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Whipsaw Wednesday – Iran Attacks US – Peace Declared?

OK, now things are strange.

Iran fired missiles into Iraq last night and attacked US bases and the Dow fell 500 points and the S&P fell 60 points but they didn't kill anyone and, even stranger, Iran then indicated that that was their retaliation and they were satisfied and Trump seemed to feel that was fair as well and now the war seems to be over and the markets are right back to where we started yesterday morning.

Iran says it does not seek war after firing missiles at bases housing Americans.

Bodies lying near the site of the Ukrainian Boeing crash on the outskirts of Tehran.That's kind of crazy, but crazy is pretty normal these days so we'll just have to go with the flow and see what happens, I suppose.  In an unfortunate coincidence last night, a Boeing (BA) 737-800 (not Max) crashed shortly after taking off from Tehran, killing all 170 passengers.  Supposedly it was "technical problems" and that's got BA stock down 2% this morning – the day after it was announced that Warren Buffett was building a stake in the airline. 

Ukraine International Airlines, is partly owned through a network of offshore companies by Ihor Kolomoisky, an oligarch with close ties to President Volodymyr Zelensky, so of course there are rumors that this all ties back to Trump sending a warning to Zelensky to keep his mouth shut but hat would seem a bit much, even for Trump, though it is a crazy coincidence that outside inspectors won't be welcome due to the weekend war (that seems to be over) so "technical issues" it is and we'll all move on and accept it, right? 

All this peace breaking out has sent Oil (/RB) plunging back down to $62 from $65.65 yesterday morning and Gasoline (/RB) fell from $1.80 back to $1.70 as the President declares all is well and has, so far, failed to mention the plane crash – so it will be interesting to hear what he has to say this morning.

The markets don't need to wait, apparently, as it looks like we'll be up at the open – as if none of this ever happened which just brings us back to what I was saying yesterday morning about it being ridiculous to pretend all is well when clearly it isn't.  Even as I write this, International Fugative, Carlos Goshn, who fled Japan over the weekend, is of course giving a press conference in Lebanon where he calls the Japanese justice system rubbish and says there is a vast conspiracy against him and he's really a freedom fighter – fighting for the rights of all oppressed Billionaires

As Trump says:  "All is well." 

 


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  1. Good Morning, All!

    We're back for 2020 with our regular LIVE webinar, 1pm Eastern, here:

    https://attendee.gotowebinar.com/register/3601073608385528333


  2. Good morning!

    I fell asleep yesterday afternoon and woke up after about 90 mins and then went back to sleep around 9 and woke up at 12 and was wide awake until 5 when I decided I did need a nap or I wouldn't make the Webinar.   I just woke up but I guess I'm still messed up from my trip because this never happens to me – I don't even set alarms because I'm always up early in the morning.  I did set an alarm last night – either it didn't go off or I turned it off in my sleep.

    Anyway – good to go now and what a roller-coaster we're on!

    Just keep in mind, this is how quickly things can change!

    Another chance to go long /KC at $120.


  3. Good Morning!


  4. Iran's 'attack' was for those grieving in Iran, nothing more….


  5. Walgreen's (WBA) doing what it does best – disappointing on earnings.


  6. Winston could not miss to post this again:

    •  yodi
    January 8th, 2020 at 8:57 am | Permalink | Tweet thisIgnore this user
    Winston, in reference to your last post, it reminds me of a game called Mikado, where you drop a bunch of sticks and you have to pick up each stick without moving the other.
    However one thing you will make the broker happy with all your options in play and at the same time you will have sleepless nights while watching all your option moves.
    I rather stick to armchair!!!!!!


  7. Yodi – I think you may have misread – that is a list of possible alternatives, all with different pros and cons – not a cluster bomb of total option combination trades to be put on at the same time.

