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Throwback Thursday – Testing our Tops from Above

"How long, how long will I slide?
Separate my side, I don't
I don't believe it's bad
Slit my throat it's all I ever
"Turn me on, take me for a hard ride
Burn me out, leave me on the other side
I yell and tell it that it's not my friend
I tear it down, I tear it down

And then it's born again" – RHCP

Well, you can see why we remain skeptical with these low-volume rallies as we've now given up 50 S&P points since Tuesday's hign along with a whopping 500 Dow points and now we are testing 2,800 from above on /ES Futures and 25,600 from above on the /YM Futures.  During yesterday's Live Trading Webinar, we called for shorting the Russell (/RTY) at 1,560 and that's down 20 points, to 1,540 and that's good for gains of $1,000 per contract but we took a quick $750 and ran into yesterday's close.  

We also shorted Gasoline Futures (/RB) at $1.915 and, of course, we always go long on July Coffee Contracts (/KCN19) at $97 and Natural Gas (/NG) is getting to be playable again as a long at $2.80 (with tight stops below) but, since it's close to expiration on April Contracts (6 days), I'd go with /NGK19, which are the May contracts at $2.815 though even a stop at $2.80 would cost $1,500 per contract – so be very careful with those!  

The Fed was very doveish, as expected but what spooked investors in the end was their overall downgrade of the economic picture as Trump's Tax Cuts simply are not boosting the economy and his Trade Wars are hurting it.  The Fed keeps dropping subtle hints that such things are our of their hands to fix and their $4Tn balance sheet makes it very difficult for them to add any new programs to boost the economy – the best we can hope for is the status quo.

Even as the Fed winds down to $3.5Tn in bonds in September, where they say they will hold it, that's still 17% of our GDP that the Fed is holding, up from 6% in 2006.  That kind of policy is anything but "normal" and monetary policy is extremely stimulative still with the 2.25% Fed Funds Rate just 0.25% ahead of expected (2%) inflation.  That's not at all normal – 1.5-2% over inflation is "normal" (implying a 4% FFR).  

Underlying forces such as slow-growing populations and diminished investment opportunities continue to weigh on economic growth and inflation around the world.  Should the economy stumble again, the Fed won’t have much ammunition with which to respond.  By global standards, the U.S. is the lucky one. The European Central Bank never managed to raise its interest rate out of negative territory or shrink its balance sheet. Earlier this month, responding to a slowdown in the European economy, it said it would keep rates below zero through December, longer than originally planned, and offered special, cheap loans to banks for the first time in three years. The Bank of Japan has, similarly, given no sign of raising its target rate from negative territory any time soon.

While our economy is struggling with what are, for the most part, self-inflicted wounds, economies like Switzerland’s, whose Central Bank signaled no change in its negative-rate policies for years to come, are small compared with the U.S. and Eurozone.  Still, they are home to major global banks and companies that are sensitive to exchange rates and financial conditions.  With financial markets so interconnected, problems in small countries can quickly spread to larger ones.  The Swiss National Bank said Thursday that it would keep its policy rate at minus 0.75%, where it has been since January 2015, and reduced its inflation forecast to 0.3% this year and 0.6% in 2020.  The SNB cited weaker overseas growth and inflation and “the resulting reduction in expectations regarding policy rates in the major currency areas going forward.”  As noted in the WSJ: 

Image result for ecb snb cartoon

Here’s why Fed and ECB decisions matter for countries that don’t use the dollar or euro: Switzerland and countries near the eurozone but not part of it—like Sweden and Denmark—rely on the bloc for much of their exports and imports. That makes growth and inflation highly dependent on the exchange rate. Central-bank stimulus tends to weaken a country’s exchange rate, so when the ECB embraces easy-money policies as it did two weeks ago it tends to weaken the euro against other European currencies such as the Swiss franc. Because the ECB is so large, Switzerland and others can do little to offset it.

“The gravity pull is very strong” from the Fed and ECB, said Sebastien Galy, macro strategist at Nordea Asset Management. “The consequence is [non-euro central banks in Europe] mostly end up importing policy from the ECB, so you end up with housing bubbles and a misallocation of capital.”

