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Testy Tuesday – Can We Hold onto the New Highs?

2,982.  

That's where the S&P 500 crested yesterday and now we're back to 2,965 this morning after falling to 2,855 yesterday afternoon.  We're so close to 3,000 that is makes no sense at all to be bullish into the holiday weekend as S&P 3,000 is going to be a tough line to cross as it's up 2,334 points (350%) from the March 2nd, 2009 low of 666.  

Clearly companies are not making 350% more money than they did in 2009 but that's a false benchmark because the stocks were clearly UNDERvalued at the time and 666 was stupidly cheap for the S&P 500 but S&P 3,000 is still going to cause people to question valuations and, as I noted in yesterday's Report, Corporate Profits are very unlikely to justify these record highs and we begin to see those results on July 15th, as Q2 earnings begin coming in volume. 

The run to 3,000 has come off our most recent consolidation at 2,400 and before that 2,000 and there's nothing wrong with moving up 20% (400 points) between 2015 and mid-2017 – that's pretty normal for 2.5 years but, just 2 years after that, we're up 600 more points and that's probably a bit much.  We WERE having healthy consolidation around the 2,800 mark in 2018, when S&P 500 companies combined for $134.95 per share, giving the S&P 500 a Price/Earnings Ratio of 17.78 at 2,400.  For Q1 of this year, we are pacing at $135.73, just a 0.5% improvement but, as we close in on 3,000 on the S&P, that's up 25% – and the P/E Multiple at 3,000 is 22.10 and that's up 24.3% – see the pattern?  

I know it may not seem like it when you have a runaway market and it's easy to say that Fundamentals don't matter but they do to the people who aren't trading every day.  The silent majority of traders are the buy and hold fund managers who hold stocks in long-term portfolios and have no reason to sell them when they S&P 500 goes up 350% in 10 years (13% annual compounded gains) but God help us all if they do decide to sell because S&P volume is not even 1/4 of what it was before the crash – so what will happen when a lot of people try to sell and find out there are no buyers for that kind of volume?  That is the real danger in this kind of sustained, low-volume rally.

As StJeanLuc noted in our Live Member Chat Room yesterday, funds have been cashing in on this market for more than a year – at an even faster pace than they did in 2007/2008 but the Trump Administration and the Cheerleading Financial Media have done a great job of luring new suckers in to keep the plates spinning for another quarter, and another, and another.  Will we ever run out of suckers? 

It's hard to say.  EVERYONE who bought stocks in 1999 was a sucker but a lot of those suckers doubled their money if they timed it right – it's the ones who were still holding on in March of 2000 that saw everything disappear in the wink of an eye.  This is not a Dot Com bubble and this is not a housing bubble – this is simply expectations getting ahead of earnings AND ignoring the deteriorating macro picture. 

Far from a wall of worry, nothing worries this market – not for more than a day or two and any positive noises heard from the Government, the Analysts or the Fed are always a reason to rally – no matter how many times they've lied to us before.  

S&P 3,000 is going to be a moment to pause and reflect and it will very likely also be a moment to pull back and we'll call it a 600-point run from 2,400 which means a weak retracement is going to be 20% of that run or 120 points so 2,880 our first pullback goal and a stronger retracement would take us back to 2,760 – where we have had some recent consolidation.  Holding that would be bullish but not testing it isn't bullish at all – it's just a bigger and bigger air pocket of weak support being pushed under the index.   That's not what we really want so we're going to HOPE for a 10% correction this summer.

 


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  1. This multiple expansion that is going on now brings back some bad memories. But I am sure that this time it's different as with the other times.



  2. Good Morning!


  3. This is another great opportunity to short Tesla.  It is looking likely that Tesla is going to meet delivery guidance this quarter, but they scorched their margins to do it.  The split between cheap model 3's vs the higher margin performance models, and S/X has shifted dramatically this quarter, and this has a significant impact on gross margin, and resulting net income.  There is tons of evidence of this available online.  Analysts are expecting a loss of only $150M in Q2, but based on what I have read on the subject, I am expecting a loss of $400-500M or more.  Here is one model that seems to make sense.

    https://twitter.com/DeanSheikh1/status/1145459230981287936

    If you are interested in learning more, follow @teslacharts.  The stock is up because the evidence is pointing towards Tesla meeting delivery guidance, but earnings are going to be a completely different story (look at what happened after Q1 earnings were released).  Furthermore, Tesla has pulled all the levers that they have to meet delivery guidance, but they still lost a bunch of money.  The 2nd half of 2019 will be characterized by YOY revenue declines, which is going to be difficult to reconcile with the growth narrative.

