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Terrific Tuesday – Indexes Recover at a Rapid Rate

Wow!

Just 4 days to re-make all the gains the Dow had in the entire month of September.  We're only 800 points away from the all-time high- we could get there by lunch at this pace.  The sell-off took the entire month of November, with 6.7Bn shares traded on the way down but it only took 1Bn trades to reverse all those losses.  Consider how much LESS money is now supporting that price indicator on the Dow – it's a real house of cards we're building here.   

Comics2Games - How that Jaws mayor got re elected is... | FacebookThe good news is that, after a whole week of evidence, the Governments and media outlets that desperately want us to be open for Christmas have declared Omicron to be "not so bad."   We all want that to be true so hopefully it is but it's way too early to make that call – irresponsible, in fact.  Remember in March of 2020 Trump was stil claiming Covid wasn't a problem.  In May of 2020 (Memorial Day weekend), most of America declared the emergency over.  How can we possibly know now whether or not Omicron is a problem or not?  

We hope not and we're certainly happy we were buying this dip as last week's Trade of the Year Runner Up, Intel (INTC) is blasting higher this morning, up 7.5% pre-market as INTC announces plans to spin off Mobileye self-driving division.  Last week's trade idea for INTC was:

Intel (INTC) was our Trade of the Year for 2021 and it did so well we cashed it out in April but now it's come back down and we'd like to add it back to our Money Talk Portfolio.  They did not make the cut because 2022 is an investment year for them but, longer-term, we're very exited to own the stock under $50. 

  • Sell 10 INTC 2024 $45 puts for $7 ($7,000) 
  • Buy 20 INTC 2024 $45 calls for $11 ($22,000)
  • Sell 20 INTC 2024 $55 calls for $7 ($14,000) 

Here we are laying out net $1,000 in cash and promising to buy 1,000 shares of INTC for $45.  If we lose all of the spread value and have to buy the stock, our net entry would be $46, which is still $3.20 (6.5%) below the current price.  It's a little aggressive but I certainly don't fear owning 1,000 shares of Intel for the long haul. It's a $20,000 spread so the upside potential is $19,000 for a 1,900% return if all goes well and, as we're starting out over $9,000 in the money – it's already going well!  INTC has to fall 10% before you lose money on the spread – that's a great way to start!

We had a very conservative target and we're going to be testing it this morning – not bad for a week's work, right?  Congratulations to all who played along with us.  Runner-Up WBA has also had a very nice week for us as has MO and our Trade of the Year Winner – IBM. 

Since Thanksgiving, Philstockworld has issued the following Top Trade Alerts to our Members:

That's 10 Top Trades in less than 10 days in ADDITION to the regular trade ideas we share in our Liver Member Chat Room every day.  That's what we do when the market goes on sale – sorry it was so boring leading up to it but we were waiting for exactly this opportunity to re-deploy some of our cash and it didn't matter that there was a new virus strain because we EXPECTED that to happen – that's why we were playing cautiously in the first place!  

I've always been very good at predicting what was going to happen – it's getting the timing right that I've had to work 40 years on…  

Nostradamas gets a few things partially correct within plus or minus 50 years and peeople say he's amazing – try doing that with stock picks and see what people say about you!  Timing is everything in the markets so we have to learn to be patient and we have to be ready to act or, as Pink Floyd told us:

"You got to be crazy, gotta have a real need

Got to sleep on your toes, and when you're on the street

Got to be able to pick out the easy meat with your eyes closed

Then moving in silently down wind and out of sight


You got to strike when the moment is right, without thinking"Dogs 

Now that the market has cycled back to the top, we're going to have to be more selective but we've already got $75,400 worth of profit potential from last Tuesday's 4 new picks.  That's in addition to the $159,936 of potential profits that were already in our Money Talk Portfolio so yes, we also hope Omicron is mild and the beaches stay open but, on Friday – we also improved our hedges – just in case it isn't.  

Be careful out there!  

