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TGIF – Hoping to End the Week on a Positive Note

Hi ho silver!  

During Wednesday's Live Trading Webinar (replay available here) we decided to go long on Silver at the $12 line and we were rewarded early this morning with an explosive run to $13, which netted a lovely $5,000 per contract for our Members, which is the same as the $5,000 per contract we gained on the S&P (/ES ) as it popped from our 2,400 line all the way to 2,500 this morning before also stopping us out – salvaging $4,000 gains at 2,480.  

A lot of that rally is fading as we get close to the open and we won't be jumping in again until we see where the bottom is as we got very close to 2,300 on the S&P yesterday so we'd really love to see that again for another Futures entry.  The Futures are an excellent way to make money in volatile markets but you have to take profits off the table as things turn around very quickly.  The EU markets opened at 4am and everything went sour then, which is why we take the money and run on a good rally before then!

Remember, it's very easy to rally the Futures as they are very thinly traded and, once the exchanges open, the volume sellers take full advantage to finish selling what they were trying to get out of yesterday so, if we closed on volume to the downside and reversed in the Futures without any Fudamental changes – it's very likely that the selling will resume in the moring until (if) the sellers become exhausted.  That's especially true in a market like this – where sellers simply can't find enough buyers to fully unwind their positions.  

Image result for market manipulation cartoonA cynic might say that the sellers themselves manipulate the Futures (not to mention the news) in order to reel in the suckers who jump in and chase the momentum in order to give themselves a higher base to sell into the next morning – but not us.  We don't care if the markets are manipulated – as long as we can figure out HOW it's manipulated and make money trading along! 

This morning we can short the Nasdaq (/NQ) Futures at the 7,500 line and set VERY TIGHT STOPS above the line – just in case things turn ugly and we ride back to the lows.  The /NQ pays $20 per point so just a move back to 7,400 will generate $2,000 in profits for each contract but /NQ was 7,150 at yesterday's low the risk is well-justified by the potential reward if today ends on a sour note.  

Dow (/YM) 20,000 is also a good line to play bullish but VERY TIGHT STOPS below that line and 2,400 on /ES is still good if it holds, as is 7,400 on the Nasdaq (/NQ) – all should provide support this morning and, if they don't – well that's why we added another hedge yesterday!

Today is options expiration day so we'll be adjusting our Member Portfolios and, generally, we're going to make bullish adjustments as I think $3Tn worth of stimulus should be enough to hold the line for now but it's also very likely that the Government will order a complete shutdown of the US this weekend for at least a week in order to contain the virus (LA is shut now) as they've tested it in cities and no one has started a revolution yet so that's the only plan they have for now – to buy a week of time to slow the spread of the virus until we can catch up on manufacturing masks and respirators (and toilet paper) to deal with the next wave of infections.  

Have a great weekend,

- Phil


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  1. Good Morning.

  2. Phil – Playing with the lines. Went back to our lines from last year except for the NYSE and Russell where I had to go all the way back to 2017 to find anything that didn't show us 50% down! Nasdaq showing why this rally was whacky to begin with… 

  3. I wonder what  the consequences will be for these senators who used classified information to get out of the market while downplaying the risks for everybody else and in one case even voting against the help package! Confiscating their assets to help pay for medical supplies would be a good first step!

  4. I remember when all the clowns like Santelli on CNBC were accusing the Obama administration of faking the job numbers before the election:

  5. Is there and SPY equivalent for Dow, Nasdaq, small caps?

  6. Hi Phil I have to roll AVGO today 320 put where to you think if this is by all means possible will be AVGO Jan 22 250???? now around 200 TIA

  7. Good morning! 

    Rally fading fast and no wonder given these numbers:

    Look at the yellow line on that graph!  

    Keep in mind today only looks a bit better because it's only morning…  

    Yesterday morning was:

    18,000 (222,642) more global cases today, 9,115 deaths, 84,506 recovered.  Notice how the deaths are outpacing recoveries now?  Italy 35,713 – WTF Italy?!?  2,978 deaths too!  

    So, if we are now at 246,275, that's 24,000 more today, the growth accelerated 33% from yesterday's and 1,500 more recovered and 1,000 more died.  Feeling good about those numbers?  

    There is so much BS on the news and the talk shows and everyone cherry picks numbers but these are the real, verified numbers and we need to make decisions based on those – not what we wish to be true!

    There will be 300,000 people infected on Monday with 12,000 deaths and HOPEFULLY 90,000 recovered but now we are going to have to see recoveries gain on deaths before we should allow ourselves to get too optimistic. 

    Also, Los Angeles is locked down and it's going well so we can expect the whole country to be on lockdown next week and HOPEFULLY that will show us the bottom EVERYTHING goes dark but that doesn't help us today, does it? 

    Nasdaq/StJ – Well how long have I been complaining that the whole rally was driven by a few insanely valued stocks and AAPL too.

    2,340 is going to be critical on /ES because, if that doesn't hold, we may have to consider a range that is 20% lower (would be confirmed by the Nas failing 7,150.

    And WTF on unemployment?  Now they are hiding data?  

    Scary Pharm!  

    Dow/Tangled – DIA, QQQ, IWM.

    AVGO/Yodi – I would have to assume there's no end in site so you are going to pay $125 to get out and that's the price of the 2022 $290 puts and I imagine they'll get back there but you could sell 2 of the 2022 $200 puts for $60+ and I think that could be less net margin or at least not worse but you are adding 50% to your potential exposure.  

    Meanwhile, what a great put to sell, the AVGO 2022 $200 puts for $60 to net you in for $140.  $60 is 42% of $140 so it's a 42% return on risk if AVGO can simply hold $200.  If you are rich enough to make these plays – they are just giving money away these days!  

  8. Thanks Phil I was aiming at 250 but at the moment only liquidated my put. God only know where all this ends. I think a total look down for 14 days will help if everyone adheres. I would include the total market as well. Just freeze it.

  9. so weird that the VIX is down here — gotta be some BS with triple witching Friday — if they can jack it up into the weekend in the face of today's news cycle they hats off to them

  10. Pharm/TheBug – good article "Although successful surveillance systems have long existed for influenza, the disease is confirmed by a laboratory in a tiny minority of cases. "

    True this. One trick the CDC uses is to extrapolate flu cases from pneumonia deaths.

  11. Future is Now Portfolio Review:  We don't need to add money to this one as we didn't spend much.  $89,235 is down 10% but not so terrible and we'll certainly look to add some stuff next week.

    • BYND – They came down hard and fast, now below the IPO price and fortunately we only committed to 5 short puts so now we are free to roll our 5 short 2022 $60 puts at $23.50 ($11,750) to 10 2021 (202 ONE) $50 puts at $12.50 ($12,500) and we can buy 10 2022 $40 ($30)/65 ($21) bull call spreads at $9 ($9,000).  That puts us in the $25,000 spread for net $1,000 as we sold the original puts for $7,250 and this is why we are happy to sell those short puts in the LTP – THIS is the downside – the stock finally gets near our target price (net $45.50) and, rather than panic – we roll into a LOVELY bull call spread where we make $24,000 (2,400%) if BYND can get back to 60% of it's IPO price in the next two years.

    That's our process!  This is why we made such ridiculous gains in the last round of portfolios.  We sell puts for good prices at small commitments and then we take advantage when the market sells off (it often does) or, if not, we just collect the short put money and sell more puts with the occasional bargain play.  It's the "bargain" plays that get us in trouble – not the early stage short puts.  The problem is everyone is too impatient and wants to deploy all their capital right away and that's a terrible thing to do.  Let's try to remember that the next time everyone wants to chase the rallies!  

    NOTHING has changed about BYND and people will still eat fake meat after the virus is over (and probably while it's around too).  You have to consider whether there's a rational reason to throw out your investing premise just because of whatever current crisis we're in.  If not – that's when you take advantage of that.  That's all Buffett does – he keeps calm when the market dips and buys more of what's worth buying while other people are panicking out.

