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Thrilling Thursday – Failure at 2,800 Spells DOOM for the S&P 500!

This is not good! 

The only reason the S&P 500 is holding the 200-day moving average at 2,776 is because the 200 dma keeps sinking.  That, of course, is also pulling the 50 dma lower and once it comes down we're only a month or two away from a "Death Cross" and then we would be looking at a very long, very hard climb back for the senior index

That's why it is very, VERY important that we finish the week back above the 2,800 line on the S&P and the 1,500 line on the Russell and the 12,500 line on the NYSE and the 25,500 line on the Dow and the 7,250 line on the Nasdaq 100.  Anything less than that is DOOM!!!!  

While we are pretty well-hedged for DOOM!!!! we did add to our hedges yesterday, in our Live Trading Webinar, and we'll be adding more hedges on Friday if the indexes don't perk up and get back to their levels which, though nowhere near a recovery, would at least indicate that there is SOME buying interest still out there – something we're beginning to doubt.  By all indications, it does look a lot more like we're consolidating for a move down – rather than a move back up:

Of course, that's why we have our bounce lines – they let us know whether a recovery is real of if it's just a dead cat bounce on the way to the next lower band.  The lines we've been using all month are:

  • Dow 25,200 is the 5% line and the bounce lines are 25,450 (weak) and 25,700 (strong)  
  • S&P 2,860 is the 5% line and the bounce lines are 2,875 (weak) and 2,890 (strong)
  • Nasdaq 7,475 is the 5% line and the bounce lines are 7,540 (weak) and 7,605 (strong) 
  • Russell 1,550 is the 5% line and the bounce lines are 1,565 (weak) and 1,580 (strong)

So our goals for Friday are now significantly below the 5% lines and, in fact, if you want to know the retrace goal on each index, you can simply subtract whatever it takes to get to the weak bounce line (about 1%) which would be:

  • Dow 25,200 – 250 = 24,950, now 25,170
  • S&P 2,860 – 15 = 2,845, now 2,790
  • Nasdaq 7,475 – 65 = 7,410, now 7,245
  • Russell 1,550 – 15 = 1,535, now 1,493

Those are our retrace lines and holding those would indicated that the -5% lines are still in play but, with 3 of 4 failing already, a failure in the Dow would indicated that the – 10% lines are now in play at Dow 24,000, S&P 2,650, Nasdaq 7,100 and Russell 1,460 and the Russell is already close and the Dow has the furthest to go, which means it makes the best short to add and we can use the 2x Ultra-Short ETF (DXD) as a new hedge: 

  • Sell 5 Macy's (M) 2021 $20 puts for $4.10 ($2,050)
  • Buy 30 DXD July $29 calls for $2 ($6,000) 
  • Sell 30 DXD July $32 calls for $1 ($3,000) 

That's net $950 on the $9,000 spread that's $3,000 in the money to start so any move down in the Dow will just put you further in the money and you only need a $2 gain (6.7%), so a 3.35% drop in the Dow, to 24,300, would put the spread $9,000 in the money for an $8,050 (847%) profit.  The short puts obligate you to buy 500 shares of Macy's (M) for $20 if it's below that price (now $21) but M is one of our favorite bargain stocks and you can offset with any stock you would REALLY like to own if it gets cheaper, like:

  • Intel (INTC) 2021 $40 puts are $4.40 so $2,200 collected for promising to by INTC 10% cheaper than today's price.
  • Cheesecake Factory (CAKE) 2021 $40 puts are $4.70 so $2,350 collected for promising to buy CAKE 8% cheaper than today's price.  
  • Gannett (GCI) rejected a hostile takeover offer at $12 and is now back to $7.63, which we think is way too cheap so selling the Jan 2020 $7.50 puts for $1 is an easy call but you'd have to sell 20 to collect $2,000.
  • Tenet Healthcare (THC) 2021 $15 puts are $3.50 so selling 6 of those nets $2,100 and they are 25% lower than the current price on a stock we love when it gets this low.

