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Face Plant Thursday – Facebook Drops 20% and Takes the Nasdaq With It

Wheeee, this is fun! 

We made a very quick $2,000 on our Live Trading Webinar idea to short the Nasdaq (/NQ) into the close as Facebook (FB) dropped 20% on earnings disappointment.  Poor Mark Zuckerberg lost $17Bn yesterday but at least we got our $2,000, right?  If only he would have listend to us and hedged his Billions into the earnings report, he could have protected his gains, right? 

That's what hedging is all about – it protects your assets from future uncertainty and that's why we prefer to have short-term short positions in the Futures – our portfolios are already filled with long-term longs – we don't need more of those!  BALANCE is the key to successful trading and this morning /NQ is down to 7,400 (where it can be played bullishly for the bounce) and that's another $1,200 per /NQ short.  We still have our /YM shorts and the Dow is still up around 25,450 and /YM pays $5 per point so even 1/2 of the Nasdaq's 1.75% pullback would be a 200-point drop, good for $1,000 per contract. 

Remember, I can only tell you what is likely to happen and how to profit from it – that is the extent of my powers….

Speaking of profits, in Tuesday's Morning Report we discussed using SQQQ as a hedge, picking up more Jan $10 calls at $2.50 and those should be about $3 this morning for a quick 20% gain against the Nasdaq's 1.7% loss so that's very good leverage on that hedge, giving you 12:1 protection on the way down but, of course, we're more worried about a major 10-20% correction in the Nasdaq than we are in a little dip like this.  I also said:

Oops, now there are rumors that China may be adding stimulus to their economy so no shorting yet – we'll have to wait and see how high we pop but hopefully 7,475 and certainly 7,500 will be a great shorting line on /NQ.

So all we did during yesterday's Live Trading Webinar was follow-through on our plan to short the Nasdaq around 7,500 from Tuesday Morning's Report, where we analyzed the top Nasdaq components and decided that all the likely good news was already priced in so shorting at the top began to make sense.  This is not about charts, we're not doing TA, this is Fundamental Analysis, plain and simple (we also made $1,500 per contract on Tuesday's dip from 7,475 back to 7,400).

The market has been saved, so far, by Trump's claim to be making a trade deal with the EU and, whether that's true or not, at least he won't be putting more tariffs on in the near future and that's a relief.  During our Live Member Chat yesterday (as well as a Top Trade Alert), we added a timely spread on Fiat/Chrysler – who had fallen too far over CEO Marchionne's sudden death.  Even this morning, you can still pick them up for $17, which is a market cap of $26.4Bn for a company dropping $3.5Bn to the bottom line so a p/e around 7.5 vs 7,500 for Tesla (TSLA) – which one has a better chance of being around in 2020?

Tesla has earnings next Wednesday and that will be fun.  We published a short for TSLA in our Morning Report of June 20th which turned a net $5,800 investment into $14,000 in 30 days for an $8,200 (141%) gain and, though we are fairly sure their earnings will suck, they are too middle-of-the-range to risk another short – especially since TSLA traders are famous for ignoring terrible results and latching onto whatever new BS Elon Musk spits out.  THEN we'll short!  

Last we heard, TSLA had $2.6Bn in cash as of March 31st and it's very likely they burned $2Bn in the past 90 days during their massive push to produce 5,000 cars in a week.  Even if you just consider the last 5,000 cars they produced in the last week of June, they couldn't have sold them and, at $40,000 per car cost (and I'm being generous), that's already $200M sitting around but what about the 2 assembly lines they opened under tents and the extra workers and the double shifts, etc?  That stuff adds up fast and TSLA was already buring $745M in the March quarter so well over $1Bn and very possibly $2Bn went out the window in Q2 and that might leave them with not enough money to fund Q3.  It's going to be interesting!  

 


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  1. Good morning..

    Phil,  One of your picks from last year.  I still had a position in my portfolio. SVU … Finally !

    United Natural Foods scoops up Supervalu

    Jul. 26, 2018 8:06 AM ET|By: Clark Schultz, SA News Editor 

    United Natural Foods (NASDAQ:UNFI) and Supervalu (NYSE:SVU) are joining forces in the grocery sector in a deal seen delivering $175M in synergies.

    United Natural Foods CEO Steve Spinner says combining the company's leading position in natural and organic foods with Supervalu's presence in fast-turning products will make it a choice for a broader range of customers.

    "The combination of UNFI and SUPERVALU provides a substantial premium and delivers certainty of value to our stockholders, meaningful benefits to our customers, expanded opportunities for our employees, and the ability for us and our vendors to efficiently serve a varied customer base," says Supervalu CEO Mark Gross on the deal.

    After the first year, the transaction is projected to be accretive to EPS at a double-digit rate excluding one-time costs.

    UNFI CEO and Chairman Steven Spinner will lead the combined entity, while United Natural Foods COO Sean Griffin will lead the integration efforts.

    UNFI expects to finance the transaction substantially with debt and says Goldman Sachs provided committed financing in the transaction.

    Over time, UNFI plans to divest Supervalu retail assets in a "thoughtful and economi"  manner.

    Upon closing, UNFI's net debt-to-EBITDA ratio is expected to be high.  With strong cash flows, proceeds from divestitures and commitment to reducing debt, the company anticipates reducing leverage by at least two full turns in the first three years.

    SVU +63.24% premarket to $31.75. UNFI -7.36% to $38.15.

    Previously: Supervalu up 63% on sale to United Natural Foods (July 26)

    Source: Press Release


  2. Good Morning, All!

    The webinar replay is now available!

    https://youtu.be/g1UwqMKSU1M


  3. Argh… Just added lines to the Nasdaq chart!


  4. The trade war is not over:

    https://www.washingtonpost.com/business/2018/07/25/its-way-too-soon-declare-trumps-trade-war-over/

    The “deal” with Europe looks odd. This is an agreement to make a deal at some point down the road. And there’s a lot to work out, even on the basics. Trump said Europe would be “a massive buyer of LNG,” but it isn’t clear how that will happen. Liquefying natural gas, shipping it across the Atlantic in special tankers and turning it into gas again is costly. Russia, which has very low gas production and pipeline costs, can easily undercut U.S. LNG. That’s why European facilities for re-gasifying LNG are operating at about a quarter of capacity. And new pipelines will deliver natural gas from the Caspian Sea to southern Europe and from Russia to Germany. “The United States is putting a ceiling on the price of gas in Europe,” Total chief executive Patrick Pouyanné said in a recent visit to Washington. But that doesn’t necessarily translate into massive sales.

