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Monday Market Movement – NAFTA “Fixed”? Of Course, that calls for a RECORD HIGH!

Image result for trump nafta cartoonAnother record high!

We're finishing August off with a bang as ANY news is good news these days, even making progress on keeping NAFTA, which Trump promised to throw out and was enacted almost 25 years ago (Jan, 1994) so the only reason there's an "accomplishment" to fixing it is because Trump broke it in the first place.  Of course the Administration will say they won big concessions but so will the Mexican Administration and, so far, Canada isn't even playing with Trump – so it's not really "fixed" at all.

It doesn't matter though as the Dow (/YM) is up 140 points (25,927) and the Nasdaq (/NQ) is up 35 points (7,530) in the Futures along with 2,887 on the S&P 500 (/ES) and 1,730 on the Russell (/TF), which also well above the June high of 1,708, depsite the weakening Dollar and rising oil prices ($69), which are considered bad for small-cap stocks.  

Word of progress on NAFTA lifted Asia's stocks as it's seen as more likely the US will begin to negotiate with Japan and China and China's Central Bank took steps over the weekend to strengthen the Yuan, sending their market up 2% overnight – another reason our Futures look so good at the moment.  That's despite the fact that China's Industrial Profits continued to cool off, down to $75Bn in May from $93Bn in June.  There's also some alarming internals as Producers and Refiners of raw materials like oil companies and steel mills have accounted for roughly 2/3 of the gains this year. Smaller firms are facing much tougher business conditions that are squeezing profit margins.  

Despite this morning's 2.5% rally, China's Shanghai Composite still has a long way to go before recovering, after falling 25% from 492 to 379 since topping out in January.  It will take 5% just to make a weak bounce off that so 390 will be the line to watch and then 410 would be a real recovery at the strong bounce line.  

For the purposes of our 5% Rule™, it's a 100-point rejection (20%) from 500 to 400 and a 20% overshoot to 380 which makes the real lines 420 (weak) and 440 (strong) and the 50-day moving average has already fallen below the strong bounce line so there's going to be a lot of resistance on the way up and it won't take much for the bears to re-assert themselves.  

We're also going to keep our eye on the DAX, which still has another 1,000 points (8%) to go before it gets back to highs of 13,500, which were twice rejected.  It's rare for the US and Europe to decouple to such an extent and the German ETF (EWG) is only just getting back over $30, down from $35 in Jan, and 8% of $30 is $2.40 so let's say $32.50 is our target if this recovery is real.  We can then set up the following bullish play:

  • Buy 20 EWG Oct $29 calls for $1.70 ($3,400) 
  • Sell 20 EWG Oct $31 calls for 0.60 ($1,200) 
  • Sell 4 LB 2020 $27.50 puts for $5.30 ($2,120) 

That's net $80 on the $4,000 spread that is $3,000 in the money.  We love LBrands (LB) and wouldn't mind owning 400 shares for net $27.70 so that's like free money to play with and all EWG has to do is squeek 0.50 higher and we make $3,920 (4,900%) in 53 days – that's the way to get a little more bullish with a little bit of our sidelined cash!  

IF the rally is real, then that's how easy it will be to make money as the bubble continues to grow but, if not, then we have our hedges, like the SDS trade we discussed over the weekend, as well as the hedging positions in our Short-Term Portfolio and our Options Opportunity Portfolio.  I know I'm getting more worried as I didn't put out a Top Trade Alert last week – meaning there wasn't anything I felt that strongly about.  I did feel strongly about LB on 8/23 and our Trade Ideas from that Alert was:

  • Sell 10 LB 2020 $30 puts for $6.40 ($6,400) 
  • Buy 20 LB 2020 $20 calls for $9.40 ($18,800) 
  • Sell 15 LB 2020 $27.50 calls for $6 ($7,500) 

That's net $4,900 on the $15,000 spread that's 3/4 covered so you have room to sell 5-10 short calls like (but not now) the Jan $30s at $2 so, even if you just sold 5 for $1,000, that's 148 days out of 512 there is to sell so, even at that pace, you could knock your net down to $1,900 on a spread that's 100% in the money to start.  

LB has gotten worse since then, now testing $27.50 and the puts are now $7 ($7,000) and the spread is now $8.65/4.35 ($10,775) for net $3,775 so a bit cheaper now than where we picked it up (or you could sell the $27.50 puts instead) but that just makes me bank the table harder on this ridiculously undervalued company.  

"If you are not going to buy stocks when they are cheap – when are you going to buy them?" – Davis

The same goes for hedges and our Long-Term Portfolio is now up 38.5% for the year at $692,291 (as of Friday's close) and that's up $57,850 since our Aug 2nd review (again, this rally is ridiculous!) with barely any changes while our Short-Term Portfolio, which hedges the LTP is also up at $231,107 (up 131% for the year) as we had huge winners from our Tesla (TSLA) and iQIYI (IQ) shorts to offset the losses in the actual hedges.  So certainly we will be "wasting" more money pressing our hedges though it's not a waste at all because having these hedges in the STP allows us to maintain the aggressive long positions in the LTP for A LOT longer than we might have been comfortable with.

