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$5,000 Thursday – Yesterday’s Oil Petroleum Plays Pay Off Fast!

Wheee, that was fun!  

For thos of you lucky enough to subscribe to yesterday morning's PSW Report we had almost all day to get in at our target entry on Oil Futures (/CL) at $20 per barrell and we got a nice ride to $22.50 this morning – for gains of $2,500 per contract on our two long contracts as Oil blasts 10% higher this morning.

Apparently China is buying up oil to fill up their Strategic Petroleum Reserves while it's so cheap and who could have seen that coming?  We could!  That's what happens when things get cheap – people buy them!  That's kind of the whole point to INVESTING – understanding the true VALUE of things and taking avantage of situations where the PRICE does not match the VALUE.  QED!

Still, we don't want to be greedy so we'll set a stop at $22.50 once /CL is over that line and at 0.615 on our Gasoline (/RB) Futures that we picked up as it came back to the 0.55 line into the close – also stupidly cheap and now up close to $3,000 per contract at 0.62.

That was a pick we discussed in our Live Trading Webinar and again in our Live Member Chat Room and playing the Futures is another excellent way you can make quick money to supplement your portfolio during a choppy market. 

8:30 Update:  6.65M Unemployment Claims this week!  That's about as bad as expected but the market still sold off on the news (which is why we set tight stops on our energy trades) and now we can get back in if we cross over those lines again or perhaps lower).  That's double last week's pace and we never like to see accelerating negatives like that.  

That should have us re-testing yesterday's lows in the Futures and now I like Nasdaq (/NQ) 7,400 for a long play with very tight stops below.  Setting tight stops at a good support like means you limit your losses but not your upside.  2,450 on the S&P (/ES) Futures is already blown but we can jump on those when they cross back over (it's better to play with the momentum anyway) and place VERY TIGHT STOPS below that line but /ES was at 2,500 this morning so, if we retake that – the upside potential is $2,500 per contract while stopping out at 2,445 is risking $250.  You only have to be right 1 out of 10 times to break even on trades like that!

The market reaction to unemployment doesn't make a lot of sense since we're sending $1,200 to all 160M working Americans AND to 130M non-working Americans BECAUSE we knew there would be a lot of unemployment and that's $360Bn, which is enough money to pay the 10M people who actually lost their jobs on the past two weeks $36,000 each. 

A Brief History of Unemployment Insurance 

So, will there be more money or less money in consumers' hands next month when the checks come?  Yes, there will be 10M less people working (probably 20M by then) and let's say they all made $4,000 per month and it will have been a month with no pay (but they do get unemployment checks – so not NO pay) – that's -$80Bn vs +$360Bn of total cash in the hands of consumers.  This is not complicated economics – it's just simple math.

That's why we'll take those Futures longs – most people can't do math!


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  1. Gave back some lines very quickly!

  2. Good Morning.

  3. Some people simply need to give up their jobs right now – you would get fired at your job for being so ignorant of facts:

    Georgia’s Governor Brian Kemp gave a press conference on Wednesday, announcing a new shelter-in-place order that’s been long overdue. But Kemp also admitted something that should terrify every person living in and around Georgia: Kemp claims he didn’t know until this week that the new coronavirus could be spread by people who aren’t showing symptoms of covid-19.

  4. This is insane and show how much the average income has lagged:

    Those two nuggets are in a new report from Edmunds, which analyzed its own data and made this startling graph. Edmunds says it’s the first time loan terms have averaged over 70 months in a single month.

    Henry Ford would be shocked that his employees have to finance one his cars over 6 years to be able to afford them!

  5. A good analysis of everything we did wrong in the US – and there is a lot there:

    I can't believe that we are saying that 100K death would be a good result. It would probably put us near the top of the worse ratios of death to size of population! That's not success unless your goal is #1 everywhere! It would more likely indicate one of the worse response failure in a very long time.

  6. Good morning, All!

    The webinar replays are now up!



  7. Wow – how low can /ng go?

  8. Loan and credit card payments to be frozen for three months in UK

  9. Good morning!

    Well the Futures were going well and then we got the unemployment number we knew we were getting.  The most surprising thing about the market is how it reacts to "news" that was obviously going to happen.  You would think traders would at least occasionally pick up a newspaper and actually read the articles and not just wait for the headlines to cross the wire.  