 


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  1. before the bell

    LMT
    Dec 2016 250 Feb 2018 360 Feb2020 439 Mar 2020 229 ! Aug 2020 395 Jan 2021 321 May 2021 390
    Dec 2021 339
    Yes I am looking for an entry with LMT. The above list tells us the ups and downs of this stock. It shows us as well that the stock can drop just about 50% in a crash. Holding the stock we see as well the stock can recover again in 5 months. Obviously it never pays to sell a stock at the bottom of a crash. 
    Besides an overall positive cash flow, the pay a healthy 3.36%. The simplest way to collect the div. over the next 773 days without holding the stock, we can just sell a Jan 24 290 put for 35.00. As you can see, this protects us just about in range with the Mar 20 crash. 
    Going further to the above we can set up the following vertical.
    Jan 24 280/380 x 4, at 48.65, sell the Jan 24 290 put x 2 at 35.20, my net cost is 12,420.00 for a possible gain of 27,580.00.
    As you see on the above you more than double your cash outlay, provided the stock reaches Jan 24 380.
    Let us look at the other side of the coin. 
    We buy the stock and sell the 380 Jan 24 call at 30.50, stock and call x 4 and sell 2 x only the at 35.20.
    You do the math but it gives you a net cost of 116,720.00.
    Looking at the above vertical we say the stock will be at 380 Jan 24.
    We will have received 9,582.00 
    Capital gain 380 – 339.90 = 40.10 x 400 = 16,040.00.
    Potential total gain 25,662.00
    Obviously should the stock not reach 380, both plays will bring less return. However, Jan24 the options will all expire, in return you will still have the stock at whatever price it would be.
    A hefty difference in cash outlay of more the 104K!!!


  2. My BABA play mentioned Friday night Jan24 70/130 is already 126.70 so 3.20 more over two years to go, to get my price money.


  3. Good Morning.


  4. China Evergrande Heads Toward Default as It Misses Payment Deadline






  5. Biden to confront Putin over Ukraine in high-stakes meeting


  6. Good morning!

    LMT/Yodi – Good to see you are catching up on our Stock of the Century.  Our LTP position is still playable:

    LMT Long Call 2024 19-JAN 300.00 CALL [LMT @ $339.96 $0.00] 10 9/14/2021 (773) $64,800 $64.80 $4.05 $64.80     $68.85 $0.00 $4,050 6.3% $68,850
    LMT Short Call 2024 19-JAN 370.00 CALL [LMT @ $339.96 $0.00] -10 9/15/2021 (773) $-32,000 $32.00 $1.35     $33.35 $0.00 $-1,350 -4.2% $-33,350
    LMT Short Put 2024 19-JAN 300.00 PUT [LMT @ $339.96 $0.00] -5 9/14/2021 (773) $-18,360 $36.72 $2.38     $39.10 $0.00 $-1,190 -6.5% $-19,550

    Currently net $15,950 on the $70,000 spread so $54,050 (338%) upside potential at $370.  

    BABA coming back nicely too.  

    BABA Short Put 2023 20-JAN 200.00 PUT [BABA @ $125.75 $2.15] -10 2/3/2021 (409) $-33,250 $33.25 $46.75 $-109.85     $80.00 $-2.30 $-46,750 -140.6% $-80,000
    BABA Long Call 2024 19-JAN 180.00 CALL [BABA @ $125.75 $2.15] 40 10/18/2021 (773) $156,000 $39.00 $-17.75     $21.25 $3.25 $-71,000 -45.5% $85,000

    Wow, LTP up $42,695 this morning!  


  7. Amazing! 

       

    Seems like /NG has some catching up to do:

        

    I'd play /NG long over $3.80 with tight stops below.

     


  8. In the sea of green that is the stock market on my my screen…….T somehow manages to be in the red! :(



  9. T/Ult – Marching to the beat of their own drummer.  

    T is a great stock for people who are patient and who know how to take a profit and a terrible stock for everyone else.  

    You may be right at the very beginning of a 3-year complaining cycle – enjoy!



  10. Goldman Sachs Has Bad News for Investors Rushing to Buy the Dip


  11. Thoughts on Treasuries or leveraged Treasury ETFs like TMV? For the coming year - 


  12. Treasuries/Pman – I don't like playing when the Fed pulls the strings.   Look at China's CB doing a full reversal back to easing this week – that's really screwing up their bond market.  I anything, I'd short 30-years at 166 – seems like a good top, but very tight stops over that, like 167.