    ++++++++++++++++++++++++++

    Some alternatives (among many others) for managing runaway short calls:

    My suggested hierarchy of protecting short calls:

    Buy long stock (before the short call goes ITM)

    Buy synthetic stock (ATM long call / sell ATM long put)

    Buy a risk reversal – close to ATM long call spread financed with the sale of ATM short put spread (widen the strikes as desired to get the right risk profile

    Buy 70 delta long calls

    Buy a ZEBRA (Zero Extrinsic Back Ratio) sell 1X ATM call, Buy 2X ITM call such that the sold extrinsic of the short call equals the bought extrinsic of the 2X long calls – that sounds opaque but look at the option chain and it becomes clearer

    Buy a ratio call – sell 1X call – buy 2X long calls – same expiration date

    Diagonallize the ratio call – sell 1X front month call / buy 2X front month +1 expiration. The plan is you hope the front month short call expires worthless leaving you with 2X the long calls.

    Sell ATM puts

    Model all these options (individually) using ThinkorSwim ANALYZE tab to see the risk profiles and how much positive delta you can pick up. 

    And of course – the challenge of any adjustment strategy is recognizing that you may just be setting yourself to having to adjust the adjustments!!! That sucks.

    Please feel free to add to the list of long delta strategies to assist managing runaway short callers


  8. Thought you were doing them all at the same time sorry!


  9. Iran/1020 – The whole thing seems like theater.  Trump used it for a distraction and Iran is using it to get their own people in line and Iraq is using it as an excuse to kick the US out of their country… 

    WBA/Winston – I think this might be a chance for us to add them in the new portfolios. The "disappointment" is $1.37/share vs $1.41 expected though 2020 guidance remains at $5.93 per $55 share with Retail Pharmacy Sales up 1.6%.  Though Gross Profit is down 5.2% from last year in a tougher environment, it's already been offset by cost savings so Net Profit is overall flat.

     

    I think $60 is the right target for WBA so we'll let them find a floor and then make a post-earnings play though I'm keeping an eye on the 2022 $50 puts as they are almost $6 for a net $44 entry, which would put the p/e below 8.

    Another slap in the face for oil:

    Crude inventory unexpectedly rise

    • EIA Petroleum Inventories: Crude +1.2M barrels vs. -3.6M consensus, -11.5M last week.
    • Gasoline +9.1M barrels vs. +2.7M consensus, +3.2M last week.
    • Distillates +5.3M barrels vs. +3.9M consensus, +8.8M last week.
    • Futures -1.44% to $61.8.

    HUGE builds on product!  How can people think demand isn't falling off a cliff?  No matter how much they cut back, we still have too much!  


  10. By the way, once upon a time, when you saw oil, gasoline and distillates all building like that, people would be very concerned that we were heading into an economic slowdown.  Once upon a time…

    Our Commander in Chief will address the Nation at 11.



  11. Would not want to take a position before 11:00 AM EST! Who knows what Trump will announce – either we pull out from the Middle-East completely (and cede it to Iran and its proxy) or we start a war with Iran. Or anything in between. Not many good options. But all is well though.


  12. Transocean scores $353M in new backlog

    • Transocean (RIG -3.4%) says it secured an additional $352.9M of contract backlog from new contracts and extensions since its October fleet status report.
    • RIG says it sees the result as a sign of an improving offshore drilling market, as "customer demand for the highest specification ultra-deepwater floaters now equals or exceeds the number of marketable rigs currently available in many areas."
    • Among five new contracts disclosed, RIG's Development Driller III semi-submersile rig was awarded a one-year contract with an undisclosed operator offshore Trinidad and Tobago at a $250K dayrate, and its Deepwater Asgard drillship won a 200-day contract by Beacon in the Gulf of Mexico at a $220K dayrate.

    BAML breaks down the airline sector

    • Bank of America Merrill Lynch issues new price targets on a number of airline stocks as part of its 2020 look at the sector.
    • BAML lifts its PT on Alaska Air (ALK +1%) to $70 from $67 vs. the average sell-side PT of $78.36 and a current price of $66.90.
    • BAML hikes its PT on JetBlue (JBLU -0.5%) to $17 from $16 vs. the average sell-side PT of $21.80 and a current price of $18.36.
    • BAML drops its PT on United Airlines (UAL +0.5%) to $100 from $102 vs. the average sell-side PT of $109.68 and a current price of $87.24.
    • BAML lowers its PT on American Airlines (AAL +0.7%) to $30 from $31 vs. the average sell-side PT of $36.42 and a current price of $27.49.
    • BAML raises its PT on Delta Air Lines (DAL +1.9%) to $59 from $57 vs. the average sell-side PT of $67.05 and a current price of $58.80.
    • Also, the firm dropped it rating on Southwest Airlines to Neutral from Buy and set a price target of $60 vs. the average sell-side PT of $59.42.

