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$600 Thursday – Our Dow Futures Shorts Pay Off Perfectly

That was easy!  

In yesterday morning's PSW Report I said:

25,600 would be a great place to short the Dow Futures (/YM) if it fails, with tight stops above but ONLY ENTER AS IT CROSSES BELOW!  At $5 per point, per contract, if you give it 20 points to the stop (25,620, you risk $100 but the Dow is up 600 points off Monday's lows and up 3,600 points since Christmas so it's very likely we get a 20% retrace of 600 in the short run and that's 120 points for $600 per contract reward and, if we get lucky, we retrace the larger rally by 720 points for a $3,600 gain – so I think it's worth a toss – especially in light of these frightening charts

Well, that's exactly what happened first thing in the morning for a nice, quick gain and we're right back there this morning for another chance to go short – but keep those stops in place!  If they are going to keep giving us the set-up, we're not too proud to keep making money off it, right?  Remember:  I can only tell you what's likely to happen and how to profit from it – the rest is up to you!

If you would like to subscribe to the PSW Report so you can have money-making ideas like this delivered to you every day, before the market opens – just CLICK HERE.

Yesterday we placed tight stops at the 25,480 line but today is the 2nd attempt at a fail and we think the indexes will succeed… at failing…  There's no way Retail Sales held up during a month-long Government Shutdown and we get that report this morning while leading Economorons haven't changed their estimates since the last time we got a report – way back in November (delayed due to the Government Shutdown).  

8:30 Update:  Oops, DISASTER!  Retail Sales are down 1.2% for the month and, if it wasn't for a nice gain in Auto Sales, it would have been DOOM.  Check out that trend – not pretty…   Not only that but Gasoline sales, which are 8% of all Retail Sales are up 13.1% for the year (due to higher prices, not demand) and, if not for that, Annual Retail Sales would be down another 1%.

Categories showing a decline in December include furniture, electronics, health and personal care stores, clothing stores, sporting goods and even nonstore retailers (Amazon and dot com gang that was supposed to be taking over).  This is the biggest monthly drop since 2009 so it looks like we can expect at least a 240-point drop on /YM this morning – down to 25,360 and, frankly, we'll be lucky if that holds as I don't see any major catalysts for the day.

Tomorrow we get the Empire State Manufacturing Report at 8:30 and Industrial Production at 9:15 followed by Consumer Sentiment at 10 am and the Fed's Bostic is scheduled to speak at 9:55 – so I think that timing is to get ahead of a poor set of reports so the market doesn't go into free-fall into a long weekend.  We'll see how that all pans out.

Speaking of predictions that come true, it's time to finally say goodbye to the A380, a plane I pronounced dead before they built it.  Airbus could have saved tens of Billions in write-downs if they had only subscribed to our Live Member Chat Room PSW:

Submitted on 2007/02/08 at 6:30 am

A380 – I’ll see your monkey and raise you a mule! Even if they get it flying where are they going to land it? Other than the few European airports that have made a commitment and some in Asia/PG, who is going to be redesigning gates to handle a super-plane that only uses it a few times a week.

It’s a huge chicken and egg problem for Airbus and wait until you see the bad press when they try to put 600 people in a plane at one time (and with 100 first class seats I bet you I STILL can’t get an upgrade!). How does this mesh with any airline gate you’ve ever seen. Will the airlines triple the staff at the gate or willl you wait on a 200 person line to ask a question? Have you ever been on a plane that was waiting for the catering car? Times 3! What happens when they scap a flight? Do all 800 of you race to the customer service counter to try to get on the next plane? What redesigns of the luggage system are being put in place to handle 5-800 people’s bags on the same belt? How many additional customs agents will they put on staff every time an A380 lands in a foreign country – or will we just wait 2 hours?

I know it’s a nightmare when 2 planes with 200 people land at the same time and hit customs, imagine 2 A380s dropping 1,600 people off at once!

All the traffic flow studies they do rest on the fatally flawed assumption that these planes take off on time, land on time, have available gates and never break down. I’d say I would avoid them until they get the bugs out but I may be too old to fly by then…

FAA – that’s because BA wisely made the 787 a logical extension of the line, not a radical departure so everyone along the process is very comfortable with what they are doing, including the regulators. The worst thing EADS can do is start actually flying A380s because the clusterf*ck they will cause at 80% of the airports they land in will lead to massive order cancellations. The A380s are designed to be customized, how stupid is that for something you intend to mass market? Ford had it right with the Model T when he said, “You can have any color you want, as long as it’s black.”

