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Philstockworld May Top Trade Review

Image result for top trade ideasYes, this is Monday morning's Report.

I don't have much to say about the markets, they are back near the highs and we'll see if they hold tomorrow, not today, as it's Monday and Monday's don't matter.  What we do need to do is bargain-hunt in case it is a real rally and the best way to do that is to look back on past trade ideas and see if we can find some that haven't gone up yet.  

We did our last Top Trade Review in Aprilso it's a good time to do one of those and, as our Members well know, the vast majority of those trades turn positive so, when they're not, it's usually just a matter of time.  As of the April review, we had looked at Top Trades that were initiated through July and, out of 36 trade ideas in 34 weeks, we had 29 winners and 7 losers but 3 of the losers turned around and that left is with 30 wins and 4 losses for a very solid 88.23% winning percentatge.

Our Top Trades are what we think are our best trade ideas of the week with the highest chances of winning and we send out Alerts to our Members via Text and Email but we don't have a specific portfolio for them as they ofen ended up in one of our 5 various Member Portfolios already.  

There's a bit of randomness to the reviews in that we check in on trades after roughly 6 months so they are usually in progress and may be randomly up or down at the moment but that's why these reviews are so great for identifying bargains that simply haven't made a move yet.  These are the Top Trade Ideas from September of 2017:

Wednesday, Sept 6th:  Some weeks we have no Top Trade Ideas, some weeks we have lots.  On Sept 6th we had 4 because I was going on Money Talk to initiate a Portfolio just for picks made on that show and these are the original trade ideas we dedcied to go with that day:

AAPL – Apple is a stock we ALWAY like to have in our portfolios – still the best of all companies.  At the time, we were speculating about the potential sales in the coming cycle and I pointed out that Apple had given good guidance and they were usually conservative so it was likely to be a great year in 2018.  So far, so good on that!  Our trade idea was:

This will end Apple's fiscal year with about $228Bn in sales and about $49Bn in profits and on track to hit $250Bn next year with $55Bn in profits which puts a $1Tn valuation ($195/share) firmly in reach as the p/e would be only 18 and, don't forget, AAPL is sitting on $250Bn in cash which, thanks to Trump, it's likely they will be able to bring home from overseas at a very low tax rate, which could lead to a massive dividend distribution or stock buyback.  

That being the case, we could play AAPL to certainly stay over $160 with the following spread:

  • Sell 10 AAPL 2019 $140 puts for $9.10 ($9,100) 
  • Buy 20 AAPL 2019 $150 calls for $25.30 ($50,600) 
  • Sell 20 AAPL 2019 $165 calls for $17.70 ($35,400) 

Your net cash outlay on the spread is $6,100 and the potential upside on the spread is $30,000 if AAPL is just over $165 on expiration day (Jan 18th, 2019) for a gain of $23,900 (392%).   Selling 10 puts obligates you to buy 1,000 shares of AAPL at $140 ($140,000) plus the $6,100 cash so $146.10 per share is a $16 discount (10%) to the current price as a worst case.  Ordinary margin on the puts is just $10,361 since it's far out of the money so the return on margin is excellent as well.

We are expecting a short-term pullback in Apple and the overall market of perhaps 10% so, it may pay to be patient on this trade.  In the very least – it's a good idea to keep hedges in your portfolio.

We did get our pullback, just as expected but, even with the impatient entry, this has been a great spread with the short Jan $140 puts down to $1.60 ($1,600) and the $150/165 spread at net $11.50 ($23,000) so far and that's net net $21,400 for a gain of $15,300 (250%) so far but no reason to think we woun't get the full $30,000 potential out of this spread so it's still good for a potential double – even though you missed the first 250% worth of gains!  

LB – L Brands was our Trade of the Year for 2018 but, by the time it was time to make an official call (Thanksgiving), LB had shot up to $50 so we switched to HanesBrands (HBI) for our actual call but, fortunately, we didn't wait for November to buy LB and we already cashed this one out in Dec and now we're back in again.  Still, we'll do the numbers as if we stuck with the original trade:

So the damage is self-inflicted and, going forward, the comps should be much stronger but, at $36.68, the Market Cap has dropped to $10.4Bn for a company with $12Bn in sales that's dropping over $1Bn to the bottom line for a p/e of about 10.  Strong sales, strong profits and an iconic brand at a huge discount makes LB a strong contender for our Trade of the Year for 2018 (if it stays this cheap).  

At the moment, our trade idea would be:

  • Sell 20 LB 2019 $32.50 puts for $4.70 ($9,400) 
  • Buy 40 LB 2019 $32.50 calls for $7.50 ($30,000) 
  • Sell 40 LB 2019 $40 calls for $4.30 ($17,200) 

The net cash outlay on this spread is just $3,400 and the margin requirement is $4,974 while the spread returns up to $30,000 at $40 or better on Jan 18th, 2019 for a net profit of $26,600 (782%).  Worst case is owning 2,000 shares of LB at $32.50 + $1.70 cash lost would be $34.20, about 5% below the current price.  

