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Micro SOFT Security Monday – Chinese Hack Wrecks Tech

China Broadens Cyber Options - Asian Military ReviewWe're under attack.

At this very moment, a Chinese Government-backed hacking group has used Microsoft's EMail software to infect 60,000 Corporate Clients.  Yes, it sounds like the plot of a movie and that we should be sending a tape to Tom Cruise or something but this is really happening – NOW.    The European Banking Authority became one of the latest victims as it said Sunday that access to personal data through emails held on the Microsoft server may have been compromised. Others identified so far include banks and electricity providers,   

The rapidly escalating attack came months after the SolarWinds Corp. breaches by suspected Russian cyberattackers, and drew the concern of U.S. national security officials in part because the latest hackers were able to hit so many victims so quickly. Researchers say in the final phases of the attack, the perpetrators appeared to have automated the process, scooping up tens of thousands of new victims around the world in a matter of days.  The Chinese hacking group, which Microsoft calls Hafnium, appears to have been breaking into private and government computer networks through the company’s popular Exchange email software for a number of months,

The attacks were so successful — and so rapid — that the hackers appear to have found a way to automate the process. “If you are running an Exchange server, you most likely are a victim.

In other news this morning:

We have a quiet week ahead of next week's Fed meeting with just Kaplan speaking on Tuesday and very little data to worry about so it's a good week for the market to drift.  3.820 is the strong bounce line on the S&P 500 and we need to see 13,000 on the Nasdaq to be back on a bullish track which is, of course, ridiculously high – so I'm not betting on that.


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  1. Good morning! Yodi, with AMJ up to $17 I'm curious to hear how your managing your AMJ Sept short 14/16 strangle from a couple of weeks ago? 

  2. Good Morning.

  3. Good morning! 

    Crazy move on oil thanks to Rent-A-Rebel:

    International benchmark Brent crude futures jumped above $70 for the first time in more than a year on Monday, before giving back those gains to trade in the red.

    The surge in prices came after Saudi Arabia said its oil facilities were targeted by missiles and drones on Sunday. A Houthi military spokesman claimed responsibility for the attacks.

    Yemen: Houthi rebels form new government | Houthis News | Al Jazeera

    Yellen says Biden COVID bill to fuel 'very strong' U.S. recovery

  4. Attack on Saudi oil site fuels upward march for crude prices

  5. Thousands of businesses around the globe hit by Microsoft email hack attack

  6. swampfox AMJ Sept options the first question is are we still alive in Sep. Boy o Boy the option is SIX month away, why are you worried now? We have a 16 call and the stock is 17.22 with a premium on the 16 call of 2.00. 16 + 2 = 18 so .78 cents of premium still to burn. Just look at the 14 put how nicely it melted down already. Please put this stock back to your armchair and rest. Many moons until Sep.

  7. Lol! I love it. Consider AMJ rested

  8. Morning Phil INTC – Do you think they've topped @ 63?  Looking to cover my 2023 $37.5 calls but feel INTC is good for $70 

  9. swampfox Glade you liked it, my wife also had a laugh over it. 

    I must be honest it is very hard to find new stocks to start a play with. Phil and many other are painting the devil on the wall with recession. 

    AMJ I set up when it was 15.15 or so, in one month up to 17.30. I never like to buy stock, jumping on a running train, even at 15 it was a bit high for me, but you see what happened. Many rolls in my port I am rolling out to at or even ITM giving me some down side protection. Look at SIG I do not trust that stock any more but now I have to roll my 40 Mar caller to where 50, as I feel 55 is way to high even the stock is trading at 55 today. Is every one buying gold chains instead of food now. Why is the gold price down. Sure strange things are happening.

  10. Phil//  Where do you AAPL stop falling?  Any suggested trade?  Thanks.

  11. Most apples fall off the tree

  12. INTC/Jeddah – I think it's just resistance at the top of the channel.  $61.32 is $247Bn but INTC made $20Bn last year and should make about the same in 2021 and 2022 – it's simply way too cheap at this price.  On the other hand, why keep calls so deep in the money?  

