4 Senate races remain undecided.
The other 96 seats are split 48/48 among Democrats and Republicans and it does look like Republicans will take the House, at 199/172 so far with 218 seats needed for control. Of course, the Democrats tend to do more mail-in ballots as the GOP has been spending years calling that system fraudulent – and that’s why they think the election is “stolen” as the predominantly mail-in Democratic votes get counted last.
With 98% of the votes counted, Herschel Walker is only losing by 35,300 votes and that is simply horrifying. Kelly (D) should win in Arizona and Wisconsin is too close to call but surprising if it turns blue. Nevada is also too close to call and that’s going to decide the Senate but only 72% has been counted there and the Dems should benefit from later votes.
The Governors generally held their offices and, on the whole, the election was a big disappointment for the Republicans but they do have potential control of Congress and that means Biden will be impeached for “crimes” to be determined and the Government will once more be shut down and good luck passing any sort of bill for the next two years.
So America leaves these midterms much as it entered: a fiercely divided country that remains anchored in a narrow range of the political spectrum, unhappy enough with President Biden to embrace divided government but unwilling to turn fully to the divisive, grievance-driven politics promoted by former President Trump.
Despite the lead the Republicans have in the House at the moment (197/172), it is very possible that the Democrats will pick up 46 of the 66 undecided seats as many of them are in California and simply late to report and, as noted above – mail in ballots – which Republicans don’t trust. Should the Dems keep the house and win the Senate – it will be a crushing defeat for the GOP – who spent the most money ever ($5Bn!) to win these races.
I know I’m the only analyst saying this but I’m also the only analyst who knows how to do math and the Dems had a 220/212 advantage in the House with 3 open seats coming into the election and, so far, with 371 races declared, they have lost 3 seats. That’s 1% and there are only 64 races left to call so, if they only lose 0.64 seats out of those – they win! The GOP has to flip 3 more seats of the last 64 to gain control – a 500% better pace than they are on so far.
The market is undecided this morning and, sadly, back below 3,840 on the S&P 500 but still holding 11,000 on the Nasdaq – so there’s still hope. We really do need to be over 3,840 at Friday’s close or we should probably be adding some hedges into the weekend. The SQQQ 2025 $60 ($27)/90 ($23) bull call spread at $4 is the best deal at the moment, offering $3,000 worth of protection for each $400 spent.
We will see which way the winds blow today but the energy sector is already taking a dive as mean old Biden may be around to call them out for raping the taxpayers for a little while longer.
Even as we speak, the GOP just lost 2 of their 199 house calls (now back to undecided, but they are trending the wrong way for them) as those late ballots roll in.
10% of Vermont voted against banning slavery in the state constitution?
https://www.vermontpublic.org/local-news/vermonts-2022-midterm-election-results
They like to keep their options open. 😉
Why would that even be up for a vote? It’s 2022 people!
With more than 244,000 votes reported Tuesday at 11:50 p.m., according to the Secretary of State’s Office, supporters of Proposal 2 outnumbered opponents 82-11%.
Though the Vermont Constitution was the first in the country to ban most forms of slavery, it included language carving out an exception: that no person serve any other “as a servant, slave or apprentice, after arriving to the age of twenty-one years, unless bound by the person’s own consent, after arriving to such age, or bound by law for the payment of debts, damages, fines, costs or the like.”
So, if you take that away, George’s idea (from Seinfeld) to have a show where a judge orders this guy to be another guy’s slave would no longer be possible.
Actually, I think the issue was re. the apprenticeships – as I’m sure that still goes on.
Next they’ll come for our Big Salads.
I half remembered it being a lever for prisoners’ rights, to fight forced labor
Good Morning.
Any thoughts on Disney? Is this an overreaction? I have a 110/125 2024 spread
They missed top and bottom so deserve to be punished. We are 20/20 in the LTP with the 2024 $80/120 spread and, in the Butterfly Portfolio, we have 80/80 2025 $100/125s so a setback but not a catastrophe.