If, for example, we decide we need to have $45,000 worth of additional coverage in our Options Opportunity Portfolio, then we can simply sell puts on each of the 5 stocks above and buy 150 of the DXD spreads and I think we'll all sleep better over the weekend, right?  That's our plan if our levels aren't taken back by tomorrow OR if the Dow fails to hold 24,950.  

Remember, these hedges are starting out in the money and the only way we lose on DXD is if the Dow is higher in July and, if the Dow is higher in July then our short puts are probably in good shape - as well as the longs in the portfolio that we are protecting – so we've hedged our hedges!  

We've been in and out of Gasoline (/RB) Futures for the last two weeks and /RBN19 (July) is back below $1.90 as the API Report showed a 5.2Mb draw in Oil but a 2.7Mb BUILD in Gasoline.  Distillates were down 2.1Mb and that even out the Gasoline and we'll see what the EIA Report confirms at 11 am (due to holiday) but we do like a long on /RB if it crosses back over (ONLY!) with tight stops back below the $1.90 line as anything but a build in /RB should send things higher and, even if they don't – it's the July contract so that holiday should help a bit over the next few weeks.   

Remember:  I can only tell you what is likely to happen and how to make money trading it – the rest is up to you…  For example, on May 9th, in the PSW Morning Report, I said:

Powell just made a doveish speech and tanked the Dollar but it's too little, too late as we're selling off hard and fast at the open and that's DESPITE the lower Dollar so NOT GOOD is my summary of the morning action though it is popping our Coffee Futures (/KCZ19) back over $95 and hopefully we'll get another crack to go long Gasoline (/RBN19) at $1.92 as we took an 0.03 ($1,000+) gain and ran yesterday.  

Nasdaq (/NQ) will critically test 7,500 and that should line up with Dow (/YM) 25,600, which was a good long the other day and 2,840 on the S&P (/ES), which is VERY BAD (see yesterday's chart) and the Russell (/RTY) is DOOMED below 1,564, as that's the 50 dma and we're already below the 200 dma at 1,563 and the 200 dma is crossing below the 50 dma and that's called a DEATH CROSS and it means we're all DOOMED!!!!  

As you can see from the Big Chart, those dma's are failing all over the place so DOOM!!! is the forecast unless a trade miracle occurs in the next 48 hours.  Needless to say we'll be reviewing our hedges this morning to make sure they are protecting us adequately – thank goodness we predicted this or it wouldn't be funny at all! 

We've been in and out of Gasoline and Coffee and /RB has gone nowhere overall but /KCZ19 just hit $107 this morning and each $1 move up in a Coffee Contract is good for $375 so that's a gain of $4,500 PER CONTRACT in just 3 weeks, so I wouldn't be greedy and I'd take at least 1/2 off the table and keep a stop at $105 on the rest to lock in $4,000 as $4,500 in 3 weeks is just silly money to make on a single contract - so be happy and, of course:


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  1. Good Morning!

  2. Time to roll out some China stories!

  3. Good morning, All!

    The webinar replay is available!

  4. Good morning!  

    Well we suddenly perked up into the open so 2,800 is possible – just 5 points away and 1,500 on the RUT is 3 points – what, us worry?  The VIX is calming down a bit too:

    /RB at $1.895 and $1.885 was yesterday's low and then up 0.04, which is +$1,680 so I'll take a poke if we hit $1.8885 but, otherwise, not unless we're over $1.90.

    Big Chart – 20 dmas death-crossing all over the place and the RUT is once again in one of those situations where it really can't avoid a death cross at this point so I think we'll see 1,440 (Must Hold) on that index at least and the NYSE is already below their Must Hold so maybe we were too soon raising those levels on the other indexes!

    Financial Distress/StJ – Wow, that's horrible!  

  5. Financial distress / Phil – These charts show that a lot of people are tapped out as far as credit is concerned. How does that sustain the economy? The situation for many people has not gotten better over the past 3 years – except for the top 1% though. But the money had to come from somewhere.