Submitted on 2007/12/11 at 11:01 am

Airbus – Has anyone heard of a single airport that has made modifications for the A380?

Submitted on 2007/12/11 at 11:31 am

A380 – it’s the gates that will be the problem more so than the runways although I’d hate to be landing in the snow in most US airports as they will be cutting it really close on length.

Submitted on 2008/02/24 at 8:12 am

NOC’s deal is an EADS parnership that will create maybe half as many US jobs. As with the 787, BA went with a smaller, lighter design than EADS and I would have to think that Airbus’s problems with the A380 would have to make procurement people think twice about a critical replacement program that they absolutely need to get done before the Dems take over and cut their budget.

If BA loses, it is absolutely a buy on the dip play as this tanker deal represents, at best, 3% of their Net in 2010 and less in subsequent years.

I don’t think the “virtual fence” is in place of the actual fence plan, it’s just easier to get started. Of course, it’s a BS scam to enrich some tech company Chertoff is in bed with. In reality, there are a couple of thousand miles of border that need to be patrolled 24 hours a day so let’s say 1 man per mile = 6,000 people to patrol a fence 24/7 OR you can hire 100 people per state to verify that businesses don’t have illegals working for them. No illegal jobs = no incentive to come in illegally and we don’t have to look like Berlin (which doesn’t even look like that anymore because Ronald Reagan declared a wall between a free and an impoverished nation was an immoral outrage that would not be tolerated by the United States of America (well the USA that used to exist anyway).

Submitted on 2008/02/26 at 1:25 pm

BA – high oil should be good for them. Not even Emirates can afford to fly an A380 around at $100 a barrel. Fuel is 1/3 of the cost of running an airline and planes are leased so, assuming you can roll a lease from one plane to the next, saving 20% on fuel is going to add 6.5% to the bottom line. LUV, for example has $9.2Bn in expenses and $645M in profits. Saving 20% on 1/3 of their expenses is a 100% increase in net profit. How can airlines NOT switch?

BA/Hoss – Remind me if they do go down, it’s not like Airbus is in better shape on deliveries.  I’ve been thinking about that since I was at the airport.  Even Orlando has only a couple of bays for the A380 so it’s going to be virtually impossible to knock BA out of US airports, who have no money to re-fit terminals.  Also, A380s have those Rolls-Royce engines (GE is a good pickup on that news too) that may have a fatal design flaw and that can cause massive delays as plane and engine design are entwined.

So, in short, I was never a fan of the A380 but look how long it took for me to be right.  Notice we were also having a Wall debate 10 years before it became popular and I already solved that problem by suggesting we simply step up employment enforcement.  Hiring 5,000 people to simply go around to businesses and check that their workers are all legal would cost (at $50,000 per job) $250M per year and that's that…

See how easy it is to pick stocks and solve problems when you just think about the Fundamentals!

 

 


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  1. Good Morning!


  2. Interesting study:

    https://www.bloomberg.com/opinion/articles/2019-01-28/trump-economy-lags-clinton-s-obama-s-reagan-s-and-even-carter-s

    In Trump’s view, that entitles him to claim that his administration has produced “the strongest economy in the history of our nation,” as he put it last June. But while the recession forecasts have not been proven right, Trump’s boast can pretty much be proven wrong.

    Measured by 14 gauges of economic activity and financial performance, the U.S. economy is not doing as well under Trump as it did under all but one of the four Republicans and three Democrats who have occupied the White House since 1976.


  3. Keep on building…

    https://asia.nikkei.com/Spotlight/Cover-Story/China-s-housing-glut-casts-pall-over-the-economy

    A massive building boom across China, including in tier-two cities like Jinan, has left as many as 65 million empty apartments across the country, according to estimates by Gan Li, a professor at Southwestern University of Finance and Economics in Chengdu.  


  4. Good morning, All!

    The webinar replay is now up!

    https://youtu.be/os5nmxmXq6A


  5. A380/Phil – that's what I've flown between LAX and ICN for the past three years, Korean Air Lines. You're absolutely right, these boulders are just too much. Landing in one of them gives you this feeling of real mass. KAL pilots are good, and they can do smooth touch-downs, but there's a real sense of this being a very big heavy plane. The ground is a problem, too, as you note, although ICN isn't so bad, and they usually hustle us through pretty efficiently. At LAX, though, what takes time is not customs (those guys just sort of give up and wave everyone past), but the baggage claim. It's a long wait for the bags to drop off that plane, usually well over a half-hour.