That's how you ride out a bubble – we keep reaping profits from our long positions by adjusting our spreads while keeping ourselves well-hedged – just in case things fall apart.  If they never do, we probably will make about 1/3 less than we could have made without the hedges but, if things do collapse, we will lock in the majority of our gains and that would put us in a fantastic position to scoop up bargains while others are scrambling for cash.

It's been over 3,500 days without a market corection (20%) and maybe it will be 3,500 more but I feel better knowing that our gains are protected – just in case.


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  1. Good Morning!

  2. good morning.   nafta day

  3. Our president is not only a coward, but a petty, small man:

    According to current and former White House aides who spoke to the Post, top White House officials like press secretary Sarah Huckabee Sanders and Chief of Staff John Kelly pushed Trump to sign off on a pre-written statement that praised McCain’s military service and career as a senator, calling the decorated Vietnam War POW a “hero.” That statement, which was written Saturday, was ready for Trump to sign off on this weekend, but Trump rejected it.

    If you didn't agree with McCain, he was the opposite of Trump in that respect!

  4. The 80's must have been crazy:

    Didn't have any money then….

  5. I wonder how accurate these numbers are:

    And maybe we could also show the rate of debt increase!

  6. ….and the flag is back to full staff at the white house, only because he was not invited to a dead man's party.


    RIP John McCain

  7. From Barron's:

    ~~Don’t Be Tempted by L Brands’ Fat Yield 
    Woes aren’t likely to end soon at parent of Victoria’s Secret, and dividend could be cut.

  8. Good morning!

    Well, not for my /NQ shorts, which are now down $11K at 7,534 (7,478 avg on 10) and I'm really not finding enough evidence to get out but the Dow is at 25,950 and /ES just hit 2,890 with /RTY over 1,730 so it sure looks like a rally that's going to force me to stop out.  If I wait until 7,550, that's another $4,000 but I don't think I have a choice at the moment.  angry

    I committed the cardinal sin last night of not closing them with a $3,000 loss when I went to dinner.  They popped at the open and it's gotten worse since….

    On the Big Chart, it's still kind of a triple top but the 20 dma is rising and the 50 dma is rising and the 200 dma is rising – not encouraging.  I'm only clinging on to reality possibly coming to save me…

    Numbers/StJ – Well I think the average Chinese person lives about as well as people in Mississippi or Idaho and they still make $35,000 a year so, even if we assume they live on 1/2 of that, there's still 5x more of them!   The World's average GDP is $12,000 and Africa is about $6,000 and certainly the average Chinese person lives better than the average African so I'd have to say China's got to be at least $10,000 per capita and 1.5Bn capitas would be $15Tn right there.  Then there's China's upper class and corporations – yep, that number makes sense and they can easily pass us if their growth keeps up.

    Full staff/1020 – Wow, that's just an insult.  You have to go way out of your way to be that insulting to someone most people have a lot of respect for.

    LB/Albo – Is that all they've got?

    Analyst actions after 2Q results

    The guidance cut by L Brands’ (LB) management along with the 2Q 2018 results on August 22 resulted in target price cuts from Wall Street. Some of the analysts that cut their target price for LB were as follows:

    • Jefferies: from $23 to $20
    • Credit Suisse: from $35 to $31
    • Keyblanc: from $28 to $25
    • Cowen and Company: from $30 to $25
    • B. Riley: from $49 to $44
    • J.P. Morgan: from $28 to $26

    L Brands now has an average price target of $32.23, reflecting an upside of around 14%. Individual target prices on the company range from $23 to $56.

    Currently, 22% of analyst tracking L Brands recommend buying the stock, 59% suggest holding it, while the remaining 19% have set a sell rating on the company.

    So there's room for more sells but not many are pulling that trigger so far.

  9. Another rockin' day for /KC

  10. Phil – There was an article in Barron's, but I don't have access to it.

    Cannabis plays TLRY and CGC are up sharply.

  11. Good morning,

    NQ/Phil- I picked up a few NQ shorts at 7530, got out at 7535…. do you think I should short at 7550 again? 

    Lastly, I was looking at China and its increase demands for LNG, even theories that to tighten the trade deficit, China will look to buy more LNG from US. Any play for companies that specialize in producing and selling LNG?

  12. Bought some HYYDF as a spec. 

    ~~On August 1, 2018, the Canadian unit of Molson Coors (TAP) announced a joint venture with Hydropothecary.

  13. Cannabis/Albo – The growth is incredible.  Demand is surging daily – it's like the dot com days and deals are pouring into New Age, which is why we wanted to work with them – as it gives us the inside track on much of what's going on in the industry so we can help put things together.  This will be going on for years in the US and other countries.  

    Check out this article…


    "Driving the growth is recreational use of the product, particularly concentrates and edibles," Modi said. "Estimates already suggest that the US category alone is $50 billion, which compares to spirits $58 billion, wine $65 billion, and beer $117 billion."

