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450-Point Friday – Dow Erases Half of its Losses – Traders Think that’s Bullish

Isn't that amazing!

What a fantastic market that can drop 900 points in 2 days and then RALLY back 450 points in 3 days.  It's AMAZING!  That's what it seems like if you listen to the Financial Press and I bet that, before I just pointed it out – you were thinking this was a strong weak for the market.  Well, it isn't.  In fact, we're pretty much where we were on November 1st (27,350) so it hasn't been a strong 5 weeks as we close week 1 of December.

We have a strong Non-Farm Payroll Report this morning at 266,000 jobs added and that's giving us a bit more lift at 8:30 and the last two reports have been revised up 42,000 jobs which is a big boost for the Dollar and an initial boost for the indexes until it occurs to someone that job numbers this strong means there's no way in Hell the Fed will lower rates next Wednesday – they should be raising them! 

There's a bit of noise in the report as 50,000 GM workers returned to work and are included in the numbers that bumped up October and November data revisions.  Overall, we're adding about 170,000 jobs a month this year – about the same pace as Obama had over his 8 years – except Obama came in when there were still huge losses but, either way, simply on our normal track with wages rising at an annualized 3.1%.  

There's also a huge bump from Census Workers and, unfortunately for Trump, he won't be able to keep them and that means we're going to see some very harsh unemployment numbers that will be as unfair to look at then as the positive numbers are now – keep that in mind in both directions…

Also note that 3.1% increases in labor costs are ahead of the sub 2% official inflation rate and that puts the squeeze on Corporate Margins and, as labor gets tighter, wages tend to go even higher.  That's why Trump is trying to force 1M people off food stamps and back to work – his Top 1% buddies need to put supply back into the labor market so they don't have to give the 167M people who are already working big raises.  See how that works?

Image result for rising minimum wages"Speaking of Republican talking points that are pure nonsense – remember when they said raising the minimum wage would ruin the job market?  Now remember when Trump talks about how strong the job market is?  I know – it's hard to keep all the BS straight….

The combination of more jobs and rising wages is very good for the economy and, if we do get a trade deal with China and if the Impeachment isn't too disruptive and Brexit doesn't destroy the entire EU – then 2020 could be a pretty good year.  

Unfortunately, a pretty good year in 2020 is already priced into the market and it will have to do better than that but we know how to make money in a flat market – so it's fine with us either way.  

Have a great weekend, 

- Phil

 


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  1. Aramco / Phil – Interesting charts yesterday. But could I invest into a company where profits are not dependent on good execution but simply on the major shareholder (Saudi government) sole control over the resource that is the only source of revenues. 



  2. Good job numbers but the trend is not so good:

    http://www.capitalspectator.com/is-us-employment-data-flirting-with-an-economic-warning-sign/

    Monthly data is noisy and so it’s best to use the one-year change for a more reliable measure of the trend. But there’s a worrying slide afoot here as well: job growth ticked down to a 1.5% year-over-year gain, the slowest since 2011.


  3. Good Morning!


  4. Good morning! 

    I didn't use it but I love this map from our friends at the Heritage Foundation which the GOP had commissioned to try to stop states from raising the minimum wage.  It's good to see that most people now realize the Heritage Foundation is a total joke and pretty much you can just assume the opposite of whatever they say is true:

    Image result for rising minimum wages"

    On the whole, even $15/hour isn't a fair wage:

    If the federal minimum wage had grown in conjunction with American productivity, today's workers would see more than $18 an hour wage today.

    This is what a family needs for a living wage (family income to stay above Poverty) in each state:

    Image result for rising minimum wages"

    You're barely going to cover that at $15/hr ($27,300 pre-tax) – even with 2 jobs and, if you don't have two jobs in your family due to "lazy" females – then you have to spend at least $15,000 per kid on day care – so what's the point of the woman working when they have small children?  So they cut day care subsidies, cut food stamps and try to keep wages below $15 and then they complain about how lazy poor people are – AMAZING!

    Aramco/StJ – XOM has popped to 20x earnings and CVX is still about 17x and Aramco is pricing about 20x so it's stretched but what gets me is we all KNOW, FOR A FACT, that the only reason Aramco is making about $90Bn is BECAUSE they are manipulating the price of oil with massive production cuts.  If that isn't kept up, constantly, for all the forward years, your investment collapses very quickly.  That's why they only got $25Bn instead of the $200Bn they originally asked for – and that was mostly from "Friends and Family".

