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2,860 Tuesday – Donald Dumps on the Dollar, Demands Fed Help Boost Markets

3,500 days.

That's how long the bull market has lasted as of today since the BIG CRASH on March 9th, 2009.  If you've forgotten how much fun that was, take a moment to read our 2010 reviews, written while the whole thing was a fresh wound:

As of tomorrow, this will officially be the longest bull market in US history but it is VITALLY important to Trump and the Republicans that it continue until November, when the GOP can ill-afford to have you pulling levers while seeing red in your portfolios.  There's only so many votes a Russian hacker can change in one day, you know!  

To that end, Trump has now called for a weaker Dollar, publicly complaining about the Fed's tighter monetary policy and saying the Fed should help him do more to boost the economy – never mind that that's not at all what the Fed is supposed to be doing.  So far, Trump has the Atlanta Fed's Bostic in his court and Bostic has now said he will dissent against further rate hikes to prevent the yield curve from inverting.

Trump has also accused China and the EU of manipulating their currency to make it weaker – giving them unfair trade advantages (it makes their exports to the US cheaper – as if the US is the only person they trade with) and all that has combined to take the Dollar down over 1% in the past week, which then reprices the market up 1% (since we buy stocks in Dollars) giving Trump the same "unfair" advantage he accuses Europe of when measuring HIS rally (the one he's been here for the last 585 out of 2,200 points of).  

That's right, Trump got on this S&P 500 ride at 2,275 and the index has gained  26% in two years for an average of 13% a year, quite a bit better than the market's 8% average returns, so he must be doing a good job but, by that logic, Obama was sworn in with the S&P at 850 and handed it over to trump at 2,275, which was a gain of 167% in 8 years or 21% a year on average – more than 50% better than Trump is doing so Trump is, in fact, presiding over a tremendous deceleration in equity gains and is acting like he's done you a tremendous service.  

Image result for trump market taking creditIn fact, after Trump's very nice first year performance (before his budget and policies went into effect), year two has been a disaster as the S&P was at 2,872 in January of this year and now it's at 2,862 which is, if I am handling the math correctly, 10 points lower in Trump's 2nd year of office, so far.  If Trump can't figure out some way to goose the S&P to new highs in the next 77 days – he's going to make it very hard for the GOP to hold both houses of Congress on November 6th.

It may even be too late to start a war, which was how Bush II managed to stay in office despite having an approval rating almost as low as Trump's.  "Don't change horses during a war" sounded good at the time but no one is attacking us an nobody votes the school bully to be the class President – unless they do away with secret ballots – which Trump is, of course, considering with a provision in the Homeland Security Bill that would allow him to dispatch Secret Service Agents to polling places in order to "make sure votes are handled correctly."  And yes, that bill passed but it was lost in the storm of other BS that's going on and it won't really seem to matter until it goes into effect – on election day, when it's too late to stop.

Of course, this is good for the markets as 4 more years of Trump, even if he is averaging just 13% vs Obama's 21% – that's still big enough (that's what she said!) to make voters happy, right?  But what happens if next year is flat, then it's 26% divided by 3 (8.666%) and if we're still at 2,850 or lower into the next election, Trump's market gains will be as tiny as his fingers and, once again, the President's performance will become an issue as his

measurements fall far short of Obama.  

Yesterday we were very successful shorting the Futures below their lines and we can take another crack at it this morning as we're at 25,800 on the Dow (/YM), 2,860 on the S&P (/ES), 7,400 on the Nasdaq (/NQ) and 1,700 on the Russell (/TF) and it's the same drill – wait for at least 2 to cross below and then short the laggards and, if any cross back over – stop out quickly.  I think the Dollar (/DX) should bounce around 95.30 and that should push the indexes lower or, more accurately, stop supporting them and they will drift a bit lower on their own.

You're welcome on Gasoline (/RBV8) which hit $1.93 this morning which is up another 0.04 per contract at $420 per penny, per contract for a $1,680 gain just from reading yesterday's $3 PSW Report in the morning.  That's the same price as the "failing" New York Times but I bet the New York Times doesn't give you trade ideas that make $1,680 in a day, do they?  

We're out of gasoline now but still liking Coffee as next July's contracts (/KCN9) hit a decade-low $109 ($101 on the front-month /KC contracts), where we last bottomed in late 2013.  There are many coffee-growing regions and we're simply betting that, at some point over the next 10 months, there will be some disruption somewhere on Earth that causes a temporary supply issue that boosts prices back to $120 and coffee contracts pay $375 per dollar move so that would be $4,125 on an 0.11 move back up.