    • TOT – Just added them yesterday, still has that new trade smell.  

    • SPWR – Another good example of investor idiocy.  While it's bad for SPWR to some extent that oil is now free – it doesn't change the 20-year picture for them and it's not even likely to change the projects that are in their pipeline to any large extent.  I'm not going to pay $1.45 to buy out the $12 calls though – that's outrageous and I don't know that I want to spend $12,000 to DD on the $5s, though that is tempting but the $10s are $1.75 so I do like the idea of buying 40 of the 2022 $5 ($3.25)/10 ($1.75) bull call spreads for $1.50 ($6,000) as that's a $20,000 spread and I think 8 is a great target so we can sell 10 more of the $8 puts for $4.50 ($4,500) to help pay for it.    That is FANTASTIC for a new trade at net $1,500 on the $20,000 spread, by the way.  

  12. Giving away money / Phil – I really want to see who they are going to give the money too because apparently what is proposed in the Senate is mostly directed at corporation (no surprise there). I hope that they realize soon that the people in the street need the money, not the execs and the shareholders. 

  13. to all ATT fans,

    It was disclosed this AM that the likely reason for the drop (hopefully temporary) in T was the cancellation of the $4 billion stock buyback scheduled for Q2 which, economically was a defensible move with T at a low end of its range but politically not, coming in the footsteps of American Airlines $11 billion repurchase program at high end prices. Now, if Randall Stephenson would just step down (or be let go)…

  14. /VX taking a tumble…

  15. Even after the /VX free fall of the past 2 days, it still needs to decline another 20+ points to eliminate the backwardation!  Crazy, and definitely something we need to check before selling those VXX calls next time LOL!

  16. Well, I'm very encouraged that we bottomed out there.  As I said above, the seller from yesterday wasn't done but now he seems to be satisfied….

    Good chance to go long as we cross over our Futures targets!  

    Done with the /NQ shorts, of course. 

    Freeze it/Yodi – I do think it wouldn't be terrible to freeze the markets until the panic subsides.  The lockdown (all of CA is in lockdown now) is a good idea because yes, Team Trump totally blew it and we're not prepared but if we can just stop the spread for a week (by keeping everyone at home) – it gives us time to make 100M masks and 10M test kits and 100,000 ventilators and to meet with local governments and agree on protocols going forward.  Once there's an actual plan in place – people will calm down – even if the numbers go higher but having no plan is what makes people run to cash and hoard toilet paper, etc.  

    Now tissues are out of stock because people are using them for toilet paper. 

    VIX/Coulter – Not weird, we didn't move 1,000 points so that's relatively calm.  That's why the VIX 80 is not sustainable, it indicates 8% swings in the market are not unlikely on any given day (roughly).  That's obviously ridiculous.  That then is priced into options contracts, making the premiums ridiculous too – also unsustainable, which is why we try to take advantage of these situations.  

    Give it away/StJ – We do need to save the business class this time around, shutting down the country for a month or two would be chaos if we let nature take it's course but the handouts are a bit capricious which, of course, is intentional.

    T/8800 – $30 is our buy point no matter who's driving the bus.  

    Maybe the Dollar is done finally?

  17. I am not sure that we have bottomed yet! I hope that we have. Let's wait until we have a better picture on the number of cases we have here in the US! I think that people will get shocked. And then job numbers… We could see another wave of selling.

  18. Lockdown – I may have missed it, but has there been discussion of Zoom (ZM) as a momo of the moment? Tons of my friends and acquaintances are starting to use it.

  19. Zoom – Ah. Just had a look at the chart. Clearly I did miss it.   :(

  20. Phil – isn't the dollar the worlds reserve currency as everyone devalues it will still be the best of the worst, if everyone rushes to cash won't the dollar go up because there aren't enough of them?

  21. Phil did you do all the div portfolio adjustments?  I thought you mentioned another look.

  22. Phil,

    Given Amzn's favored niche in the midst of our current lockdown, any thoughts on the best vehicle to establish a long position? Selling puts (my preference) have a 100+ point bid/asked spread. 2020 low -1626, rally high – 1957, 24 mth range 1300 – 2180.

    Thanks in advance

  23.  "if everyone rushes to cash won't the dollar go up because there aren't enough of them?" — My thought is that is a big yes!

    I'm selling QQQ  April 180 calls at 10 when I can get them.

    ZM – I'd say it's a buy. There's going to be winners and losers to sort out of this mess were in. On a side note, are people buying ZOOM because they think it's ZM? The former is a Beijing operation with "no significant operations."

    I was trying to sell some CCL call spreads but can't, schwab says "symbol not valid" even though I'm using their own selector tool. Maybe just a schwab glitch.

  24. StJ – we might have 3 to 5 more waves over the next few months. You could see markets 1929-1932 style, down 90%. Probably 60% is the median probability. Where we are now is not even the first decile percentage probability, IMO. 

  25. T is on sale!!!!

  26. T/Yodi – Thanks for the callout, put 500 on board. Might be more on sale later so going to just nibble.

  27. I think you're right on ZOOM.  That was my first mistake when I looked at the stock price.  I knew it was ZM but went to ZOOM first.  

  28. ‘We’re Going to Close the Valve’: Cuomo Announces New York Coronavirus Lockdown

  29. Bank of England cuts interest rates to all-time low of 0.1%

  30. Disrupt Your Own Narrative

  31. Well, all flat again in Futures but will do 7,200 on /NQ if it comes back and 2,300 on /ES if that is over the line.  /YM 19,800 too but not really worth much risk now.  

    Another depressing press briefing and it's funny how everyone who speaks has to start by saying what a great job the President is doing.  It's like we live in North Korea now and have to praise "Deal Leader".  Even in China, they may throw you in jail for criticizing Xi, but you don't have to tell him how great he is every 5 minutes!  

    ZM/Snow – The stock of the moment. 

    Dollar/Coulter – That's why it's going up like crazy.  And it has been much higher:

    Of course, we were paying 15% interest back then.  

    Portfolios/Tangled – After this, that's my next project.

    AMZN/8800 – Hard to see how they lose unless they lose the ability to deliver.  At $1,895 you can sell the 2022 $1,000 puts for $50 so why not?  In fact, let's sell 5 of those in the LTP for $25,000.  ToS says net $13,916 in margin so very efficient.  The $1,500 puts have $102,000 in margin so be aware that, if AMZN does get ugly, the margin requirement goes up almost $20 per $100 drop so maybe stops at $75.  On the bullish side, the 2022 $1,700 ($460)/$2,000 ($320) bull call spread at $160 is a big investment (net $160 on a $300 spread) but it does pay 100% at $2,000 and gives you room to sell short calls.  The May $2,000 calls are $85 so, if you bought 15 long spreads ($240,000) against the 5 short puts and 5 short calls ($42,500), then you will have spent net $172,500 using 56 of your 672 days.  If we can pick up $42,500 10 more times, that's $425,000 back + whatever your $450,000 spread is worth.  Hard to lose.  In fact, let's add that to the Butterfly Portfolio but as 2 short puts, 6 spreads and 2 short calls.  

    ZOOM/BDC – ROFL, that's funny! 

    CCL/BDC – Schwab doing you a favor!  

    Yikes, Team Trump strikes again with another very unhelpful press conference.  

  32. Trump is now yelling at reporters for asking questions.  Not inspiring much confidence.  

  33. I hope Trump is checking his report card after his press conferences…….

  34. Snow, weren't you listening?  School is closed! No report cards…for anyone.  That's what winning looks like.

  35. I wonder if Buffett is buying his own shares?

  36. /Phil/ES- Long over 2400 with tight stops?