    Embraer partners on drone delivery systems

    • Saying the "cargo market is prime for an autonomous aircraft," Embraer's (ERJ -0.2%) innovation subsidiary, EmbraerX, has signed a collaboration agreement with Elroy Air.
    • Founded in 2016, Elroy has developed a VTOL aircraft, called the Chaparral, which can carry between 250 and 500 pounds over 300 miles.
    • The aircraft also features a hybrid-electric powertrain, requires no charging stations and loads and unloads cargo autonomously.

    Visa, Mastercard, Global Payments among KBW top picks in payments

    • Keefe, Bruyette & Woods analysts will be looking closely at payment companies' 2020 guidance as they report Q4 2019 earnings.
    • Its top picks in the payment space are Visa (V +1%), Mastercard (MA +1.3%), Global Payments (GPN +0.9%), FleetCor Technologies (FLT +1.4%), and Wex (WEX +0.3%).
    • For Mastercard, KBW analyst Sanjay Sakhrani sees potential upside to EPS this year from data & services M&A and stock buybacks.
    • At Global Payments, KBW sees strong pipeline for accretive M&A and underlying organic growth should remain strong, Sakhrani writes.
    • For Fiserv (FISV +0.9%), sees upside for synergy targets; "We believe that the Street is expecting a revision at the upcoming Investor Day in March 2020."
    • M&A and strong organic growth could deliver upside to 2020 EPS for FleetCor.
    • Also recommends Adyen (ADYEN), a non-U.S. issuer, for institutional investors only, as the company's securities may not be eligible for sale in all states or jurisdiction.

    Macy's details store closings plan

    • Macy's (NYSE:Mconfirms it will close 28 Macy's stores and one Bloomingdale's location as part of its annual review.
    • The company plans to updates its three-year strategy at a special event on February 5, which could involve more news on underperforming stores.
    • Shares of Macy's are up 0.7% after showing a gain or more than 4.0% earlier today.
    • Previously: Macy's gains on Q4 sales beat hopes (Jan. 7)
    • Previously: Macy's cuts more jobs (Jan. 8)

    Services is king as Apple News hits 100M MAUs

    • Demonstrating key Services business growth as iPhone sales decline, Apple News (AAPL +0.1%) has reached 100M monthly active users vs. 85M in the prior year.
    • The company also said that App Store customers spent a record $1.42B between Christmas Eve and New Year's Eve, a 16% increase over last year, and $386M on New Year's Day 2020 alone, a 20% increase over last year and a new single-day record.
    • Apple's overall services segment revenue rose 16% to $46.3B in its most recent fiscal year ended on Sept. 28, 2019, while its iPhone segment sales fell 14% to $142.4B.

    Iron ore jumps to five-month closing high

    • Chinese iron ore futures rallied to their highest close in more than five months, on hopes of strong restocking demand from mills ahead of local holidays.
    • The most active May contract for iron ore futures on the Dalian Commodity Exchange jumped as much as 2.8% to 685 yuan/ton ($98.69) before settling +2.1% at 680 yuan, the highest close since Aug. 2.
    • Traders do not expect the flareup in Middle East tensions to directly impact iron ore supply due to limited output from the area, but higher crude oil prices could increase the freight costs of iron ore shipments.

    Nomura cautious on Carnival

    • Nomura Instinet cites four reasons for keeping a Neutral rating on Carnival (NYSE:CCL) to start the year.
    • Analyst Harry Curtis points to higher fuel costs for Carnival that are not reflected in consensus, a lack of pricing power, higher leverage and flat 2020 EPS growth at best. He warns that Carnival could guide its full-year profit guidance lower in the coming weeks due to the higher fuel costs in the market.
    • "We have increased our 1Q EPS est., which is still $0.10 below consensus. Our below-consensus 2Q est. also assumes a dry dock to repair the Carnival Glory. Both our 2020 and 2021 forecasts assume continued pricing challenges in Europe and Alaska due to CCL’s aged less competitive fleet," writes Curtis.
    • Shares of Carnival are up 0.25% premarket to $48.65. CCL is up 20% over the last 90 days.

