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Full-Throttle Thursday – Nasdaq Blasts Back to All-Time Highs

We’re back baby!

Not our posts – we’re still having WordPress issues and I can’t format but the market is roaring back on news the Trump may go easy on Canada and Mexico with his tariffs but I think he’ll sign a bill with no exemptions this afternoon and tank the markets again so we’ll look for shorting opportunities – especially as the Nasdaq (/NQ) closes in on that 7,000 line (now 6,962 on the 100).

As long as the S&P (/ES) holds it’s strong bounce line at 2,728 – it’s silly to short but below that, we will look for 1,575 on the Russell (/RTY) and 6,950 on /NQ and 24,850 on the Dow (/YM) to confirm weakness and short the laggards on the way down (with tight stops if any of them pop back over, of course).

Yesterday, in our Live Trading Webinar, we made $445 trading the Russell and Nasdaq Futures – not bad for 2 hours’ “work”. Our longs from the Morning Report yesterday on the Dow (/YM) paid of very well at 24,800, good for gains of $1,500 per contract on the day.

We reviewed our Member Portfolios during the Webinar and all are in great shape but the paired Long-Term/Short-Term Portfolios (LTP/STP) are simply performing fantastically as we have, so far, played the channel very well. This will be the Nasdaq’s 3rd attempt at the 7,000 line and the first time (Jan) we fell back over 10%, to 6,300 and the 2nd time, late last month, we fell only 300 points (5%) to 6,750 so, even if we’re getting stronger – I still think we see a 150-point dip back to 6,850 and 150 point on the Nasdaq Futures pays $3,000 per contract vs the risk of getting stopped out with a $100 loss if we pop over – that’s the kind of reward/risk set-ups we love to play in the Futures!

But we’re not there yet – let’s look for 24,850 on /YM and 1,577.50 on /RTY to fail this morning with very tight stops over each while we wait to for the Nas to make a move.

Hopefully the posts will be fixed tomorrow but I’ll continue my commentary in chat today.

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  1. Phil/CI/ESRX-

    * Sources: Available cash ($7.2 bn), New debt and CP ($22.5 bn), ESRX debt
      assumed ($13.2 bn), New equity ($26.6 bn).
    * Uses: Purchase equity ($54 bn), ESRX debt assumed ($15 bn), Other ($0.6 bn).
    * Pro forma debt-to-capitalization of ~49%, projected to return to 30s in 18-24
      months post-close.
    * Committed to retaining investment grade debt ratings.
    * Anticipated closing December 31, 2018.

    ~~* “Cigna’s acquisition of Express Scripts brings together two complementary
    customer-centric services companies, well-positioned to drive greater quality
    and affordability for customers,” said David M. Cordani, President and Chief
    Executive Officer of Cigna. “This combination accelerates Cigna’s enterprise
    mission of improving the health, well-being and sense of security of those we
    serve, and in turn, expanding the breadth of services for our customers,
    partners, clients, health plans and communities. Together, we will create an
    expanded portfolio of health services, delivering greater consumer choice,
    closer alignment between the customer and health care provider, and more
    personalized value. This combination will create significant benefits to
    society and differentiated shareholder value.”
    * “First and foremost, we believe this transaction delivers attractive value to
    the Express Scripts shareholders" said Tim Wentworth, President and Chief
    Executive Officer of Express Scripts. Regarding the combination of Cigna and
    Express Scripts, Mr. Wentworth noted, "Together, our two organizations will
    help make the healthiest choices the easiest choices, putting health and
    pharmacy services within reach of everyone we serve. Adding our company's
    leadership in pharmacy and medical benefit management, technology-powered
    clinical solutions, and specialized patient care model to Cigna’s track
    record of delivering value through innovation, we are positioned to transform
    healthcare. We will continue to have a distinct focus at Express Scripts and
    eviCore on partnering with health plans, and together, build tailored
    solutions for health plans and their members. Importantly, this agreement is
    a testament to the work of our team and their resolute focus on providing the
    best care to patients, and the most value to clients.”


  2. Good morning!

    Euro moving up as ECB left rates unchanged (0.25%) but indicated the asset purchases would wind down by Sept so there's $40Bn/month the markets won't have to play with soon.

    Here's what 2.5Tn Euros ($3.3Tn) since 2014 will buy you these days:

    Not that much…

    We got a lot more bang for our bucks but don't our companies all operate on the same planet?  Either they are way underpriced or we are way overpriced and, even if it's something in between – we are overpriced!  

  3. The Race-Based Mortgage Penalty

  4. KInd of fascinating to see markets completely discount the level of chaos we have in our government – clearly Mueller now has some damaging information on Trump and some of his associates, it's only a matter of time until it unfolds. But I guess major investors are thinking that while we are busy untangling all these scandals, there will be less oversight on business practices – no M&A review, fewer regulations, and of course they got their tax cuts. So perfect environment for raping the country without supervision.

  5. Americans Adore Their SUVs

  6. AP FACT CHECK: Trump keeps citing wrong information on trade

  7. Morning All!

    The webinar replay is now available!

  8. Good Morning.

  9. Nice pop into the open – we'll see if it sticks.  If /ES can spend the day over 2,728 without failing – things will be more bullish.

    Still, I shorted /RTY at 1,580 as planned.