  13.  
    QSR +4.61%
     
     
    Dec. 07, 2021 11:24 AM ET

    • Evercore ISI upgrades Restaurant Brands International (QSR +4.4%) to an Outperform rating and hikes its price target to $72.
    • The firm modestly increases same-store sales estimates on Tim Hortons Canada due in part to a successful Justin Bieber promotion that is providing an additional near-term lift to loyalty membership and already-improving multi-year sales trends.
    • Evercore's QSR breakdown: "We have seen important foundational improvement at the brand (47% of EBITDA), including loyalty, digital marketing, food innovation and coffee improvements. While Burger King US SSS trends have improved in 4Q versus -2% SSS in 3Q, we still see that segment (17% of EBITDA) as a problem area. However, the struggling Burger King US is increasingly surrounded by RBI’s other growth drivers."
    • Looking ahead, analyst David Palmer and team believe a stabilizing Tim Hortons will be helpful to the company’s reputation among Canadian investors.
    • Of note to income investors, QSR offers a much higher dividend yield than restaurant sector peers.

    QSR Long Call 2023 20-JAN 60.00 CALL [QSR @ $60.24 $2.70] 15 3/25/2021 (409) $17,250 $11.50 $-6.00 $11.50     $5.50 $1.20 $-9,000 -52.2% $8,250
    QSR Short Call 2023 20-JAN 72.50 CALL [QSR @ $60.24 $2.70] -15 3/25/2021 (409) $-9,750 $6.50 $-4.75     $1.75 $0.33 $7,125 73.1% $-2,625
    QSR Short Put 2023 20-JAN 50.00 PUT [QSR @ $60.24 $2.70] -10 3/25/2021 (409) $-4,500 $4.50 $-1.48     $3.03 - $1,475 32.8% $-3,025

    In the LTP, let's buy back the QSR 2023 $72.50 calls as they are already up 73%.


  14.  
    BABA +1.73%
     
     
    Dec. 07, 2021 10:43 AM ET

    • Despite what seems like a never-ending slate of drama surrounding Chinese tech companies, e-commerce giant Alibaba (NYSE:BABA) is still flexing its muscles by "building a strong moat around its merchant services."
    • That's the assessment of Macquarie Research analyst Ellie Jiang, who on Tuesday assumed coverage of Alibaba (BABA) with an outperform rating and $162-a-share price target on the company's stock. Alibaba (BABA) shares hit a 52-week-low of $108.70 on Friday due to broader fears about DiDi Global's (NYSE:DIDI) plans to delist its shares from the New York Stock Exchange and move its listing to Hong Kong.
    • However, Alibaba's (BABAhas bounced back after naming a new chief financial officer over the weekend, and comments from China that suggest officials there won't go on a wholesale offensive to force companies to move their stock listings from the U.S. or other overseas stock markets.
    • Jiang said that she believes Alibaba's share value "has troughed" and the "bulk of the risk is now factored into the stock." Jiang added that any signs of Beijing easing up on its regulatory actions, an economic recovery or stabilizing margins, "could lead to a rebound in 2022."
    • Jiang also said that due to Alibaba (BABA) commanding about 40% of China's online retail sales, the company could end up being "the largest beneficiary of any [Chinese] governmental support for consumption and/or economic stimulus."
    • On Monday, Citi analyst Alicia Yap said last week's selloff of Chinese tech stocks was likely an overreaction, as Chinese regulators called reports they would pressure other companies to delist their U.S. shares "completely misleading."

     
    COMM +13.99%
     
     
    Dec. 07, 2021 10:56 AM ET

    • CommScope (NASDAQ:COMM) shares are surging on Tuesday, up more than 13% to $11.64, as Jeffries upgraded shares to buy, noting it's likely to benefit from an improving telecom capital spending environment.
    • Analyst George Notter boosted his price target to $15 on CommScope (COMM), noting it's likely to benefit from an improving supply chain – which could take a year or more – as well as C-Band and 5G spending for outdoor wireless and fiber cabling, price increases over the next four years and an ongoing cost reduction that should help the company's EBIDTA.
    • "Given  these  items,  we  think  there’s potential for lots of its previously-lost EBITDA to come back into the model over the next 1-2 years," Notter wrote in a note to investors. The analyst also noted that it is the best telecom spending environment in 20 years, with CommScope (COMM) likely to benefit and the company's upcoming December 14 Analyst Day with Chief Executive Officer Chuck Treadway providing more insight.
    • In late November, CommScope's (COMM) Chairman Claudius Watts and Chief Financial Officer David Lorentzen purchased shares in the open market, with Watts buying 35,000 shares and Lorentzen scooping up 25,000 shares, respectively.

    COMM is kind of tempting but I'd like to see them make profits for at least 1Q first.