  37. Why would T be falling?  Their service should not be adversely affected should it?

  38. Phil-- 10 ZM 2022 80/130 Call spreads -10 85p, pays $50K and is 100% in the money!!!  Looks good to me, but maybe you can pick better strikes?

  39. Trump, GOP senators – I wonder who is behaving the worse right now! It's almost like they want to tank the economy. A repeat of 2008 when Dems had to basically help the Bush administration to pass TARP because the GOP was watching Rome burn! It's amazing how history repeats itself and people keep voting these guys in!

  40. As a Zoom user, you can tell that these guys are running at over 100% capacity now! I used to get cloud recordings rendered very quickly. Took hours on Tuesday. Seems better now so I assume they added capacity.

    My wife is using Google Classroom and Hangout Meet to teach now. Google will come out well from that.

  41. BDC – Not as pessimistic as you are but I still think that there is room for bad news in this market. Especially with sociopaths in charge!

  42. T announced that they stopped their buyback program (news is above).  I think that is why they are getting crushed.  It seems like a good buying opportunity to me, right?

  43. Earnings Portfolio Review:  $67,814 is down 32.2% and that's much better now that the VIX has calmed down but still sucks, of course.  I'm going to make adjustments under the assumption that we're WILLING to put another $100,000 in – otherwise I would not be so aggressive.

    • WYNN – Holy crap!  Do we think WYNN will remain viable down the road?  $53 a share is $5.7Bn in market cap and they do make $500M a year in a good year but this will not be a good year and that's on $6Bn in revenues so $500M a month in expenses and here we are talking NO ($0) revenues coming in.  Do they still have to pay back their loans?  Yes.  Do they still have to pay Cirque du Soliel?  Don't know.  The buildings are assets but only if someone actually wants them but I'd guess, for the year, they'll take a $2Bn loss so let's say they only make $300M a year going forward (if we avoid more viruses) and 15x is $4.5Bn – a bit lower than here.  That makes those calls pretty useless, we're lucky to get $9.50 back so let's sell those and let's buy 10 of the 2022 $30 ($32)/$50 ($22) bull call spreads at $10 ($10,000) and sell 5 2022 $30 puts for $10 ($5,000) so net $5,000 on the $20,000 spread seems great for a new trade with a 300% upside potential at $50.

    • ACB – We liked it because it was such a cheap spread.  Do we want to turn it expensive?  Well the 2022 0.50 calls are 0.40 and, if we're not willing to buy those then we should be folding.  We can get 0.20 for our $2s so let's do that roll for 0.20 and add 20 more longs at 0.40 ($800) to bring us to 50 and let's buy back the short $3s no more than 0.10 – just to clean things up.  The puts are a reasonable target so let's leave those.  
    • CLF – These I love and I'm fine with the $7 target so let's buy back the short calls and roll our $5 calls at $1 to the $3 calls at $1.75 and add 10 more to make 50 long and see what happens
    • HBI – Don't you wish you had bought Levis during the great depression.  Think about it, people have to go to the hospital and your mother always told you to wear clean underwear for just such an occasion!  Still, we have other things to pay for and this isn't far out of the money so we'll leave it.    

    • HRB – They delayed tax season and that blew our premise!  We can roll the 5 short 2022 $22 puts at $11 ($5,500) to 10 short 2022 $15 puts at $5 ($5,000) but let's not spend money on longs for now.  
    • IMAX – I just wish they had longer-term options.  $18 is still a fair target so let's leave the short puts but we can roll the 30 Sept $15 calls at $3 ($9,000) to 30 Sept $10 calls at $4.30 ($12,900) to widen the spread by $15,000.  If we get a chance to roll the $10 calls to the $5 calls for less than $2 – we should do that too!

    • IRBT – This should be a good bottom as $40 is just over $1Bn and they make just under $100M so 10x earnings on strong growth is great.  Maybe no growth this year but so what?  The short calls are ridiculous but we can roll the 10 2022 $40s at $12 ($12,000) to 20 of the $30s at $17.50 ($35,000) and sell 10 of the $65 calls for $7 ($7,000) and 5 more of the $40 puts for $15 ($7,500) so that's net $8,500 spent to turn a $25,000 spread that was at the money into a $70,000 spread that's $20,000 in the money.

    • M – Just going to roll our 25 2022 $10 calls at $1.65 ($4,125) to 25 $5 calls at $3.20 ($8,000).
    • SQQQ – I wish I could say take a profit but too crazy!  Spread #1 is newer and it's a $150,000 spread at a net $6,250 credit so this is fantastic as a hedge for anyone.  It's not very bearish as the short callers are at the money but we thought this was a bottom so we wanted to sell a lot of premium.  If you want to be more bearish – just sell less short calls!  Spread #2 is messy but let's say it's a $100,000 hedge.  As the Jan $20/$35 bull call spread is just $3(ish), I want to add back 30 for the weekend but let's do it this way, we have 30 short Jan $30 calls so let's roll those up to the $35s and buy 30 more Jan $20s for $12.40 and let's sell 30 June $35s for $7 and roll our June $25s up to there as well.  

    We'll see if we need to add cash but I think we can get away without it as long as things don't get worse.  

  44. Phil,

    In your morning post you mention you think it is likely they will shut the US down this weekend. If I understand correctly, you also say this will let companies catch up on things like toilet paper.  What I don't understand is who is going to do the work?  We still need FedEx, we still need the grocery store staffed, etc.  This is part of why I am a little confused on the lock downs.  Plus, we have already half assed it, isn't the horse out of the barn?

  45. In a stock market crash people sell their winners last — TSLA CMG and then what everyone is long AAPL

    i don't think we are there yet

  46. /ES/Ravi – Yes but each time it hits the line it's got less chance of bouncing so be very careful!  

    T/Tangled – If you need money to cover other things and T is still flattish – you're not too worried it will get away from you so you can get back in later.  

    ZM/Rvn – Until I read a lot more about what they actually do, they are a fad stock I would not touch.  They made $25M last year on $622M in sales and you are paying $36Bn for them at $133.  While it's POSSIBLE they'll scale efficiently – we don't know what's really going on over there.  

    GOOG/StJ – I agree, this is a huge win for them, a whole generation of kids being pushed into their products will change the way businesses do meetings forever.  

    T/Palotay – See, now is the time I WISH companies would buy back their stock but they only seem to do it when it's expensive.  

    Shutdown/Dano – They will indicate essential services, of course but generally they don't want people on the streets without a good reason.  

    Cuomo Orders Tighter Restrictions in New York: Live Updates

    Coronavirus lockdown in California: What are the rules

    The official order is displayed at the bottom of this article.

    What remains open?

    • Grocery stores, farmers markets, food banks, convenience stores
    • Take-out and delivery restaurants
    • Gas stations
    • Pharmacies
    • Laundromats/laundry services
    • Banks
    • Essential state and local government offices and services, including law enforcement

    What’s closed?

    • Dine-in restaurants
    • Bars and nightclubs
    • Entertainment venues
    • Gyms and fitness centers
    • Public events and gatherings
    • Convention centers

    What jobs are considered “essential”?

    Besides the staffing of the businesses allowed to remain open, the order specifies activities needed “to maintain continuity of operation of the federal critical infrastructure sectors, critical government services, schools, childcare, and construction, including housing construction.”

    The orders issued Monday by seven counties in the San Francisco Bay Area had a more comprehensive list of essential businesses, including hardware stores, shipping and mailing offices and taxis.

    What are the 16 “critical infrastructure sectors”?

    According to the Department of Homeland Security, they are:

    • Chemical
    • Commercial facilities
    • Communications
    • Critical manufacturing
    • Dams
    • Defense industrial base
    • Emergency services
    • Energy
    • Financial service
    • Food and agriculture
    • Government facilities
    • Health care and public health
    • Information technology
    • Nuclear reactors, materials and waste
    • Transportation systems
    • Water and wastewater systems

    For what other reasons can residents leave their homes?

