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Which Way Wednesday – Trump and Earnings Drive the Market, both are Unpredictable

MADNESS!  

Our call to short the Nasdaq Futures (/NQ) at 7,460 in yesterday's Morning Report made a lovely $1,000 per contractyou're welcome!  Today we are shorting Oil Futures (/CL) below the $68.50 line (tight stops above) ahead of the 10:30 inventory report as API (a private report) showed a big draw in Oil (3.2Mb), Gasoline (4.9Mb) AND Distilates (1.3Mb) and yet, $68.50 is all they could manage – even with a weak Dollar.  That sends a pretty clear sign that oil is in trouble and anything but a huge draw in the official EIA report is likely to send it down hard and fast but, as I said, we'll be thrilled to take a quick $500 off the table ahead of the report on any sort of dip.

Meanwhile, earnings season is off to a good start with 17% (85) of the S&P 500 reporting as of last night and 87% of them (74) have beaten expectations vs 70% (60) in a typical year.  Those of you who know statistics may cringe at the small sampling and more so considering Banks and Big Tech have gone first but those are the kinds of numbers TV pundits throw out as if they are meaningful – I'm sure you'll hear plenty of examples of it this morning on any of the Financial Networks.  

All this FABULOUS news was already baked in however as companies are only beating expectation by an average of 4.5%, vs 5.6% last year and revenues are only 1.4% ahead of expectations.  Analysts are, in fact, LOWERING their Q3 expectations on companies that have reported, especially in the Non-Finanical, Non-Tech sectors (Energy, Industrials, Consumer Discretionary, Health Care, Utilities, Consumer Staples, and Real Estate).

Speaking of Real Estate, sales of new and existing homes in Southern California are down 11.8% from last year's first half while the median price of a home shot up to a record $536,250.  Newly built homes were the hardest hit, with sales off 47% compared to last June – partly due to low inventory and partly due to rising rates putting prospective buyers on the sidelines.  

As goes Real Estate, so goes the Nation – and the markets — eventually.  So far, no one seems to care while, in Manhattan, inventory is up 25% from last June as NOTHING is selling.  Even "affordable" homes that are priced at less than $1M are clogging up the books, those bargains are up 27% from last year at the highest level of inventory since 2013.  Even the hip boroughs of Brooklyn and Queens are looking at the highest inventory levels since 2008.  In September, listings usually pick up after the summer and that could actually force NYC home prices negative for the first time since Bush II was President.  

There is good news, however, in China, where the Government is using stimulus to offset the damage done by Trump Tariffs and that has popped the CSI 300 200 points (6%) in the past 10 days but still down 20% from the highs so only really weak bounce so far – so let's not get too excited but it is better than going lower.

Of course, stimulus-driven rallies should always be taken with a grain of salt and our rally is driven by tax cuts and buybacks – both one-time events as it's really hard to go any lower and now there are no funds to repatriate.  Trump keeps talking about how other countries are using us as a piggy bank but Trump is using $4Tn of money that was kept overseas to avoid paying the US Government $1Tn in taxes as a piggy bank he has busted wide open to boost the economy.  If 4% GDP growth is all we can do after "repatriating" 20% of our GDP – that's actually kind of sad…

We'll get our first look at Q2 GDP on Friday and the Atlanta Fed is now predicting a whopping 4.5% expansion in our economy and the President already put out a gleeful tweet about the economy, presumably because he saw the number and can't wait to take credit for it.

The problem with the GDP number is that it counts rising inventories as a positive and Trump's Tariffs have caused a lot of inventory to pile up at the docks and in warehouses as things remain uncertain and already Trump is spending $12Bn of the $12.5Bn in taxes his tariffs have generated to bribe bail out farmers who got slammed with unsold crops.

Unfortunately, you can't claim your inflated costs on goods and services as a campaign contribution but Trump can sure use it as one as he robs from everyone to give to the famers so they don't end up on camera complaining about how Trump screwed them over into the election.  Even if we hit 4% in Q2, that still only averages the same 3% we averaged last year for the first half of this year and, in order to average 4% for the year – we'll have to average 5% growth in Q3 and Q4 – which simply isn't going to happen so prepare to be "disappointed", no matter how excited the President gets or how many victory laps he does based on a single data point.