    Furthermore, the vows Trump and Juncker made to work toward zero tariffs and zero subsidies on industrial goods a lot like the Transatlantic Trade and Investment Partnership, a deal negotiated by the Obama Administration that Trump had previously pushed aside. Is Trump really ready to embrace it now when the only major change is for Europe to buy more soybeans?


  5. Maybe bad news for QCOM, but worse news for iPhone users:

    https://mashable.com/2018/07/25/apple-dump-qualcomm-chips-next-iphone/

    On AT&T, devices with Qualcomm's X20 LTE modem, which is embedded in its Snapdragon 845 chip powering many flagship 2018 Android phones, saw download speeds of up to 64 percent faster than the Intel modems inside of some iPhones. 

    Same went for T-Mobile: Devices with Qualcomm's modems saw up to 68 percent faster download speeds than iPhones with Intel modems.

    Dumping Qualcomm is a big win for Intel or any other modem maker Apple's potentially considering. But unless one of these companies is able to make a faster mobile modem than Qualcomm, iPhone users lose the most. Instead of getting the fastest modems, they'll have to settle for second or third fastest. 


  6. Draining the swamp:

    https://talkingpointsmemo.com/news/penalties-corporate-violators-dropped-50-percent-trump

    The report found that in 11 of the 12 federal agencies led by a Trump-appointed official during the president’s first year, penalties imposed on corporate violators dropped, in the majority of cases by more than 50 percent.

    Penalties dropped at the Justice Department by 90 percent, the Commodity Futures Trading Commission by 80 percent and the Securities and Exchange Commission by 68 percent.

    The largest drop was at the Environmental Protection Agency, formerly led by Scott Pruitt, where overall penalties dropped by 94 percent, from nearly $24 billion in President Barack Obama’s last year in office to $1.5 billion. Penalties at the Federal Communications Commission dropped overall by 85 percent.


  7. Morning

    Phil, thoughts on IMAX, ABX earnings?


  8. Is this a good time to sell some SQQQ calls?


  9. Good morning! 

    Nas going lower and Dow going higher so far.

    TRV up $3.70, JNJ $2.50, MMM $3.50, IBM $2, CAT $2 so that's 120 points of the gain right there so it seems like a prop job to me and I'm still betting against it but now DXD gets attractive.

    In the STP, we have the Oct $32/26 DXD spread and now we can take advantage and buy back the 50 short Oct $36 calls (0.50) and roll the $32 calls ($1.25) down to the $30 calls ($2) and add 50 more ($10,000).


  10. ABX wtf???


  11. SVU/Learner – Congrats.  I hate it when my bargain stocks get bought out though, can't play them anymore…

    Great call by Palotay in May:

    SVU is getting interesting again.  Moving to a wholesale distribution model focusing on smaller rural grocery stores (which are somewhat insulated from Amazon), selling their retail properties, paying down debt, and generating impressive EBITDA for their value.  I found this article informative:

    https://seekingalpha.com/article/4168409-supervalu-next-stop-20

    The 2020 $13/22 Call spread can be have for around $3.30, and you can sell $15 puts to completely offset the cost.

    Lines/StJ – LOL!  

    Trade War/StJ – The thing is we haven't really had much of a war yet so it doesn't have to be "fixed" – just not started but, then again, why would the market get so excited about what's netting out to be a non-event.  Of course Europe was going to buy LNG from us anyway, we only just started exporting it so Trump is once again taking credit for something he had nothing to do with in order to not look like he's completely ineffective.  How is Europe going to force companies to pay more than the lowest rate for NG?  THAT is going to be the devil in the details and, meanwhile, Junker has not confirmed any of Trump's claims – he just said they are talking.

    “The United States is putting a ceiling on the price of gas in Europe,” Total chief executive Patrick Pouyanné said in a recent visit to Washington. But that doesn’t necessarily translate into massive sales.

    I said that from day one – our LNG exports will only serve to ultimately reduce the global cost of NG but it won't necessarily make us a huge exporter.  Our plan was always to buy the rumor and sell the news on /NG, though it's still not at our $4 target, which is about where I think global prices will level out ($6 delivered and LNG process adds $2).

    iPhone/StJ – Apple isn't dumping QCOM because they saw a worse chip and they have to have it.  How silly!  

    /RTY at 1,700 again – it's still a good shorting line with tight stops above.  Lined up with 25,525, 2,840 and 7,425.


  12. TradeExchange/Phil – seems like a cross marketing partnership with the likes of Hulbert is a natural fit.


  13. Phil,

    When you say tight stops, what exactly does that mean? Do you have a fixed amount you’re willing to lose? Can you give examples when you do your futures play? Thanks.


  14. A lot of time I use 5 pts as a stop and it spikes up, I get stopped out, and then there is a big drop. If my stop was 10pts I would have caught the move down


  15. Japar I don'T gamble but tight stop means you are willing to lose 50 to 100$ I hope!


  16. Phil/FB

    Good morning!

    I know you have not been a fan of FB.

    HOWEVER, increase in expenses and the drop in operating margin from 50% to perhaps 30%, I think they continue to attract advertisers.

    I am not a FB user, but they have Instagram, WhatsApp, and a lot of international exposure to daily users.

    At 17X future earnings, what do you think of the 2020 $150/200 spread for $26?

    Maybe sell half the $175 puts for $22?

    Value your thoughts!


  17. Maya1 FB I might be swimming against the current but I like them at 150 much more


  18. Yodi/FB

    Thanks.

     

    $150 would be great but highly unlikely they get that low. They have already had a number of analysts come out in support of their plans to increase expenses for security etc.


  19. ABX/JMD – Well they lost $95M (0.08) and costs of production were $882/oz but they paid down $600M in debt and guidance remains unchanged.  They did big maintenance jobs at two big mines with Nevada an expansion project.  Those mines will now outproduce for the rest of the year.  Hopefully the price of gold will increase because it's all about the margins and that's what killed the quarter as gold fell from $1,340 on 4/1 to $1,240 on 6/30 so figure they sold gold for $50 less on 1.07M ounces and that's your missing $54M right there.  So, if anything, a buying opportunity as people chicken out.

    IMAX/JMD – They made 0.12 but 0.25 was expected but IMAX is building so many theaters, you never know how much they will have to lay out each Q.  Revenues were $98.3M, not $99.4M expected but that's out of their control and you'll notice a theme in stocks I like as they go on sale for factors that are not under their control so you can buy the business while it's cheap and wait for an up cycle to sell (which won't last either).  Then it's wash, rinse, repeat…

    SQQQ/Soma – We're looking for $1.20 from the Jan $20s (now 0.70) to cover in the STP

    ABX/Jabob – See above.  