  6. Good morning! 

    Goaaaaaaaaaaalllllllllllllllllll!!!! already on /YM – that was fast!  Well, there's no point in coming in tomorrow – I'm done!  cool

    Big Chart – Only the Dow is/WAS over the hump and the Dow is meaningless.  The fact that everyone else stopped dead there is what mattered.  

    Ranks/StJ – Wow, Trump and the Bush's, Republicans are so delusional it's amazing…

    China/StJ – Well that could solve the World's immigration problem right there!  And the homeless problem…  Even at just 2 people per apartment, that's empty housing for 10% of the people.  In this country, that would be a massive recession.

    380/Snow – God forbid they had caught on and air travel would have ground to a halt.  I can't for the life of me understand why they didn't see these issues coming before they started.

    23,360 not even holding – that's the stop now.  


  7. Let's file this under NOT GOOD:


  8. /YM /Phil – And out…That pays for the subscription Phil.  Thank you!


  9. A380 / Phil – From day one, that plane never made sense to me! When you have to make so many changes to the airport to be able to first accept a new plane, it's not good. I guess some airlines liked them because they made these big luxury suites in them, but for most, it was just cramming 800 people in a plane and who wants that? I flew in a 787 for the first time and that makes so much more sense – confortable, not too big, plenty of tech. Who needs more.


  10. China / Phil – This would kill the real estate market in any country even in China but for the fact that the government lends more money to build more… It's simply crazy. 


  11. Phil; now that you have become an expert in the MJ industry, thoughts on CGC earnings ?  Lost .31 and .76 the last two quarters.  Street is expecting only a .05 loss this quarter.   That seems like a high (no pun intended) target to hit.  Any thoughts on a trade setup.  TIA


  12. Phil,

    Would appreciate your thoughts on the water space (TTEK,AWK,XYL). Xyl seems to have best performance #s, AWK is at top of its range but with high debt. All options are thin. Looking at trying to sell XYL Jul 65s puts @ 1.65. Thanks


  13. Options Opportunity Portfolio (OOP) Review – Part 1:  WTF?  Now we're up 187.1 at $287,087 on the same positions we had on Monday at $273,614!  Our last full review was 1/17 and we were at just $235,237 then.  I don't like making this much money as I feel like it's not going to last and we should take it off the table, so I'm going to be very critical going through these trades but, then again, I say that a lot and end up loving the positions too much to let go (and for good reasons it seems).  

    • HMNY – They got delisted today.  In the LTP, we punched it up to 240,000 shares at about 0.05 and I think it's silly not to spend $600 to buy another 80,000 shares here – just in case we luck out.  These are fun things you can do when you are way ahead.  
    • JO – Not looking very promising.  Even lower today but hopefully the bottom holds.  

    • SCO – Huge comeback on these but we're already up 70% and we want to get more cash so let's take this one off the table.
    • LB – No worries
    • PLAY – Good for a new trade.
    • SIG – So good we played it twice.  I will fix and good for a new trade.
    • TZA – I'm tempted to punch it up but let's just buy back the short $25 calls – as they don't have much left to give us at this point.  Hopefully we can sell more into a spike.

    • AAPL – On 1/17 this was – $5,000 and now + $7,000 so + $12,000 just on AAPL.  The net of the spread is still just $19,337 on the $65,000 spread that's $50,000 in the money so pretty good as a new trade still though our original net entry was $12,500.  How can you not love these kinds of plays???

    Keep in mind that the reason we're doing well here is because we stuck with one of our most important plans which is:  If a trade goes against you AND you intend to stick with it (after carefully reviewing your premise to make ABSOLUTELY sure it's still intact) - you roll the long calls down as far as you can for 0.50/$1.  With AAPL, we originally had the $160/185 spread for about $13 (not counting the puts) and then we spent $10 to roll to the $140s and $10 to roll to the $120s as AAPL went lower.  So now we're in the spread for $33,000 less the $13,000 for the puts is really net $20,000 but we wouldn't even have broken even yet if we had just sat there and prayed for a rebound!  

