Option Investor

Daily Newsletter, Saturday, 9/23/2017

Table of Contents

  1. Market Wrap
  2. Index Wrap
  3. New Option Plays
  4. In Play Updates and Reviews

Market Wrap

Apple Tanks Techs

by Jim Brown

Click here to email Jim Brown

Apple has declined 7.5% or $12 since the product announcement and it is weighing on the tech sector.

Weekly Statistics

Friday Statistics

I warned about the normal post announcement decline for a couple weeks before the announcement. I said a decline in Apple shares will contaminate the other big cap tech stocks and they will likely decline in sympathy. That has certainly happened and the Nasdaq is paying the price. Apple has erased 84 points from the Dow and 55 points off the Nasdaq since the announcement. Since the Sept 1st high at $165, Apple has lost $67.8 billion in market cap.

The North Korean threat to launch an H-bomb into the Pacific to show the US they are not going to be intimidated caused the S&P futures to tank 8 points Thursday night but the S&P only declined 4 points at the open. North Korea is finding it difficult to get any respect for its illegal activities. I have written several times since the first missile over Japan that dips caused by NK would likely be bought. I have to admit that threatening to set off an H-bomb over the Pacific surprised me and I was shocked the futures dip was not worse. I think most people find it hard to believe Kim Jong-Un would actually take that step because it would be a major spike in the threat profile and could lead to immediate retaliation of some sort. After China "supposedly" cut off all banking relations, the hermit king may be having second thoughts. Talk is cheap but military tests are going to be a lot more expensive in terms of economic impact if they continue.

There were no material economic reports on Friday. Next week is a very busy calendar with no less than 12 Fed speeches including Janet Yellen. Now that the FOMC announcement is behind them the Fed heads are free to spin their own version of the future.

The new home sales and pending home sales are probably next in importance followed by the Kansas and Richmond Fed manufacturing surveys. The second reading on the Q2-GDP is not expected to show any material change.

The Atlanta Fed real time GDPNow for Q3 has flat lined at 2.2% until we get the new economic data next week.

Apple stores opened for business on Friday with the iPhone 8s and watches in stock. When Tim Cook was interviewed at 10:00 PT in California he said the watches and phones were already sold out in a lot of locations "around the world." In previous product launches, when he said the same thing just hours after the open, I mentioned that is something he has under his control. If Apple only ships 100 iPhones to multiple locations to be available for the open, they will sell out instantly and Cook can repeat his claims in hopes of creating some buying hysteria for the product. Phones may be sold out on Friday but the rest of the shipment will be there on Monday to fill orders.

You know Apple knows almost to the phone how many each retail location will sell on the opening weekend. They have done this so many times they have all this history on file. For them to sell out on opening day would either have to be purposeful or bad planning on their part. I seriously doubt it is bad planning by a company that is going to sell 85 million phones in Q4.

We know that preorders for the iPhone 8 were well below the levels seen for the model 7. China Mobile said they received 1.5 million preorders for the 8 compared to 2.5 million preorders for the 7 and 3.5 million for the model 6 in the first 3 days after their announcements. Piper Jaffray surveyed more than 400 iPhone users and 16% are planning to upgrade this fall compared to 15% at the same time last year. However, 66% of iPhone users are on phones more than 2 years old. That means they are ripe for an upgrade in the coming months even if they are not planning on it today.

This order cycle is going to be difficult to draw any real conclusions since the iPhone X is still a month away. There appears to be a lot of interest in the phone and that could be depressing the orders for the model 8. The Apple rumor sites claim the production of the X is going very slow with very bad yields. That means the X will be very hard to get well into Q1. That will increase the hype and make it more desirable. It may also frustrate users with existing phones that are limping along and they may decide not to wait and get a model 8 instead.

Cook said the problem with the cellular connectivity on the watch was going to be an easy fix with software because the watch is getting confused when there are multiple WiFi networks available at the same time and it tries to connect with the WiFi instead of by cell. Apparently, the watch is in high demand despite the glitch. Many tech reporters were happy with it despite the problem.

Personally, I think Apple has reached a buy point. Typically, it falls 4% to 6% in the three weeks after a product announcement. At -8% it has reached short term support at $152 and dipped slightly below the 100-day average. The confluence of the horizontal support at $152 and $148 plus the 100-day at $153 and the 150-day at $149, suggests there are a lot of buy points around this level. Granted, we have not made it through the 3-week period yet but even if it drops $2-$3 more dollars, the odds are good it is not going a lot lower.