    Maybe Elon has another trick up his sleeve, or maybe not…  I'm very short right now.



  4. Good morning! 

    A little red today but not much.  

    Trump making nice with Mexico but setting small ($4Bn) tariffs on Europe.

    Volume yesterday was 50% higher than Friday but it was pretty much all selling after the pumped-up open.  That's a big indicator of manipulation and I have very little faith in these highs.  

    Date Open High Low Close* Adj Close** Volume
    Jul 02, 2019 295.61 295.69 295.13 295.35 295.35 4,377,890
    Jul 01, 2019 296.68 296.92 294.33 295.66 295.66 78,705,600
    Jun 28, 2019 292.58 293.55 292.01 293.00 293.00 59,350,900
    Jun 27, 2019 291.31 292.06 290.89 291.50 291.50 40,355,200
    Jun 26, 2019 291.75 292.31 290.35 290.47 290.47 51,584,900
    Jun 25, 2019 293.70 293.73 290.64 290.76 290.76 82,028,700
    Jun 24, 2019 294.23 294.58 293.47 293.64 293.64 47,582,700
    Jun 21, 2019 294.13 295.52 293.76 294.00 294.00 83,309,500

    TSLA/Palotay – If they are actually selling the cars and hitting their production targets, I'd be a little forgiving of profit margins.  Last year, they were doing 50,000 for the Q, now 100,000?  That's pretty good for a year and yes, we knew the mix would shift but keep in mind that most car companies lose money for sustained periods – if you are in it for the long haul, that shouldn't be why you are bailing.

    Related image

    I'm not much of a bear on TSLA as they are now down near my $150 target for next year (and on track to get there).  What matters, in the very long run, is that TM makes about $5,000 per car so TSLA making 500,000 cars a year has the potential to make $2.5Bn and $225 is a $40Bn valuation for TSLA but they are making electric cars, which we KNOW will be the only car type in 20 years so the market is wide open for them to grow into the 70M/yr ICE market so you can easily argue they can hit 1-2M/yr over 5 years and making $5,000/car is $10Bn a year so $200Bn valuation makes them a 5-bagger to an optimist.  As long as that potential premise isn't destroyed – you're still going to have a lot of believers.

    Also, Elon is a master at shifting the narrative so now it's all about Space X and the Boring Company (is Hyperloop still a thing?) – anything he can do to keep investors interested in himself. 

    • Tesla (NASDAQ:TSLA) engineering VP Steve MacManus has left the company, according to Business Insider.
    • The reason for the departure isn't known.
    • The comings and going of engineering execs at the EV automaker draw even more interest than normal employee shuffling due to interest on where Tesla stands with its plans for pickup trucks and semi trucks.
    • Shares of Tesla are up 0.90% premarket to $229.01.

    Happy Birthday America:

    • Early July is typically one of the two times each calendar year that U.S. drugmakers hike prices. Yesterday, on cue, many appeared to do just that.
    • B. Braun raised the price of its Isolyte saline solution by more than 100% to almost $6/package. Saline solutions, used to rehydrate patients and dilute medicines before administration, have been in short supply in the past few years.
    • GlaxoSmithKline (GSK +0.1%) raised the price of ovarian cancer med Zejula (niraparib), acquired in Tesaro merger, by 5% to $6,913 for a 30-day supply.
    • Amneal Pharmaceuticals (AMRX -1.3%) hiked the price of thyroid med Unithroid by ~10%.
    • According to Rx Savings Solutions, 20 companies raised prices on over 40 products by an average of 13.1%, both higher than July of last year when 16 firms boosted prices by an average of 7.8%.
    • Many pharmaceutical makers have pledged to restrict increases to less than 10% per annum. During Q1, list prices for U.S. branded drugs rose 3.3% versus 6.3% a year ago per SSR Health LLC.
    • Some observers believe that many companies may raise prices later this year when there is less attention on the issue.
    • ETFs: BIBGRXTHWBMEBISIXJARKGCHNAIDNAXLV
    • Selected tickers: Takeda (TAK +0.2%), Bristol-Myers Squibb (BMY +1%), Merck (MRK +0.3%), Pfizer (PFE +0.8%), Johnson & Johnson (JNJ -0.2%), AbbVie (ABBV -0.4%), Eli Lilly (LLY+0.7%), Novartis (NVS +0.1%), Roche (OTCQX:RHHBY +0.1%), Allergan (AGN +0.1%), Amgen (AMGN -0.3%), Biogen (BIIB +0.1%), Gilead Sciences (GILD +1.4%)