Obviously, you want to stop out below $100, so risking a loss of $400 to potentially gain $4,000 is just the kind of risk/reward profile we like to play in the Futures.  Note, at the bottom of the chart that it's Large Traders who are heading for the exits while Commercial Hedgers are picking up the longs – it's going to be interesting to see how this resolves.  

For the Futures-challenged, BJO is the Coffee ETF and it's new and in serious trouble as it's collapsed from $50 at the March open down to $38 yesterday.  As people bail on the ETF, it forces them to liquidate their Futures positions and exacerbates the decline so we'll look for signs of a bottom there as well and you can limit your exposure by simply picking up the following trade, which we can add to our Options Opportunity Portfolio:

  • Buy 20 BJO March $38 calls at $3.20 ($6,400) 
  • Sell 20 BJO March $41 calls at $2.10 ($4,200) 

That's net $2,200 on the $6,000 spread so the upside potential is $3,800 (172%) in 7 months if BJO manages to get back over $41.  So the upside is very nice, there is no margin requirement and your loss is limited to $2,200 but, if you follow the same rule and get out if /KC fails to hold $100 – then the maximum loss should be minimal against a pretty exciting potential gain.

That is how we teach our Members at PSW to use options for both leverage and hedging at the same time!  

 


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  1. Good Morning.


  2. ~~BofAML adds AT&T to US 1 list

    • Bank of America Merrill Lynch adds AT&T (NYSE:T) to the US 1 list, a collection of the best investment ideas drawn from the Buy-rated stocks covered by BofAML.
    • Firm reiterates the price target at $37, a 12% upside to yesterday’s close.
     


  3. Good Morning, 

    If you have shares in a private company, how do you determine the value of those shares?  I have someone with 56,000 shares of Green Gorilla looking to sell 1/2.  Any thoughts appreciated, you guys/gals are the only ones I know that would know.   =)


  4. JPM – JPMorgan Chase announces new investing app with 100 free trades in the first year; brokers are gapping down on the competitive threat that results in continued pressure on fee revenue.  

    Decline in AMTD looks overdone to me.  Bought some at 56.50 for a scalp.  Risking two points.


  5. I wonder if  JPM will be offering free option trades too? Does anyone know?


  6. I an trying to anticipate the market reaction to Paul Manaford jury decision if any. Obviously, a non-guilty verdict would bring a sigh of relief and the market would probably respond positively. Would the market ignore a guilty verdict?  And Cohen is liable to be charged with bank and tax fraud later this week. Can this also be ignored?


  7. Opening very positive but volume is not much better than yesterday.  


  8. /RB/Phil- are you closing RB or holding into holidays, thought the original plan was to hold into holidays or until it gets to 2. 


  9. denlundy:

    Not sure the reaction will be that great as there are two trials set, one in Virginia, the next in Washington D.C..

    https://www.politico.com/blogs/under-the-radar/2018/03/01/paul-manafort-two-trial-strategy-433528


  10. In 2014 coffee almost doubled in half a year. Here's an article about it. It;s worthy to watch for a repeat but probably not until winter (summer in Brazil)?


  11. Good morning!  

    Big pop at the open and we just slapped more sanctions on Russia – nothing seems to matter in this market.  

    I've got 7 long /KCN9 now, avg is $113.62 so still way behind ($8,000) but, as noted above, this is now stupidly low so I'm more enthusiastic.

    You have to consider that coffee farming is a subsistence business for the most part – there's a certain minimum level at which the farmers can't afford to grow the crops.    It's the same way we call the dead bottom in gold – it can go lower – but it's very unlikely to last. 

    Big Chart – All holding up so far.

    2,869.75!  

    T/Albo – Anything in the low $30s is good for me with T.  We have short 2020 $33 puts we sold for $4.35 in the LTP, still good at $3.50 but we forgot to pick up the bull call spread.  With T, it's channel-bound so you want to set it up to sell short calls so, for the LTP, let's add 25 2020 $30 calls at $4.50 ($11,250) and sell 25 of the 2020 $35 calls for $2 ($5,000) for net $6,250 on the $12,500 spread and we'll also sell 5 of the Jan $34 calls for $1.07 ($535) as that's 150 days out of 514 so, even if we only do 3 sales like that – it knocks $1,500 off the basis but we'll sell 5 more if they go lower and sell 10 if they look more toppy down the road.  

    And, of course, T is a stock we're happy to own more of if they get cheaper.  We already sold 10 of the puts for $4,350 so our net net is ($6,250-$535-$4,350) = $1,365 on the $12,500 spread yet we took our first leg in April and waited PATIENTLY (too patiently) for it to prove out a nice bottom before adding the rest.

    Private/Grass – Well they did a private round back in May so that's the best indication – taking into account whether they are executing on what they said they'd do at the time.  On the whole, the stock is only worth what you can sell it for but you can contact the broker who handed the PP in May and see if there's an after-market for them.    