    They've doubled in the past 3 years in Revenues but losing money while growing.  They used to drop 5% to the bottom line and now $8.5Bn in sales and just a $2Bn market cap at $11.65 but haven't made a penny since 2018.

     
    VLKAF +3.01%
     
     
    Dec. 07, 2021 10:36 AM ET

    • Volkswagen (OTCPK:VLKAF) soars after German publication Handelsblatt report that the Porsche-Piech family is considering a partial sale of its large stake in the German auto giant. The news is being viewed bullish as some analysts think the family selling its stake could be a catalyst for future share gains.
    • Right now, shares of Volkswagen are 7.38% higher in Frankfurt.
    • Seeking Alpha author Jonathan Weber made the case earlier this year that Volkswagen could be worth more than $100B if it was valued like the EV businesses of other companies. The chart below is a look at how the 10-year market caps of Tesla and Volkswagen (OTCPK:VLKAFhave evolved over time.

     
    CMCSA -5.40%
     
     
    Dec. 07, 2021 10:36 AM ET

    • Comcast stock (NASDAQ:CMCSA) has taken a sudden tumble, down 5%, as it sets some disappointing expectations for growth ahead.
    • Speaking at a UBS conference, Comcast cable chief Dave Watson says the company expects to end up with around 1.3 million broadband net additions for 2021, implying that Q4's growth in subscribers will fall somewhat short of analyst expectations.
    • That would mean about 185,000 net adds in Q4, whereas analysts had been looking for near 300,000.
    • Watson also suggested Q4 EBITDA growth would be in the 7-8% range, about half of what the Street was expecting.
    • He said the company expects free cash flow in the "low double digits."
    • Cable peers are sinking in sympathy: Key rival Charter Communications (NASDAQ:CHTR) is down 3% in recent minutes, while Altice USA (NYSE:ATUS) is now down 2.5%.
    • A few weeks ago, a Morgan Stanley update on cablecos named Comcast as its top pick in the sector.

     
    W +4.80%
     
     
    Dec. 07, 2021 10:28 AM ET

    • Wayfair (W +3.4%) will open three new brick-and-mortar retail stores for its speciality retail brands AllModern and Joss & Main in 2022. All three stores will be located in Massachussetts.
    • These locations will be the first in a series of openings as Wayfair plans to launch additional stores representing all five of its brands over the next two years. Wayfair has previously dabbled in the physical space, opening a smaller format retail store at the Natick Mall in 2019 that closed after 15 months.
    • The primarily-online furniture retailer hopes to create an omnichannel shopping experience by allowing customers to engage with the brands they know in an innovative format that blends in-store and online shopping.
    • The move comes after Wayfair reported a 19% Y/Y revenue drop in Q3 and customers placed fewer orders.

    ROFL – we saw that coming!  

    SPY +2.11%Dec. 07, 2021 10:13 AM ET1 Comment

    • Exchange traded funds continue their surging capital inflows as Monday they attracted over $12B in net new money inflows, three times their daily average, according to Bloomberg data provided by Senior ETF Analyst Eric Balchunas.
    • S&P 500 tracking ETFs SPDR S&P 500 Trust ETF (NYSEARCA:SPY) and Vanguard S&P 500 ETF (NYSEARCA:VOO) attracted together more than $4.1B in new money on Monday, which is greater than the $4B daily average inflows for all ETFs combined. SPY took in $2.63B, and VOO brought in $1.56B.
    • So far in 2021, VOO has been the world's top ETF inflow leader as the fund has attracted $49.89B while SPY is the fourth largest inflow leader garnering $17.64B according to ETF.com.
    • The iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSEARCA:LQD), which invests in investment-grade corporate bonds, has been the year's largest ETF outflow detractor, as the fund has experienced $15.48B in outflows. However, on Monday, the fund was the tenth largest inflow leader, taking in $414M.
    • Year-to-date price action: SPY +22.7%, VOO +22.7%, and LQD -3.29%.
    • For further dissection of exchange traded fund flows, see November's top three ETF investor flow winners and losers.


