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Monday Market Melt-Down Continues – Day 12 of the War

My son's school sent out a note slamming us for keeping our kids at home  during the storm… it was disgusting

"I'll never know war

And if I ever know it

The glimpse will be short

Fireball in the sky

No front line battle cries

Can be heard as the button is pushed by a soul that's been bought

And the armies remaining will judge without people or courts

And there's no point pretending that knowing will help us abort

I'll know no war" – The Who

No point in pretending, is there?  

Day 12 of the war in Ukraine and you can tell on the weekend shows that Americans are already losing interest.  Oil tested $130 early this morning and is still at $121 as Biden is threatening to ban Russian Oil (10% of the World's Oil) and Natural Gas (/NG) has blasted back over $5 for a full 0.50/contract gain since our pick last Monday in the PSW Report (which you will never miss if you subscribe here)., where I said:

Of course we went long on Silver (/SI) again as it tested $24 on Friday – that's easy money and already at $24.40, which is up $2,000 per contract over the weekend.  We also took a long on Natural Gas (/NG) at $4.56 and that hasn't moved much yet, so still good for a new trade as it will skyrocket if Putin cuts Europe off. 

Silver is now at $26 and that's up a whopping $10,550 for the week for our Members at the moment and those Natural Gas contracts are up $5,000 each as well so congratulations to those who do subscribe and were able to play along at home!

There are many ways to skin a cat and knowing how to play the Futures is a very useful tool to have in your belt and it's amazing how you can make these very obvious trades (gold, silver, oil and natural gas rising during a war with Russia, for example) even after the news is released.  

In fact, reading the news and keeping up with events is what good fundamental investing is all about.  That's why it's called PhilStockWORLD and that's why Warren Buffett says he spends about 80% of his day reading and our Members are well aware I also do my fair share of it – sharing the highlights so our traders can see where I'm getting my crazy ideas from (see also our "Market Moving News" magazine on Flipboard).  

You can't just pick up a paper when something happens to "catch up" – it's all part of a grand, interconnected tapestry of events and, if you can understand which thread is being pulled and when – THEN you can more easily see which threads you should be investing in at any given time.  See – simple!

"Once amid the soft silver sadness in the sky
There came a man of fortune, a drifter passing by
He wore a torn and tattered cloth around his leathered hide
And a coat of many colors, yellow-green on either side

He moved with some uncertainty, as if he didn't know
Just what he was there for, or where he ought to go
Once he reached for something golden hanging from a tree
And his hand came down empty" – Carole King 

We also pay attention to the Data and we have CPI on Thursday and Consumer Sentiment on Friday but not a whole lot else going on although Earnings are still coming in daily – so let's pay attention to the changes in what the CEOs are saying regarding outlook now that the war is shaping up to be more than a weekend exercise.  

Image

Predominantly small-caps at this point and no Fed Speak as we have the meeting next week and clearly Powell didn't instill any lasting confidence last week so we'll just have to sit back and watch our bounce levels and see how things look but, so far, NOT GOOD:

  • Dow 36,000 to 28,800 would be a 7,200-point drop with 1,440 bounces to 30,240 (weak) and 31,680 (strong).   
  • S&P 4,800 is 20% above 4,000 and that makes it an 800-point drop with 160-point bounces so 4,160 (weak) and 4,320 (strong) is where we are this morning (again).
  • Nasdaq is using 13,500 as the base and we bottomed yesterday at 13,580.  14,100 is the weak bounce and 14,700 is strong.  
  • Russell 1,600, would be about an 800-point drop with 160-point bounces to 1,780 (weak) and 1,960 (strong).
   

  

NONE of these lines should be red as this is the chart that tracks the 20% correction we haven't even had yet (but we predicted in January).  We were HOPING it wouldn't come to this but, as our Members well know – Hope is not a valid investing strategy – so we have remained very well-hedged and are mostly just watching this all unfold – waiting for a clear opportunity to come off the sidelines with our CASH!!!

The S&P and the Russell are at their inflection points so any additional red on this chart will indicate we're on a sinking ship – so make sure you know where those lifeboats are….

 


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  1. Good morning!

    Here's a fun way to learn the 5% Rule.  Look at the Euro Stoxx and the Dax above and calculate 80% of 4,400 and 80% of 16,000 and that's where the 5% Rule predicted they would bounce off a 20% correction.  Did that happen?  If so, the bounce is nothing to get excited about but the US indexes will react as if it's positive – even if it's meaningless.