  5. Drugs / Phil – So funny to see them restrict themselves to increases of less than 10%! Inflation is around 2%, some restraint! And it's not like they have so much pressure on cost. Salaries barely keep up with inflation. 


  6. Phil, I guess I see it differently.  They promised 20%+ margins on the Model 3, and the market extrapolated that into a huge valuation.  Now, after only a couple quarters, they are discounting like crazy to meet the low end of their delivery guidance, which IMO is going to result in margins of 10% or less this quarter.  These margins are also highly manipulated because they book a bunch of warranty work as "goodwill", which does not count against gross margin.  Lot's of financial shenanigans.  This is the high water mark, where they opened up a number of new countries, are fulfilling pent up demand, and are still enjoying tax credits.  Steady-state demand looks far less than 500k cars per year, and even if they can sell that many cars, they are on track to lose $2B this year.  So how is that a sustainable business?

    Furthermore, high-end competition has destroyed demand for the Model S/X even amidst heavy discounting, and that should be a sign of things to come when more competition comes out in the Model 3 price segment.

    Ford has huge scale, and makes a lot of cars in Mexico,  Tesla makes cars in the Bay Area!  



  7. To Evade Sanctions on Iran, Ships Vanish in Plain Sight


  8. Oil back to $57 – $60 didn't last long.

    Saudi's rushed Aramco right back to the markets – they REALLY want to get that IPO money.  That's why they will do anything Russia says for now.

    • Dimmer global economic reports damp the effect of extended supply cuts agreed to by the OPEC+ group over the weekend, sending oil futures down.
    • Contracts for crude oil delivery in August fall 3.1% to $57.27 per barrel on the New York Mercantile, snapping yesterday's rally.
    • United States Oil ETF (NYSEARCA:USO), which invests in WTI crude futures, drops 3.7%, and State Street's Energy Select Sector SPDR ETF (NYSEARCA:XLE) slips 1.2%.
    • Among XLE's holdings: Exxon Mobil (XOM -1.2%), Chevron (CVX -1.8%), (COP -2.2%), EOG Resources (EOG -4.3%), Occidental Petroleum (OXY -1.9%

    Drugs/StJ – And material costs are down too.  Most things get cheaper to manufacture over time – drugs seem to go the other way…

    Companies are warning that earnings results are going to be brutal. 

    U.S. Drilling Slowdown Triggers Oil Bankruptcy.

    Global chip sales decline for fifth straight month.

    China's state-controlled media has completely ignored coverage of Hong Kong protests.

    Global bond bubble inflates as fearful investors seek safe havens. 

    Factories in recession as trade war, eurozone slump and 'no deal' Brexit fears hit home. 

    UK Economy stagnates amid ‘relentless Brexit uncertainty’, survey finds


  9. Wow $57 didn't hold on /CL – that's a hard fall!  /BZ testing $62.50.

    Dollar 96.30.


  10. TSLA

    Palotay,Don't know if this has already been posted, but it appears the tax credit was reduced yesterday from $3750 to $1875. 

    Those who want to buy a Tesla have only a few days to take delivery if they want to claim a federal tax credit of $3,750. 

    Tesla is in the midst of the phase-out of its federal tax credit after it reported selling a cumulative total of 200,000 cars last July.

    The $1,875 credit on Teslas will last from July 1 to December 31, before Tesla buyers lose the credit altogether.


  11. TSLA/Albo – A sign of success to some extent but will people still buy without the credits.  Might be why they are pushing numbers so hard this Q, next Q they can use this as an excuse and, hopefully, by then, Musk will have scammed up some more money.