Despite missing expectations, Revenues were up 9% from last year and mostly from parks up 36% due to re-openings and much higher prices. Cash flow was $2.52Bn and that’s what matters with DIS’s crazy accounting (lots of asset depreciation). Still, that costs you $180Bn so it’s not cheap.
Subscriptions to Disney+ were rocking at 12.1M vs 9.3M expected but the content costs killed them – though they, of course, see that as a long-term investment.
The 2024 $110s are $8.50 and the 2025 $95 ($20)/110 ($14.50) bull call spreads are $5.50 so, if you have the margin for it, rolling the $110 calls to 2x of the 2025 spreads should give you plenty of coverage against the remaining short $110s for not much more money (and you can sell 2025 $100 puts for $20).
Not likely to be a quick recovery, you have to play to grind it out.
https://charts2.finviz.com/chart.ashx?t=dis%20\&p=w&s=y
Thanks as always
Good morning everyone. Here is the link to today’s webinar
https://attendee.gotowebinar.com/register/5179959134648124944
Good morning!
Elections going better than I’d hoped but that is not good for the indexes, unfortunately. Still, usually this is a good time to buy:
The possibility of a fiscally responsible Congress is popping the Dollar back up.
11,000 is what we care about at the moment.
Wow, that reversed rather quickly.
It’s 50/50 for tomorrow, by the way – large hurricane heading right for me at the moment. People closer to the beach have already been ordered out of their homes last night.
I think Musk is relying on the Costco model for Twitter as there are 240M active daily users and if he can get 50M (20%) of them to pay $8/month is $4.8Bn a year vs $3.4Bn in total revenue and $1Bn in profit previously. It’s not like he’s charging the 240M to stay – only the people who want blue checks. $96/yr is not enough for me to quit twitter, so I’ll end up paying it and so will most people who already have it, I think. Then the people who don’t have them will certainly have a percentage who wanted them but couldn’t get them before (the process was ridiculous).
“With 98% of the votes counted, Herschel Walker is only losing by 35,300 votes and that is simply horrifying. “
The Heisman trophy winner is hardly the ideal choice, but never forget Warnock ran over his wife and steals from the collection plate. So kind of a tough choice.
Yes, but the alternative is Herschel Walker!
The ex is still alive and there’s no proof of pilferage…move along… 🙂
Yeah, what he said.
I don’t think being a Capitalist requires you to believe any nonsense you read on the Internet.
https://www.politifact.com/article/2022/sep/08/fact-checking-herschel-walker-attack-ad-about-raph/
You’re right though, Walker is the smarter candidate – better to pay to have the babies aborted than let them grow up and end up in a custody battle with your ex-wife, right?
I’m referring to the Red Wave as the Red Leaking Bladder. Apologies to anybody who has incontinence issues, but man am I happy that MAGA doesn’t appear to be performing nearly as well as expected.
Still 48/47 in the Senate and 174/198 in the House. No one seems to be in a hurry to report today.
We really don’t take Democracy very seriously in this country…
Is this sarcasm or are you serious ? If it’s sarcasm, please mark it as such.
You don’t know Warnock’s background obviously.
I’m surprised at the love of the leftist candidates. Thought this site was about capitalism.
It’s a valid question since your first statement was wrong and I’ve never seen you post here before. There has been attempts to “humor” through sarcasm before on this site but it never really works out that well except when Phil does it because we all know him.
A quick fact check pointed to your first statement of Warnock running over his wite (which should have said running over wife’s foot) being wrong. Couldn’t find fact checks for your 2nd statement so the question is “Are you writing this as what you think are facts or are you just trying to be funny”. I don’t care if you are leaning left or right. I just don’t want to see BS presented as facts.