    When do they become meaningful?  Well you take that 20% drop and then you take 20% of that and add it to the -20% line and that's your weak bounce and another 20% is the strong bounce line for those indexes.  See – not hard…


  2. Oh, and especially as they blew through the 10% correction without even stopping – it's not a good sign that 20% is going to hold.


  3. Good Morning Sunshine!


  4. Phil/5% – There's also a time perido over which that has to happen, right? Thanks.


  5. GM Phil.  What are your thoughts on IEP?  They pay a good dividend.  Any suggested trade on that?  Thanks.


  6. Good Morning

    CROX had more insider buying    ( hey , just trying to find something positive today ) 



  7. 2 massive wildfires burn thousands of acres, force evacuations in Florida Panhandle


  8. White skin, Blue eyes. Not many Americans are losing interest, yet….

    There is a lot we don't see…. https://twitter.com/IntelCrab


  9. TA, Astrology for men, however;

    LABU double bottomed this morning, ~$12.50. Over the last 3 months it has made lower lows with rising RSI.  If you prescribe to the idea of bullish divergence, this is text book. 

    honestly looking at a lot of charts im seeing this.


  10. Oil is up 60% this year. How high can prices go?


  11. Morning. Heads up PETS is on the move towards $30


  12. Euro zone investor morale plummets in March on Ukraine crisis


  13. Time/Seer – Generally you need a strong bounce in less time than it took to fall or you're into a bearish consolidation.  The EU indexes have taken 2 months to fall, so we'll be looking for a strong bounce over the next two months but the less symmetrical it is, the less likely you are to get a V-shaped recovery so 16,000 x 0.8 = 12,800 is down 3,200 points so 640-point bounces to 13,440 (weak) and 14,080 (strong) on the DAX and then, if it's going to be a strong correction – you want to see 13,440 back as fast as we lost it (one day) and 14,080 was Tuesday so need that back by Friday if we are going to call this an ignorable spike down (which would keep the more bullish zones in play).  Once that fails, you can hope for a "W" recovery, where we test the strong bounce, then pull back to lows and then, hopefully, try again to make a full recovery but, once you blow the "V" and blow the "W" – you have to admit you may just be consolidating for a move below 20%.

    https://finviz.com/futures_charts.ashx?t=DY&p=d1

    IEP/Rookie – I am not a huge fan of Icahn.  He often wins by cheating and bullying and he's well past his prime.  DK is pushing him out and it's a win for Icahn as he'll make money after being a hostile agitator but the fact that DK's stock is going up shows you what people think of the prospect of Icahn actually running a company.  

    OXY is also getting rid of Carl and Co. 

    Icahn, who had been trimming his once 10% stake in the company in recent days, sold the last of it, according to a WSJ report, which cited a letter he sent to the board on Sunday. Icahn's two remaining representatives on the OXY board are also stepping down.

    I prefer BK and BLK in that space to IEP, who have been issuing a lot of shares to make their distributions which then causes their distributions to be more expensive in the next round.  Watch the cash flow and be careful as they can't afford another bad year:

    Something positive/Stock – Anything in the Energy sector with Buffett taking a bit of OXY for himself.

    LABU/Monk – I hope so:

    See, now that was a nice V-shaped recovery in 2020.  If we assume $12,50 is the bottom then I'd look for $25 and $50 to be your recovery points and, if we count the $37.50 fall from $50 as our working range, then bounces are $7.50 so call it $20 (weak) and $27.50 (strong) as our short-term goals.

    We fell from $20 in mid-Jan so 2 months to get back there and from $50 was mid-November, so 4 months or less to get back to $50 would be nice. 

    PETS/Jeddah – Nice!   Been waiting for them to wake up.

    That was a fun morning rally that's already fading.  

       

    2,000 is becoming too predictable of a shorting line for /RTY.  


