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Thursday Failure – Trump Shuts Travel, Provides No Solutions, No Stimulus – Market Tanks (again)

Down and down we go.

The Futures are off another 5% this morning and that is their limit (like Monday) so it's very likely we're facing another trading halt at the open with a 7% drop in the indexes to start our day.  The S&P 500 is already testing the 2,600 line 10% lower than it was at Tuesday's close (2,882)!  This is already the bottom of the range I predicted for the S&P last night on Money Talk (part 2 is here).  It's also 10% of the 15% that Goldman Sachs said we would fall yesterday – we just didn't think they meant "tomorrow"…  

I decided to post part 2 of the interview because, rather than rehash all the doom and gloom you can hear from anyone this morining (I was all alone in my warnings last month) I want to be constructive and talk about all the great things we can buy.  I am NOT ready to call a bottom yet – the markets could still drop substantially lower if this virus spreads out of control (as I said above) but, as I also said above – you have to be prepared for a move up as well as a move down though Trump's misadventures in crisis management last night do seem to make down the more likely case.

Still, we added three trade ideas to our Money Talk Portfolio and there are PLENTY of blue chip stocks that are going on sale AND the Volatility Index (VIX) is going to be in the 60s this morning and that makes it a fantastic time to SELL options – especially put contracts on stocks we REALLY want to own if they get cheaper.  

We will stay away from banks, insurance and travel stocks as we don't know how bad things will ultimately get and we will keep our entries small on the expectation we very likely may have to roll them or double down on them (or both) if the market drops another 20% but here's the kind of bargains we can engineer for ourselves in this kind of market.  Do be aware that margin requirements can jump up as the stock goes lower so you should have the cash available to actually buy these stocks.  ThinkOrSwim ordinary margin is noted for each item:

  • Boeing (BA) – It's hard to call a bottom on BA but they will be close to $160 this morning and that means we can sell 5 of the 2022 $110 puts for $27.50 ($13,750) in the LTP for just $3,707 in margin.  This one could be a rough ride.

  • Cisco (CSCO) – Rarely goes on sale and this is a doozy back at $35 this morning.  We can sell 10 of the 2022 $25 puts for $3.20 ($3,200) in the LTP to net in for $21.80.  $785 margin.

  • Hanesbrands (HBI) – HBI is one of our "safety" retailers.  They make ordinary underwear, which even people with the flu have been known to wear.  Down at $9.50 is impossible to resist as that's $3.5Bn for a company making $600M a year so 7x earnings AND they pay an 0.60 dividend, which is 6% on this price.  We don't have to buy them for $9 to collect 0.60 though as we can sell 20  2022 $8 puts for $2.20 ($4,400) in the LTP to net us in for $5.80.  $519 margin.

  • IBM (IBM) – Our 2019 Stock of the Year is back where we came in in 2018 at around $110 and we can sell 5 2022 $80 puts for $10 ($5,000) in the LTP to net in for $75.  $1,206 margin.

  • Intel (INTC) – Hasn't been this cheap in a while and $50 is $220Bn in market cap for a company that made $20+Bn in each of the past two years.  We can sell 10 of the 2022 $30 puts for $3 ($3,000) in the LTP and net in for $27 – almost half that price.  $748 margin.

  • 3x Biotech ETF (LABU) – This index is completely falling apart, just caught up in the general selling that's going on in the market.  It fell 20% yesterday and another 20% this morning so VERY RISKY to catch this knife at $25 but we can sell 10 2022 $15 puts for $7.50 ($7,500) in the LTP to net us in for $7,500 on 1,000 shares so the risk/reward is pretty good.  Margin on that is $607 but we're also going to buy 20 of the 2022 $20 ($15)/$35 ($10) bull call spreads at $5 ($10,000) as that will be net $2,500 on the $30,000 spread with $27,500 (1,100%) upside potential if LABU can get back over $35.

  • Plug Power (PLUG) – This was on our "Stocks of the Future" list but it got away from us before we could buy it at $3 and now it's back to $3.15 this morning and we can sell 50 of the 2022 $2.50 puts for $1.10 ($5,500) in the "Stocks of the Future" Portfolio to net us in for just $1.40.  $1,369 margin.

  • TD Bank (TD) – This is a very solid bank that is not as exposed to the energy sector as other Canadian banks.  Testing $40 this morning is under $75Bn for a bank that made $8.5Bn last year and pays a 5% dividend ($2.37) but we're not paying that, we're just going to promise to buy 500 shares by selling 10 2022 $25 puts for $3 ($3,000) in the LTP to net in for $32 if asssigned.   $1,834 margin.

  • Tenet Healthcare (THC) – One of our biggest winners from last year is back on sale at $19 and it's tempting to back up the truck but we'll just sell 10 of the 2022 $15 puts for $3.50 ($3,500) in the LTP so we can remember to keep an eye on them.  $2,090 margin.  