    Your 2023 $37.50 calls are $25.50 and you can cash those and buy 2x of the 2023 $55 ($13.90)/$70 ($8) bull call spreads for net $5.90 so you are spending $11.80 to have $18.20 more upside potential AND you are taking $13.70 off the table entirely.  If INTC goes back to $50, you can sell some puts, roll the long calls down and buy back the short calls and you would be right back in an aggressive trade at the bottom of the channel.  If not, you make $18.20 (154%) more at $70.

    • Consumers increase their expectations for expected earnings growth but see their spending rising even more, according to the New York Federal Reserve Bank's February 2021 Survey of Consumer Expectations.
    • Median one-year-ahead expected earnings growth increased to 2.2% in February after staying flat at 2% for the previous seven months; the median still remains below the year-ago level of 2.6%.
    • Median expected household income growth, though, was unchanged at 2.4%; that's higher than the series low of 1.9% in April 2020, but still below the 2.7% level of a year ago.
    • Median household spending growth expectations increased to 4.6% in February, rising from 4.2% in January and 3.4% in December.
    • Expectations for inflation follow a similar narrative. Median year-ahead inflation expectations increased to 3.1% in February, its highest level since July 2014, vs. 3.0% in January.
    • In the longer run, consumers haven't changed their outlook for inflation; median expectations for inflation at the three-year horizon were unchanged at 3.0%.
    • The mean perceived probability of losing one's job in the next 12 months increased slightly to 14.2% in February vs. 13.6% in January, but remains below the 2020 average of 16.5%.
    • Consumers were also slightly more pessimistic about finding a job if they lost their current one; that mean perceived probability fell to 48.8% in February from 49.5% in January,  and remains well below its year-ago level of 58.7%.
    • ARK Investment Management says non-fungible tokens ((NFTs)) will “unlock more value for content creators than any platform in history.”
    • NFTs are unique cryptographic assets run on the Ethereum blockchain that are gaining popularity. Twitter (NYSE:TWTR) CEO Jack Dorsey has put the first tweet ever up for sale. The high bid is currently from Sina Estavi, CEO of Bridge Oracle, for $2.5M.
    • “Despite its rapid growth recently, we believe NFT use is nascent,” ARK analyst Yassine Elmandjra writes.
    • Digital “creators can monetize their followers directly with NFTs, selling unique digital content without intermediaries,” he says.
    • "Last week, for example, EDM music producer 3LAU sold 33 unique tokens for more than $11.6 million, the NFTs redeemable for 'special edition vinyl, unreleased music, and special experiences.'"
    • ARK holds Grayscale Bitcoin Trust in the ARK Next Generation Internet ETF (NYSEARCA:ARKW). Its flagship ARK Innovation ETF (NYSEARCA:ARKK) has been hit hard of late as high-valuation tech stocks slump amid rising yields.

    This is getting very interesting! 

    • Noting the "improving 2021 outlook and relatively early days of OLED adoption," Roth Capital Partners upgrades Universal Display (NASDAQ:OLED) from Neutral to Buy with a $250 price target.
    • Key quote: "As we enter 2021, we expect the recovery in mobile devices (11% growth in 2021 according to Gartner) and continued growth in OLED TVs (~2% penetration) which gives comfort to 2021 guidance of 24-31% growth."
    • OLED shares are up 6.2% to $200.70.
    • Last month, Universal Display rallied after reporting Q4 beats and a dividend increase.
    • Seeing an attractive risk/reward balance after the recent selloff, BMO Capital Markets upgrades Marvell (NASDAQ:MRVL) from Market Perform to Outperform and raises the price target by $5 to $50.
    • The firm notes that current management has MRVL on a "path to transforming the company" to focus on the infrastructure market, which has "far higher growth characteristics" than the HDD market.
    • Key quote: "Bottom line for us, we like how the company has been executing. We see it very well positioned in a sticky, and growing infrastructure market. It has continued to add key IP/capability to address the same. And at current levels we find the risk reward on shares appealing."
    • Marvell shares are currently relatively flat at $41.50. Shares are down nearly 19% in the past month due to the broader tech rout and Marvell reported inline Q4 profit and a soft outlook.