    Rolling numbers/StJ -750,000 Census workers will be leaving starting next summer – going to be very hard to stay above 1% (1.7M jobs) in 2020.


  5. Wow, indexes going through the roof.  Kudlow in CNBC crowing about jobs numbers and assuring that China is going well.

    Oil blasting higher too on OPEC+ cut extension.

    No one is worried (again):

    Now Kudlow predicting GDP up huge next year as well.  Another guy who constantly lies but they believe him every time.  

    Image

    Wow, $1.666 on /RB!  $59.85 on /CL, $64.85 on /BZ – it's almost like it's coordinated…


  6. Minimum wage / Phil – I remember these GOP guys saying that in the 60's, they had taken jobs for minimum wage and it was OK. But as you show in your chart, in today's dollar it was 30-40% higher than today. Just that alone is a joke! 


  7. GDP / Phil – What else can they do to boost the GDP next year? Another deficit busting tax cut? There is no data right now to support higher numbers. And in fact, if the economy will grow this fast, why would they be bullying the Fed to cut rates? 


  8. I thought kudlow was scheduled to speak on tv this morning has anyone heard his spin yet?

    tjhanks


  9. Today I want to setting up some new plays, especially aimed at new comers, who do not have yet the million dollar accounts. I trust we do have newcomers, as from the old rabbits I can still learn something every day.
    Here I also wish to point out my armchair trading, with which I have weathered very well.
    This one I will call ‘’the poor man’s trade’’, as the same does not require the great amount of cash outlay one pays when purchasing the stock.
    I will select mostly stocks, which I have as well used for my armchair trading, with other words stocks which pay a div. mostly over 3%.
    Again the stocks should have still an upside potential, not being on top of their two year trading scale. So in case one should come in to a position of being assigned, one can use it discounted by the put sold, for armchair trading.
    Especially with some crazy clown at the helm, spooking the market just about on a daily bases, one should be very careful, where you are going to invest your cash.
    My plays will be based on a one option trade, which you can increase as desired. But as always I suggest one starts small just to get your feet wet, even try it out with paper trading first.
    I will explain the trade at the first play after which you can work out my way of thinking on each further trade I will past.
    T buy (all one off) the Jan 22 33 call for 6.65, sell the Feb. 20 40/36 strangle for 1.32.
    Cost of the trade is 5.33, margin with TOS 344.00.
    My aim is here to reduce my cost of the long leap call to zero, possible over the next five to seven strangle sales. After that my strangles should be poor profit.
    The first thing I look for is what do I get paid for the 33 call on the 6th of Dec 2019.
    Provided the stock remains at today’s price, my long caller would have left with a value of 5.25 Jan 22, looking at today’s sales price of the Dec. 19 33 option.
    Obviously the price of the stock at Jan22 stands in the stars, and only the clown would know.
    The object of these plays are, to receive cash selling strangles and expect to receive still a reasonable amount of cash for you long call at the end of the trading circle of 2022.
    Further one needs to understand that you do not get any div. paid, and as a foreigner TOS will still charge taxes on puts and calls being over, I believe, a delta of .75 to .80 and up. However there is no 35% tax deduction on the usual stock div.
    Further plays will follow. Any comments welcome.


  10. Slow and steady wins the race – but has anybody told AAPL that yet? Boredom leads to greed and I'm thinking what can I do about the following spread:

    AAPL Jun 2021 $180 ($42.50) / $220 ($23.00); so the $40 spread bought for net $19.50 that is now trading just a tad over $30 – so $10 to gain by waiting for the end of eternity. These LT spreads are so boring.

    I also decided to ditch the selling of short term short calls (that's so last year) and align to a strategy that actually recognizes that – in the words of Jesse Livermore – 'this is a bull market!'. So I've been layering on 90 DTE additional bull call spreads that have added to the cash pile along the way. 

    Having said that I have started to move to layering on back ratios: Buy 1X ATM, sell 2X OTM.

    Caution/Prudence dictated that I invest (sic:waste) money on hedges. So I now feel the need to adjust the following:

    Sold 20x Jan 20 SQQQ $30 puts @ $2.68 – now $5.27 to pay for the:

    Bought 50X Jan 2021 $30  / $45 BCS @ $3.50. now @ $1.70 (but the bid ask spreads are rather wide).

    But seriously, that was a great call by Phil (a while back now) and I always hesitate when Phil starts selling short callers, especially on one of the stocks where Phil has a clear rule – NEVER SHORT AAPL!).

    I took Phil's advice in this case and it paid off handsomely.