    Hulbert/Tangled – Yeah, we have lots of people interested but we have to finish our "sprints" first.  What a nightmare launching a major App!  

    Tight stops/Japar – Well it depends what you are willing to lose.  Tight stops for me is a craps roll – the amount I'm willing to lose on a single roll of dice on a table – maybe $500 (not per contract, but total) but it also depends on how the underlying contract is behaving – is it jerking up and down or is it rising steadily?  Are the candles getting longer (more momentum) or shorter?  When in doubt, tight stops mean over the line but, as you get more experienced, you know there are many, meaningless spikes over a line but you have to make a judgment call based on your own risk tolerance (mine is high but that's because I play constantly and know I can make up substantial losses very quickly). 

    Generally, of course, I scale in so I'll short /RTY, for example, at 1,699 and then one more at 1,701 to get 2x at 1,700 even but then it pops to 1,705 and, if I don't see a good reason for it (news, Dollar, other indexes) I might short 2 more instead of stopping out and then I have 4x short at 1,702.50 and, of course, I'd like get back to 2 short there but if it then flies up to 1,707.50 and I still think it's silly, I add 4 more for 8x at 1,705 and then, finally, it goes back to 1,705 and now I have 2 short at 1,705 and I'll either make some money or go 4x at 1,710 to average 1,707.50.   Keep in mind, this is assuming, of course, that nothing has changed and I still think it's going down.

    FB/Maya – It's not that I don't like them, it's that I didn't think they were cheap.  We even sold puts when they had that big dip (not much lower than they are now).

    Short Put 2020 17-JAN 120.00 PUT [FB @ $178.34 $-39.16] -5 3/27/2018 (540) $-5,150 $10.30 $-5.33 $-10.30     $4.98 $2.55 $2,663 51.7% $-2,488

    Submitted on 2018/03/19 at 10:14 am

    FB/Maya – Well if they stopped selling data then they'll have less data earnings and if they said they did but they didn't – things can turn ugly.  I don't think people will stop using them but I do think there will be oversight and that oversight will cost money and impact their margins to some extent.  Anyway, the point is you can not assume the infinite expansion (and other countries are really going to freak out) that's baked into FB's $500Bn valuation on $40Bn in sales and $16Bn in profit (p/e 31).   If they start being valued as a normal company with a normal p/e – they can lose value even if they make more profits.  

    FB/Palotay – Well, we sold some puts yesterday but I wouldn't get too aggressive on FB until we see how they end up  getting regulated.  

    I'd let the dust settle on them before jumping in and, as you can see, we're getting nowhere near what we got last time for the short puts but another leg down and you should be there.  

    And what Yodi said!  


  20. Thanks Phil, Yodi for input 


  21. ABX – In the LTP, let's buy back the 40 short 2020 $20 calls at 0.27 ($1,080) and buy 40 of the 2020 $13 calls for $1.15 ($4,600).


  22. Phil,

    Do you have a play for a new entry on ABX?


  23. Go ALK go! 

    Not sure what Phil will advise, but I added some ABX with some vertical call spreads earlier. Slightly negative theta on them (I'm already short puts) but they sure were cheap. 


  24. Can't believe SVU is getting bought out and at such a huge premium. We were just at Cub store in Duluth yesterday and it was out of some organic Wild Harvest we always buy, their brand and excellent. They supply so many stores in small towns and the produce is great. They also gave you a .10 credit for every $50.00 dollars you spend for gas at the Holiday stations so it subsidizes the hour plus drive to get there. Up to 12 gallons. It will be like WFM, just go down the tubes because no one will know how to run it and they will make cheap garbage like WALFART.


    • July Kansas City Fed Composite Index+23, vs. +28 prior.
    • Manufacturing Index +22 vs. +38 prior.
    • “Our composite index came down slightly from record highs in recent months,” said Wilkerson. “Many firms remain concerned about labor availability and tariffs, but optimism is still high.
    • June Durable Goods: +1.0%vs. +3.8% expected, -0.3% prior (revised)
    • Core capital goods +0.6% vs. +0.5% expected.
    • The European Central Bank's president, Mario Draghi, says uncertainty over the eurozone's inflation outlook is "receding," even as global protectionism poses a more "prominent" risk, the Financial Times reports.
    • Though ECB sees the "direct effects' of tariffs imposed by the U.S. so far as "limited," a trade war--with rounds of retaliation and responses would be an "entirely different climate," Draghi said Thursday.
    • Draghi also said progress continues to be made on increasing inflation closer to the ECB's target of close to, but less than 2%.
    • Earlier today, ECB policymakers held interest rates at historic lows and confirmed plans to end the bank's bond-buying program in December, FT said.

    Sanctions coming for Turkey – White House

    • Trump on Twitter: "The United States will impose large sanctions on Turkey for their long time detainment of Pastor Andrew Brunson, a great Christian, family man and wonderful human being. He is suffering greatly. This innocent man of faith should be released immediately!"
    • The president is following up on similar comments made earlier today by Vice President Pence.
    • TUR -2.8%

    Money is pouring out of U.S. stock funds

    • More than $20B was pulled in June from long-term mutual funds and ETFs that invest in American equities, according to Morningstar. The trend has continued this month, with nearly another $12B exiting in the three weeks ended July 18.
    • There are always plenty of reasons to be bearish – trade worries, higher rates, and perky valuations make the list today – but there's probably little predictive power in fund flows.
    • Where's the money going? Bond funds – both long- and short-term, with short-term being particularly attractive given the Fed rate hike cycle. The two-year Treasury yield was recently quoted at 2.655% – well above the S&P 500 dividend yield of 1.9%.
    • Tweeting this morning: "Twitter 'SHADOW BANNING' prominent Republicans. Not good. We will look into this discriminatory and illegal practice at once! Many complaints."
    • TWTR -3.2% premarket, though this price movement is likely to do with the 20% post-earnings plunge in Facebook.