    Of course, as I said above, it's just math and logic as well as habits.  USUALLY, if you see 6M people out of work – that's bad.  Usually a fire is bad too but if you cover your house in fire-resistant foam and suck all the oxygen out of the area – it probably won't be so bad.  We were PREPARED for this fire – we saw it coming a mile away and we turned on the hoses 2 weeks ago with a $6Tn stimulus package to compensate for $80Bn (20M unemployed) in lost monthly wages and some corporate bailouts as well.  

    You have to be more of a scientist looking at these things and not just gut react to the headlines.  Yes, money was removed from the equation but no one is foreclosing on homes, autos or credit cards and those institutions will be made whole from their losses so the unemployed people won't be displaced – nor will they starve (assuming we have a 3 month virus window) so there's NO LASTING DAMAGE.

    Yes, if those things happened WITHOUT Government action, we'd be screwed but the Government already acted – just like they finally acted with TARP but that was too late – this time they got ahead of the curve but traders are acting like they didn't do anything.  They are wrong and you can either take advantage of it or you can stare at it like a deer in the headlights!  

    Market Cycles and the Emotional Reactions Traders Experience

  10. Big Chart – Hopefully we avoid the Big W pattern that takes us back to the lows but, again, that was pre-$6,000,000,000,000 stimulus and I'm sorry but I think that matters…

    Looking at a chart is great to tell you what happened but, when circumstances change, looking at the chart is a detriment!  Let's say the chart showed you the times of a mile race that were getting better and better and then the guy lost a leg and they got much worse.  Would you expect them to bounce back over time?  What about if he got one of those blade legs?  Maybe it won't go back to the worst times ever again?  If you use charts but don't take new data into account – the chart is completely meaningless!  

    SYFY | Chosen One of the Day: Gazelle from Kingsman: The Secret ...

  11. /CL/Phil  How about kudos to the webinar gang for keeping you in the trade?  ;)

  12. Kemp/StJ – That's simply a lack of leadership at the top.  Of course there are uninformed people at all levels of Government but, USUALLY, the people in the Federal Government, who have access to all the top scientists will have meetings and send out action plans with facts and details about what the best practices will be but, unfortunately, we're in the middle of conducting an experiment in anti-science leadership right when we happen to have a science crisis.  Shame on Kemp for not taking advantage of the CDC, right in his state but, of course, he's just another Right Wing Lunatic that the Republicans love to elect these days.  

    During Kemp's tenure as secretary of state, his office was affected by several accusations and controversies. In 2015, a data breach within Kemp's office distributed the Social Security numbers and birthdates of over 6.2 million Georgia voters.[3] Kemp was the only secretary of state to reject help from the Department of Homeland Security to guard against Russian interference in the 2016 election.[4] He also implemented Georgia's controversial "exact match" system for voter registration.[5] Critics have described Kemp's actions as secretary of state as an example of democratic backsliding.[6] Kemp denies that he actively engaged in voter suppression.

    In 2018, Kemp was a candidate for governor. After coming in second place in the Republican primary, he defeated Lieutenant Governor Casey Cagle in the Republican runoff with 69% of the vote. In the general election, he faced Democratic nominee Stacey Abrams. Kemp notably refused to resign as secretary of state while campaigning for governor, a move that some critics claimed constituted a conflict of interest.[7] Following the general election on November 6, Kemp was declared the winner with 50.2% of the vote.

    Kemp rejects the conclusion by the United States Intelligence Community that Russia interfered in the 2016 election.[18] Amid Russian interference in the 2016 election, Kemp denounced efforts by the Obama administration to strengthen the security of election systems, including improving access to federal cybersecurity assistance.[18] He denounced the Obama administration's efforts, saying they were an assault on states' rights.[18]

    In October 2015, the Georgia Secretary of State's office, under Kemp's leadership, erroneously distributed personal data (including Social Security numbers and dates of birth) of 6.2 million registered Georgia voters. This data breach occurred when the office sent out a CD with this information to 12 organizations that purchase monthly voter lists from the office. The office was not aware of the breach until the following month and did not publicly acknowledge the mishap until the Atlanta Journal-Constitution reported the class action lawsuit against the office as a result of the data breach.[3]

    Kemp drew criticism again in 2017 when it was revealed that a flaw in the State voting system exposed the personal information of all of Georgia's 6.7 million voters, as well as passwords used by county election officials to access voter files, and went unfixed for 6 months after it was reported.[27][28] After a lawsuit was filed, a server at the center of the controversy was wiped, preventing officials from determining the scope of the breach.[29]

    Georgia has been the most aggressive state in removing registered voters from voter rolls for not voting in consecutive elections.[50] Between 2012 and 2018, Kemp's office cancelled over 1.4 million voters' registrations, with nearly 700,000 cancellations in 2017 alone.[51][37] On a single night in July 2017, half a million voters, or approximately 8% of all registered Georgia voters, had their registrations cancelled, an act described by The Atlanta Journal-Constitution as what "may represent the largest mass disenfranchisement in US history."[52] Kemp oversaw the removals as Secretary of State, and did so eight months after he declared that he was going to run for governor.[53]

    Geez, who could have imagined this guy would bungle a crisis?