    • MeaTech 3D (MITC), an Israeli tech company that aims to develop the technology to grow proteins in a lab and “print” meat without having to kill animals, has initiated marketing on a U.S. initial public offering of American depositary shares.
    • The company, which currently trades on the Tel Aviv Stock Exchange with about a $389M market capitalization, plans to sell 1.7M ADSs at $15.10 each.
    • It’s also granting underwriters the option to buy another roughly 250,000 ADSs for overallotments.
    • All told, the offering aims to raise $25M, or $28.8M if underwriters exercise all overallotments.
    • Plans call for MeaTech to trade on the Nasdaq under the ticker “MITC.”
    • MeaTech described itself in an S-1 filing with the U.S. Securities and Exchange Commission as “a technology company focused on developing and out-licensing our proprietary three-dimensional printing technology, biotechnology processes and customizable manufacturing processes … to manufacture proteins without the need for animal slaughter.”
    • The company said that unlike rivals who are trying to develop “unstructured” lab-grown meat products like sausages, MeaTech aims to create “high-margin, high-value structured and cultured meat products such as steak.”
    • MeaTech said that while the industry has “struggled” to develop lab-grown steaks, “this is the test on which we have set our sights – a three-dimensional, printed steak based on animal cells rather than plant-based alternatives. We believe we are the first company to be developing both a proprietary bioprinter and the related processes for growing cultured meat to focus on what we believe is a high value sector of the alternative protein market.”
    • MeaTech shares were down some 2% at last check on the Tel Aviv Stock Exchange.
    • Seeking Alpha contributor Donovan Jones does a deep dive into MeaTech's IPO here.

    This Week In Food: Tonights Dinner Is Printed & Eating Away The Plastic  Problem | FoodHack

    AAPL/Rookie – We're still over $2Tn at $118 and they make about $75Bn so 20x that is $1.5Bn so still 30% too heavy if this market were trading realistically.  Not a knife I'd want to catch at the moment.

    $80 is where I'd be excited to buy but we need a broad market correction for that.

  13. Yellen Says Stimulus Unlikely to Cause Inflation Problem

  14. Phil / TSLA – Seeking your advice on TSLA yet again. I had listened to your recommendation in January to roll my Jun 510 short calls into the Jan $1,100s. This has helped recoup a good majority of the money I had lost in the short Jun 510 calls. Thanks once again for your help withis.

    The sale of the short Jan $1,100s on Jan 13 resulted in me netting  -$152K and the position is now -$52K. Should I exit the position or should i ride it down to expiration and collect premiums or should I consider doing some kind of rollout?

    I have pasted below your recommendation from January 13 :


    Phil / TSLA,

    I have a TSLA Jun 21 510 short call. Is there any rollout you would recommend to salvage this position at this point of time or should I just sit tight and pray that TSLA price starts falling down in the next 6 months.

    TSLA/Jij – Not much of a roll once they get so deep.  Praying is not the best investing strategy.  June $510s are $358 and the Jan $1,100s are $190 so a 2x roll there with a stop at $250 would put $22 in your pocket and then take $250 back out if you have to stop but it's a good probability roll as the value would be insane with TSLA up around $1Tn and the option naturally decays at $20/month but that's $40/month if you have 2 outstanding.

  15. What it felt like to lose time — and all other things coronavirus took away

  16. TSLA/Jij – Well, when you come back from a major loss, you should be thrilled to exit with a minor loss.  In our STP, for example, we're done with the short March $900 calls as they are now up 99% and I see no chance of them coming back but now TSLA is too low to sell calls against.  We have the Jan $800/600 bear put spread but it's net $78,170 out of a potential $80,000 – so no point in that either (let's close our the TSLA Jan $800/600 bear put spread in the STP and we may as well kill the short calls too). 