The bottom line is that Apple has multiple devices in high demand including the iPhone 7, iPhone 8, iPhone X, Series 3 Watch, Apple TV, etc. There are customers still buying the model 7 because of cost. Six months from now investors will look back and say, "Why didn't I buy that dip?"

Apple Prices

Cash Range - Monthly Range
7 - $549 - $649, $22 - $28
8 - $699 - $849, $34 - $41
8+ $799 - $949, $39 - $46
X - $999 -$1149, $49 - $57

Tesla (TSLA) shares crumbled $38 over the last week on multiple issues. The stock was hit with a major downgrade to sell at Jefferies with a $280 price target. Then a headline appeared claiming they were moving away from Tesla towards AMD for their AI processing. CNBC then broke a story they were eliminating some versions of the Model S starting this weekend. Lastly, we learned on Friday that Solar City would pay $29.5 million to settle allegations that it tried to cheat the government by overstating the cost of its installations to get a larger tax credit. It was a rough week for Elon Musk.

Tesla lowered the base prices for the higher end versions of the Model S and Model X to put them more in line with the cheaper Model 3. They are going to discontinue the rear wheel drive versions of the Model S and only offer the all wheel drive versions. This will reduce the complexity of the production lines and allow them to increase production rates. The Model 3 will be the only rear wheel drive car in the lineup. There is an optional all wheel drive version of the Model 3. Tesla is expected to move from production of 1,500 Model 3 cars per month in September to 5,000 per week by December.

Tesla is announcing its semi truck on Oct 26th and rumors suggest initial orders could be in the 100,000 range. This is going to be a major product for Tesla. They are going to need a diversity of products because Porsche will begin delivering its Mission E all electric sports car in 2019 with a price range of $80-$90,000. It has almost exactly the same specifications in range, speed and acceleration of the top of the line Model S except the S costs $162,500. Competition is coming!

Nvidia (NVDA) shares were rocked after news broke that Tesla was looking at moving to AMD and away from Nvidia for the chips to power the autonomous driving functions. The initial headline saw AMD spike and Nvidia decline. The actual story is that AMD and Nvidia are partnering on creating a chip solution for Tesla. It is no surprise that AMD is in the mix because Tesla hired Jim Keller to lead development of Autopilot. Keller previously worked at AMD and led the development of the Zen architecture and the Ryzen processors.

It appears that Nvidia and AMD have a team of about 50 engineers working to develop a comprehensive solution for Tesla. Here is where it gets interesting. I would not be surprised to see Tesla make an acquisition bid for AMD. The company only has a $13 billion market cap compared to $110 billion for Nvidia. AMD has a lot of products that are different from the Nvidia product line even though they both make GPUs. AMD has only existed for years as a foil for Intel. The bigger company could not be considered a monopoly as long as AMD existed. Now with Qualcomm getting into the processor market and AMD and Nvidia in a high tech partnership, it would make sense for Nvidia to acquire AMD. Since GPUs are a small part of AMD's product line, there may not be that much regulatory concern. Is it a long shot? Absolutely, but definitely in the realm of possibilities.

Wal-Mart (WMT) is going where no retailer has gone before. The company is partnering with smart lock maker August for in home delivery. Consumers can sign up for the service and drivers from Deliv will have access to their home and will deliver groceries right to the kitchen and refrigerated goods into the refrigerator/freezer. This is like having your UPS driver pick up your cleaning and put it in your closet. Wal-Mart said this "may not be for everyone" but it is part of the "natural evolution" for the company.

I am having a problem with this concept and clearly it could foster some negative events if the wrong people end up driving for Deliv. Wal-Mart is already in a price war for delivery with Amazon and this is one more step into that battle. Wal-Mart also said it is expanding its online grocery pickup service to include customers using food stamps.

Earlier this week the meal kit company Plated, made famous by Shark Tank, was sold to Albertsons for $300 million and will begin selling/shipping meal kits locally all over the US. Immediately Wal-Mart announced it would begin offering meal kits on its website by December. Wal-Mart is going one step further by offering meal kits from multiple companies rather than sell its own. This is a way for Wal-Mart to test the water before launching its own kits. Wal-Mart assumes no infrastructure and no marketing risk with this introduction.

Amazon (AMZN) announced it had teamed up with OLO (online ordering) to make it easier for customers to integrate with Amazon Restaurants. OLO has agreements with more than 200 restaurant chains with more than 40,000 restaurants on its service and 60 million users. You can preorder for pickup or dine in or you can order and have it delivered. Shares of GrubHub (GRUB) fell 7% intraday on the news but cut that in half by the close.