    /NG/Jeff – I just added 2 long at $1.55.  

    Still have 2 long /ES, 2 long /NQ and 2 long /SI/CL and /RB stopped out.

    /CL/1020 – That's right, I was cursing that thing out yesterday, wasn't I?  

  13. That's a good lesson though.  I was pissed I missed $21 on /CL in the Webinar but we came in at $20 so it was just a missed exit and then it went over $21 into the close and didn't fall back enough to stop out again and then news came in about Trump meeting with Putin and the Saudis, so we gained a bit of conviction, which is why I didn't stop out at night – as the risk seemed to outpace the reward but then, this morning – 10% up is always a good time to take a profit!  

  14. I believe the moderator preaches 'patience' frequently here…. :)

  15. SVXY Feb high to March low, 68.16 to 24.91, or -63.5%. This could be a good entry at 30 and in two years it's guaranteed to be at least at 50, +33% per year (29.1% APY).

  16. Not sure if anyone looks at squeezemetrics or not. They've got a proprietary indicator which is pretty interesting, and the rationale behind the indicator is interesting. Their indicator (DIX) for dark pool buying hit a very high level yesterday. I figured we'd go lower first, but a crazy bounce would not be surprising.

  17. Oil just popped 2 bucks   Saudis and Russian agree to 10 million barrel cut ?

  18. Phil /HRB

    I think this was in the earnings portfolio but I cant find any of the adjustments in the old posts.  All I have left is July 20 calls which are most likely wotrthless (.25)

    New Play to salvage some of the losses?


  19. Phil/STJ – Kemp

    Yep, Kemp rings all the bells for the epitome of what a leader should not be. Georgia is in reality two distinct political entities: #1, Atlanta and its environs (and parts of Savannah) and #2, – no derogatory reference implied -  the rest of the state. While it is a source of unfathomable consternation for a transplant from South Philly like me that Kemp would be elected,  the folks who did vote him in, had visceral reasons that are rooted in their heritage that take precedence over logic and reason as to who the better candidate might be.

    One answer to this problem – locally and nationally – is the broadening of one's horizons (education, formal or otherwise, interaction with folks with different views) which unfortunately, takes time. Since Georgia, until recently, had an agrarian economy, there was a dis-incentive to educate the populace – to bring education to the masses – because the aristocracy had an economic need for low cost, unskilled labor. 

  20. trump doing great job of talking up oil

  21. Abrams was the obvious choice….

  22. WBA had great earnings but responsibly pulled guidance and they are down 6% – ridiculous!

    Patience/1020 – It does my heart good to see that SOMEONE is getting the message.  

    Squeeze/Ati – Wow, an indicator that tells you we might go up or we might go lower!  Where can I sign up?  cheeky  I'll stick with Cramer thank you – at least I KNOW he's wrong 90% of the time so I can reliably bet against him.  

    I can't even comment on this anymore – it's too depressing:

    Meanwhile, this is the kind of brain-dead idiocy they have at Seeking Alpha:

    Wrong. Check your facts. Experts are now saying the fatality rate is actually around 0.17%.

    NEW|01 Apr 2020, 10:35 AMReply0Like

    Author’s reply »


    Clearly that expert isn't Italian as Italy has 13,155 deaths already out of 110,574 cases and only 16,847 people have recovered. Who are these experts? What data are they using that's different from the official published data the rest of us can read?



    There are 216,768 cases in the US and 5,000 people are dead and only 8,710 people have recovered. That's 2.3%. 5,000 is 0.17% of 2.9M so are you and your "expert" saying the US has 2.9M infections already (1% of the population) and that's why 5,000 people are dead and, of course, you would also have to be saying that no other people will die of the 2.895M that have the virus but are still hanging in there.


    I'm just curious what reality you think you are inhabiting with those numbers?

    It goes back to the same thing over and over again – people just suck at math so they hear numbers and no part of their brain says "wait, that number doesn't make sense".  That's why people like Trump can spout endless BS to a generally uneducated public while vilifying the "intellectuals" who question his facts and numbers.  Who are you going to believe, the fun rich guy with a megaphone and a podium or the geek with a newspaper byline or a seat on a talk show?  