    Aramco hits fresh low on Iran tensions

    • While Mideast tensions have boosted oil prices and producers, Saudi Aramco (ARMCO) is not benefiting from the gains due to concerns about its proximity to the conflict.
    • Aramco shares opened at 34 riyals ($9.06) this morning, their lowest level since the oil giant began trading on December 11, and down about 12% from last week's peak.
    • The market is also concerned with further possible attacks on Aramco facilities, according to Russ Mould, AJ Bell's investment director.

    Earthquake knocks out power in Puerto Rico

    • Following a week of tremors, a magnitude-6.4 earthquake rocked Puerto Rico on Tuesday, triggering a blackout on the island that is still recovering two years after Hurricane Maria.
    • The territory's federal board, which last year struck a $35B debt restructuring deal with creditors, authorized $260M in emergency reserve funds for expenses related to the quakes.
    • More than 133K Puerto Ricans moved to the U.S. mainland in 2018, accelerating an exodus that has further damped the local economy.

    Boeing 737 crashes in Iran, no survivors

    • A Boeing (NYSE:BA) passenger plane operated by Ukraine International Airline crashed minutes after takeoff from Tehran killing more than 160 passengers, according to Iranian news agencies, which blamed the crash on technical problems.
    • The 737-800 is a predecessor of the 737 MAX, the type that regulators grounded worldwide in March after two fatal crashes in a span of five months.
    • "We are aware of the media reports of out Iran and we are gathering more information," Boeing said in a statement.

  13. WBA – you would think that the management would realize – my goodness they have had enough attempts -  that it is rather better to under-promise and over-deliver than the other way around.


  14. Samsung expects 34% profit drop in Q4

    • Samsung Electronics (OTC:SSNNF,OTC:SSNLFexpects a 34% drop in its Q4 operating profit to $6.1B, which is a smaller drop than was expected and could indicate a slight memory demand recovery.
    • For the full year, the operating profit dropped 53% to $23.6B.
    • Q4 revenue fell 0.5% Y/Y to about $50.2B.
    • A source tells Reuters that Samsung's chip and mobile earnings were stronger than expected, while display lagged.
    • Detailed Q4 results will come out later this month.

    Tesla price target hiked to Street-high $556 by Argus

    • Argus Research analyst Bill Selesky raises his 12-month price target on Buy-rated Tesla (NASDAQ:TSLA) shares to a Street-high $556 from $396, citing stronger than expected Q4 deliveries among other reasons.
    • "We are raising our 2020 EPS estimate to $5.96 from $4.40 to reflect improved economies of scale in 2020 production and delivery results and a better than expected ramp up of vehicles produced at the Shanghai factory in China," Selesky says.
    • The analyst expects TSLA to improve performance over time, despite recent production delays, parts shortages, labor cost overruns and other difficulties, and he also thinks the company will grow in other segments such as energy generation.

    U.S. crude supply fell 5.9M barrels last week, API says

    • The American Petroleum Institute reportedly shows a draw of 5.95M barrels of oil for the week ending Jan. 3.
    • Gasoline inventories reportedly show a build of 6.7M barrels and distillate inventories show a build of 6.4M barrels.
    • Data from the Energy Information Administration, to be released tomorrow, are expected to show crude inventories fell by 3.7M barrels last week.