    Wow, there goes my other $3,000 as /NQ tests 7,550 already.  26,011 on /YM, 2,895 on /ES and 1,740 on /RTY – I'd say they are good shorting lines but nothing has been for the past week or so! 

    /NQ/Dave – Clearly (down $14K), I'm not the right guy to ask.  It's Money, it could all reverse tomorrow, there's no reason for us to be rallying like this but it was the same for the last 150 points so it's more like we'll need a good reason to go down than just stop going up.

     As to LNG, I like LNG, they are our leading exporter but they haven't been cheap recently, so we haven't played them.  CHK is one we are playing, they make the gas…

    Also be careful as I think we may be getting ahead of ourselves with LNG as they are building more terminals than we can supply and that's even based on the assumption that demand will fly up but other countries are building LNG terminals too – we're not the only game in town.  

    • Dallas Fed Manufacturing Survey+30.9 vs. +28.0 consensus and +32.3 prior.
    • Production: +29.3 vs. +29.4 prior.
    • Capacity Utilization: +25.2 vs. +25.0 prior.
    • New Orders: +23.9 vs. +23.3 prior.

    • Mexican peso rises 1.2% against the U.S. dollar after President Donald Trump says "A big deal looking good with Mexico!" via Twitter Monday morning.
    • The peso trading for 18.7 per U.S. dollar vs 18.9 earlier in the day.
    • Previously: New NAFTA agreement likely 'hours' away (Aug. 27)
    • Goldman Sachs and Silver Lake had Volkswagen (OTCPK:VLKAYOTCPK:VLKAFOTCPK:VLKPYlined up as one of the investors willing to pitch in to take Tesla (TSLA -1.7%) private, according to reporting from The Wall Street Journal.
    • The German automaker is said to be part of a group willing to come in with $30B at $420 per share.
    • Musk reportedly was uninterested in giving Volkswagen a greater amount of control in the company than Toyota (NYSE:TM) and Mercedes-Benz (OTCPK:DDAIF) had when they held stakes in the past.
    • Volkswagen has a sweeping plan to bring 80 new EVs to the market by 2025 and offer electric versions of every model across brands [VW, Audi (OTCPK:AUDVF), Porsche (OTCPK:POAHYOTCPK:POAHY), Bentley, Lamborghini] by 2030. The apparent willingness of Volkswagen to buy itself EV market share could rattle other parts of the auto industry.
    Another thing that doesn't matter:  Germany plans action on Facebook this year
    • Germany's Federal Cartel Office expects to take first steps this year in its probe against Facebook (FB +1.6%) after finding that the social media giant abused its market dominance to gather data on people without their knowledge or consent.
    • The probe is being closely watched in Europe amid mounting concerns over data leaks of Facebook users, as well as the extensive use of targeted ads by foreign powers seeking to influence elections in the U.S.
    • The investigation is not expected to end in fines for Facebook, in contrast to EU probes into Google that have ended in multi-billion-dollar penalties, but the cartel office could require Facebook to take action to address its concerns.

  14. What is wrong with CMG an other rat in the tortilla.

  15. Yodi / CMG: it's gone from $440 in late July to $520 last Friday. That's some rat!

  16. Yodi – I saw this on Briefing.


    Chipotle Mexican Grill downgrade details — to Underperform at Wedbush ; tgt lowered to $445. 

    Wedbush downgrades CMG to Underperform from Neutral and lowers their tgt to $445 from $450. Quarter-to-date checks suggest risk to the current Q3 consensus SSS growth expectation. Specifically, firm's Q3-to-date checks suggest SSS growth trending below 5.7% consensus. Monthly cadence in Q3:17 consisted of a tougher July (+4.5%) and September (+6.0%), which laps the launch of Queso. Therefore, given an easier August comparison and a July comp approximately in-line with Q2's 3.3%, firm should be seeing a higher SSS growth rate in August than our checks imply. Firm attributes a slowdown to the Ohio outbreak. They believe a higher YoY promotional cadence through the end of Q3 is likely. Nevertheless, firm lowers their Q3 SSS growth est to 4.5% from 5.5%. Firm also lowers their 2018 EPS eststo $8.64 from $8.85.

  17. Albo thanks I needed this as my Aug 31 is 495. Waited patiently for that for quite a while.

  18. CMG/Yodi – That's why we did that bearish adjustment on Friday – $520 was just silly.

    Image result for chipotle food poisoning cartoon

    I agree with Webush's TGT around $450 (200 dma):

    Speaking of adjustments, HMNY survives the weekend and goes up 30%!   0.0025 baby!!!!