And now I don’t want to talk about this anymore.
well said
not well said. Phil loves a little sarcasm. Phil likes irony. Even if he didn’t, fkeithl has every right to express himself here. You should be happy he challenged you to explain how capitalism dovetails with your particular political choices. And to characterize what he wrote as presenting that Warnock ran over his wife as a ‘fact’, is ridiculous. It was obvious, not veiled, sarcasm. What’s an options investor? He or she isn’t left or right; we perch in abject fear on the fence, in the center, grasping at facts, hoping for conviction, waiting to jump at the opportune moment. Besides, you want to change fkeithl’s mind about politics, so you have to communicate with, not denigrate him.
happy
choices
obvious
change
denigrate
??? – did I miss something?…
nobody should infer that i agree with fkeithl’s political outlook; i just strongly believe he should be able to speak his mind here.
Counterpoint: He’s spreading unfounded statements. Post a link to the “truth” coming from AP, Reuters, or another legitimate news source and I’ll read it. Otherwise, it’s just baseless rambling.
you could gracefully post that link. phrases like ‘baseless rambling’ needlessly antagonizes fkeithl. or maybe feithl prefers a no-holds-barred politcal brawl filled with personal invective. i’m suddenly uncertain what we’re shooting for here. i’m definitely certain fkeithl is not uplifted.
Phil / AAPL
A reminder on looking at a new trade on AAPL
hi phil can you check oil report if you have time. thanks
AXON one of our old stocks up on earnings. I have 100 shares. We thought someone should have been tasered rather than shot. Now its all about recording the incident.
That used to be TASR, right? I made bundle on it back in the day, on a Phil play. Fun!
That was our original 2010 Stock of the Decade but we took the money and ran when we got our 10x. Ended up doing better than that but we switched to SPWR (and got our 10x on that too!).
That was our premise on them.
Well it sure is raining a lot so far.
EIA inventory report – Crude inventory builds higher than estimates
UCO -5.04%
Nov. 09, 2022 10:30 AM ET
9 Comments
Trump SPAC Digital World drops 21% as Red ‘wave’ may not happen
DWAC -18.13%
Nov. 09, 2022 10:21 AM ET
15 Comments
Crazy how dependent that stock is on political winds.
AAPL/Jijos – So here’s a company that is on track to make $100Bn this year and maybe flat the next two as they have a lot of R&D ahead. $137 is $2.2Tn so it’s not like they are super-cheap so they do need to execute but supply issues out of China is not a reason to sell them off (if it’s even true).
The spent a lot of money, now they have $72Bn in debt so 5% of that is $3.5Bn off earnings – not really moving the needle.
That means you are in AAPL for future prospects but, again, how do we move that needle? AAPL TV is part of their big investments – doing OK but not going to be huge (PARA’s entire market cap is $10.5Bn) and the phones are already out, watches already out, music is out, Apps are out. Their CC business is promising and MA is $300Bn so let’s say they end up at $150Bn, still not even 10% of $2.2Tn and we’re talking 5-10 years of gaining traction ahead.
I think the most likely thing AAPL does is partner with Auto companies to create environments for cars and with builders for homes. You walk to your car or home and it opens/starts for you, seats move to where you like them, lights, A/C, music – all the way you want it. Think about that not only for you own car but for any Uber or Taxi you hail – it arrives set to your preferences. Then that goes for hotels too.
I think that’s going to worth a TSLA $600Bn – even if they don’t make their own cars.
Then there would be robots. We’re far away from that but it’s logical for AAPL.
So, immediately, I can see where they can add about $750Bn in the next 5-10 years but, sadly, that’s just 30% growth. That means $140 is basically fair and that’s why we have the $110/160 spread in the Butterfly Portfolio and just short $105 puts in the LTP – we’ve been in no hurry to buy at the higher prices for a very long time.
https://charts2.finviz.com/chart.ashx?t=aapl%20\&p=w&s=y
As a new trade, I’d go for:
Buy 15 AAPL 2025 $110 calls for $47.30 ($70,950)
Sell 10 AAPL 2025 $150 calls for $27 ($27,000)
Sell 5 AAPL 2025 $135 puts for $20.70 ($10,350)
That’s net $33,600 on the $60,000 spread and the goal would be to sell 5-10 short calls each Q along the way. At the moment, the March $150 calls are $6.65 so selling just 5 of them would be $3,325 using 128 out of 800 days we have to sell. That means we get 6 sales and 5 short is no risk (as we have 5 uncovered) so 6 x $3,325 is $19,950 we can reasonably expect to recover.