  14. Phil – Thanks on 5% rule this morning. Ant idea what happened to CAKE?  I can't find any news that caused them to suddenly turn South


  15. KRBN taken to the woodshed. Tip toeing into put selling 


  16. Another annoying spin-off:

    NCLH -5.69%Mar. 07, 2022 10:18 AM ET

    • Norwegian Cruise Line's (NCLH -5.5%) Oceania Cruises has set new record for single-day booking as its 2024 voyage aboard Insignia sold out within 30 minutes of opening for sale on Mar. 2, 2022.
    • This sell-out of the six-month-long world cruise and active response to its four newly launched Asia-Pacific voyages led to single-day booking surpass the previous record set in September 2021 by almost 12%.
    • The company told its 2024 world cruise saw almost half of all bookings coming from first-time, new-to-brand guests, and 42% from repeated guests.
    • Additionally, 18% of guests opted to extend their voyage to a total of 196 days.
    • Earlier (Feb. 24): Norwegian Cruise Line stock sinks on Q4 earnings miss

    SPY -1.30%Mar. 07, 2022 10:15 AM ET15 Comments

    A Kremlin spokesman said Monday that Russia will halt Ukrainian operations "in a moment" if Kyiv meets a list of conditions, according to Reuters. The news has lifted equity futures (NYSEARCA:SPY) and mitigated the oil price rally (NYSEARCA:USO) overnight:

    • Ukraine cease military action.
    • Ukraine change its constitution to enshrine neutrality (eliminate possibility of NATO, EU membership).
    • Recognize separatist republics of Donetsk and Lugansk.
    • Acknowledge Crimea as Russian territory.

    The UN recently adopted a resolution demanding Russia immediately withdraw to its internationally recognized borders. Russia showed no intention of withdrawing as the Kremlin detailed its list of demands. However, if Monday's statements prove true, a point many are sure to debate, it could indicate a narrowing of scope in negotiations. Markets have responded favorably, as the list of demands provide some framework for a political resolution.

    AFRAF -4.18%Mar. 07, 2022 10:13 AM ET3 Comments

    Global airline stocks fell again on Monday as the Ukraine-Russia headlines and the prospect for higher jet fuel prices continued to power down expectations for a full post-pandemic recovery in the summer of 2022.

    Some of the notable decliners included China Southern Airlines (ZNH -5.6%), Azul (AZUL -8.6%), Gol Linhas (GOL -8.3%), China Eastern Airlines (CEA -3.3%), Volaris (VLRS -4.9%), Sun Country Airlines (SNCY -3.5%), Ryanair (RYAAY -5.7%), Allegiant Travel (ALGT -4.6%), Delta Air Lines (DAL -5.2%), American Airlines Group (AAL -3.9%), easyJet (OTCPK:EJTTF -4.7%), Air France-KLM (OTCPK:AFRAF -4.2%), Japan Airlines (OTCPK:JAPSY -7.9%), Copa Holdings (CPA -4.5%), Qantas Airways Limited (OTCPK:QABSY -5.1%), United Airlines (UAL -6.8%), JetBlue Airways (JBLU -5.2%) and International Consolidated Airlines Group (OTCPK:ICAGY -2.6%).

    The market is still digesting just how far down earnings revisions for the airline sector will have to go in 2022.

    WEAT +5.36%Mar. 07, 2022 9:42 AM ET6 Comments

    Chicago wheat futures (W_1:COM) soared 40% last week, its biggest weekly rise on record, and on Monday have hit their highest price since March 2008+7% to $12.94 1/4 per bushel, rising by the daily limit for the sixth straight session.

    The record close for a most-active contract was set on March 12, 2008, while an all-time intraday high of $13.50 per bushel was set on February 27, 2008, according to data going back to 1984.

    "The risk now is that [Ukraine] planting is further compromised," Peak Trading Research's David Whitcomb tells marketWatch. "We get more clarity on that topic every week, and thus far it looks problematic."

    Corn and soybeans are trading at around their highest levels since September 2012, with gains Monday for front-month corn (C_1:COM) +2.7% to $7.75 1/4 per bushel and soybeans (S_1:COM) +2.1% to $16.95 1/2.

    ETFs: WEATCORNSOYB

    "Until the fighting in Ukraine ends, it cannot be expected that wheat and corn exports from Ukraine and Russia will resume," a European trader told Reuters, and there are concerns that some countries will begin export restrictions to prevent depletion of their own domestic supplies.

    Already, Hungary has banned all grain exports with immediate effect because of skyrocketing prices.

    Egypt, the world's top wheat importer, is seeing prices spike due to the war in Ukraine, sanctions against Russia and soaring insurance and freight costs.

    Global food prices hit an all-time high last month, up 3.9% from January and 24.1% from a year ago.

    Limit up every day! 