    And this is why we make these adjustments when a position gets toppy:

    Our LTP position needs adjusting, it's:

    Short Put 2020 17-JAN 270.00 PUT [CMG @ $520.25 $2.21] -5 1/2/2018 (511) $-17,600 $35.20 $-31.53 $-115.14     $3.68 $-0.73 $15,763 89.6% $-1,838
    Short Call 2019 18-JAN 420.00 CALL [CMG @ $520.25 $2.21] -6 5/24/2018 (147) $-32,640 $54.40 $59.00     $113.40 $0.40 $-35,400 -108.5% $-68,040
    Long Call 2020 17-JAN 400.00 CALL [CMG @ $520.25 $2.21] 15 5/24/2018 (511) $143,400 $95.60 $64.40     $160.00 - $96,600 67.4% $240,000
    Short Call 2020 17-JAN 480.00 CALL [CMG @ $520.25 $2.21] -15 5/21/2018 (511) $-87,675 $58.45 $48.10     $106.55 - $-72,150 -82.3% $-159,825

    I think we're a bit overdone here at $520 as that's $14.5Bn for a FAST FOOD COMPANY with $4.5Bn in sales and $200M in profits so 70x earnings but let's assume 35x as they work their way back to pre-crisis profit levels.  The thing is, new traders are seeing this as explosive profit growth ($23M in 2016, $176M last year, $116M in Q1 and Q2 this year) but they make $475M in 2015 on $4.5Bn in sales – before all this nonsense although people were paying $750 back then!

    Still, I think $520 is plenty and what we can in the LTP do is roll the 6 short Jan $420 calls ($113 = $67,800) and the 15 short 2020 $480 calls ($106 = $159,000) to 20 short Jan $460 calls at $80 ($160,000) and we'll cash in our 15 2020 $400 calls at $159 ($238,000) and buy 20 2020 $460 ($118)/580 ($58) bull call spreads at $60 ($120,000) so we are taking $51,200 off the table and now we have a $240,000 spread that's $120,000 in the money covering the 20 short, rollable calls that are $120,000 in the money too so we're playing this for a pullback and, when we get one, we'll buy back some short calls to restore a 2:1 ratio.

    Untouched, the spread is now -$2,300, -$56,910, $211,800 and -$137,700 for net $14,890 off Friday's net $10,297, so up SLIGHTLY as CMG calms down.

    Because we cashed in our $420 calls (because we thought they were higher than they should be so we took it an ran), we locked in that gain and flipped to:

    • 20 short Jan $460 calls at $80 ($160,000), now $63 ($126,000) 
    • 20 2020 $460/580 bull call spreads at $60 ($120,000), now $102/48 = $54 ($108,000) 

    We took $51,200 off the table and our new spread is net -$18,000 and still -$2,300 for the puts is -$20,300 so net net (of the cash) is $30,900 – more than double what we would have had if we were greedy on the long side and, more importantly, we now have 20 $120 spreads ($240,000) vs 15 $80 spreads ($120,000) on the long side and easier to roll short calls so we have a ton more potential in this spread than our old spread had.  

    It's not always about adjusting losing positions – sometimes those winners are ready to be harvested too!  

  19. So strange, on Bloomberg, they have Trump just listening to his speaker-phone on the desk at the White House – he looks like a bored child…

  20. Trump / Phil – He is a child, a capricious one…

  21. Thoughts on HIBB.  One of the few remaining sporting goods stores.  Took big hit Friday and down again today. P/E of about 10.  Plenty of cash and very little debt.  Looking at 2020 BCS .. 17.50/25 for $2.50 (about $2ITM) and sell the 17.50 put for $2.85.  Thoughts?

  22. I think the overlooked golden child in the medical cannabis field is actually hemp CBD and its isolates.There are  only trace amounts of THC in the Hemp products. Unless somebody actually wants the high from the marijuana based products, hemp is the way to go for medicinal benefits that are emerging, Epilepsy symptoms and Parkinson tremors look particularly promising to reduce symptoms.. Thoughts anybody?    

  23. U.S. and Mexico Agree to Preliminary Nafta Deal

  24. U.S., Mexico Reach Trade Deal as Canada May Rejoin Nafta Talks

  25. The anti-dollar awakening could be ruder and sooner than most economists predict

  26. LNG/Phil- I agree LNG is rich… what about the secondary providers such as LNG ships? ticker: TK 

    you like them?

  27. Phil--what is your opinion on HMLP as a div investment—thanks

  28. Albo,  HYYDF or HEXO.TO    good choice.  Well run company sure to be a winner. 

  29. still being censored from posting?

    come on Phil…

  30. Phil,

    Any changes to your /NQ position? 

  31. Thanks, Stockbern. 

    I got the idea from Briefing Trader.

  32. HIBB/Nomi – I'm surprised they have 1,000 stores but I guess that's because I think if DKS for size and they only have 728 stores but do $8.5Bn with $325M in profit vs HIBB not even $1Bn and not even $50M in profit.  DKS is trading at 10x HIBB ($3.7Bn) but the tie-breaker for me is that DKS only has 5x more employees and more sales per employee is a thing that matters. 

    I'd wait for HIBB to prove a bottom before jumping in and DKS can give you exposure to the sector if you want that, selling perhaps their 2020 $30 puts for $3.60 as that's net $26.40 is 30% off the current price.

    CBD/Wilsons – We're not overlooking them, New Age process those too!  And then we're looking at uses for the waste-product hemp fibers – and there's lots of those.   We had a big chat discussion about that on 8/4.