So far, there have been few consequences to this dangerous game but capital is, indeed, being misallocated because the rates at which companies borrow money are artificially low and that means their profit outlook and balance sheet health is also questionable and it's very likely that companies would be hit very hard if external factors cause rates to actually reflect the risk of lending (like what happened to Greece very suddenly in 2010, when people finally realized they were cooking the books.  Fortunately, we have a President whose much better at cooking the books than the Greeks – so hopefully we won't get caught.  How's that for a bullish premise?  

We'll see if the markets can bounce back today but failing our lines – especially those 200-day moving averages – would be very, very BAD – so let's hope we can end the week on a positive note but the Russell still hasn't held its 200 dma at 1,582 and that's so bad it's been dragged down 3 more points while we're waiting. 

Be careful out there! 


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  1. KCN catching strong bids


  2. Good Morning!


  3. Good morning, All! The webinar replay is now available!

    https://youtu.be/G2JiBQHOPbY


  4. Good morning!  

    Nice /KC pop to $99 but we may have caused it, so be careful.  That's up $500 per contract from yesterday's close and almost back to even (down $500 on 4) so I don't want to take too much rejection if they can't bust over.  

    Indexes recovering a bit, /CL right at $60 with /BZ at $68.20.  Copper took a big dive so trade talks probably not going well:

    I have an 11 am thing with Hemp Boca.  We have a radio show (not yet but the station is promoting us) so we're invited to the official opening of the IPic Cinema.  I should be back about 1pm.

    Image result for ipic delray

    Unfortunately, I still can't talk, yesterday's Webinar killed my voice.  

    Wow, Dow green again!  Up 150 since 7:45.

    CBD is being sold at the largest drugstore chain in the U.S.

    Curaleaf Isn’t Just Selling Marijuana Anymore

    Curaleaf is CURLF at $6.86, not up too much yet and only just listed in Nov, closer to $8 at the open but fell to $4 at some point.  They won't be the only ones on the shelves (we're talking to WAB but so are 100 other people) but it's nice to have a deal to crow about. 


  5. I don't know how bullish you can go when looking at these projections:

    https://www.motherjones.com/kevin-drum/2019/03/fed-projects-growth-of-2-1-this-year/

    We are pricing growth higher than this IMO. How many more tax cuts can we afford to boost the economy?


    • Wheaton Precious Metals (NYSE:WPM+1% pre-market after reporting better than expected Q4 earnings but a 19% Y/Y drop in revenues blamed on weaker metals prices and lower silver production.
    • WPM says Q4 gold production rose 11% Y/Y to 107.5K oz., mainly due to the start of the San Dimas gold stream in May and the Stillwater precious metals stream in July, but silver production slipped 22% to 7.1M oz., primarily due to termination of the San Dimas silver stream in May and deliveries from the Lagunas Norte, Veladero and Pierina mines ceasing in March.
    • Prices fell during the quarter, as WPM fetched $1,229/oz. of gold vs. $1,277/oz. in the prior-year quarter and silver prices averaged $14.66/oz. vs. $16.75/oz. a year ago.
    • WMP estimates attributable precious metals production in 2019 of 365K oz. of gold, 24.5M oz. of silver and 22K oz. of palladium, resulting in production of 690K gold equiv. oz.
    • For the five-year period ending in 2023, WPM forecasts average annual gold equiv. output of 750K oz., with the increase primarily due to continued growth from the Peñasquito, Constancia and Stillwater mines as well as the commencement of the Voisey's Bay stream in 2021.

    Finally got a break-out over $22 that might stick.