  6. CTL appears to have bottomed.

    FTR's sale of mostly rural lines consisting of a lot of consumer and copper for 5X EBITDA  highlights the value of CTL's properties.  More than 1/2 CTL's EBITDA comes from fiber.

    The Jan 10 2021 CTL calls still look cheap to me.  Should be lots of opportunity to sell OTM calls against the position over the next 17 1/2 months.

  7. looks like could be forcing out oil longs before eia report

  8. eia delayed till 11 am

  9. hey phil any chance oil report is a nice big draw and energy pops up giving the markets a temporary lease on life lol

  10. albo – Thanks for your insights. If I am starting from scratch How would you play CTL with almost a 10% yield?

    1. In a retirement account with only Covered Calls and option buys allowed (cant write naked calls/puts)

    2. Regular Brokerage account with margin 


  11. Vkat – I'd buy the stock today.  It goes ex-divd tomorrow and you'll get a .25 dividend.  You'll get 5 dividends over the next 13 months.

    I'd also buy some of the Jan 2012 $10 calls.  If you do any option writing against the position, I'd hold off for now.  Assuming the calls increase in value over the next several months, you could sell calls against your long call position to bring in more income.

  12. Jan 2021 calls.

  13. the anticia      say it      pation of waiting to hear phils thought on eia is killing me

  14. The Bond Market Is Trying to Tell Us Something (Worry)

  15. EIA Report not helpful at all, forget the longs – even Freedom Gas is heading lower:

    • EIA Petroleum Inventories: Crude -0.3M barrels vs. -0.9M consensus, +4.7M last week.
    • Gasoline +2.2M barrels vs. -0.5M consensus, +3.7M last week.
    • Distillates -1.6M barrels vs. 0.6M consensus, +0.8M last week.
    • Futures -0.07% to $58.77.

    Distress/StJ – I've been worried about that for ages, Corporate and Consumer borrowing have driven the rally – what happens when it stops.  The big warning came when consumer debt passed the 2007 levels a month ago and we knew Trump's Tax BS wasn't actually helping anyone in the bottom 90% – no matter how "confident" it made the consumers feel to be lied to by the President and his team.

    CTL/Albo – Been looking cheap for a very long time…

    $1.885 not even holding on /RB – what a disaster!  

  16. Phil,

    Why do you think /RB numbers were so weak? Lack of demand? I thought travel was up this Memorial Day holiday?

  17. CTL/Vkat – Having seen FTR go down and down and down, I'd be careful with FTR but the $1 dividend is very attractive and, as Albo notes, it can be $1.25 in 13 months and 0.50 more by Jan 2021 so, assuming you collect $1.75, you can buy the stock for $10.68 and sell the 2021 $10 calls for $2 and sell the 2021 $8 puts for $1.25 and that's net $7.43 less the $1.75 dividend is net/net $5.68 if called away at $10 and worst case is you get assigned 1x more at $8 to average $6.84, which is 36% off the current price.  

    My logic there is to buy 1/2 of a 1.5x position since you are getting the discount so, if you were going to spend $10,680 on 1,000 shares, you can buy 700 shares for $7,476 less $1,400 for 7 calls and less $875 for 7 puts is $5,201 and you'll get $1,225 in dividends to drop the net on 700 shares to $3,976 and then, if you are assigned 700 more at $8 ($5,600), you'd be in 1,400 shares for $9,576 – less than you were planning to be in 1,000 shares for with the $6.84 basis so, even if the dividend is cut – you are still in good shape.

    $57.50 should at least be bouncy on /CL to $57.75 – good for $250 per contract. 

    /RB/Japar – I guess the fleet is getting more efficient than analysts think or, in my opinion, families tend to now have at least one efficient car and they are choosing to use that for longer trips since it makes a significant difference in gas money at $3+/gal and that causes the use of gasoline to be much lower than anticipated – ESPECIALLY on holidays, when the family chooses one car to take a trip with.