    Mar. 07, 2022 9:21 AM ET12 Comments

    • Saudi Arabia's Aramco (ARMCO) announces monthly relative price premiums / discounts, whereby the seller sets export prices relative to popular crude benchmarks; when markets are loose, Aramco (ARMCO) discounts pricing below benchmarks to ensure delivery of volumes, when markets are tight, the Kingdom is able to sell at a premium to benchmark prices.
    • Over the weekend, Saudi lifted pricing to Asia by $2.15/b; pricing now sits at a $4.95/b premium to the Dubai benchmark, an all time high.
    • Prices for Arab Light to the US were lifted by $1.0/b to $3.45/b, for April deliveries.
    • Over the weekend, the White House weighed plans to visit Saudi, in hopes of mending ties and convincing the Kingdom to lift oil output (NYSEARCA:USO).


  17. CAKE/Jeddah – Well there is this:

    And this:

    And this:

    And, if there were a Labor chart, it would look like that too.  CAKE gets sold off with the rest of the sector – even if it is likely to do better than their peers.

    All Consumer Discretionary is being hit:

    Except our old favorite, BBBY:

    KRBN/Jeddah – There's one I'd love to get back into:

    People have no time for the environment again.  Only John Kerry and I still seem to be concerned…


  18. Phil – looks like GOLD is hitting $25. Are you planning to trim or adjust or keep it as a further hedge? I'm getting a little antsy with the big profit lol.


  19. Wheat- last time there was a spike in prices and supply was curtailed we had Arab spring. More potential unrest for bread rebellions? Populations can get very hangry.



  20. Airline Profit Hopes Fade With $125 Oil as U.S. Mulls Ban



  21. SPG, being downgraded today down over 4.2% good div payer over 5% PE 19 possible a good thing to sell some puts. Jan 23 10.60 and Jan 24 16.60.


  22. That is the 110 put for SPG


  23. GOLD/Willsons – Didn't we just talk about this?  

     

     

    GOLD/Lionel – I think Gold (/GC) should be over $2,000 by now so we should have more room to run.  Gold was $2,050 in Aug of 2020 so it's not like there's a lot of resistance that has to be tested so I think give it a chance.  GOLD was testing $30 at the time so $25 is only on the way.  If I thought we were topping out here I'd sell $25s, not $30s.  Why sell $30s if you think $25 is going to be all we get out of it?   And, if you don't think $25 is all we're going to get – why sell the $30s now?  

    I'm not saying NOT to cover.  If it's a lot of exposure, then cover, of course – at least some.  As with scaling out, if we sell some calls now and some more as a stop if $24 fails to hold, etc – there's nothing wrong with that strategy but I think GOLD is still undervalued at $25 and the risk of collecting a bit less for the call sales isn't enough to deter me from seeking a better reward for being patient at the moment.

    In the Butterfly Portfolio, where we SHOULD be covering when possible, we have this:

    GOLD Long Call 2023 20-JAN 15.00 CALL [GOLD @ $24.49 $0.29] 50 3/22/2021 (319) $35,000 $7.00 $2.83 $7.59     $9.83 $0.27 $14,125 40.4% $49,125
    GOLD Short Put 2024 19-JAN 20.00 PUT [GOLD @ $24.49 $0.29] -50 9/20/2021 (683) $-25,500 $5.10 $-2.49     $2.61 $0.08 $12,450 48.8% $-13,050

    So for one thing we might want to just take a $26,000 profit (net $36,000) off the table vs, selling Jan $25 calls for $3.30 ($15,000) and waiting to get the other $50,000, which would be a $35,000 profit + the $15,000 ($50,000) if we hold $25.  On 2/17, when Gold was $1,900, the 2023 $25s were $2 so I'm really risking $1.30 ($6,500) by not covering against the possibility of selling the current $25s for what the $20s are $6 at $30 and that would be collecting $2.70 more ($13,500) or maybe we'll decide to sell the $30s for the same $3.30 (now $1.90) as things go up and widen the spread by $25,000 (and opening us up to more short-term call sales).  

    I'm not sure which is the better path but things are going my way and there's little harm in waiting – so waiting PATIENTLY wins! 

    Wheat/Randers – Yes and it's getting tragic across the board – imagine if we have a natural disaster on top of this man-made one:

           

    It takes a few weeks for price spikes like this to hit the consumer so if we're not making any progress this week on the war – then we can expect things to start deteriorating rapidly into the end of March.

    And of course this is its own tragedy:

     

    I really can't imagine what these dip buyers are thinking….


  24. Here's a nice comparison.  The first one is June 28th, 1914:

    1. Archduke Francis Ferdinand is assassinated.

    2. July 28, 1914

      Austria-Hungary declares war on Serbia, beginning World War I.