    • Not surprisingly, the Bank of England's monetary policy committee keeps its benchmark bank rate at 0.75%.
    • Committee also voted unanimously to maintain stock of corporate bond purchases at £10B and U.K. government bond purchases at £435B.
    • The pound sterling falls 0.5% against the U.S. dollar to $1.3123.
    • Notes that Brexit uncertainties "continue to weigh on confidence and short-term economic activity, notably business investment."
    • Also observes volatility in U.K. asset prices arising from shifting expectations in terms of nature and timing of the U.K.'s withdrawal from the EU.
    • " The monetary policy response to Brexit, whatever form it takes, will not be automatic and could be in either direction," the committee said in its statement.
    • Banks' net interest margins face pressure from a more-dovish Fed, leading to lending spread compression. deposit re-mixing, and potential for yield-curve inversion, Baird analyst David George writes in a note.
    • Sees analysts cutting 2019, 2020 NIM estimates as Fed rate hikes are subtracted from consensus.
    • He recommends that investors be disciplined in their exposure to banks considering "bank valuations are tempting"  relative to the broader market.
    • Financial Select Sector SPDR ETF (NYSEARCA:XLFslips 0.7% in premarket trading.
    • Individual names also sliding premarket: Bank of America (NYSE:BAC-0.9%, JPMorgan Chase (NYSE:JPM-0.9%, Citigroup (NYSE:C-0.9%, Wells Fargo (NYSE:WFC-0.8%, Goldman Sachs (NYSE:GS-0.5%, Morgan Stanley (NYSE:MS) -0.7%.
    • Previously: Financial sector goes south post-FOMC (March 20)
    • U.S. junk bonds extended their rally after the Fed turned even more dovish than expected Wednesday.
    • High-yield index increased 0.06% Wednesday, bringing YTD gain to 6.81%, as CCCs exceeded BBs and single-Bs with a 0.13% return.
    • Market CDX North America High Yield Index rose to highest level since Oct. 9, 2018 afte the Fed decision.
    • Source: Bloomberg First Word.
    • Previously: Junk bond ETFs see $1.3B in outflows: Lipper (March 8)

    • Citi downgrades Micron (NASDAQ:MU) from Neutral to Sell on the belief that shares and estimates will remain under pressure even after the earnings beat due to the DRAM crash.
    • The firm notes that Micron guided weak due to the memory crash and cut capex, which are the appropriate steps.
    • Micron shares are up 3.6% pre-market to $41.55.
    • Previously: Micron +2.2% after Q2 beats, capex cut (March 20)
    • Canadian Solar (NASDAQ:CSIQ-9.4% pre-market after reporting better than expected Q4 earnings but warning that its net profit in 2019 will be lower than the previous year.
    • "While we have a strong 2.9 GWp late-stage solar project pipeline, due to the typical project development cycle, we expect to realize sales for the majority of these late-stage projects in 2020 or later. This will likely create a temporary pullback in 2019 compared to 2018," CSIQ says.
    • The company also expects lower profit in 2019 from its module manufacturing business, partly due to higher costs caused by the appreciation of the Chinese currency vs. the U.S. dollar and euro in recent months.
    • As a result, CSIQ sees Q1 revenues of $450M-$480M, compared to $901M in Q4 2018 and $1.42B in the year-ago quarter, while net profit will come in "low or negative," despite module shipments of 1.3-1.4 GW, in line with 1.37 GW shipped in the prior-year period.
    • For FY 2019, CSIQ forecasts revenues of $3.5B-$3.8B vs. $3.74B analyst consensus estimate with total module shipments of 7.4-7.8 GW, reflecting the impact of an expected lower module ASP and lower revenue from solar project sales.
    • OPKO Health (NASDAQ:OPK) is up 7% premarket on increased volume on the heels of positive topline results from a Phase 2 dose-escalation study evaluating OPK88003, a weekly injectable oxyntomodulin compound with dual glucagon-like-peptide 1 (GLP-1) and glucagon agonist activity, in adult type 2 diabetics with inadequate blood sugar control with metformin and/or diet and exercise.
    • The study assessed the effects of a dose-escalation regimen of OPK88003 on HbA1c, weight loss and safety over 30 weeks in 113 subjects.
    • Patients in the treatment group experienced an average 1.30% drop in HbA1c compared to a 0.09% reduction in the control arm (p<0.0001). 50% of subjects receiving OPK88003 achieved HbA1c levels of 6.5% or lower compared to 13.8% for the control group (a level below 7.0% is considered a good target for diabetics).
    • Patients in the treatment arm experienced average weight loss of 4.4 kg at week 30 compared to an average loss of 1.8 kg for the placebo group (p=0.01). About 38% of treated patients lost at least 5% of their baseline weight versus 13% for placebo (p=0.008).
    • The average decrease in triglycerides from baseline favored OPK88003 (-31.2 mg/dL compared to -11.6 mg/dL) but the separation from placebo was not statistically significant (p=0.44).
    • No new safety signals were observed. The most frequent treatment-related adverse events, mostly mild, were nausea, vomiting and diarrhea.
    • The data will be presented at the American Diabetes Association meeting in San Francisco, June 7-11.
    • Phase 3 studies are next up.
    • Aimed at accelerating its entry into the U.S. hemp market, Canopy Growth (NYSE:CGCacquires AgriNextUSA for an undisclosed sum.
    • AgriNextUSA plans to develop hemp industrial parks in the U.S., the first in New York State.
    • Shares are up 1% premarket on light volume.
    • Biogen (NASDAQ:BIIB) is down 26% premarket after it and development partner Eisai (OTCPK:ESALYannounced that they terminated two late-stage studies of Alzheimer's candidate aducanumab due to lack of efficacy.
    • Tencent (OTCPK:TCEHY) reports its largest quarterly profit drop since its 2004 IPO with net profit down 32% to RMB14..2B (or $2.1B). The decline was attributed to a RMB2.1B one-off charge related to Tencent Music and weaker market conditions.
    • Smartphone game revenue grew 12% Y/Y to RMB19B. Nine new games were approved in the quarter following a months-long Chinese license freeze due to a regulatory crackdown.
    • Online advertising gained 38% Y/Y to RMB17B on the back of a 44% growth in Social ads.
    • Press release.
    • Previously: Tencent Holding reports Q4 results (March 21)