    PayPal decline may be result of disappointing Q3 revenue outlook

    • PayPal (PYPL -2.6%) extends the decline that started after-hours yesterday despite Q2 beat-and-raise that combined with $10B stock buyback would usually boost stock prices.
    • Weaker-than-expected Q3 revenue guidance--$3.62B-$3.67B vs. consensus of $3.71B--may explain the negative reaction, BTIG analyst Mark Palmer writes.
    • In addition, the large stock buyback may be perceived as management admitting it can't find better uses for its cash. Management has stated it prefers to use its cash for internal investment and M&A and only buy back shares when it can't deploy cash efficiently through those means, Palmer says.
    • Palmer reiterates his neutral recommendation.
    • Keep in mind, profit-taking could be at play, with PYPL having risen almost 21% year-to-date. By comparison, the S&P 500 is up 6.3% YTD.
    • Previously: PayPal falls after Q2 beats by a penny; boosts forecast and new stock buyback (July 25)
    • Saudi Arabia suspends oil shipments through a strategic Red Sea waterway after Yemen rebels attacked two tankers, one of which was slightly damaged; Brent crude +0.5% at $74.34/bbl, U.S. WTI flat at $69.33/bbl.
    • Stopping crude shipments through the Bab el-Mandeb strait, which connects the Red Sea to the Gulf of Aden, marks a new escalation in the war between an Arab military coalition and Iranian-backed Houthi rebels for control of Yemen.
    • Saudi energy minister Khalid al-Falih says all oil exports through the southern Red Sea will be halted “until the situation becomes clearer and the maritime transit through Bab el-Mandeb is safe.”
    • Refiners Valero Energy (VLO +3.7%) and Marathon Petroleum (MPC +5.4%open with strong gains after reporting better than expected Q2 earnings (III) and big revenue gains which easily topped expectations.
    • Total revenue and other income at VLO soared 39% Y/Y to $31B from $22.2B a year earlier, and jumped 22% at MPC to $22.4B from $18.3B in the same period last year.
    • Greater processing of cheap, light crude from West Texas helped boost refining and marketing margins by 14% at VLO and 36% at MPC.
    • Earnings also were helped by a discount on crude prices in Midland, Tex., which widened by nearly $10/bbl against benchmark futures during Q2, as production in the Permian surged beyond pipeline capacity to move oil out of the region.
    • New Gold (NGD -15.7%) reports Q2 operating income increase 23.3% Y/Y to $89.4M driven by higher volume and metal prices.
    • Gold production of 108,550 (+37.4%) ounces was primarily due to additional ounces from Rainy River; sales volume increased 43.7% to 105,924 ounces.
    • Copper production decreased 11% to 20.4M pounds, with sales volume down 5.8% to 19.6M.
    • Average price: Gold: $1,297 (+1.5%) per ounce; Copper: $2.91 (+24.2%) per pound; Silver: $15.89 (-4.2%) per ounce
    • Updated 2018 outlook: Gold production: 415,000 to 480,000 ounces as compared to previous guidance of 525,000 to 595,000 ounces; all-in sustaining costs of $1,080 to $1,120 per ounce (previously $860 to $900 per ounce).
    • Copper production outlook remains unchanged at 75-85M pounds.
    • Previously: New Gold misses by $0.01, misses on revenue (July 25)
    • Cameco (CCJ +3.8%) and other uranium stocks rally at the open after the company said it would extend the shutdown of its McArthur River mining operations to support the uranium price, which has fallen by more than 40% over the past five years.
    • “Until we are able to commit our production under long-term contracts that provide an acceptable rate of return for our owners, we do not plan to restart,” CEO Tim Gitzel said.
    • The closure could remove ~11% of the global uranium supply, according to analysts at Berenberg, who sees CCJ's decision as a "positive move for the uranium price as it clearly flags that Cameco is willing to make long-term decisions for the benefit of the industry and its wider portfolio of production assets."
    • The McArthur River closure could prod utilities to start purchasing future uranium supplies, according to analysts at BMO Capital, as "the suspension of a tier one producing asset is another clear message to utilities that future supplies are by no means guaranteed at the current uranium price, therefore we would expect to see some more upward bias to the uranium price."
    • In early trading: UUUU +2.8%UEC +4.6%URG +1.8%DNN +5.3%NXE +4.3%OTCQX:FCUUF +4.4%

    • Shares of Ford (F -4.3%) are threatening to trade in the single digits for the first time since 2012 after Q2 results underwhelmed investors. The low point for the morning so far is $10.03.
    • At least one analyst doesn't think the slide is over yet. "Our downside scenario assumes 2019 EBITDAP (excluding equity income) is ~$7.5 billion or ~32% below our base case, driven by softer market conditions and a more competitive environment," writes RBC Capital Markets' Joseph Spak. "For valuation purposes, we use a ~2.5x EV/ EBITDAP multiple — this yields a downside scenario of $8," he surmises.
    • The major restructuring at Ford is still being worked out, according to Ford CEO James Hackett. The exec says he believed the automaker has the potential for about $11B of EBIT restructuring charges with $7B of cash-related impacts over the next three to five years."
    • While those numbers are big, the lack of specifics from Ford is a source of irritation to some analysts as witnessed by the conference call interchange below.
    • Morgan Stanley's Adam Jones to Hackett: "I want to ask the question, what does $12 billion, I'm sorry, what does $11 billion of charges or $7 billion of cash charges buy you in the restructuring world? But am I wasting everyone's time here? Are you going to – is there anything else you can say in terms of geography, function, region? Anything else tonight besides the number?"
    • Hackett to Jonas: "No we're not going beyond that tonight."
    • Ford earnings call transcript
    • Previously: Ford -3% after lowering profit guidance (July 25)
    • Tesla (NASDAQ:TSLA) is down 1.51% in premarket trading to $304.07.
    • Whistleblower Martin Tripp will meet with the SEC to discuss his allegations, according to his attorney. The meeting in itself doesn't mean that the SEC has opened a new investigation into the company.
    • Electrek reports that the company's Supercharger network has delivered over 400 GWh of energy and is "rapidly accelerating" as new stations come online and Model 3 deliveries ramp up.
    • Forbes contributor Sebastian Blanco has an update on a solar roofing patent filed by Tesla.
    • On Wall Street, Baird is the loudest voice of the morning. Analyst Ben Kallo says the company's ability to generate free cash flow is being underappreciated by investors. Baird has an Outperform rating on Tesla and price target of $411 (+35% upside).