Amazon has already applied for a trademark application for "prepared food kits composed of meat, poultry, fish, seafood, fruit and/or vegetables, ready for cooking and assembly as a meal." Whole Foods already has meal kits from Purple Carrot but that is likely to fade away once Amazon gets its act together.

Finish Line (FINL) reported earnings of 12 cents that beat estimates by a penny. Revenue of $469.4 million just squeaked by estimates for $469.3 million. Same store sales fell -4.5%. They guided for the current quarter for a loss of 32-40 cents per share and earnings of 50-60 cents for the full year. The CEO said earnings were hurt by a "very promotional marketplace" and "we are planning for a challenging retail environment in the near term." They guided for same store sales in Q3 to be down 3% to 5% and the same for the full year. Shares fell -12% at the open but rebounded to gain 5.5% at the close. FINL shares are very heavily shorted with 29% of the float short. When the drop appeared on six times normal volume traders raced to cover and got caught in a sudden rebound.

Hewlett Packard Enterprise (HPE) said it was cutting 5,000 workers between now and year-end. That is 10% of the current workforce. CEO Meg Whitman said she was cutting "layers" out of the company suggesting she was eliminating some middle management and supervisory positions to save $1.5 billion. The plan to eliminate layers will lead to fewer lines of business and create a simpler, nimbler and faster operating model. Shares rallied 3% on the news.

The earnings cycle begins to pick up again next week as we head for the Q3 earnings that begin the second week of October. We have one Dow component this week and that is Nike on Tuesday after the close. Expectations are very low given all the downgrades on shoe retailers. Blackberry on Thursday also has low expectations and could see a spike if guidance has improved.

Ocean Rig (ORIG) said it had completed its restructuring with a debt for equity transfer. As part of the restructuring, they cancelled 22,222,222 of its treasury shares and 56,079,533 shares held by its subsidiary Ocean Rig Investments. The company also completed a 1-for-9,200 reverse stock split of the remaining shares. This left 8,975 shares issued and outstanding. The company also issued 90,651,603 new common shares to the company creditors. Let's just say the existing shareholders had a very bad day with the 1-for-9200 reverse split.

Another company crushing shareholder accounts on Friday was Versartis (VSAR). The company announced after the close on Thursday the experimental drug for treatment of growth hormone deficiency in children did not meet the goals of a late stage trial. The company said their drug somavaratan failed to show results compared to patients on Pfizer's drug Genotropin. That is how you produce an 87% drop in your share price.

OPEC concluded a meeting on Friday and said they did not decide to extend the production cuts in January. The existing production cuts expire at the end of March. The cartel said they were slowly winning the battle over excess global supplies and it was too soon to decide if the cuts needed to be extended. They targeted January as a decision time frame. Russia's oil minister said OPEC and non-OPEC producers would need to continue working closely well into 2018 to make sure their strategies would correct the problem. He said they would meet again to work out a strategy for the future starting in April. He also said oil demand was rising at a "high rate."

Crude prices traded over $50 for most of the week but we have entered into the low demand period for the next 6-8 weeks. The wild card is the lingering refinery outages. There is still more than 1.0 million barrels of daily capacity offline in Texas and supplies of refined products are falling sharply. Refinery utilization rose from 77.7% to 83.2% last week but it should be over 90% at this point on the calendar. That suggests refiners will be ramping up sharply as they finish the cleanup on their outages. Some refiners have put off planned fall maintenance to capitalize on the high crack spreads while other refiners are taking advantage of the down time to accelerate their fall maintenance to be ready for the winter fuel blends when they restart. Oil inventories should continue to climb and that will eventually weigh on prices.

However, Brent crude is currently $6 higher than WTI and that is creating an export opportunity for our light crude. This will help to limit the normal October inventory buildup and should help support the price of WTI.


Welcome to the health plan death rally. The market was negative and trending slightly lower ahead of the weekend until Senator John McCain announced at 1:30 that he was not going to vote for the new Obamacare repeal plan called Graham-Cassidy. That was the next to last nail in the coffin for this last chance to get something passed before time expires on Sept 30th. While it may not be completely dead, the odds of passage declined significantly with McCain's no vote. Senator Susan Collins will be the final nail in the coffin and she said Saturday she is leaning towards a no vote.

Dow component UnitedHealth (UNH) rebounded $4.75 from the lows of the day on the McCain news. Aetna (AET) rebounded $5 from the lows but faded into the close. The Graham-Cassidy bill would end subsidies to companies like UNH/AET. This headline was responsible for pulling the indexes back from the brink ahead of the weekend event risk. The S&P rebounded 6 points from its 2,497 1:PM low to 2,503 at 3:30.