    Other than essential work, the written order does not specify allowable activities outside the home. But the state’s COVID-19 website says Californians also may leave home to:

    • Get food
    • Care for a relative or friend
    • Get necessary health care or critical medical supplies

    In my town, I saw about 20 people doing yoga in the park – they were not 6 feet apart.  I've been riding my bike around town – it's surreal – like a scene from a post-apocalyptic film.

    A lot of the restaurants I talked to aren't really going to stay open – they are just trying to sell off what they have left in the fridge before it goes bad and then they are shutting down so I'm really not sure what the plan is for people to eat.  

    Given the very strong possibility that they do shut things down nationwide, I strongly suggest making a shopping run today or tomorrow to stock up as if there was going to be a week-long hurricane or whatever disaster you are used to preparing for – just in case.

    Not there yet/StJ – I'm still thinking $3Tn is a lot of money and they are deploying it BEFORE we are even a month in so maybe $6Tn or 1/3 of our GDP before we're done.  Debt issues aside – that's a LOT of stimulus that may not even be necessary in the end (if we end up with China's 2-month curve).

    China ended up with 80,000 infected out of let's say 800M as 600M are very rural farmers who are 1,000 feet from the nearest person anyway so we'll call China a 0.01% rate.  US 330M people and we have  and 14,000 infected – I think that's 0.0042% so far and let's say we're a month in.  If we get drastic this weekend, then we can possibly stop it at about 0.01% (33,000 infections) and that's manageable.  

    The only problem is doing what we are doing and what China is done does not prevent the virus from re-spreading if even one person contracts it and starts the cycle again and, since it's all over the World – it's not really the best plan but it is the ONLY plan we have at the moment and it's better than nothing.

    That's the funny thing about Trump when you think about it – he's actually not better than nothing.  Nothing would be a huge improvement! 

  47. So buy T and sell the Dec $30 calls and pick up whatever dividends they have along the way?

  48. Would DC be crazy enough to ban all buybacks for the next few months?


  49. Phil – what about a UUP call spread

  50. DIS – Been playing selling DIS weeklies against a Jan 22 $80 call currently $24.50.  Can sell next Friday $90's for $4.40.  Roll to next week if needed.  Volatility is great for these weekly plays.  

  51. Should we be stocking up on companies that sell lots of baby products looking ahead 9 months +

  52. COVID-19 – Interesting article in NYT on cloud based thermometer readings used to predict COVID-19 hot spots.  Florida looks like a potential disaster in the making in the next couple of weeks.  

    Look at the heat map in the article. Makes me think that the markets might get worse in the next 2 weeks as we see the death toll start to spike in the US and fear rises.

  53. Link to actual heat map here.

  54. Tangle T I just sold the Jan 21 25 put for 3.10 covers the div and you do not need to spend money on the stock. Obviously if it goes below 25 you got the stock any way.

  55. Dividend Portfolio/ Phil -

    Have you reviewed the dividend portfolio lately?  I'm wondering what to do about my version.


  56. Stuman Just watched on TV how idiots still celebrate spring break in Florida. These brainless creatures are dancing with the devil. They just as smart as the clown himself.

  57. We going to get a stick into the close, like the last few Fridays?

  58. Selling it pretty hard 

  59. Going to need new lines on Monday again!

  60. There is really a case if you can borrow at 0% to go big now! Ask for $5T and spend it on the infrastructure! Create all these jobs! In 50 years (new 50 year bonds), with inflation, that $5T will be such a small percentage of GDP anyway! 

    Deficit hawks are in hiding now! We are all Keynesians! They'll come back as soon as a Dem is president, but fewer people will listen after this scare I think.

  61. Dividend Portfolio Review:  Well, so much for leaving this one alone and seeing how it goes!  We are down to $7,771 (down 92.2%) which is because we have stocks and there are no hedges in this portfolio, specifically – which is not to say you shouldn't have hedges, just that we keep ours in the STP and there's no sense in having 5 STPs for 5 portfolios.  

    This is a great example of why I strongly prefer options – stocks tie up too much money and require too much money to fix when you do have a market disruption and, from my perspective, we had one in 1987, 2000, 2008 and 2020 so pretty much every 10 years since I've been trading – seems kind of idiotic not to expect it, right?  

    Clearly we have to add $100,000 here in order to make adjustments but, for the most part, I want to stick with the premise that, over 6-8 years, we will reduce our basis(s) to $0 and it really doesn't matter what the stock does between here and there – this is a great test of that theory!  

    • PFE – We can roll the 5 short 2022 $35 puts at $9.40 to 10 short 2022 $28 puts at $5 and it drops our basis from $31.20 to about $26 so we're committing $26,000 vs $15,600 – that's not so terrible because then we'd sell puts and calls for maybe $6 and we've back to net $20,000 if assigned.  We can live with $20 a share so the roll makes sense.  

    • TD – Same concept.  The 5 short July $57.50 puts at $19.60 can be rolled to 10 of the Oct $42.50 puts at $10 about even.  

    • CHL – It's really not damaged enough for us to bother adjusting.  If the portfolio were healthier, I'd love to DD but we have bigger fish to fry. 

    • ET – What a catastrophe.  I really can't see how this is that bad for them so here we have to DD at $5.15 ($5,150) and then we can buy back the short 2022 $12 calls at $1 ($1,000) and sell 20 2022 $5 calls for $2 ($4,000) and, although I'm not worried about the 10 short $10 puts at  $6.10 ($6,100), I do like selling 15 of the $8 puts for $5 ($7,500) so consider that the roll.  That's net $750 spent to turn the net $6,800 position that would be called away at $10 ($10,000) for a $3,200 profit into a net $7,550 position that would be called away at $5 ($10,000) with an $1,800 profit.   Of course, we need to be over $8 really because of the puts but we'll roll them along as long as ET is solvent.  If they keep paying the dividends, we'll be thrilled to have 2,000 shares instead of 1,000 shares.  They just paid 0.305 on 2/6 too so that's $305 we just collected and it will be $610 in May!  

    • F – Bailout!!!!  It's only been 10 years, why shouldn't they get another bailout?  This is one where we should TD so 2,000 more shares at $4.40 ($8,800) and we'll sell 20 2022 $3 calls for $2.20 ($4,400) to cover those but the put target is fine so we leave those.  So we're spending net $4,400 on top of the $5,760 we started with puts us in 3,000 shares of F at net $10,160 so $3.86 and F just paid 0.15 ($150) on 1/29 and next time we get $450 if they don't cut it.  7 x $450 is $3,150 + called away at $15,000 at $5 (ignoring bonus money if we hit $7) is net $7,990 in profits over $5 to pay for the 1,000 shares we get assigned back if we're below $7 – certainly we can live with that, right?  

    • M – OK, we clearly paid too much for these!  Rather than pay money to buy more shares at $6.40, let's just say we WOULD double down at $4(ish) by selling 20 more $8 puts for $4.20 ($8,200) and I still believe in the $13 target of our original puts but we can buy back the short $15 calls for $1 ($2,000) and we paid net $15,900 for 2000 shares so net $7.95 but now we're netting $6,200 for changes so $9,700 is net $4.85 and we can sell the $5 calls for $3.50 ($7,000) and that drops our net by $2.50 to $2.35 with a $5,300 profit over $5 to pay for the potential of being assigned 2,000 shares at $5 and $2,000 shares at $13 is $26,000 – $5,300 + $10,000 (assigned at $5) = $30,700/4,000 = $7.675 if we are assigned at $5 or lower.  If we are above $5, we only get assigned 2,000 at the same $20,700/2,000 = $10.35 but, either way, it's way cheaper than the $15 we started with after 2 years.  This is why I say in 6-8 years, unless the company goes BK, you pretty much end up with free stock so who cares what happens along the way?  M just paid us 0.378 on the 12th so $756 x 7 = $5,292 that will be knocked off the price if the dividend continues.  That's right, we weren't even counting on dividends to get to $7.675 per share (would knock off $1.35ish).  

