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Thursday Failure – Warning Lights Flashing on our Market Dashboard

chartWe're still painting the bounce lines red 

As I warned you on Tuesday, there's blood on the streets and we have now picked up 4 red boxes as each index has been taken down a notch this week and, with the Nasdaq (/NQ) failing it's 10% correction AGAIN at 6,870 and the Russell (/RTY) right on the -10% line at 1,495 – will the Dow (/YM) and S&P (/ES) be far behind?  For the Dow, that's a 700-point drop to 24,300 and the Dow (/YM) futures pay $5 per point per contract so I love shorting /YM below the 25,000 line with tight stops above.  

  • Dow 24,300 with a weak bounce at 24,800 and a strong bounce at 25,300
  • S&P 2,640 with a weak bounce at 2,710 and a strong bounce at 2,780
  • Nasdaq 6,870 with a weak bounce at 7,080 and a strong bounce at 7,230
  • Russell 1,485 with a weak bounce at 1,530 and a strong bounce at 1,575

For the S&P (/ES) we're at 2,696 this morning so another 56 point-drop and we're all red on that index too.  On the other hand, if /ES can get back over 2,710, then playing /YM bullish ABOVE 25,000 with tight stops below would be the smart play – but even fixing Brexit wasn't enough to hold the weak bounce line yesterday for the S&P and Powell didn't save us last night so it's all up to President Trump to make a deal with China that will save the markets – what could possibly go wrong?

Oil and gasoline are also playing out our worst-case scenario from Tuesday, where I said:

Oil fell for the 11th consecutive day and is back at the $60 line this morning and we still like it for a bounce but tight stops below.  As noted yesterday, $60 is 20% down from $75 and we could overshoot to $57 but, either way, we expect to see at least $63 into Thanksgiving and we did go long on Gasoline (/RB) as well at $1.615 but, so far, that's not working and we'll have to take a loss below $1.60 and wait to see if $57 gets tested on oil, probably lining up with $1.55 on /RB for our next opportunity to take a long poke.

We overshot the mark at $55 and $1.54 but we took the longs on the way back up and we'll see how things play out now with the EIA Inventory Report out at 11 am this morning and now we have 4 Fed Speakers today with Quarles at 10, Powell at 11, Bostic at 1pm and Kashkari at 3pm, which was not originally sheduled (see Monday's Report) so lots of things that can move the market today while we wait for word on Brexit (and now Italy is rumored to be leaving the EU) and, of course, CHINA!!!

 


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  1. BDC – I recall that you got upset that Dems could not even take back the house in the state of Wisconsin and that they should be upset. In fact, they did win the popular vote:

    https://talkingpointsmemo.com/cafe/it-will-take-many-many-more-blue-waves-to-undo-the-gops-2010-power-grab

    More than 1.3 million Wisconsin voters backed a Democratic candidate for the state Assembly, compared to 1.1 million ballots for Republicans. The GOP, however, maintained its 63-36 supermajority in the Assembly and expanded its edge in the state Senate. Only eight Assembly races were competitive enough to finish within single digits. Republicans won seven. Had Democrats won them all, they’d still have a double-digit minority of seats.

    Tough to win when the other side cheats that much! At the same time Dems did the same thing in Maryland but the GOP does it everywhere! Thankfully some states are now passing legislation against that. But too few so far.


  2. Psychology myths:

    https://www.nateliason.com/blog/psychology-myths

    There are two problems with the 10,000 hour theory. First, not all fields are alike. I could invent a game right now, say boosted board juggle racing, where you weave in and out of NYC traffic while juggling on an electric skateboard, and if I spent a week or two working on it I’d probably be an “expert” mostly because no one else would be stupid enough to do it.

    On the other end, disciplines like chess, violin, gymnastics, soccer, and other incredibly competitive fields may take significantly more than 10,000 hours to become an expert in, considering how good everyone else is.

    But then the bigger problem is that not all practice is the same. 10,000 hours goofing off on the golf course with your buddies is not the same as 10,000 hours of guided instruction from a pro. You can’t just “do your 10,000 hours” and expect to be a pro, you have to practice the right way.