    Speaking of private placements in the Cannabis Industry – PSWI Investors who expressed an interest in New Age Ventures to Greg should expect documents to come today or tomorrow! 

    This only works if you have submitted your qualifying document to him, by the way… 

    Brokers/Albo – I'm not to enthusiastic on them as the free model will begin to quickly spread.  Another PSWI project, TradeExchange, is working closely with pretty much every major broker and the pressure is on all of them to go free.  The bottom line is 30% of AMTD's revenues are from trading fees – it's not something they will be able to just shrug off.

    Manaford/Den – This trial (there's another one after this) is about pre-Trump stuff, for the most part so I doubt it will have a huge effect either way but guilty means the next trial is likely guilty too and that gets into the Trump ties where he might flip on Trump.

    And what DC said!  

    /RB/Ravi – I did close it yesterday when $2.02 got rejected on /RB ($1.92) as it was a nice, quick gain.  Now I hope we get a sell-off and I'll get back in for the holiday.  I did plan to hold but that was based on the assumption it was still down but getting an 0.04 ($1,680) jump in a day was nothing to sneeze at.  Also, /KC was killing me so that profit offset those losses so I could let /KC ride a bit longer.

    /KC/BDC – Yes, that would be nice!  


  12. LB… what a tease.. WTF???


  13. Phil – Thanks on AMTD.  Just looking for an intraday bounce.  Tightened my stop after your comment


  14. LB – i think they report earnings tomorrow? so not sure why they are moving today but could be in anticipation of earnings or something


  15. crs--after the close tomorrow.

    hope they finally do not disappoint!


  16. Thanks Phil on the private GG info. 


  17. LB/Jabob – something is spooking people the day before earnings.  

    You're welcome Grass.


  18. AMTD – Sold 1/2 up .60.  Stop to entry on balance.


  19. RB/Phil- what will your reentry for RB if it does sell off?


  20. If you think democrats are going to crush it on Nov 6th here's a prediction contract for it. How it works is you buy at the open market price now (currently) 10 cents and if the the result in November is >250 seats you gross $1 on each share. The site takes 10% on the net (right now it would be $0.90 * 10% = 9 cent fee). The max you can buy and still satisfy some CFTC requirement is $850 (at 10 cents = 8500 "shares").

    Maths (gross-fee) = 8500 – 0.09*8500 = $7,735 (+810%)

    538 currently gives the D's ~9% chance of hitting this number (about right for the payoff!), and the over/under is 229 D - 206 R. The median vote shift is D+7.6% and I've calculated D+9.0% is necessary to sneak to the 251st seat line, so it really could be quite close if ~2 in 100 people say "let's try the Dem out" once they reach the polls (or some R's stay home, etc).


  21.  i bet a fellow college D a case of beer that Reagan would beat Carter.  Figuring that if I was gonna be drafted to fight in El Salvador, I'd at least have a case of beer to drink before they sent me


  22. Jabo / LB; work on the basis that they will disappoint and earnings and guidance will suck leading to the stock price to crater. Psychologically you should be intact knowing you were right – the LB account position, well that's another thing.


  23. winston—could you send me an email at; ??

    jabobeast@hotmail.com


  24. winston--i hear but hasn't the stock price already cratered?

    i am "hoping" they finally recover..


  25. Greg,

    I have not gotten the New Age paperwork yet. Not sure if you sent it out or not. Just don’t want to get missed! Thanks 


  26. of course you can bet the other way; risk 90 cents to make 9. It's not a bad bet if the market stays super-charged actually. If the market faulters, the Dem bet is definitely the way to go, IMO.

    rexx – lolz


  27. OLED & FNSR catching some bids today. 

    Nice looking charts.


  28. Phil/HRB-

     

    In your OOP review last week you mentioned that you would take a look at the HRB position this week and see if you wanted to sell calls or close.  Just reminding you…


  29. LB reports tmrw AMC


  30. /RB/Dave – Wow, I wish it were such an exact science!  Inventories are tomorrow so I'm not really looking to leap back in – especially since much of the run up is due to Dollar weakness.

    Election gambling/BDC – Wow, yet another reason for someone to fix the elections – great…  crying

    New Age/Japar – I said it is GOING to be sent out today or tomorrow.  That's for the investment, the qualifications should already be in.

    1,720 on /RTY, 7,435 on /NQ, 2,870 on /ES, 25,850 on /YM – AMAZING!