Image result for i love it this muchWe're still above the short put line and the Jan $32.50 puts are down to $3.75 ($7,500) while the $32.50/40 spread is down to $2.80 ($11,200) so the net is $7,700 and up $4,300 (126%) despite LB's massive pullback.  I would not use this as a new trade as the 2020s are out but the same targets there work out to a net CREDIT of $2,500, so I like that trade very, very much as it's now net $2,474 in margin and returns $32,500 if successful.  I'd call that a TRADE OF THE YEAR!!!  

IMAX – Imax has been on a wild ride since we jumped in but it's now right at our target price of $22 though it closed March below the target so we'll just count that finish for the purpose of this review.  In our chat room, we took advantage of the March dip and doubled down into September – a move we also announced on a later episode of Money Talk – it was the first adjustment we ever made to a position in that portfolio…  The original trade was:

IMAX doesn't have 2019 options, they only go out to March so our trade idea for IMAX is:

  • Sell 10 IMAX March $20 puts for $2.35 ($2,350) 
  • Buy 20 IMAX March $18 calls for $3.10 ($6,200) 
  • Sell 20 IMAX March $22 calls for $1.30 ($2,600) 

Here our cash outlay is $1,250 on the $8,000 spread that's $3,000 in the money to start.   The margin is a steep $2,200 because we're selling aggressive puts but the turnaround time is just 6 months if all goes well and we stand to make a potential $6,750 (540%) return on cash if IMAX is over $22 on March 18th.

March options expired on the 16th and IMAX finished the day at $20.75, $1.25 shy of our goal.  Fortunately, we had the $18 calls and they finished at $2.75 and 20 of those were $5,500 while the short March $20 puts and the short March $22 calls both expired out of the money so we netted the $5,500 for a gain of $4,250 (340%) – only half of what we'd hoped for in the unadjusted position but, as you can see below, we moved to the Sept spread, which is now up another $3,660 so far.  

WPM – Wheaton Precious Metals was our 2017 trade of the year back when it was called Silver Wheaton.  That was our first portfolio trade and it was a big one and is currently up $12,863 (643%) but the trade was already at net $9,100 on Sept 6th, so we'll call it up $3,763 (41.3%) since then and it pays $25,000 if WPM holds $22 for the year so still almost 100% left to gain – even though you missed the first $10,000!  

This is what our Money Talk Portfolio looks like now:

A 70% gain is not bad for 7 months "hard" work!  There's still plenty of gas left in the tank on these trades and we only touch them about once a quarter, when I am invited to the show – this is very much a self-hedging "set and forget" portfolio and these are not particularly aggressive trades nor are they risky companies – you don't need to do that sort of thing to make perfectly good returns in the market.  You just have to learn how to Be the House – NOT the Gambler!  

Profit From Experience

Thursday, Sept 14h:  SCO - We though the summer pump in oil would fade out by November but we were totally wrong and this trade was a total wipeout!  The trade idea was:

In the OOP, let's add: 

  • Buy 20 SCO Nov $33 calls for $4 ($8,000) 
  • Sell 20 SCO Nov $39 calls for $1.80 ($3,600) 
  • Sell 10 SCO Nov $35 puts for $3 ($3,000) 

That's net $1,400 on the $12,000 spread that makes money as long as oil is under $50 in November.  Upside potential is $10,600 (757%) in 64 days.  That should pay for our Christmas shopping and also makes a nice market hedge. 

In the STP, let's do the same spread but with 50 bull call spreads and 25 short puts.  

SCO expired in November (17th) at $27.95.  We pulled the plug on this one early but, if you didn't, not only did you lose the $1,400 cash portion of the spread but the 10 short $35 puts expired $7.05 in the money for another $7,050 loss bring the net loss to $8,450 (603%) – leverage cuts both ways and that's why it's very important to stay aware of your exposure and cut your losses quickly if you don't intend to work into a larger position.  It was a hedge, and hedges are supposed to lose money when the market does well -  but hopefully not that much!  

Tues, Sept 19th: TGT – We already had Target trades in both of our main portfolios (LTP and OOP) and we decided to get more aggressive, the new trade was:

  • Roll the short 7 2019 $52.50 calls at $9.70 ($6,790) to 12 2020 $65 calls at $5.50 ($6,600) 
  • Buy 12 2020 $50 calls for $12.40 ($14,880)
  • Roll the 5 short 2019 $45 puts ($1,150) at $2.30 to 8 2020 $52.50 puts at $7 ($5,600) 

So we are pocketing $3,750, which is more than the $3,125 we started with and now we go from a potential (almost certain) $5,625 profit in 16 months to a potential $18,625 profit (still playing conservative) in 28 months.  I think it's worth waiting 12 more months for 3x more money, don't you? 

As a new trade (if you're not already in it) – it's simply selling the new 2020 $52.50 puts for $7 and buying 50% more of the 2020 $50/65 spreads for $6.90 and that's net $6.70 and returns $30 for a $13.30 profit on each spread (192%) if TGT is over $65 in Jan 2020.