    Here's something fun to ignore:

    • Vice President Mike Pence has canceled a New Hampshire appearance to return to the White House, say sources.
    • No reason is apparent, but earlier today 14 sailors were reported dead after a fire broke out on a Russian sub.
    • Gold (GLD +1.6%) has popped back over $1,400, and the 10-year Treasury yield is off five basis points to 1.97%. TLT +0.7%TBT -1.4%.
    • General Motors (GM -0.5%reports U.S. deliveries fell 1.5% in Q2 to 746,659 vehicles.
    • The automaker's crossover deliveries set a new Q2 record after a 17% Y/Y jump.
    • Deliveries by brand: Buick +4.7% to 55K, Cadillac +1.3% to 40K, Chevrolet -5.3% to 500K, GMC +9.8% to 152K.
    • Model standouts: Chevrolet Spark +62% to 7.2K units, Chevy Tahoe +23% to 33K, Chevy Suburban +21% to 18K, GMC Canyon +24% to 12K, GMC Terrain +12% to 25K.
    • "Auto demand was better than anticipated in H1 and we expect strong performance in H2 of the year. If the Fed cuts rates, as widely expected, lower financing costs will provide further support to auto sales," notes GM Chief Economist Elaine Buckberg.
    • GM’s average transaction prices rose by $1,575 to a Q2 record of $37,126, compared to an industry average of $33,681, according to J.D. Power PIN estimates.

    • Mazda (OTCPK:MZDAY) unit sales -15.1% Y/Y in June to 22,828 units.
    • Car sales squeezed 32.1% to 6,430 units.
    • Truck sales slipped 5.9% to 16,398 units.
    • YTD Mazda U.S. sales decreased 15.5% to 138,555 units.

    • Porsche (OTCPK:POAHY) unit sales rose 6.4% to 5,205 units in June.
    • 911 sales slipped 39.3% to 458 units.
    • 718 sales down 25.3% to 422 units
    • Cayenne sales advanced 101.9% to 1,147 units.
    • Panamera sales dropped 28% to 529 units.
    • Macan sales grew 16.7% to 2,649 units.
    • YTD Porsche U.S. sales +2.8% to 30,257 units.
    • Toyota (TM +1.1%) unit sales -3.5% to 202,352 units vs. -4.4% forecast by Edmunds.
    • YTD unit sales down 3.1% to 1,152,108 units.
    • Toyota division sales slipped 3.5% to 179,305 units.
    • Lexus division sales decreased 3.4% to 23,047 units.
    • Total YARIS sales squeezed 21.8% to 1,925 units.
    • Total Corolla sales rose 2.5% to 28,869 units.
    • Camry sales up 2.4% to 28,889 units.
    • Prius sales down 26.5% to 5,769 units.
    • On the SUV front, RAV4 sales +3.8%, Highlander sales -8.2% and Land Cruiser +17.2%
    • Volkswagen (OTC:VLKPF) unit sales +10% to 31,725 units vs. -3.2% forecast from Edmunds.
    • Golf sales up 3% to 3,656 units.
    • Jetta sales up 17% to 8,486 units.
    • Total Beetle sales rose 50% to 1,686 units.
    • Passat sales squeezed 79% to 797 units.
    • Tiguan sales increased 19% to 9,250 units.
    • Atlas sales grew 101% to 7,424 units.
    • CPO sales expanded 13% to 9,780 units
    • YTD Volkswagen U.S. sales +6.8% to 184,608 units.