The S&P spent the entire week in a very narrow range gaining only a couple points a day. For the entire week, the S&P only traded in a 12-point range. That is extremely rare. The S&P gained 1.99 points for the week to close at 2,502.

The 2498-2508 range has been tough resistance with the Dow gaining for 8 days straight but the S&P was struggling at these levels. The Apple decline caused the other big cap techs to be weak and that was a weight on the S&P.

The decline over the last two days was noise. It is not material in a longer-term outlook. In a normal year, the markets routinely make lows for the second half of the year over the next three weeks. There is almost no chance of that happening in 2017. The market is in an uptrend and Q3 earnings kick off in three weeks. Without the normal end of September budget battles and potential government shutdown, there is nothing on the horizon that would cause a major decline. The wild card would be an actual North Korean H-bomb in the Pacific. That would be a game changer.

The longer-term uptrend support is just over 2,450 and it would take a major dip even to reach that level.

Even with the UNH rebound, the stock was still the biggest drag on the Dow with Apple a close second. Note that the rest of the gains/losses were minimal. There was no conviction in either direction. Given the weekend event risk, the lack of a negative bias could be considered bullish for Monday.

Nike reports earnings this week but a $53 stock has little impact on the Dow unless the move is significant. After multiple quarters of disappointments, it should be time for some positive guidance.

The support is around 22,000 with small speed bumps at every 100-point number between Friday's close and 22,000. Resistance is around 22,500.

In the Dow's 9-day rally the average daily gain over the last 7 days was less than 0.3%. That is the lowest volatility for a 7-day period since 1896. So far, in 2017 the Dow has had three consecutive winning streaks of 9 days. That is the first time that has happened since 1965.

The Nasdaq had a tough week. The index fought resistance at 6,460 all week and then gave up the fight on Thr/Fri as Apple's declines proved too much for the index to overcome. The 6,400 level returned as support with the index trading down to exactly 6,400.81 on Friday before rebounding 25 points. This should continue to be initial support with 6,460 solid resistance. We need some catalyst to break us out of this two-week trading range.

The Russell 2000 closed at a new high by 0.4 points. The index traded over 1,450 throughout the day and held the gains despite the weekend event risk. The prior intraday high of 1,452 was tested on three days in July and was almost tested again on Friday. The Russell has rebounded 7.5% or 102 points since the 1,349 low on August 18th. The Russell has outperformed the other indexes for that period and a break over 1,452 would be very bullish for market sentiment. Portfolio managers do not buy small caps if there is any fear of a market correction in the near future. This is a bullish move.

Bearish sentiment rose slightly last week despite the markets making new highs through Wednesday when the survey closes. Bearish sentiment is still below the historical average and bullish sentiment is back over its average for only the third time in 2017.

Now that the Fed decision is behind us and Q3 earnings are three weeks away, there is nothing obvious on the calendar to cause a market decline. Obviously the market does not need a reason and can suddenly drop like a rock at any time, but normally it takes a negative catalyst to really push it over the cliff.

Investors should continue to buy any dips in equities with potentially strong earnings. Once we get past this next three weeks we will be heading into the best six months of the year which start on November 1st.

If you like the market commentary you have been receiving and you are on a free trial then now is the time to subscribe. Do not wait until you miss a newsletter to decide you want to take the plunge.

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Enter passively and exit aggressively!

Jim Brown

Send Jim an email


"Glory is fleeting, but obscurity is forever."

Napoleon Bonaparte


Index Wrap

One Small Step

by Jim Brown

Click here to email Jim Brown
The markets took one small step backward last week after setting new highs.

I do not think you will find anyone that did not expect the markets to pause after the Dow posted 9 consecutive daily gains with 7 consecutive new highs. Betting on some profit taking would have been a wise move but only in a very short-term trade.

The declines were meaningless in the bigger picture. The S&P traded in a very narrow 12-point range and ended roughly in the middle with a 2 point gain for the week. That is hardly a significant decline. The S&P has traded in only an 18-point range since September 12th. Eventually we are going to get a catalyst that breaks us out of this range and the odds are increasing that the move will be to the upside.

When you stop and consider that North Korea actually threatened to launch a missile over Japan complete with an H-bomb warhead and then explode it in the Pacific and the S&P only dipped 4 points, I would say the market was nearly bullet proof.

Despite the minor weakness in the S&P over the last couple of days the advance/decline line remains at its recent highs. There is no weakness in the internals. The volume was light on Friday with only 5.2 billion shares but the advancers were 2:1 over decliners even with the Dow and Nasdaq 100 indexes negative. The Russell 2000 even set a new high. It is hard to say anything bad about the market under these conditions.