Category Q1 Q4 Q3 Q2 Q1
GDP 2.0% 2.9% 3.2% 3.1% 1.2%
Inventories (change) $13.9B $15.6B $38.5B $5.5B $1.2B
Final Sales 2.0% 3.4% 2.4% 2.9% 2.7%
PCE 0.9% 4.0% 2.2% 3.3% 1.9%
Nonresidential Inv. 10.4% 6.8% 4.7% 6.7% 7.1%
Structures 16.2% 6.3% -7.0% 7.0% 14.8%
Equipment 5.8% 11.5% 10.8% 8.8% 4.4%
Intellectual Property 13.2% 0.8% 5.2% 3.7% 5.8%
Residential Inv. -1.1% 12.8% -4.7% -7.3% 11.1%
Net Exports -$656.8B -$653.9B -$597.5B -$613.6B -$622.2B
Export 3.6% 7.0% 2.1% 3.5% 7.3%
Imports 3.2% 14.1% -0.7% 1.5% 4.3%
Government 1.3% 3.0% 0.7% -0.2% -0.6%
GDP Price Index 2.2% 2.3% 2.1% 1.0% 2.0%

On the other hand, you can expect the usual Economorons featured on the Financial Networks to start pontificating that the US is the new China and extrapolating continued record growth and that should help us put in a firm market top and set us up for a lot of earnings disappointments as the other 83% of the S&P 500 along with 3,000 smaller-cap companies report over the next few weeks.  

The NYSE has finally gone bullish over our Must Hold Line and the Dow is flirting with the 20% line at 25,200, which we shorted yesterday for a 100-point gain (+$500 per contract) and we'll see if we get another chance today but, as noted above, things are very unpredictable at the moment so the wise thing to do is not make any predictions until we get a bit more clarity so I declare a watch and wait day and we'll have our Live Trading Webinar at 1pm to see how things are shaping up.

 


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  1. Good morning, All!

    Join us at 1pm for the weekly webinar!

    https://attendee.gotowebinar.com/register/7015152858373881603


  2. Good morning,

    HMNY/Phil- looks like all of us got assigned of the short puts? 


  3. Need…more…lines!


  4. Trump last night – what you are seeing, reading and hearing is not what's happening! Who you are going to believe, me or your lying ears and eyes?

    Mueller must be getting close to these money laundering deals and Cohen is talking!


  5. For people using Google Sheets to track your portfolio, I recently ran into a way to get option prices into a spreadsheet. It's not difficult once you have set one up. Let me know and I can post about it.


  6. Let the states decide unless it goes against the interest of our corporate overlords:

    https://www.vox.com/energy-and-environment/2018/7/24/17606030/trump-california-fuel-economy-waiver-standards-conservative

    When states want to pollute more, the Trump administration argues for the need for flexibility.

    If, as in California’s case, they want to pollute less, well, it’s time for a little federal discipline. So the administration is setting out to shut down California’s pioneering fuel economy standards, one of the most successful and longstanding examples of federalism in national policy. 


  7. Corporations are not paying taxes anymore:

    https://www.washingtonpost.com/business/2018/07/24/across-globe-taxes-corporations-plummet/

    The average corporate tax rate globally has fallen by more than half over the past three decades, from 49 percent in 1985 to 24 percent in 2018, the study found. [...]

    The international decline in corporate taxes threatens to drain governments of a source of funding for health care and other social welfare programs, while already leading many European countries to adopt larger regressive sales taxes on goods, Wier said.

    Proponents of tax cuts have maintained that lower corporate rates spur capital investment and business growth, improving worker productivity and wages. But the academics say the falling tax rates instead reflect a race to the bottom as nations try to prevent multinational firms from “artificially” shifting their profits overseas through accounting gimmicks.[...]

    “There is nothing natural in the decline of corporate income tax rates,” the paper’s authors said. “Profit shifting, more than tax competition for productive capital, is the key driver of this decline.