    • Hillhouse Capital is expected to bring in other investors to form a consortium as it makes a run for Yum China (YUMC +28.3%), according to The Information.
    • "A takeover led by Hillhouse, known for its early bets on Tencent and Didi Chuxing, could accelerate Yum China’s efforts to outfit its brick-and-mortar stores with high-tech initiatives that appeal to Chinese millennials," writes Yunan Zhang and Juro Osawa.
    • Yum China has traded as high as $40.65 on the day vs. the 52-week range of $32.10 to $48.75. Before the report broke, YUMC was sitting on its 52-week low.
    • Previously: Yum China pops on buyout report (July 26)
    • Mondelez International (NASDAQ:MDLZ) trades higher after the food giant delivers a narrow profit beat.
    • Organic revenue rose 3.5% during the quarter and operating margin came in at 16.7% of sales.
    • For the full year, Mondelez expects organic revenue to the high end of the prior range of 1% to 2%.
    • Susquehanna analyst Pablo Zuanic posts a quick assessment on Mondelez following the earnings update. "Our price target is now $40 ($41 prior). For valuation purposes we continue to take a 5% discount given risk of more direct competition across the U.S. product portfolio, concerns about higher costs in key overseas markets (FX in the U.K.), and decreased probability of a 3G bid," he writes.
    • MDLZ +3.25% premarket to $42.85.
    • Previously: Mondel?z beats by $0.02, misses on revenue (July 25)

    • Grocery store stocks are higher after Supervalu (SVU +64.6%) scores a heavy premium in a takeover by Unted Natural Foods (UNFI -14.1%).
    • Smart & Final Stores (SFS +10%), Natural Grocers by Vitamin Cottage (NGVC +2.7%), Ingles Markets (IMKTA +2.5%), Kroger (KR +1.9%), Sprouts Farmers Market (SFM +1.6%) and Weis Markets (WMK +1.7%) are your names to watch.
    • The deal is also of interest to Target (TGT +0.7%) and Walmart (WMT +1.2%) as they assess the retail grocery landscape.
    • Previously: Supervalu up 63% on sale to United Natural Foods (July 26)
    • Previously: United Natural Foods scoops up Supervalu (July 26)
    • Diageo (NYSE:DEO) plans to buy back $2.6B worth of shares after already firing off $1.5B in buybacks this year through the end of June.
    • CFO Kathy Mikells says the beverage giant will continue to look at making bolt-on acquisitions despite the buyback blitz.
    • Diageo's update on the full year included the company posting organic sales growth of 5% and operating profit growth of 8%. Strong demand for bourbon in the U.S. and gin in Europe helped to offset higher World Cup-related marketing spending.
    • CEO update: "Diageo has delivered another year of strong, consistent performance. Organic volume and net sales growth is broad based across regions and categories. We have expanded organic operating margin while increasing investment behind our brands ahead of organic net sales growth."
    • DEO -2.02% premarket to $147.91.
    • Previously: Diageo reports FY results (July 26)
    • GNC Holdings (NYSE:GNC) roars higher after the company posts stronger-than-anticipated Q2earnings.
    • Same store sales fell 0.4% in domestic company-owned stores during the quarter against a tough comparable.
    • Adjusted EBITDA came in at $63.5M vs. $74.8M a year ago.
    • "During the second quarter of 2018, although we experienced some softness in our U.S. brick and mortar business, we delivered meaningful growth in our e-commerce and international businesses consistent with our long-term growth initiatives" says GNC CEO Ken Martindale.
    • Previously: GNC Holdings beats by $0.05, beats on revenue (July 26)
    • GNC +8.36% premarket to $3.50.

    • IMAX (NYSE:IMAX) is down 1.08% after a mixed Q2 report.
    • Adjusted EBITDA increased 35% to $39.5M during the quarter.
    • The company says the total IMAX theater network consisted of 1,410 systems at the end of the quarter, of which 1,314 were in commercial multiplexes. There were 635 theaters in backlog at the end of the quarter, compared to the 580 in backlog a year ago.
    • CEO update: "Not only are studios emphasizing blockbuster-type content, consumers are increasingly seeking differentiated ways to experience that content. We believe IMAX is uniquely positioned to benefit from these trends, especially with the roll out of our new IMAX with Laser experience, which we expect will further increase the differentiation of The IMAX Experience."
    • Previously: IMAX beats by $0.04, misses on revenue (July 25)
    • Piper Jaffray says 3D Systems (NYSE:DDD) is facing increasing competition for its main products and that system demand has ticked down.
    • Analyst Troy Jensen expects the company to “struggle to deliver organic system growth with HP, GE, Formlabs, Carbon and others attacking their biggest revenue contributors.” 
    • Jensen downgrades 3D Systems from Neutral to Underweight with a $10 price target. 
    • Source: Bloomberg First Word. 
    • 3D shares drop 3.9% premarket to $13.45. 
    • Under Armour (UAAUA) trades lower after reporting Q2 numbers.
    • Revenue increased 8% to $1.2B during the quarter. On a constant-currency basis, revenue increased 7%.
    • North America revenue rose 2% to $843M.
    • The company's international business saw 28% revenue growth to $302M.
    • Apparel revenue increased 10% to $747M vs. $722M consensus, led by strong demand in training and running. Footwear revenue increased 15% to $271M vs. $247M consensus. Accessories revenue decreased 14% to $106M to miss the consensus mark of $126M.
    • Gross margin fell 110 bps Y/Y to 44.8% of sales to fall short of the consensus estimate of 45.5%.
    • Looking ahead, Under Armour expects revenue growth of around 3% to 4% to $5.12 to $5.18B vs $5.16B consensus. A low to mid-single-digit decline in North America is seen being offset by international growth of more than 25%.
    • UAA -7.49% premarket to $19.50. UA -6.33% to $18.49.
    • Previously: Under Armour EPS in-line, beats on revenue (July 26)
    • Nokia (NYSE:NOK) is 6.3% lower on the NYSE after posting Q2 profits that fell 42% as margins in its key networking business tumbled.
    • The first half went "as expected," the company said, but net sales dipped (down 5.5%, and down 1% in constant currency) and the network equipment unit continues to lag ahead of an expected 5G cycle (operating profit margin of just 1.5%).
    • Gross profit fell 13% to €2.04B. Gross margin dropped 340 basis points, to 38.3%.
    • Nonetheless, Nokia reiterated its full-year guidance — expecting improving market conditions in Networks with "particular acceleration" in Q4 in North America, and 6-9% operating margins — and says it "remains on target to deliver €1.2B of recurring annual cost savings in full year 2018."
    • Net sales breakout: Networks, €4.69B (down 6%); Nokia Technologies, €361M (down 2%); Group common and other, €278M (down 9%).
    • Operating profit breakout: Networks, €69M (down 83%); Nokia Technologies, €292M (up 27%); Group common and other, -€27M.
    • Press release
    • NXP Semiconductors (NASDAQ:NXPI) reports Q2 results after the termination of the Qualcomm (NASDAQ:QCOM) deal. Inline Q3 guidance has revenue of $2.35B to $2.5B (consensus: $2.48B).
    • Revenue breakdown: HPMS segment, $2.19B (+5% Y/Y); Automotive group, $1.01B (+7%); Secure Connected Devices, $644M (+10%); Secure Interface and Infrastructure group, $398M (-9% due partly to ZTE ban); Secure Identification Solutions group, $143M (+7%).   
    • Key metrics: Non-GAAP gross margin, 52.8%; operating margin, 27%; total gross debt, $5.34B; cash, $2.98B; adjusted EBIDA, $3.18B; cash flow from operations, $403M; FCF, $274M; capital allocation, $2.3M.   
    • Share repurchase: The board authorizes a $5B share repurchase program. 
    • Earnings call is scheduled for 8 AM Eastern with a webcast available here
    • Press release
    • NXP shares are down 8.5% premarket to $90.      
    • Previously: Qualcomm +3.6% on Q3 beats, $30B repurchase program on NXP deal end (July 25)
    • Previously: No comment from China on Qualcomm-NXP (July 26)
    • Previously: NXP Semiconductors EPS of $0.16 (July 26)
    • Comcast (NASDAQ:CMCSA) is 3.6% higher after its Q2 profits came in higher than top estimates even with revenues that were in line at best.
    • Cable Communications spurred revenues to growth despite declines in video revenues as residential subscribers continued cutting cords.
    • Customer relationships saw 182,000 net adds to reach 29.8M (27.56M residential, 2.24M business). In residential subs, 9.05M were double-product customers and 9.88M were triple- and quad-play customers. Video saw 140,000 net losses to end at 22.12M customers, while Internet had 260,000 net adds to reach 26.5M.
    • NBCUniversal saw strong results in television (broadcast and cable) amid higher distribution, licensing and ad revenues, but a drag from Universal Pictures against tough prior-year comps and with typical film slate timing issues.
    • Revenue by segment: Cable Communications, $13.7B (up 3.4%); NBCUniversal, $8.32B (down 0.1%).
    • Cable revenues: Video, $5.63B (down 1.9%); High-speed Internet, $4.26B (up 9.3%); Voice, $994M (down 3.9%); Business Services, $1.76B (up 11.1%); Advertising, $666M (up 6.4%); other, $399M (up 6.9%).
    • NBCU revenues: Cable Networks, $2.9B (up 8.2%); Broadcast Television, $2.39B (up 6.7%); Filmed Entertainment, $1.71B (down 20.2%); Theme Parks, $1.3B (up 3.6%).
    • Press release