The Russell 3000 is the market of tradable stocks and the index closed at a new high on Tuesday at 1,485 and only closed 3 points below that level on Friday. This shows significant bullish sentiment and that the market has excellent breadth. Uptrend resistance at 1,486 is strong and held the index in check over the last several days but the trend is still intact.

I don't have an A/D chart for the Russell 3000 but the closest I can get is the NYSE, which is 2,400 stocks. The NYSE Index closed at a new high on Friday at 12,151.79. With the A/D line at a new high on the NYSE and the index itself at a new high, we have to accept the fact the rally is expanding even though the Dow was slightly negative. The NYSE actually broke through the uptrend resistance that has held the other indexes back.

The Dow posted a minor 2-day decline after 9 consecutive days of gains. I will take that tradeoff every time and we could make a lot of money with that trend. The uptrend resistance is going to come back into play around 22,500. Technically, the Dow could easily give back a few more points but the minor declines suggest that is not going to happen without a negative catalyst.

The Nasdaq had a tough week with multiple failures at the 6,460 resistance level. Apple is dragging the other big cap tech stocks lower and that kept the Nasdaq from breaking out. Despite the decline on the Nasdaq the A/D line closed at a new high. This is proof that only a few big cap stocks were weighing on the index while the majority of the tech sector was moving higher.

Assuming North Korea does not follow through on its H-bomb threat, there are no negative catalysts on the horizon to push the markets lower. With only three weeks before the beginning of Q3 earnings, portfolio managers should be adding risk in stocks they want to hold for the rest of the year.

As long as the A/D lines remain positive across the broader market, investors should continue buying any dips. Eventually the trend will end but it could be when the political threshold events return in early December. Until then, the trend is your friend.

Enter passively and exit aggressively!

Jim Brown

Send Jim an email

New Option Plays

Support Level Reached

by Jim Brown

Click here to email Jim Brown

Editors Note:

Multiple investing legends recommend buying when stocks are falling and support levels are reached. Baron Rothschild famously said, "Buy when there is blood in the streets" referring to drops caused by military battles. Warren Buffett said "Traders should be fearful when others are greedy and buy when others are fearful." Everyone was running in fear from Apple last week.


AAPL - Apple Inc - Company Profile

Apple Inc. designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players to consumers, small and mid-sized businesses, and education, enterprise, and government customers worldwide. The company also sells related software, services, accessories, networking solutions, and third-party digital content and applications. It offers iPhone, a line of smartphones; iPad, a line of multi-purpose tablets; and Mac, a line of desktop and portable personal computers. The company also provides iLife, a consumer-oriented digital lifestyle software application suite; iWork, an integrated productivity suite that helps users create, present, and publish documents, presentations, and spreadsheets; and other application software, such as Final Cut Pro, Logic Pro X, and FileMaker Pro. In addition, it offers Apple TV that connects to consumers' TV and enables them to access digital content directly for streaming high definition video, playing music and games, and viewing photos; Apple Watch, a personal electronic device; and iPod, a line of portable digital music and media players. Further, the company sells Apple-branded and third-party Mac-compatible, and iOS-compatible accessories, such as headphones, displays, storage devices, Beats products, and other connectivity and computing products and supplies. Additionally, it offers iCloud, a cloud service; AppleCare that offers support options for its customers; and Apple Pay, a mobile payment service. The company sells and delivers digital content and applications through the iTunes Store, App Store, Mac App Store, TV App Store, iBooks Store, and Apple Music. Company description from FinViz.com.

Earnings October 31st.

Apple shares have fallen $13 since the September 1st high and $12 since the product announcement on September 12th. The shares have fallen into a cluster of converging support levels and the post announcement decline should be "about" over. Nobody will know for sure until the rebound begins.

After the product announcement Apple reaffirmed its guidance saying we planned for the recent event surrounding the production and release of the new products when giving the prior guidance. Apple rarely misses guidance. Knowing they were having production problems and staggered release they probably low-balled the number.

They are expected to sell 85 million phones in Q4. More than 66% of iPhone users have phones older than 2 years. They will have five active models for sale in Q4. They have the 7, 7+, 8, 8+ and the X plus they still have some of the older, cheaper models they are selling overseas in places like India. The new Watch could be the model that actually turns the Watch into its own revenue category instead of being lumped into the "other" category.

I have been negative on Apple for the last three weeks and the decline is going as expected. I believe the stock has reached a level where buyers will appear. There could still be several dollars of decline but the rebound could be just as quick once it appears to have bottomed.