    Draghi turned things around with his press conference, where he back-peddled the more hawkish statement:

    • The euro (NYSEARCA:FXE) shot higher in the initial moments after the ECB policy decision (no change) and statement, with traders seizing upon a modest change in tone surrounding the QE program.
    • On further reflection and amid Mario Draghi's post-meeting press conference, traders are now talking about the "well past" phrase – as in "ECB interest rates to remain at their present levels for an extended period of time, and well past" the end of QE.
    • The euro has turned lower vs. the dollar by 0.3% and the Stoxx 600 has moved from flat to up 0.8%. Bond yields across the Continent have also reversed to nicely lower on the session.
    • The Bloomberg Consumer Comfort Index edged up to 56.8 from 56.2 last week.
    • The State of the Economy index moved to 60.1 from 59.7.
    • The Personal Finance index rose to 62.0 from 60.6
    • The Buying Climate index was unchanged at 48.4.
    • Hovnanian (NYSE:HOV): Q1 EPS of -$0.21 misses by $0.13.
    • Revenue of $417.2M (-24.4% Y/Y) misses by $44.4M.
    • Shares -1.75%.
    • Press Release
    • It's high times at Caesars Entertainment (NASDAQ:CZR) after a $2.03B tax benefit helped swing the casino operator to a Q4 profit.
    • Same-store revenue was level with last year at $1.96B for the quarter. Las Vegas RevPAR was essentially flat year-over-year at $124, while Las Vegas Strip market RevPAR declined 3%.
    • EBITDAR came in at $505M to top the $502M consensus estimate of analysts.
    • Shares of Caesars are up 4.80% in premarket trading.
    • Previously: Caesars Entertainment EPS of $2.48 (March 7)

    • Kroger (NYSE:KR) falls after the grocery store operator's full-year guidance falls short of expectations.
    • Identical-store sales including fuel were up 2.7% during Q4 to fall short of the consensus estimate for a 4.8% rise. Identical-store sales ex-fuel +1.5% vs. +1.4% consensus.
    • The company reports a FIFO gross margin of 21.9% of sals.
    • Operating, general & Administrative costs as a percentage of sales increased by 22 bps, while rent and depreciation fell by 9 basis points.
    • Looking ahead, Kroger expects FY19 identical-store sales growth of +1.5% to +2.0% and EPS of $1.95 to $2.15 vs. $2.10 consensus.
    • Previously: Kroger EPS in-line, beats on revenue (March 8)
    • Shares of Kroger are down 5.26% in premarket trading to $24.85 vs. a 52-week trading range of $19.69 to $31.45.
    • Dell Technologies (NYSE:DVMT) reports Q4 results with a 20% revenue growth for VMware to $2.3B. VMware operating income grew 48% to $834M.
    • Operating segment performance: Client Solutions Group +8% to $10.6B with Commercial +9% to $7.3B and Consumer +6% to $3.3B. Client operating income grew 70% to $2.2B. Infrastructure Solutions Group grew 5% to $8.8B with servers and networking +27% to $4.6B and storage at $4.2B. Other businesses (Pivotal, RSA, SecureWorks, Virtustream) grew 3% to $492M. 
    • Conference call started at 8 AM ET with a webcast available here.
    • Press release 
    • Dell shares are up 0.6% premarket to $77.35. 
    • Previously: Dell Technologies net income of $1.1M (March 8)
    • Apple (NASDAQ:AAPL) increased its number of high-performing suppliers by 35% last year, according to the company’s 2018 Progress Report featuring an audit of 756 facilities.
    • The company found 44 “core violations” of its code of conduct in 2017, nearly double on the previous year. Apple doesn’t name the suppliers. 
    • The violations included 38 cases of work hour falsification, two cases of underage workers (who were returned home and to school and promised future jobs), and three bonded-labor situations. 
    • Snap up: Vanity Fair’s Nick Bilton outlines the case for Apple potentially acquiring Snap (NYSE:SNAP). 
    • Bilton cites Apple’s lacking social networking presence, a desire to court a teenage audience, and CEO Tim Cook’s belief that augmented reality is the future of tech. 
    • Apple shares are up 0.3% premarket to $175.55. 
    • Snap shares are up 1.6% to $18.31.  
    • Previously: Snap pares gains on report it's planning biggest layoff yet (March 7)
    • Previously: GBH Insights sees minimal tariff impact on FANG stocks (March 7)
    • L Brands (NYSE:LBreports total sales increased 11.6% to $854M during February.
    • Comparable sales were up 3% during the month vs. +4% expected. Comparable sales were up 2% for the Victoria's Secret business, while Bath & Body Works turned a 7% comp.
    • L Brands says it authorized a new $240 buyback program, inclusive of $23.1M outstanding under its prior authorization.
    • LB +0.86% premarket to $44.35.

    Time To Buy Some Lithium Miners 

    • Wynn Resorts (NASDAQ:WYNN) held a conference call last night during which it preannounced positive trends in Las Vegas and an EBITDA beat in Macau as part of its CEO update.
    • The company also raised its quarterly dividend payout rate to $0.75 per share.
    • A search at Wynn is already underway to replace the two board directors who stepped down.
    • Susquehanna analyst Rachael Rothman keeps a Positive rating on Wynn after factoring in the update. The firm's price target is trimmed to $211 from $214.
    • SEC Form 8-K
    • Shares of Wynn are up 3.85% premarket to $174.89.
    • Vail Resorts (NYSE:MTN) reports resort EBITDA of $308.9M in FQ2, up 58% from a year ago as the acquisition of Stowe factored in.
    • Total effective ticket price increased 10% during the quarter due to price increases in both lift ticket and season pass products. Visitation was down 3.1%.
    • CEO update: "Given the historically low snowfall across the western U.S. this winter, we are pleased with our results for the quarter, which demonstrate the resiliency of our strategic business model and the network of resorts and loyal guests we have developed."
    • The company expects full year EBITDA of $599M to $625M vs. $621M consensus. Net income of $357M to $391M is anticipated.
    • Previously: Vail Resorts beats by $0.54, beats on revenue (March 8)

  10. what is wrong with LB and M today?