  6. Holy crap, getting right back to yesterday's highs on the indexes. 

    Good Philly Fed and good indicators but nothing amazing.

    Leading indicators surges past estimates

    • February Leading Indicators: +0.2% to 111.5 vs. +0.1 consensus, -0.1% prior.
    • Coincident Economic Index +0.2% to 105.9.
    • Lagging Economic Index flat at 107.0.

    25,900, 2,840, 7,450 and 1,560 are still the lines to watch for break up or down.  

    Slowdown in Jumbo Mortgages Tests Banks’ Postcrisis Playbook

    High-end home buyers are turning cautious, a blow to banks that refocused their mortgage businesses around wealthy borrowers in the years after the financial crisis.

    The right to speak hate is being protected:

    Trump to Issue Order Tying Federal Grants to Free Speech on Campus

    President Trump is expected to issue an executive order directing federal agencies to tie grants made to colleges to more aggressive enforcement of the First Amendment. 221

    Boeing Defends 737 MAX Design Process, Sees Software Fix in Weeks

    Boeing is working on changes to the 737 MAX plane that will update its flight-control software and could be approved in weeks.51

    I knew he wasn't going to let that money go:

    Trump Signals U.S. to Keep Tariffs on China After Deal

    With the U.S. and China preparing for a fresh round of face-to-face negotiations, President Trump said the U.S. expected to keep tariffs on Chinese goods in place for a “substantial period of time,” even after a deal. 342

    And how dare the WSJ ignore the fact that these tariffs are a tax on OUR people – not China. 

    After Suffering Bruising Losses, Ackman Pursues Quiet Recovery

    Biogen’s Blowup May Lift Smaller Biotechs


  7. Phil

    What would you roll -5 short AAPL 2020 $185 calls to? The bullish spreads I have aren’t keeping up with the margin needed for those


  8. coulter,

    Possible show the BCS you have to get an idea.


  9. AAPL being used to save the markets – again.  

    AAPL/Coulter – Well, the Jan $185s are ridiculous at $22.80 as they are only $9 in the money so $13 of premium.  As Yodi says, easier to say if we know the Bull Call Spread but the point is that the 2021 $210s are over $20 so that's your ultimate roll at 1x and everything else would require adjusting the spread – and I'm heading out until 1 now!  