    TSLA Short Call 2021 19-MAR 900.00 CALL [TSLA @ $583.61 $-14.34] -2 1/13/2021 (11) $-19,600 $98.00 $-96.99 $-129.50     $1.02 $-0.38 $19,397 99.0% $-203
    TSLA Long Put 2022 21-JAN 800.00 PUT [TSLA @ $583.61 $-14.34] 4 2/8/2021 (319) $85,600 $214.00 $90.48     $304.48 $5.38 $36,190 42.3% $121,790
    TSLA Short Put 2021 16-JUL 600.00 PUT [TSLA @ $583.61 $-14.34] -4 2/4/2021 (130) $-19,800 $49.50 $59.55     $109.05 $3.69 $-23,820 -120.3% $-43,620

    As to your short $1,100s.  It's doubtful TSLA goes back there and you have $52,000 left to gain but just make sure you are willing to deal with things if TSLA suddenly pops 20%, back to $700ish.  What will you do then when you are down another $50,000 – is your conviction worth it or are there less stressful ways to make $50,000?

    The June $510s are now $128 so that's 2x $64 and the Jan $1,100s are $48 so you actually did better on the Jans than you would have keeping the short $510s – that's the logic of those rolls – you are selling so much more premium, there's little reason NOT to make those rolls when you are jammed up.

    • Small-cap stocks are one of the best-performing asset classes when interest rates are rising, but a quick move in yields can jolt them, Bank of America Securities says.
    • Yields are up again today, with the 10-year up 4 basis points to 1.6%. (NYSEARCA:TBT) +0.9% (NASDAQ:TLT) -0.5%
    • Moves in the 10-year Treasury yield of more than 100 basis points in six months, which has been seen recently has "typically been accompanied by small cap multiple compression," but "multiples expanded in a third of those instances (with the Russell 2000 up in 60% of those instances), and meanwhile, a slower (25-50bp) rise in rates was worse for multiples than a 50-100bp rise in rates," strategists led by Jill Carey Hall wrote in a note.

    • In addition, "continued quick/”disorderly” move up in rates accompanied by deteriorating financial conditions could cause spillover effects and is a risk to watch, particularly with elevated leverage levels (and more floating rate debt vs. large caps)."
    • Small-cap ETFs: VB +1%SCHA +1.4%ESML +1.9%FYX +1.9%SMLF +2.1%JKJ +1.9%PBSM +2%FLQS +2.5%(NYSEARCA:IWM) +0.6%(NYSEARCA:TNA) +2.2%
    • "The recent decline in the performance of the largest 10 IWM components may suggest that speculative sentiment maybe finally beginning to reverse, Seeking Alpha contributor Stuart Allsopp writes.

    • After a strong last month's performance dating back to February 8th, 2021, value-based ETFs have the momentum moving forward versus growth-based exchange traded funds.
    • With interest rates reaching record lows, it has powered investors’ appetite to make 2020 the year for value funds.
    • However, the sentiment has now shifted with the consistent rise in bond yields and stronger economic outlooks due to vaccine rollouts and the $1.9t stimulus package passed by the Senate.
    • The U.S. 10-Year Treasury Yield is continuing to rise, up 0.042% in midday trading. Yields have increased in the U.S. 10-Year now up 36.67% since February 8th, 2021 and 72.89% YTD. 
    • Additionally, the steepening of the spread between the US 10YR-2YR Treasury Note has taken off. The spread has increased over 60% since the end of January and a steepening yield curve typically points to stronger economic activity and rising inflation expectations and thus, higher interest rates in the future. With that being said, growth stocks that have weak balance sheets and rely on debt to fund their operations can be put at risk.
    • See below a YTD chart comparing the S&P 500 with both the Russell 1000 Value Index and Russell 1000 Growth Index.