  11. Is /RTY not an ICE future? 

  12. /RTY/Jeff- it's CME futures, TD told me that if I want to trade TF then i have subscribe to ICE future but they said RTY is the same

  13. /RTY is CME

  14. The future of GE:

    Towering 260 meters over the sea, more than five times the size of the iconic Arc de Triomphe in Paris, France, the Haliade-X 12 MW carries a 220-meter rotor. Designed and manufactured by LM Wind Power, the 107-meter-long blades will be the longest offshore blades to date and will be longer than the size of a soccer field. One Haliade-X 12 MW turbine will generate up to 67 GWh annually2, enough clean power for up to 16,000 households per turbine, and up to 1 million European households in a 750 MW windfarm configuration.

    Looks good to me!

  15. That's one massive wind turbine:

  16. LB/Jabob – I guess people weren't pleased with Feb sales but they were up 11.5% from last year.  Also the buyback thing.  I think JCP is tanking retail in general, bringing M down too.

    1,570 on /RTY – and the Egg McMuffins are paid for!

    Haliade/StJ – That's very cool.

    Seems like any town with a water tower should get one.  

    Oh noooooooooooo!  There goes 2,728 and the counter resets at 0 days over the line!  

    That's the easy short now if you missed /TF, also /YM just crossing below 24,800 is good too.

  17. Phil

    I need to update my hedges

    What is the correct link to updated portfolios (or date when you updated)

    I looked and could not find what day you updated


    Thank you for the help

  18. Shorts stopped out.

    Heges/QC – Lots of changes but here's STP at the moment:

  19. Actually, let's take advantage of Nas 7,000 (almost) and buy back the 40 short SQQQ Jan $30 calls in the STP – that flips us more bearish and we can always re-cover and roll lower.

  20. Almost time to buy:

    • FQ1 net loss of $30.8M or $0.21 per share vs. flat a year ago.. Revenues of $417.2M vs. $552M.
    • Homebuilding gross margin (incl. interest and land costs) of 14.8% up from 13.5% last year.
    • Consolidated lots controlled increased to 27,183 from 25,329 lots at end of last quarter.
    • Total liquidity at the end of the quarter was $292M.
    • CEO Ara Hovnanian notes the company's financing issues are now in the rearview mirror, and he expects FQ1 to mark the low point for the year.
    • Conference call at 11 ET
    • Previously: Hovnanian misses by $0.13, misses on revenue (March 8)
    • HOV down -6.4%
    • The 30-year fixed mortgage rate increased for the ninth consecutive week, reaching its highest level since January 2014, according to Freddie Mac's latest weekly survey.
    • The benchmark 30-year rate averaged 4.46% during the week ending March 8, up from 4.43% a week ago, and the 15-year fixed-rate mortgage averaged 3.94%, up from last week's 3.90%.
    • A year ago at this time, the 30-year and 15-year fixed rates averaged a respective 4.21% and 3.42%.

  21. Argh, I forgot HOV doesn't have long-term options anymore – makes them way less fun to play than they used to be. 

    Only 0.32 for the HOV Aug $2 puts and 0.45 for the calls.  I guess if you do the $1 ($1.15)/2 (0.45) bull call spread for 0.70 with the short puts you net in for 0.38 on the $1 spread – that's not bad with a $1.69 break-even but nowhere near as much fun as the plays we used to make on them.

  22. /RB getting relentlessly hammered.  Should have played that one as I did notice gas prices didn't go up this weekend despite the contract rollover popping the front-month 0.20 (which I said was not going to hold up).

    Oil crashing too.

    Even honey badger cares about this one:

    Dollar strength not helping.

    You know what to do – BANG BANG!!!:

  23. Good chart from SoldGood – something is going to happen soon! 

    Classic triangle squeezy thingy pattern! 

  24. Phil

    I like that!!!

    Bang Bang…..NOW, if some of us neuron challenged don't see it, then we need to call it quits as investors.

  25. Phil/GOOGL

    I bought 100 GOOGL when it was at 927. However, waiting for market pull backs to protect myself by 5-10%, I have been selling calls against the shares, hoping to make 10% and reducing my risk at same time.

    Now the June $1060 short calls that I sold for $73 as rolls from about $950, are $130.

    Yes, of course I have been selling puts along the way…

    I suspect there is nothing to 'fix' here and it would not bug me too much to get called away at $1060 in JUne…UNLESS, GOOGL shoots up to $1200…I guess at that point I may convert the shors call to a spread…

    Your thoughts, if any…(But don't tell me not to waste my money on buying a non dividend stock and tying up funds,,although you can

  26. BTW… that drop to $999 was too short lived for me to buy the shorts back.. although I did manage to sell a put

  27. Triangle thingie / Phil – Generally prelude to a resumption of the previous move:

    Although in this case, the parallel trend line would be parabolic so hard to see that happening. 

    Of course, in 25% of the cases, we breakdown lower!

  28. I wonder why ESRX is only trading at $81 when the deal was supposed to be valued at over $90?

  29. GOOGL/Maya - You just sold the 1 short call against 100 shares, right?   Of course step one would be selling the June $1,000 puts for $17 so, if you are called away you have that and, if not, cheap enough.  You can use that $17 to roll the $1,060 calls ($102) can be rolled up to the $1,100s at $76 so net out of pocket is $9 and you push the short calls into $50 of premium (from $35) with, of course, a $40 better call away and an easier roll.