I am recommending a November spread to reduce our risk and depending on the stock price before earnings, we might hold over the event. That is where they will give sales numbers and Q4 guidance and they could be strong.

Buy Nov $155 call, currently $4.20, no initial stop loss.
Sell short Nov $165 call, currently $1.45, no initial stop loss.
Net debit $2.75.


No New Bearish Plays

In Play Updates and Reviews

Flat Line Struggle

by Jim Brown

Click here to email Jim Brown

Editors Note:

The major indexes struggled to close near the flat line and that is encouraging. Given the nuclear warning by North Korea on Thursday evening, closing anywhere near zero for the day was a major win. Even more amazing the Russell 2000 closed at a record high. In theory, that should be bullish for next week.

Current Portfolio

Stop Loss Updates

Check the graphic below for any new stop losses in bright yellow. We need to always be prepared for an unexpected decline.

Profit Targets

Check the graphic below for any profit stops in green. We need to always be prepared for a profit exit at resistance.

Current Position Changes

No Changes

If you are looking for a different type of option strategy, try these newsletters:

Credit spreads and naked puts = OptionWriter

Long term option investments = LEAPS Investor

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BULLISH Play Updates

A - Agilent Technologies - Company Profile


The company received expanded FDA approval for the use of Dako PD-L1 IHC 22C3 pharmDX diagnostic in gastric of gastroesophageal junction cancer.

Original Trade Description: September 12th.

Agilent Technologies, Inc. provides application focused solutions to the life sciences, diagnostics, and applied chemical markets worldwide. Its Life Sciences and Applied Markets segment offers liquid chromatography systems and components; liquid chromatography mass spectrometry systems; gas chromatography systems and components; gas chromatography mass spectrometry systems; inductively coupled plasma mass spectrometry instruments; atomic absorption instruments; microwave plasma-atomic emission spectrometry instruments; inductively coupled plasma optical emission spectrometry instruments; laboratory software and informatics systems; laboratory automation and robotic systems; dissolution testing; vacuum pumps; and measurement technologies. The company's Diagnostics and Genomics segment provides reagents, instruments, software, and consumables; arrays for DNA mutation detection, genotyping, gene copy number determination, identification of gene rearrangements, DNA methylation profiling, and gene expression profiling, as well as sequencing target enrichment services; and equipment focused on production of synthesized oligonucleotides for use as active pharmaceutical ingredients. Its Agilent CrossLab segment offers GC and LC columns, sample preparation products, custom chemistries, and various laboratory instrument supplies; and startup, operational, training, and compliance support, as well as asset management and consultation services. The company markets and sells its products through direct sales, electronic commerce, resellers, manufacturers' representatives, and distributors. It has a collaboration agreement with University of Leuven to focus on detecting genetic abnormalities in cell-free DNA and embryo biopsies. Company description from FinViz.com.

Agilent reported earnings of 59 cents that rose 20.4% and beat estimates for 52 cents. Revenue of $1.11 billion rose 6.7% and beat estimates for $1.08 billion. They ended the quarter with $2.56 billion in cash and $1.8 billion in debt. Free cash flow was $228 million. They guided for revenues of $1.15-$1.17 billion for Q3 and earnings of 60-62 cents. Analysts were expecting $1.14 billion and 59 cents. The company raised guidance for the full year from $4.36-$4.38 billion to $4.435-$4.455 billion. Earnings guidance is now $2.29-$2.31, up from $2.15-$2.21. Analysts were expecting $2.22 and $4.39 billion.

Earnings expected on Nov 14th.

Shares spiked on the earnings and have been moving steadily higher. On Monday they gained $1 and closed at a new high. This stock may not be as "exciting" as Alibaba or Amazon but the options are cheap and they rarely decline.

Update 9/19: The company said the FDA had approved their PD-L1 IHC 28-8 PharmDX cancer diagnostic test for additional typed of cancers.

Position 9/13/17:

Long Nov $67.50 call @ $1.70, see portfolio graphic for stop loss.

ABBV - AbbVie - Company Profile


AbbVie and Bristol-Myers announced a collaboration to evaluate a therapeutic regimen in advanced solid tumors. The partnership will test AbbVie's drug ABBV-399 along with the BMY drug Opdivo in non-small cell lung cancer.

Original Trade Description: Sept 20th.