    As long as you go into these positions with 1/4 entries (scaling in) that you will be THRILLED to DD on when they drop 20% of more and HAPPY to DD again when they drop another 20% or more – you will enjoy this kind of trading but if you are impatient and deploy your capital too quickly – you will not have a good time! 

    • MO – Not down enough to bother with.  

    See, good point.  We're not interested in doubling down MO, even though it's just 500 shares because it's only down at our net entry ($34.50 or $37.50 if assigned another 500 at $40) so it's not enough of a bargain for us to want to deploy more capital – not when we can buy M for 1/2 our entry price instead!  

    • NLY – Our net entry was $4.44 and, if assigned at $10, will be $7.22 so $5.65 is nice but not thrilling.  Fortunately, we only sold 10 2022 $10 puts and those are now $6.25 and yes, I would love to buy 2,000 more at net $3.75 so of course we can sell 10 more 2022 $10 puts for $6,250 and now we have spent net $5,130 for our 2,000 shares ($2.565/share) so even if we do get assigned 2,000 more at $10, that's net $6.28/share and they are $5.60 now so we're back to the point where it's not worth doing more than that at the moment.  NLY should be paying us 0.25 this month so $500 coming 8 times is $4,000 more of a discount (another $2 per share off) if they don't cut it.  

    You can see why I have trouble panicking in a sell-off.  This is just our first 2-year cycle and we're only 6 months in on this one and already we're down to $2.65 a share if we get called away at $10 but, even if we don't, it's $6.28 on our first 4,000 shares and then we sell more puts and more calls and drop another $2 off the net into 2024.  After a while, you're at net $0 – especially if they don't cut the dividend.

    • SIG – Damn, they were doing so well too!  Fortunately, we came in at $16.95, not $30 but now $8.20 it would be a shame not to DD so here we will buy 1,000 more shares at $8.20 ($8,200) and we will buy back the short 2022 $13 calls for $2.40 ($2,400) and I'm not worried about the $13 puts nor do I want to sell $10 calls so let's leave it as that for now.  So we're spending $10,600 and we netted in 1,000 for $5.65 ($5,650) so now $16,250/2,000 is $8.125 – that's because we're not selling more puts and we aren't re-covering yet but that's also the current price and being assigned 1,000 more at $10 won't change that much but it does double our $370 quarterly dividend to $740 x 7 is $5,180 if all goes well – 1/3 of what we laid out for 2,000 shares in our first 2 years – right on track!  (and we will still collect at least $4,000 more when we decide to sell calls!) 

    • SKT – See, this is why we save our money!  Fortunately, we made a conservative entry but not conservative enough, it seems.  We were in for net $11,000 ($11/share) and I'm happy to TD so let's roll the 10 short 2022 $15 puts at $9 ($9,000) to 30 $8 puts at $3.70 ($11,100) and buy back the short 2022 $15 calls at 0.40 ($400) to clear the slot and add 2,000 more shares $7 ($14,000) so net $12,300 spent plus $11,000 is $23,300 for 3,000 shares is net $7.76/share and the $8 calls are $1.70 which would drop our net to $6 but let's wait and see if things pick up.   They paid us $335 on 1/30 and if they pay us $1,005 x 7 that's $7,035 off (1/3) and I almost hope we get to own 3,000 more at $8 on this one!  That would put us in 6,000 shares (collecting $2,010/qtr) for net $23,300 + $24,000 – $7,035 = $40,265/6,000 = $6.71/share WITHOUT selling more calls – but we will eventually.  

    • T – Damn, another one we should buy more of but let's just sell 10 more 2022 $30 puts for $7.50 ($7,500) while we can and that drops our net cash outlay on 1,000 shares to $22,050 ($22.05/share) and if we get assigned 2,000 more at $30, that's still net $27.35/share on 3,000 shares that would be paying us $1.50 (5.5%) per quarter if they don't cut the dividend.  

    While this portfolio requires more cash when the market drops 40%, it's very likely money well spent when you can get into a position of collecting 20% annual dividends from AT&T!   That's why we're not upset to move more cash off the sidelines and into this portfolio! 

  62. I just went through a bunch of stocks and some PE ratios are still @5 year averages. I dont think the markets are taking this seriously, unless the Fed can make everyone whole.

    F never took bailout money your thinking GM.

  63. I guess people are going to drive up and down their driveways eating chipolte as those are the only green stocks I see on my screen (oh and NFLX)

  64. That leaves the Butterfly Portfolio and the LTP, neither of which urgently need adjustments but we will want to add $100,000 to the Butterfly but the LTP is fine as the STP money is also in that mix.  

    We'll make the changes next week as nothing is urgent and I wanted to be very detailed about how and why we are changing things so I simply ran out of time this week.

    Butterfly snapshot:

    Note on the Butterfly Portfolio the VIX plays hell with the "value" because we sell so much premium but there are certainly adjustments we want to make.  Our prior Butterfly Portfolio made ridiculous gains BECAUSE we got bullish in the 2018 Christmas sell-off.  We're at the same level now!  

    As to the LTP – 3 parts!  

    Also suffers greatly from a high VIX.  STP is $328,648 at the moment so $428,000 out of $600,000 we started with is down 27% overall on our paired portfolios.  That's because the hedges don't really kick in unless we STAY DOWN and it's only been a month so far.  Still, we have 73% of our buying power and stocks are 30-40% off so that's just right.  Also, I have not had a chance to add our latest LTP additions – I'll try to be all up to date by next week as things will likely continue to be crazy.

  65. Also, who is the socialist now:

    President Donald Trump said Thursday the government should take an equity stake in some companies that need bailouts because of devastating effects of the coronavirus pandemic on the U.S. economy.

    Trump told a briefing he has executive authority to curb the impact on businesses. “There’s a lot of executive power,” he said. “If we don’t have to use it, that would be a good thing, not a bad thing.”

    Such a move could be an extraordinary reach by government into the private sector. He said he’d specifically target companies that did stock buybacks, rather than investing in infrastructure. Trump also said he’d back restrictions on executive bonuses and future buybacks from companies receiving federal support.

  66. AAPL getting smacked down, oof. Glad that week is over. Everyone stay healthy this weekend!

  67. hey FTR green today!!

  68. Another 1000 points down (or so). Getting so common now! For me it's like – at least it was not 2000 points!

  69. Damn, more volume selling into the close – the big boys are not done dumping.  

    We are supposed to get more stimulus on Monday but also possibly a "shelter in place" notice for the whole country so I guess better safe than sorry for some.  

    T/Tangled – I'd buy T for $28.67 and sell the 2022 $25 calls for $6 and the 2022 $25 puts for $5 so you're in for net $17.67/21.33 so whatever amount of T you REALLY want to own for $21.33, you can buy 1/2 now with the combo but I mean REALLY because this market is trading like it's end of days! 

    DC crazy/Kustomz – Even as you say it, you know the answer is yes.  

    UUP/Coulter – You want to go long here?  I think it's overdone.  Panic buying is not a reason to jump in and chase things.  

    DIS/Stu – It works until it doesn't, be careful.  

    Baby products/Tangled – Good idea!  Nothing else to do is there?  

    Maddie (19.8) is hanging out with "a close, small circle of friends" but Jackie (18.2) and her friends are basically on spring break and having a great time riding around and owning the apocalypse.  I'm still considering my advice to Jackie as it's statistically very unlikely she will be badly affected by the virus – even if she does get it – so should I be the one to kill what is actually a really fun time for the kids?  I doubt I would have chosen to be a hermit when I was her age – given my assessment of these particular risks.   

    On the whole, Maddie is too worried and Jackie not worried enough.