  • ViacomCBC (VIAC) – They have done nothing but go down and we already have them so not for our portfolio but $18.50 is INSANE as it's $12Bn in market cap for a company that made $3.3Bn last year.  If anything, you would think more people will be watching TV as they stay home every night.  You can sell 10 2022 $15 puts for $4.50 ($4,500) to net in for $10.50.  $743 margin. 

That's a good starting set in what will hopefully be a rolling bottom call.  Remember, there may be A LOT more pain ahead so these are relatively small entries for our $500,000 Long-Term Portfolio and we're collecting $43,350 in CASH!!! plus we have $27,500 of potential upside in LABU all against just $9,901 in margin and THAT is how we play a crisis!

Keep in mind, however, that margin requirements can go up SUBSTANTIALLY if these stocks drop 20% so you have to REALLY be prepared to own them or else – keep tight stops on your losses.  If S&P 500 can't hold 2,500 – we are in DEEP TROUBLE!

Let's hope not…

 


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  1. Good Morning!


  2. Does anyone think tdump was told he and his friends could make money on the way down as well?….


  3. I was telling my much younger colleagues that I went through 9/11 and 2008 with my business but this feels very different! Yes, money is at stake, but so are lives. In many ways, this feels more scary.

    And clearly Trump does not have the skills or temperament to get us through this well. How can you deal with people suffering when you have no empathy! They are still talking about kicking 700,000 people off food stamps! Who the heck does that – I mean WTF!


  4. On the positive side, it looks like the virus is slowing down in Italy. I guess keeping people at home does help!


  5. Good Morning, Everyone!

    The webinar replay is up! 

    Youtube:

    https://youtu.be/fSbREnODDyA

    BitChute:

    https://www.bitchute.com/video/pqPAriwwOVVx/


  6. That's great news about Italy! Hope we follow their containment lead ASAP. It'd be great to sit around laughing about how unnecessary the lockdowns were in a couple of months, wouldn't it?

    We'll always have TSLA I guess… it only took the world grinding to a halt to make a nice profit in there. 


  7. Added the old lines for reference!


  8. Could also be that Italy is not updating their reports! But Japan took some drastic measure like closing schools very quickly and it looks more contained there.


  9. My son'n HS in SF just closed – all private schools in Santa Clara County now closed – till end of month. Not all athletic events and gatherings cancelled.  Not sure of Public schools but assume these will close this week as well.   this should help.  No gatherings greater than 1000 anywhere.


  10. My son'n HS in Santa Clara Count ( CA)  just closed – all private schools in Santa Clara County ( Silicon Valley) and SF now closed – till end of month. No all athletic events and all gatherings cancelled.  Not sure of Public schools but assume these will close this week as well.   this should help.  No gatherings greater than 1000 anywhere.


  11. Phil – can supposedly make money selling AMC 50 cent puts (though not sure if really offered).  Could they really fall below that?  Surely some breakup value?

    Is USO a good candidate for an oil play?  The option prices are super high but how low can it go?


  12. That's the way to go at this moment! And from what I read (and Snow can correct me), kids have been very immune to the virus as far as bad cases are concerned but still carry viral loads even when they show no symptoms. So let's keep them home!


  13. BDC showing some prescience on MUB yesterday, ouch. Time to halt the market for a few days yet?


  14. Best stock market ever! Fool…


  15. St Jean-I don't understand when I hear that this virus has no vaccination avail and there is no immunity against it how children can escape? Adults, you would think logically have developed More immunity not less. Apparently what I can ascertain because it is "novel" meaning new that the threat is extreme because we are all equally able to spread it and get sick.


  16. I said last night that we could see 1000 on the Russell and we are not far!


  17. Virus / Pirate – Not sure why, but some reasons, children seem to develop very mild cases or show no symptoms on average. Maybe doctors on the board could explain why!


  18. Good morning and wheeeeeeee!!!!

    Europe is down 10% so this is going to be rough. 

    Even CNBC sounds depressing this morning.

    Dollar rally is not helping:

    5 mins to re-open (cue scary counting sounds).

    Containment/StJ, Ati – There's talk of a 2-week paid national holiday but not sure how that helps small businesses that won't make money.  Not a fun holiday if you are supposed to just sit home and try not to touch anyone…

    Still, the main goal is to slow the virus before it crashes our health-care system and, sadly, it takes very little to crash our health-care system.

    Nice with the old lines, StJ.  

    That yellow line is very scary – global cases rising faster than China and still there's a massive lack of testing so probably much worse than it seems (and it seems HORRIBLE)!    Deaths are still 6% of outcomes – that's been very consistent and is very underplayed.   Look at Italy with 12,462 cases and 827 deaths already.  