    TK/Dave – Again, it's a potential over-capacity issue and TK has certainly not been a growth story over the past few years:

    Year End 31st Dec 2012 2013 2014 2015 2016 2017 TTM 2018E 2019E CAGR / Avg
    Revenue $m 1,981 1,830 1,994 2,450 2,329 1,880 1,623 1,254 1,270 -1.0%
    Operating Profit $m -150.4 62.7 427.2 625.1 384.3 6.70 -102.8      
    Net Profit $m -160.2 -114.7 -54.8 82.2 -123.2 -163.3 -86.7 -48.5 23.7  
    EPS Reported $ -2.31 -1.63 -0.76 1.12 -1.56 -1.89 -0.93      
    EPS Normalised $ 1.88 0.64 -0.78 1.87 -0.19 0.19 1.35 -0.50 0.24 -37.1%
    EPS Growth %   -66.1                
    PE Ratio x           37.4 5.15 n/a 29.0  
    PEG x           n/a n/a n/a 0.15

    They HOPE to make 0.24/share next year, which still puts them at 28x earnings for a shipping company (historically a sub-10x business due to heavy debts and cyclicality) so it's not for me.  This whole LNG story you are chasing has been going on for years – you are very late to the party to be expecting to discover bargains…

    HMLP/Savi – Don't know anything about those guys but it is another way to play LNG and at least they make money ($60M) on $143M in sales that's growing the right way and $616M is only 10x earnings – so I like that.  They do have $1Bn in debt though and they are paying out all the profits as dividends so how will they keep growing and what happens when rates creep up on them?   Without options to protect – it's not for me.

    Pot companies/Albo, Stock – I love how easily these guys get $1Bn valuations.  

    /NQ/Japar – Not so far as I really can't find any fundamental reason to get out but super-painful up here.  If /RTY wasn't heading lower I think I might have given up and /ES not holding 2,900 helps but, overall – not looking good on the short side and what if AAPL announces something cool?  

  33. Exactly. Want to get out to make sure I can short /RB. But last time I got out too early and it dropped 100pts 

  34. ABX/Phil- I only have 20 short 2020 $15puts on ABX, I want to load more ABX… I am thinking should I just short another 20 $15 puts to be same as the LTP portfolio or should I do $13 puts? They both seem to give me a net entry of low $10s if assigned.. I am guessing the $15 puts is still your choice? Since they give more premiums with not much more required margin.

  35. Phil- Sorry I didnt check properly, seems like you only sold 20 $15 puts, ignore my question!

  36. Yodi – do you have a excel spreadsheet you use for your armchair picks? Sorry if you already answered this previously.

  37. ~~•Apple (AAPL) plans to introduce 2 larger screened iPhones with organic light-emitting diode technology in additional new updated iPad and Apple Watch.

    Scott – OLED is up nicely.

  38. How's this for a trading premise this week;

    -Cliff notes; " The authors find strong empirical support in favor of a geomagnetic-storm effect in stock returns after controlling for market seasonals and other environmental and behavioral factors. Unusually high levels of geomagnetic activity have a negative, statistically and economically significant effect on the following week’s stock returns for all U.S. stock market indices."

    combined with this….

    Cliff notes: "According to NOAA Space Weather forecasters, a powerful G3-class geomagnetic storm is in progress on August 26th as Earth passes through the wake of a coronal mass ejection (CME) that arrived with little notice approximately 24 hours ago. "

    Perhaps a stretch! haha but an interesting premise nonetheless 

  39. Nantucket,

    Well yes I do record all my armchair trades on an excel spread sheet. But pick stocks via a spreadsheet is not the way to start.
    Selecting a stock to play needs some basic ground work to evaluate the stock and options before even put it in to a spread sheet.
    The spread sheet I developed myself using a variety of formulas. Again it works and gets updated from the relevant watch sheet (market watch) I have set up with TOS.
    So something one has to get used to work with. Like flying a plane. You need to learn to operate it.

  40. Short-Term Portfolio Review (STP):  It's really just adjustments but there aren't too many positions so we'll look at them all.  The LTP is at 45.1% ($725,704) and that's up almost $30,000 since this morning (or really Friday's close) and we haven't changed a thing so of course we need to add more protection to lock this stuff in.  The STP is $225,802 so it gave up $6K since this morning so we can see we need to be more bearish as we aren't actually feeling 5:1 bullish – are we?

    Keep in mind the STP is mainly there to hedge the LTP so we mostly look for bearish positions but, once we have those, we add some bullish positions to hedge the hedges (without making another, even smaller portfolio just to hedge the STP as we get into Cat in the Hat territory there).  

    • DXD – We were so sure we'd get a better price for short calls that we did not cover the Oct $30s.  That cost us $11,000 so far!  Now DXD is below $30 and we have 0.90 left so let's go for 100 of the Jan $28 ($2.75)/34 (0.90) bull call spreads at $18,500 and, rather than collect just 0.90 ($9,000) for our Oct $30s, let's sell 70 Nov $30s for $1.25 ($8,750) and, hopefully, we can get out of the Oct $30s at a higher price and the short calls will still be covered (1.5x by the longer spread) or, if not – then the short Novs go worthless and we're back to rolling our longs.  Let's call the coverage $30,000 on the full spread. 