    • Stocks continued to grind higher, with the S&P 500 rising for a third straight session to within 0.6% below its Jan. 26 record high and the Dow hitting its best level since early February.
    • Optimism ahead of resumed trade talks between the U.S. and China, set to kick off on Wednesday, helped fuel today's move on the heels of gains in most of the world's equity markets.
    • Pres. Trump reiterated that he was "not thrilled" with Fed Chair Powell for raising rates and accused China and the European Union of being currency manipulators, sending stocks slightly below their session highs near the close.
    • Eight of the 11 S&P industry groups finished in the green, led by energy (+0.7%), materials (+0.7%), consumer discretionary (+0.6%) and industrials (+0.6%), but weakness in the tech sector (-0.2%) kept broader gains in check.
    • U.S. Treasury prices rose, pushing yields lower across the curve, with the benchmark 10-year yield shedding 5 bps to 2.82%, its lowest yield since May.
    • September WTI crude oil rose 0.8% to settle at $66.43/bbl following last week's 2.5% decline.
    • Investors also kept an eye on the Turkish lira, which fell 1.2% against the U.S. dollar.

    Signs of retail recovery continue

    • Chain store sales are buzzing along, according to the weekly read from Johnson Redbook.
    • Sales rose 4.7% Y/Y for the week ending on August 18 as strength with apparel was noted.
    • Sales are expected to increase 5.1% for the full month and be 0.8% higher than the level seen in July.
    • While state tax holidays have helped to boost traffic, there are also signs that underlying spending trends are improving.
    • Commerce Secretary Wilbur Ross says a report on auto tariffs won't be out this month as expected.
    • Ross noted the delay is tied to ongoing negotiations with Mexico, Canada and the European Commission.
    • U.S. automakers have voiced opposition to tariffs, while some foreign automakers have already shifted production plans away from the U.S. amid the skirmish.
    • The Trump Administration has accelerated trade talks this week in hopes of striking some deals.

    • Shares of Tesla (NASDAQ:TSLA) are up 3.67% on the day and traded as high as $324.79 earlier.
    • Tesla uber bulls don't appear to be going away anytime soon as CNBC reports that Ark Invest is urging Tesla not to go private. The investment manager is sticking with its long-term forecast for 80% gross margins for Tesla as transportation evolves into a service model. Ark CEO Cathie Wood says Tesla's new chip is about three years ahead of rivals (CNBC video).
    • Ark's thesis on Tesla hinges on the potential in the MaaS market: "ARK estimates that electric vehicle sales will outpace expectations in the next five years, reaching 17 million units sold in 2022, and Tesla will be a market leader. Perhaps more importantly, the autonomous MaaS market, which according to our research should be valued in trillions of dollars today given the massive future cash flows, is nowhere to be seen in most valuation models."
    • Ark Invest held 315K shares of Tesla as of March 15, according to Bloomberg data.
    • A total of 30,187 U.S. properties started the foreclosure process in July, up 1% from June and up less than 1% from a year ago, marking the first Y/Y increase in foreclosure starts in 36 months, says ATTOM Data Solutions.
    • Foreclosure starts increased from a year ago in 96, or 44%, of the 219 metropolitan areas that the report analyzes.
    • “Gradually loosening lending standards over the past few years have introduced a modicum of risk back into the housing market, and that additional risk is resulting in rising foreclosure starts in a diverse set of markets across the country," says Daren Blomquist, ATTOM senior vice president.
    • Metro areas posting Y/Y foreclosure start increases include: Los Angeles--up 20%; Houston, TX--up 76%; Philadelphia--up 10%; Miami,FL--up 29%; and San Francisco--up 10%.
    • Mortgage-related ETFs: MORLREMMORTDMOTSIPGZJLSCMBSFMYJMTLMBSMBSD
    • Previously: MBA: Delinquencies fall; foreclosure rate lowest since early 2007 (May 16, 2017)
    • Citron Research is out cautious on Nvidia (NASDAQ:NVDA), saying the company is “on its way to $200” due to short interest at an all-time low and major datacenter competition.
    • Read the short seller’s full report here
    • Nvidia shares are up 1.7% to $252.16 still riding the wave from yesterday’s Turing GPU announcement. GPU competitor AMD (NASDAQ:AMD) is up 1.1% to $20.19.  
    • Previously: Nvidia continues gains after Turing GPU announcement (Aug. 21)
    • Officials in Yokohama say 22 companies have joined the RFI process for developing property in the region, which could include a casino.
    • Nine of the companies are integrated resort operators and six more are domestic property developers.
    • Yokohama is the second largest city in Japan.
    • U.S.-based MGM Resorts (NYSE:MGM), Caesars Entertainment (NASDAQ:CZR), Las Vegas Sands (NYSE:LVS) and Wynn Resorts (NASDAQ:WYNN) have all expressed interest in opening casinos in Japan.
    • Microsoft (NASDAQ:MSFT) Teams competitor Slack raises $427M in a financing round that pushes valuation up to $7.1B, up over 40% from the last fundraising less than a year ago.
    • Fundraising now totals nearly $1.3B. Dragoneer Investment Group and General Atlantic led the round with participation by funds advised by T. Rowe Price and Wellington Management plus existing investors.
    • Slack has 8M daily active users (many using the free version) and 70K paying teams from enterprises including IBM, eBay, and BuzzFeed.
    • Slack didn’t disclose recent revenue but said that it hit $200M in annual recurring revenue last year and is growing at 100% a year.
    • Microsoft recently released a free version of Teams to compete with Slack’s offering. Slack purchased and shuttered rival HipChat from Atlassian.
    • Previously: Microsoft Teams gets free version to battle Slack (July 12)
    • Previously: Atlassian +22.7% on Q4 beats, HipChat sale to Slack (July 26)
    Image result for coal pollution
    • Acting Environmental Protection Agency head Andrew Wheleler has signed a proposal to scrap Obama-era environmental restrictions on power plant emissions, a long-expected step to help coal-burning plants compete with natural gas and other cleaner alternatives, WSJ reports.
    • The new plan recommends various upgrades designed to let coal-fired plants produce energy with less fuel and seeks to eliminate triggers that mandate costly technological overhauls at coal plants, according to the report.
    • The EPA is expected today to discuss the details of its proposal, which it is calling the Affordable Clean Energy rule, to replace the Obama-era Clean Power Plan, which was designed to curtail greenhouse gas emissions from power plants; the overhaul of the Obama rules is sure to launch years of legal clashes.
    • Earlier: U.S. set to roll back restrictions on coal-burning power plants (Aug. 20)