    Oil/Bert – ROFL!  Silly me with my stopping discipline – they flushed me out!  At least we still have USO.  

    I was fully intending to get back in too – just happened way too fast.  

    Good for the index longs though as the energy sector should be liking this.  XOM, TOT, CVX up 10% – Ka-ching!

    HRB/Jeff – Yeah, we have the July $20 calls at 0.25 and the 10 short Jan 15 puts at $5.35 but the trade was net $1,650 so we'll roll the puts at some point and if they expire worthless that's a very small loss and I'm not looking to press my luck as it's hard to say how the 3-month delay is going to affect these guys for the year.  So, the "plan" is to do nothing, if we luck out on the calls, fine and, if not, we will hopefully limit our loss to $1,650 if the short puts eventually expire worthless.  You can't fix every position – you need to save firepower for the ones that are worth saving.

    Education/8800 – That's the problem we have in general in this country.  We have one party whose goal is to dumb down the voters and keep them living in constant fear and insecurity so they can keep running moron crooks who promise to make them "safe".  

    Trump/Tommy – Imagine the payday he's getting from this.  

  23. Phil/stimulus/QE


    Great thought process/reasoning for oil/futures….if I could think that clearly, well, actually I would still be here..

    anyway, I believe that the virus has just started with us in this country. Look at the number of deaths in Italy. Some are not even counted and they have given up on the elderly.

    We may see the same scenario in NY and New Orleans and CA. What frightens me about it is that no amount of money will keep the economy going. We are all going to be locked in for months, not weeks. They have chosen to apply rolling lock ins while keeping travel open between states. I don't see that as working very effectively. I am in the Bill Gates camp in that the entire country needs to be on the same timetable.

    so, this market could collapse with the weight of the virus on the healthcare industry AND the weight of the lockdown. Do we see break below the recent S&P low of 2200? Very much so, I think.

  24. That pop was from a well timed tweet from the orange man

  25. Well Maya, I hope not.  

    My theory is that we can stop the spread any time we gather the will with a full lockdown – it's been generally effective in places it's been tried.  If we get to 1M infections before finally doing a full lockdown, then maybe 2M infections would be the end of it with 400,000 hospitalizations and 200,000 deaths.  That's 10x where we are now so maybe 3 weeks – end of April and we'd need to be locked down all of May and into June – which is about my expected time-frame for the US.  While it's terrible – it's still not forever.  

    Now, if you think we go from 200,000 this week to 400,000 next week and 500,000 into easter weekend and over 1M into the last week of April and Donald Trump and Congress still refuse to take action and we still have no line on masks and supplies 30 days later (we geared up for WWII faster than that!) – then sure, 5M, 10M cases – maybe the whole country is infected at that point but, as I said yesterday, the US doesn't work that way and individual Governors are already stepping up to take control and, as far as Trump goes – this is how kings get overthrown – a crisis finally forces the people to rise up against them but his Senators will stab him in the back long before that happens.  

    Custom LEGO The Walking Dead: The Governor | "Go through the… | Flickr

    Julius Caesar was a dictator. Julius Caesar was... | Sutori

    Basically Trump taking credit for a decision they made that had nothing to do with him.

  26. How much difference does 10M barrels make against the reduced demand?

  27. Maybe MBS will put another Washington Post journalist on the alter for Trump

  28. Found an inbound JBLU flight, Kennedy to Seattle. So it's just business as usual for the Deep Staters or what? Attention Port of Seattle, NYC has 90k cases, more than all but two countries worldwide.

  29. I just don't know who at this time has any confidence left in Trump! His press conferences are a bunch of lies when you try to match what he says with the reality on the ground! People are dying and he talks about ratings, the price of oil, what a great job he is doing and so on! I watch the pressers in France and it's so much more facts, data and somber as appropriate to the situation. 

    Soon, we'll hear that 500,000 death is in fact a great number and that no one else would have done a better job than he did! And then it will be 1M death and so on… I hope it doesn't come to that, but people like Kemp, DeSantis and Trump in charge, who knows.

  30. BTW, Russia just extended their "vacation" until April 30! They fine companies very heavily if employees are found in the offices and they even revoke business permits! Which I am sure will end up in Putin's friends pockets eventually!