    • Short puts – All good except ABX and we don't mind owning ABX long-term (but we'll roll it in Jan). 
    • IQ – Back to $30 already?  This one is pouring money into the STP!
    • AAPL – Another steady source of income for the STP, miles in the money.  Jan $185s ($36.50) can be rolled to June $195s, now $33.20 for $4.30 and then we'd be in a $30 spread ($15,000) at best but the June $165s can now be cashed for $57.50 ($28,500) and the Jan $185s are $18,250 for net $13,250 so what's the point of waiting?  Let's cash this in.  
    • CELG – New, bullish position, doing well.  
    • SCO – We paid net $1.50 on the bull spread and now we can salvage $1.10 by selling the 20 Sept $15 calls for $1.10 ($2,200) and buying 40 Nov $15 ($1.70)/18 (0.65) bull call spreads for $1.05 ($4,200) so we're doubling down on the oil short and that's a play we have in the hedge fund as well.  If all goes as planned, the short September calls will expire worthless and we'll net $12,000 on the spread.  

    • SQQQ – At least these are somewhat mitigated with short calls but they were too high to help much.  I'm certainly not going to buy them back 100% out of the money but we can roll the Jan $10 calls ($2.15) to the March $10 calls at $2.40 for net 0.25 ($4,000) as that's essentially getting 3 more month's protection for free and we will 1/2 cover (80) with the March $18 calls at $1.10 ($8,800) and then we'll see where we are in Jan.  A 20% drop in the Nas would push SQQQ up 60% to at least $17 so call these $112,000 in protection currently valued at net $32,000 – so a lot of protection here.  
    • TSLA – Deep in the money and should pay the full $9,000 and currently net $6,435 so not worth taking off early.  
    • TZA – Not much damage as these are well-hedged but no reason not to take advantage of cheap long-term positions.  I still have some hope for the Jan $15 puts but the 2020 $10 puts are $3.20 so we may as well do a 2x roll to 40 of the 2020 $10 puts while we can.  That leaves us with 80 partly-covered Oct $7 calls at $1.05 and we'll move them to 80 Jan $7 calls at $1.25 for 0.20 ($1,600) and we'll let the Oct cover expire before selling more calls.  A 60% move in TZA would be over $12 so call it $40,000 of protection currently showing net -$6,400.

    So we've got about $200,000 in protection in the STP plus $163,000 in CASH!!!, which is also protection so I think we're OK unless the charts start faltering.  

    I would have added that EWG play but you guys drove up the prices already!  

  41. Yodi – sorry for confusion – I didnt really want to know what picks you have made – I was just looking for a template to help me monitor by monthly returns/goals, and I thought instead of designing a new worksheet maybe someone out there already had a excel template i could start with.

  42. ABX/Dave – Well 50% in the money is a lot.  I'd wait for 2021s to come out and do a proper roll so you just have the one set at whatever strike.  

    Stretch/Crs – A 93M-mile one at that!  They keep saying we get hit with these things but I'm not aware of any major disruptions caused by them.  

    Spreadsheet/Nan – I just use a Watch List to keep tabs on things.  When stocks we like get cheap – we pull the trigger (unless something has changed).

    Speaking of cheap, SPWR is as low as it usually gets ($6.80) 

    We have them in the OOP and I still like the position:

    Short Put 2020 17-JAN 7.00 PUT [SPWR @ $6.79 $0.00] -20 1/4/2018 (508) $-4,600 $2.30 $-0.06 $-4.68     $2.24 $0.01 $120 2.6% $-4,480
    Long Call 2020 17-JAN 5.00 CALL [SPWR @ $6.79 $0.00] 30 2/6/2018 (508) $10,200 $3.40 $-0.95     $2.46 - $-2,835 -27.8% $7,365

    In the LTP, we have the same but we sold $12 calls to cover (I would not as a new trade).

    WPM, WHR, NLY, LB (of course), GNC, GE, FTR, CDE, BBBY and ABX are 10 stocks (out of 24) that haven't made progress this year so all potential buys for the brave at heart.

  43. Nan,

    As Phil said you start with a watch list of TOS.

    I gladly send you a copy of some of my trades on an excel spread sheet and you can possible use it to develope your own.