  8. Good Morning.


  9. Good one from Barry:

    http://ritholtz.com/2018/07/worlds-biggest-family-fortunes/

    Bloomberg recently updated (no paywall) this giant set of infographics looking at the 25 biggest family fortunes.

    Whenever you see a politician wanting to get rid of the Estate tax, it has nothing to do with small businesses or family farms — the first $22 million is exempt from estate taxes (married couple) — so you know the politico in question is blowing smoke.

    What really concerns the anti-estate taxers are their true Lords & Masters — it is all about these folk:

    https://www.bloomberg.com/features/2018-richest-families/


  10. Good morning,

    What do you think of OMC?  increased dividends for 9 straight years. It's look like everything nice.

    Thank you Gabor


  11. Good morning!

    Not getting cooperation from /CL so far but I have 3 short at $68.66 avg, looking to get back to 2 if I can but will add one short at $68.80 to avg $68.70 if I can too.  So I'm good either way at the moment…  cheeky

    Atitlan tried my HMNY trick and bought one for 0.085 and ended up getting one for $22 this morning – WOW! – that is NUTS!  I read it but I didn't really believe they could have set something up that was that stupid. 

    Already HMNY is down 33% to $14.22 – things are not looking good for what are now 120 shares (was 20,000, then assigned 10,000 more from the short puts).

    WHR still going down, that's why we wait for a bottom to form.

    Corporate Taxes/StJ – Good point but the horses have left the barn long ago.  We need a serious revolution at this point.  Workers of the World, UNITE!!! Oh damn, we tried that one already….

    OMC/Kgab (good djay name!) – I guess there's still a place for big advertising agencies.  We're working with them on PSWI's FUNN project and they seem to be doing well enough, though revenues and earnings are flat as a pancake for years now (which is why they want to work with us!).  They are dropping $1.2Bn to the bottom line and you can buy the whole company for $15.3Bn so a good value and a 3% ($2.40) dividend is nice too.  

    Year End 31st Dec 2012 2013 2014 2015 2016 2017 TTM 2018E 2019E CAGR / Avg
    Revenue $m 14,219 14,585 15,318 15,134 15,417 15,274 15,385 15,322 15,470 +1.4%
    Operating Profit $m 1,804 1,825 1,944 1,920 2,009 2,060 2,088     +2.7%
    Net Profit $m 998.3 991.1 1,104 1,094 1,149 1,088 1,146 1,280 1,291 +1.7%
    EPS Reported $ 3.61 3.71 4.32 4.46 4.77 5.10 5.42     +7.1%
    EPS Normalised $ 3.54 3.81 4.32 4.46 4.77 5.10 5.42 5.59 5.77 +7.6%
    EPS Growth % -6.9 +7.7 +13.4 +3.2 +7.0 +6.8 +9.5 +9.56 +3.22  
    PE Ratio x           13.3 12.5 12.1 11.7  
    PEG x           1.39 1.30 3.75 1.68
    Profitability

    I don't see them growing much so they are pretty fairly priced around $70 but the volatility gives you a chance to sell the 2020 $62.50 puts for $4.70 so 5 of those raises $2,350 and then you can do a conservative spread like 5 2020 $55 ($14.80)/$65 ($8.50) bull call spread for net $6.30 ($3,150) so net $800 on the $5,000 spread that's 100% in the money to start means, as long as they stay flat, you stand to gain $4,200 (525%) at $65+


  12. Question on HMNY-I had 2000 shares and now have 8 which I understand. However I now have a almost 40K margin call on my account?


  13. HMNY/Pirate – I have no idea, better ask the broker.


  14. I had no short puts.


  15. Wow, in the LTP we are up $268,000 today because they changed the price of HMNY but not the share count!  Pirate, something like that may have happened to you but, as I said, check.


  16. IRBT!


  17. Now, that's an impressive chart:

    HMNY Helios and Matheson Analytics Inc. weekly Stock Chart

    With that reverse split we have an historic prices of over $9000 :-)


  18. NOC On 7/16 I gave a tree planting play on the stock. Reported today and before opening was shining in all aspects. Positive outlook etc. Stock down more than 5% or 17.40 As usual some crazy once jumping off the train. I wait and see to load up with some more puts and possible call home the Aug 330 caller, at present covering in equal money my Aug 300 put. Possible Phil might have another good explanation.