    AMC/Tangled – They have tons of debt, no cash and 1,000 theaters to pay bills on every month and they may be shut down until June after Q1 is about 50% below last year so yes, they could go below 0.50.   The ask on the Jan $3.45 puts is $5.90 – that should tell you something!

    Ouch, down 2,000 on the re-open!


  19. What do you think about USO as an oil play…buying some and then selling calls?


  20. Is it worth buying an SQQQ bcs?


  21. The Bug/StJean et al – general immunity is often enough to keep you from catching a bug. People seem to to think, and this drives a lot of the panic, that if you're exposed to a bug you'll get the disease. Not so. With COVID-19, that Ro of 2.5 (or whatever it is today) means that each infected person will share the bug with an average of 2.5 people. The rest will dodge it – not a big enough dose, stronger immune systems, whatever. And youth.

    As for asymptomatic spread, yes, it happens – but coughing those bugs out into the local air is a lot more effective. I saw some research out of China showing that the bug spread almost exclusively among household contacts, and even that was at a 15% rate. Korean data should be more revealing, and once we get the Seattle Virus Watch data, we'll have a real handle on it.


  22. The Dow is now 5% higher than when Trump took office! NYSE is 8% lower…


  23. Heh. Remember how we laughed because it seems Trump uses the market indices as a report card on his performance? Wonder how he feels about that now that it turns out to be accurate…..


  24. USO/Tangled – Yes, we have it in the STP.

    USO Long Call 2020 17-JUL 10.00 CALL [USO @ $6.94 $0.00] 100 1/27/2020 (127) $7,400 $0.74 $-0.58 $0.59     $0.17 $0.00 $-5,750 -77.7% $1,650
    USO Short Put 2020 17-JUL 11.00 PUT [USO @ $6.94 $0.00] -20 1/27/2020 (127) $-2,580 $1.29 $2.84     $4.13 $0.00 $-5,670 -219.8% $-8,250

    USO 2022 $3 calls are $4.10 so not much premium in those with oil at $30 so I like them as a straight buy as you can make a quick 50% on a small move back up.

    Kids/StJ – Good point.  

    MUB/BDC – Great call – thanks! 

    March 11th, 2020 at 12:24 pm | (Unlocked) | Permalink |

    Notice it took a very long time into the 2008 crisis before MUB crashed and, even then, it recovered fast so a spread won't work but we can grab 10 of the Aug $110 puts for $1.75 and maybe we get lucky in the STP – half off at $3.50 to make it a free trade.  

    The puts are $3 already!

     

    Kids/Pirate – From what I'm hearing the condition of your lungs is critical to whether or not the virus is dangerous.  Smokers do very badly as well as old people and people who live in polluted places that cause lung damage – it seems to give the virus little nooks and crannies in the lungs to settle into.  Children have lovely pink, new lungs and so they are relatively unaffected by the virus.  They get it – they just don't notice.  Just like kids thought the plague was funny way back when as it generally only killed adults:

    Image result for ring around the rosie animated gif

    "Ring-a-ring-a-rosies

    A pocket full of posies

    Ashes, ashes

    We all fall down…"

    Gotta give /ES a shot on the long side if it crosses back over 2,500 (very tight stops below).  21,250 on /YM, 7,350 on /NQ and 1,150 on /RTY.  


  25. Snow – Based on what you have seen, do you then agree that children are less susceptible to show severe cases? It's generally what happens with these viruses, but not always true.


  26. SQQQ/Wing – I think it's a bit late at this point.  Hopefully, this is the blow-off bottom (hitting GS's 15% drop goal from yesterday).


  27. Phil//  What are your thoughts on NLY?  It is at a 52 week low at this point.  Thanks.


  28. The Bug/StJean – yes, as usual the dang kids get off light. It begins to look more and more like smoking is the key. As the Korean data come out that should become more clear, as the cult recruited heavily among women in their 20s, who generally don't smoke. Italy's morbidity and mortality seem to be driven by smoking, too.


  29. LABU dropped to 20.51 today….


  30. STJ – The good news is that my long VIX position is completely offsetting the losses in VXX.  Which is a big relief.  The bad news, is that my margin requirements are going up fast.  Have you decided to roll up further, and sell more contracts yet?  It looks like I could roll all the way up to 80 on the VXX by doubling the contracts.


  31. TD/Phil:  I'm not getting any 2022 Expiration option for TD, nor $25 strike options for that matter.  Is it just me?


  32. I do wonder if oil has yet priced in no one driving or flying this summer.


  33. Phil/COVID 19

    good morning…maybe not so much?

    I am amazed at the ignorance of the political leadership.

    The Physicians and scientists are gutless and unwilling to speak out. Maybe Dr. Fauci came close, but nowhere near where he needed to be…they still have jobs to protect but they don't realize that there may not be much left to protect here.

    We have had 8 weeks to prepare. Between the CDC test hacks and egos in preventing private companies from developing tests, we have caused a pending medical crisis as well as a financial one, both exacerbating each other.