Target blew through our targets and the 2020 $52.50 puts are now just $3.40 ($2,720) while the $50/65 bull call spread is $9 ($10,800) so net $8,080 is up $5,400 (201%) but it's an $18,000 spread with $11,920 (147%) left to gain if Target holds $65 into Jan 2020.  Even if you are not PSW subscriber and are just seeing this for the first time and missed our Members' 200% initial gain - it's still probably the best trade idea you've ever gotten!  

That was it for September.  We didn't like any other trades that month enough to make them Top Trades but we did finish the month with 5 winners and just the 1 loser and, although that's 83.33%, it still brings the average down a bit to 35 and 5 or 87.5% through Sept.  On the cash side, the winners totaled $33,013 while our $8,450 loss knocked it down to $24,563, which is still a good month for most people.

Getting back to the markets:  We still have a lot of earnings this week and it's a very dull data week so expect the focus to be very much on earnings – especially with only a snattering of Fed Speak (4):

Mondays are meaningless (I retired from Monday's and I'm teaching our Members to enjoy 4-day work-weeks) and tomorrow will be Technical Tuesday, where we'll focus back on the charts – unless Trump does something crazy that causes a crisis – so 50:50….

 


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  1. These are insane numbers:

    https://www.engadget.com/2018/05/03/youtube-1-8-billion-viewers/

    On stage today at Radio City Music Hall, YouTube CEO Susan Wojcicki made a surprising revelation: the service gets 1.8 billion logged-in viewers every month. And that doesn't include people who aren't logged in — which means the actual number of people watching YouTube is definitely much higher. Last June, the service had 1.5 billion logged-in watchers. On TVs alone, people are now watching 150 million hours of YouTube every day. The latest figures are yet another sign that YouTube's reach is staggering, something that Wojcicki wanted to make crystal clear for the audience of advertisers and potential partners at its annual BrandCast event.


  2. These people are idiots hurting the environment and most importantly, the economy. But their friends get richer so who cares:

    https://www.vox.com/energy-and-environment/2018/5/3/17314000/scott-pruitt-epa-cars-trucks-fuel-economy-cafe-standards

    By 2025, the freeze would increase US oil consumption between 126,000 and 283,000 barrels a day; by 2030, assuming no change in standards, between 221,000 and 644,000 barrels a day.

    “Purchasing this oil,” Rhodium writes, “would cost drivers an additional $193 to $236 billion cumulatively between now and 2035, again depending on oil prices.”

    So $200B that could be spent on stuff that create jobs here! And will also make our car industry less competitive so we'll need to bail them out again.


  3. Rb/Phil- shorted at 2.9, safe to hold shorts when Iran deadline coming?


  4. Good Morning.


  5. Any reason for LB getting hit today?


  6. Good morning!  

    Dow up 170 points yet again – what a joke.  2,684 is the line to watch on /ES.  

    It's all a matter of perspective. As 1,600 is the big line on /ES with 2,400 up 50% from there (which is roughly our 10% line and 10% below that (2,200) MUST HOLD for us to remain long-term bullish – that's all that line means), we have an 800-point run so 160 overshoot is 2,560 and another 160 is 2,720 so that's the zone on the Big, Big Picture above the line and then -160s below it, which has not been an issue so far.  

    Meanwhile, on the weekly chart, it's more like a move from 2,000 to 3,000 that has been rejected on the first try and, if the S&P is consolidating to move over 3,000, then the strong retrace should hold.  A weak retrace of a 1,000-point move is 200 so 2,800 is the weak retrace line and we kind of failed there but 2,600 is the strong retrace and that's been holding – so it's a little encouraging. 

    The next level of proof then is that we assume 2,600 will hold (it has to if we're heading to 3,000) and that means the fall from 3,000 (which we never hit but plan to in this case) to 2,600 is 400 so 80-point bounces which means 2,680 is the weak bounce and that happens to be only 4 points off our short-term calculation – so we should take that line very seriously! 

    Over that line, and we could be setting up for another 80-point gain to the strong bounce at 2,740 – that's your bullish scenario and, over that, we can put on our 3,000 caps.  

    I'm not suddenly bullish – that's just the bullish technicals to look out for!  On the whole, I like 2,680 for a short on /ES with a stop over 2,685 ($250 loss).

    As long at the NYSE is trolling around the 200 dma at 12,470 (now 12,552), it's hard to take any of the other indexes seriously if they are up more than 15% from their Must Hold.  

    YouTube/StJ – That's all the kids watch now.  Some NFLX but more YouTube as they prefer "real" stuff.  Makes you realize the power of these micro-influencers.  My girls never read instructions – there's a YouTube for everything.  Jackie had a party at my house and they made a hole in the wall and she watched a video on how to fix dry wall, went to HD with a list of stuff, came back and followed the instructions to fix it.  Did a good job too!  

    Autos/StJ – So sickening.