    Google Assistant can read, translate websites

    • Google (GOOG,GOOGL) Assistant will soon be able to read long-form web content and translate the text from one of 42 languages if needed.
    • Android device users will need to load up the site and then activate the feature with "Hey Google, read this page" or "Hey Google, read it."
    • The feature, which could help visually impaired users, will roll out later this year

    Markets need to prep for Bernie – Jeff Gundlach

    Image result for bernie sanders socialist

    T-Mobile COO confident Sprint deal goes through

    • While testimony has wrapped in the trial of several states vs. Sprint/T-Mobile, the latter company's COO says you can't rule out a settlement.
    • Mike Sievert told Citi's Global TMT West conference that a settlement with the suing states is "never off the table" and that he's confident the acquisition of Sprint will be completed.
    • Sievert is set to succeed John Legere as CEO of the company on May 1.
    • His comments came after the company reported strong subscriber additions for Q4, including 1.9M total net adds, 1.3M branded postpaid and 1M branded postpaid phone. Cable and Verizon were tough competition for customers in the quarter, Sievert said.
    • T-Mobile (NASDAQ:TMUS) finished the day up 0.4% and is up 0.1% after hours; Sprint (NYSE:Sslipped 1.7% and is down 0.2% postmarket.

  15. WBA/Winston – I think it's investors that need to work on their expectations.  Above is an item by an analyst who says since TSLA is going to make $6/share – he's raising the target to $556 while WBA actually makes $6/share NOW and can't find analysts to go along with $60/share. 

    Year End 31st Aug 2014 2015 2016 2017 2018 2019 2020E 2021E CAGR / Avg
    Total Revenue
    $m

    76,392 103,444 117,351 118,214 131,537 136,866 139,905 143,834 12.4%
    Operating Profit
    $m

    4,194 4,668 6,269 5,484 6,111 4,998     3.57%
    Net Profit
    $m

    1,932 4,220 4,173 4,078 5,024 3,982 5,235 5,258 15.6%
    EPS Reported
    $

    2.19 3.98 3.66 3.78 4.92 4.31     14.5%
    EPS Normalised
    $

    2.35 4.34 3.89 4.80 5.72 5.45 5.93 6.15 18.3%
    EPS Growth
    %

    -21.1 +84.4 -10.3 +23.2 +19.3 -4.80 +8.86 +3.78  
    PE Ratio
    x

              10.9 10.0 9.64  
    PEG
     

              1.23 2.65 2.68  
     

    Oh no, please save us from the steady (other than the merger year) top and bottom-line revenue growth!!!  


  16. TLSA is now $83Bn and WBA is $52.5Bn and here's TSLA's numbers:

    Year End 31st Dec 2013 2014 2015 2016 2017 2018 TTM 2019E 2020E CAGR / Avg
    Total Revenue
    $m

    2,013 3,198 4,046 7,000 11,759 21,461 24,420 24,424 30,202 60.5%
    Operating Profit
    $m

    -61.3 -187 -717 -667 -1,632 -388 -14.8      
    Net Profit
    $m

    -74.0 -294 -889 -675 -1,961 -976 -828 -97.9 1,053  
    EPS Reported
    $

    -0.620 -2.36 -6.93 -4.68 -7.47 -5.72 -4.78      
    EPS Normalised
    $

    -0.620 -2.36 -6.93 -4.68 -7.47 -5.21 -4.16 -0.418 5.66  
    EPS Growth
    %

                       
    PE Ratio
    x

                    82.9  
    PEG
     

                    0.730  
     

    Which one would you rather buy with your $100Bn?  

    How is that even a question?  TSLA is pure madness and WBA is madness on the other end of the spectrum.  


  17. TSLA would satisfy my gambling instinct – but I'm in rehab now so I'll have to pass on that one.

    I'm long WBA at $50, I am just a concerned investor challenging management to step and take ownership of managing expectations. They know that analysts expect guidance on the financial statements – (to the penny) every quarter – so step up and take ownership of that issue. Investor Relations need to be doing their part by communicating the story effectively.


  18. An interesting article about the future of automobiles, who do you think will be in the photo?        https://www.fastcompany.com/90444002/the-next-big-thing-in-transportation-the-un-car





  19. There's been a lot of good stuff on the board on rolling and adjusting positions these past few days. For those who would like to take a peek into the PSW gold mine, here's a link to a postfest on the subject – from way back in November 2007:

    Basic Tactics – Rolling Options

    Repetition is the Mother of Learning

     


  20. Winston – thank you for the link to rolling.


  21. Trump didn't say much – markets like that. 

    Expectations/Winston – Good point.