    Containing an epidemic for a rich nation is not rocket science. A newly minted Epidemiologist could come up with a plan in 24-48 hours. We have had 2 months! Our Chief is the worst culprit! 
    I have been telling friends for 2 months to watch the market fall…We need medical/epidemiology solutions ahead of monetary and fiscal stimulus….

    Waiting for another 20% down move like the 2008 scenario. UNLESS, we control this thing NOW!


  34. Phil – Do you think they will shut down the markets due to the virus, like they did after 9/11?  I've been hearing some people predict that.


  35. VXX / Palotay – I have rolled some to the 80 strike today. Margin is going up but manageable so far.


  36. COVID 19- SOMETHING in kids is making them resist this virus or tolerate it easily…if only we could find out what it is. I have not heard of any studies looking at this issue, ie., taking kids, looking for antibodies and other parameters in their blood and then tapping those to possibly treat the elderly and high risk people.


  37. Maya1: I was watching a doctor on youtube speculating that kids tend to lack memory T-cells that adults have built up throughout their lives that makes adults prone to exaggerated immune responses like the dreaded "cytokine storm". The overactive immune response is what tends to put normally, young healthy patients into the ICU.

    I think this its still speculative. I'm not an expert so take with grain of salt.


  38. Phil/CHL

    I have 10 of the June $35/40 bcs for $2.43/0.53, now $1/0.7. Also sold the June $37.5 puts for $1.5, now $4.90

    This thing went down too fast for me to do anything.

    any strategy you can come up with?

    thanks






  39. What's a good way to short the VIX?





  40. NLY/Rookie – Low rates are not good for Mortgage REITs as people refi and bust their margins.  Generally it stabilizes over time (lowers their borrowing cost) but it can cause a lot of short-term damage.  

    That is kind of crazy, though.

    LABU/1020 – That's how we get the good entries.

    TD/Kinki – My bad, that was Oct – just at the end of the chain and I failed to notice they didn't go out that far I guess but I can't imagine why there's no $25 – I'm sure it was there.  Well – NO TRADE ON TD THEN.

    Oil/Tangled – No way are they pricing in people not going anywhere (globally) – the builds could be astounding.  

    Control/Maya – This is the worst possible Administration for this to happen under.  Even Bush II turned to actual experts when things hit the fan – we've got Jared solving the virus, fresh off solving the Middle East. 

    Markets/Palotay – I doubt they'll shut them.  9/11 was shut because they physically lost their computer and phone connections in lower Manhattan, I doubt they will shut the markets if they are able to function.

    Kids/Maya – They get it, it just doesn't bother them.  

    CHL/Maya – Yikes, they got ugly!  Options only go out to Sept and Sept $35 puts are $3 so I'd do a 1.5x roll to those because I doubt people will cancel their phone service due to virus.  The June $35s are still about $2.40 so you can salvage that by rolling to the Sept $32.50s at about $3.50 and, when the short Junes expire, you can sell something else in Sept.

    VIX/Dawg – That's StJ's jam.

    Europe closing down 10% – hopefully they've been pushing us lower and it will ease off as they shut down for the day.


  41. Holy crap, look at /RB!  

    There goes the crack spread!


  42. My LMT buy order hit this morning.  I got shares at $318.  I also nibbled on BRK/B, DIS, MSFT, and GOOGL.


  43. DXD Hedge – I own 30 July 22/25 BCS.    Right now I can cash out at a little over 50% of max profit. At this point is it wiser to cash our and enter a new higher strike spread and take some gains or stay put to seemingly collect the rest of the spread?  I don't have the margin to sell the long calls and open a new spread while leaving the shorts open, so looking for potential alternatives.


  44. The S&P PE ratio was 25 back in January and of course experts told us that this time it was different – not a bubble. It's at 19 today and I don't see anything that I would want to buy right this minute! And it's at 19 based on earnings estimate that are sure to be revised!


  45. As for shorting the VIX – would not do it now. We still don't know how many cases we have in the US. There could be more shocks coming! And Trump is still in charge. 


  46. Still really appreciating the VIX/VXX discussions Palotay & StJ. I am not short the VXX but was short puts here and there. The 3000% gain on these so far has really helped as a hedge!

    Markets are the ONLY place I'm not all that nervous right now. Thanks Phil and everyone!


  47. COVID cannot be caught outside (like a large race, for example). This is my humble, non medical opinion. But look where it rips through – cruise ships, retirement homes. This whole thing is over-baked. We are starting to consider a financial collapse now (when stock and bonds both fall). For a disease that kills almost no one under 50 I'm not sure everyone staying home from school helps. NOt to go all dawgdaddy on you guys here, but doesn't this actually, purely from and callously from economic perspective and nothing else, solve a problem (pensions and entitlements)?