The only way we get burned on the short sales is if AAPL spikes over $150 and then we’d be $60,000 in the money on the spread so no complaints there. I’d wait on the sale and hope for a $10 bounce, which would make the short March $15s about the price of the $140s ($11) and, if that doesn’t happen, our goal is to sell at least $3,000 of something but we can sell 6 or 7 with little added risk.
The key is to sell the $3,000/month and then our net drops below $15,000 on the $60,000 spread. If AAPL looks weak, we sell 5 more. As long as we pretty much cover the $30,000, our only risk is being assigned AAPL at $135 for 500 shares. Since that doesn’t seem like a terrible thing – it’s a good way to start a spread.
And, keep in mind that 500 shares of AAPL at $135 is $67,500 so AAPL would have to pretty much double to make $60,000 on the stock – there’s not really any way in which this spread isn’t better than owning the stock.
Thanks Phil for the detailed response.
Holy crap, I forgot it’s Webinar day!
Stockbern, I am with you on AXON, Cost basis $6 a share ( not including all the premium received over the years). Guess I’m not great at selling and moving to fresh horses. I enjoy selling calls though. Received nearly $40 today for the 12/2023 $ 175 calls.
Can anyone hear me in the Webinar – I see no responses?
I forgot…dialing in….
nope.. waiting to view your screen..no sound.
Waiting to see your screen.
Phil// Has the trade of the year announced for 2023 yet? I want to make sure I didn’t miss it. Thanks.
Phil, thoughts on going long /KC? Seems to have fallen a long way…thx
OK, so the Webinar turned gloomy as I was going over the macro outlook. If you need to be convinced to go to CASH!!! – just watch the replay.
And, to top it off – the market is diving again.
I think perhaps people are realizing this election won’t be over until December.
Oh, see – as soon as I say something in the Webinar, someone writes an article about it:
INTC releases a killer chip and they go down with their competition due to indexing:
Hi Phil,
I’m still catching up on October review 😜 You wrote this about LOVE:
“LOVE – Oh nooooooooooooooooo!!! I forgot we had two of these. Let’s roll our 40 April $20 calls ($30,000) to 30 more (45 total) of the Dec 2023 $20 calls for $9 ($27,000) and sell 20 more (30 total) of the Dec 2023 $30 calls for $5 ($10,000) for net $17,000. That takes $13,000 off the table and we’ve got the short calls well-covered.”
Is that a typo that should read 70 total instead of 45? Is it still good to do that or would you recommend a different roll?
They’re in the Earnings Portfolio
That’s in the Earnings Portfolio and we had just added (to the earlier set, 15 long Dec 2023 $20 calls so now (2nd set), we are adding 30 more $20 calls to TOTAL $45 of the Dec 2023 $20 calls. You have to look at both parts, not just the one.
Phil,
It would appear we will be in limbo until the election – and control of Congress is decided (at least December). The mood seems to be that the market wants Repub control even though history suggests it does better with Dems. Is the lower volume drift down today, suggesting that Dems might be in control or fearful thereof? Backstopping this is the statistical tendency – as you related – for post-midterm election years to be bullish – which would be contrary of the move today. Would like your thoughts.
Thanks
I think the markets rallied thinking the election was a slam-dunk and now it’s not so who knows what chaos will ensue? Also, CPI tomorrow likely to be high so more rate hikes and (I assume you missed the Webinar), we just sold $100Bn of 3-year notes at 4.5% and that was rolled over from 1.5% and we owe $32Tn so you do the math on how F’d we are….