    3. August 2-7, 1914

      Germany invades Luxembourg and Belgium. France invades Alsace. British forces arrive in France. Nations allied against Germany were eventually to include Great Britain, Russia, Italy, Australia, New Zealand, South Africa, Rhodesia, Romania, Greece, France, Belgium, United States, Canada, Serbia, India, Portugal, Montenegro, and Poland.

    4. August 10, 1914

      Austria-Hungary invades Russia.

    5. September 9, 1914

      Allied forces halt German advance into France during First Battle ofthe Marne.

    So Putin didn't need a reason to start the war so let's call two weeks ago July 28th  and a week later Germany was in Luxembourg and Belgium.  France went into Alsace as punishment but that didn't dissuade Austria/Hungary from starting a whole new front with Russia  – that all took one week and the war went on for 3 years with sanctions, trade blockades, etc.  Don't go thinking this was is going to go away in a few days.  There's always hope – but it shouldn't be your trading strategy…


  25. Can't get rid of that white space.


  26. 1920s Economy With Timeline and Statistics

    Best First World War GIFs | Gfycat

    GIF ww1gif world war 1 historia - animated GIF on GIFER

    Timeline of the 2022 Russian invasion of Ukraine - Wikipedia

    NationalWWIMuseum black and white military footage historic GIF

    world war i vintage GIF by US National Archives

    NationalWWIMuseum black and white german tank military GIF

    NationalWWIMuseum black and white cheering military footage GIF

    NationalWWIMuseum black and white military factory footage GIF


  27. SPG/Yodi – Hopefully another chance to buy SKT too.  People think malls don't make money in recessions – great for long-term players to get in.  Just don't forget how illogically low they can trade these things.  


  28. Phil, thoughts on AMAT…They make machines that make chips that everyone wants now and for the foreseeable future


  29. what is your take on the possible oil and gas sanctions on russia. do you think it will happen?


  30. Phil/yeti – with the downward turn, thoughts on a new YETI trade of 20 of the Jan 24 50/70 Bull call spread for about $9.6. Then selling 10 of the Jan $60 puts. Seems like ridiculous upside potential.


  31. I imagine oil is fungible enough that, as long as ANYBODY buys Russian oil and gas (china maybe?), the sanctions will be meaningless.  The only caveat might be if the infrastructure for delivery is unavailable.  In that case, the resource could be stranded but I don't know the logistics of that one.


  32. Black-Owned Brands Get Lift as Big Retail Invests to Help Them Scale





  33. Time to re-enter JETS? The rebound, whenever it occurs, will be pretty drastic. I think one of the concerns (apart from high oil, etc.) is potential equity raises (https://seekingalpha.com/news/3809776-united-american-airlines-may-need-to-consider-potential-equity-raises-with-oil-prices)


  34. NOBODY's playing a rebound right now. It's a low probability, but if Putin isn't bluffing with his demands, and Ukraine accepts and the Red Army vacates (for now) we will see a market rebound that'll give you whiplash.



  35. It sure feels like a long time ago when we were discussing negative oil prices. It's been a weird 2 year stretch.



  36. AMAT/Millard – They are kind of like BA, backed up for years so no particular benefit to a demand surge.  About half their revenues come from China and that's a little problematic at the moment.  Their second biggest market is Taiwan so imagine what happens to them if Taiwan/China heats up.  Certainly not that I don't like them long-term and $120 is only $111Bn in market cap and these guys should be pushing $7.5Bn to the bottom line so well worth it here – just beware it may be a bumpy ride.  I'd let them find a floor first, rather than guessing it.

    Oil/Tommy – Well the right thing to do is sanction Russia's oil – that's 50% of their operating capital and 90% of Putin's.  It's all silly though as the oil will get sold somewhere and, if the price goes up to $150 over the sanctions – Putin will make even more money selling exclusively to China than he did via OPEC and the only people who really suffer will be consumers and then we're looking at global Recession very possible.  Still, morally you have to take a stand – this is why the UN and NATO have lost their power – not willing to do the right thing.  Germany is firmly against it and it's a new chancellor (bad time for it) so nothing will happen soon in any event.

    And what JPH said! 