    If I'm driving 300 miles to the Jersey shore and I can take my SUV which gets 17mpg and will cost $60 for 20 gallons or I can take my hybrid which gets 35mpg and will cost $25 – that's a no-brainer and we're using 8.5 gallons instead of 17.5 – it doesn't take a lot of people making that kind of decision to completely wreck the models that use the fleet average of 26 mpg and assumed you'd use 11.5 gallons.  

  18. Phil,

      Also, I thought there was a math error last report. Even with that corrected the numbers are bad?

  19. Math/Japar – We'll have to see the 1pm report and see if they fixed it.

    It doesn't matter what inventory is really, we generally produce the same 19.5Mb/d of product regardless of what the demand is and inventory is in a certain band almost all the time.  What matters is the usage trends and low usage on a major 3-day holiday to kick off the summer is devastating for oil/petroleum bulls.  

  20. how about ng at 2.54 is that still good or no

  21. CTL – Thanks Phil and Albo; That helps a ton.

  22. Phil and the Gang, how low can KHC go?  

  23. KHC – Our $30 calls can be rolled down to $22.50 for about 3.75 (or 50%).  This seems like an overreaction unless there is some accounting fraud.

  24. Copper anyone? Now below $2.65.

  25. CTL – Thanks Phil. As usual you have some interesting and very attractive trades which allow you to get into the trade for less money and still have good upside.

    With CTL, I've kept it simple.  I believe that by Jan 2021 the stock will be back in the 20's and that the stock and the Jan 10 calls will be very profitable; but I've  certainly been wrong on the stock price so far.

  26. /NG/Tommy – I don't know where the bottom will be on Freedom Gas but $2.50 has been good and it should rebound at some point so, as long as you don't mind waiting it out, /NGZ19 is $2.84 and I do like it for a long-term play though summer is often not kind to /NG (/FG?).

    "The percentage you're paying is too high a price

    While you're living beyond all your means

    And the man in the suit has just bought a new car 

    From the profit he's made on your dreams

    But today you just read that the man was shot dead 

    By a gun that didn't make any noise

    But it wasn't the bullet that laid him to rest was 

    The low spark of high-heeled boys"

    KHC/Robert – People are just dumping that stock ahead of restated financials.  Last Q they wrote down $15.86Bn of Goodwill and the net loss was $12.67Bn so, to me, they won't have to pay taxes for the entire next decade – that's a plus.  

    Year End 29th Dec 2013 2014 2015 2016 2017 2018 2019E 2020E CAGR / Avg
    Revenue $m 6,240 10,922 18,338 26,487 26,232 26,259 25,900 26,089 +33.3%
    Operating Profit $m -8.00 1,568 2,639 6,142 6,773 -10,193      
    Net Profit $m -77.0 657 634 3,632 10,999 -10,229 3,464 3,556  
    EPS Reported $ -0.94 -0.053 -0.22 2.82 3.26 -8.32      
    EPS Normalised $ -0.85 -0.053 -0.22 3.43 3.55 0.33 2.83 2.92  
    EPS Growth %         +3.6 -90.7 +753.2 +2.97  
    PE Ratio x           86.4 10.1 9.83  
    PEG x           0.11 3.41 2.39

    I'd say, realistically, they should make about $750M per Q so $3Bn/yr and, at $27.50, you are buying the company for $33.5Bn, so it's very fair.  In the OOP, we have the 2021 $30 calls and we're down about $5,000 in the current position, which was net $2,500 cash to start looking to make $10,000 at $40.  