    Not sure why Gold/bitcoin are also falling but I expect those to rebound. Bitcoin could go to 18-25k. Gold should be at 3000. Pd Rh should be dead. "Should be" is my new operative statement.


  48. Sorry – that's 3000% gain on Mar VIX calls.


  49. Yup, that was a very smart hedge move from Palotay! Gonna be part of the strategy moving forward.


  50. Phil/SVXY

    how is the Sept 50/60 BCS. The volatility will defn go down as we approach summer and into summer.

    regards


  51. Phil,

    Buffet has a lot's of money. He will buy wise and will profit a lot.

    When it's time to buy BRK?

    Is it resonable?

    Thanks


  52. The Bug – the public policy move I would go for right now if I were king of the US would be to mandate paid sick leave for everyone, part-timers, burger-flippers especially. And pay for it somehow – it's the logistics of payment that would be tricky more than the amount. That would help slow the outbreak a lot, IMHO.


  53. LMT/Palotay – I wish I could say those are cheap but we're accelerating to the downside and tomorrow we head into a very uncertain weekend…  I'd be careful still.

    DXD/Music – July $22s are $14.75 but, without margin, there's not much you can do as it's a tight spread and DXD only goes out to Oct.  That's why we don't usually play them – no flexibility.   

    PE/StJ – Good point, it's like 2008 when we found out all those financial and real estate earnings estimates were total BS.  

    Dollar 98.25! 

    This kind of stuff doesn't happen…

    You're very welcome Ati – so glad to be of help!

    Problem-solving/BDC – I tried to start that conspiracy theory weeks ago, it didn't catch on.  Very much fits though.  Gold due to strong Dollar, Bitcoin due to its general uselessness. 

    SVXY/Pat – I don't know when we'll return to "normal" or what normal is at this point.  The VIX has been abnormally low for years and all these violent swings can cause SVXY to decay rapidly so, not something I'd bother with.

    BRK/Kgab – $180 is about where Buffett starts buying back stock on BRK/B.   That's $440Bn and they made $80Bn last year!  That was unusual though and we can assume they are good for $25Bn – even in a bad year.  

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

    194,699 210,943 215,114 239,933 247,837 254,616 272,201 283,407 5.51%
    Operating Profit
    $m

    28,131 35,068 24,254 18,696 28,623 28,913     0.550%
    Net Profit
    $m

    19,872 24,083 24,074 44,940 4,021 81,417 26,903 28,115 32.6%
    EPS Reported
    $

    8.10 9.82 9.81 6.82 1.52 33.4     32.7%
    EPS Normalised
    $

    8.10 9.82 9.81 6.82 1.52 33.4 10.7 11.6 32.7%
    EPS Growth
    %

    +2.04 +21.2 -0.076 -30.5 -77.8 +2,102 -67.8 +7.68  
    PE Ratio
    x

              5.83 18.1 16.8  
    PEG
     

                2.36    
     

    For the LTP, we can sell 5 BRK.B June 2022 $130 puts for $15 ($7,500) and buy 15 of the June 2022 $170 ($40)/$190 ($30) bull call spreads for $10 ($15,000) for net $7,500 and we can make a nice income selling calls on the way up.  The June $190 calls are $13 – not that we'll sell them now but just 5 of those makes $6,500 back!

    By the way, lots of portfolio plays in the post above – don't forget!

    Burger flippers/Snow – But who will make my burgers?   Would be better if we simply tested the Hell out of everyone like China/Japan and SoKo are doing.  Then, IF people are sick, you give them paid leave but no sense in shutting everything down.  


  54. SVXY – I'm going to take a small position – the Jan 21 30/40 spreads if I can get them for around a dollar.


  55. The Bug/Phil – yes, testing is fine but we don't have the test kits and they aren't 100% or even close. And Korea is doing paid sick leave in addition to all the testing. Also shutting down church services and that damn call center, but that's another story. I shudder to think what will happen if The Bug hits India.


  56. sorry the 40/50 spreads – they were at a dollar now already at 2, so may not do it


  57. This would have been a nightmare without the VIX hedge, but I'm still kicking myself for how fast I scaled in. I just rolled my $45 2022 VXX calls to the 80 strikes, at a 10 to 18 ratio.  This has a bit higher delta that my existing position, but way less margin requirement.  My VIX calls probably are not going to offset all of the delta if volatility keeps increasing, due to the higher delta of my new VXX position.  Which makes me nervous.

    Stj, are you still holding the VIX calls?  Mine are worth $7.2 right now, from a 0.15 basis!  I also have a bunch of the April 30/40 call spreads on the VIX, which judging by this action should hit full value.  So far I'm at a 13% loss to my portfolio from the strategy, which isn't terrible, but if it is this bad before businesses and restaurants start to shut down, what is going to happen when our cities look like Wuhan?  When does the average buy/hold investor start to panic and sell their ETFs? 