  3. FB is a horrible company! I hope they get broken up…


  4. Someone posted some chart on Twitter saying that oil was on its way to $47! $55 is my Must Hold line, then around $52 and then $50. Some big lines between now and $47.


  5. Quote of the day:

    "People just want simple answers. They want there to be a “10-step guide” to getting rich or “5 daily habits” to become successful. Though the truth is far messier, they will follow whoever gives them the easy path. I am not immune from this either."

    (Nick Maggiulli)


  6. Good Morning.


  7. CTL

    FWIW

    CenturyLink (NYSE: CTL) declared a quarterly dividend of $.54 per share, or $2.16 annualized.

    The dividend will be payable on December 7, 2018, to stockholders of record on November 26, 2018, with an ex-dividend date of November 23, 2018.

    The annual yield on the dividend is 11.3 percent.


  8. Good morning! 

    Big Chart ugly and more so if the Dow fails to hold 25,080 (200 dma) and, so far, they are having trouble holding 25,000 so – NOT GOOD.

    Gerrymandering/StJ – Wrecking democracy and the best strategy for the Dems now is to do it as much as possible so the President's Court is forced to pass laws against it.  As it stands now, as long as the GOP net benefits, SCOTUS thinks it's just fine.

    10,000 hours/StJ – Well  I'd say just because he cites outlying cases where it doesn't work, doesn't disprove the concept.  I've found it applies pretty well and that's all it is – a guideline, not a law of physics that is disproven by a single exception.  I think most people can think back on their life and the things they got proficient in along the way and do the math and it generally works out.

    Speaking of 10,000 hours, I realized why Florida drivers are so bad.  It's not just that they are old but they are old AND inexperienced.  A lot of these people moved here in their 60s and the ones that came from cities may have only STARTED driving then.  Then they only drive about 5-10,000 miles a year (Florida is the best place to find a good used car) so figure 30 miles an hour avg is 300 hours a year behind the wheel at best – simply not enough experience and it doesn't take too many of these idiots to mess things up for everyone.

    Oil/StJ – Not likely, I still say $63 into Thanksgiving is very possible.  


  9. Put/Call ratio at 1.50.

    Possible squeeze coming ?


  10. Oil/Phil- are you on any CL or RB future contracts? I guess kinda dangerous to hold over the weekend right


  11. Despacito/StJ – Any time a marketing guy comes across our education article and video titled "How to Get Rich Slowly" says the same thing:  "Don't say that, people don't want that."  

    Lots of fun spikes so far:

    Powell says Global Economy is slowing but also sees a lot of inflation signs (stagflation), which means he WILL hike in December and then we'll see what happens at the next meeting.  This isn't about slowing things now but whether the Fed has firepower to speed us up in the inevitable downturn.

    They are saying China did submit a paper to the US regarding trade but I don't think we're going to like it:

    Image result for fuck you chinese


  12. Long NQ and Gasoline. AAPL showing the way! BABA calls above $8…sold too early :{


  13. In and out of /YM three times under that 25000 level - worked like a charm, didn't take more than a few points of heat & closing the last one up here around 24910. 


  14. DXD/Phil- we do have a 70 short $30 nov 16 calls, are we gonna wait and see how it goes?


  15. BABA/Lionel – Happy to double up on an earnings trade. 

    Good job scalping Ati! 