    /RB/Dave – Wow, the whole point to a $1.90 entry (I assume not $2.90) is that $2 makes a good stop.  I don't think it's safe at all – that's why I'm not playing, even at $2.13.

    LB/Jabob – Nothing I see.  

    COLUMBUS, Ohio, May 4, 2018 — In conjunction with L Brands' sales
    release, you are invited to listen to a pre-recorded broadcast of the
    April Sales report. The broadcast will be available on the Internet on
    Thursday, May 10, 2018 at 7:30 a.m. ET.

       What:   L Brands April Sales Report

       When:  7:30 a.m. ET on Thursday, May 10, 2018

       Where:  http://www.LB.com

       How:    Simply log on to the Web at the address above or dial
    1-866-639-7583


  7. jabo/     thought is higher gas prices means less money to spend:

    Chain store stocks are underperforming broad market averages to start the week.

    Department store stocks in particular are off to a slow start, with J.C. Penney (JCP-2.9%), Dillard's (DDS-4.8%), Sears Holdings (SHLD-4.5%) and Nordstromg (JWN-1.8%) all down.

    Target (TGT-1.7%) is also showing some morning weakness.


  8. Phil/T

    Good day to you!

    I have some stock, paying me a quarterly dividend that’s enough to buy my necessities like food.

    However,  I am trying to decide whether to buy more and average down or sell some 2020 $30 puts for $3.

    That’s equivalent to 6 dividend payments instead of the 8 payments with owning stock. Plus I pay ordinary tax on the puts vs dividend rate on T’s quarterly payments…..

    Or, buy VZ? Or follow Buffett into AAPL……but he likely bought at $151 on Feb 9 and now the dumb herd is buying his scraps 


  9. thanks stockbern!




  10. Phil/T

    I suppose the other advantage of buying the stock here at a yearly low, is that although I don’t want to own double the stock, I could hope this is the bottom, collect twice as much in dividends and hope to sell my original shares around $35-36 range….basically making a $3-4 profit on my trade and be able to take a tax loss on the original lot of shares…and still keep collecting the dividend? 


  11. Phil

     Do you think FTR is moving because of the FTRPR transfer to FTR in June?

     Thanks


  12. Buffett bashes bitcoin as nonproductive, thriving on mystique


  13. Ben Carson, where will l live?


  14. Eh/Phil- yes it’s not 2.19 for sure it’s 2.13. Somehow my phone always mix the numbers, not the first time. My bad… so I shorted 2 with avg at 2.1315, looking to close at 2.08.


  15. /RB

    Sorry autocorrect is not with me today. ????



  16. Last night’s ‘Silicon Valley’ episode was a masterpiece



  17. Phil, I know that today is an off day for you! However, would you please do a similar levels analysis on the RUT. Thanks as always for your insights!



  18. Gas/Stock – Good point.

    Picked up some /KCU8 @ $122.50, around the $120 line on /KC.  Might go lower and I'll add.

    /NG back already:

    T/Maya – Well, the dividend is $2 with T at $31.92.  The thing is, what are you really trying to do?  Do you want to collect $3,000 (10 short puts) and then you have to weigh that against what you are accomplishing.  VZ makes you a bit more diversified as opposed to potentially doubling down on T and VZ pays $2.36 at $47.75 but you can sell 10 VZ 2020 $45 puts for $4.10 so now you have the same as the T dividend but the stock, if put to you at $45, would be 50% more.

    AAPL is a whole other animal but you can collect $3,000 on AAPL by just selling 2 of the 2020 $175 puts for $15 and than you'd owe $35,000 for 200 shares – right in between T and VZ's cost.

    The real question is, which one do you REALLY want to have assigned to you at the net price?  That's the put you should sell.  

    Personally, I'd sell 10 CHL Dec $45 puts for $2.10 as that pays better than any of them over the shorter length of time! 

    T/Maya – As to the 2nd part.  Are you selling calls?  If not, consider that if you have 1,000 uncovered T @ $31.90, you can sell 10 of the 2020 $25 calls for $7.20 ($7,200) and 10 of the 2020 $35 puts at $6 ($6,000) and then you've taken $13,200 off the table, which is 41% of your money and you'll either keep getting your dividend each Q or your stock will be called away at net $32.20 and you'll have taken another $25,000 off the table for $38,200 total which is way more than the stock and 2 years of dividends.   Then you wait to see if you are assigned back at $35 but, even if you are, since you collected $38,200, the worst case is you are back in less $3.20/share or $31.80 – right where it is now – and only the 1,000 shares you started with (as long as T is over $25).  Best of both worlds.  

    FTR/QC – I think this sums up recent action:

    investors had shorted an almost incomprehensible 40% of FTR's common stock. That's fuel for a turnaround -

    It is a huge mandatory conversion coming up, I'm sure that's also having an effect. 

    /RB/Dave – I don't hate the idea but, as I said, it's a very dangerous trade and a no-play for me.  I want to wait for the Iran deal to play out.