  10. MU – Up nicely despite a negative outlook for Q3 and this :

    Citigroup's Christopher Danely downgraded shares of Micron (MU) to "Sell" from "Neutral" with a new $30 price target.

    The company does expect improvement in Q4.


  11. Phil,

    Any interest in BIIB; Seems like a small entry say 3 contracts to keep an eye on them. Jan 2021 180 Puts for about $14.30. thanks as always.

    Stj, your inputs welcomed also


  12. Not trying to beat a dead horse re: Tesla, but the June 2020's $10 puts pay 20 to 1 (Jan 2020's pay 50 to 1!).  $5k turns into $100k if it implodes.  You can easily sell a few calls at a safe strike to cover the outlay.  If there is a big scare, IV will shoot up, and you can probably sell half and get most of your money out, and have a free lotto ticket for what I think is an inevitable BK.  



  13. OPK -Phil, OPK is up nicely today, as you pointed out. Have been adding to my short put position.

    Dr. Phillip Frost. their discredited Chairman and CEO, continues to add to his already huge position.  He now owns about 35% of the outstanding shares.  Wouldn't be surprised to see him attempt to take the company private, and leave it to his heirs.  Dr Frost is 84 years old.


  14. MU up 8% today. Interesting to see if they break through $45!


  15. Dr, Frost might also just sell OPK to a larger company.  He has a history of doing that with Key Pharmaceuticals,, Ivax, etc.






  16. Our laugh for the day-as long as Dumpy has his mouth open there will always be ENOUGH wind. Just be sure you have your air freshener with you!!


  17. EA – Up big today.  Their game Apex Legends is a blockbuster.

    From SA last week:

     

    In only 4 weeks, Apex Legends has reached a level of gamers that Fortnitecould've only dreamed to match in that period. The game has gone from 25 million users after the first week to 50 million active players now. Fortnitedidn't reach that player total until sometime after 16 weeks, or over 4x the time on market.


  18. Well, that took a lot longer than I though – big reception thing I wasn't expecting.

    MU/Albo – I don't see a $30 target, they are $48Bn at $43.50 and dropped $14 BILLION to the bottom line last year.  That was abnormal (top of the chip cycle) but last 4 Qs were $3.3Bn, $3.8Bn, $4.3Bn and $3.3Bn and they are likely to go back to more like $1.5Bn but I doubt right away so call it $7Bn for 2019 and that's still very reasonable to pay $48, $30 is just silly!  

    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 24,677 24,325 +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 8,351 6,708 +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 7.20 5.96 +110.9%
    EPS Growth %   +894.5 -9.6     +162 +87.7 -38.0 -17.3  
    PE Ratio x           3.46 3.29 5.57 6.74  
    PEG x           n/a n/a n/a n/a
    Profitability

    Buying a Semi is like buying a builder or a REIT – they have ups and downs and you try to thread the needle but this analyst is completely off the rails – no wonder the stock is up 8.5% on his downgrade.  

    BIIB/Jasu – Not sure what the rest of their pipeline is but that was supposed to be the big one and it seems dead in the water.  I don't see a big recovery from here and wouldn't jump on the falling knife so soon in any case – that's something we do when we think there is needless panic on some news – this is a legitimate derailing of their growth strategy. 

    BIIB makes about $4Bn on $13Bn in sales and $227 (now down 30% for the day!) is $44.6Bn so 11x earnings, pre-disaster.  There's a decision coming on Tecfidera (MS) and, if it goes against them, they face generic competition in 2021 so that's going to hang over their heads regardless and, until today, investors were saying "At least we'll still have the Alzheimer's drug" – well, FORGET THAT!  (get it?) 

    TSLA/Palotay – Won't be that quick to BK but a 10-20% drop could happen any time.  I know TSLA is a house of cards but Trump is still President and even John Oliver has given up on saying "We got him!", because we never actually do…

    OPK/Albo – I gave up on them.  We tried in the OOP but they are so frustrating to hold.  