  31. Lockdown – isn't going to happen. Liberal media already trashing Trump for his "ill-advised thought balloon" to quarantine NYC. We should have done that 3 weeks ago. Trump is about three weeks behind the curve on the virus, and a complete buffoon, and that means we're screwed. 

    But anyone out there thinking that Joe "podcast" Biden would be doing a better job, I'd point out that that senile old idiot is about 6 weeks behind the curve. He was the assclown out saying how great China is and how we can't stop flights from Wuhan when The Trumpster Fire shut them down. 

    Dumb or Dumber – pick one. That's your presidential election right there. Same as last time. 

  32. What is your opinion of Comcast?  CMCSA  I searched and can't find any mentions in chat.


  33. NO not same as last time. Suggesting that Biden wouldn't have jumped on this with both feet listening to the experts is insane! It was the DELAY of the orange clown saying "It is all a hoax to discredit me" was what was insane. This has been forecast for 40 freaking years after Sars and all the rest of them. Disbanding the Epidemic team was insane, not stockpiling PEP's was insane. That's what a psycho/sociopath does-me, myself, and I for last and always. Only I, ME counts!! No conscience. Biden has a conscience, he's empathetic and knows to listen to when one has to rely on others in a crisis.

  34. Not quite dawgy. It may be a 'Weekend at Bernie's" with Biden, but he will surround himself with competence and make nice with our old 'friends'. That's a good start.


    Seriously, Did it really take a nasty virus to put away the MAGA hat?

  35. Reminder, the Trump Admin sent 17+ tons of medical supplies to China earlier this year to help them with virus spread.  Good thing the virus spread was a hoax or else we would be in desperate need of those supplies right now.

    But to Draft Dodging Donny's credit, he was right in that I am absolutely tired of all this winning…

  36. Well, I'm unable to confirm from anywhere but Trump's tweet that oil will be cut by 10Mb/d and, looking at the FACTS, that dosn't make a lot of sense with the Saudis and Russia at 22Mb/d so are they going to cut 50% of their production?

    Again, math….

    10Mb/Tangled – And that's math too.  We just saw a build of about 20Mb in a week in the US so consumption down 3Mb/d (15%) which means in an 80Mb/d global market, they need to cut 12Mbd – assuming it's consistent.  

    My guess is (if we can assume there's even a grain of truth in what Trump said) that MBS said to Trump that THEY (including the US, all of OPEC and Russia) need to cut production by 10Mb/d to balance things out – not that the Saudis and Russia were offering to bite the bullet for the whole World.   

    JBLU/BDC – Our leading export is Coronavirus!  

    Don't forget Pence/StJ – I can't get my head around how he can be such a Christian and then get up there and lie his ass off.  Trump, obviously, is a fake Christian but Pence seems like the real deal but then how can he act the way he does if he really believes there's a Heaven and Hell and a God who judges your actions?

    Permits/StJ – Those who lived through WWII in Europe will be recognizing the phrase "Papers Please!"

    Nazi Papers Please Gif

    Fawlty Towers S02E03 - This Is Exactly How Nazi Germany Started ...

    Biden/Dawg – So Trump ACTUALLY screwing everything up is the same as Biden theoretically screwing things up in your mind? "Why change horses when we know the one we have is definitely dead for one that might be dead too because, you know – you never know with horses, right?"  That's some really fancy logic you're brandishing there…

    CMCSA/Tx – I think the last thing people will do in this crisis is cut their cable/internet but Comcast is victimized by their diversity (like DIS) as they also own theme parks and sports teams and arenas as well as DreamWorks, Universal Pictures, NBC Studios, Telumnudo and Sky Sports – which are horribly hurting at the moment.  About 1/2 their money comes from TV/Internet and the rest is in trouble.  Theymade $13Bn on $108Bn in revenues last year so, long-term, $34 ($155Bn) is a good deal but April 30th earnings are likely to be a shambles and too soon to predict an end to the nightmare so I'd be careful but still an opportunity to establish a 1/4 entry:

    For the LTP:

    • Sell 5 CMCSA 2022 $30 puts for $5 ($2,500) 
    • Buy 15 CMCSA 2022 $30 calls for $8.25 ($12,375) 
    • Sell 15 CMCSA 2022 $40 calls for $3.75 ($5,625)

    That's net $4,250 on the $10,000 spread so $5,750 (135%) of upside potential at $40 and we HOPE it goes lower so we can DD on the puts ($3,000) and roll the $30s to the $20s ($5,000) for net $2,000 and then we'd be in the $20,000 spread for $6,250 but, for now, best to start off cautiously and, worst case, it goes up and we "only" make 135% on our original play.  

