this lazy management style that everything can be measured, which absolves you of responsibility for doing more than looking at numbers.  

    ALB/Dave – You're right, it's not even, we're down about $2,000 in the LTP with a slightly different mix:

    Long Call 2020 17-JAN 110.00 CALL [ALB @ $100.43 $-11.14] 15 2/9/2018 (687) $29,250 $19.50 $-2.75 n/a     $16.75 $-6.55 $-4,125 -14.1% $25,125
    Short Call 2020 17-JAN 130.00 CALL [ALB @ $100.43 $-11.14] -10 2/5/2018 (687) $-13,500 $13.50 $-2.80     $10.70 - $2,800 20.7% $-10,700
    Short Put 2020 17-JAN 100.00 PUT [ALB @ $100.43 $-11.14] -5 2/6/2018 (687) $-7,750 $15.50 $1.65     $17.15 - $-825 -10.6% $-8,575

    I don't know if it hadn't adjusted yet when I looked before the bell or if I just misread it.  

    Anyway, down $2,000 in a $50,000 allocation block is not time to panic. They made $1.34/share beating $1.21 expected and sales, at $857M were up 23% and crushed expectations of $791M BUT that's non-GAAP accounting.  GAAP-wise, they lost $1.95 and made only 0.49 for the year so the p/e is technically 200 at $100.  They did generate $300M in cash flow, so I'd go by that and call it 33x.  

    Guidance is $3.3Bn in sales (up 4%) and $5.20 in earnings but, again – non-GAAP.  With the MS downgrade, people are nervous and jumping ship.

    Image result for keep calm don't panicWe took the trade to take a stab at lithium and lithium is still a thing, just not this week or this quarter.  Traders have no patience and ALB spent $317M of Capital Spending to invest in the future – so of course their stock gets punished for it because who wants their company to make money in the future, right?  

    From an LTP perspective, we only have 5 short puts and it was a net $8,000 entry so that's our loss limit other than being assigned at $100.  I guess we'll roll the 2020 $110 calls ($17) down to the $100s ($21) for $4,000, which puts us in for $12,000 on the 15/10 $30 spread and then we can sell 10 April $110s for $2 ($2,000) and, if we do that in 10 out of the 20 months we have, we'll collect $20,000 against our $12,000 longs and whatever remains on the spread will be a bonus.  

    So, on the whole, it turns from a bullish play where we might have made $27,000 at $130 to more conservative Butterfly-type play where we have a good chance of making $8,000 and, if they bounce back up, $38,000 at $130.

    Come to think of it, I might have thought we were even because I didn't realize we were unbalanced.  Had we been more conservative (less greedy) and sold 5 more calls, we'd have made $1,400 more on the short calls and the trade would have been down just $600.  There's a lesson there! 

    Ring/BDC – I remember watching the original show and thinking those guys were nuts.  I wish there were an easy way to contact the people they reject sometimes.  Maybe we should do a post shark tank show called Remora's! 

    LB/Batman – Well at $3/share x 15 $45 is a fair price for 2018.  Monday's trade idea was the 2020 $40/50 bull call spread with the short $40 puts for net $2,600 on the $20,000 spread and now we can drop it to the $35/45 spread with short $35 puts and put it in the LTP!  

    Submitted on 2018/01/04 at 10:27 am

    LB/Den – About time, I'd love to be able to get back in.  Comps were easy to beat and they barely did and guided down 2.5%.   Bottom line is guidance is about $3.10 for the year (2017) with that $2 so $60 is too much without a raise and $45-50 is about the right zone at the moment (if they are projecting little or no growth). 

    Submitted on 2018/02/28 at 12:46 pm

    LB/Batman – Not sure which way they will go but hopefully lower so we can add them to the portfolios.  I wouldn't risk going naked – there's no telling what they did last Q.  Retailers have been all over the place and were you intending to gamble or invest?

    It's all about PATIENCE!