  44. More bulls piling on:

    • Small-cap stocks' gains this year will continue for the rest of the year on strong financial performance and the benefits of tax reform, CNBC reports, citing a Stifel note to investors.
    • Last December, the U.S. corporate tax rate was permanently cut to 21% from 35%.
    • "As we move into the second half of the year, the market environment is positioned well for U.S. small cap equities to remain one of the preferred markets," global head of investment strategy Michael O'Keeffe said in a note to clients.
    • Small business owners expect increased sales and even better business conditions for the rest of year, which should boost investment spending and help fuel GDP growth, O'Keeffe wrote.
    • With generally less exposure to international markets than companies in the S&P 500, they'll do better if the trade environment deteriorates, he said.
    • The Russell 200 has risen 12.8% YTD, compared with the S&P 500 Index, which is up 8.3% in the same period. the Russell 200 Index is up 0.35% to 1,731.69 on Monday, while the S&P is up 0.7% to 2,895.57 after President Trump announced a trade pact with Mexico.
    • Previously: Small-cap and mid-cap indexes hit records, as S&P trails (Aug. 7)

    Toyota to invest $500M in Uber

    • Toyota (TM +3.2%) will invest about $500M in Uber (UBER) as part of an agreement between the two companies to work together on autonomous vehicle development.
    • The investment by the Japanese automaker values Uber at about $72B.
    • Toyota (TM +2.7%) says four of its group companies are forming a joint venture aimed at creating software to manage braking, steering and other automated driving features.
    • Advics, Aisin Seiki  Denso and Jtekt Corp are targeting a March launch for the self-driving tech JV.
    • Denso will be the largest shareholder with a 65% position.
    • As expected, Wall Street analysts are scrambling after Tesla (TSLA -1.8%) announced that Elon Musk and the board pulled the plug on exploring go-private options.
    • Analysts on TSLA stock: Morgan Stanley analyst Adam Jonas is back in the game with an Equal-weight rating. Nomura lowers its price target to $400 from $450. Meanwhile, RBC Capital keeps a Sector Perform rating and price target of $315 in place, although the firm says the whole episode from start to finish leaves the bear camp with better talking points than the bulls.
    • Taking a peek at Bloomberg's analyst ratings scorecard shows that sentiment is about evenly distributed as can be — with 11 Buy-equivalent ratings, 10 Sell-equivalent ratings and 11 Hold-equivalent on the books. So much for the theory that Wall Street is ganging up in heavy numbers to one side or the other.
    • Analysts on TSLA bonds: Outside of the view of the battle over Tesla's share price there are some number crunchers looking at Tesla's bond issues.
    • CreditSights is negative on the implications of the last several weeks for the Tesla debt issues: "Tesla's announcement to stay public at least removes some uncertainty for now, but for bondholders the equity-like risk reward symmetry is still not fully reflected in yields despite recent weakness. We shift back to underperform."
    • Moody's called Tesla's private push a "credit negative" event in a note on August 9 and has a Negative outlook overall. The ratings agency is likely to update again on the EV automaker after the latest developments.

    TiVo +4.6% as B. Riley sees 69% upside

    • TiVo (NASDAQ:TIVO) is up 4.6% after B. Riley FBR reiterates its Buy rating and boosts its target price to $23, from $19.
    • That implies 69% upside from today's already higher price.
    • B. Riley added TiVo to its Alpha Generator, pointing to compelling opportunity from TiVo's ongoing strategic review, which could yet end up with a few favorable outcomes; the company could sell its product segment, use net operating losses to shield gains and take its IP licensing segment private, notes analyst Eric Wold. (h/t Bloomberg)
    • Valuation has been held down by investor focus on the company's litigation with Comcast, he notes.
    • Previously: TiVo sinks on report of Amazon DVR plans (updated) (Aug. 17 2018)
    • Previously: TiVo +4.9% as quarter report updates strategic review (Aug. 08 2018)
    • Previously: TiVo loses another patent battle to Comcast (Aug. 07 2018)

    AMD races to new all-time high

    • Advanced Micro Devices (NASDAQ:AMD) is now up 11% as investors continue to rush in on news of the company's new graphics card.
    • The company says in its release that the new Radeon Pro V340 graphics card employs advanced security features and helps to cost effectively deliver and accelerate modern visualization workloads from the datacenter.
    • Separately, AMD also won a patent fight with Vizio over TV graphics.
    • Shares of AMD carved out a new all-time high of $26.80 earlier.

  45. AVGO – Starting to look interesting again.  IMHO

  46. WTW Jun 105 now 76 possible new trade idea By buying the Jan 20 BCS 65/85 for 9.30 and sell the JAN 20 60 put for 7.10. Along the way you can sell half cherry calls Sep 78 for 2.10.

  47. I'm starting to consider a short list.  Considering GRUB, OLED, AVP, LLY, MANU, FIVE, CVS, AMED, IRBT, ADP, LOGI, BJRI, MTN, SVU, NFLX, SQ…  Been a long, long time since we had a short list!  

  48. Albo AVGO did recomment 7/12 to sell and I did collect the Jan 20 200 put @ 26.80. The horse is slowly getting out of the stable!!!!

  49. Damn, should have shorted /RTY today, almost red!  

    The others are clearly being held up by programs:

  50. Phil/Yodi – Thanks – Im really trying to get better organized here – and having a master watch list is much appreciated – now all I have to do is finish that excel spreadsheet so I can feel like I have a good handle on things going forward – over time my plan is to have stock/dividends/sold calls/sold puts all on one spreadsheet. I use PowerOptions – but its more orientated towards your actual results. I envision the spreadsheet providing me with choices – like (should I put on that Sept covered call – or have I already made my 2% for Sept – so lets move out to Oct/Nov/Dec) Maybe I am over thinking this but its the way my mind works. 