    • Nvidia (NVDA -1.9%will launch the GeForce RTX 2060 Super and RTX 2070 Super cards on July 9 and the RTX 2080 Super on July 23.
    • The Turing-based cards will retail for $399, $499, and $699, respectively.
    • Nvdia says the 2080 Super offers faster performance than its current top-of-the-line Titan Xp.
    • Last month, rival AMD (AMD -0.6%) unveiled its Radeon RX 5000-series gaming chipsets with the "best of the best" Radeon 5700 XT priced at $499 with a July release.
    • It's too early to tell if the U.S. economy's recent slowing is a pause before  resuming a sustainable level of growth or if it's headed for a more significant decline, said Federal Reserve Bank of Cleveland President Loretta Mester, in a speech in London.
    • "The U.S. economy has proven itself resilient to a variety of economic shocks, headwinds, and uncertainties," she said. "We have seen similar episodes of soft data and sentiment that subsequently reversed."
    • Mester, though, isn't a voting member of the FOMC this year.
    • Cutting rates now, she says, "could reinforce negative sentiment about a deterioration in the outlook even if this is not the baseline view, and could encourage financial imbalances given the current level of interest rates, which would be counterproductive."
    • "I prefer to gather more information before considering a change in our monetary policy stance," she said
    • Broadcom (AVGO -1.2%) is withdrawing with the rest of the market, after nearly a week's rally, but Piper Jaffray has updated its price target with a boost based on potential tailwinds from 5G development.
    • The firm kept its Overweight rating and raised its target to $330 from $305, implying 11.2% upside.
    • Developments in the 5G world could add $240M to 2020 revenue, the firm says, adding it it feels investors aren't appreciating that part of the story. Delayed restrictions on Huawei (from which Broadcom gets about 5.3% of its revenue, according to Bloomberg) doesn't hurt either, it suggests.
    • Saudi Arabia is restarting the process for a potential initial public offering of Aramco (ARMCO), the world's most profitable company, months after putting the planned listing on hold, Bloomberg reports, citing people familiar with the matter.
    • Aramco recently had talks with a small group of investment banks to discuss potential roles in the IPO, they said.
    • The process may accelerate later this year or early next year.
    • Challenges include achieving the $2T valuation the kingdom of Saudi Arabia has been seeking for the company and growing concern among institutional investors about investing in fossil-fuel companies.
    • Update at 11:07 AM ET: Saudi Arabia oil minister Khalid Al-Falih says the Saudi Aramco IPO was "never fully suspended" and was always set for the 2020-2021 timeframe, Bloomberg reports.
    • The Baltic Dry Index rose for the 13th day in a row with a 4.7% gain to 1,446 points.
    • The Capesize index was up 6.3% and the Panamax index increased 4.0%, while the Handysize index fell 0.5%.
    • The 52-week range for the BDI is 595.00 to 1,774.00. The index hasn't been over 2K since 2014.
    • Jefferies lowers Dave & Buster's Entertainment (NASDAQ:PLAY) to a Hold rating from Buy on concerns of new traffic competition for the chain.
    • The firm drops its price target on D&B to $50 from $56 vs. the average sell-side PT of $50.64.
    • Shares of PLAY are down 1.47% premarket to $39.45.
    • Citi's Jim Suva says Apple's (NASDAQ:AAPL) consensus estimates could fall as analysts examine the potential impact of weaker China demand.
    • Suva again says that Apple's China sales "could be cut in half" due to a "less favorable brand image."
    • Suva maintains a Buy rating and $205 PT, but warns of potential volatility ahead.
    • Apple shares are down 0.3% pre-market to $200.90.
    • AAPL has an Outperform average Sell Side rating.
    • Related: Yesterday, Wedbush estimated the US-China trade truce could add $20 to $25 to Apple's share price.
    • Benchmark cuts Western Digital (NASDAQ:WDC) from Hold to Sell with a $40 price target.
    • The firm cites a share rally that has gone "too far, too fast" despite the US-China trade truceoptimistic results from Micron, and a power outage analysts say could help WDC's pricing.
    • Analyst Mark Miller says those factors are already baked into the valuation and the potential higher prices don't offset the decline in NAND prices.
    • WDC shares are down 2.6% pre-market to $48.37.
    • Western Digital has a Neutral Quant rating.
    • Royal Caribbean Cruises (NYSE:RCL) says it entered into an agreement with shipbuilder Meyer Turku to order a third Icon-class ship for delivery in 2025.
    • The company says the new ship will join its two sister ships to be delivered in 2022 and 2024, respectively.
    • Royal Caribbean notes that the clean-power technology Icon class is powered by liquefied natural gas that leverages the latest, environmentally-friendly applications.
    • The new order is contingent upon financing.
    • Source: Press Release
    • Hooters of America announces that Nord Bay Capital and its advisor TriArtisan Capital Advisors have closed on a transaction to acquire the company from H.I.G. Capital, Chanticleer Holdings (NASDAQ:BURG) and other investors.
    • Financial terms of the deal were not disclosed, although the selling entities will each retain a stake in Hooters.
    • BURG +11.13% premarket to $1.16.
    • Source: Press Release


  12. Well, the Oligarchs fooled the last of the Commies – it's all over now.  Next we collapse their economy, get bailed out and then buy all the assets for 80% off.  