    RUT/Jasu – RUT is easy because very clearly they move from 800 to 1,200 to 1,600 on the big chart 

    That means their major moves are 400 points and again, if you want to be bullish, you expect the retraces to hold up and you shouldn't even have to worry where the strong bounce is.  In the Russell's case, we already expected them to hold 20% over 1,200 (1,440), which is the current Must Hold line.  So we're looking for the move from 1,440 to 1,600 and that's a 160-point run so the weak retrace is 32 points (1,568) and the strong retrace is 64 points (1,536) so, in the shorter-term, that's the range you want to see holding up if the RUT is going to be bullish and Lo and Behold:

    See – easy!  

    To me, I take the market move with a grain of salt when AAPL and Oil are driving it:

    • Shares of Exxon Mobil (XOM +2.2%) and other big oil firms enjoy hefty gains as U.S. crude oil pierces $70/bbl for the first time since November 2014 amid anticipation of potential new U.S. sanctions against Iran and Venezuela's collapsing oil industry.
    • At last check, June WTI +1% at $70.42/bbl and Brent +1.2% at $75.75/bbl.
    • Among other global oil stocks, CVX +1.6%BP +1.7%RDS.B +0.9%.
    • Other big gainers include CHK +3.4%DVN +3.3%SWN +3.4%RRC +6.1%EQT +3.8%.
    • XOM may be enjoying a bigger boost than the rest because of a favorable Barron's article over the weekend, calling the company "a bet on the future of oil."

    • Bill Gates says he would short bitcoin (BTC-USD) if there was an easy way to do it. “As an asset class, you’re not producing anything.”
    • Holding court at Capitalist Woodstock over the weekend, The Oracle called bitcoin "rat poison squared."
    • Meanwhile Buffett's charming business partner Charlie Munger: "Suppose you could make a lot of money trading freshly harvested baby brains. Would you do it … bitcoin is almost as bad.”
    • Threatening $10K headed into the weekend, bitcoin is down to $9.3K this morning.
    • OTCQX:GBTC -4.5%
    • This just in: The price of lumber is through the roof. Lumber futures at the CME are again locked limit up, with the price for July delivery now just shy of $600.
    • The price of lumber is higher by more than 30% this year, and nearly 60% Y/Y.
    • Gannett (NYSE:GCI) is up 6.5% after its Q1 earnings beat expectations as profits didn't drop as far as expected and the company pointed to digital advertising momentum.
    • Revenues fell 6.5% and missed, though declines moderated sequentially. Same-store day-adjusted operating revenues fell 7.2%; they had dropped 8.8% in Q4, with stronger digital revenue and subscriber pricing initiatives.
    • Total digital revenue rose 9% and makes up 35% of total revenues.
    • Revenue breakout: Advertising, $399.5M (down 8.3%); Circulation, $266.6M (down 5.9%).
    • Revenue by segment: Publishing, $638.7M (down 8.1%); ReachLocal, $96.5M (up 24.4%).
    • Adjusted EBITDA by segment: Publishing, $77.8M (down 15.2%); ReachLocal, $6.2M (up 97.4%).
    • It's reiterating full-year guidance for revenues of $2.98B-$3.03B, EBITDA of $330M-$340M, and capex of $65M-$75M
    • Press release
    • Another strong weekend by Disney's Avengers: Infinity War has pushed the YTD U.S. box office mark up to $4.112B through May 6.
    • The box office tally is 5.5% higher than the pace from a year ago on the same date and up 10.7% from two years ago.
    • Athenahealth (NASDAQ:ATHN) is up 21% premarket on the news that Paul Singer's Elliot Management has made a $155 – 160 bid for the company.
    • Friday's close was $126.08.
    • Update: Elliot confirmed its bid of $160/share.
    • Eurozone investor confidence weakened for the fourth straight month in May following a series of soft economic data covering the bloc.
    • The index compiled by Sentix fell to 19.2 from 19.6 in April, and has dropped dramatically from 32.9 at the start of the year.
    • Concerns over trade – like whether the U.S. will slap the eurozone with tariffs – have weighed on sentiment.
    • Three-quarters of Facebook's (NASDAQ:FB) U.S. users have been as active or more since revelations of the Cambridge Analytica scandal, according to a Reuters/Ipsos poll released on Sunday.
    • "I have yet to read an article that says a single person has been harmed by the breach," said analyst Michael Pachter of Wedbush Securities. "Nobody’s outraged on a visceral level."
    • Full poll results
    • FB +0.6% premarket
    • Pharmaceutical and healthcare companies are preparing for a string of new regulations designed to lower drug prices in the U.S., with President Trump expected to give a speech this week outlining his new policies.
    • "We'll be building on the proposals in the president's budget, but he wants to go further," Secretary of Health and Human Services Alex Azar declared. "The entire system is under review."

  19. Phil thank you for your comments in WDC, yes indeed we find pros and cons in this stock, and it is great to have different opinions. I have initiate however the play suggestion on AFL. I feel the stock stands on more solid ground for a conservative play.