    I wouldn't be surprised to see the Dec 2018 lows, or worse.


  58. Seems the only solid hedge currently is stocking up on toilet paper.


  59. 500B from the fed 3 month repo


  60. Looks like Fed will purchase treasuries beyond bills,  QE
     


  61. Big spike up and down really fast on Feds good money after bad announcement but the VIX did not move?


  62. Help adjusting SDS hedge to capture profits, I have

    15 June 2020 $22 calls @ $2.68

    -15 June 2020 $27 calls @ $1.08

    I'd like to adjust this to capture the long's profit without incurring to much (or any) margin

    Thanks


  63. The symbol BRK.B does not seem to work for me in the TOS platform.  Any suggestions what to use

    anybody?


  64. I was thinking it would 2T to support the markets, the Fed is handing out 4T.

    rvnelson its BRK/B


  65. On TOS the symbol is BRK/B


  66. VIX / Palotay – Done with them. Used that to roll my VXX calls! All my VXX calls are at 80 now. Nothing is safe but safer and much less margin! There will be chances to make whatever has been lost on the way down. I was really happy to be mostly in cash although with hindsight, should have loaded more VIX calls. Like I said, lessons for the future.


  67. BRK/B- note that the B shares trading at around 180 are just a bit over book value. Usual trading range for BRK/B over the years has been 1.2X to 1.6X book value. So, I would be very surprised if we don't see Buffet having scooped up stock this week.


  68. Thanks Pstas!


  69. Some platforms- TD Ameritrade it is BRK.B


  70. Wow, quite the spike up.  

    Toilet paper/Tangled – And it's so silly as we have to buy it because everyone else is so the shelves are getting empty and so, even if we think it's idiotic, we still have to buy TP when we see some in case it isn't there when we do need it.  That's how the shelves get emptied out. 

    $500Bn/Kustomz – Oh aren't they nice?  

    SDS/Edro – Where were you 100 points ago?   SDS is $36 so hard to adjust.  I'd cash the $22s at $14.50 ($21,750) and buy 20 Jan $25 ($12.50)/40 ($8.50) bull call spreads at $4 ($8,000) and roll 8 of the June $27 calls at $10.50 ($8,400) to 16 April $35 calls at $5.50 ($8,800).  That's net $14,150 in pocket and you still have a $30,000 spread that's well in the money covering 16 short April calls at the money and 7 short June $27s you can roll over time.

    If you don't have a PM account, there will be margin though.  An alternative would be to cash the $22s ($21,750) and buy 23 long Jan $40s for $8 ($18,400) and do the roll to 16 April short $35s (net $400 credit).  That's only putting $3,750 in pocket but you are fully covered with a nice time advantage.  

    Woops, so much for the Fed boost:

    Image result for and it's gone animated gif

    If they close Disney we can just ride these charts…


  71. Are oil futures following the market or is the market following oil futures (or are they both following something else)?


  72. I think the markets are following the yellow brick road to the land of Oz. :)


  73. Phil/Vix

    I see from your vix chart that the straight up rise is almost at 2008 levels.

    as it gets above 60, towards 70, I would like to be selling it.

    what is the best vehicle for doing that? What index or index options?

    thanks


  74. I did not know airlines have to fly a certain number of flights on any route to hold their slot, even if the plane is empty.  I gotta think they will waive that rule for a while.


  75. XOP for the brave and brazen


  76. You Will Adjust to the New Normal


  77. $50 Trillion in Question as U.S. Treasury Liquidity Dries Up


  78. United Airlines borrows $2 billion as coronavirus slams industry



  79. DOW 21,648. Dow low 12/24/18: 21,712. I just need to put that in print to see it. It's no back to ~July 2017. Only 9 more months of backwardation to undo the "Trump rally" (e.g., fake money pumping into a fake economy), including the pump from election to inauguration (18,000 is the real line here).


  80. Bitcoin/uselessness: currency uselessness is relative. It's not science like gravity or the speed of light. It's a wholly owned subsidiary of the human brain. Currencies organize economic activity via a System of Trust. We'll be re-visiting and learning a lot about fiat's "System of Trust" properties over the coming months.

    Speaking of which: Treasury repo idiocy = $300 + another $500B and the markets go from -9% to -4% and backed to -8%???? Red alarm time. This is bad. They can do absolutely nothing.


  81. TVIX = the new TSLA ——- LOLZ!!!!


  82. VPU already halfway to my 90 target. The 134 puts were a good idea!!!


  83. Phil/SQQQ – I have 30 June 21/40 SQQQ call spreads, with a basis of about $3.70.  Would you recommend adjusting this play right now?  The IV on the short calls is so high that the hedge was disappointing in terms of delta, but I have a huge gain on the long call side.


  84. Flights / Tangle – They have waived these rules in Europe already as airlines were flying empty planes to keep their slots. Idiotic!