    ACLU: Amazon facial rec tool mismatched Congress members to mugshots (update)

    • Amazon’s (NASDAQ:AMZN) facial recognition tool Rekognition wrongly identified 28 Congress members as police suspects in a test conducted by the ACLU.
    • The ACLU says it paid $12.33 to have Rekognition compare the official photos of every Congress member against a database of 25K public arrest photos. The “matches” showed while searching with the default 80% accuracy and were disproportionately people of color.
    • Amazon says it takes issue with the settings of the Face ID during the test and that 95% or higher is the search threshold for law enforcement activities.
    • The ACLU, other civil rights groups, and some Amazon employees have pushed the company to stop selling Rekognition access to governments. Law enforcement in Oregon and Florida were using the tool, thought the latter program recently ended.
    • Amazon shares are down 1.2% premarket to $1,841.50.
    • Previously: ACLU: Amazon facial rec tech used by police poses a "threat" (May 22)
    • Previously: Congressmen want Amazon to answer questions about facial rec software (May 25)
    • Previously: Shareholders pressure Amazon on selling facial recognition to government (June 18)
    • Previously: Orlando police ends Amazon facial recognition pilot program (June 25)
    • Update with an AWS spokesperson's statement to Seeking Alpha:
    • "We have seen customers use the image and video analysis capabilities of Amazon Rekognition in ways that materially benefit both society (e.g. preventing human trafficking, inhibiting child exploitation, reuniting missing children with their families, and building educational apps for children), and organizations (enhancing security through multi-factor authentication, finding images more easily, or preventing package theft). We remain excited about how image and video analysis can be a driver for good in the world, including in the public sector and law enforcement."
    • "With regard to this recent test of Amazon Rekognition by the ACLU, we think that the results could probably be improved by following best practices around setting the confidence thresholds (this is the percentage likelihood that Rekognition found a match) used in the test. While 80% confidence is an acceptable threshold for photos of hot dogs, chairs, animals, or other social media use cases, it wouldn’t be appropriate for identifying individuals with a reasonable level of certainty. When using facial recognition for law enforcement activities, we guide customers to set a threshold of at least 95% or higher."
    • "Finally, it is worth noting that in real world scenarios, Amazon Rekognition is almost exclusively used to help narrow the field and allow humans to expeditiously review and consider options using their judgement (and not to make fully autonomous decisions), where it can help find lost children, restrict human trafficking, or prevent crimes.”

  25. ABX/Japar – Sure, just sell some 2020 $13 puts ($2.35) to pay for 2x the $13 longs and wait.

    ALK/Ati – As I said: "Stupidly cheap" 

    Submitted on 2018/02/27 at 1:01 pm

    ALK/Dave – I like the spread but I'd go lower.  The 2020 $60/70 bull call spread is $4.80 and the $50s are $21 vs $14.30 so $6.70 for the lower spread ($50/60) and $55 ($16.50)/$65 ($11.50) for $5 seems like a bargain with a 10% lower strike ($5) for a 0.20 higher cost.   Always look at the surrounding brackets to see which one is the best risk/reward.  

    Short Put 2020 17-JAN 60.00 PUT [ALK @ $59.64 $0.53] -10 1/9/2018 (540) $-8,100 $8.10 $0.20 $-8.10     $8.30 $-0.30 $-200 -2.5% $-8,300
    Long Call 2020 17-JAN 45.00 CALL [ALK @ $59.64 $0.53] 10 1/25/2018 (540) $18,750 $18.75 $-1.60     $17.15 - $-1,600 -8.5% $17,150
    Short Call 2020 17-JAN 70.00 CALL [ALK @ $59.64 $0.53] -10 1/31/2018 (540) $-8,000 $8.00 $-3.80     $4.20 $-0.40 $3,800 47.5% $-4,200

    SVU/Pirate – AMZN is forcing a rapid consolidation in that sector.  