    Biden's Weekends at Bernie's - WND

    And what Pirate and 1020 said!

  37. Well, I tend to keep taking these things off the table too soon but how can I not?

    I guess stop one at 7,550 and one at 7,500?  The way these things swing, it's hard to set stops.

    /ES is up about the same at 2,505 so stop on both at the 2,500 and I guess we'll look for fresh horses if they fail.

    Takes away the sting of missing the oil move…

  38. What do you think of CVS at these prices?

  39. Phil/ infections/IBM

    I hope we don't get to 1million infections. If we do, it is very unlikely that the total ends up being only 2 million. More than that.

    400,000 hospitalizations with 25% of that going to ICU's (from the NY numbers) translates to a huge burden  on healthcare. Approximately 6100 hospitals, including rural ones. Not all hospitals have ventilators or nursing staff/physicians to deal with ventilated patients. So, if half are assumed to be able to take care of these patients for 2-4 weeks on a ventilator, that's an average of 32 patients…in each ICU and 90 patients in the regular beds. I suppose it's doable..maybe. Some hospitals only have 50-100 beds total and 1-4 ICU beds.

    Scary! See this going through summer/early fall unless coordinated effort by our entire country.

    Back to business: IBM is down. Any adjustment to our $120/140 spread? I paid $7 to roll the 120's down to 100. Anything else you would do? The 5 $120 puts are still there, maybe could be rolled to 10 of the $100's for even?

  40. 3 week lockdown and at least 2-3 rapid tests on everyone in that period and we would be over this by end of April! Completely over!

  41. I like WBA better, Tangled – you know that, right?  

    CVS is good too at $56 as that's $73Bn and they made $6.6Bn last year so 11x and there's no reason to think this will be a bad year for them – other than 10% of their customers dying if Trump doesn't get his act together this month!  

    WBA, on the other hand, at $40, made $4Bn last year but it was a transition year as they merged with Boots and absorbed RAD.  $40 is $35Bn so WBA is simply cheaper then CVS and WBA has $136Bn in sales and CVS has $256Bn in sales so WBA drops 3% to the bottom line and CVS drops 2.5% to the bottom line and CVS has 10,000 stores and WBA has 14,000 stores with 232,000 employees vs 290,000 at CVS so WBA is generally a much more efficient operator better able to ride out a downturn and 1/3 of WBA's business is international – which is a huge plus not putting all eggs in the same basket.  

    So, other than by comparison, CVS is fine. 

    Infections/Maya – As you say, scary but doable and, at the moment, we're still in the doable zone.  When we begin to leave it, then I'll be more bearish.

    40% of NYC tenants may not pay April rent according to Bloomberg.  How's that for damage!  

    IBM/Maya – As noted above, you can't adjust every single position.  There's nothing wrong with the 2022 $140 target so there's no NEED to adjust the position while other positions have targets that no longer make sense and MUST be adjusted to increase their likelihood of becoming profitable.   

    Of course you don't need me to tell you that buying back the 2022 $120 puts for $28 with IBM at $110 is paying $18 in premium out of fear for no good reason as $120 is a very realistic target for IBM to hit in two years and there's no way someone would be stupid enough to assign you and blow $18 and it would be pointless to double your margin requirement just to roll down 20% from the short $120 puts to the $100 puts.  You also don't need me to tell you that if you feel you MUST spend money on IBM at this juncture, that the best thing to do is roll the long $120 calls at $10.50 to the long $110 calls at $14.50 as you'd be spending $4 to go $10 lower (though only at the money) and the $100 calls are $19.50 so another $5 and then you're $10 in the money for net $9 – so also not a bad use of funds but, if it's 10 longs and that costs $9,000 that you could have spent fixing something that really needed it – then maybe not the best use of $9,000?

    Testing would be nice but still a fantasy for now. 

  42. Hmmm speaking about testing:

    Health experts say they now believe nearly one in three patients who are infected are nevertheless getting a negative test result. They caution that only limited data is available, and their estimates are based on their own experience in the absence of hard science.

    That picture is troubling, many doctors say, as it casts doubt on the reliability of a wave of new tests developed by manufacturers, lab companies and the U.S. Centers for Disease Control and Prevention. Most of these are operating with minimal regulatory oversight and little time to do robust studies amid a desperate call for wider testing.

    We are so screwed!