    As usual patience in jumping any train!!


  19. WHR for one or the other reason I still show a Jan 20 85 long put which is shining today. Not sure how it got there must be getting old possible the rest of an iron condor?


  20. stjeanluc / HMNY chart – LMAO


  21. FU LB!!!!

    FU HMNY!!!!

    FU GE!!!!


  22. For anyone interested, I've been holding onto USAT since it was at $5. RLH is also a nice play. TRXC is another one that is rumored to be heading to $10. USAT and RLH are holdings in a friend's fund. Finalcials and CEO's have been vetted out.


  23. Damn, oil went flying the wrong way on a big headline draw:

    • EIA Petroleum Inventories: Crude -6.1M barrels vs. -2.6M consensus, +5.8M last week.
    • Gasoline -2.3M barrels vs. -0.7M consensus, -3.2M last week.
    • Distillates -0.1M barrels vs. +0.2M consensus, -0.4M last week.
    • Futures +0.22% to $68.67.

    It's still not net more than API so I have 2 at $68.70 avg and I'll go 2 more around $69.20 to avg $68.95 on 4 short and see how it goes.  

    NOC/Yodi – After Trump's speech yesterday, we should be buying all the military contractors!  

     

    IRBT/Scott – Should have stuck with our Stock of the Decade after they split off – wow! 

    USAT/Soma – That's a nice steady climb.  I don't follow them but things look good on revenues. Hopefully they turn them into profits at some point.


  24. HMNY/Pirate. On Interactive broker I also have 110K margin call. I sold puts.
    I begin chat with IB, they don't know anything, they cant do anything
    "

    I do not have a specific time regarding the processing.

    The contract adjustment is still being reviewed.

    your account is set to not liquidate because they are still processing"

     


  25. USAT makes a device that allows vending machines to accept credit cards and electronic payment from your phone. I haven't done the math, but there have to be a TON of these machines around the world.


  26. This HMNY reverse-split might hitting some software parameters that were not planned like for example, they programmed splits to be 2 digit numbers and the systems are going crazy. So people are being putted 10's of 1000's of the new shares! Just a guess… We don't often have 1-250 reverse splits.


  27. NYCB/Phil- down 6%


  28. CL had one at 68.60 added at 69.25 one out even  stopped out of other at 68,50  440.00 for breakfast


  29. Phil / Any thoughts on a FB earnings play? I think they report tonight.


  30. Wheee, that's much better – hit $68.25!  Back to 2 short, of course and stop at $68.75 to protect about $1,400 – what a silly market…

    USAT/Soma – There are but there's also a ton of ways to do it.  

    NYCB/Dave – That's why we were in conservatively with an $11 call away.  Not much to do but see where they settle for now.  

    Short Call 2019 18-JAN 11.00 CALL [NYCB @ $11.02 $-0.39] -15 5/23/2018 (177) $-2,100 $1.40 $-0.65 $-1.40     $0.75 - $975 46.4% $-1,125
    Short Put 2019 18-JAN 13.00 PUT [NYCB @ $11.02 $-0.39] -10 5/23/2018 (177) $-1,500 $1.50 $0.70     $2.20 - $-700 -46.7% $-2,200
    NYCB New York Community Bancorp Inc 2000 5/23/2018 63 $24,000 $12.00 $-0.98     $11.02 $-0.39 $-1,960 -8.2% $22,040

    New York Community Bancorp Inc. (NYCB) on Wednesday reported second-quarter earnings of $107.4 million.

    The Westbury, New York-based company said it had profit of 20 cents per share.

    The results met Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was also for earnings of 20 cents per share.

    The bank holding company posted revenue of $440 million in the period. Its adjusted revenue was $286.7 million, which missed Street forecasts. Six analysts surveyed by Zacks expected $287.9 million.

    Wow, they missed revenues by $1.2M that's almost 0.5%! 

    NYCB: Suffering From Recency Bias

    FB/Soma – That one is WAY too crazy to call.  