    • Analysts say Pres. Trump's desire for Europe to buy more natural gas from the U.S. will face a reality test, as Russian gas is significantly cheaper and U.S. exporters may not want to rush to Europe since their gas fetches a higher price in Asia.
    • Where that gas goes is just dictated by the dynamics of the global gas market and it’s not clear to me what any [European Union] policy maker could actually do to change that,” says Energy Aspects analyst Trevor Sikorski.
    • A U.S. LNG cargo out of Sabine Pass, La., currently fetches $6.58/MMBtu in the U.K. and $6.65 in the Netherlands, according to Platts, while delivery to Guandong, China, will bring in $8.08/MMBtu and to Futtsu, Japan, $8.47.
    • At current prices, U.S. gas delivered to Europe costs an average of more than $7/MMBtu, while Russian pipeline gas costs $4.5-$5.5/MMBtu, according to Energy Aspects.
    • Russian gas giant Gazprom's (OTCPK:OGZPY) exports to Europe rose nearly 8% in 2017 to 192.2B cm, while ~3B cm of U.S. gas was delivered last year to the EU and Turkey.
    • U.S. mortgage rates inch up this week to their highest level since late June, according to Freddie Mac's Primary Mortgage Market Survey.
    • 30-year fixed-rate mortgage averaged 4.45% for the week ending July 26, up from 4.52% last week.
    • “Existing sales appear to have peaked, sales of newly built homes are slowing and unsold inventory is rising for the first time in three years," says Freddie's chief economist, Sam Khater.
    • "Affordability pressures are increasingly a concern in many markets, as the combination of continuous price gains and higher mortgage rates appear to be giving more prospective buyers a pause," he says.
    • 15-year FRM averaged 4.02% vs. 4.00% last week.
    • 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.87%, unchanged from last week.
    • Source: Press Release
    • Previously: U.S. home sales could rise if inventory increases: Freddie forecast (July 23)
    • Homebuilder tickers: TOLLEN,PHM,DHI,KBH,HOVBZH
    • Mortgage-related ETFs: MORLREMMORTDMOTSIPGZJLSCMBSFMYJMTLMBSMBSD

    I love how I say something here and it's in the news 2 hours later! 


  26. Phil; Just an FYI.  You already bought back the ABX 2020 shorts with the monthly update for $.37


  27. CDE/ABX/Phil- which of these miners you like the most?


  28. Just wonder when they are going to start playing "The Doors – When the Music's Over"  -  They can't seriously have several 1T companies mid summer.  What will they do for encore 1.5 T?


  29. F might look a bit like GM way back when GM was trading for 5$ I got out at 2.50 sold the stock to a better believer!!!!


  30. Ford has a hard time in Germany competing against local cars in quality and price. So with Trump wanting to scew up the market they even have a much harder time to sell their cars here.


  31. ABX/Options – Forgot about that.  Could have saved a dime…

    ABX/Dave – I like ABX because they have the lowest cost (about $850 all in) and the most gold (100M oz) of all the miners so really, they are just a long-term proxy on the price of gold but, instead of having to hold gold futures, you can just hold ABX and wait for the spread to improve.  Keep in mind, at $1,250, they make $400 an ounce but at $1,650, they make $800 an ounce so ABX profits go up 100% on a 30% rise in gold prices.  From the CC:

    Moving on to guidance, as Kelvin mentioned, we remain on track to meet full-year gold production and cost guidance. Production is second half weighted, with costs steadily improving. We expect third quarter gold production to be over 1.2 million ounces, up from just over 1 million ounces in the second quarter.

    And now on to the balance sheet. At the end of the second quarter, the company had a consolidated cash balance of approximately $2.1 billion. Subsequent to the end of the quarter, Barrick completed a make-whole purchase of the outstanding principal of the 2021 notes, $629 million, reducing our total debt to just under $5.8 billion.

    And to put the scale of our debt reduction into perspective, over the last five years, we've repaid over $10 billion. And as it stands today, the company has less than $100 million in debt due before 2020 and more than 85% of our outstanding debt matures after 2032.

    Moving on to our pilot plant expansion at Pueblo Viejo, we continue to advance the pre-feasibility study on a plant expansion that would increase throughput by 50%. This is designed to include the addition of a pre-oxidation heap leach pad, a flotation process, along with the additional tailings capacity.

    On 100% basis, this project continues to have the potential to convert roughly 7 million ounces from measured and indicated resource into proven and probable reserves, and allow the mines to maintain an average annual gold production of 800,000 ounces after 2022.

    We continue to expect initial production from the third shaft in 2022 with sustained production from 2023, and that's at an estimated capital cost of between $300 million and $325 million on 100% basis. The shaft is expected to increase annual production on 100% basis to more than 500,000 ounces per year, at an all-in sustaining cost of approximately $630 per ounce.

    Mining at Deep South is expected to result in production of approximately 300,000 ounces annually, once we have fully ramped up between 2024 and 2028, with expected cost of sales of $650 per ounce.

    On the Goldrush, which is one of our most exciting projects and our development work on the project continues in terms of both exploration and construction. We're continuing to work on converting the 9.4 million ounces of measured and indicated resources to proven and probable reserves adding to the 1.48 million ounces we converted in 2017.

    And I would also highlight that the benefit of having a portfolio, you will see we've made changes across our gold mines to still end up at the same place. That really is the strength of Barrick is that we can have these external factors hit us, whether it's earthquakes, whether it's non-operated joint ventures, and still be able to meet our guidance. And I think that really illustrates the strength of our portfolio.

    Bye bye 25,500 (yes, I'm still short (14 now))


  32. SVU/Phil

    Oh, yes…I was one to buy your wholesale business thesis at the Vegas meet.

    Time to take profits and sell today!

    Thanks!


  33. Phil/Vegas

    So, closed out XOM last year as a ‘losing trade’ for a $1200 or so profit and closed SVU today for the max profit less about $500 for the slight premium still left in the spread.


  34. FCAU/Phil- only manage to sell the puts, the BCS can't seem to be filled at $2.3, closest seems >$3… did anyone get a fill at $2.3 or close?


  35. FCAUing filling – one of the more aggressive Phil fills/ TOS showing $3.40 for the spread and $2.75 on the short puts. Will require patience – or fill half at the current prices and wait and see how things develop for filling the other half. 


  36. Phil/HMNY

    65% down. not sure I understand this. At this point do you believe it is fine.

    regards


  37. SVU/Maya – Congrats!  Definitely done with that one after this pop.

    XOM/Maya – Funny how they do come around over time.  

    So much for the Dow falling – picked right back up.  