  43. Short /CL here? They just said 10Mb is too much cuts

  44. What are your thoughts about Century link vs Comcast. More of a pure cable play??

  45. maya 1 who said it

  46. Not everybody is losing money:

    With the coronavirus outbreak creating an unprecedented demand for medical supplies and equipment, New York state has paid 20 cents for gloves that normally cost less than a nickel and as much as $7.50 each for masks, about 15 times the usual price. It’s paid up to $2,795 for infusion pumps, more than twice the regular rate. And $248,841 for a portable X-ray machine that typically sells for $30,000 to $80,000.

    Good jobs being created I am sure!

  47. Testing/StJ – All they did in China was simply see if people had a fever and, if so, didn't let them wander about!  You don't need perfect tests to control a pandemic – they had NO tests in the 1800s and they managed to figure it out.  This is simply and epic failure of Government to govern…

    /CL/Maya – I liked the floor for a long but who knows what will happen at $23.66?  I find with the futures, you should only make a bet when you are 90% sure – that way you're only wrong about half the time.  

    CTL/Millard – After playing FTR I have no taste for regional carriers.  CTL had $22.4Bn in sales and lost $5.3Bn last year and FTR had $8.6Bn in sales and lost $750M last year yet CTL is priced at $9.5Bn at $8.75 and FTR is priced at $38M at 0.36 so I'd rather have 24 shares of FTR than one share of CTL still – though why would I spend money on either when T is $28.35 (10x earnings) and VZ is $54.67 (11x earnings)? 

    I do not understand why people want to buy non blue-chip stocks when blue chip stocks are trading at 10x earnings.  What can you possibly think is better about gambling on second and third-tier companies?

    Extortion/StJ – Sickening.  Lack of Federal coordination has states bidding against each other for vital supplies and Trump STILL has not enforced the production act to make sure supplies will be available when we have 10x more patients in a month.  He is willfully, knowingly killing people!

  48. Extorsion / Phil – I know some people here object to the words sociopath and criminal. But what else can you call what is going on now with Trump? 

  49. As long as it's New York City and not Kansas City (Kansas), Trump considers the death count to be check marks on his enemies list. 

  50. Drumroll please…..

    Let's go to the tote board': editorial -

  51. Extortion – Like I've said, A robust and competent FEMA at the center of the coordination would be a huge help. 

    In the meantime, if I were the states, I would remind those involved that they will have a long memory of those looking to 'make out' during the crisis. Bastards….

  52. …and I don't give two sh*ts about supply and 'demand'….

  53.    says over 1M

  54. Must be time for my meditation… :)

  55. Phil what is that site you are using for virus stats?

  56. Let's see, we were 962,977 at 10 am and this update is 12:27 so that was 36,000 in 2.5 hours which means we are already over 1M cases today.!

    Try getting it yourselves,' Trump tells governors seeking ...

    Yep, that was 15 days ago (3/16)… Great job!  

    Monday Market Mayhem – Limit Down (Again) as Fed 0% is NO HELP!

    Remember 9/11 – there was a plan.  We formed a Department of Homeland Security who put out a color-coded threat level indicator which we did make fun of at the time but it was actually reassuring when it wasn't orange or red.  The response to 9/11 was immediate and MASSIVE – people volunteered to help out as firefighters, charities raised hundreds of millions of Dollars for relief efforts, the National Guard was mobilized.  In short, America did what it had to do to deal with a threat. 

    Leadership matters!  Elections matter!  And if you elect a Democrat to replace Trump in 2020 but then re-elect a Republican Senate to block him every step of the way, what have we changed?  That was Trump speaking two weeks ago, when the US had 15 cases and he was calling the virus that had already infected 100,000 people around the World "a hoax" perpetrated by his enemies.  Two weeks later, the US has 3,774 confirmed cases yet we have no idea how many actual cases because the Government still hasn't been able to provide testing kits.

    Meanwhile, cases outside of are now exceeding those in China for the first time and we are still rapidly accelerating while still less than half the people infected have recovered at all and, of the people with outcomes to date, 77,257 people have recovered and 6,513 have died – that's a 7.7% mortality rate on the outcomes and that's what it's been since the beginning yet Trump FAILED to take it seriously and now 3,774 Americans are infected, which means hundreds are likely to die due to his ineptitude – hopefuly not thousands – which would be worse than 9/11 in a self-inflicted wound.


    This virus will get worse but it will also get better at some point but we need leadership that is able to address the reality of the situation as well as show us the light at the end of the tunnel.  As Peter Coy noted over the weekend, "you can't fight the virus without harming the economy" and, so far, the Trump Administration has been more worried about the economy than the virus and that is NOT the right message to send to investors, who KNOW the economy can recover over time – but they don't know if there will be a future with a virus running rampant and no actual plan to deal with it.