    Florida/Stu – Well thanks for that, now I'm worried!    That seems like a really good predictive tool but there has been a non-corona flu going around Florida this past month – lots of people got it – even my Mom (who (80) has completely cut off all human contact – won't even see me or my brother or her grandchildren).

    I guess I should head for the everglades…

    Dividends/Sag – I don't think we had VZ in there.  We went with T but it's the same(ish) thing.  

    Italy/Stock – Complete catastrophe.  

    AAPL/Ati – That can crush the market all by itself.  Off 4% today.  

    FTR/Coulter – Holy crap, did we FINALLY find a bottom at 0.20?

    Indexes down again, VIX spiking again – going to be another wild week ahead.

    Have a great weekend folks, I'll be around (nowhere to go!) so let's keep the chat going.

    - Phil

  70. Phil/Hanging out

    but isn't they are telling people to not even do playdates. My son (6) and his friend did an online playdate yesterday and it really helped to refresh them. Kids don't get affected that much but they can transfer it I guess…


  71. Phil/ET,

    Any BCS that you suggest? Also for PAA?


  72. I have been selling GOOG calls almost every month against a long call position, it has been nice to receive the monthly premium. Today I got killed because they were expiring and had small intrinsic value and GOOG tanked. Usually it balances out better because the shorter calls have higher time decay (theta) .

  73. Phil – Is FAZ good to play if financials start tanking?

  74. Some interesting trading in the June $10 (bankruptcy) puts on Tesla.  They were literally trading at 0.01 on March 9th, and hit a fat finger spike high of $2 (!!!) on Wednesday.  Currently trading at 0.24 right now.  Is 2020 the year that Tesla goes bankrupt?

  75. Phil// Here is the link that shows F suspended the dividend.

    So does this change your premise for the dividend income portfolio?


  76. Play dates/Pat – Yes, defensively you shouldn't even mingle the kids but, realistically, are you really going to do that for a month?  Most likely, you'll end up picking a family or two you think is "safe" and let them get together by week 3.  If we ever have proper testing if you are sheltering and I am sheltering and we both test our families negative and we both trust each other not to go around licking the counter at the local donut shop – then there's no reason we can't all sit together somewhere.  

    Here's our problem in the US, we are still nowhere near taking this seriously and that's because our Government is totally unprepared and STILL would rather lie to you than admit that.  China has 1Bn people and EVERY SINGLE ONE OF THEM has masks:

    Image result for virus life china

    Do you think they just happened to be laying around.  Notice these are not dirty, raggy masks, they are all bright new masks so they have fresh ones every day to walk about with.  Initially, China did not have masks but then they jumped into action and now have so many they are supplying the rest of the World with masks.

    We knew the virus was coming since January, when China first started making masks – yet still we are not prepared and the President says "Who could have seen it coming?  Who could have known?" like we are idiots who can't put 2 and 2 together.  It's shameful!  

    Image result for virus life china

    Image result for virus life china

    And it's not "social distancing" that's got things under control in China – it's masks.  Masks and constantly de-contaminating surfaces and streets with those spray trucks and spray patrols.   

    Image result for virus spray china

    Image result for virus spray china

    Image result for virus spray china

    Image result for virus spray china

    Image result for virus spray china

    Image result for virus spray china

    THAT is how a government fights a virus.  Are we doing ANY of these things?

    Our Government's response has been and continues to be shameful and, if you call them out on it, Fox calls you unpatriotic now and Trump is calling the virus a "foreign invader" as if he is now a wartime President because his new reelection strategy is to keep you afraid and in your homes so you can't go out and vote for someone else. 

    And, meanwhile, he'll keep telling you how great his approval rating is and every day he'll hold press conferences where every single speaker tells you what a marvelous job the President is doing. 

    While you're stuck at home – read 1984 again.  This is how it began for Big Brother – maybe he was an actual person once but the party simply kept his image alive and deified him a symbol to control the people with in their endless propaganda campaign where they tell you what to think until they can ultimately force you think what they tell you.

    Image result for 1984 propaganda quotes

    Image result for 1984 propaganda quotes

    Image result for 1984 propaganda quotes

  77. ET/Pat – I was just thinking about writing an article about that – trading in your stock for bull call spreads.  A lot of stock people (we are options people) have stocks that are down 40-60% and to get even when your stock is down 60% means you have to gain 150% – that's a tough get, especially if you overpaid and chased a rally that may not be seen again.

    While you may be in ET for the dividend, the fact is the stock fell from $14 to $4 and now $5.25 (so up 30%!) but $14 is still a long way away.

    Let's say you had $14,000 worth of ET and now $5,250 worth – how do you get the money back?  Well, if your premise is they recover in the next two years then, rather than hold the stock and hope they don't cut the dividend, you can flip to the 2022 $4 ($2.55)/$8 ($1.35) bull call spread for $1.20.  You can afford 40 of those for $4,800 and they pay $16,000 back if all goes well so that's your original purchase plus $2,000 + $450 you had left from the $5,250 and that's without selling a put.  If you were willing to keep owning ET at $5,250, you could also sell 15 of the 2022 $8 puts for $5 ($7,500) and now you have put $7,950 in your pocket and you still have a $16,000 potential spread and your worst case scenario is having the same 1,000 shares assigned back to you for $8,000 – but that's what you just put in your pocket so not a penny worse off than you are now yet you get all of your money back PLUS $9,950 at $8/share instead of just getting your money back at $14.  

    GOOG/Randers – Crazy to see panic selling in GOOG – down $100 during the day.  

    Keep in mind though, it's only re-testing where buyers stepped in before so, unless there are fundamentally worse revelations (macro and micro), $1,050 is still likely to hold as there were clearly volume buyers there.  

    FAZ/Akrum – Yes, we made a fortune with them in the financial crisis.  It's already way up but as a 3x, it can go crazy from here.

    XLF is down from $30 to $18, so about 50% and FAZ is up 180%.  That doesn't seem right but that's because the 3x resets daily so it's like compound interest as XLF falls.  So, if XLF drops from $18 to $9, FAZ could get close to $200.  People aren't wired to think like that – even the people who trade these things for a living so the spreads at that altitude don't even exist but you can do something like take the July $60 ($28.50)/85 ($24.50) bull call spread for $4 that pays $25 though you won't likely ever get $25 but you should get a good $12 if FAZ takes off.

    FAZ June $85s are $22.50 and the $50s are $28.50 which is silly because they are in the money by $15 and you're only paying $6 for the spread.  If you were to take 15 of those for $9,000 and sell 5 of the April $85s for $11 ($5,500), you've paid for more than half of the spread on your first sale.    You can pay for the rest by selling puts in your favorite bank or JPM/Chase, who fell from $140 to $80 and the 2022 $50 puts are $8 so selling just 5 of those puts $4,000 in your pocket.  That's a good one for the STP as the FAZ can pay up to $52,500 and who doesn't want to own JPM at $50?

    TSLA/Palotay – I think $150 is worth the risk on them so no, I don't see a BK.  They do sell cars, they can last a very long time and Musk is a great manipulator – he'll just keep announcing new BS and taking deposits to hide his losses for many years.

    F/Rookie – It doesn't change me wanting to own F because F does like paying dividends so, if we buy them cheaply now, we'll have a lot of F when they go back to paying dividends in the Future.  The fact that they stopped paying the dividend is a big reason they got sold off in the first place as a lot of dividend funds were forced to sell them for that reason alone.   F makes about $4Bn in a normal year and pays out $3Bn in dividends – I would rather they take that money and invest it.  At $17Bn in market cap – they could go private in 4 years and stop worrying about pleasing shareholders. 

    Buffett bought Delta – I'm sure he has $25Bn laying around to grab F with….  Even for Berkshire, $4Bn a year is a nice return on $25Bn.