  85. Ah, the US has waived the keep your slot rule for now also.


  86. palotay-I have he 23 sqqq but this month. Already bought back the short call for a loss. Anyways, really would like to unload but got a feeling too soon. Had the 17.5 vxx and cashed out way to early!!


  87. My son is in Madrid for semester study. His program was cancelled at the country going to level 3 and they want him gone soon. The travel ban has people streaming into airports- like an evacuation mentality. It's probably not great timing. Almost impossible to find a reasonable fare on short notice that leaves enough time to get thru customs. Especially if there is health screenings thrown in. He says that Madrid is like a ghost town, no one is outside. Probably too graphic of description!


  88. Trump boasts stock market ‘is still much higher than when I got here’



  89. Just heard from my family that all schools (all levels) are closed in France starting Monday!



  90. Fed may go into its crisis tool kit soon. What’s in it?



  91. VIX up to 72!


  92. I've got 50 QQQ calls so any kind of comeback between now and tomorrow's close would be very welcome. 


  93. Let's dust off these Dow 20,000 hats!


  94. What's going on with BND? from 89 to 80. I had 87 calls I bought for $0.10 hahaha shoulda cashed in half at least! oops. But seriously, how can BND be down 10% in any kind of "normal" credit market? It cannot.


  95. bdc/qqq

    which strike price?

    regards


  96. Pat/QQQ 190 but I'm already down $1000 in 15 minutes


  97. Is there enough money supply for everyone to go to cash? 


  98. MLB now suspending play along with NHL.

    Lots of blaring headlines scaring the bejesus out of people. About time some bargain hunters dove in. This will not last forever!


  99. VIX/Maya – TVIX is at $400, that's an interesting short but no options.  

    VIX has options and the June $30 puts are $5 – those should do OK when things calm down.  

    Slots/Tangled – Would be silly to keep enforcing that.  Not like others are going to fill them.

    Repos/BDC – It's not the right kind of stimulus.  How do repos stop a virus and keep the economy moving when people won't travel, eat out or generally leave their homes?  Not to mention the way this virus is exposing all the flaws in our Health Care system and making people feel very insecure – not good for Republicans in November!

    SQQQ/Palotay – Sure, that one is great to take off the table with the June $21s at $13 ($39,000) and SQQQ at $31.24.  You can cash those out and cover the short June $40s ($7.85) with Jan $30 ($13)/45 ($11) bull call spreads for $2-4 (doesn't matter but might get $2) so let's say $12,000 so that's $27,000 off the table and you still have a $45,000 spread that's at the money covering the remaining short calls.  You could roll half to the March $32s ($4.45) to speed up the expiration and you'll make up that difference on the next short-term sale.

    Empty planes/StJ – Greta would not approve.

    Image result for greta meme

    Maddie's college is going on-line for next semester.  I think almost all colleges are.

    Also announced today, the Hockey East Championship Quarterfinals Series between UMass and Northeastern starting Friday at the Mullins Center will be played without spectators.

    Meanwhile, a decision about whether students will return to regular classes will be made on April 1.

    I still like the 2,500 line bullish on /ES.  

    BND/BDC – This is far from normal.

    Cash/BDC – No there is not but going to cash fortunately just means #s in your ledger, so you'll never know there's no actual money.

    Not last/Pstas – Not many things left to cancel.


  100. Mexico with just 12 virus cases, US 1,323 – Maybe they will pay for that wall after all!


  101. 1929 wasn't a stock market crash (that was a symptom).

    THERE WAS NO MONEY. Remember, that was the problem: bank failures.

    The answer was to go off the gold standard, a currency mechanism that no longer represented the emerging manufacturing economy well. This should sound very familiar.


  102. Phil// What is your take on cruise lines?  Wait for another 2 weeks before nibbling 


  103. So we have to ignore the disinformation machine in the White House and pay attention to what the academics are doing and that's cancelling classes until April so that means that their best guess is we've got another 2 weeks of this crap before MAYBE we can see some light at the end of the tunnel.  That makes sense as China had an explosion of cases the week after hitting the level the globe is at now and then leveled off about two weeks later – so they are probably betting on a similar cycle.  I think that's optimistic though.

    Yes BDC but fiat is not gold, it's not real and can be created with the stroke of a pen.  Going to Bitcoin is going back to the gold standard, where everyone has their very own actual, verifiable coin that cannot reproduce or expand - that's not really a step forward…

    Cruise lines/Rookie – As above, 2 weeks before there is any clarity and I bet cruise lines will be generally stopped for a month or so.

    Big spikes down at the close – maybe things are just collapsing?


  104. The Bug/Phil – plenty more disinformation than the WH – I've had to debunk that silly "40% fibrosis in your lungs, so gargle" thing several times just today.