    Of course, if you want to go crazy, you do have $112,300 tied up in the stock and you can buy the 2020 $1,000 ($250)/$1,300 ($110) bull call spreads for just $140 ($14,000) so you can buy 4 of those for just $56,000 and sell the same puts for $1,700 and roll the short June $1,060s ($10,200) to 2 short $1,120s at $65 ($13,000) so that's net $60,800 back in your pocket and you have 4 2020 $1,000/1,300 bull call spreads that pay up to $120,000 and 2 short and easily rollable June $1,120 calls and the 1 short put – also easy to roll.  That's almost all your original money back in your pocket and still $120,000 upside potential and you are $48,000 in the money to start!  

    Resumption/StJ – I think they just connotate an inflection point is coming, often it's good but you still have to take the macros into account and, as you note, it's very possible the parabola does not continue.

    ESRX/Jet – Only $48.75 cash and CI may tank over the spend they just agreed to and, also, potential regulatory hurdles.  CI tried to buy ANTM a couple of years ago and got blocked.  I think it goes through because CI can point to UNH and Team Trump not likely to try to stop this.

    Speaking of Trump – he says Cohn can come back if he wants.  

  30. Phil/GOOGL

    Thanks for your thoughts

    Yes, it was only one short call

  31. In April there will be a 50% increase in the pace of Fed balance sheet reductions

  32. Trump at 3:30, why announce before market close?

  33. @knightpilot – maybe Carl Icahn needs some time to place his trades ;)

  34. HA!!!

  35. HOV sticking to its role as serial disappointer. Time to assign it to the reject bin and move on.

  36. You're welcome Maya.  

    Fed/Mike – Is that a fact or an opinion?

    Why/Knight – Because Gary Cohn isn't there to tell him it's a bad idea.

    HOV/Winston – We have nothing to move on from, we're not in it – yet.  Also, how was this serially disappointing (from the old LTP)?

    HOV Hovnanian Enterprises Inc. 10000 4/6/2016 701 $14,700 $1.47 $0.67 $1.47     $2.14 $-0.15 $6,650 45.2% $21,350
    Short Call HOV 2018 19-JAN 1.00 CALL -100 4/6/2016 (0) $-9,000 $0.90 $-0.90     $0.00 $-0.90 $9,000 100.0% $0
    Short Put HOV 2018 19-JAN 2.00 PUT -100 4/6/2016 (0) $-9,000 $0.90 $-0.90     $0.00 $-0.90 $9,000 100.0% $0
    We had a net credit of 0.33 and got called away at $1 with the put expiring worthless for a gain of $13,300.  May all our disappointments be so serial!
    • Congress looks set to pass a bi-partisan bill prohibiting credit reporting agencies from charging fees for credit freeze's. Currently 42 states allow credit reporting agencies to charge customers for prohibiting open access to their credit reports.
    • The proposal states that credit reporting agencies will need to place the freeze within 1 to 3 days after receiving the consumer's request, and  be able to unfreeze within an hour if requested electronically.
    • Senator Mark Warner says he regretted that the legislation—the result of a compromise between the political parties—doesn’t do more to rein in credit-reporting companies.
    • Legislators are looking at other proposals for more oversight of credit bureaus in the wake of Equifax's (NYSE:EFX) massive data hack last year, including charging penalties in the event of further breaches, or establishing credit freezes as the default option for consumers.
    • German factory orders fell by 3.9% following a revised 3.0% surge in December as foreign demand fell by 4.6% amid a decline in orders of nearly 6% percent from other eurozone countries.
    • Reports suggest extended factory closures after Christmas and new year holidays contributed to the fall in industrial production and does not expect the economy to falter any time soon.
    • Steel and aluminum shares are broadly lower ahead of Pres. Trump's expected announcement on tariffs 3:30 ET this afternoon, as investors will see if the president's tone has changed at all from last week when he proclaimed a 25% tariff on imported steel and a 10% levy on aluminum.
    • Investors also may be concerned that U.S. Steel's decision to restart two blast furnaces at its Granite City Works is premature, although Credit Suisse analyst Curt Woodworth thinks the move should prove highly accretive to the company.
    • In reiterating his Outperform rating and raising his stock price target to $55 from $48, Woodworth says is strategic and makes sense regardless of where the U.S. finally comes down on tariffs, as "payback should be rapid and U.S. Steel is already short on volume."
    • X -2.6%AKS -3%CMC -3.6%NUE -2.3%STLD -2.2%ZEUS -1.9%MT -2.3%SCHN-1.6%WOR -1.6%CENX -8.5%AA -1.4%CSTM -1.9%KALU -1.5%.

    • IBM’s (NYSE:IBMinvestor briefing includes a longer-term model with an unspecified time frame.
    • The model is compared to results from the last three years.
    • Revenue expected up in the low single-digits, EPS up in the high single-digits, and pre-tax income in the mid single-digits. 
    • FCF realization expected over 90% compared to the past 104%. Capital expense seen at a steady rate compared to the $11B and acquisition spend strategically aligned with the $10B in the past years. 
    • Dividends expected to increase annually from the $16B and share repurchases to reduce the share count by about 2% annually. 
    • IBM shares are down 1.2% to $156.46. 
    • Looking to raise $1.25B in the leveraged loan market, Uber is eschewing banking advisors, and instead making direct approaches to investors. Industry vets can't remember the last time an issuer sought to raise that large of an amount on its own.
    • Uber last went to the leveraged loan market in 2016, raising $1.15B, but relied on Morgan Stanley to arrange. Is credit just flowing too freely at the moment, or are banks about to face another secular revenue threat?
    • WSJ reports Uber (Private:UBER) is near a deal with rival Grab (Private:GRAB).
    • Uber would turn over most of its operations in Southeast Asia for a 30% stake in Grab. The region’s ride-hailing market could grow over five times to $13.1B by 2025, according to Google and Temasek data. 
    • Sources say regulatory agencies could still block the deal and that the stake involved could prove lower. 
    • Precedent: Uber merged its Russian operations with local competitor Yandex for a 37% stake and sold its Chinese operations to Didi Chuxing for a 20% stake. 
    • Connecting thread: SoftBank has stakes in Grab, Didi, and Uber. 
    • Previously: Uber could sell unit to Grab for stake; Waymo planning ride-hailing service (Feb. 16)