    KHC Short Put 2021 15-JAN 35.00 PUT [KHC @ $27.28 $-1.40] -5 2/22/2019 (596) $-3,000 $6.00 $3.50 $-6.00     $9.50 $0.50 $-1,750 -58.3% $-4,750
    KHC Long Call 2021 15-JAN 30.00 CALL [KHC @ $27.28 $-1.40] 10 2/22/2019 (596) $7,250 $7.25 $-4.50     $2.75 $-0.33 $-4,500 -62.1% $2,750
    KHC Short Call 2021 15-JAN 40.00 CALL [KHC @ $27.28 $-1.40] -5 2/22/2019 (596) $-1,750 $3.50 $-2.63     $0.88 $-0.03 $1,313 75.0% $-438

    That might be out the window but, as Palotay notes, we can roll our $30 KHC calls in the OOP to the $22.50 calls for $3.75 ($3,750) and we can do that and buy 10 more 2021 $22.50 calls for $6.50 ($6,500) and buy back the 5 short 2021 $40 calls for 0.90 ($450) and Sell 10 (of 20) 2021 $30 calls for $2.85 ($2,850) so our net spend is $7,850 plus our original $2,500 is $10,350 on what would now be a $15,000 spread at $22.50 with 1/2 uncovered so we can make more at $30, etc.  

    The make or break for this trade is can we whittle down the basis from $10,350 back towards our intended $2,500 over 596 days and, since we're half uncovered and since we can sell 10 July $27.50 calls for $1.50 ($1,500) and we have 10 sales like that to look forward to, which would be $15,000 back in pocket – I'd say this trade is far from lost and now we have moved our strikes $7.50 lower and doubled our potential return.  Not terrible.

    Copper/Dawg – At the moment, the possibility of China cutting off rare earths and triggering massive, escalating retaliations makes any of this kind of trading very dangerous.  I'd rather do FCX as a proxy than straight copper. 

  27. Decided to play 1 long /CL at $57.50 with tight stops below $57 – too much potential to ignore.  

    In /NGZ19 at $2.84 as well, of course.

  28. Phil, I have been working on a KHC buy write ( just small position) and I am net $28.01 in the position.  I have 2 front month 21Jun19 $32.5 puts that I expect to be assigned on.  My question is at what point should you start expecting assignment?  The $32.50 have very little extrinsic value.  Thanks!

  29. KHC/Robert – The June $32.50 puts are $5.10 with the stock at $27.50 so just 0.10 in premium left but still, why would someone want give you the stock for $27.40 AND pay assignment fees when they could sell it on the open market for $27.50 with pretty much no fees?  Until the premium is pretty much completely washed out, your risk of assignment (in a liquid stock that's easy to get on the open market) is very slim. 

    Still, more to the point, those puts are doing nothing for you and you can roll them to 2x the Jan $27.50 puts at $2.80 for better than break-even or the 2021 $25 puts at $3 so 3 of those would almost pay for 2 of the $32.50 puts OR you could just roll the loss without increasing your exposure.  Either way, your assignment risk would go away (for now) and TOS says margin on 2 June $32.50s is $1,109 while margin on 3 2021 $25 puts is $903 so you can actually lower your margin by selling more puts!  

  30. Phil, thanks as always for the advice.  I am trying to work the front months verses the longer dated options but i definitely keep my eye on those leap rolls.  It just seems you should be able to capture more premium by working the fronts verses the leaps.  My plan is to roll the June $32.50 along for sure.  I can always roll longer if need be.  Thanks again.

  31. So the green line is $57.65 and that's up $150, which isn't much but it was like 10 mins for the trade and it's silly to let quick profits go so that's the stop now.

    More premium/Robert – Yes, you can capture more premium but you have less protection should there be a drastic move in any given month and then, after the drastic move, you end up no longer being able to sell covers in your target range and then you can be forced to effectively lock in your losses with monthly sales.  Between that risk and the overall hassle factor – I generally prefer to just use the leaps. 

  32. And don't forget to watch the Dollar if you are playing Oil:

    And Brent! 

    $67.50 should be bouncy too and we'll call that down $2.50 from $70 so 0.50 bounce to $68 should give us $58 on /CL if all goes well.