    Ford (F) Taps Brakes on Dividend Payout, Withdraws '20 View

    The company had $22.3 billion in cash and $35.4 billion in liquidity at the end of 2019, which would be used to deal with the downturn caused by shutdowns in production due to the pandemic-led crisis.

    The company is also planning to draw $15.4 billion from two credit lines. It will borrow $13.4 billion under its corporate credit facility and an additional $2 billion under the supplemental credit facility.

    The company, through its financing division, has announced a program giving customers who buy new vehicles the option to delay their first payment for six months. Ford will pay for three months and customers can defer for up to three more for a total of six months. The program is only for people purchasing 2019 and 2020 model-year vehicles, excluding 2020 Super Duty trucks.


    Moreover, the United Auto Workers (UAW) union recently ordered Ford, General Motors GM and Fiat Chrysler FCAU to shut down their U.S. factories for two weeks, in order to safeguard its members, families and communities. All three automakers have bowed to pressure from the UAW as coronavirus cases keep escalating in the nation.

    Ford currently carries a Zacks Rank #5 (Strong Sell).

    F spends $10Bn a month but most of that money is on car parts and labor so a variable cost so let's say they burn $5Bn a month for 3 months – that won't even deplete their cash.

  78. Oh, of course, since F isn't paying a dividend, you could liquidate 1,000 shares for $4.33 ($4,330) and buy 50 2022 $1 ($3.65)/3 ($2.25) bull call spreads for $1.40 ($7,000) and sell 1 GM 2022 $10 puts for $2.25 ($2,250) so that's net $4,750 and you get $10,000 back at $3 and worst case is you own 1,000 shares of GM for $10,000 instead. 

    If you don't want to risk the GM put, you can just pick up 50 of the F 2022 $3 ($2.25)/5 ($1.35) bull call spreads for 0.90 ($4,500) and that pays $10,000 at $5 with no margin.  A lot easier than waiting for $9 to come back.  

  79. Looking at the above, it does remind me of our 2008/9 prices that seemed pretty unreal in retrospect – until this week – of course – when they are being offered to us again!  

    Stock Market Crash – Year One Review III – March Madness!

    I happened to be on TV myself that afternoon, broadcasting the last 3 hours of a day that the market was plunging 300 points off the open on Livestock with Tim Sykes, where I laid out my bullish case.  Sticking to our plan, we were BUYBUYBUYing stocks at the bottom but the trade of the day was the one our Members had been planning all week – the shorting of SKF at $250, an entry we hit pretty much on the button that day and turned into a 1,100% winner.  In fact, people viewing the show that day who put $1,000 into each position we picked that day would have had this virtual portfolio:

    • Short SKF: 1 March $210 put for $10 ($1,000) finished at $12,000 ($11,000 profit, 1,100%)
    • Long FAS: 71 shares of stock at $14 (adjusted), now $77.70.  In for $994, now $5,517 ($4,523 profit, 455%). 

       Note, I advocated 1,000 shares!  

    • Long FAS: April buy/write 12 contracts at .80 ($960) with $2.50 called away at $3,000 ($2,040 profit, 212%). 
    • Long RUT (Russell Index): 1 May $390 call at $10 ($1,000) finished at $10,500 ($9,500 profit, 950%). 
    • Long GE:  142 shares at $7 ($994), now $2,094 ($1,100 profit, 110%)
    • Long BAC: 318 shares at $3.14 ($998), now $5,466 ($4,468 profit, 477%) 
    • Short SKF: 6 March $125 puts at $1.60 ($960), finished at $21,000 ($20,400, 2,087%)

      Note, I advocated doing 200 of these contracts!

    • Long DIS: 62 shares at $16 ($992), now $1,758 ($766 profit, 77%)
    • Long XLF: 166 shares at $6 ($996), now $2,423 ($1,427 profit, 143%)
    • Long AMZN: 16 shares at $62.50 ($1,000), now $1,339 (up $339, 34%)
    • Long TGT: Selling 1 April $25 puts at $2 (credit $200), expired $0 (up $200, 100%)
    • Long HOV: 1,538 shares at .65 ($1,000), now $6,305 ($5,305 profit, 530%) 
    • Long RKH: 110 shares at $9 ($990), now $2,441 ($1,441 profit, 144%)

    So that's 13 bullish plays in 3 hours while the market was crashing - The profit on $13,000 invested 6 months later is over $61,000 – 469% profits, outperforming the S&P by over 400%!   Compare what Tim and I were saying live on March 6th (buying with the Dow at 6,500) at the exact same time (2:30) as Jim Cramer was calling 5,320 as a possible bottom – 20% lower – adding to the panic for the average viewer.  I was specifically saying to buy DIS which Cramer predicts would go lower, virtually at the same time on two different shows!  Later that night, even after having a chance to view our show, Cramer was still VERY negative, with the OPPOSITE advice we gave.  Fast money also told viewers that same Friday that "there’s too much risk and too little reward to get involved."  That night, even though they could have taken some time to listen to Livestock, the Fast Money team said:

    • "A lot of people are calling bottoms", says Guy Adami. "But I still don’t think we’re there, yet. It has to feel like the end of the world before the market can bottom." 
    • "The data that I’d watch to signal a bottom is the rate of decline slowing", adds Karen Finerman. "But I don’t see that, yet." 
    • "We won’t be at the bottom until the financials participate in the market’s broader moves," adds Pete Najarian. 
    • "I don’t think we’ll get a bottom until we get policy going forward that doesn’t seem like it’s just attacking Wall Street," adds Jon Najarian.

    Television is a powerful and emotional medium, it is very difficult to go against the will of ALL these "experts" when they get on TV and all tell you to sell (or buy) and then their TV station backs them up with bearish news and bearish guests – it’s a natural bias that develops, they aren’t going to make their own paid personalities look foolish by contradicting them with facts and dissenting opinions.  On Monday, March 9th, Cramer and company were still at it with his ridiculous, fear-mongering Dow 5,320 call.  Cramer wasn't the only idiot on that bandwagon – the same morning Uncle Rupert's Journal headlined "Dow 5,000?  A Bearish Possibility" but that didn't stop me from taking our QID puts off the table in Monday morning's post at exactly the high of the year.  Not only did we take the money and run at $70+ on QID but we flipped into the QLDs for $20 – at their low of the year (now $49) – now that's flipping!

    Of course we don't always get such clear market signals and generally, in times like these we are happy to grind out normal monthly gains but the trick about investing is to be ready for opportunities like this when they come along.  Sure you could have turned $13,000 into $74,000 but you have to have $13,000 to invest.  Tying up all your buying power is never a good idea and that's why we try to stress balance and patience.  The MSM is full of buffoons who stampede the masses in and out of the markets at will.  If you review these three posts you'll see that betting against them wasn't a one-day event but a months-long process that culminated in our being in the right place at the right time

    You never know when the right time is going to be, but – if you keep showing up at the right place – you have a better chance of being there when it finally is the right time

  80. The best thing for this country to make it through this crisis would be to have Trump stop talking and asking for undying loyalty from the experts. Him lying every single day on that podium about testing, masks and so is getting people killed! And of course, not taking responsibility for anything which is the original sin for any leader! 

    He had been warned since January and chose to ignore it because it was politically inconvenient. At this point, it's frankly criminal! We'll make it through this but with much unneeded suffering. But we had been warned – he told us he would run the country like he had been running his businesses! But his businesses are going to get bailed out, again… And the country won't get close to what he gets!

  81. Pharm & StJeanLuc – I live in the Boston area and would love to meet you guys for dinner when the crisis is over. Be well,

  82. Cool Deano! Can't wait for this to be done… 

  83. They are saying that we are now over 1 billion people in confinement! How can the economy not take a huge hit?

  84. I am curious just what chemicals are being sprayed directly on people

  85. Hopefully, it's a mixture of Joy dishwashing soap and water…. ;)

  86. also have brk/b Looking primarily to add to my AAPL and Brk/b positions. No more put selling at this time but will do verticals. I have sold aapl 22 June 230 puts.