    • September business inventories+0.3% to $1,967.5B vs. +0.3% consensus and +0.5% prior (revised).
    • Sales +0.4% to $1,468B (M/M).
    • Inventory/Sales ratio of 1.34 vs. 1.37 (Y/Y).
    • Stocks are off to another weak start, as the implications of a potential hard Brexit for financial markets weigh on investor sentiment; S&P -0.4%, Dow -0.3%, Nasdaq -0.1%.
    • Four U.K. ministers, including Brexit secretary Dominic Raab, have resigned, pressuring Prime Minister May's attempt at staging an orderly exit from the European Union as well as her leadership.
    • European bourses are modestly in the red, with France's CAC -0.9%, U.K.'s FTSE -0.5% and Germany's DAX -0.4%; in Asia, Japan's Nikkei -0.2% and China's Shanghai Composite +1.3%.
    • In U.S. earnings, Wal-Mart -0.9% despite beating earnings estimates and raising its fiscal 2019 guidance.
    • Among S&P sectors, information technology (+0.6%) shows relative strength, as Apple (+0.8%) provides some support after entering the session with a 14.7% loss for the month.
    • On the downside, the consumer discretionary (-1.3%), real estate (-1.6%) and utilities (-1.7%) sectors are early laggards.
    • U.S. Treasury prices continue to rise amid the volatility in the equity markets, pushing yields lower across the curve; the two-year yield is 3 bps lower at 2.83% and 10-year yield is down by 4 bps to 3.08%.
    • Also, the U.S. Dollar Index is +0.4% to 97.18, and WTI crude oil +0.5% to $56.55/bbl.
    • Still ahead: business inventories, EIA natural gas inventory, EIA petroleum inventories
    • Retail sales rose 4.6% on a year-over-year basis in October.
    • Categories showing strength include nonstore retailers (+12.1%), food services/drinking places (+6.2%) and clothing/clothing accessory stores (+4.7%).
    • Weakness was seen in the department store (-0.3%), auto dealers (-0.7%) and health/personal care stores (+1.8%) categories.
    • The hurricanes this year and last year made the monthly comparisons a bit choppy, according to economists.
    • A bit of bad news from the report was the downward revision for the September tally to -0.1% from +0.1%.

    • The retail sector is underperforming after earnings reports from J.C. Penney (JCP -2.5%) and Dillard's (DDS -14.4%) throw a scare into investors just ahead of the holidays, despite another strong quarter posted by Walmart (WMT -0.9%) – highlighted by 43% e-commerce growth during the quarter.
    • On a broader scale, retail sales in October were up 0.4% M/M on a seasonally adjusted basis and were up 5.6% Y/Y on an unadjusted basis. "Today’s pickup in retail sales shows a healthy pace of spending and a sign of ongoing consumer strength which is consistent with the state of the US economy," notes National Retail Federation Chief Economist Jack Kleinhenz. Still, the dominant e-commerce growth of Amazon, Walmart and Target is being seen as a margin pincher for the rest of the retail sector unable to compete at scale.
    • Retail decliners: Target (NYSE:TGT-1.3%, Burlington Stores (NYSE:BURL-1.8%, Big Lots (NYSE:BIG-1.5%, Shoe Carnival (NASDAQ:SCVL-4.6%, Abercormbie & Fitch (NYSE:ANF)-2.9%, Kohl's (NYSE:KSS-3.1%, Macy's (NYSE:M-4.5%, TJX Companies (NYSE:TJX-1.3%, L Brands (NYSE:LB-2.7%, Nordstrom (NYSE:JWN-2.3%, Shoe Carnival (SCVL-6.0%, Williams-Sonoma (NYSE:WSM-3.3%, Gap (NYSE:GPS) -1.8%, Chico's FAS (NYSE:CHS-3.0%, Guess (NYSE:GES-3.9%, Express (NYSE:EXPR-3.6%, J. Jill (NYSE:JILL-2.7%, Destination Maternity (NASDAQ:DEST-4.8%.
    • American Express (NYSE:AXPlaunches American Express Go, a digital product for mid-sized and large companies to handle business expenses for temporary workers, recruits, and employees without corporate cards.
    • The product features a virtual card that can be used online or over the phone and has the option for virtual numbers to be printed on companion plastic cards for in-person payments.
    • The new offering uses American Express vPayment, a virtual payments solution that enables business clients to create specific-use virtual account numbers with per-authorized spend controls and enhanced data capture.
    • AXP -0.3% in premarket trading.
    • Previously: Square improves payroll app (Nov. 14)
    • Canadian Solar (NASDAQ:CSIQ+2.8% pre-market after beating Q3 earnings expectations but missing on revenues and saying Q3 shipments came in toward the high end of guidance.
    • CSIQ says Q3 revenues fell 16% Y/Y to $768M and total solar module shipments slipped 6% from Q2 to 1,590 MW from 1,700 MW but at the high end of guidance of 1,500-1,600 MW.
    • But Q3 operating profit was $95.9M vs. $53.9M in Q2 and $57.8M in the year-ago quarter; Q3 gross margin was 26.1% vs. 24.5% in Q2 and above guidance of 20%-23%.
    • For Q4, CSIQ forecasts shipments of 1.67-1.72 GW and revenues of $690M-$800M, including 170 MW of shipments to its utility-scale solar power projects that may not be recognized as revenue in the quarter.
    • CSIQ says its portfolio of utility-scale solar power plants in operation totaled 1.1 GW as of Oct. 31, and its late-stage, utility-scale solar project pipeline including those in construction totaled 2.9 GW.
    • Facebook (NASDAQ:FBposts a lengthy response to yesterday’s NYT report detailing how CEO Mark Zuckerberg and COO Sheryl Sandberg “stumbled” during the bumpy past year at the company.
    • Facebook denies knowing about Russian activity in Spring 2016 but slowly launching an investigation and employing others to attack Apple on behalf of the company.
    • Facebook says it’s committed to fighting fake news, didn’t remove President Trump’s comments on the Muslim ban for the same reason other newspapers covered the news, and that Sandberg only championed the sex trafficking legislation “because she believed it was the right thing to do.”
    • Facebook shares are down 1.7% premarket.
    • Previously: NYT probes Facebook's crisis response of 'delay, deny, deflect' (updated) (Nov. 14)