  33. Phil great point on the smoothing ability of time with options.  You can be blown out by front month options for sure and it is true that the leaps smooth the price movement and they don't react as violently to a sharp move as would the front months.  Where is the best point to balance?  For example, I can sell the ATM $27.50 17Jan20 call and put for $5.40.  The 15Jan21 ATM $27.50 call and put for $8.25.   The Jan 20 options have 232 days left to expire with the Jan 21 options expiring in 596 so you should be able to do the shorter trade 2.58 times yielding $13.87 in premium over the same time period verses the $8.25 which is 68% more.    Yodi really likes the quarterly options it seems (Yodi if you have a comment please share).  Great discussion!

  34. Well, good thing we stopped out of /CL – it collapsed down to $57, where I'll take another poke. 

    Best/Robert – I tend to go for the quarterly sales when I don't mind messing with front-months but my favorites are still the artificial buy/writes – where we buy a bull call spread in lieu of owning the stock and sell a put to offset the cost – THEN I might sell front-months against that spread.

  35. I don't know if this is China's version of right-wing but it did get on a state-sanctioned TV station and we should take this stuff seriously:

  36. China / Phil – Maybe their hackers will find Trump's tax returns and give them to the Dems! Of course, getting help from a foreign power is illegal…

  37. Wow, oil is just collapsing now, $65 on Brent and $56.50 on /CL.  

    Once again, there's a huge discrepancy between the Total Stocks and the actual numbers above them.  This week it adds up to 1,907.6 but shows 1,930.3 and last week showed 1,931.9 but adds up to 1,908.4 but last year shows 1,854.8 and adds up to 1,854.7 (normal due to rounding) so this is very, very strange.  

    Production was up 300,000/day so 2.1Mb more for the week and most other stuff stayed the same.  $56 is right about the 5% line for /CL and that's down $3 for the day so we can look for a bounce back to $56.60 but this is really ugly – hard to say if this is the end of it.

  38. Phil

    thoughts on SKT here? dropping like a rock over last 6 months

    I have the stock covered by 2020 $20 calls and same amount of 2020 Short $20 puts

  39. Well, we're up a bit into the close so I guess we'll have to give tomorrow a chance but I think we will want to add those hedges into the weekend.  

    Also, I'll be in Cuba on Monday and on a boat back Tues so mostly working Tues but Monday I'll just put up a post and be gone all day…

    SKT/Coulter – All the REITs are taking a pounding.  I like SKT as a long-term value and the dividend is $1.42 against $16.88/share so 8.4% at the moment with a market cap of just $1.6Bn they are a very nice deal but you should never be in high-paying dividend stocks looking for the stock to go up – it's all about the dividends. 

    Year End 31st Dec 2013 2014 2015 2016 2017 2018 TTM 2019E 2020E CAGR / Avg
    Revenue $m 384.8 418.6 439.4 465.8 488.2 494.7 494.3 468.6 466 +5.2%
    Operating Profit $m 127.7 118.7 144.5 151.3 125.1 108.6 108.4     -3.2%
    Net Profit $m 107.6 74.0 222.5 204 68.0 43.7 83.1 121.1 77.0 -16.5%
    EPS Reported $ 1.13 0.77 2.32 2.12 0.71 0.45 0.87     -16.6%
    EPS Normalised $ 1.14 0.85 1.05 2.06 1.02 0.99 0.94 1.31 0.84 -2.9%
    EPS Growth % +101.3 -25.2 +23.2 +95.7 -50.7 -2.7 -8.3 +32.1 -35.6  
    PE Ratio x           17.3 18.3 13.1 20.3  
    PEG x           0.54 0.57 n/a 1.80

    So you have the stock with the short $20 puts and calls but let's say it's like the LTP play (since I know the amounts):

    SKT Tanger Factory Outlet Centers Inc. 2000 3/16/2018 440 $44,500 $22.25 $-5.36 $20.50     $16.90 $-0.21 $-10,710 -24.1% $33,790
    SKT Short Call 2020 17-JAN 20.00 CALL [SKT @ $16.90 $-0.21] -20 2/26/2018 (232) $-8,100 $4.05 $-3.75     $0.30 $-0.05 $7,500 92.6% $-600
    SKT Short Put 2020 17-JAN 22.50 PUT [SKT @ $16.90 $-0.21] -20 2/1/2018 (232) $-5,400 $2.70 $3.45     $6.15 - $-6,900 -127.8% $-12,300