  105. Phil/Bitcoin – I know it is fairly useless. I'm not happy about the drop but I might buy some down here anyhow.


  106. Disney just closed California!

    March madness cancelled.  


  107. Seattle schools will be closed now through April 24th


  108. The only reason we have not taken bigger measures and locked down people is because of Trump's ego. He would have to admit that he was wrong the entire time he talked about not being bad, people going to work and so on. And he can't do it. And also he is only worried about being re-elected. In the meantime, people will die. Hopefully we are seeing the end of the Trump experiment!


  109. Wait – California is closed? So we aren't letting in any Texans, just as an example? Or New Yorkers (just an example). Huh! Disney's okay, in my book.


  110. Here in Spain the reaction has been near to panic, today my regular supermarket had  empty of canned good, meat, fish, rice, and frozen food …and toilet paper! Everybody was with 20 rolls packages.


  111. All museums, theatres, conventions, schools and universities are closed  until new notice,

    my sport club will not allowed older than 65 , subway and buses have dryly disinfection…my trip to France is now cancelled and my account is 40% below ….


  112. This thing with toilet paper, I don't get! Not a crucial item… But I still think that it makes sense to have some food saved up in case we are quarantined for a couple of weeks which will happen soon I am sure. Both my kids and my son-in-law have been sent to work from home now. My son-in-law is in IT and he has been setting VPN for all their customers so that people can work from home and access their data.


  113. If the markets don't recover, tax collection next year will take a hit from all the losses we are seeing! That tax cut that passed in 2017 is going to look so dumb soon!


  114. Phil – I asked about rolling (closing?) TSLA 550 puts a few days ago and you said they seemed to be holding up so no.

    Doesn't look like they are still with TSLA at $533 after hours

    thoughts?


  115. AAPL $240


  116. Nothing is safe in a panic Coulter!


  117. OH schools cancelled


  118. Imagine we started a war with Iran during a pandemic: https://www.newsweek.com/us-allied-rocket-attack-airstrikes-iraq-syria-1491828

    Gives you 1918 vibes doesn't it? 


  119. The ES futures are very strange this afternoon, large spreads (compared to recently), it's like nobody wants to play anymore.


  120. Spain/Advill – Madness – stay safe.  I was talking to a Dr friend of mine and he says people's fear levels are off the charts.  They are giving people masks when they get checked in to prevent spread to other patients but then people come to the doors and see a room full of people with masks on and they turn tail and run away.  The main problem is there's no clear message informing the public because if you tune in to Fox, nothing is happening while other channels act like the World is ending.

    We don't have any politicians people trust, no clergy people trust, no Walter Cronkite types people will believe and Mr Rogers has the virus!  MADNESS!!!

    They do seem to be zeroing in on the lung factor.  If you have good lungs, you are likely to be fine.  80% of the people who are infected have essentially an ordinary flu at most.  

    TSLA/Coulter – I see $557 at the moment.  What timeframe $550 puts?  If 2022, not much you can do with them unless you want to roll to 1.5x at a lower strike or sell calls and use that money to roll down but neither option appeals to me and I think TSLA is simply selling off with the market and will bounce back a bit once the panic subsides (if it ever does).

    Remember when Australia was on fire?  No one cared about that!  

    39,429 people were killed by guns last year, 24,090 committed suicide, 155,000 people died of cancer, 165,000 people from heart disease in the US.  

    Globally, 1.6M people died of Diarrhea!  1.3M in car accidents, 1.7M babies die in childbirth, 1M from Aids….  Yet the global economy limps along:

    Image result for leading causes of death in america

    Futures/Motox – They raised the margin requirements on /CL.  That's twice in a year, now $4,900 – was $3,500.

    AAPL $236 now.


  121. CL  margins in my TD ameritrade account is 7700.00  and ES went up to 12,430.00 per contract 2nd time this week it went up NQ up to 14300.00 per contract 



  122. Futures are down another 500 points! I guess it's a relief… Anytime we lose less than 1000 points in one day is a win! History is repeating itself as it has a tendency to do and we don't learn the lessons! We'll get through this and we won't be prepared next time because we'll choose the easy or dumb path between now and then – like cutting funding for the CDC to pay for a tax cut!



  123. It’s a MAGA Microbe Meltdown




  124. Phil can you offer an opinion on ET at these prices?



  125. Phil/politicians

    Don't forget about social media. If you want to dive into a rats nest of misinformation and idiocy, just download Facebook and scroll along. Sadly, I believe many people get most of their information from social media sources these days. It's adding to the hysteria. 


  126. Phil I have 2021 1 550 short puts and 2 480 short puts — balancing June 2021 580 and 680 short calls and 2 short 2020 calls 1200 



  127. The Fed’s Liquidity Cavalry



  128. Asian shares dive, then trim losses after Wall St sell-off



  129. FTR – at .26….  don't know why I still have it on my watch list – I sold a while back – but it was a painful lesson.