    Have to go to a breakfast meeting.

    DXD/Dave – We'll have to roll them anyway so may as well wait and see if the Dow can keep it together today, though doesn't look good!


  16. Nat gas really taking it on the chin – all these extreme moves are so bot driven! It's going to get worse I think. Great for agile day traders, bad for the average person.


  17. StJ – DGAZ up 43% today on that move in nat gas.  But without me !

    Some of us day traders are not so agile !


  18. Phil, quite a few cannabis stocks are up today. i.e., TLRY, CGC, HYYDF, etc.


  19. Theresa May speaking live in 30 min.

    Amazing oratory performance – almost 3hrs explaining her position standing on her feet!


  20. As a side comment, just listened to Nigel Farage on BBC…What a clown! No understanding at all of EU process of negotiation. Just fluff…Trump's style with a British twist


  21. lionel 

    unfortunately we have a trump wanna bee in canada also  

    mr ford the premier of ontario does his best to immatate trump and recently he is employing a variant of 

    trumps very effective manner of dealing with opponents and critics by creating a diversion or changing the subject 

    He has his whole party stand up and clap and stamp their feet in the house of commons everytime opponents try and call him out on his misdoings.

    crazy


  22. The day before expiration my short NLY puts drop from total profit to exactly total erasure of the premium.

    Coincidence or Big Algo is watching?


  23. WPM taking it on the chin after earning last night


  24. Nice squeeze here.  Don't know how long it'll last, but /NQ up 90 points off low.


  25. Phil/group

    What is the general rule for closing out a Bull call spread

    for example I have the AAPL 2020 155/185 spread which I could have closed out when AAPL was up towards 220 but I figure it is still fine

    That being said though I could have covered and reentered it — so is there a % and time ratio you use?

    thanks

    Matt


  26. Coulter/Close out BCS; we have often talked about closing out the spread when it has achieved 80% of max value, e.g. close out a $10 wide spread when you can get $8 for it. 

    That obviously means you are giving up a 20% opportunity cost, because if you can close out a 2020 spread for 80% of max value then it is going to be 100% ITM. 

    What I normally do, because I tend to be greedy, and hate giving up that 20%, is look to sell a short put which will allow me to recover that 20% opportunity lost. So in the example above where the opportunity cost is equivalent to $2, I will look for a short put that I can sell for $2.

    Another strategy, which ratchets up the leverage and risk is once you can get the max value of the spread by selling the long call side of the spread, i.e. the value of the long call would be above $10, then sell the long call side, then invest those funds into a new longer dated LEAP BCS, and then decide what you want to do with the additional short calls (the short leg of the original BCS). 

    That's a conundrum that is worth discussing. You have a few options:

    Manage what is in effect a calendar ratio spread, hoping that the stock does not spike on you.