  15. Comment content omitted because it is too long.


  16.  
    AAPL +3.45%
     
     
    Dec. 07, 2021 10:02 AM ET

    • Much of Apple's (NASDAQ:AAPL) recent success in China can be tied to a 2016 deal the company signed with Chinese officials, estimated to be worth more than $275 billion, to help develop the country's economy and technological prowess, The Information reports.
    • The news outlet reported that the five-year deal, not previously reported, was personally spearheaded by Apple (AAPL) Chief Executive Officer Tim Cook, who made a number of in-person visits to the country to end certain regulatory actions that were negative to Apple's business, citing internal documents. Prior to the meetings, Apple's (AAPL) business in China had slowed considerably, due to a government crackdown on concerns the company was not providing support to the local economy and subsequent bad publicity.
    • Cook wound up personally lobbying officials over issues relating to Apple Pay, iCloud and the App Store, which have helped Apple's (AAPL) success in the country for both its services, as well as its devices.
    • The crux of the deal is a 1,250-word agreement, a memorandum of understanding, signed between Apple (AAPL) and China's National Development and Reform Commission, in an effort to boost relations between the tech giant and the Chinese government. Face-to-face meetings happened after Chinese regulators shut down iTunes books and movies in April 2016. One month later, Apple announced that it would invest $1 billion in DiDi Global (NYSE:DIDI) to help give it a leg-up in the ride-hailing space against Uber (NYSE:UBER). Uber (UBER) eventually sold its Chinese business to DiDi (DIDI) in exchange for a sizable stake in DiDi.
    • Other concessions were made by Apple, including a pledge to help Chinese manufacturers develop technologies, train Chinese citizens, use more components from Chinese suppliers, sign deals with Chinese software firms and a host of others, including spending "many billions of dollars more" than what Apple (AAPL) previously spent in the country.
    • Citing separate documents, Apple's (AAPL) total investment would account for more than $275 billion in spending over five years and the deal would automatically extend through May 2022 if neither side had objections.
    • There is some concern that Apple (AAPL) may be too reliant on Cook's diplomacy, who had received a personal invitation from China’s No. 2 official, Premier Li Keqiang, to meet in 2016.
    • The 61-year-old Cook has made several visits to China over the years, helping continue positive China relations, but there are concerns about what the company would do if other Apple (AAPL) execs were unable to build positive relationships should Cook become unavailable.
    • In fiscal 2021, Apple (AAPL) generated $68 billion in revenue from Greater China, accounting for 19% of the company's total sales, having recently become the largest smartphone brand in China for the first time in six years.
    • On Tuesday, Morgan Stanley boosted its price target on Apple (AAPL) to $200, the highest on Wall Street, as analyst Katy Huberty notes shares should benefit from a "flight to quality," upside from new products are priced in and near-term strength in the iPhone and App Store.

     
    UBER +1.92%
     
     
    Dec. 07, 2021 9:56 AM ET

    • Uber Eats (UBER +2.5%announces the expansion of seasonal delivery offerings with the brand new Holiday Hub category. The offering will expand and rotate seasonally throughout 2022 and beyond to accommodate various holidays.
    • This holiday season, the category features Uber's Holiday Shop which offers customers on-demand delivery of 2-4 foot Christmas trees and wreaths in Los Angeles, San Diego, West Palm Beach, and New York City. The partnership with Proper Companies' holiday division will also give shoppers the option to order 5-10 foot trees for pick-up.
    • Uber Eats is offering customers $20 off orders of $60+ from gifting merchants and specialty food stores to promote the new feature.
    • Click here to read SA contributor Asif Suria's analysis of Uber CEO Dara Khosrowshahi's recent insider stock purchase and what it could mean for the stock.

     
    MRNA +2.57%
     
     
    Dec. 07, 2021 9:43 AM ET

    • Cowen has initiated Moderna (MRNA +2.1%) with a market perform rating due to a discounted cash flow analysis showing an appropriate valuation.
    • The firm has a $250 price target (~6% downside).
    • Analyst Tyler Van Buren says that target is based on the company's four lead franchises: COVID-19, flu, respiratory syncytial virus (RSV), and cytomegalovirus (CMV).
    • "Moderna's near-to-mid-term valuation will rely heavily on new variant epidemic waves like Omicron, as we are not yet in the endemic phase and variant-specific boosts may be more important now than ever," he says.
    • Van Buren estimates COVID-19 vaccine revenue of $17.6B, and $22B. However, revenue will fall to ~$10B by 2026/2027 as the virus becomes endemic.
    • Based on its success with its COVID vaccine, "we believe it is highly likely that Moderna will be successful in developing vaccines for several other diseases."
    • Moderna shares closed down 13.5% yesterday amid early signs the Omicron variant may not be as severe as earlier feared.