    • Toll Brothers (NYSE:TOL) gains 7.2% in premarket trading after reporting Q3 EPS of $1.26 beating consensus estimate of $1.03 and comparing with 87 cents a year ago.
    • Q3 revenue of $1.91B  exceeds average analyst estimate of $1.82B and up from $1.50B in Q3 2017.
    • Guidance: Sees Q4 deliveries 2,550-2,850 units with an average price between $840,000-$870,000; sees Q4 adjusted gross margin about 24.8% and tax rate of about 28.5%.
    • Toll adjusts FY2018 deliveries forecast to 8,100-8,400 from 8,000-8,500 it expected as of May 20. And lifts the low end of its average price range guidance to $835,000 from prior view of $830,000, top end of the range stays at $860,000.
    • Sees FY adjusted gross margin about 24.0% of revenue, consistent with the midpoint of its prior guidance range of 23.75%-24.25%.
    • Backlog value at Q3 end rose to $6.48B, up 22%; 7,100 units, up 13%.
    • Q3 adjusted gross margin 24.3%.
    • Source: Press Release
    • Previously: Toll Brothers beats on revenue (Aug. 21)

    • Medtronic (MDTQ1 results: Revenues: $7,384M (-0.1%); Cardiac & Vascular Group: $2,811M (+6.2%); Minimally Invasive Therapies Group: $2,052M (-17.5%); Restorative Therapies Group: $1,949M (+7.7%); Diabetes Group: $572M (+27.4%).
    • Net Income: $1,075M (+5.8%); EPS: $0.79 (+6.8%); Non-GAAP EPS: $1.17 (+4.5%); Non-GAAP Net Income: $1,601M (+3.9%); Quick Assets: $4,380M (+19.4%); CF Ops: $1,702M (+130.9%).
    • Fiscal 2019 Guidance: Revenue growth (organic): 4.5 – 5% from 4 – 4.5%; non-GAAP EPS: $5.10 – 5.15 (unch).
    • Shares are up 4% premarket.

    • More trade tensions? Germany's current account surplus will remain the world's largest for the third year running in 2018 at $299B, followed by Japan with $200B, according to the Ifo institute.
    • "On the other end of the spectrum, the U.S. is set to remain the country with the largest current account deficit with roughly $420B."
    • The situation is set spark criticism of Germany's export strength and Chancellor Angela Merkel's fiscal policies.

    • A group of 22 state attorneys general and the District of Columbia late Monday asked a U.S. appeals court to reinstate Obama-era landmark net neutrality rules and reject the Trump administration's efforts to preempt states from imposing their own rules guaranteeing an open internet.
    • Several internet companies also filed a separate legal challenge to overturn the FCC decision, including Mozilla, Vimeo, ETSY, and numerous media and technology advocacy groups.
    • Previously: Net neutrality comes to an end (Apr. 24 2018)

    • The U.S. Department of Energy is offering 11M barrels of crude for sale from the nation's Strategic Petroleum Reserve ahead of sanctions on Iran that are expected to reduce global oil supplies and increase prices.
    • The SPR was established in the 1970s after the U.S. economy was paralyzed by an oil embargo. As recently as 2011 it contained 727M barrels in caverns along the Texas and Louisiana coasts.