    Keep a close watch on the value of those original short calls, and close out in two steps of 25% (decide the values you are willing to tolerate, and then buy back the remaining 50% to then do double down at a higher strike. I call that the Houdini gambit.

    A blend of the two.


  27. Winston – so are you saying close the spread at 80% and then sell the equivalent put


  28. And a word of warning – giving any blend of ratio write means you have to be lucky on time, and a strong bank balance to keep rolling in case the stock takes off on a vertiginous path upwards. People will tell you now that they knew that AAPL would never stay above $230 for long (October 3rd 2018 was the high). Hmmmm, I'm not so sure it's as easy as all that.


  29. Coulter / making it up on the put. A concrete example, I was in a significant AMGN Jan 19 BCS which I put on some time in Jan 17 – I cannot remember the exact strikes but it was a $20 spread. It started deep ITM and AMGN then started rocketing up. I was able to sell the spread for $16, leaving $4 on the table. It was a 50 contract spread, so 50 * 100 * $4 means the opportunity cost was $20,000. I decided to sell the AMGN Jan 19 $100 put for $7.50 – which at the time I sold it was way, way out of the money and I would have loved to own AMGN at $100. I sold 30 contracts giving me a credit of $22,500.

    It is a trade I would make every time. 


  30. Wow, looks like I missed some fun!  

    WTF people, pick a direction….

    Very good meeting, I think we could really be on a path to $1Bn with New Age in a few years, certainly $100M.  Sorry it took so long but we're putting deals together in several states and we had lawyers and everything for the breakfast meeting (lawyers make everything take longer..).

    Cannabis/Albo – I'm telling you, you go to this convention and, if you've been to Comdex, you can see the same almost everything Comdex had in the 90s with so many companies with amazing growth potential in an industry that is clearly the Future.  If Obama was still President or anyone who was more liberal on pot laws – we wouldn't even have this opportunity because most people would have already been swept up by national players.  As it is, we have a few years to play ball so the best plan is to make ourselves big enough to be attractive to PM, et al down the road.

    May/Lionel – I love that about British PM's you can't get that position unless you are a very good orator due the their Parliament process. 

    NLY/Tangled – Blame Powell for that one.

    /NQ/Albo – 6,712 to 6,857 is a nice turnaround for the day.  /YM 24,782 to 25,170 is another 400-point intraday move.  What volatility?

    WPM/Bert – Nothing wrong with the actual report, people are just being impatient. 

    AAPL/Coulter – When a spread is way in the money, we often like to cash in the long calls (so the $155s would have been about $70 at $220) and leave the short calls and then buy a 2x spread to cover it, like the 2021 $185/245 bull call spread, that way for every penny we have to pay the short caller, we go 2 pennies in the money on our longs.  Currently, that spread is $37/$16 or net $21 but you would have bought it $30 ago so we look at the $155/215 bull call spread for a comparable price and that's $53/23 so $20.  

    So the move would have been to cash your, for example, 10 2020 $155 calls for $70 ($70,000) and buy 2x (20) the 2021 $185/215 bull call spreads at $20 ($40,000) and that would drop $30,000 in your pocket (enough to cover the short $185 calls to $215) but now you have twice as many long-term spreads.  

    If AAPL kept going up, then you look to roll the short calls along to higher strikes and, if not, well the short $185s are now $28 ($28,000) and the 2021 $185/245 bull call spread is $37/16 or $21 ($42,000) so you could close it all out for net $13,000 and with the $30,000 you pocketed, you'd be done at $43,000, which is $13,000 more than you would have made if you kept the original spread and, of course, many ways to roll and stick with it.

    That's what we do, as a general, general rule, if you are up over 70% of a spread that still has a year to go, you should look to do something with it as now you're risking a lot to make a little. 

    And what Winston said but I do not favor put selling since you are getting out of the bull spread BECAUSE the stock is performing ahead of expectations.  You would be closing out because you think you are at an unsustainable high – wait for a pullback to sell puts.  