    But I also know that Phil does not like deep ITM spreads, as he (quite rightly) always has an eye on better opportunities to exploit.

    I was planning to roll those $180/220 spreads to Jan 2022 $220/$280 BCS – I started legging into those, but can you believe it – the purchase of the new spreads ($220/$280 BCS filled and I never got the prices that I wanted for selling the June 2021 $180/220 spreads. So now I find myself 2X into AAPL – it could be worse, but I'm conscious that my portfolio is now (over?) concentrated into AAPL BCS 

    Would appreciate any advice. Personally I still can't find anything I like better than AAPL.


  11. I did finish that November Portfolio Review, by the way.  

    Image result for volkswagen $1,999"Minimum Wage/StJ – I had a paper route in 1973 and I made about $20/week (good for a 10-year old!) and that was probably about $2/hr and, on the highway near where I walked was a billboard for a VW Beetle at $1,999 and my realistic plan (not imagining I was going to get better jobs at the time) was to save half my wages for the next 5 years so I could buy a new car as soon as I got my learner's permit.

    Even at that level, making sub-minimum wage in a part-time job, it was realistic for me to plan on owning a new car – that's certainly not true for people making $7.25 today!  

    That paper route, by the way, is how I became so political when I was young as I used to read the papers I delivered and it was during Watergate and I found the whole thing fascinating.

    Why/StJ – Well, it's an election year, they will do whatever it takes to keep the economy going – and that includes incumbent Democrats who also want to keep their seats.  

    Kudlow/Tommy – See above – CNBC. 

    OK, you guys know how I feel about CMG over $820 so it's time for another short in the STP as $820 is $23Bn and EVEN CMG doesn't think they are going to make more than $500M in 2020:

    Year End 31st Dec 2013 2014 2015 2016 2017 2018 TTM 2019E 2020E CAGR / Avg
    Revenue $m 3,215 4,108 4,501 3,904 4,476 4,865 5,371 5,541 6,230 +8.6%
    Operating Profit $m 532.7 710.8 763.6 34.6 270.8 258.4 385.4     -13.5%
    Net Profit $m 327.4 445.4 475.6 22.9 176.3 176.6 309.8 390.9 501.9 -11.6%
    EPS Reported $ 10.5 14.1 15.1 0.77 6.17 6.08 10.7     -10.3%
    EPS Normalised $ 10.6 14.3 15.4 1.25 6.47 8.21 12.0 13.9 17.9 -5.0%
    EPS Growth % +19.9 +34.6 +7.6 -91.9 +419.5 +26.9 +41.6 +69.4 +28.6  
    PE Ratio x           99.9 68.4 59.0 45.8  
    PEG x           1.44 0.99 2.06 1.76
    Profitability

    So 46x earnings is kind of steep for a restaurant stock and any misstep can send them flying over and I see no way people will pay 50x so 10% higher would be extreme so we can do something similar to our BKNG spread, that's been very good to us for the STP:

    • Buy 2 CMG 2021 $920 puts at $150 ($30,000) 
    • Sell 2 CMG 2021 $820 puts at $95 ($19,000) 
    • Sell 2 CMG March $900 calls for $22 ($4,400) 
    • Sell 2 CMG March $750 puts for $22 ($4,400) 

    That's net $2,200 on the $20,000 spread that's 95% in the money to start and, of course, we will have 3 more chances to sell $8,800 in premium ($26,400) so the profit potential on this spread is over $40,000 (1,818%) if all goes well (it rarely does).  Still, so many ways to win in between makes it a great play while we have $500,000 of LTP money sitting around doing nothing.  


  12. Some would say we get the leaders we deserve: USA:Trump, UK:BoJo, Deutschland: Mutti, France:Macron – (some would say that even France didn't deserve to be led by Macron!).

    What a sorry state we are in. Although it's only a small blip on the geo-political Richter scale, but in 6 days time their might be a seismic shift in the politics of the UK. 

    I hope the Gods are smiling on us.


  13. Nice, conservative trade, Yodi – thanks.

    AAPL/Winston – Holy crap – that's 100 Dow points off the low from AAPL alone and half of the Nasdaq's move too!

    AAPL/Winston – "Caution/Prudence dictated that I invest (sic:waste) money on hedges."  LOL!  That's great!  I don't like tying up $30 for a year to make $10 (33%) when we can do much better – that's for sure!  

    You have the 2021 $180s, now $94 and the short $220s, now $61 so more like $33 if you are patient with the exits but why pay the short $220 caller $12 in premium?  There has to be a better way.