    • Loup Ventures' Gene Munster throws out a wildcard on Tesla (TSLA -0.8%) in the form of the multi-billion ride-sharing opportunity the company could have down the road if various obstacles are overcome..
    • Munster's musings on the issue are posted below.
    • "We believe there’s a greater than 50% chance that Tesla will operate a ride-sharing fleet by 2023."
    • "We believe Tesla could have between 4% and 10% of the U.S. ride-sharing market in 2023."
    • "The fleet could add $2B to $6B in high margin revenue for Tesla starting in 2023. Tesla does not make money today."
    • "While we still expect the first iteration of fully autonomous mobility to be a shared ride-hailing platform, the Tesla fleet idea presents a differentiated approach down the road. Significant advances in software, passing of key legislation, and production hurdles stand between where we are today and realizing this potential, but the magnitude of the opportunity is too large to ignore."

  37. TSLA entering the ride-sharing market because UBER is so profitable.

  38. They are just trying to stay over $320 so they have a friendly analyst make some idiotic projections:

    It's like when they used to prop up companies by talking about how well they'll do when they start selling to 1Bn people in China…

  39. Move on from HOV – as in don't fall in love with a company that simply is not delivering, and hasn't delivered for a long time. 

  40. HOV/Winston – It wasn't about the company, it was the math of the position that made them attractive (along with my firm belief they would not BK).  When the stock was at $1.47 we targeted $2 and sold the puts but conservatively sold $1 calls to net an 0.33 credit on 10,000 shares.  All they needed to do was hold $1.165 for us to break even and $2 was a massive profit.  As it turned out – they blasted to $3 (a double while "failing to deliver") before pulling back but were still way over our target.  

    I like playing HOV because I understand the nature of their business and accept the fact they have good and bad quarters so, when they have a bad one – if the options are right – I like to play them because the reward can greatly outweigh the risk.  My advice to you is don't hate on stocks and bypass fantastic opportunities to trade them just because you don't like them.

  41. HOV — ditto!  i've made good money every year on HOV just by buying stock, selling straddles, and repeating…eventhough the stock has essentially gone down from where i started in 2011.  thanks to phil's belief that it likely will not go BK.  a mere 2K investment has made something like 30-40% each year.

  42. Fed/Phil, that is fact.  In October 2017 reductions started at $10 billion/month going to $20B in January, $30B in April, $40B in July, $50B October 2018 and staying at $50B thereafter

  43. 13 of 18 BofA Bear Market indicators have been triggered

    “He may be a globalist but I still like him,” Trump says of Gary Cohn at a cabinet meeting. “I have a feeling he’ll be back”

    Watch: Mario Draghi, president of the European Central Bank, has taken aim at Donald Trump’s decision to impose tariffs on US imports of steel and aluminium, which has triggered fears of a trade war

    Welders, axle makers and others fear soaring costs from Trump’s steel tariffs via More jobs in the US are from firms that use steel and aluminum than firms that make steel and aluminum


    Jon Favreau to write, produce a new "Star Wars" series

  44. WASHINGTON, March 8 (Reuters) – U.S. household wealth reached $98.7 trillion in the fourth quarter of last year, driven by a rising stock market and real estate prices, a report by the Federal Reserve showed on Thursday.

    That compares to an downwardly revised $96.7 trillion net worth for households in the previous quarter.

    Although the U.S. stock market has been volatile over the past couple of months, it remained buoyant until the beginning of this year. During the fourth quarter of 2017, the S&P 500 jumped by about 10 percent. The value of stocks increased $1.3 trillion, the report showed.

    Household borrowing rose at a 5.2 percent annual rate in the October-December period, the report also showed, up from a 3.5 percent growth rate in the third quarter.

    Consumer credit increased at a 7.8 percent annual rate, up from 3.6 percent in the prior quarter.

    The value of real estate grew $0.5 trillion, the report said. Growth in mortgage debt rose to a 3.0 percent annual rate from 2.8 percent in the previous period.

    The U.S. economy is in its third-longest period of growth since World War Two and the unemployment rate at 4.1 percent is near a 17-year low.

    Elsewhere in the U.S. central bank’s report, liquid assets held by non-financial firms were $2.5 trillion versus a revised $2.4 trillion in the July-September period.

  45. Your next hotel room might have wine on tap

    I'm willing to gamble long on /RB now with the weekend looming ($1.875).  Very tight stops below.

  46. Crude tumbles as rising supply counters the bullish outlook for demand

    U.S. asks China to reduce annual trade deficit by $100 billion—Trump’s tweet was off by $99 billion via “Both sides said there won’t be a trade war” Is Mr. Trump on the TO: line of the memo?

    U.S. services data suggests upward revision to fourth-quarter GDP

    With all these headlines, I just assumed Steel Tariffs was Stormy Daniel's co-star.

  47. Thanks Mike.

    Good day for GreenCoin – 0.0026!   I was going to offer to accept them in April at 0.0005 but that ship seems to have sailed…  Maybe if we get another big pullback.