    • PepsiCo (NYSE:PEP) started strong today following news of its $3.2B deal for Sodastream (NASDAQ:SODA) but finished nearly flat, as investors apparently decided the company was "paying too much for a fizzy water brand that's fighting for market share against several other major brands," says Avi Salzman at Barron's.
    • SODA shares have more than doubled this year but has gone through booms and busts over the past decade, Salzman says, noting that Q2 sales in the Americas totaled just $38M, a particularly disappointing result given that sales of sparking waters in the U.S. doubled during 2015-17 to $8.5B.
    • SODA may appeal to some people on environmental grounds because of its reusable canisters, but Salzman says the company is going "against the trend of new innovations making our lives more efficient," noting that unlike brewing coffee in a Keurig machine – which reduces the amount of time to produce the coffee – making your own seltzer takes longer than just popping open a can, and PEP's outgoing CEO Indra Nooyi once said so herself.

     
    Also:
    • Cannabis-related stocks may see broad buying today as they announce supply agreements with retail operators ahead of the launch of the adult-use recreational cannabis market in Canada on October 17. Cronos Group (NASDAQ:CRON) and Tilray (NASDAQ:TLRY) have already announced deals. Both are up premarket.
    • Canopy Growth (NYSE:CGC) is up 3% premarket on light volume. The ETFMG Alternative Harvest ETF (NYSEARCA:MJ) is up 2% premarket.

    • Bahamas Development Corp. (OTCPK:BDCI) affiliate Global Consortium, doing business as Cannabis Consortium, and its partners have agreed to merge all operations and assets under Bahamas Development.
    • The group has also agreed to change the name of the company to Global Consortium, Inc.
    • Global Consortium's operations merged first, including a hemp farm in Colorado, Infused Edibles and Indulge Oils, effective July 1. ToMarRa is next up.
    • 2018 estimated revenue is $5M, but jumps to $100M next year.
    • In a update to investors on its joint venture with Global Hemp Group (OTCPK:GBHPF), Marijuana Company of America (OTCPK:MCOA) says it secured a 4,000 sq. ft. cannabis processing facility in New Brunswick in June. A biomass dryer to process flowers and leaves from participating farms will be installed by next week. The dried cannabis will be stored until legal sales start in Canada on October 17.
    • The company also says advanced monitoring techniques will be used to monitor the health of cannabis crops, specifically, the use of airborne drones to provide targeted field diagnostics to identify potential stresses (e.g. drought effects) on the plants.

    Map of cannabis laws in the US

      Legal
      Legal for medical use
      Legal for medical use, limited THC content
      Prohibited for any use

      D  Decriminalized

    Any state that is not dark green is a growth opportunity – any state that is not grey, we can sell in now (once licensed).


  31. HRB/Jeff – Thanks, I'll do an OOP review this afternoon.  


  32. Sold some more of my CTL calls and rolled some out to 2020.  This was my intermediate target with the dividend yield under 9%.  The stock has one of he spikiest charts that I've ever seen.


  33. albo – i was going to buy some naked calls yesterday and looked at that chart. couldn't do it. CTL is on a tear tho!


  34. Soma – I know !  It's got pull back at some point.  Thought it would have happened before now.


  35. Phil – tried calling, will try again in a couple hours.


  36. Additional armchair trade MDP buy stock @ 52.30 and sell Oct 50/55 strangle for 2.35.

    Combined return 2.58 % per month.


  37. Nice reverse on oil they ran ClU8  contract up over 1.50 today.  CLV8 never kept up though.

    U8 is finally done today


  38. I picked up some CRON


  39. CTL/Albo – FTR catching up!  

    MDP/Yodi – PSO is turning around.  

    CRON/BDC – Wow, on just $4M in revenues and $2.5M in profits (from being an investing group specializing in Medical Marijuana), they have a $1.4Bn valuation.  I think we need to raise the price of PSWI shares IMMEDIATELY!  

    Reverses/Bert – Dollar took a dive below 95, that's a huge help, down 1% for the day giving a 0.4% lift to the S&P and a new ATH at 2,874.


  40. FCX/
    Commodities being helped by a weak dollar this week, it seems that FCX has found a bottom. I am looking at selling 1 x Put 2020 15 for $2.90 and buying 2 x CS 12/17 for $2.2.
    If the markets keep going up miners and commodities play have to go up…


  41. Anyone know why Brazil (EWZ) keeps tanking???


  42. Options Opportunity Portfolio Review (OOP) – Part 1:  Now that VRX (now BHC)  is fixed, we're back to $130,675 but it's all because VRX is fixed as it was -$7,000 before an now +$4,000.  Not much movement otherwise and we have less cash than I wanted to be at ($58,000), so we'd better LOVE our positions or we may have to cut some.