  31. albo

    can you tell me where a fellow would look to follow that put call ratio you accurately predicted a squeeze with.

    thanks  


  32. Tommyt – I found it on Briefing Trader, a subscription service. 

    A high put/call ratio doesn't always lead to a rally.

    I also read where there had been an unusually large amount of hedging.

    In this case, an article in FT regarding trade apparently also provided some impetus.


  33. Phil — short straddle on MDLZ in the butterfly portfolio, expiring tomorrow.  Puts are looking to expire worthless.  Do you recommend rolling the calls into a new position?


  34. "Very good meeting, I think we could really be on a path to $1Bn with New Age in a few years, certainly $100M."

    Nice! Can't wait to hear about this in the next PSWI report or on the forum. Glad it's going well out there.


  35. MDLZ/Idi – I'm just working on the Butterfly Portfolio Review now.

    Well, nice rally but we haven't taken back yesterday's highs yet so nothing to get too excited about.  


  36. Brexit / lionel – First of all, I suspect that Nigel was in the pockets of Putin and doing his best to sow discord in Europe. Second, that all Bexit thing could come down to a watered down EU membership anyway. So that entire drama is going to come to nothing:

    https://www.motherjones.com/kevin-drum/2018/11/brexit-blows-up-again/

    Anyway, the whole deal appears to be…nothing much. The border with Ireland stays open, which means the entire UK kinda sorta stays in the customs union. Britain also kinda sorta keeps all the EU’s social, environmental and labour regulations. It also kinda sorta confirms the rights of current EU and British citizen to continue residing outside their home country—for a while, anyway. But Britain loses full access to EU financial markets and will have to pay $50 billion for forcing the EU to go through with all this nonsense.

    On the bright side, Brits will once again have blue passports, and tariffs on fish will remain.

    The hard Brexit option would be very painful and I am sure that May knows that by now. Only the hardest of hardliner or the corrupt ones like Farage would push for that.







  37. Japan’s minister of cybersecurity has never used computer



  38. Butterfly Portfolio Update:  Using the 11/2 chart so numbers won't be right and only discussing changes that matter – keep that in mind.

    • AAPL – This is why we only sold 4 puts and calls.  We got burned on the $220 puts, now $29.95 so we lost $7,780 but we made $3,400 on the short calls so our net lose for the 1-month sale is $3,380 vs the potential $7,200 we could have made if we hit the mark.  We think AAPL will come back so we're going to roll the 4 short Nov $220 puts at $28.50 ( $11,400) to 6 short Jan $210 puts at 19.50 ($11,700) and we'll also sell 4 short Jan $200 calls for $3.70 ($1,480) so we're putting another $1,780 in our pocket and we still have the $7,200 we sold last month so now we have $8,980 in pocket against paper losses while our backing spread, since we now sold the puts, cost us just net $4,550.  While it would nice if it had gone perfectly, it really doesn't matter that it didn't as it's one disappointing sale out of 6-8. 
    • Meanwhile, while it's cheap, let's also buy 12 more months to sell and roll our 10 2020 $180 calls at $31 ($31,000) to 15 2021 $180 calls at $40 ($60,000) so we'll put a bit more ($29,000) into the position to get more bullish.  We can recapture $12,000 by selling 5 2021 $220 calls for $24 but we'd rather not if we don't have to go back to a full cover.  

    • MDLZ – We sold $2.20 in premium and the short calls are $1.73 in the money so we won 0.47!  While disappointing, it's a one month sale and we make $235 against our net $3,500 position in a single month and our position is $3.73 in the money so $7,460 coming on that end too – what's not to love?  Now we feel better about MDLZ's stability and maybe even a bit more bullish as it held up well so we'll roll our 5 losing short Nov $42 calls at $1.75 ($875) to 6 short Jan $44 calls at $1.30 ($780) and we'll sell 6 of the Jan $42 puts for 0.80 ($480) so we're dropping another $385 in our pocket in addition to the $1,100 we still have from the last sale so now we have $1,485 to play with and a wider target ($42 to $44) to max our our gains.  

    OIH – Let's sell 5 more 2021 $24 puts for $6 ($3,000) and let's roll our calls (all 25) down to the 2021 $15s at $5.40 ($13,500) and we should recover about $6,000 so costing us net $7,500 to make that move but we can sell 25 2021 $ 20 calls for $2.75 ($6,875) to recover most of that but hopefully we can do a lot better.