    So step one is get your $94 (maybe $95 today) out as you already have a new $220/280 spread (2022 I presume) to cover the 2021 $220s and I would propose adding just 1/2 more 2022 $220s at $70 to help cover the short Jan $220s so you'd be taking $46 (1/2 of $94) + $24 (difference of the roll)/2 = $12 == $58 off the table per 2021 spread and you are left with 1.5x 2022 $220s covered by 1x the 2022 $280s and 1x the 2021 $220s.

    Now, you can 1x the July $220 puts for $5.40 and use that money to roll the 2021 $220 calls up to the $230 calls ($54.50) for a couple of bucks out of pocket and you'll be able to do that at least one more time so $240 is the eventual roll which gives you nice protection on your long spread and the 2021 $240s are $48 and they can be rolled to the 2022 $260s ($47) so the only issue is, if AAPL is over $275 and you get worried (keeping in mind your $220 calls would be $55 in the money) you could buy back 1/3 of the short 2021 $230s (maybe $60 by then) or add 1/3 to the long 2022 $220s (probably $75) but either way that only uses $20-$25 of the $46 you took off the table but your 2022 spread is 50% wider so, even if you spend the rest of the $46 to end up 1/3 over-covered, that would only happen if your 2022 $220/280 spread is totally in the money and you just move on to the next rolling cycle.  If AAPL ever does stop going up – you'll collect a boat-load of money!

    Leaders/Winston – Head like a hole! 

    "Head like a hole.

    Black as your soul.

    I'd rather die than give you control.

    Bow down before the one you serve.

    You're going to get what you deserve.

    God money's not looking for the cure.

    God money's not concerned with the sick among the pure."  – NIN 


  14. MO buy Jan 22 45 call @ 8.35 sell Mar 20 55/47.5 strangle for 2.29 margin 347.00


  15. ED Jan22 77.5 call @ 12.70 sell Feb.20 strangle 90/82.5 for 2.23 margin 730.00


  16. Anyone daring enough to short up here 3150, 28000, 8400, 1650?  


  17. Jeffdoc – FWIW,  I just shorted MDY at 370.20 as a hedge/scalp trade.


  18. Following along with Albo but with short QQQ instead. Put spreads.


  19. CMG- I like the trade but very leery of the short puts. Will hold off on that and perhaps revisit at a lower strike on a pullback off the high (I know, what is that?) One of the few benefits of getting older is that one recalls such things as a regular part of the cycle. 


  20. Phil – thanks on the AAPL ideas for adjustment. AAPL at all time highs – would you believe it. Your brain seems to work at the speed of light – mine still trying to get to the speed of sound – but I hear what you are saying :)

    Anyhow, one thing I have learnt is not to rush into any adjustments before I have internalized your thoughts and worked out for myself what the best moves should be. Of course that normally concurs with your point of view.


  21. Yodi – I always like your ideas but I am lazy (or busy) and I was thinking of skipping some sales and buying the Jan 22 T 33 call and selling the 35/40 Jan 21 strangle. Looks like about $1.80 in cash and you can then sell the Jan 22 strangle if not called away at 40 and actually get a credit on the trade. Being called away at 40 is still 200% of cash and about 50% on regular margin. Not bad for 13 months – beats the dividend and keeps you ahead on inflation (except in Venezuela). 


  22. SIG – Breaking out above the 200 dMA and at a new recovery high.

    Covered some by selling  the April 22 calls.  Nice premium !


  23. stj Well that is the lazy man! a bit more work a bit more money!


  24. Wow Yodi – very productive today.  Thanks for the input!  

    Untouched STP up 8% since our 11/22 Review – that's actually slipping from our start (+6.5%/week) but I think CMG can put us back on track:

    Of course it's insane that the market keeps going up like this – even averaging 4% a week compounded growth for 52 weeks turns $100,000 into $768,658.  That doesn't seem likely, does it?  6.5%/week, by comparison, is $2.6M in 52 weeks – that's why we always try to make the best use of our capital at all times! 

    Index shorting/Jeff – Tempting but no. 

    Actually 3,150 is a playable short line on /ES with VERY TIGHT stops above, figure out at 3,151 is a $50/contract loss so you can risk $250 on 5 crosses and hope you get one nice 5-point dip to make up for it.  Watch 8,400 on /NQ as if you have money on that too and get out if either pops (8,405 on /NQ would be the stop).  

    CMG/Pstas – You have to have a hedge in case you are wrong.  You could sell just one 2022 $600 put for $42.50 ($4,250) but then you only get the one sale and you can roll the short March puts there eventually anyway so I'd rather take the chance on getting 3 more chances to sell them.