    Future of autos/Advill – I think anyone who doesn't have one of these will be gone in 20 years:

    Image result for flying car

    There are now dozens of working variations and, while people fret about flying cars falling out of the sky or air chaos, the reality is they'll be computer-driven and adding altitude as a factor in transportation will increase the available "road" space by 5 cars per 100 feet (20 vertical ft per car) so even following the same road paths and using 300 feet of air space would reduce congestion by 90% and reduce infrastructure costs to $0 – no more road repairs, no more bridges….  Too many positives to think this isn't going to happen.   

    Keep in mind that, 20 years ago, these were state of the art:

    Top Consumer Rated Luxury Vehicles of 1999 - 1999 Mercedes-Benz CL-Class

    Top Consumer Rated Luxury Vehicles of 1999 - 1999 Toyota Land Cruiser

    Top Consumer Rated Luxury Vehicles of 1999 - 1999 BMW M3

    Most Fuel Efficient Luxury Vehicles of 1999

    Things change pretty fast…

    SUN is an interesting long-term short given this situation as they are a pretty pure gas-station play.  

    Tactics/Winston – Very cool, thanks!  


  22. Holy cow, up 225!  

    That's kind of a pattern to this market, slightly down on a crisis that's quickly resolved and then higher than we we were before the crisis.  What doesn't kill it makes it stronger!

    Hakuna matata:

    Reality is seriously up for grabs these days.  


  23. Should Robots Pay Taxes?




  24. TSLA to the moon

    Probably a waste of $ but bought the 2022 520/660 spread for $44 to hedge my short 480 calls


  25. Short Webinar today as I have to go meet Maddie at the airport, so I'll be gone after that.

    15 mins to webinar time!  


  26. Ugh.  I'm contemplating throwing in the towel, and just rolling a portion of my loss to the short 2021 $400/500, 450/550 call spread.  This is relentless, and the more you reduce your delta, the harder you make it to get your money back on the way back down.  


  27. TSLA/Palotay – Holy crap!  Another $20 today.  Super short-squeeze going on and what you are saying is exactly why this is happening – bears are forced to become buyers to get out while another one of Elon's pals gives them an upgrade.  


  28. Hi Phil,

    I really struggle with reading /CL numbers – and I have done so since our first live PSW event in Las Vegas!  You mentioned crude a couple of times today which made me think I should just ask some questions.  Around 1035 today your post mentions the EIA report Crude inventory up 1.2 (consensus was -3.6 which seems like a big miss to me) and last week it was -11.5.  Then we have the ADI report showing supply down 5.95.  How do I interpret all of this?  Does this mean that last week inventory was down 11.5 million barrels and in the week since we have made up that 11.5 and added an additional 1.2 million barrels?  When ADI says supply is down 5.95 does that mean that production is down?  How do you trade this information?

    Thanks!


  29. Well they got me.  I switched to the short call spread position.  Under $400 in January 2021 will get me half my loss back.  Expensive lesson…


  30. Sorry about TSLA now 492 my play yesterday buy at 465.40 and sell the Feb 480/390 strangle for 37.92 would have been a better deal. the call would be 12$ ITM today capital gain 26.60 and the short put well lost already 1.80. the same strangle now  49.35 an increase of 11.43 against a capital gain of 26.60.

    How about that Winston!!!!


  31. The power of buying the stock!!!!!


  32. Yodi – nice play, just not quite as nice as my one::) :) – and you don't tie up all that cash in the stock!!! And even my prayers were answered for a short squeeze (but I agree this is not fun if you are short):.

    How about selling the Feb 21 $475 straddle for $70 and then protecting the upside by BUYING the Feb 21 $485 call for $28.50. 

    That caps your upside risk to $10 – so you get to keep $70 – $28.50 = $41.50 as you pray for a short squeeze and then you got $41.50 to protect yourself on the downside.

    Current option pricing on the Feb 21 options are predicting a $67 move up or down. See how those straddle prices look about right (there ain't any free money going around).

    Earnings on Jan 29.