  20. AMGN is an other interesting play I initiated 5/1 going very well.


  21. AFL/Yodi – I certainly like them for the long run.  Good call on AMGN – another good deal.

      

    Oliver/QC – So good!  

    Disney is, so far this year, responsible for 33% of all box office sales and Solo (Star Wars) is looking to be a big hit as well.  

    We don't seem to have any DIS in the LTP, though it is in the Butterfly Portfolio.  For the LTP, let's go with:

    • Sell 10 DIS 2020 $95 puts for $7.25 ($7,250) 
    • Buy 15 DIS 2020 $95 calls for $16.25 ($24,375) 
    • Sell 15 DIS 2020 $115 calls for $7.10 ($10,650) 

    That's net $6,475 on the $30,000 spread so the upside potential is $23,525 (363%) but the reason I spent the extra $4,500(ish) on 5 more spreads is so we can sell (not now) something like 5 July $100 calls for $5.20 ($2,600) and, if we do that for 7 quarters, we'll get a LOT more than $4,500 back and we'd be triple-covered on the sale if it pops on us.  

    Earnings are tomorrow – we'll see which way they go before we sell short calls (we did sell May $105s in the Butterfly but it's more conservative than the LTP).  


  22. Phil I know we talked AAPL to death, I still have spear space for some cherry calls on my leap BCS eyeing to sell the Jun 18 190 caller. Do you think they still will overrun 190. I personally feel the will enter a short draw back. Any thoughts.


  23. Hs anyone noticed any news on OLED today?  Seems a strange day for a partial reversal of their earnings pop given the strength of the market. 


  24. AAPL/Yodi – I'm pretty sure they pull back from $1Tn in market cap, which is 5% up from $185 so  about $195 should get people thinking twice about what kind of TINY, Tiny, tiny (doesn't work the other way so I thought I'd start big and go small) percentage of the company they own for $195/share.  Still, I wouldn't bet the farm on it as they are still worth it with $60Bn a year in earnings around the corner. 

    You don't need a penny just to hang around
    But if you've got a nickel, won't you lay your money down?
    Over on the corner, there's a happy noise
    People come from all around to watch the magic boys
    Down on the corner, out in the street
    'Willy and the Poor Boys' are playin'
    Bring a nickel, tap your feet – Creedence 

    OLED/John – Bad note in Barons:  DJ Tech Trader: For the Mobile Tech Industry, the Future Is on Hold — Barron's

    Consumers don't seem to notice the grinding pace at which electronics is
    moving forward. Staring fixedly into their iPhones as they wander into
    traffic, they are mostly satisfied with technology's current plateau.
         And that's good news at the moment for Apple and its suppliers, because
    it means Wall Street inevitably forgets the problems of the current iPhone
    and turns with eager anticipation toward the next iPhone. Shares of Apple
    chip suppliers Qorvo (QRVO), Skyworks Solutions (SWKS), and Universal
    Display (OLED) all ended last week up sharply despite reporting forecasts
    for the immediate future that were affected by the smartphone slump
    . In the
    fall, there will be growth, for that's when the next iPhone is expected to
    arrive.
         The current impasse for technology is going to continue to reduce new
    opportunities for Apple, for competitors such as Samsung, and for suppliers
    like Qorvo and the rest. But there is enough wealth in the steady supply of
    what exists to keep investors like Buffett delighted with the cash flow.
    Milking it, at the moment, triumphs over innovation. --


  25. Wow, so much for the 175-point gain – will it even stay green?

    Nice dip on /ES per our fabulous 5% Rule – that's all we need on a Monday ($750/contract).  


  26. Phil/CHL

    I don’t know if you know this, but according to Yahoo finance and dividend calender, CHL only pays dividend TWICE A YEAR, and NOT every quarter. Their last was $.73 and next one is in July, $1.03.


  27. PhilT 

    Yes, I have been selling calls and puts…but very carefully. My last calls sold were with the stock at $35…

    Sold a few puts recently for $2.59 and may sell more but prob won’t sell calls here just now


  28. CHL/Maya – I think they are bumped up to about $2/yr which is over 4% on $46.95 – not bad.  You make more money selling puts and calls though.  If you get assigned at net $43, you can then sell Dec (or whatever) $42.50 calls at $4.75 and $45 puts for $2.10 and that's $6.85 back in your pocket (16%) for just 8 months and your basis is $36.15 so no worries if you are called away at $42.50 either.  