    VIAC +1.27%Dec. 07, 2021 9:32 AM ET6 Comments

    • ViacomCBS (VIAC +0.7%VIACA +0.2%) has a global content partnership with CJ ENM, a move that will bring streaming service Paramount+ to South Korea next year.
    • Financial terms weren't disclosed.
    • The deal includes co-productions for original series and films, and content licensing and distribution across the two companies' streaming services.
    • South Korea will represent the first move of Paramount+ into the Asian market, in partnership with TVING, CJ ENM's service.
    • Among various aspects of the team-up, Paramount Television Studios and CJ ENM/Studio Dragon will co-develop and product English-language scripted series based on the latter's titles for Paramount+; they'll look to distribute one theatrical movie a year in various territories; they'll license EJ ENM's library for Paramount+, and co-finance new Korean series for global distribution; and ad-supported Pluto TV will launch a dedicated CJ ENM branded channel.
    • ViacomCBS recently sealed a $1.85 billion deal to sell off its CBS Studio Center facility, part of a move toward shedding legacy assets to get lighter.

     
    PFE -0.27%
     
     
    Dec. 07, 2021 9:29 AM ET

    • Pfizer (NYSE:PFE) CEO Albert Bourla has suggested that the higher transmissibility of the new Omicron variant of COVID-19 could lead to further mutations.
    • With early evidence indicating that the variant could be more transmissible with the potential to cause a milder form of the disease, Bourla was asked if it bodes well for the trajectory of the pandemic.
    • “No. Something that spreads fast means it will be in billions of people and another mutation could arise,” Bourla has said on Tuesday at the ongoing WSJ CEO Council, according to CNBC’s Meg Tirrell.

    • On the condition that no new variant emerges, the pandemic situation is likely to ease by next year, he added. "Absent a variant that changes everything, I think we're on a good path for middle of next year to have things under control."

    • Pfizer (PFE), with its partner in COVID-19 vaccine development BioNTech (NASDAQ:BNTX), had previously stated that they could refine their vaccine to target the new variant within 60 days, and shipments could begin in 100 days.
    •  

      COVID-19 vaccine developers, Moderna (NASDAQ:MRNA) and BioNTech (BNTX) experienced a selloff on Monday after the Omicron-driven rally late last month.

     
    COIN +8.71%
     
     
    Dec. 07, 2021 9:20 AM ET

    • Coinbase (NASDAQ:COIN) President and Chief Operating Officer Emilie Choi believes the crypto exchange can control its operating income even with volatility surrounding digital asset markets, she says at the Goldman Sachs U.S. Financial Services Conference.
    • Some of these investments include custody, trading, derivatives, everything that institutions want, she says.
    • Choi also notes that there is retail interest for a subscription based service on the Coinbase (COIN) platform.
    • On mergers & acquisitions, Choi says "we've been quite aggressive with M&A," with tons of robust global M&A opportunities ahead.
    • For 2022, Choi thinks parts of DeFi and non-fungible tokens are a long-term trend that could end up being really big.
    • Shares of COIN climb nearly 3.5% as Bitcoin (BTC-USD +5.8%) jumps back over $50K level.
    • Previously, (Nov. 30) Coinbase will acquire Unbound Security.

    COIN Long Call 2024 19-JAN 200.00 CALL [COIN @ $286.50 $23.26] 5 10/15/2021 (773) $63,000 $126.00 $10.00 $126.00     $136.00 $17.00 $5,000 7.9% $68,000
    COIN Short Call 2024 19-JAN 300.00 CALL [COIN @ $286.50 $23.26] -5 10/15/2021 (773) $-45,000 $90.00 $2.50     $92.50 $12.10 $-1,250 -2.8% $-46,250
    COIN Short Put 2024 19-JAN 200.00 PUT [COIN @ $286.50 $23.26] -5 10/15/2021 (773) $-22,000 $44.00 $-1.10     $42.90 $-2.30 $550 2.5% $-21,450