    While it won't stop the market from going lower, I will point out that China, after two terrible months, is starting to get back to "normal" with very few new cases of the virus and, in January and February, retail sales were down 20.5% but invesments were down 25% – expectations exceeded reality to the downside.  Unemployment in China rose 1%, from 5.2% to 6.2% and home prices were flat.  In retrospect – it's nothing that should have caused a 40% market sell-off, was it?

    March 16th, 2020 at 10:09 am | (Unlocked) | Permalink 

    Surviving/Seer – Waiting to put my kids' college funds back to work.  As I keep saying, 2,850 is the "right" price for the S&P but that was based on pre-virus earnings.  If we assume 20% less sales for 2 Qs that's 10% off the year but that could be 20% of a company's profits easily so we have to look at 20% below 2,850, which is 2,280 (which we just hit) and, if that's "normal" – we could still go 10% lower so 2,000 on /ES might be a good spot to add more but, so far, we're only back to Thursday's lows – where we sold our first round of new puts for the LTP.

    So, other than giving us a chance to get the things we missed Thursday, nothing actually happened other than the 30% drop from 3,400 to 2,400 leading to a 20% weak bounce to 2,600 that was rejected on the first attempt.  Now if we consolidate above 2,400, we could be setting up to break in either direction but 2,400 was good support in Dec 2018 so hopefully there are still buyers out there at this level.  

    As I said in the Webinar – this is nothing that we didn't expect – we just have to now be patient and let it play out.  We called a bottom, took some aggressive longs and added some hedges – now we have to wait and see how effective containment is and how effective FREE MONEY is in the first round.  

    March 16th, 2020 at 11:03 am | (Unlocked) | Permalink

    Waiting/StJ – I agree, certainly not the right conditions to dive in at the moment – no clarity.

    Guidlines/Pstas – The Government has to consider the trade-offs, which are:

    • Allow the virus to spread:  People panic anyway and self-quarantine.  Hospitals overwhelmed, possible millions die.  US becomes a pariah nation for allowing such suffering and endangering the rest of the World by allowing a deadly virus to progress unchecked through a large population —  This is not a good option, economically or electably 
    • Set up massive screening and quarantine all potential threats (many Asian countries are doing this effectively):  Legally tricky but it allows commerce to continue.  --  Have to trade your political career for economic stability as, either the virus still spreads and you are called a fool or the virus is stopped and your efforts get called "unnecessary".  
    • Mitigate the virus: Wimpy combination of the two that allows the virus to spread but hopefully not so fast that it overwhelms the health care system.  — takes an economic hit but with a full population of live people – that can be fixed by the next election and you can be the guy who led the recovery — WINNER!!!

    Cool stuff Dano.  I'm hearing from way too many medical people that they think it's a lot worse than the Government is admitting though I can't say I'm seeing that from the numbers in Asia – perhaps we're more susceptible?  More likely it's Westerners don't habitually cover themselves when they are sick or avoid getting others sick to any great extent and certainly we don't know how to self-quarantine and the Government is too spineless to act in loco parenti.  

    TOL/1020 – I don't think home buying will be high on people's list for a while.  People don't even want to look at houses for fear of catching the virus and people don't want to sell houses out of fear of infected people coming into their home.  

    Trump says avoid gatherings of 10 or more people.  Was 50 this morning.  Tomorrow it will be "avoid human contact".  

    Image result for i picked the wrong week to stop animated gif

    Stats/Tangled -

  57. Wow, up into the close for a change…

  58. Glad we got out of the short TLSA $350 puts!

  59. Heh… Phil! You posted that and TSLA popped $70 :D

  60. Just wait for the earnings report.  It is not going to be pretty.  And Q2 will be way worse.

  61. This is not my day for timing!

    People are starting to notice Trump is full of craps about the oil.  There is no confirmation from anybody that this happened.  The guy just pulled off one of the biggest market manipulation moves in history and he will never be prosecuted.  When do I get to be president? We can make $1 trillion if I can get up there and make statements like that…

  62. I am telling you that I would not be surprised if one day we find out that Trump and his friends are making bank on all the moves prompted by his lying tweets and statements! 

  63. Do Tea Drinkers Live Longer?

  64. Face Masks Are In

  65. H&M March Sales Plummet 46%

  66. Thailand says new economic measures to ease virus impact worth 10% of GDP