    /YM testing 25,100 from on top – won't be good if it fails. 


  31. A long trip to go nowhere for /CL:

    EU 50 and DAX down about 1% so maybe they are dragging us down into their close.  We'll see in 15 mins:


  32. Phil / NDX looks toppy against all the indices any short plays here or still waiting for a higher bounce ?


  33. Talk about sticking to a plan:  The audio sucks but I pretty much did exactly what I said I'd do with my life 30 years ago!  

    To clarify, Pam was my HS girlfriend from 15-17 but this was 22 and I said "Kids, sorry, this could have been your mother…" Lisa is still one of my best friends.


  34. NDX/Pat – Things are too crazy, market moving up and down on rumors which can be fun but you have to pick your spots very carefully.  Look at /CL – back at $69 now but no reason so I'm not going to play it short again unless it hits $69.50 (and slows down).  Could be anything driving it up or nothing.


  35. OK, took one /CL short at $69.15 – couldn't resist…


  36. GM/Phil- sank 7%, any concern for F


  37. Bought some FB 215 weekly's. Rollin' the dice! Ha!


  38. daveH F is already 4% down does that explain the simpathy.


  39. GM/Dave – F down 4% and likely to have the same issues but it's a long-term play and, hopefully, tariffs are going to be a short-term problem.

    We can go long the laggard once they start turning back up…

    Oil blasted up to $69.70 – still no reason.

    As expected, Europe closed and we popped up – those Europeans are such 'fraidy cats!  


  40. LOL, like clockwork, the pre-earnings Apple-bashing begins:

    • Morgan Stanley analyst Katy Huberty says Apple (NASDAQ:AAPL) could delay the launch of its low-cost LED iPhone by a month.
    • Huberty cites suspected “LED backlight leakage” that could push the 6.1-inch phone’s launch back to October. 
    • The second-gen 5.8-inch iPhone X and 6.5-inch iPhone X Plus phablet is still expected to debut in September. 
    • Huberty expects the delay to cause Apple to deliver a “slightly weaker-than-consensus September quarter.” 
    • Source: MacRumors/Barron’s 

    Nomura talks up Tesla

    • Tesla (NASDAQ:TSLA) pops back over $300 with a 1.82% gain as Nomura Instinet checks in with positive commentary.
    • The investment firm calls discussion of Tesla fighting off insolvency greatly exaggerated as it forecasts an improvement in fundamentals during Q3.
    • "If Tesla can execute to plan, we believe that the narrative around bankruptcy risk will go away, thereby reducing short interest and driving the stock higher," writes analyst Romit Shah.
    • Channel checks from Nomura out of Taiwan and South Korea show Tesla procuring Model 3 parts at a rate of 6K per week.
    • Nomura is on the books with a Buy rating and price target of $450 on Tesla.
    • Tesla is only one week out from reporting Q2 earnings.

  41. FCAU / opportunity?

     

    Marchionne  the grat CEO who rescued the FIAT group died today,  How do you feel it  Phil?


  42. FCAU / Phil – The CEO dying yesterday doesn't help there.


  43. StJ/FCAU

     

    Yes, that´s why perhaps is an opportunity there, sad story of  Mr. Marchionni he never enjoyed life, always rescuing FIAT but now is a 7 brands 5 million units/year company. with a -13% stock decline today


  44. FCAU/Advill – When they get a new CEO, they'll probably pop but this tariff thing has to play out.  Overall, I do like them long-term at this price.  They said he went in for shoulder surgery and ended up dead – so much for Socialized Medicine!  