    • ALK – Very much on track and I strongly believe in them.  Still just net $3,450 out of $15,000 potential but we had a credit when we started.  
    • BBBY – Damn, I thought this was finally one I could get rid of but they are too strong!   Still insanely underpriced at $2.25Bn ($16.40) with about $300M in earnings and they just beat Q4 (which is their Q12019) by 6.5% at $1.48 per $16.40 share for that quarter alone.  This spread was -$2,000 and now +$7,000 so nice turn here as well and again we pressed our bets to stay in position to take advantage of a move, buying back the short $20s and rolling the $12.50s to the $10s.  Now we don't need the $10s so let's cash them for $7 ($14,000) and buy 25 2021 $15 ($4.30)/22.50 ($2) bull call spreads for $2.30 ($5,750) so we're still pocketing $8,250 while leaving a potential gain (all gains now) of $18,750 down the road with less downside exposure.  Our 20 $10s would have to get to $26 to make the same money for us and now we only need $22.50 and 2/3 less money!  Aren't options the best?

    • BHC – Old VRX and it's a $40,000 spread at net $1,630 so good for a new trade (though I would sell higher short calls) and way too good to throw away with $38,370 upside potential.

    • C – Good earnings so no reason to get out of this $30,000 spread at net $9,000.
    • CDE – Still waiting for the miners to come back.  Tempted to kill this one as we have GOLD and FCX but I think a China deal will come and things will go higher all around so, instead, we'll spend net $5,000  to roll the 40 2020 $5 calls at $1.05 ($4,200) to 40 2021 $3 calls at $2.60 ($9,200) and now we're $8,000 in the money – so that makes sense.  
    • CHK – I really believe Nat Gas exports will send prices higher – one day…  Let's roll our 25 Jan $3 calls at 0.45 ($1,125) to 20 more of the 2021 $1 calls at $1.70 ($3,400) so now we have 50 of the 2021 $1 calls that are $1.50 in the money ($7,500), partly covered by $3.50 calls and the short $4 puts – so that's our target and, if correct, we net out $12,500+ for our troubles.  

    • FCX – Another trade war victim.  Good for a new trade.
    • FNSR – Over our target at net $11,450 out of a potential $14,000 but that's getting boring so let's cash the long calls for $10.25 ($20,100) and buy back the short Jan $17 puts for 0.60 ($600) and we'll flip to 20 2021 $20 ($5)/27 ($1.50) at $3.50 ($7,000) and we'll roll the 20 short Jan $20 calls at $4.30 ($8,600) to 15 short June $22s at $2.15 ($4,300) so we're putting net $8,200 in our pocket and leaving the 3/4 covered $14,000 spread on the table so instead of waiting one year to make $3,550, we now have to wait 2 years to make $14,000 – plus the $8,600 we already took off the table PLUS there will be more sales ahead – including put sales if we dip lower.  

    • FTR – We sold the $5 puts for $2.70 and now they are $3.10 so let's take that loss ($1,200) and spend $6,780 more to buy $3,000 more shares, which will make our average cost $3.40 and we'll buy back the 15 short Jan $8 calls for 0.15 ($225) and that profit more than cancels what lost on the short puts so we have a clean $3.40 on the stock and we COULD sell the 2021 $3 calls for $1 and drop our net to $2.40 but let's just see where earnings end up first on 2/26.


  14. Trying to get more stock in KO fishing for May 45put for 1.17


  15. FNSR / Phil – Isn't the IIVI deal going to close soon? I thought that they were looking at June.


  16. Phil,

    Do you like a poke at an /RB short here at 1.50?


  17. Sold KO 45May put for 1.13


  18. You're welcome Buck!  

    CGC/Options – Was just talking to Ken from New Age this morning, I don't see how anyone in this industry can't make money – you have to be really, really bad at business to not make money.  That being said, these big, public MJ companies are spending money trying to crowd out the small guys.  New Age is trying to be a medium guy and, so far, we're the only small guy who survived the purge in CA so now we get to go to other states and see if we can hold our own against the Goliaths like Canopy.  CGC may be losing money but they are gaining market share and now have about 1/4 of the Canadian Market (which is like having 1/4 of CA).  They've moved into US hemp now and we (New Age) decided that market is way too expensive to get into so we're partnering with hemp growers instead.  