    • China its set to end ownership limits for foreign investors in its financial sector in 2020, a year earlier than scheduled.
    • China also will further open its manufacturing sector, including the auto industry, while reducing its negative investment list that restricts foreign investment in some areas, Premier Li Keqiang told the World Economic Forum in Dalian.
    • The moves come after the U.S. and China agreed over the weekend to restart trade talks in another attempt to strike a deal and end a bruising tariff war.
    • ETFs: CHIX

    Could be WWIII tomorrow but the market is flat:

    PUTIN PULLS OUT OF SCHEDULED EVENT – RIA QUOTES KREMLIN PUTIN TO MEET HIS DEFENCE MINISTER VERY SOON – TASS QUOTES KREMLIN

    Fed’s Mester Sees No Need To Change Policy Stance At This Time Despite Signs Of Weakening Demand -Warns More Info Required Before Considering A Change In Monetary Policy Stance -Cutting rates at this time may cause imbalances

    11:01 AM – 2 Jul 2019

    Russia thing was an accident and all that scrambling was just "normal" military procedure.


  13. GBTC reverses up 14% from today's low.  Never a dull moment !


  14. The Russians seem to have a lot of trouble keeping these subs afloat!


  15. George Gilder,  in an interview,, is predicting big things for blockchain.


  16. GBTC/Albo – What a ride!

    Blockchain/Albo – Blockchain will be huge but why should any one crypto currency dominate when another one can be put together tomorrow?  That's why the rally of BitCoin because FB is making a competitor didn't make sense, that's like the Dollar rallying because the Euro is coming. 

    People don't seem to grasp the concept that there is only a finite amount of value to the World and it takes many forms and some of those forms are currency but creating a currency doesn't create value – a currency only has value when it's easily exchanged for goods or services that are widely sought after so that, over time, the value of the goods and services is conveyed to the currency itself – since they can be readily exchanged for each other:

    10 Beads = 1 Chicken = 48 eggs = 1 pound of steak = 3 gallons of gas = 1 movie ticket = popcorn & a coke = $10.  So you can exchange $10 for any of those things and that's a lot easier to exchange those things for each other which is why fiat currency replaced the barter system rather quickly.  

    The question with cryptocurrency, which uses blockchain, is what does it do that's better than the currency we already have?  And I know they say "feeless transactions" but there's a fee in that you aren't sure your money won't be stolen and the time it takes to conduct a transaction is an issue as well.  Then there's the sheer insanity that the people who originate these currencies tend to own 30% of them so, accepting a global replacement for the Dollar would transfer 1/3 of your wealth to 18 people you don't know (in the case of Bitcoin) – do people seriously believe that's going to happen?

    Image result for be more brenda

    You don't need ads to get people to buy Dollars – people are willing to work for them.  This is seriously an ad that's all over the British Subway system.  As I said, the lesson learned from the last BitCoin crash by the BitCoin Billionaires is that they need to relentlessly promote to keep up the public interest and many of these articles and interviews we're seeing are all part of that PR push – so take things with a grain of salt.



  17. Thanks, Phil.

    Gilder is launching a new subscription newsletter priced at $2500.


  18. Those change counting machines in grocery stores now offer payment in bitcoins.


  19. Hello Phil and the Gang.  Phil I have a position in SIG and it seems the stock can't get any positive momentum.  I have 20 BCS $18 (1.60) / $20 (1.05) and 22 BCS $18 (1.60) / $22 (.675).  Since we just hit a new low I sold 10 Oct 16 puts for $2.25.  I am considering selling the 42 Oct $18 ($6720) and leaving the $20 and $22 calls short.  I would cover with buying 30 Jan20 $14 (4.00) / $20 (1.78).  I don't want time to start working overtime on the Oct series and I want to push the longs down into the money.  Thoughts? 


  20. Sorry.  The 20 and 22 BCS is OCT.


  21. Robert – the dates on the spreads would be helpful.


  22. Robert – I see the dates now.


  23. Big spike into the close saves the day.  Can't have people showing up at the holiday barbecue talking about a down market I guess.

    Change machines/Tangled – That's because they can totally rape you on the exchange rate.  Too bad Redbox went private – that's a good investing premise for them. 