    Anyway, not much sales growth but $3.5Bn in profits on a $25Bn market cap and estimates are that they will make about $3 per $16 share yet people are bailing – maybe I just don't understand how stocks work anymore…

    Year End 31st Dec 2012 2013 2014 2015 2016 2017 TTM 2018E 2019E CAGR / Avg
    Revenue €m 83,765 86,624 93,640 110,595 111,018 110,934 110,242 115,532 117,862 +5.8%
    Operating Profit €m 3,384 2,897 2,757 2,564 5,038 7,607 7,662     +17.6%
    Net Profit €m 44.0 904 568 334 1,803 3,491 3,870 5,117 5,468 +139.8%
    EPS Reported 0.036 0.74 0.24 0.033 1.18 2.24 2.48     +128.7%
    EPS Normalised 0.13 1.07 0.29 0.082 1.37 2.05 2.31 3.31 3.52 +72.7%
    EPS Growth % -73.2 +702.9 -73.2 -71.4 +1,569 +49.5 +67.7 +62.1 +6.14  
    PE Ratio x           8.06 7.15 4.98 4.69  
    PEG x           0.13 0.12 0.81 0.54
    Profitability

    Seems kind of silly not to sell 10 of the 2020 $17 puts in the LTP for $3 ($3,000) and we can pair that with 20 of the 2020 $13 ($5)/20 ($2.70) bull call spreads at $2.30 ($4,600) for net $1,600 on the $14,000 spread so our upside potential at $20 is $12,400 (775%) and we're $7,000 in the money to start.

    Even if we're assigned 1,000 shares at $18,600 ($18.60) it's still only a 1/4 allocation block we'd be happy to work with long-term.  That's a play we can't turn down!  

    Webinar time (10 mins)!  


  45. FCAU/Marchione

    Phil, fwiw his surgery was hardly routine. Had sarcoma in the right shoulder, ultimately died of a cerebral embolism. Tragic complication. 


  46. Telecom stocks are weak.  New yrly low on T.


  47. Pharm, 

    Can you comment on Biogen’s new AD drug, Ban2401? Phase 2 trial results are supposedly promising. Conference this afternoon will tell more. If promising it seems as though it will be a significant player in the space. 


  48. Phil

    Good afternoon!

    I am back from a summer of travels and learning flying etc…tried to stay out of trouble.

    What do you think of AT&T at these levels. I know you don’t want to bet on a stock that our President is against, but that’s hardly their problem.

    How low can they go? I am betting: not much. The dividend appears safe and with a yield of almost 6.6%,what’s not to like longer term?

    With the yield, I am simply inclined to buy the stock, collect $0.50 dividend and wait for a rebound to sell some OTM calls in 6 months or so.


  49. Can someone please post the CELG ?? earnings trade info from the webinar? I think it was CELG


  50. For the STP from the Webinar:

    • Sell 5 CELG 2020 $85 puts for $9.20 ($4,600) 
    • Buy 10 CELG Jan (2019) $90 calls for $6 ($6,000) 
    • Sell 10 CELG Jan (2019) $100 calls for $2.70 ($2,700)

    That's a net credit of $1,300 on the $10,000 spread that's out of the money.  It's an earnings play and we hope they pop for a quick win but, if they don't, then they'll become an LTP play.


  51. Maya – I'm thinking the same way.  Haven't bought the stock yet, but sold a few June 2019 puts for $1.60.  Buying the stock at $26.4 looks like a good play to me.  May also add some stock.


  52. I am with you guys on T – not in love with the company, but the dividend has to be supportive around here. Who turns down a 6% div!


  53. Marchione/Jeff – Ah, thanks for clarifying.  Sucks that, even with the best doctors, you never know…

    Welcome back Maya!  I always like T when its on sale but TWX is a big pill to swallow and it will take years, not quarters, to turn around.  Their earnings were not good, just improved by tax reform and revenues are off across the board as people continue to cut cords and the TMUS/S merger has got to be a concern as they would be bigger than T or VZ if that happens.  So, how low can they go?  This low:

    Bottom line is T is still making $3.50/share and you can buy them for $30, which is stupid cheap.  We have 10 short 2020 $33 puts in the LTP that we sold for $4.35 ($4,350) so net $28.65 and I am inclined to add 30 2020 $28 ($3.80)/33 ($1.65) bull call spreads at net $2.15 ($6,450) which would put us into $15,000 worth of spreads for net $2,100 with a $12,900 (614%) upside potential and our worst case is owning 1,000 shares of T at net $35.10 – not tragic.  