    Of course, we're still happy to take them for 0.0005!  cheeky

  48. what are we expecting for FNSR earnings today?

  49. FNSR/Rperi – You know me…

    Could be anywhere, we didn't buy them for the quarterly earnings – just the overall value. 

  50. I just realized, that show's been on a year break.  One of my favorites.  

  51. Dollar is killing /RB ($1.87) so I've stuck it out, worth a gamble on the weekend premise as it's better than 75% effective.

    4 long now at $1.872 avg.

  52. CHOC – wow. stopped paying attention when /CC went away from TOS and Zoom!

  53. AP reporting that President Trump's tariffs on steel and aluminum will take place within 15 days; Canada & Mexico exempted indefinitely.

  54. FU LB!!!!

  55. Elementary will return on 4/30

  56. Tariff Time but seems Canada and Mexico are exempt, softening the blow but I'll still short /YM at 24,900 as China will retaliate quickly. 

    CHOC/Scott – Never played that.

  57. Nice pump on /RB!  Over $1.88

    Other countries can somehow pledge a National Security Agreement with the US to avoid tariffs?  This is crazy!  

  58. Phil

    I have some June CHL 50 puts OTM I sold did we roll those?

    Or just wait


  59. LOL, the 10 people who actually benefit from the tariffs are standing in the oval office (steelworkers).
    • According to the AP, the tariffs the president is set to sign into being this afternoon will take effect in 15 days. As previously floated, Mexico and Canada will be indefinitely exempted. Other countries will be allowed to negotiate on a case-by-case basis.
    • The peso and the loonie have both eased off of earlier declines.


    • FTD Companies (FTD -35.1%) craters after the company warns that it won't be able to comply with certain financial covenants in its credit agreement.
    • The company says it's in discussion with lenders and large shareholder Liberty Interactive regarding credit agreement modifications and other financing transactions.
    • FTD also issued preliminary 2017 results and updated 2018 guidance, including the expectation for Q1 revenue to fall short of prior expectations by $20M.
    • Stocks of big videogame makers are mostly higher heading into a White House meeting taking up the subject of whether games are a cause of violence.
    • Electronic Arts (NASDAQ:EA) is up 1.2%; Take-Two Interactive Software (NASDAQ:TTWO) is up 1.8%; Microsoft (NASDAQ:MSFT) is up 0.4%, Sony (NYSE:SNEup 0.9%, and Nintendo (OTCPK:NTDOYup 2.5%. Activision Blizzard (NASDAQ:ATVI) is up 3.5% alongside the reveal of an Oct. 12 release date for its next franchise entry Call of Duty: Black Ops 4.
    • The meeting was set to include members of Congress (Sen. Marco Rubio, and Reps. Vicky Hartzler and Martha Roby, all Republicans) along with industry reps (Strauss Zelnick, CEO of Take-Two's Rockstar Games, and Robert Altman, CEO of Bethesda Softworks parent ZeniMax Media) and critics like Dave Grossman, an author who referred to some games as "murder simulators," and Media Research Center's Brent Bozell and Parents Television Council's Melissa Henson.
    • Petrobras (PBR -0.4%) has signed a new revolving credit facility worth $4.35B with a syndicate of 17 banks, potentially creating a new alternative financing resource to fund its business during 2018-22.
    • The syndicate includes such major banking names as BNP Paribas, Credit Agricole, Bank of America, Bank of China, JPMorgan Chase, Morgan Stanley, Deutsche Bank and Standard Chartered.
    • “This contract creates yet another cash availability alternative for the company to use according to its needs," the company says. "As such, Petrobras may use its cash for early repayment of current debts, allowing for the reduction of the carrying cost of debt."
    • Tech Data (NASDAQ:TECD) shares continue to sink after this morning’s Q4 results beat on EPS and revenue but included downside revenue guidance. Q1 guidance has revenue from $8B to $8.3B (consensus: $8.52B) and EPS from $1.30 to $1.60 (may not be comparable to consensus of $1.97).
    • During the earnings call, management said that “the guidance reflects the increasingly competitive market environment" that started in the latter part of Q2. 
    • Tech Data also found out late last FY that a few key vendors would alter their existing programs due to the constricted environment, which would lower margins for distribution partners. 
    • Non-GAAP operating income revised from flat to low-single-digits in FY1.
    • Tech Data expects the new revenue recognition standards to reduce sales by 7% this year. 
    • Press release 
    • Earnings call transcript 
    • Tech Data (TECD -18.3%) falls sharply after the company's guidance fell short of expectations.
    • The company expects Q1 revenue of $8.0B to $8.3B vs. $8.56B consensus.
    • CFO Chuck Dannewitz explained the reason for the light numbers on the earnings conference call (transcript).
    • Dannewitz: "Our Q1 guidance reflects the increasingly competitive market environment that we began to experience in the latter portion of last year’s Q2 and that continued through the remainder of fiscal year ’18. In addition, late in fiscal year ’18 we were notified by a few key vendors that they intend to alter their programs to align more closely to their current operating environments. The impact of these changes results in lower margin opportunities for their distribution partners. Some of these changes began to take effect beginning in Q4 of fiscal ’18 and will roll out over the course of fiscal year ’19."
    • Tesla (TSLA -1.5%) CEO Elon Musk asked President Trump on Twitter if he thinks the U.S. and China should have equal and fair rules for cars?
    • Musk pointed to the differences in import duties on cars going back and forth between the U.S. and China, as well as the contrasting rules on foreign ownership of factories.
    • "I am against import duties in general, but the current rules make things very difficult. It's like competing in an Olympic race wearing lead shoes," tweeted Musk.
    • Trump praised Musk and SpaceX on Twitter earlier today.
    • Nano cap Jaguar Health (JAGX +139.7%) rockets on massive turnover of 150M shares. No particular news accounts for the action.
    • Last month, it filed a prospectus for the potential sale of up to ~6M shares held by current investors.
    • Last week, subsidiary Napo Pharmaceuticals inked an agreement with pharmacy services provider Transition Patient Services aimed at expanding patient access to HIV-related diarrhea med Mytesi (crofelemer).
    • Caesars Entertainment (CZR +3.2%) officials were in Brazil this week to  discuss tourism issues and offer their support for opening up gambling at land-based casinos.
    • The gambling legislation, which has been floating around Brazil's Ministry of Finance since 2014, is expected to be fianlly actively discussed by politicians, according to Casino News.
    • Previously: Caesars Entertainment rallies after earnings (March 8)
    I disagree with this one:  Dave & Buster's drops amid analyst caution
    • Dave & Buster's Entertainment (PLAY -4.3%) is notably lower on a move being attributed to cautious comments from data tracking firm M Science.
    • The company is due to report earnings on March 27.