    /NG made 0.02, nice for a day! 

    EA/Albo – Damn, I was thinking that selling was overdone.  


  19. Hello Phil and the gang. I am trading currently in an individual account ATM. Should I be trading in a trust, LLC or some company mechanism to better take advantage of tax planning ie expense write off ect. Any advice is truly appreciated. Thanks.


  20. Why so sure they won't go BK?  Demand has fallen off a cliff, they have a large amount of debt with big payments due soon, large volume commitments to suppliers (Panasonic is the big one), and large negative cash flow (post Q3-Q4 2018).  The icing on the cake is that Elon has taken large margin loans out against his shares, which may force him to sell if we get a 10-20% correction, which could start a chain reaction.  There is a lot of evidence that they are barely surviving this quarter (recently issuing $15M in stock to a supplier), closing stores, etc.  June 2020 seems a very long way off, especially with the further reduction in tax credit coming in July 2019.  


  21. Trust/Robert – You have to check with your accountant about that, lots of complicated issues depending on your financial picture.  Family trusts are the hot thing under the new tax law, basically turns your trading into a business you can easily pass on to the kids but you HAVE to have a professional help you with stuff like that.

    TSLA/Palotay – They won't go BK quickly.  He can spin off Solar City or the Batteries to raise cash – I'm just saying don't have any fantasies they'll go to zero by June or even Jan.  It would take at least two and probably 3 consecutive bad quarters to chase enough people out of the stock to push it over the edge – no matter how bad it looks (unless there's fraud – which there may be).  Last I heard they had $3Bn in the bank and $1Bn is burned on note redemptions leaving them with $2Bn and not likely to lose even $1Bn this Q – they made $200M+ in the last two and most people think that number is improving.


  22. Gundlach on CNBC saying we are still in a bear market and this is just a double top. 


  23. Hi Roberthjrfl,

    I've traded in an LLC at TDAmeritrade for years and never had a problem. I've used an accountant to help with the tax side and it has been very advantageous. 


  24.  Sundevils:

    Re the LLC- what state? Here in CA , the annual LLC fee is $800.

    Also, once set up, are you able to net out gains and losses and carry forward losses from a down year?

    I have been considering this but in the past it seemed marginal for my circumstances but may be worth another look given new tax laws.

    Thx                


  25. AAPL $196 – they can keep this up for a while. 

     

    • The European Union is moving toward allowing an extension of the Brexit deadline until May 22, but warns that the U.K. may fall out of the EU if Prime Minister Theresa May's agreement with the EU doesn't get U.K. Parliament's approval by that date.
    • Elections for the European Parliament begin on May 23, and May told her EU counterparts that she wouldn't organize elections for the European Parliament in May.
    • EU officials and diplomats say faith in May's ability to get backing for her exit deal is diminishing, the Wall Street Journal reports.
    • A third vote on the deal May negotiated with the EU is expected next week, days before the U.K. is scheduled to leave the bloc on March 29.
    • Bloomberg reports that European leaders are discussing how to proceed if May's Brexit deal is defeated a third time by U.K. lawmakers--one option is to offer a nine-month delay.
    • Previously: Pound skids 1.1% as Brexit turmoil churns on (March 21)