    Not to rush/Winston – Well that's why we try to only make our monthly portfolio adjustments.  Almost no matter what happens – I'd rather take a bit of time to think about it before making changes and I try to teach PATIENCE by keeping that discipline with our Member Portfolios.  

    Lazy/Busy/StJ – Me too, while you certainly can make more money doing it Yodi's way, it's a lot of work!

    SIG/Albo – Don't remind me, was a Stock of the Year contender but I decided it was still too uncertain.  


  25. Yodi, good night!

    As usual your trades and comments are highly appreciated .

    I see that you are changing now your cherries approach, strangles are in my opinion in this market moment  a safer proposition to play with or without stock, having a range  to move having an additional income.

    My only question is how you decide your up and down limits?  I use  the high and low in a 3 /6 months period depending  volatility, but I been using strangles with GLD in a pretty consistent way., generally  are around 30 days 


  26. Lazy / Phil – When I am in semi-retirement 10 years from now I'll switch to Yodi's timing just to keep me busy between 2 bingo games :-)


  27. C`mon StJ!

    Night is long…and coffee cheap.


  28. LOL Advill – no coffee for me though! And I am happy with 50% yearly return. 


  29. Forgot to post this the other day but we might be seeing something that looked impossible 10 years ago:

    https://www.engadget.com/2019/11/28/amd-beating-intel-threadripper-ryzen/

    With AMD now ahead in HEDT workstation performance, it could seriously bite into its rival in this high-profit segment. Intel still enjoys a lead in gaming, but that's also at risk if AMD does a tick-tock while its rival is three-stepping.

    As someone who does both gaming and video editing, I'd be more interested in AMD than Intel if I was in the market for a processor. To me, AMD feels like the future of high-end desktop computing, with more interesting and advanced technology across the board. Meanwhile, Intel is struggling just to get its existing products out, let alone create new ones. It really needs to do something to shake things up, or it could soon find itself in an unfamiliar position: second place.


  30. AMD/StJ – I think AMD has taken over from a desktop perspective but, overall, I don't think INTC is quaking in their boots just yet:

    Image result for amd vs intel market share 2019"

    CPUs, however, is a different story entirely:

    Image result for amd vs intel market share 2019"

    I think it's more of a reflection of INTC's move to IoT than an indication that AMD is "beating" them (as if $6Bn in sales vs. $70Bn doesn't already make that point).  INTC's net income is $20Bn!  AMD squeaks out $1Bn:

    Year End 29th Dec 2013 2014 2015 2016 2017 2018 TTM 2019E 2020E CAGR / Avg
    Revenue $m 5,299 5,506 3,991 4,272 5,253 6,475 6,023 6,722 8,540 +4.1%
    Operating Profit $m 102 -216 -481 -440 115 439 299     +33.9%
    Net Profit $m -83.0 -403 -660 -497 -33.0 337 209 742.5 1,341  
    EPS Reported $ -0.11 -0.52 -0.84 -0.60 -1.22 0.33 0.20      
    EPS Normalised $ -0.12 -0.22 -0.74 -0.62 -1.25 0.34 0.18 0.62 1.11  
    EPS Growth %               +85.0 +77.7  
    PE Ratio x           117.8 218.6 63.7 35.9  
    PEG x           1.39 2.57 0.82 1.06
    Profitability

    A nice little business but not for $44Bn!  INTC is $250Bn at $57 so 12x earnings vs 44x earnings for AMD – INTC NEEDS AMD to do well somewhere or they'll have such an obvious monopoly that the Government would almost have no choice but to demand a break-up.  I wouldn't be surprised if that Intel-bashing story came from a Intel's own PR people….


  31. Phil your mention of delivering newspapers brought a smile to my face.Ther were 9 of us and we had the route for around 20 years. But this time of year, the visions of xmass tips danced in our heads. Worthy lessons were had by all.      enjoy the season.


  32. Same here on the paper route! I had one at age 12 or 13 & was saving the cash for a bright red MGB that a neighbor was selling. 

    I can swear that Phil mentioned sugar as a play a while back. It's finally starting to move enough for the CANE options to start to make some money.


  33. AMD / Phil – True but 10 years ago AMD was only kept alive (by Intel?) to prevent anti-trust action against Intel. Still a long way to go though.