    • HMNY – Just a lottery ticket at this point.  We'll see if they stay in business without having to borrow money (more than their usual LOC) for the next 10 days.  
    • SQQQ – Very aggressive hedge down $5,000 already but it's $8,000 in the money so good protection.  If the Nasdaq were to fall 10%, then SQQQ would go up 30% ($3.60) to $15.75(ish) and then we'd have $23,000, which is + $12,500 so that's our conservative protection from these calls.  
    • Short puts – All good and on track to expire worthless.  
    • BJO – This morning's trade, already a profit!  
    • TZA – Our other hedge at net $5,200 with potential for $25,000 at $12 but TZA at $8 x 1.3 is only $10.40 so that's our real protection on a 10% drop so $3.40 x 50 = $17,000 or another $12,000(ish) of protection here.  

    • FTR – We're off track below $6 but not too much and it's not worth adjusting.  Is it worth keeping?  It's net $2,000 and we get $12,000 if called away at $8 so yeah, worth keeping for $10,000 upside potential.  
    • ABX – We got more aggressive but no luck yet.  Have to DD on the 2020 $10 calls so 20 more at $1.73 as it's a shame not to bring the average down to a more realistic $3.215 and, if we sell 20 of the $15s (now 0.50) for $1, then our net goes to $2.20 on the spread and we already sold the 10 $15 puts for $2.35 and $2,350/40 is 0.5875 so call it net $1.62 so $11.62 is our break-even not counting the annoyance of having to roll the puts.  That's not entirely terrible for a trade that's gone down and down on us. 

    • ALK – Came back nicely.  On track.  Glad we doubled down on the short puts. 
    • BBBY – Another one from the retail slaughterhouse but $18.28 is $2.5Bn and they did $12.3Bn in sales last year and made $424M but usually they drop more like 6% to the bottom so they should be good for $2/share – no reason to let that go at $18.  That means we kind of have to buy back the short 2020 $25 calls for $1.35 and then we need to roll the 10 2020 $17.50 calls at $3.70 to the $15 calls at $4.85 and let's buy 10 more of those too.

    • BHC (formerly VRX) – On track.
    • C – Halfway to $20,000 and over the money already.  
    • CDE – We just bought back the short calls and we may as well roll the 20 2020 $7 calls at 0.85 down to the 2020 $5 calls at $1.55 as we pick up $2 in strike for just 0.70 and, since it's such a nice deal, we'll double down to 40 long at $1.86 avg (not counting the short puts).
    • CHK – Consolidating for a nice break over $5.  


  43. Phil – FTR has a ways to go. 8-)


  44. A quick note on HMNY.  My mother who lives in FL has been a subscriber (retired and likes to go to the movies) for about a year.  She loved the service but now can't find a movie to go to.  She will see a movie available before she leaves her house but by the time she gets to the theatre nothing is available.  The ticket sellers have even told her to pick another movie at their theatre on Movie Pass and just go into the movie she really wants.  Unfortunately there are none available.  She canceled her subscription last night.  Not a good sign for HMNY.. 


  45. Hi Phil,

    Wanted to clarify on ABX. 

    I currently have (after doubling down last time):

    20 lots of Jan 20 @ $10 calls for $3.62

    -10 lots of Jan 20 @ $15 calls for $2.5

    To double down, I guess its:

    Buy 20 more lots of $10 calls for $1.73

    Sell $15 calls for $.5

    And leave the 10 short puts (not add more) for now?


  46. Options Opportunity Portfolio Review (OOP) – Part II:  

    • CHL – On track but already net $6,825 out of $7,250 on the bull call spread so let's take that off the table and leave the short puts to expire worthless.
    • FNSR – Finally getting themselves together.  It's a $14,000 spread currently net $5,075 so still good for a new trade.  
    • GE – I think, if we're going to be serious about this, we need to roll the 2020 $13 calls ($1.65) down to the $10 calls ($3.30) for $1.65 as we pick up $3 that's mostly in the money.  Then we can add 20 more and our goal will be to sell 20 (of 50) of the $15 calls (now $1) for hopefully $1.50 or better to pay for the roll (but not the new, uncovered 20).  We're not changing the puts until the 2021s come out.

    • GNC – There's an error here as the short $5 puts are not $0 so we're $2,500 less profitable than we think we are.  Gotta double down on the 2020 $2.50 calls at $1.40.
    • HBI – A bit low but still profitable.  Good for a new one.
    • HRB – We uncovered as they dipped and that's been a great decision so far.  Now we can sell the Jan $25 calls for $2.80, which is $2,800 off the table and still another $3,000 to collect if $25 holds is plenty to make on this spread.