    • WTI June crude oil settles above$70/bbl for the  first time since November 2014, closing +1.5% at $70.73/bbl, but has since dipped below $70; Brent crude recently traded +0.6% at $75.31/bbl.
    • Pres. Trump tweeted a few minutes ago that he would announce his decision on Iran sanctions at 2 p.m. tomorrow from the White House; oil prices have run higher in recent days, partly on the belief that Trump will take a hard line on the deal.
    • March Consumer Credit increases $11.7B (M/M) vs. $16.2B consensus and $13.64B prior (revised from $10.6B).
    • The Bank of Japan's decision to drop a timeframe for hitting its 2% inflation target shows it is losing confidence in its price outlook and could mean it puts off exiting easy policy for years to come.
    • At the April 27 rate review, the BOJ issued new forecasts projecting inflation will hit 1.8% in fiscal 2019 and 2020 signaling that inflation would fall short of the target for another three years.
    • The central bank's projected timeframe has slipped several times since it was first introduced in 2013. In deploying a huge asset-buying program back then, the BOJ pledged to hit the price goal in two years. Since then, weak inflation forced the bank to push back the timeframe six times.
    Image result for herman munster
    • Loup Ventures’ Gene Muster tells CNBC that the past week shows Apple (NASDAQ:AAPL) has entered a new era.
    • Munster cites two changes to the “Apple story” with iPhone sales relatively steady and reducing anxiety between quarters and the strong cash position potentially leading to more buybacks.  
    • Apple is trading at new highs after reporting better-than-expected earnings last week, which was followed by Berkshire Hathaway’s announced 75M share purchase in Q1. 
    • Munster: “I’ve observed the Apple story for a long time, and I think we’re entering a period where this is as big of an event as the iPhone was, for totally different reasons.” 
    • Apple shares are up 1.3% to $186.26.       
    • Previously: Apple hits new high after more positive Buffett comments (May 7)
    • Tesla (TSLA +2.8%) dropped its 10-Q and Bloomberg's Liam Denning is already in with some analysis after digging through the various adjustments and credits to the company's automotive gross margin rate.
    • "So margins on automotive sales, ex-leasing, did increase in the first quarter, even when all the adjustments are made. This likely reflects selling higher-spec versions of the Models S and X. Still, the underlying figure of 14.3 percent is markedly lower than the headline one and is in line with last year’s weak third quarter, when the Model 3 began production and margins took a big step down."
    • Denning also points out that roughly a third of Tesla’s $2.67B of cash at the end of Q1 appears to be held overseas (mostly in Chinese yuan, euros and Norwegian kroner).
    • Tesla also amended an existing credit agreement on May 3 to enable it to potentially pledge its Fremont plant.
    • German industrial orders unexpectedly dropped for the third month running in March to 0.9% due to weak foreign demand citing that factories are facing headwinds from rising protectionism.
    • The government last month revised its 2018 growth forecast to 2.3% from 2.4% amid concern about international trade tensions.
    • In a further sign that the looming tariffs are a concern, Eurozone investor morale hit 19.2, the lowest level since February 2017.
    • Alphabet’s Google (GOOG +0.7%)(GOOGL +0.9%launches an Android Things operating system spinoff for home appliances and other machines like cash registers and vending machines.
    • A new version of Android an provide users with interface consistency across devices and gives partners an app distribution standard. 
    • Google doesn’t charge manufacturers for Android but hopes to generate a return when the gadgets are used to search, watch YouTube, or buy Play Store content.    
    • Arete Research analyst Richard Kramer, on Android’s prior successes in branching out: “If you’re charitable, you say it’s early. If you’re not, you say Android is irrelevant outside phones.”    
    • Previously: Google Daydream headset launches; News getting a revamp (May 4)

    • Investor morale in the eurozone deteriorated for the fourth consecutive month to 19.2 amid concerns about the possible introduction of U.S. tariffs, lower economic expectations and slightly weaker assessment of current conditions.
    • Germany is urging its European partners to show some flexibility and pursue a broad trade deal that benefits both sides. But that puts Germany at odds with European peers such as France.
    • "The economy in Germany is booming and yet the zenith seems to have passed," Huebner said.
    • Source: Investing.com
    • Bank of America Merrill Lynch reiterates its Buy rating on Nvidia (NASDAQ:NVDA) ahead of earnings on Thursday.
    • Price target held at $300, a 25% upside to Friday’s close.
    • Nvidia shares are up 4.4% to $249.56.
    • Update with comments:
    • Vivek Arya: “In our view, FQ2 sales outlook can be at-least inline or better than consensus from continued data center strength, start of Nintendo Switch sales, workstation demand, and shift of GPU sales to gamers from miners.” 
    • Shares of Walmart (NYSE:WMT) are down 2.15% on a slow decline tied to general anxiety over April retail sales reports.
    • Though the retail giant doesn't update sales monthly, investors may have their eyes on Costco's (COST -1.1%) April report due out later this week.
    • Walmart is now down 15% over the last 90 days.
    • Previously: Chain store stocks weak ahead of monthly data (May 7)
    • The WSJ reports that China is near finalizing a $47.4B investment fund to finance semiconductor research and startup development.
    • The government-backed China Integrated Circuit Industry Investment Fund Co. will be behind the fund. The move comes as China wants to increase its tech independence during a period of heightened relations with the US. 
    • A similar fund was launched in 2014 and raised $21.8B (and the recent ire of US officials). 
    • The Philadelphia Semiconductor Index is up 1%
    • Calorie counts will have to be posted at thousands of restaurants, grocery stores and movie theaters starting today as the Trump Administrations allows the Obamacare provision to survive.
    • Many large restaurant chains such as McDonald's, Starbucks and Panera already post the information.
    • The calorie count rule applies to chains with more than 20 locations.
    • Investors appear edging about apparel chain stocks ahead of this week's round of reporting on April sales from select companies.
    • "April is facing several headwinds which are likely to depress sales growth despite a relatively robust macroeconomic environment through the first 4 months of this year," warned Retail Metrics' Ken Perkins last month.
    • Stocks trending down on the day include Guess (GES -3.1%), Destination XL (DXLG -3.1%), New York Company (NWY -4.5%), American Eagle Outfitters (AEO -2.5%), L Brands (LB-1.1%), Gap (GPS -1.6%), Ross Stores (ROST -1.6%), Buckle (BKE -1.1%) and Citi Trends (CTRN -1.9%).
    • More than 77% of U.S. manufacturers are finding it difficult to hire workers to fill openings, according to the Institute for Supply Management's Spring 2018 Semiannual Economic Forecast.
    • As a result, 53.3% of manufacturers surveyed have raised wages to recruit new hires.
    • For the non-manufacturing sector, 64.4% of those surveyed said they're having difficulty in filling open positions; however, only 35.7% said they increased wages to recruit new hires.
    • Both manufacturing and non-manufacturing supply management executives expect economic growth to continue: Manufacturing revenue is forecast to jump 6.6%, while non-manufacturing revenue is seen rising 3.2%.
    • Source: Press Release