  60. LOL – How obvious was that?  Amazingly, people didn't believe Trump would actually do it and the Dow dropped over 80 points ($400/contract) the second he actually announced it.  Talk about easy money!  

    Image result for rodney easy money

    /RB back to $1.875 if you want to catch the next one (might go lower first).

    I'm telling you – you just read the news and place your bets – that's all it takes!  

  61. President McKinley liked Tariffs, according to Trump.  Do you think Trump knows they shot him?

    Good insight into why Trump is pursuing this though – it's an election strategy:

    The 1896 presidential election is often seen as a realigning election, in which McKinley's view of a stronger central government building American industry through protective tariffs and a dollar based on gold triumphed. The voting patterns established then displaced the near-deadlock the major parties had seen since the Civil War; the Republican dominance begun then would continue until 1932, another realigning election with the ascent of Franklin Roosevelt.[113] Phillips argues that, with the possible exception of Iowa Senator Allison, McKinley was the only Republican who could have defeated Bryan—he theorized that eastern candidates such as Morton or Reed would have done badly against the Illinois-born Bryan in the crucial Midwest.[114] According to the biographer, though Bryan was popular among rural voters, "McKinley appealed to a very different industrialized, urbanized America."[115]

    Stopped out of /YM at $400.

  62. CHL/QC – We never did add them officially, did we?  If you sold the June $50s, those are now $5 and the Sept $47.50s are $4.20 so 0.80 to roll down $2.50 isn't bad and I'd keep an eye on it but I'd tray to wait for Jans to come out to get a better roll (premium-wise).


    Meanwhile, we missed $45 but, in the OOP, let's:

    • Sell 5 CHL Sept $47.50 puts for $5 ($2,500) 
    • Buy 10 CHL Sept $40 calls for $6.50 ($6,500)
    • Sell 10 CHL Sept $47.50 calls for $1.70 ($1,750)

    That's net $2,250 on the $7,500 spread that's $6,000 in the money at the moment.  At $47.50 we make $5,250 (233%), which is great money for 6 months' work!  

    In the LTP, we're doubling it to 10 short and 20 of the spreads.

  63. BX/Phil- did we set a spread for BX yet? I only did short puts.

  64. ~ FNSR – Finisar misses by $0.03, reports revs in-line; guides Q4 EPS below consensus, revs below consensus.  

  65. FU FNSR!!!!

    geez, is every stock going to get punished when they report… WTF!

  66. BX/Dave – No, just the short puts so far.  It's pretty much in-line from where we came in (1/8), never got cheap enough ($30) that we find the bull call spread compelling.  They don't all become bull call spreads – just the ones that go on sale for silly reasons. 

    FNSR/Albo, Jabob - We bought back short calls at $18 and now the stock is $19 after pulling back on the bad news.  Seems fine to me…

    They have a big GAAP miss but non-GAAP is 0.20 vs 0.23 expected – not a big deal.  As long as they will make $1 for the year, all is well.  

    We'll see how the CC goes (5pm).

  67. Wilbur Ross is on CNBC talking soup again.

  68. Actually, we were supposed to sell the FNSR $25 calls for $4+ in the LTP and we forgot to make it official.  They were $4.50 today! 

    Submitted on 2018/02/16 at 11:06 am

    • FNSR – They went totally out of favor and we already doubled down on the $15 calls so we'll just have to wait and see.  So far, we bought back the short calls for a $7,950 profit so we're in for net $27,000 so our break-even is about $20 but right now we can (but we're not) sell the 2020 $20 calls for $4.50 ($9,000) which would drop out net to $18,000 with a $7,000 profit (38%) at $20 and that's AFTER the stock dropped 20% on us.  This is why I love option spreads!  Meanwhile, I think we can do better than that, maybe we'll sell the $25s for $4+ (now $3.05) and that will then give us room to sell some short-term calls while we wait to see if we get $50,000 back on our $15/25 spread.

    I forgot they were uncovered because, in the OOP, we rolled to the $13/20 bull call spread and I didn't realize we left the long $15s naked in the LTP.  

  69. Trump accepts offer to meet Kim Jong Un

  70. wing Albanian party attacks

  71. Las Vegas Sands to sell Pennsylvania casino for $1.3 billion

  72. China builds ambitiously in Africa as US sounds the alarm

  73. Nuclear fusion on brink of being realised, say MIT scientists

  74. Donald Trump has bizarre Twitter gaffe involving The Apprentice

  75. Court filings imply that Donald Trump got Stormy Daniels pregnant and she had an abortion

  76. Paul Manafort’s Russian oligarch hits the panic button

  77. Donald Trump angry at Sarah Huckabee Sanders after she screws up badly in press briefing

  78. Good morning! 

    Very pleased to see /RB moving back to $1.886 and hopefully we hit $1.90 but I'll take a penny ($420/contract) if I have to.  