    Also have brk/b 22-June 170/190 spreads. 
    Scary times bet brk price very attractive now just at or below BV.

    Plan  to continue small legging in. 

  87. Pstas I like spreads know too, they reduce the overall risk. I'm just reacting to times; Earlier in the year puts were expiring worthless, now it is calls.

    Figure out the worst case scenario is that you could die, and if you can live with that, in which actually you can't. You might as well treasure each day. People are behaving well in general. I got take out last night from a restaurant that I could walk to. People were queing in the first 10 feet and all maintaining safe distances. I opened a special bottle of bourbon after that. I have not been to the office in over a week. Armageddon has benefits !

  88. 1984 was one of the books my son brought on a 3 month backpacking class in the Rockies with NOLS 

    I think it profoundly changed his thinking, along with being off a cell phone for weeks at a time. There is no service for miles in the Wind River range. 

  89. Right now I give perhaps a week to ten days before the shelter in place orders begin to unravel. Americans are simply too restless to sit still for very long  Also, I see conflicting advice on mask wearing  CDC vs NYT columnist. Health workers need them so pushing the public to get masks is counterproductive especially given shortages of raw materials to make them . God bless the Chinese people for what they deem prudent but short of biblical proportion calamity universal mask wearing here is not going to happen.

  90. Could be the new norm – No shaving guys!  ;)

  91. Phil// Thanks.  Any suggestions on AAPL trade or wait for aapl to bottom

  92. Phil if only holding the short $8 put part of the SPWR position what would you add to it?

  93. Thank God the Doctor Is In

  94. Italy, Pandemic’s New Epicenter, Has Lessons for the World

  95. I would be a fan for life of the reporter, who once insulted by potus, tell's him to go f*ck himself…  :)

  96. Research the stocks that might thrive post-Covid19

  97. Leaderless on the Economy

  98. Two degrees of separation – a friend of a friend in NYC has the virus. 

  99. You can expect more cases of just one degree of separation – one of my wife's cousins has it!

  100. ‘I had been walking a fine line’: Fauci says correcting Trump is risky

  101. NY airports, hospitals feel pressure as virus alarms grow

  102. AP Exclusive: 1st fed inmate tests positive for coronavirus

  103. The GOP senate plan includes a $500B fund that Mnuchin would control by himself. Would be able to choose beneficiaries including the Trump companies. Dems are opposed for good reason. Also very weak buyback restrictions. These guys are truly sociopaths.

  104. Hi Been trying to get out of Fla and what a struggle to change tickets. In desperation I just rebooked a new ticket since I couldn't get my round trip return ticket either cancelled or credited even when they claim there is no penalty for change! It's Dal and I'll never book rdtrip again. Online they say I have to call an 1-800# which of course no one answers! Needless to say the problem with the spring breakers is they can bring the virus home and infect everyone. With family in NYC things are very dire for them. I pray this is short term for everyone's sake.

  105.  More bad news from China. 


    If I hear anything else,  I'll let you know.

  106. Well, that was a poor attempt at some gallows humor. In the original, the ? were all Chinese language characters. Cut/past did not recognize it. 

  107. LOL Pstas!  I’ve had that happen to me too.  

    That $500Bn thing is sickening.  

  108. Pressure mounts for Trump to actually use Defense Production Act

  109. How the Coronavirus Became an American Catastrophe

  110. Phil if only holding the short $8 put part of the SPWR position what would you add to it if anything?

    For positions like those in dividend portfolio is there too much risk in selling again at high VIX the same puts then closing out the original puts when vix comes back down?

  111. trump not impressing market soo far

  112. It took five minutes for futures to lock up down 5%!!!

  113. Limit down on futures at the open

  114. I counted 4 mins :) back downstairs to watch a movie……….maybe if they come up with some sort of plan the markets will start trading up.

  115. Yikes. Looks like we are going back to 2016 Election day numbers.  A complete repudiation and erasure of the Trump era.

  116. ….but I'm on Canada time and we're a huge discount right now. :)  

  117. trump sure isn't giving me a warm fuzzy feeling. he says the words but they don't sound sincere.  

  118. How to Solve the Ventilator Shortage

  119. Limit down in the Futures again as there’s no deal in Congress.  

  120. Aaaand Senator Rand Paul is positive for Coronavirus.

  121. AP FACT CHECK: Trump falsely says ventilators coming ‘fast’

  122. COVID-19 lung patterns show few clues for treating pneumonia

  123. Nothing yet from feds on backstopping the debt market.  Seems like a big omission to me.

  124. This is what you call a bad month:

    You can see why we like SQQQ hedges!

    Well, we had fun playing 0.65 last week on /RB so why not play 0.55 long now?

    AAPL/Rookie – If I wanted to start now, I'd go for the June 2022 $200 ($68.50)/300 ($30) bull call spreads at $38.50 and assume you'll later sell the $300 puts (now $100) if it starts going up and using that money to widen the spread and lower the basis.  If AAPL goes lower, then you can sell the $200 puts (now $40) for $65+ (the price of the $250s now) and use that to roll the $200s to the $150s (now $100) for another $32(ish) and pay off the net of the spread.  So, if you want to own the AAPL June 2022 $150/300 bull call spread with the short $200 puts for free – step #1 is buying the $200/300 bull call spread and your worst case is probably not AAPL going lower and getting the great spread but AAPL going higher and all you make is 160% on the spread at $300+.

    SPWR/Tangled – Since the 2022 $8 puts are now $4.25, you should simply be thrilled if they expire worthless but you can always add the 2022 $8 ($2)/12 ($1.50) bull call spreads for 0.50 if you are a believer – seems like a very good risk/reward ratio to me.

    Puts/Tangled – I would try to avoid adding too much risk.  The Administration is still bungling the job and inspiring no confidence.  We could be just a week away from hearing we have more cases than China (Italy may be days away) and when we start seeing film footage of US hospitals like that one in Italy – I'm not sure where the bottom will be to this market.  Not to mention the way Congress is screwing up the relief bill while Trump tries to turn this whole thing into a money grab for himself and his pals.  

  125. This is why the Fed has opened the spigots: Goldman Sachs spends $1bn to shore up two money market funds

    "A regulatory filing, first reported by Reuters, shows Goldman paid $772m to buy securities from its Square Money Market Fund (SMMF) last week, and another $301m to buy assets from its Square Prime Obligations Fund (SPOF).

    The SMMF shrunk by $7.1bn in the week to Thursday, leaving it with assets of $9.6bn, according to industry monitor Crane Data, while the SPOF’s assets declined by $1.7bn to $5.5bn over the same period."

  126. What is the best oil play if you believe it will rise but know not when?  USO I assume has some roll loss over time along with the expense ratio.

  127. Good morning!

    Only down about 3% at the moment and that would certainly be better than the alternative.

    The rapid spread of coronavirus cases and Washington’s delay over an economic rescue package rattled markets, sending U.S. stock futures, global stocks and oil prices lower.

    Babies!  So what if it's stalled – we're going to get it and this is only the March package.  We all know that so people need to calm down.  Unless the virus gets significantly worse, I think the damage is priced in.

    But that's not going to keep you reading the papers, is it?


    SoftBank to Sell $41 Billion in Assets, Plans Big Share Buyback

    SoftBank said it planned to sell up to $41 billion of its assets to buy back shares and redeem debt, in an unprecedented move to combat the tumbling price of its stocks and bonds.39 minutes ago

    Governments world-wide are increasingly imposing mandatory restrictions on residents to force people to keep their distance from each other, stepping up efforts to slow the global spread of the coronavirus as cases surged past 330,000.9

    Oil/Tangled – Remind me later.

  128. /Phil/rb- did you exit rb?