    • NLY – My favorite REIT.  Just paid an 0.30 dividend on June 28th, which is $300 or $1,200/yr off our net $8,400 entry so we're picking up 14% while we wait for them to break back to $12 so we can sell calls.  
    • SPWR – Back to their lows and we already got more bullish so we wait.  
    • WBA – Easy money on that one, on track.  

    • WPM – As I said in the Money Talk Review, I want to buy back the short 2020 $25 calls at 0.75 and then we'll just wait and see.

    Well darn, every time we look to cash things out, the positions in the OOP are just too good and too well-balanced to want to change anything!  Maybe next time…


  47. Phil/HRB -

    Sorry to keep bugging you but had a question

    The $22 calls in the OOP are Jan 2019 but you said sell the $25 call for 4.30 which is Jan 2020 pricing.

    Usually you don't sell calls past the strike of the long call so just checking if that's really what you meant.


  48. Wow, what happened to the rally while I was writing the review?  

    Ah, Cohn cops a plea but is going to jail anyway – that man must have been SOOOOO guilty!  

    Image result for guilty guilty guilty

    Trump has got to be freaking out.

    Brazil/Jabob – If you lived that close to Venezuela, you'd be tanking too!  Think of their major trading partners:  Crazy Trump, Collapsing Venezuela and Hyperinflating Argnentina.  When Columbia is the "good" neighbor you can count on – you're in trouble!  

    HMNY/Options – What does that mean, "not available"?  That's not the way the service is supposed to work.  Yeah, not a good sign.

    ABX/Martin – I'm not sure I have that right as you suddenly say puts in the last part.  Do you mean you have 10 short Jan 20 $15 puts sold for $2.50?  ALL we are doing is doubling down on the calls, no other changes, no short calls are being sold, no puts are being sold.  I said (and conditional plans seem to really confuse people) that IF we can sell the $15 calls for $1, THEN I want to do that but NOT to sell $15 calls for 0.50 – that's just a note on their current price.  


  49. HRB/OOP, Jeff – You are right, that's my mistake.  Good catch.  So if we cash the Jan $22 calls now, we collect $5.10 ($5,100) or if we sell the Jan $25s for $2.80, that's $2,800 now and, hopefully $3,000 later for net $5,800 so the question is, is it worth tying up $5,100 we could take off the table now just to make $700 more?  Well, it is 14% in 4 months so yes, that's still a cover we want to do.

    Officially, in the OOP, it's going to be covering HRB with the Jan 2019 $25 calls a $2.80, not the 2020s! 


  50. Oh, and we're not even tying up $5,100 as we are collecting $2,800 of it from the put sale so totally worth it!  


  51. LB Earnings tomorrow - 


  52. options alpha--thanks for the quick note.

    Unfortunately, it looks like HMNY toilet paper is doomed.

    I hope they file before the end of the year unless there is a miracle for that POS.


  53. Will the market finally take a breather tomorrow?

    Or ignore the noise???


  54. Trump and Slick Willy – the men get elected, but the women bring them down. Always the same with these guys. Billy had a weakness for cigars and Drumpf the porn stars.


  55. Most important day of news day of, well, probably ever, and America-hating Fox "news" is leading with Mollie Tibbits murder suspect who, as luck would have it, is a dirty brown-skinned illegal. (note that white wife-and-children murderer in Colorado is still being portrayed as a "good family man").


  56. They also nailed Duncan Hunter. He's House Scumbag #2 to endorse trump (note that #1 Chris Collins is already going to jail). Here's a teaser: "buy some Haiwaiian shorts [with campaign funds] and just say you're buying golf balls for wounded warriors or something."

    What happened to criminals at least having some class?


  57. trump dump – I hope everyone is feeling better…..



  58. Shacking Up With Mom and Dad




  59. Facebook Identifies New Influence Operations Spanning Globe




  60. Uncertainty looms over House race after Hunter indictment



  61. NAFTA ‘handshake’ deal with Mexico targeted for Thursday


  62. Herbalife distributors claim in $1B suit events were a sham



  63. U.S. Retail Earnings This Week



  64. SEC Could Face Backlash if Elon Musk Is Exonerated


  65. /KC- Phil,  In your comparison of gold having a bottom based off extraction costs.  When does the price of coffee cause the the farmer to stop producing coffee?   At some point, if your not making money, you stop producing the product, at least, if you want to have some beans in your pocket. 

    Based off the morning post $100 hold line, is it time to add, hold, or call it a day and keep it on the watch list?    If it dips back to $117, I'd like to buy more, unless that $100 front month line has some significance.

    TIA