    SIG/Robert – It has amazing momentum.  Unfortunately, it's all downhill.  No news and they lost 5% today.  I don't actually understand your position so please clarify before I suggest anything that might help.  I know how much fun it is to make up your own format but it confuses me so, when you have a multi-leg position, try (my best guess):  "I have:

    • 20 (DATE) $18 ($1.60)/20 ($1.05) 
    • 22 (DATE) $18 ($1.60)/22 (0.675) 
    • 10 short Oct $16 puts at $2.25 

    Even then I assume those are current prices and not what you went in for.  I know in our OOP we have 10 2021 $15 calls we bought for $8.50 and are now $4.70 and we sold 5 2021 $20 puts for $5.30 and they are now $8.30 – see how clear it can be made?   

    I'm thinking you have the Oct $18s, since they are $1.60 and not the LTP or OOP play (don't worry, you would have been just as screwed).  Hopefully, you didn't pay more than $2 for the $4 spreads so the key is to rescue the $1.60 so I'd roll those Oct $18s at $6,720 to the $6,660 spread but, since we KNOW SIG is in a long-term turnaround plan, I'd rather go for the 2021 $15 ($4.80)/22.50 ($2.70) bull call spreads at $2.10 ($6,300) and, of course, I'd keep a stop on the short Oct $20s at $1.50 ($3,000) to make sure it doesn't get away from me.  The puts will be a simple roll when you need to but I would have sold the 2021 $17.50 puts for $6.50 instead of the Oct $16 puts for $2.25 because, if SIG does pop – you would then have to sell higher puts for $2.25 and you'd end up with more downside risk than you want in a bullish play and the point of the puts is to offset the short calls, which go worthless if they puts are in the money (and vice versa).  So, on the whole, I'd rather pocket $6,500 now against my $5,000 worth of short calls since they both can't be in the money at the same time and they balance out.  The bull call spread is your actual bet – the rest is just money you hope to earn while you wait (even if that wasn't your original plan – it is now!). 

    Oh, October – I win!  

    Thanks Winston – keeping all of us sane…

    TLSA reports 95,200 deliveries and is popping 5%.  


  24. 7% for TSLA now, might keep going.  See my explanation above for why this is happening. 


  25. Nike Pulls ‘Betsy Ross Flag’ Sneaker After Criticism of Slavery-Era Imagery






  26. SIG, I own 100 shares and 4 of the $15 Jan 21 calls, I am short 5 Oct19 $25 calls and 1Put $25 Jan 20 . How can I use this fall to improve position overall


  27. Under pressure from Trump, OPEC embraces Putin


  28. House Files Lawsuit Seeking Disclosure of Trump Tax Returns





  29. Melting Greenland Is Awash in Sand



  30. Lagarde to Succeed Draghi as ECB Chief as Economy Weakens




  31. Airstrike hits Libyan detention center, killing 44 migrants


  32. Good morning! 

    Markets up about 0.25% but no volume at all.  Today is going to be meaningless as we roll into the holiday and Friday will be completely pointless – in that nothing that happens will have any meaning and can be reversed the next day.

    /ES 2,988 this morning (2,986 now) and /NQ 7,872 (7,860) so "THEY" are still trying to jam things higher.

    Europe is up 0.666% as they seem very happy with Laguarde taking over the ECB – at least she's solid but I think she's a bit more independent than Draghi and not as quick to dispense money as they hope.

    SIG/Millard – Well the Oct $25 calls are only 0.35 so you are kind of done with those.  I'd buy them back or at least keep an 0.50 stop on them.  Since you sold $25 calls, I'll assume you bought the stock for $25 so you are down $1,000 on the stock and probably down $2,000 on the long calls but the stock that remains is $1,638 and I think you are better off ditching that and using that money to buy 6 2021 $10 calls for $7 ($4,200) and then roll the 4 2021 $15 calls at $4.80 ($1,920) to 4 more 2021 $10 calls at $7 ($2,800) and then cover that with 10 short 2021 $17.50 calls at $4 ($4,000) and that's net $1,080 out of pocket (plus buying back the short Oct calls) to end up in 10 of the 2021 $10/17.50 bull call spreads that can pay up to $7,500 back. 

    The 1 short Jan $25 put is $10 ($1,000) and you could roll to 2x the 2021 $15s at $4.80 ($960), which puts them back to all premium and your worst case only goes from owning 100 share at $25 ($2,500) to 200 shares at $15 ($3,000) so $500 more but twice as many shares.