    Not official yet, just what I'm looking at.  Maybe if CELG does well…


  54. Phil – succession at FCAU was decided over the past weekend – obviously those close to the sources at the hospital knew the reality of a cerebral embolism related to his shoulder sarcoma surgery. 

    Fiat Chrysler Chairman John Elkann named Michael Manley, head of the company’s Jeep and Ram truck divisions, to replace Marchionne at an emergency meeting in Turin, Italy on Saturday

    He died after surgery at a Swiss hospital – hardly a socialist state. I imagine he was able to afford the best hospital treatment possible.


  55. Microsoft at a new high.  Have held MSFT for a long time.  It didn't move for years.

    Only thing wrong with the move is that Ballmer just keeps getting richer and richer.

    Stock seems very pricey.  Will look to sell some OTM calls on a few shares.


  56. Thanks Winston – was just kidding about the medicine – shit happens…

    Wow, indexes popping up ahead of Trump/Junker speech (15 mins?) – I guess they think there will be a trade deal.  

    Kind of unrealistic to expect a trade resolution after a 2-hour meeting but you never know with Trump…

    Ballmer/Albo – I like the not-in-Microsoft Ballmer – he's a nice guy…


  57. NAS buy program kicked in around 2:30


  58. Well there goes the /YM and /NQ shorts. Right out of nowhere…


  59. 2:30 CST —  3:30 on the east coast


  60. Phil/CL- planing to hold the short into weekend?

    Any new futures trade from webinar?


  61. Ah "Trump said to secure concessions to avoid Trade War" is the Bloomberg headline.  

    Still, we never went down over a trade war and China is the bigger deal and that's not resolved but at least there's hope, I suppose. 

    Dollar down 0.33% is helping boost things.

    /CL/Ravi – Got out in the Webinar on that nice dip @ + $1,800.   Might get back in at $69.50 if my /YM shorts don't kill me (25,306).


  62. ~~ Follow Up: Markets spiking toward HoD following report that President Trump has secured trade concessions from EU which includes importing more soybeans and possibly some liquefied natural gas.  


  63. Nice 300-point pop in the Dow since 11.  

    NQ 7,500!  5,000 was the 1999 bubble high(ish) and here we are 50% higher.

    Apparently, EU agreeing to buy Soybeans and LNG from US but it's not like they don't do that anyway. 

    Still, making nothing seem like something is a skill – so you have to give Trump that.


    • Stocks spike to highs of the day following a Dow Jones report that Pres. Trump has secured trade concessions from the European Union, including the import of more soybeans and possibly some liquefied natural gas: Dow +0.6%, S&P +0.9%, Nasdaq +1.1%.
    • The report comes shortly before Trump and European Commission Pres. Juncker were scheduled to brief the press at a joint conference in the White House Rose Garden.
    • Potentially relevant agriculture stocks include ADMBGANDEMOSCFUANNTR.
    • ETF: SOYBUNGUGAZDGAZBOILKOLDUNLDCNGGAZB

  64. Looks like Trump will drop the tax on cars in german news look at F


  65. FCAU also coming back – good timing on that one!


  66. QCOM terminating deal and buying back $30Bn in shares (30%) instead!  


  67. FB disappoints, /NQ drops 50 points!


  68. Wow, that took the sting out of my /YM shorts!  Hopefully they back off too but I took the /NQ money and ran at 7,470.


  69. V is good, I was hoping they'd miss so my /YM thesis is not playing out.  Still, 25,400 is ridiculous and my avg is now 25,345 so I'll wait and see if I can get out even.  


  70. Wonder if the faceplant will stick?  Or will bezos save the day.


  71. Made a quick 30% on the FB 215's today and took the profit. So glad I watched that webinar. When Phil was looking at all of the charts of companies reporting this afternoon, the comments about FB's chart being toppy made me change my mind about gambling on the earnings. Thanks Phil!


  72. You're welcome Soma!   I hate to risk profits into earnings.

    Bezos/That – He could also put the nail in the coffin.  It's all about the cloud for AMZN, everything else is a money-loser. 


  73. F misses and guides lower, down to $10.50.


  74. I knew it the entire time, that Trump guy is simply a genius negotiator!

    More likely Junker threw him a bone so no one loses face and there will be no material impact on anyone. And they can all claim victory. And the markets can rally because everything is awesome again. And so cheap!