    • GameStop (NYSE:GME) is 33.27% higher after the company's governance update stokes some buying action.
    • The company's Strategic Planning and Capital Allocation Committee of Alan Attal, Ryan Cohen and Kurt Wolf has appointed a Chief Technology Officer and hired two executives to lead GME's customer care and e-commerce fulfillment functions, respectively. It has also begun a search for a new CFO with tech or e-commerce experience.
    • The committee, chaired by Cohen, will continue to focus on identifying actions that can transform GameStop into a technology business and help create enduring value for stockholders.
    • Ryan Cohen's involvement with GameStop has been a rallying point for bulls.
    • Globally semiconductor sales rose 13.2% Y/Y and 1.0% M/M to $40B for the month of January 2021.
    • SIA or Semiconductor Industry Association represents 98% of the U.S. semiconductor industry by revenue and nearly two-thirds of non-U.S. chip firms.
    • Regionally, sales increased on a Y/Y basis in the Asia Pacific/All Other (16.0%), the Americas (15.4%), China (12.4%), Japan (9.6%), and Europe (6.4%).
    • On a month-to-month basis, sales increased in China (3.4%), Europe (2.0% percent), and Asia Pacific/All Other (1.5%), but ticked down in Japan (-1.0%) and the Americas (-3.0%).
    • “Global semiconductor sales got off to a strong start in 2021, increasing both year-to-year and month-to-month in January. Global semiconductor production is on the rise to meet increasing demand and ease the ongoing chip shortage affecting the auto sector and others, and annual sales are projected to increase in 2021,”said John Neuffer, SIA president and CEO.
    • TSM (NYSE:TSM) largest semiconductor manufacturer in the world reported 8% growth in January, while its peer reported negative growth.
    • The Semiconductor index is far outpacing the market with VanEck Vectors Semiconductor ETF (NASDAQ:SMH) +71.3%, iShares PHLX SOX Semiconductor Sector Index ETF (NASDAQ:SOXX) +71.9%, Direxion Daily Semiconductor 3x Bull Shares ETF (NYSEARCA:SOXL) +132.9%, ProShares Ultra Semiconductors ETF (NYSEARCA:USD) +95.9%, SPDR S&P Semiconductor ETF (NYSEARCA:XSD) +82.9% vs. the S&P 500 +29.3% in a year.
    • Previously (Feb.01): Annual semiconductor sales increased 7 percent last year

    • President Biden's $1.9T coronavirus relief package should help to fuel a "very strong" U.S. economic recovery, but it won't remedy long-running inequality problems, U.S. Treasury Secretary Janet Yellen said in an interview on MSNBC.
    • The bill will provide the relief Americans need to "get to the other side of the pandemic, and we expect the resources here to really fuel a very strong economic recovery," she said.
    • That includes the U.S. returning to pre-pandemic levels of employment next year.
    • Further legislation will be needed to address inequality problems; the Biden administration dropped the $15 per hour minimum wage provision in its relief package, which it expects to pursue separately.
    • Specifically, the COVID-19-induced recession has hurt women's participation in the workforce, Yellen said during a discussion with International Monetary Fund Chief Kristalina Georgieva.
    • "It's an extremely unfair thing that's happened," she said, pointing out that women as a group had experienced far greater job losses as they make up a large number of workers in the service sector and/or dropped out of the labor force to care for children while schools discontinued in-school instruction.
    • As for fears that the large amount of stimulus may lead to high inflation, Yellen doesn't see that materializing. She sees the package addressing a lot of the biggest economic risks that can cause permanent scarring.
    • Like her former colleague Fed Chair Jerome Powell she contends that "there are tools to deal with" higher-than-hoped-for inflation
    • The Dow's (DJI) +1.5% cyclical components and its price-weighted composition are helping it outperform today.
    • Goldman Sachs, Visa, Boeing and Honeywell are posting outsize price gains.
    • The Nasdaq (COMP) -0.8% remains the weakest performer, with Amazon the only megacap in the green.
    • The S&P (SP500) +0.4% is seeing broad gains. Ten out of 11 of its sectors are higher. Info Tech (NYSEARCA:XLK) is the only decliner.
    • Materials (NYSEARCA:XLB), Industrials (NYSEARCA:XLI) and Financials (NYSEARCA:XLF) lead the sectors.
    • The 10-year Treasury yield is still higher, up 4 basis points to 1.6%.
    • "Nominal yields have been climbing since September, but the magnitude has lagged that of the rise in inflation expectations during the period," BlackRock says today. "Inflation-adjusted yields remain deep in negative territory – in line with our new nominal theme. We still believe the new nominal will support equities and risk assets over the next six to 12 months."
    • Airlines (NYSEARCA:JETS) are among the best performers in the S&P. American is locking in rates as yields rates and is raising $7.5B to repay a government loan. Southwest says it plans to add service to three new cities this year.