    But again it was just just a vapour trade – absolutely no intention of placing it with real money.

    See how crazy you can get when you're using paper money.


  33. Not bad. You right all in theory. there for never bet on high fighters

     


  34.  Pot stocks are higher following NY Times story indicating that New York Gov Cuomo intends to pursue the legalization of marijuana in 2020.


  35. SKT is having a great day. My short $15 puts showed a nice profit yesterday but are in the red today – premium has really increased. 


  36. Windston I set up your TSLA trade on paper Feb 495/495 and bought the 505 call credit about 79.50 and cost 36.60, so we see how it will work out.


  37. Good luck – it will  I'll be interesting – thanks


  38. Towel/Palotay – We went over the TLSA numbers for the STP, which has 5 short March $400s and it turns out there's still plenty to work with so I'm going to keep at it. 

    /CL/Dan – As a rule of thumb, I ignore API other than to see if that's why oil spiked on Tuesday night/Wed morning.  API is a private survey run by the oil companies that consists of just calling people with storage facilities and asking them how much they have.  Like the Fed Beige Book – it's really just an estimate based on anecdotal information.  EIA is a pretty serious Government Report that requires accurate readings from people who want to maintain their licenses.  

    And yes, as I explained in the Webinar, last week had a draw because gas stations, especially in the North, want to have their tanks topped off ahead of the holidays but AFTER the holiday (as it has been with every holiday this year) it turns out a lot less fuel was used than they thought – so it piles up as gas stations don't re-order in the week after the holiday.  

    Overall, demand is down for the long run but, for the short run, I took a long on /RB at $1.645 as it's a bit too low and we have more holiday weekends coming (MLK, President's Day).

    /NG back to $2.15 already.  

    NY/Albo – That's fantastic!  Ken (New Age) is in Michigan now and also working on a deal in Chicago.  Happy to go off to NY later in the year if they open that up.

    SKT/Ati – About time.

    OK, have to go get Maddie at the airport and then we're off to Grandma's. 

    See you tomorrow (on time, I hope).


  39. Winston only on paper, my concern would be if that stock goes below 452 you in for a fat stock you possible do not wish to own at that price.


  40. MU / Phil – Thanks – I like. the BCS to protect the shorts ….  we'll see how it goes.  Samsung had a decent earnings and called out positives on the Men market.   Thank you for your help on this.


  41. Winston,

    Your trade idea on ABBV 89.52. Sell May strangle 87.5/90 for 8.82 and buy the May 92.5 call for 2.94, net 5.88 having a down side protection to 81.62.

    A more tradable idea than TSLA and if assigned at 81.62,you got a stock paying 5.27%.

    Or  the PMTrade buy the Jan22, 75 call @ 17.65 ( jan20,10, 75 call has a value of  14.00) Sell Jan 22 60 put for 4.00 and sell the May 87.5/92.5 strangle for 7.75. On a theoretical  zero investment you receive 7.75. Or on your present net cash outlay 1765.00 less 405.00 gives you 1360.00.
    Here we are looking at 7% income per month.








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  44. Yodi – thanks for thinking along with me – and it is so helpful to other people's ideas of a potential trade setup..

    I think your trade on ABBV works very well. The only thing I would say is  that given the premiums I may widen the strangle slightly:

    Sell May 20, $85 put / $92.50 call ; credit of $$6.70

    Buy May 20, $97.50 call ; debit of $1.50

    Overall credit of $5.20


  45. Yodi – PMTrade – that's a green for go!!!!

    I'm already long the 2022 $80 calls (synthetic – so zero cost because of the sale of the Jan 2022 $80 puts),

    I have the Jan 2022 long $77.5 puts as the disaster insurance.

    I constructed that setup because I put it on during a time when there was more uncertainty in the market. I was rather conflicted because I believed that PM should be a lot higher, but with the issues on vaping etc a lot of question marks on the effect on PM). So I hesitated selling shorter term short calls and short puts.

    But I fully agree with your approach to sell the May strangle setup – provides some nice upside and a cushion on the downside. Thanks.


  46. Yodi – on that May PM strangle I am only seeing max $6.55 for the short sale?