  75. I wonder where growth comes for FB moving forward – DAUs are down in Europe and flat in the US. I guess elections are around the corner so there will be lots of new accounts created to "inform"  potential voters. I predict higher DAUs in Russia.


  76. QCOM gonna jump tomorrow… I guess when you buy back 30% of the shares, that EPS number will grow quickly.


  77. Donald Trump just said something truly terrifying




  78. O Canna-bis! US marijuana companies go public in Canada





  79. North Korea is continuing to produce nuclear bomb fuel: Pompeo




  80. National Enquirer’s Yearslong Dealings With Trump Lawyer Fall Under Federal Scrutiny


  81. The level of misinformation from trading services is amazing.  I got email from one such advertising their services.  It said: "July will mark the 2nd anniversary of our VIX Trade Alerts service, hosted by ……… whose equity trades have generated a total return (sum of gains/losses) of 239% in the two years."

    When I look at the portfolio history they actually just summed the gains/losses over a few hundred trades.  By their math 100 trades each making 1% would mean 100% gains instead of 1%.   Their actual gains were just over 3% over the 2 years.  To be fair a lot of the trades were just a few days and none more than a few weeks so maybe their annualized ROI would be great but there is no practical way I can think of to determine that. 


  82. Phil why were you short YM and not NDX ? tryig to understand


  83. Just going through my normal routine of checking ITM call options, I thought it might be a good idea to let, especially newbies know how I do it.

    Checking on TOS the net share value on the call option does not always tell you the truth, this applies especially on options whose stock is close of paying a dividend.

    Here I am looking at one example on my SO Aug 17 44 short caller. Holding 2 short options, my net shares shows -182, meaning I still have 18$ of premium in this option. Now why would someone call for the stock and pay me still 12$ extra? On the surface the assumption is true.

    However looking a bit deeper at this position I see SO is ex div on the 8/17 the amount is .60 cents.

    So here a simple way to check the 44 caller. Stock before opening today 47.55. Premium asked 3.62.

    Here we go: 44 + 3.62 = 47.62 – stock value now 47.55 = .07 still premium. On the surface no reason to panic yet!

    BUT as above the stock pays .60 of div. An eager option buyer will call for the option as it is more than .53 cents over 100% ITM. So for me, if I do not wish to land up with 200 short stock, I roll out to a value over the present stock value, or buy the caller back.

    Hope this helps for some of you. And watch out for wooden nickels.

    Have a nice new trading day. Trust it will be positive, as Trump has again changed his mind.

    He is more unpredictable than a weather cock on a church steeple


  84. Yodi – good lesson on remembering that the 'devil is in the details'.


  85. In the above example you might say: you paying much more for the roll than you originally received. Again this might be true to a certain extend but, do not forget in my armchair trade the stock has increased to the extend of a delta of 1 and my short put option has decrease practical to worthless. So in the end you will find rolling is not always as costly as it may seem.


  86. Thanks Winston


  87. How Facebook’s $151 Billion Rout Could Rewrite the History Books




  88. Dunkin’: 2Q Earnings Snapshot


  89. They thought this was Trump country. Hell no


  90. Trump lies. And lies. And lies.


  91. Europe to Disappoint Trump as Big Buyer of U.S. LNG




  92. Good morning!  

    Nas gapped down hard, down 100 at the moment.  We'll see what sticks but glad we doubled up SQQQ as a hedge!  That's why – when companies have 100x multiples, they can't afford a mistake and FB wasn't even that bad compared to most.

    Misinformation/Tangled – That's an issue PSWI's TradeExchange is looking to address by tracking each service's actual trading results, both over their history and over the time you subscribe to a service.  It makes it impossible to BS people and, since that's the case – only real, reputable services will join since you can't fake the results.  

    NDX/Pat – I was shorting both in the Webinar an /YM went up so I added to it and /NQ went down so I took the money off the table (which negated the damage from /YM) so now, if /YM comes down too – I get paid!  

    Good note Yodi!