  17.  
    ITB +1.19%
     
     
    Dec. 07, 2021 8:41 AM ET

    • The iShares U.S. Home Construction ETF (BATS:ITB) hit an all-time trading high on Monday and has now topped new levels in Tuesday’s pre-market trading. ITB is +1.8% and has touched $82.37 a share.
    • ITB has rallied +47.8% YTD, which is more than double of the benchmark SPDR S&P 500 Trust ETF (NYSEARCA:SPY) which has returned +22.7% YTD.
    • ITB is an ETF that provides exposure to the U.S. homebuilding industry and manufacturing of residential homes. The fund has top-weighted exposure in stocks such as D.R. Horton (NYSE:DHI) at 14.2%, Lennar Corporation (NYSE:LEN) weighted at 13.17%, and NVR (NYSE:NVR), which has a weighting of 7.91%.
    • Moreover the fund is equipped with $3B assets under management and an expense ratio of 0.41%.
    • ITB has been supported by the continued demand for new home development amongst global supply chain issues. 
    • ITB is not the only homebuilder exchange traded fund rising to the top. The SPDR Homebuilders ETF (NYSEARCA:XHB), Invesco Dynamic Building & Construction ETF (NYSEARCA:PKB), and Direxion Daily Homebuilders & Supplies Bull 3x Shares ETF (NYSEARCA:NAIL) are three other home building funds that are flirting with record trading highs as well.
    • From a year-to-date return stance, XHB is +46.1%, PKB +29.7%, and the 3X leveraged NAIL is +151.6%. In identifying what the future holds for these four home builder ETFs see below Seeking Alpha’s momentum analysis.

    Dec. 07, 2021 8:36 AM ET

    • Q3 Productivity and Costs: -5.2% vs. -4.9% expected, +-5.0% prior (non farm productivity); drop was led by 1.8% growth in output and hours worked rose 7.4%.
    • This is the largest decline in quarterly productivity since Q2, 1960 when the measure was down 6.1%.
    • Q/Q, nonfarm business sector labor productivity decreased 0.6%; This four-quarter rate is the largest decline since Q4, 1993 when measure dropped 0.6%.
    • Unit labor costs grew at an annual rate of 9.6% in Q3, a 3.9% increase in hourly compensation and a 5.2% decrease in productivity.
    • Unit labor costs increased 6.3% over the last four quarters.
    • The nonfarm business labor productivity index is 2.8% higher in Q3 than it was in 4Q19 corresponding to an annualized growth rate of 1.6% during the pandemic period of 4Q19 through 3Q21.
    • This rate is slightly higher than 1.4% average annual growth rate during the previous business cycle--from 2007 to 2019--but below the long-term average rate since 1947 of 2.1%.
    • Manufacturing sector labor productivity decreased 1.8% in Q3, as output increased 5.1% and hours worked increased 7%; durable manufacturing sector,  productivity increased 0.7% with 9.7% increase in output and an 8.9% increase in hours worked.
    • Nondurable manufacturing sector productivity decreased 3.6%.
    • Prelim Q3 measures were announced today for the nonfinancial corporate sector; productivity increased 0.7% in Q3 as output and hours worked increased 6.8% and 6.1%, respectively.

    These are amazingly bad numbers!  

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  18. Phil – AWS down reminds me – any updates/developments on the new PSW website launch date? 


  19. Launch/Pman – I have been told it will be in two weeks for 2 months at this point.

    RUT and Nas up 3% on the Day, Dow and S&P up 2% – just incredible.  

       

  20. Hi Phil,

    Do you think IBB/XBI are at levels that it is investable?

    Thanks


  21. Just got an Amazon pharmacy email.


  22. IBB is up 50% this year – I'd rather cherry pick the holdings for ones that are lagging.  MRNA is 10% of the index, then there's AMGN and GILD, who we like as well, then ILMN (80x earnings, no thanks), BNTX we like and then REGN (13x but I don't think they sustain), VRTX (15x, not bad), BIIB (12x but erratic and I'm unsure of their pipeline)…   Aside from forcing you to buy bad companies along with good ones, this ETF has 0.5% expense ration so, win or lose, they'll take 0.5% of your money.  Not only that but the 34% turnover rate means they are churning your stocks and wasting fees.  ETFs are good for when you have no clue who the winners are going to be or hedging sectors – that's about it.

    We played IBB in 2010, when Biotech was new and any one of these guys could have won.  10 years later – I think we know who we like and who we don't.


  23. Hi Phil, I have sent an email to you about suspending my account for probably 6 months or so but I haven't gotten a response. My payment date is coming up in a week or so and wanted to make sure you were aware of my request and was not charged. Thanks, Traderd.



  24. No worries Trader, we’ll take care of it.