  39. Well I guess it will be OOP and LTP tomorrow.  Going to be tough but I have to get back to the convention.

    Later all!


  40. MDLZ – very interesting bid/ask spreads on the Nov 16 42 calls and all strikes below. You could drive a double decker bus through them. Certainly not an easy roll.


  41. Paul Thomas/Bloomberg

    Text size

     

    Francisco D’Souza, CEO and vice chair of Cognizant Technology Solutions(CTSH), has just placed a half-million-dollar bet on General Electric (GE).

    D’Souza, who has been a GE director since February 2013, bought 60,000 GE shares for $499,200, or an average of $8.32 each, on Wednesday, according to a filing he made with the Securities and Exchange Commission. D’Souza now owns 151,000 shares in his personal account.

     

    Read More: Sentiment on General Electric Is Terrible. So What’s Next for the Stock?

     

    D’Souza’s most recent previous GE transaction was on Nov. 20, when he bought 55,000 shares for $1 million, or $17.94 each—more than twice the per-share price in his latest buy.


  42. Wow – the crypto/NVDA correlation continues to hold. Oof – NVDA down 15% after earnings. Dragging MU down a bit unfortunately.


  43. Only the best people:

    The Trump administration’s top environmental official for the Southeast has been arrested on Alabama state ethics charges related to a scheme to help a coal company avoid paying for a costly toxic waste cleanup.






  44. The economic sugar rush and the Fed: a rate hike quandary



  45. Trump and Xi Likely to Get Only Framework Trade Deal, Ross Says





  46. Good morning!  

    Another cool party I had to skip (High Times) but that was after a party I did go to until 10 for Dope Magazine (I know, embarrassing) who just wrote an article featuring one of our products   I'm putting in my 10,000 hours to become an industry expert and these trade shows are great for drilling into every aspect as I get to talk to all the owners and marketers of all the companies involved (that are here) so I'm getting to know the lingo.

    Futures are down a bit this morning and looking weak, we'll see how it goes.  


  47. MDLZ/Winston – I would rather let them expire than pay more than 0.05 over the intrinsic value.

    D'Souza/Pstas – So he's doubling down (in quantity, not price).  Someone should teach him how to use options…  cheeky

    NVDA/Ati – That's why I never got caught up in the hype on them, didn't think that demand would last. 

    • Submitted on 2017/08/16 at 3:22 pm
    • NVDA/Pat – Talked about in webinar.  Bump from coin mining may not last and IOT is a ways off.  Assuming they make $2Bn this year, at $165 they are priced at $98Bn so in no way are they cheap so I'd just watch and hope for a pullback.
    • Submitted on 2017/08/17 at 8:02 am
    • NVDA/Newt – The gist of it is they are a nice company with good long-term prospects but not cheap after rising 60% in 3 months (I would think that part is obvious).   Good one for a watch list.
    • NVDA/StJ – And what if the cryptos crash?  How doe they replace that revenue?  I wouldn't chase them.
    • Submitted on 2018/05/14 at 12:41 pm
    • NVDA/Dave – They said they expect a slowdown and $257 is $156Bn for a company with $10Bn in sales and $3Bn in profits so 50x earning is too much for me to swallow.  I'd stay away but you can sell the 2020 $170 puts for $11 if you have faith and that's net $159 so 40% off before you are in trouble.  If you consider that free money, then you can put it towards a spread like the 2020 $230 ($67.50)/$275 ($46) bull call spread at $21.50 so net $10.50 on the $45 spread but, I think it's way to high to play that aggressively. 


  48. MDLZ expiration. Yes, let the short puts expire, but it is the $42 short calls that create the issue. I noticed this on DIS recently. The MM keep the short calls artificially high until what seems like the last minute of trading and it, so buying back costs a ridiculous amount of extrinsic premium. Pre-open the bid/ask looks reasonable.

    One approach would be to buy the stock and let it be called away – I know that seems insane – but it might be a way to lock in a known loss? Any alternatives?