    It's all a moving target as legalization is still rolling through and still very few people smoke as there's still a social stigma to it but Aurora (ACB) just punched revenues up 82% on their report – so it's not likely that Canopy won't also knock the top line out of the park.  Whether they make or lose money will be a bookeeping issue as they are spending about $150M just to do US Hemp and MAYBE they sold $50M in the last Q but think if the upside in the US, which is more than 10x Canada – and don't forget the rest of the world.  They are not wrong to press their first-mover advantage at the expense of short-term profits. 

    But no, I wouldn't bet it but, if they go down on a miss, I'd consider going long.

    AMZN officially out of NYC. 

    Water/8800 – I do intend to get into that one day but we're still pretty far off the crisis point.  I think AWK is way over-priced and TTEK and XYL are already priced with a bit of speculation built in.  

    XYL is much bigger than TTEK and seems to be growing faster so I'd lean that way too.  Unfortunately, they don't have very long options but we (PSW) can fix that by causing interest so let's sell 5 of the XYL Dec $70 puts for $4.60 ($2,300) in the LTP and see how things go.

    KO/Yodi – They were high in the channel and lowered guidance – I wouldn't look for a snap back to $50 – I think LOW to mid-$40s is right for them.

    FNSR/StJ – Yes, deal should go off at $26 as it's $15.60 in cash and 0.2218 shares of IIVI, which is now $38 so $8.40 makes $24 at the moment but I think the cash component will come up or IIVI will recover a bit. 

    So, even if they get taken out at $23, our 20 $20 calls will be $6,000 and the short calls would be $1,500, so we will have taken $12,700 off the table at $23 with up to $1,500 more as a bonus at $26 (+$6,000 on the longs less $4,500 on the short calls).  Since we are at net $11,450 now and we took $8,200 of it off the table, it's very unlikely we won't get at least $3,000 but with a lot of potential upside – depending on when or if the deal closes.  If the deal falls apart – we're better off with the new spread and the short calls.   

    Though, as I think about it, you're right, we should sell just 10 short calls on FNSR in the OOP, not $15.  

    /RB/Japar – Well if you waqnt to watch it closely and short it below the $1.50 line with tight stops above – sure but I have no conviction as we're heading into a holiday weekend.


  19. Do you think /RB drops after the holiday given the recent builds the last couple of weeks?


  20. Phil KO thanks for the comment. The idea is to buy more stock for my armchairs. Hold stock at 42 and possible like to add more at 43.90 +- They pay a steady div of 3.4%. Remember the comment of yesterday 2% per month !!!!!


  21. Trump Administration Is Selling Western Wildlife Corridors to Oil and Gas Industry




  22. Trump privately gripes that GOP was outplayed by Democrats



  23. /RB/Japar – I think OPEC moves trump all else and they are trying very hard to get Brent back over $65 (now $64.40) so I wouldn't bet against it – or for it.

    KO/Yodi – Nothing wrong with that.

    • The Atlanta Fed tracker is now seeing just 1.5% GDP growth in Q4. That's down from 2.7% seen one week ago. The cause? This morning's shocker of a retail sales report for December, which showed the largest monthly decline since 2009.

    Sounds like bad news but, as I said, Fed to the rescue:

    • As downside risks gather, Federal Reserve Governor Lael Brainard says she's comfortable with the Fed's current patient stance and indicates that the central bank may be nearing the end of its program to shrink its balance sheet.
    • "My own view is that the balance sheet normalization process should probably come to an end later this year," she told CNBC.
    • Regarding interest rates, Brainard endorses the Fed's wait-and-see attitude in that the policymakers need to assess economic data as it comes in.
    • "Let's be on hold for now while we learn about what's going on in the economy--I think it's the right place to be."
    • And for the downside risks, specific concerns include the U.S.-China trade dispute and uncertainty surrounding Brexit and China's economic growth.
    • And while today's retail sales numbers, the worst in a decade "caught my eye," she said, she "didn't want to make too much" of one month's numbers.
    • With the surprisingly bad retail numbers, 10-year Treasury gets bid up, pushing yield down 4 basis points to 2.66%.
    • Previously: Powell doesn't see recession probability elevated (Feb. 12)

  24. GDP / Phil – I wonder what the explanation is going to be if we show 1.5% in Q4 after we added $1T to the deficit with tax cuts. Pretty thin ROI there. Of course, if we started construction on the wall, it would add jobs and help the economy grow. That should be the next argument.