    /KC doing it's thing, as usual.

    NFP at 8:30 – nothing else matters and how good can it be that I wouldn't short /RTY at 1,580?

    Lined up with (June contracts now) 24,950, 2,745 and 7,000 (also a great shorting line)

    Remember to take these pops with a huge grain of salt as the new contracts haven't been tested yet.

    I'm thinking we can very quickly adjust down to March levels as June contracts still have unrealistic expectations in them. 

    • Crude oil prices are slightly higher after a stretch of declines tied to trade war fears. News of the planned meeting between President Trump and Kim Jong Un may be helping to calm traders.
    • WTI crude oil future +0.53% to $60.442/bbl at last check. Brent crude +0.64% to $64.02/bbl
    • Finding a buyer for GoPro (NASDAQ:GPRO) is a tough go, according to New York Post. Sources indicate that no serious bidders have emerged after the company hired JPMorgan last year to assist it in pursuing a sale. CEO Nick Woodman has hinted about a sale as recently as last month. Shares of GoPro are down -1.0% in premarket action.
    • Movie theater chains hope to see the recent momentum at the U.S. box office extend for another week. Led by the $516M brought in by Disney's (NYSE:DIS) Black Panther, the U.S. box office is up 8.5% compared to a year ago through March 7.
    • Disney (DIS) is expected to have the top two movies this weekend, with the debuting A Wrinkle in Time forecast to challenge Black Panther for the top spot. Other movie premieres this weekend include STX Entertainment's Gringo, Entertainment Studios' The Hurricane Heist and Aviron's The Strangers: Prey at Night.
    • Automakers are watching Washington, D.C. for action on several fronts. The industry wants the Trump Administration to revise the fuel efficiency standards on the books for 2022 and 2025 after a revision was passed over as part of the tax reform legislation. The White House has preliminary plans to hold a meeting on Monday on U.S. renewable fuel standards.
    • Earlier this week, General Motors (NYSE:GM) CEO Mary Barra called on the U.S. Congress to expand the consumer tax credit for electric vehicles after the company disclosed it plans to increase Bolt production. Ford (NYSE:F), Uber (Private:UBER), Tesla (NASDAQ:TSLA), BMW (OTCPK:BMWYY), Nissan (OTCPK:NSANY) and Volkswagen (OTCPK:VLKAY) are some of the other companies looking for the EV tax credit to be expanded
    • Earnings season wrapup: The strong earnings season didn't pack as much punch for investors as in past years, according to data from FactSet. Despite the record percentage of companies that topped consensus estimates, a variety of macroeconomic, political and valuation factors handcuffed share prices.
    • Research from Bank of America Merrill Lynch showed that S&P 500 companies that beat analyst estimates only generated a 0.8% gain vs. the +1.6% historic average.
    • Fedspeak: Boston Fed President Eric Rosengren is due to give a speech in Springfield, Massachussetts on the U.S. economy and monetary policy. It will also be a busy day for Chicago Fed President Charles Evans, with appearances on Bloomberg Markets and Squawk Box on his schedule, along with a speech on current economic conditions and monetary policy at the Manhattan Institute Shadow Open Market Committee event in New York.
    • The Fed talks take on added significance amid the new trade war wildcard.
    • Consumer prices in China increased 2.9% in February to top the 2.5% consensus estimate of economists and almost double the 1.5% rise in January.
    • The CPI jump was the strongest recorded in the nation since 2013.
    • Strong consumer demand around the Chinese New Year and rising food prices are being attributed as the main drivers of inflationary pressure during the month.
    • "When we’re pursuing quality-oriented growth, we’ll depend less heavily on the credit-based growth model," said PBOC Governor Zhou Xiaochuan in Beijing.
    • As expected, the Bank of Japan's policy board voted to keep the benchmark interest rate at -0.1% and the yield on 10-year Japanese government bonds near 0%.
    • The decisions by the central bank were made with inflation in Japan still comfortably below the BOJ's 2% target rate. During the press conference, Governor Haruhiko Kuroda said it wasn't the right time to discuss details of an easing exit. He also said there is a high chance that the 2% inflation target will be reached around fiscal year 2019.
    • AutoWeb (NASDAQ:AUTO) has slid 34.8% after hours following a miss in its Q3 earnings that also features the exit of its CEO and CFO.
    • “The board and I have been discussing a succession plan for several months,” says President/CEO Jeff Coats. “After more than a decade of leading AutoWeb and 20 years on its board of directors … I will be stepping down to begin the next phase of my life."
    • Kimberly Boren is exiting the chief financial officer's role April 12, he said, and Wesley Ozima will serve as interim CFO.
    • The company swung to a net loss of $65.8M from a year-ago gain of $1.4M, with this year's result including a noncash charge to income tax of $25.4M and a goodwill impairment of $37.7M.
    • Income on a non-GAAP basis fell to $0.1M from $4.7M.
    • Press release
    Image result for monopoly card fraud
    • Tesla (NASDAQ:TSLA) Chief Accounting Officer Eric Branderiz has exited his post.
    • In a very brief SEC filing, the company says "On March 7, 2018, Eric Branderiz left Tesla for personal reasons. Tesla appreciates Eric's service to the company."
    • Perhaps spooked with low information about a key role, investors have sent Tesla shares 1.7% lower in the postmarket session on some robust volume, though shares are off their lowest bid

    Image result for monopoly card fraud