     Biogen and Eisai aducanumab flop pressures ProMIS, down 24%

    • Thinly traded nano cap ProMIS Neurosciences (OTCQB:ARFXF -23.5%) is down on almost a 9x surge in volume in apparent sympathy with the drop in Biogen and Eisai after they terminated development of Alzheimer's candidate aducanumab, an amyloid beta-targeting monoclonal antibody.
    • ProMIS says its candidate, PMN310, won't suffer the same fate because it selectively binds only to the toxic form of amyloid beta, not the plaque form that aducanumab does or all forms of amyloid beta that Roche's crenezumab does.
    • Clinical trials have yet to begin.
    • Amazon (NASDAQ:AMZN) is launching video ads on its smartphone shopping app to take a bite of the $129B digital advertising market.
    • Bloomberg sources say Amazon has beta tested the product-based ads for several months.
    • Google (GOOG +0.5%)(GOOGL +0.6%) is reportedly planning a similar product for Android that will launch later this year. Google and Facebook (FB +0.4%) dominate the digital ad market.
    • The Philadelphia Semiconductor Index is up 3% as chips rally behind Micron's earnings report, which included a downside forecast offset by the predicted memory market recovery in the second half of 2019.
    • Semi stocks the move: Skyworks (SWKS +5.4%), ON Semi (ON +4.2%), FormFactor (FORM+3.7%), MKS Instruments (MKSI +5.3%), KLA-Tencor (KLAC +3.1%), Ultra Clean (UCTT+5.5%).
    • Comcast (CMCSA +0.9%) is rolling out a low-cost video streaming service aimed at its Internet-only customers.
    • The service — Xfinity Flex — will cost $5/month (on top of Xfinity customers' Internet service cost) and aggregate existing subscriptions to bigger streamers including Amazon Prime and Netflix, along with other service like HBO and also a library of free ad-supported shows to watch.
    • That's a way for customers to "start thinking of the television as a digital display," says Xfinity chief Matt Strauss.
    • Facebook's (FB -0.6%) on the move again, dipping into the red, as the Krebs On Security site reports that the company stored hundreds of millions of user passwords in plaintext for years.
    • That's a departure from conventions where password data is encrypted.
    • There's an ongoing investigation into how employees were able to build applications to log unencrypted password data and store it in plaintext on internal servers.
    • A company source tells the site that some 200M-600M Facebook users may have had their passwords stored in that manner, and searchable by more than 20,000 company employees.
    • Facebook says the probe has so far found no indication that employees have abused access to the data.
    • Updated 12:33 p.m.: Facebook responds. "As part of a routine security review in January, we found that some user passwords were being stored in a readable format within our internal data storage systems. … We have fixed these issues and as a precaution we will be notifying everyone whose passwords we have found were stored in this way." It estimates it will notify hundreds of millions of Facebook Lite users, tens of millions of other Facebook users, and tens of thousands of Instagram users. Shares are down 0.3%.
    • Amazon (AMZN +0.4%) is aggressively blocking vendor and wholesaler ads for unprofitable products to help boost its profits.
    • Emails to violating vendors/wholesalers warns that the product "no longer qualifies for advertising because the sale of this product on Amazon.com currently results in a loss to Amazon" and says the price must be lowered to qualify for ads again.
    • Third-party merchants aren't affected by the crackdown.
    • In other Amazon-related news, San Francisco is weighing a proposal to ban cashier-free stores like the Amazon Go stores.
    • New Jersey and Philadelphia recently passed laws to ban stores that don't accept cash, saying the setup could discriminate against low-income shoppers who mighta ban not have a debit or credit card. Amazon Go stores use mobile wallets for checking out.
    • The two Boeing (BA -0.9%) MAX 737 jets that crashed lacked two safety features in their cockpits because the company charged extra to install themNew York Times reports.
    • The doomed Lion Air and Ethiopian Airlines flights were brand new but not equipped with an angle of attack indicator or an angle of attack disagree light, according to the report.
    • The angle of attack indicator determines how much the plane's nose is tilted, and the disagree light is activated if the jet's sensors are giving contradictory signals; Boeing will now make the disagree light free of charge on all new 737 Max planes, but the angle of attack indicator will remain an option that airlines can purchase, the report says.
    • Neither safety feature was required by the FAA, but "they’'e critical, and cost almost nothing for the airlines to install," says aviation analyst Bjorn Fehrm. "Boeing charges for them because it can. But they’re vital for safety."

  26. CMG finally stopped going up.  

    Well, that was an interesting day.  Volume has been crap so doesn't mean anything.  