  25. Options Opportunity Portfolio (OOP) Review – Part 2:

    • GE – Almost at our goal!  We're at net $8,527 out of $30,000 so "on track" after rolling and rolling to get here.  We're still down $21,000 on the position so all we can do is "get even" overall but that $21,000 is already counted out in the portfolios balance so it's not about getting even on the position, it's about whether or not this $8,527 is well-deployed – and it is, looking for a $21,473 (252%) gain at $12.

    • GOLD – Well now they are absorbing a buyout so it's going to be an iffy year but, as we discussed in yesterday's Webinar, I think the analysts who criticized the earnings are idiots so I'm happy with our position as is.
    • HBI – Nice improvement on this one as we were down about $5,000 last month and we spent net $700 to roll out to this position and now it's up about $7,000 so $700 to buy a $12,000 turnaround is money well spent (and well-timed, as it turns out).

    • HRB – This should be the bottom.  We spent $2,500 adjusting this one last month and no move yet but my theory is come March/April people start thinking about them and $5Bn for $600M in earnings is not a bad thing to sit on.
    • LB – Uh-oh – retail!  Fortunately, it's the gift-giving part of LB that's been suffering so probably not any worse.  Like HBI, they sell the basics but we'll have to wait until 2/27 for their report.  Meanwhile, our conservative spread is in the money but only net $3,000(ish) out of $11,250.
    • MJ – My favorite!  Canopy (discussed above) is MJ's biggest holding (WEED.TO) at 10%, followed closely by Cronos (CRON.TO), Tilray (TLRY), Aurora (ACB.TO) with CannTrust (TRST.TO) and others bringing up the rear at 5% or less.  My theory is one of these guys will be a 10-bagger and if 10% of your holdings becomes a 10-bagger, that's +100% of the ETF's whole portfolio - so all the rest of them have to do is not suck and MJ should do great.  Meanwhile, we're already over my target though we're only 1/2 covered but that's fine for now as it gives us an opening to sell short-term puts if we feel overbought (not at the moment). 

    • MU – Another one that's already in the money.  Also half-covered so we have nice upside but $38 is $26,000 and currently net $25,540 so there's really not too much point to this spread as we are basically just looking for the upside of 10 long $25 calls, which are currently $21 ($21,000).  Let's say MU gets to $50 or even $60, so $8,000-$18,000 more from $21,000 seems like we can do better so let's cash this spread (puts too) and buy 20 of the 2021 $40 ($12)/55 ($6.75) bull call spreads for $5.25 ($11,000) and sell 10 of the 2021 $33 puts for $4.75 ($4,750) so that's net $6,250 on the $30,000 spread so now we have $23,750 of additional upside but also $19,290 CASH!!! back in our pocket.

    • NAK – Looking much better now at around that $1 mark.   10,000 shares is plenty as it's pure speculation and we'll either get $100,000 or $0 in a few years.   
    • NLY – We're just in it for the dividends.  Someone did sell the 2021 $8 calls for $2.34 recently so I'd say let's ask for $2.50 and see if it fills (10 contracts) as it will put $2,500 in our pocket and we'll still get our dividends.  
    • OIH – Another sector where I expect to see a comeback but, so far – so wrong!  

    • SPWR – Pretty much at our goal but only net $6,670 out of $10,000 so let's let it ride.  
    • SQQQ – Despite today's recovery, I feel better if we're more bearish so let's buy back ALL the short callers and see how the weekend goes.  
    • TWTR – The short calls should go worthless and we're left with the conservative spread that's on track.  

    • WBA – Already at our goal but net $11,300 out of a possible $25,000 means this one is almost good for a new trade.
    • WPM – Back in black already.  We just buy this one over and over and over again when it's in the teens.  It's a bit over our March target for the short calls but just 10 so we'll ride it out and see.  If it blasts higher, I'm very happy to buy more long spreads.  

    Once again our trades are too good to close!  I know you guys might think it's silly that I keep trying to close them but they keep making more and more money but I really would like to be less exposed – really….


  26. GDP/StJ – I can't believe the market recovered on this BS.  Well, I guess we can just hope for another round of 25,600 shorts.

    1,550 being tested on /RTY – that's important.