  51. Nice work, Yodi ! 

    I like the stock at these levels.  They report on Sept.6, and I'm thinking they will put a positive spin on the CA acquisition.

  52. Phil short list Do you intend selling the stock, selling calls or buying puts, as they mostly right on top of the scale. But as the market goes today they might even fly higher.

  53. Albo yes nice div. as well, that is why I started selling puts. Notice on German TV they got the green light for one or the other thing??

  54. Nan, Power options I used them quite some time back. I felt they are expensive, good for millionaires like Phil!!! The problem is if you discontinue with them you lose everything you have set up.
    So as I said if you like to look in to the excel spread sheet just let me know.

  55. Wow, look at the effect rich people have on Average vs median:

    That's why, if you hear people quoting averages, everything seems fine – no matter how poor half the population is.  

    Short List/Yodi – Those are just ones I'm investigating to set up a watch list on the short side.  Not sure how but most likely bear spreads and long puts (short calls too dangerous).  

  56. The USDA will make $4.7 billion in payments to farmers to offset trade losses, with soybean growers receiving the bulk

    Imagine if they just gave poor people $4.7Bn to buy soybeans with?  

  57. Albo, the problem is for armchair trades they are a high number 213$. Can knock a hole in your port if you short of cash. Obviously selling puts you should have the cash always available just in case.

  58. Yodi – would love to work with the spreadsheet – not sure how to connect with you?

  59. Trump not going to McCain's funeral.  This is just horrible disrespect! 

    Flag back at full staff atop WH. Pres Trump did not issue proclamation on the death of , which usually calls for flags to remain at half-staff through the day of interment, which is Sunday at the .

    I'm surprised Trump is passing up the opportunity to dance on his grave…

  60. Phil short list just as I thought they might go higher and higher, burning up your naked caller, look at the TSLA dream until it pops.

  61. Phil / Short List – SVU has agreed to be purchased by United Natural Foods, hence the current price…

  62. Nan, As I said you welcome to look at it for some it is easy for others difficult. Just let me have your email and I send a sample sheet to you.

  63. Trump / Phil – Was not invited to the funeral but is showing disrespect anyway! I just don't know how people in the armed forces can support this guy!

  64. Short list Funny I am always looking for stocks at the bottom of the scale, in a stage of recovering. This will be quite a different approach.

  65. Yodi – I'd like a peak as well.

  66. Europe Wages / Phil – I saw the same thing happen in Russia the last 20 years. Was outsourcing some services there with many other software developers and wages rose very quickly. Still much cheaper than in the US – about 1/3 for software development but many people looked for other places like Bulgaria for example where it was still cheap. I imagine that we'll run out of cheap places someday or maybe one day with these anti-science guys in power, we will be the cheap place.

  67. SVU/Eric – Thanks, forgot about that.  

    Not invited/StJ – Really?  They actually told him he couldn't go?  That's funny. 

    Wages/StJ – I guess it goes around somewhat but the next wave is the robots, who work 24/7 so, even at $100,000 for a robot that lasts 5 years – it'll be the cheapest labor on the planet, even if they aren't better than humans.   I'd be curious to know where this chart is now:  

    Image result for amount of people to assemble a car by year

    It wasn't NAFTA that killed jobs, we were miles behind Japan and we began to catch up on automation.  

    Image result for autos produced per worker history

    Ah, here's something:

    Image result for auto manufacturing productivity

  68. Spreadsheet/Yodi – I'd like to take a peek.  I have a spreadsheet under construction, but some of my formulas aren't working correctly.  Thanks for sharing!

  69. SDS -  Thank you for the information, after a second look, the $20K spread eats up 33K or buying power, it appears to be those March calls.  Perhaps, it is my trading platform (TastyWorks) which does NOT offer Portfolio Margin.  I do have margin on my cash portfolio and most of my put sales are margin efficient.  Anyhow, I put on a smaller position than below and decided to not cover (at the moment).   

    I am curious what the margin is on TOS.  I use TOS for Futures trading, but, when I try to enter the below trade, rather than the TOS system showing the Buying Power Effect, it tells me "illegal – trade".  I am sure the issue is that I am not setup to trade Options on TOS.  Would you share the buying power effect for the below trade?  

    Sell 10 SDS Jan $35 puts for $2.70 ($2,700)

    Buy 40 SDS Jan $35 calls for $1.85 ($7,400) 

    Sell 20 SDS MARCH $40 calls for $1.50 ($3,000) 

  70. Trump’s Mexico Trade Deal Looks Like a Lemon

  71. What an interesting and frightening read!  This article highlights the Border Wall will do little to keep the drugs from flowing into the USA.  What I found most most alarming is the risk of a terror attack coming to a town near you.  

    An excerpt : Kinetic Attack In this scenario, an attacker might strap guns or explosives to a drone and fly it into people or structures to inflict physical damage or loss of life. The targets of these attacks may be individuals, buildings, or transportation infrastructure such as commercial airliners.

    Phil – hope you don't mind me posting stuff like this after hours, if so, please let me know.