    Date Open High Low Close* Adj Close** Volume
    Mar 21, 2019 280.64 285.18 280.61 284.60 284.60 68,643,957
    Mar 20, 2019 282.16 283.50 280.32 281.55 281.55 84,429,600
    Mar 19, 2019 283.51 284.36 281.41 282.40 282.40 90,268,100
    Mar 18, 2019 281.55 282.66 281.30 282.33 282.33 62,199,800
    Mar 15, 2019 280.54 282.21 280.33 281.31 281.31 81,309,000
    Mar 15, 2019 1.233 Dividend
    Mar 14, 2019 281.37 281.84 280.67 281.16 279.93 67,518,400
    Mar 13, 2019 280.48 282.38 280.30 281.34 280.11 80,639,200
    Mar 12, 2019 279.06 280.07 278.85 279.49 278.26 79,667,500
    Mar 11, 2019 275.26 278.62 275.23 278.44 277.22 65,098,900
    Mar 08, 2019 272.94 274.65 272.42 274.46 273.26 85,795,800
    Mar 07, 2019 276.83 276.99 274.07 275.01 273.80 94,885,100
    Mar 06, 2019 279.15 279.16 276.97 277.33 276.11 75,039,800
    Mar 05, 2019 279.54 279.76 278.41 279.02 277.80 59,114,600
    Mar 04, 2019 281.60 281.87 276.84 279.40 278.17 106,494,600
    Mar 01, 2019 280.44 280.88 278.82 280.42 279.19 78,880,500

  27. I rolled 2020  CMG short 680 calls to 780 2021s for even roll ala the earlier AAPL advice


  28. Phil, to clarify, I bought the 2020 June $10 puts (as a craps roll play) which expire in 15 months, not this June.  My view is that Tesla's cash balance was window dressed for the quarter, and the real figure is far lower.  Hence the extreme (and margin shredding) discounting they are doing now to move cars to raise cash.  They are selling Model S/X inventory for 20-30% off right now, it is all over the Tesla Owners forums. Elon/Tesla bought SCTY to save it from bankruptcy, so I think it is highly suspect that it is worth much of anything (and installations have slowed down to a crawl).  The valuation assumes massive growth, and you can still buy a Model 3 in Europe and the USA for delivery in March, which indicates that the backlog has already been completely burned through.  There is a lot of evidence that True run-rate for ongoing (not 2-3 years of pent up) demand is far lower than the market expects.  But we shall see.  Very fun to watch.  I have 5% of my portfolio invested in shorting this.


  29. TSLA / Palotay – It could be worth a roll of the dice! The Jan 21 10 puts are $0.70! Not much to risk and would be a nice return if they go to zero. BTW, the open interest for the Jan 20 puts under 100 is over 100,000 contracts so other people are thinking the same way. But too close I think – they can stretch it longer than that I think. But something to ponder as a side bet.


  30. pstas,

    I have the LLC in Arizona…I'm not aware of an annual fee here. If there is one, I haven't paid it!! I deduct losses or add gains each year. I was told by my accountant that losses are considered business losses and are fully deductible and not limited to the 3k max per year. I have not had any issues as of yet. Hope this helps…I have used the LLC for real estate and other business investments as well…



  31. US, Europe eye closely as China, Italy deepen ties




  32. Can Trump Survive Mueller?


  33. Good morning! 

    A bit of a pullback but nothing serious so far.   Someone said China deal still far off.  

    Europe has been just going down for days:

    CMG/Coulter – I would have waited until a lot more premium had burned off the $680s.  Now the premium will decay half as fast.  

    TSLA/Palotay – Oh 2020 is better for that idea, those can pop on any $20 move lower.  If I were Musk, I'd make a deal to be the solar roofer for a big CA builder (solar roofs are now mandatory) and then spin it out.  SCTY does about $1Bn in sales but adding just 5,000 $50,000 homes bumps them 25% in sales and, of course, that would then get extrapolated to the rest of the country.   More smoke and mirrors, but it would probably work.  It does sound like their sales are way off on the cars but they are already spinning that shipments to China are slowing sales (as there's a lag until they can be counted) I've heard a lot of reports of people getting obviously defective Model 3s shipped to them – like they are rushing the process to get things out the door.