    FCAU/Dave – It's very hard to fill if you try to fill the spread at the net.  You need to pay attention to the momentum (hopefully up in this case) and buy some calls and then sell some short calls until you are filled.  The calls filled at $5.20 but no luck on short calls yet (now $1.95) but, since I'm bullish, I am asking $3 and waiting. 

    You can even still get the $13s for $5.20 at the moment.  The puts filled at $3 so all is well (still $2.85).

    HMNY/Pat – No, it's not fine, they tried something and it totally failed.  Market cap down to $7.8M and they'll be removed from the Nasdaq for being under $50M anyway.   If they don't announce something soon (and I can't imagine what) then this thing will become worthless – not  that it isn't at $7.06/250 =  0.0284 per old share. 


  38. F/Phil- thanks for the strategy on FCAU, I am reading on Ford that if they close single digit <$10… may trigger more selling? what's your take, I do realise we have the $9.87 short calls, does that mean you are'nt really bother by it since the short calls at single digit strikes?


  39. HMNY / Phil – What's interesting is that options in ToS are not even represented fairly. They show 1/100 when it should be 1/250. My guess is that these programming issues where no one planned for such big adjustments is behind the margin calls we saw yesterday.

    What solutions do they have now – sell shares at $7 that will be worth $3.50 tomorrow? Financing – I have to think that it's getting expensive right now either in terms or equity.


  40. phil.

    held onto a couple spreads from 2017,one being teva and the other svu-big thanks!


  41. F/Dave – We knew they were going to have a rough ride and they are having a rough ride but still 18 months to go and the Dow is up 100 because trade is "fixed" so why should F or FCAU worry?  

    HMNY/StJ – The only way I'd "finance" them rather than buy them is to buy 95% of the company for $500M (assuming we thought that was going to be enough) and then the company is worth $7M + $500M in cash, so I've essentially acquired the intellectual property, customer base, etc. for my 5% haircut ($25M less $6.5M (95% of $7M) = $18.5M).

    The problem with that is, the only reason I am not doing an asset purchase and stripping the company away from the shareholders is for "goodwill" on the assumption a lot of shareholders are also customers and it isn't worth pissing them off or the bad press it would generate BUT, since they would be getting a 95% haircut in the dilution anyway – they'll probably be angry just the same.  Also, they might sue and say we did some kind of unfair manipulation to devalue the company and take it away so, unless I'm a strategic buyer, I wouldn't bother.  

    You're welcome Tstep!  


  42. Indexes are dribbling into the close – GDP tomorrow at 8:30 doesn't seem like it's going to be 4% with Durable Goods missing today but we'll see.  

    AMZN is the big deal tonight.  If they disappoint like FB, look out below but FB had special troubles – it only affects AMZN in that it sets a cautious tone for others who worry about 20% drops.

    SBUX seems a bit low but nothing else I'd bet on this evening.  SBUX 2020 $50 puts can be sold for $4.70, that's a nice one – same as our LTP play:

    Long Call 2020 17-JAN 50.00 CALL [SBUX @ $51.53 $-0.09] 15 7/16/2018 (540) $9,300 $6.20 $0.18 $6.20     $6.38 $-0.04 $263 2.8% $9,563
    Short Call 2020 17-JAN 57.50 CALL [SBUX @ $51.53 $-0.09] -10 7/16/2018 (540) $-3,200 $3.20 $0.02     $3.23 $-0.00 $-25 -0.8% $-3,225
    Short Put 2020 17-JAN 50.00 PUT [SBUX @ $51.53 $-0.09] -10 7/16/2018 (540) $-5,000 $5.00 $-0.38     $4.63 $0.08 $375 7.5% $-4,625

    Still good for a new trade but $45 ($9.10)/55 ($4.10) @ $5 is a bit more attractive.  

    AMZN out already, looks like they beat by a lot, but not enough to hit $1Tn (+14% to $2,063)! 



  43. Already announcing tomorrow's numbers it seems:

    https://www.cnbc.com/2018/07/26/trump-hints-at-us-second-quarter-gdp-number.html

    President Donald Trump is talking up Friday's second-quarter gross domestic product release, saying he would be content with U.S. economic growth of about 4 percent or more.

    "Somebody actually predicted today, 5.3. I don't think that's going to happen — 5.3. If it has a 4 in front of it, we're happy. If it has like a 3 but it's a 3.8, 3.9, 3.7, we're OK," the president said Thursday during a speech about trade at a steel facility in Illinois.

    He probably called his good friends with the actual number. What a fraud!


  44. SBUX buying back $25B of their own stock by 2020! That's 35% of their market cap. The cash that these companies are sitting on or borrowing is incredible. And they can't find better use for it?



  45. HMNY could accelerate their moviepass business with a token IMO


  46. advill that is a wicked cool map. very well done.


  47. According to the map all the farmers around me voted for trump didn’t realize I lived in such a red area




  48. Prosecutors Seek to Question Trump Organization’s Finance Chief


  49. Michael Cohen just dropped a collusion bombshell in the Russia investigation





  50. The startling revelation from Pompeo hearing








  51. AP FACT CHECK: Trump skews claims on economy, GDP growth


  52. I am tinkering with TSN they still seem to be breeding chicken. They seem to be above their two year low of 57 to 63.71 now, and toying with a tree planting idea.

    Buy the Jan 20 BCS 57.5/72.5 for 7.25 and sell the Jan20  57.5 put for 4.50 combined this with the sale of a half 67.5 Aug cherry call 1.35. Possible a playable tree if you like chicken for the next 18 month.


  53. Good morning! 

    Things seem to be holding up so far.  /YM back to 25,550 and also /RTY 1,700 along with 2,845 on /ES and 7,440 on /NQ so shorting the laggard but favoring the /YM short still.  

    /RB testing $2.17 makes a nice short into the weekend but might push higher first. 

    /KC back to $109.50 so I like that long and that's $121.20 on /KCN7

    /SI below $15.40 so long there if it goes back over (only) with very tight stops below.


  54. Hooray for GTC orders – uncovered most of my CHK and ALK yesterday morning for a dime. CHK up $0.60 overnight.


  55. Yodi, Nice pickup on TSN. 

    Did you mean 65 Aug. Cherry Call for $1.35, or $67.50 for .55?    


  56. Grass Sorry Aug 65 I feel 67.5 is a bit far out, I looked at 67.5 first therefor the mistake good pick up.


  57. Thanks, I assumed so, but assuming has gotten me in trouble.  =)   

    nice selection – I am going to follow you on this one.


  58. Grass you need always to check once the market opens things can change sometimes drastically


  59. The tension is killing me on /YM right now… something's gotta give.