  27. NLY calls – why sell the $8 calls for $2.50 vs sell the $10 calls for $0.50?  In the latter case somewhat less likely to be called away?  


  28. CTL - 

    I know that CTL has been discussed before on this board by the dividend seekers – any adjustments from those who hold the stock?  







  29. Kashmir Suffers From the Worst Attack There in 30 Years


  30. Goldman Alumnus Jumps Into Cannabis Debt Financing


  31. Tangle NYL if the stock goes below 10$ you will get more out of the 2.50.


  32. Phil MU you surely hope of a bull run on this one. I only hold 6, 3x 25/40 and 2x 25/60  with one 25 long, even with 4x Jan 20 65 call sold for 8.30 now 1.70, but still will hold on and possible will sell an other set of your play. Obviously only 6x again. Your play is at present all OTM


  33. NLY/Tangled – Because the $8 calls offer better downside protection and the same net $10.50 if you are called away.  The likelihood of being called away would be the same, NLY would have to be over $10.50.

    And what Yodi said.  

    CTL/Jeff – I have long said I'm not a fan.  The biggest difference between them and FTR is people don't like FTR and they used to like CTL but now people are having doubts about them so who knows where the bottom might be?

    MU/Yodi – Well it's not really from scratch, we're cashing our winner and expecting more long-term upside which I don't think is unreasonable with IoT progress and MU, at $47.5Bn ($42.50) dropping about $6Bn to the bottom line (assuming normal taxes).  That's my assumption but analysts are saying $8Bn:

    Year End 30th Aug 2013 2014 2015 2016 2017 2018 TTM 2019E 2020E CAGR / Avg
    Revenue $m 9,073 16,358 16,192 12,399 20,322 30,391 31,501 25,436 25,264 +27.3%
    Operating Profit $m 1,737 3,082 2,950 164 5,839 14,609 15,480     +53.1%
    Net Profit $m 1,190 3,045 2,899 -276 5,089 14,135 14,750 8,816 7,455 +64.0%
    EPS Reported $ 1.13 2.54 2.48 -0.27 4.41 11.4 12.0     +58.8%
    EPS Normalised $ 0.28 2.77 2.51 -0.22 4.43 11.6 12.2 7.76 6.69 +110.9%
    EPS Growth %   +894.5 -9.6     +162 +87.7 -33.1 -13.9  
    PE Ratio x           3.59 3.41 5.37 6.23  
    PEG x           n/a n/a n/a n/a
    Profitability

    $8Bn would make them ridiculously cheap while $6Bn means they are simply reasonable down here but, either way – I want to stay in them.


  34. Rally / Phil – Do people expect that the Fed would cut rates with a bad GDP? Sure, I would expect Trump to call for that and complain about high rates again (which of course hurts his business).


  35. Not a very exciting day.  We'll do STP and LTP tomorrow (and boy do I dread LTP reviews!).  

    Fed/StJ – Hope springs eternal but it would be irrational for the Fed to cut rates at this stage and I doubt they'll go that far unless things are really falling apart.  As I keep saying, these are self-inflicted wounds – not a real reflection of the economy.


  36. Pelosi is like an ex wife you are forced to deal with when discussing wedding plans for the kids:

     




  37. Well said Trump!

    Buffett just bought a bunch of RHAT – even though they are being bought by IBM.  Interesting.

    Just what we were talking about yesterday in the Webinar:

    Hedge funds are ratcheting up wagers on the Australian dollar — in both directions — after it became the most-volatile Group-of-10 currencies in the past month.




  38. It’s a Very Bad Day for U.S. Farmers


  39. Illinois set to hike minimum wage to $15, highest in Midwest


  40. Trump Organization shelves plans for two new US hotel chains




  41. Asian stocks slip on Wall Street leads as trade talks simmer




  42. Artificial Intelligence Now





  43. DAN posted a nice earnings last night. In  the same vein, here’s some more grist for the mill:Delphi DLPH, American Axle AXL, Modine MOD, Tenneco TEN and in a completely different vein, a troubled bank that’s trading for a fraction of book, DeutscheBank DB  - good deal or uninvestable mess?

     

    Thoughts on any of these guys?


  44. whoops – DELPH MOD and TEN don’t have LEAPs so that narrows the field.


  45. Good morning! 

    Remind me later Dawg.

    Futures up a bit but off the highs.  Oil up to $55 as /BZ crosses $65.