    So we bought the stock for $22.25 and sold $6.75 in puts and calls (conservative on the calls, aggressive on the puts) and our net was $15.50 and, if assigned another 2,000 shares at $22.50, our net on 4,000 will be $19 even.  Meanwhile, we've collected 5 dividends of 0.35 ($1.75) but that's on 2,000 so drops our net/net to $18.125 on 4,000 (if assigned).

    If we were assigned today at $16.90, we could buy back the Jan $20 calls for 0.30 and sell the Jan (there is no 2021 yet) $16 calls for $1.75 and the $17.50 puts for $2 (because the other puts would be gone from the assignment) and that would drop our net to $13.45 on 4,000 shares with an obligation to buy 4,000 more for $17.50 to average $15.475 on 8,000.  Meanwhile, for the next year, we'll collect another $1.40 in dividends which drops us 0.70 more on 8,000 to $14.775 and we only started at $22.50 last February!  

    Our goal is to get down to a zero basis and, frankly, I don't care if I have 80,000 shares if my basis ends up at $0, right.  Even with just 8,000 at $14.775 in Jan of next year, we'll be collecting $11,200 in dividends against our $118,200 position, which is 9.5% and, at this rate, we're about 4 years away from a zero basis whether it's 8,000 or 16,000 or 32,000 shares by the time we get there.

    So, as long as SKT isn't actually going BK – we're happy to accumulate more shares and clip coupons.

    If, however, we wanted to avoid doubling down, at $16.90 we're in for $13.75 after dividends on 2,000 so we could cash out with a $6,300 gain and then just deal with the 20 short 2020 $22.50 puts which, if we paid them of, would cost us $6 ($12,000) and we'd be down net $5,700 or we could just roll them to 2x the short Jan $19 puts at $3.10 so we'd still have our $6,300 and 40 short $19 puts for net $17.425 on 4,000 and, of course, when 2021 comes out we can roll it lower.  

    That's why, when you start, it's very important to make sure you are in a position you are very comfortable scaling into, which is basically doubling down twice.  If you are HAPPY to do that, you are pretty much bullet-proof but if a 25% drop causes a crisis in your portfolio – then the position was way too big to start with and you set yourself up for failure.  

    Above I'm talking about getting to a $118,200 position on 8,000 shares in our $1.5M LTP with $3M in buying power so, though I don't INTEND to have such a big position in SKT – it's no big deal and, should the situation change and we have to take a $6-12,000 loss – it's no big deal to the portfolio.  The loss currently reads at $17,600 but we collected $3,500 and, of course, we have no intention of taking it off ahead of schedule and, if we got worried, we could flip the $20 calls (0.30) to the $15 calls ($2.40) and pick up $4,800 that way as well so $17,600 – $3,500 is $14,100 if we pull the plug here or we could drop our loss by $4,800 with the short $15 calls ($9,300) and, even if we only collect $4 more in 2021, that's another $8,000 and, if the dividend keeps up – we're back in the black – so why would we stop out?

    GREENSBORO, N.C.May 29, 2019 /PRNewswire/ -- Tanger Factory Outlet Centers, Inc. (SKT) announced today that Steven B. Tanger, Chief Executive Officer, will be a featured presenter at NAREIT's REITWeek 2019 Investor Conference on Tuesday, June 4, 2019 at 11:00 a.m. EDT.

    A link to the live audio-only webcast will be available online at or at An online replay will be available at the same locations beginning approximately four hours after the conclusion of the presentation until June 14, 2019. 

    GREENSBORO, N.C. (AP) _ Tanger Factory Outlet Centers Inc. (SKT) on Monday reported a key measure of profitability in its first quarter. The results matched Wall Street expectations.