    This is the kind of crap that reminds you that you either keep learning or start retiring!  

    • Microsoft (NASDAQ:MSFTpartners with DJI on a Windows 10 drone SDK that will allow full flight control and data transfer between PCs running the operating system and the drones.
    • The SDK makes it easier to integrate third-party hardware.
    • Microsoft Azure will work together to use Microsoft Azure as DJI’s preferred cloud provider.
    • Floor plans: The new mixed reality program Microsoft Layout will let HoloLens users design a floor plan with holographic furniture.
    • Users can first define the floor plan in Windows Mixed Reality then move models around on it or a VR headset before going to a physical location to use HoloLens to see the plan alongside existing objects.
    • AI models: Project Brainwave, the system for running AI models with specialized chips, is now available in preview mode on Azure. Developers can deploy models on programmable silicon for higher performance than CPUs and GPUs.
    • Microsoft says Brainwave puts Azure as the fastest cloud running real-time AI.
    • Disability AI: Microsoft pledges $25M to an “AI for accessibility” effort focused on how AI could help those with disabilities.
    • The project will involve a mix of tech commitments, grants, and other assistance.
    • Will update with more news as it breaks.
    • Microsoft shares are up 1.4% to $96.50.
    • Kinect returns: Microsoft is bringing back the Kinect by moving it to the cloud.
    • The Project Kinect for Azure will combine the depth sensor with Azure AI services to help developers make more precise devices that use less power. The company says that AI deep learning on depth images could create AI algorithms that are cheaper to deploy. 
    • Cortana + Alexa: Microsoft demonstrates Cortana and Alexa running in tandem, the result of an integration agreement first announced last year. The project is still in development with a limited beta up right now. 
    • Meeting improvements: The company shows off a new conical device for simplifying meetings. The tool recognizes speech patterns and automatically transcribes them for remote users and visually recognizes meeting participants joining the room. 
    • The device also syncs with Cortana for things like finding a meeting room or determining the best meeting time for all team members.  

  29. Silly me for doubting! They bumped it back up into the close.   Shows you how silly it all is when we can go up and down 100 points like that. 


  30. Up day on low volume. S&P hit the 2684 wall at 2:30 and then crated.


  31. As Cryptocurrencies Rise, Who Needs Banks?



  32. Good morning and go VRX! Well soon to be Bausch health companies… smart move to change name. 

    Beat and Raise…. stock up 5% pre-market.  


  33. Good morning! 

    We are now EXACTLY where we were at Friday's close – yesterday has been rendered completely meaningless.  

    That means the NYSE is back at the 200 dma so watch that for any negativity that takes it below. 

    /NQ right on the 6,800 line – bad if that breaks. 

    Oil right at $70, Brent $75.50, /RB $2.12 and /NGV8 back to $2.78

    /SI testing $16.50 from below, /YG $1,309.  

    Dollar popped to 93, that's pressuring things down at the moment but should subside and allow things to lift a bit higher. 

    I was hoping Berkshire would have taken a better hit on earnings – might want to buy it before it's back over $200.

    Copper took a nice dip, worth watching:

    Trump has his Iran decision today and that will be a market-mover and Powell is speaking at 3 but it's at a conference in Zurich so he's not likely to drop any bombshells there.  

    We're selling a lot of notes though and the market tends to drop on note sales weeks to panic people into lending the Government $100Bn at 2% (short-term) so they can roll over the old debt.


  34. A.I. to A.I. commerce won't be a USD event, obviously