    YETI/Swamp – I still like them but it's an ugly chart and things are uncertain so why try to guess it if you aren't already in? I don't want to be a stick in the mud but we came about 1,500 feet from a massive nuclear disaster last week in a war that is escalating and the market is getting uglier and uglier so WHY do you want to add new stocks right now?  This is what happened to people in 2008, when stocks were down 20% and everyone thought it was time to buy and the people who resisted that urge were thrilled when they got to buy for 40% off but pretty much no one had any buying power left when the market was down 66% so everyone just sat around and prayed.  And it didn't matter if you have a bank or an airline or a hotel or a car company or clothing or retail or manufacturing or shipping – EVERYTHING was down 50-90%. 

    They say you should buy when there's blood on the street but this is just a nosebleed in round one of the fight.

    Flesh Wound GIFs - Get the best GIF on GIPHY


  37. hey check out FF, looking alive 


  38. FF/Stock – Fingers crossed on that one for sure.  

    FF Short Call 2022 20-MAY 10.00 CALL [FF @ $8.17 $0.40] -15 11/16/2021 (74) $-113 $0.08 $0.23 $-1.02     $0.30 $0.10 $-338 -300.0% $-450
    FF Short Put 2022 20-MAY 10.00 PUT [FF @ $8.17 $0.40] -15 11/16/2021 (74) $-3,000 $2.00 $0.00     $2.00 - $0 0.0% $-3,000
    FF Long Call 2022 19-AUG 7.50 CALL [FF @ $8.17 $0.40] 50 12/22/2021 (165) $4,900 $0.98 $0.45     $1.43 - $2,225 45.4% $7,125

    February 17th, 2022 at 2:14 pm | (Unlocked) | Permalink

    FF – It annoys me that they pay an 0.24 dividend.  I'd rather the re-invest the cash.  Earnings are March 15th, so we'll have to wait but it's a $329M market cap at $7.36 and they made $46.6M last year so I think these guys are stupidly cheap. 

    • As a dividend play, you could buy the stock for $7.36 and sell the Aug $7.50 puts for $3 and the Aug $7.50 calls for 0.90 to net if for $3.60 with an over 100% profit if called away at $7.50 in 6 months.  If assigned, you have 2x at $5.55/share – so good either way.   In fact, let's add 4,000 of these to the Dividend Portfolio.  
    •  

  39. Phil, I know you're not crazy about "insurance" but PRU seems like a bargain?


  40. PRU/Kustomz – I might warm up to insurance if rates rise.  Insurance companies are forced to hold vast sums in reserves and they can only put them in BS investments like TBills so rising rates are fantastic for them.  I haven't liked insurance because of added Covid costs but PRU doesn't do much health though they do life and, of course, Global Warming has not been kind to property/casualty.  On the other hand, car insurance has been a huge money-maker with less driving the last two years.  

    $103 is $40Bn and, pre-covid, they were good for $4Bn and post they are expecting $4.5Bn so less than 10x.  They lost $374M in 2020 but made $7.7Bn in 2021 so average $3.7Bn is barely dented during the crisis so yes, a great stock to have.  They pay a $4.80 dividend and we have $172,000 cash in the Dividend Portfolio so why not add them?

    • Buy 500 PRU at $102.71 ($51,355) 
    • Sell 5 PRU 2024 $100 calls for $17.50 ($8,750)
    • Sell 5 PRU 2024 $80 puts for $10.75 ($5,375) 

    That's net $37,230 and, if called away at $100, it's a $12,770 (34%) profit plus 7 rounds of $600 dividend payments for $4,200 (11.2%) gives us 45.2% over 2 years, paying for almost half the position.  Worst-case is being assigned 500 more at $80 ($40,000) to average $77.23, which is about 25% off the current price – that's not a bad worst case.  


  41. Oil/fungible- I don't think crude oil is quite as fungible as commonly asserted. There are different types of crude requiring different refining capacity. As such, the world market is very complex making sanctioning Russian crude a bit tricky. In any event , Russian crude and gas are here to stay especially due to political concerns here in the US and Germany. Any such move would in all likelyhood boost US gasoline prices significantly and I don't think Germany has any option near term for dropping Russian gas. The current administration is scrambling to mitigate the anticipated upcoming midterm election damage and higher pump prices will not help. 

    Longer term, removing US imposed industry restrictions is where the answer lies but …….



  42. I'm not sure that Russian oil is a fungible as one would think, this is from 5 days ago.

    Oil price rises again as buyers shun Russian crude – BBC News

    We need the Iran deal to be finished for more supply and the Saudi's to stop gauging, miracles in other words. 



  43. Not a good finish – last-minute surge to lower lows. 

       

  44. Thank you Phil, I like the play, but will sit on my hands for now and adjust.