    The real estate investment trust, based in Greensboro, North Carolina, said it had funds from operations of $55.9 million, or 57 cents per share, in the period.

    The average estimate of five analysts surveyed by Zacks Investment Research was for funds from operations of 57 cents per share.

    Funds from operations is a closely watched measure in the REIT industry. It takes net income and adds back items such as depreciation and amortization.

    The company said it had net income of $61.7 million, or 66 cents per share.

    The factory outlet mall operator posted revenue of $123.2 million in the period. Its adjusted revenue was $120 million, surpassing Street forecasts. Three analysts surveyed by Zacks expected $119.9 million.

    Tanger expects full-year funds from operations to be $2.22 to $2.28 per share.

    The company's shares have declined 6.5% since the beginning of the year. In the final minutes of trading on Monday, shares hit $18.91, a decrease of 9% in the last 12 months.

    So at $17 they are making $2.25/share and they JUST had earnings and indicated no issues in Q1 or with forward guidance yet the stock is down 10% since – MADNESS!

  40. Phil, thanks for the detailed commentary and trading logic on SKT.

  41. Wheee! Thank you Mr. Trump.

  42. Tariffs, Mr. Trump’s Miracle Cure

  43. Trump announces new Mexican tariffs in response to migrants

  44. Trump considers new rule to dramatically limit asylum eligibility

  45. Good morning!

    Captain Insaneo strikes again as Trump threatens our trade with Mexico to get them to stop people from asserting their CONSTITUTIONAL RIGHT to seek asylum in the US.

    At the same time, Trump expanded ethanol use AND delayed petrochemical sanctions on Iran and that's why Oil and Gasoline (but not /NG) are down another 2.5% this morning.  /CL hit $55 and /RB hit $1.8075 with /RBN19 at $1.81 and the best long, of course.

    The US, of course, looks completely ridiculous, trying to force a foreign Government to solve what is really a domestic problem and it puts the entire USMCA (NAFTA) in jeopardy but also makes us look completely irrational to anyone else we're negotiating with.

    WASHINGTON—President Trump said Thursday the U.S. would impose escalating tariffs on all Mexican imports beginning June 10, in an effort to push the country to deter the flow of asylum-seeking Central American families to the southern border.

    Reacting to what he described as “Mexico’s passive cooperation in allowing this mass incursion,” the president said the tariff on America’s third-largest trading partner would begin at 5% and grow steadily, hitting 25% on Oct. 1 unless Mexico takes satisfactory action to halt the migrants.

    “If the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment, the Tariffs will be removed,” Mr. Trump said in a statement released by the White House.

    The president also lashed out at Democrats, who he said “refuse to help in any way, shape, or form.”

    Image result for trump baby tantrum gif

    This is, once again, a money grab for Trump since we import $346Bn worth of goods from Mexico and a 25% tax on the American people as "punishment" for immigrants from other countries going through Mexico (legally) to get to the US (legally) would generate another $86.5Bn that Trump can then dole out as favors to people he likes.  Even 5% is $17Bn and he's not going to stop there (obviously).

    “This is a misuse of presidential tariff authority and counter to congressional intent,” said Sen. Chuck Grassley (R., Iowa), chairman of the Senate Finance Committee. “I support nearly every one of President Trump’s immigration policies, but this is not one of them.”


    Mexican President Andrés Manuel López Obrador responded with a letter addressed to Mr. Trump in which he called for deeper dialogue on the migration issue.

    “Social problems are not resolved with taxes or coercive measures,” he said. He reiterated his proposal to confront migration through development efforts in Central America, adding that Mexico is doing what it can to curb the flow of migrants across Mexico without violating human rights.

    “People don’t leave their homelands for pleasure but out of necessity,” Mr. López Obrador said. “I don’t lack courage, I’m not a coward or timid, but act out of principles. I believe in politics which, among other things, was invented to avoid confrontation and war.”

    This is just nuts, we'll have to see how it shakes out today.  

  46. Phil, you are on Seekng Alpha this morning.