  34. advill I always keep an eye on the 2 year chart and judge the highs and lows of the stock, in hope no clown messes it up. Obviously there is no 100% sure thing. The calls will always somewhat go in tandem, even that the shorter call has in many cases a greater fluctuation. Only the short put can hurt you in a down market. Wish I bought more stock of MO at 40!!!! To adjust your put sale you have to make up your mind at which point you happy to buy the stock. A delta of .30 or below is always a good point to start calculating your strangles.
     


  35. AMD vs Intel – part of the interesting dynamic is that AMD is fabless, leveraging TSM which is now ahead of INTC in terms of advanced / smaller die manufacturing.  Until INTC "catches up", AMD has a relative advantage.  But if you ask corporate IT purchasing managers – their default is still with INTC for at least a few more years.


  36. Paperboys of the World Unite!  

    Was a really great way for kids to make money, back in the day.

    Sugar/Ati – CANE was, I think, one of the last trade ideas from our old portfolio set.  

    September 13th, 2019 at 11:19 am | (Unlocked) | Permalink 

    I'm liking Sugar (/SB) here at $10:50, fun to play.  /SBH20 takes you into March, catching Christmas and Easter demand and it's $11.96 so it can be played above $12 with tight stops below.

    CANE is the ETF and this is usually the bottom (around $6) and, for the OOP, I'd like to just buy 20 of the Jan $6 calls for 0.60 ($1,200) and see how that goes.

    The Jan $6s are now 0.90 so up 50% is not bad for 2 weeks and most likely the ETF is just pausing at that upper resistance because Sugar (/SB) is way up since 9/13.  The /SBH20s just hit $12.80 but /SB is only $11.20 per penny so +$896 on the contracts.  

    /SB made a really nice move to $13.21, up $1.25 on /SBH20 is good for $1,400/contract – not terrible.

    The CANE Jan $6s are 0.85, so only up 0.25 is +$500, which is why I prefer futures for this kind of stuff though it is over 40% in 3 months – man, we are so spoiled when that doesn't seem exciting! 


  37. Speaking of Futures, that's a quick $150+/contract on /ES and I would keep a tight stop on the gains now as that was just some nice, fun weekend money to make.


  38. CSCO buy Jan22 35 call @ 10.47 sell the Mar 20 40/47.5 strangle @ 1.59
     


  39. Phil/Atitlan- I took profits on the cane trade for some quick holiday cash. thanks for the play.


  40. AMD / Mito – Also true. But there has been a lot more pricing pressure on Intel. They have had to lower prices on many CPUs recently. 


  41. And I do prefer Intel processors myself but that could change!


  42. Speaking of spoiled, these Jan 21 35 VXX calls sold for $3 Tuesday are now $2.10 so a nice 30% win in 3 days. If I recall Palotay got a boat load of them…


  43. STJ he must have a mole in the Whitehouse


  44. You're very welcome Tstep!  It's always nice to find extra cash ahead of the holidays…  

    VXX/StJ – Yes, that was a great call – those have been very reliable but, one day….

    Well, up 300 for the day brings us back to 28,000 and 28,200 was the high on Monday so new record highs next week for the Fed Meeting – can't see why they'd even consider lowering rates with that backdrop.   Then next Sunday is the deadline for a China deal or Trump says he will add another $300Bn in tariffs to the list.  Should make for an interesting week.

    Have a good weekend everyone, 

    - Phil


  45. VXX / Phil – As with everything else, position size is what you need to control and it's hard because it does look like a sure bet (it is in the long run). Right now I need the VIX at 100 to have any potential margin issue! I think that at that VIX level, VXX won't be the only instrument of pain (90 happened in 2008)! And of course, you can roll all the calls knowing that the VIX will come back down (it did then – 6 months later it was down to 25). People won't be able to roll out of a 50% loss on their 401K and will need a 100% gain to recover. 


  46. And now people are in fact dying because of anti-vaxxer:

    https://arstechnica.com/science/2019/12/leading-anti-vaxxer-jailed-as-measles-death-toll-rises-to-63-in-samoa/

    Samoa’s most prominent locally based anti-vaccine advocate will stay behind bars as officials go door-to-door vaccinating residents against a massive measles outbreak that has already killed 63—nearly all of whom are children under 4 years old.

    A sickness that was pretty much under control! 


  47. Patience wins again on VXX calls.  Up $5k so far.  Only using 1-2% of my available margin.  Kicking myself for not selling more, but such is life…


  48. X / Phil -  With X at $13.94, any thoughts on the March 20 $14 calls we sold, half of which are uncovered?  

    Phrased another way—left to my own devices, at this point, I would panic.  How do I remain calm?