    • Rio Tinto (RIO +0.0%) says it will build a new $2.9M plant at its Kennecott copper mine in Utah to recover tellurium, a mineral used in solar panels.
    • Rio says the plant, which will recover tellurium as a byproduct of copper smelting – extracting a valuable mineral from waste streams – will have a capacity to produce ~20 metric tons/year of tellurium, with production expected to begin in Q4 2021.
    • Along with producing nearly 20% of U.S. copper, Kennecott's smelting process also recovers gold, silver, lead carbonate, platinum, palladium and selenium.
    • The company's production from Kennecott totaled 140K tons last year, down 25% from 2019 due to lower grades in part of the operation and changes in mining sequencing

    Good for FSLR

    • CureVac (CVAC -3.3%) in collaboration with Tesla (TSLA -2.9%) are developing an mRNA printer that with the help of required reagents could develop mRNA medicines on a computer, tailored to a particular patient’s requirement.
    • The drug printer is about the size of a regular car, and it could ‘print’ the medicine on-site after sourcing the reagents via a courier and downloading the prescription for the required medicine over the internet.
    • “The printers can be placed in pharmacies and doctors' offices around the world,” Ingmar Hoerr, the founder, and CEO of CureVac said.
    • “There is still a lot to optimize,” Hoerr added. It could be several years before the device is ready for mass production.
    • In August, it was reported that CureVac was working with Tesla Grohmann Automation, a unit of the electric car maker, to develop RNA printers to help manufacture its messenger-RNA-based vaccine candidate.
    • A group of 17 U.S. House Democrats are introducing legislation as early as today that would award $6B to the U.S. Postal Service to buy tens of thousands of additional electric delivery vehicles.
    • The bill would require at least 75% of the new USPS fleet be electric or zero-emission vehicles, according to Reuters. The legislation's backers include Representative Peter DeFazio, who chairs the Transportation and Infrastructure Committee, and Representative Carolyn Maloney, who chairs the Oversight and Reform committee that oversees USPS.
    • The bill would also require no less than 50% of medium and heavy-duty vehicle purchases be electric or zero-emission through 2029 and all new USPS vehicles be zero-emission after January 2040.
    • Legislation covering electric vehicles has been widely anticipated since Joe Biden won the U.S. presidency and control of the Senate flipped to the U.S. Senate. Most analysts expect the major green push to arrive after COVID-19 stimulus is disbursed and funding for ramped up vaccinations is set.
    • The development is seen as positive for Workhorse Group (WKHS +8.7%) and Oshkosh (OSK +0.2%).
    • EV watch: Lordstown Motors (RIDE +0.8%), GreenPower Motor (GP +1.5%), Nikola (NKLA +0.5%), FuelCell Energy (FCEL +0.9%), Plug Power (PLUG +1.1%), Tesla (TSLA -2.3%), Fisker (FSR +2.2%), Hyliion Holdings (HYLN +1.2%) and XL Fleet (XL -1.4%).
    • Interestingly, both Ford (F +3.8%) and General Motors (GM +3.3%) are strong on the day as investors weigh electric upside for the Detroit legacy players.
    • A question for investors is how much of the EV legislation potential is already baked into some of the high valuations in the EV sector?

  17. Greensill Files for U.K. Insolvency After Swift Unraveling

  18. Another terrible day for the Nasdaq.