AbbVie Inc. discovers, develops, manufactures, and sells pharmaceutical products worldwide. The company offers HUMIRA, a biologic therapy administered as a subcutaneous injection to treat autoimmune diseases; IMBRUVICA, an oral therapy for the treatment of patients with chronic lymphocytic leukemia; and VIEKIRA PAK, an interferon-free therapy, with or without ribavirin, for the treatment of adults with genotype 1 chronic hepatitis C. It also provides Kaletra, an anti- human immunodeficiency virus(HIV)-1 medicine used with other anti-HIV-1 medications as a treatment that maintains viral suppression in HIV-1 patients; Norvir, a protease inhibitor indicated in combination with other antiretroviral agents to treat HIV-1; and Synagis to prevent RSV infection at-risk infants. In addition, the company offers AndroGel, a testosterone replacement therapy for males diagnosed with symptomatic low testosterone; Creon, a pancreatic enzyme therapy for exocrine pancreatic insufficiency; Synthroid to treat hypothyroidism; and Lupron, a product for the palliative treatment of prostate cancer, endometriosis, and central precocious puberty, as well as for the treatment of patients with anemia. Further, it provides Duopa and Duodopa, a levodopa-carbidopa intestinal gel to treat Parkinson's disease; Sevoflurane, an anesthesia product for human use; and ZINBRYTA, a subcutaneous treatment for relapsing forms of multiple sclerosis. The company sells its products to wholesalers, distributors, government agencies, health care facilities, specialty pharmacies, and independent retailers from its distribution centers and public warehouses. AbbVie Inc. has collaboration agreements with C2N Diagnostics; Calico Life Sciences LLC; Infinity Pharmaceuticals, Inc.; M2Gen; and Principia Biopharma Inc. Company description from FinViz.com.

A lot of companies have 1-2 real drugs in the pipeline that may be approved. Several companies have one drug that could be a blockbuster and reach $1 billion in sales annually. AbbVie has multiple blockbusters in the pipeline and dozens of other drugs already in the market.

AbbVie was a spinoff from Abbott Laboratories in 2012 and they are doing great. In the first quarter they reported earnings of $1.28, that rose 11.3% and beat estimates by 2 cents. Revenue of $6.5 billion rose 10.1% and that was higher than three of its biggest competitors Amgen, $2.8 billion, Biogen $5.5 billion and Celgene $3.0 billion.

Earnings are expected to continue growing with analyst estimates for 14% annual growth over the next five years. AbbVie guided for 13% to 15% in 2017. Despite the earnings growth the stock only trades at a PE of 11.

Shares dipped back in May when Coherus won a court battle invalidating one of AbbVie's patents on Humira, their biggest drug. However, AbbVie said it was not a problem because there were 61 other patents on the drug and they would fight it in the courts until 2020. The first trial is not even scheduled until 2019. Amgen won FDA approval for a biosimilar but AbbVie said it would not happen until 2020 at the earliest.

The company's confidence that there would not be a biosimilar drug until 2021-2022 matched analyst estimates. This is a steep uphill battle for anyone trying to copy this drug.

The company's other drugs are going to be cash cows. Imbruvica generated $1.8 billion in sales in 2016 and could reach $7 billion annually over the next couple of years. Venclexta was approved in 2016 for leukemia and sales could peak at $3.5 billion a year. An experimental cancer drug called Rova-T could hit $5 billion a year when approved. A psoriasis drug called risankizumab could produce $4 billion a year and arthritis drug upadacitinib could peak at $3.5 billion. Given all these cash flow giants in the pipeline, I am amazed the company only trades at a PE of 11.

The company recently received a favorable opinion on MAVIRET, a once daily Hep-C drug, from the European Medical Agency and the CHMP. This is an 8 week cure for Hep-C that will compete with Gilead's products. AbbVie has declared war on the Gilead Sciences Hep-C franchise. Mavyret has a 97.5% cure rate and only costs $13,200 for four weeks of treatment compared to Gilead's newest drugs at $25,000 for four-weeks. Most patients are cured in 8 weeks but some have to continue for 12 weeks. Gilead's Harvoni was initially $96,000 for a 12-week treatment.

Estimated earnings date is Oct 27th.

I would not normally pick a stock with the strong gains over the prior two weeks. However, the outlook for AbbVie is so strong that I believe they will move higher. After the $14 gain in early September, the stock pulled back for a week. Shares are starting to pick up again and I think we should buy this dip. The options are cheap so the risk is minimal.

Position 9/21/17:

Long Nov $90 call @ $1.81, see portfolio graphic for stop loss.

ALB - Albermarle - Company Profile


No specific news. Shares declined for the second day but the decline was minimal in a weak market. Shares missed our stop loss by a penny.

Original Trade Description: Aug 21st.

Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals worldwide. The company offers lithium compounds, including lithium carbonate, lithium hydroxide, lithium chloride, and lithium specialties and reagents for applications in lithium batteries, high performance greases, thermoplastic elastomers for car tires, rubber soles and plastic bottles, catalysts for chemical reactions, organic synthesis processes, life science, pharmaceutical, and other markets; cesium products for the chemical and pharmaceutical industries; and zirconium, barium, and titanium products for pyrotechnical applications. It also manufactures cesium products for the chemical and pharmaceutical industries; and zirconium, barium, and titanium products for various pyrotechnical applications, including airbag igniters; and performance catalyst solutions, such as polymer catalysts, curatives, organometallics, and electronic materials for polyolefin polymers, packaging, non-packaging, films, injection molding, alpha-olefins, electronic materials, solar cells, polyurethanes, epoxies, and other engineered resins markets. In addition, the company offers bromine and bromine-based solutions for fire safety, chemical synthesis, mercury control, water purification, beef and poultry processing, and various other industrial applications, as well as for the oil and gas well drilling, and completion fluids applications. Further, Albemarle Corporation provides clean fuels technologies, which is primarily composed of hydroprocessing catalysts; and heavy oil upgrading, which is primarily composed of fluidized catalytic cracking catalysts and additives for application in the refining industry. It serves petroleum refining, consumer electronics, energy storage, construction, automotive, lubricants, pharmaceuticals, crop protection, food safety, and custom chemistry services markets. Company description from FinViz.com.

With production of electric cars exploding with more than 1 million expected to be manufactured in 2018, the demand for Lithium-ion (Li-ion) rechargeable batteries is also exploding. When Tesla's Gigafactory reaches full production in 2020 of 35 gigawatt-hours, that will be more battery capacity than the entire world produced in 2014. Tesla has blamed the battery shortage for misses in auto production and they are already planning on building a second Gigafactory. The demand for lithium is suddenly huge and Albemarle is already responsible for 35% of global production.

They reported Q2 earnings of $1.13, up 22%, that beat estimates for $1.11. However, revenue of $737.3 million missed estimates for $740.6 million. They guided for full year earnings of $4.20-$4.40, a 21% rise and revenue of $2.90-$3.05 billion. The revenue miss was due to a divestiture of a specialty chemicals business and currency exchange issues. They repurchased $250 million in stock in the first 6-months of 2017 and paid dividends of $69.8 million.

Next earnings Nov 6th.

Shares declined after the revenue miss but rebounded exactly from long-term uptrend support.

Update 9/18/17: Shares exploded higher by nearly $4 after the company said it had developed a new technology to produce lithium in Chile without requiring additional brine pumping. They are planning to boost production by 80,000 metric tons a year on a sustainable basis. Their lithium business rose 36% in Q2 and they are targeting 50% market share of the industry.

Position 8/22:

Long Oct $120 call @ $1.75, see portfolio graphic for stop loss.

CAT - Caterpillar - Company Profile


No specific news. Shares only declined 36 cents in a weak market. They are holding just under the historic high.

Original Trade Description: Aug 29th.

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives for heavy and general construction, rental, quarry, aggregate, mining, waste, material handling, oil and gas, power generation, marine, rail, and industrial markets. Its Construction Industries segment offers backhoe, compact, track-type, small and medium wheel, knuckleboom, and skid steer loaders; small and medium track-type, and site prep tractors; mini, wheel, forestry, small, medium, and large track excavators; and motorgraders, pipelayers, telehandlers, cold planers, asphalt pavers, compactors, road reclaimers, and wheel and track skidders and feller bunchers. The company's Resource Industries segment provides electric rope and hydraulic shovel, landfill and soil compactor, dragline, large wheel loader, machinery component, track and rotary drill, electronics and control system, work tool, hard rock vehicle and continuous mining system, scoop and hauler, wheel tractor scraper, large track-type tractor, and wheel dozer products; longwall, highwall, and continuous miners; and mining, off-highway, and articulated trucks. Its Energy & Transportation segment offers reciprocating engine powered generator set and engine, integrated system, turbine, centrifugal gas compressor, diesel-electric locomotive and component, and other rail-related products and services. The company's Financial Products segment offers finance for Caterpillar equipment, machinery, and engines, as well as dealers; property, casualty, life, accident, and health insurance; and insurance brokerage services, as well as purchases short-term trade receivables. Its All Other operating segments provides parts distribution and digital investments services. Company description from FinViz.com.

CAT has been alternately ignored or talked down for the last couple years but the shares keep rising. Part of the recent gains came from the guidance. The company has been bitten by the global slowdown in construction since the financial crisis. Then it was hit by the slowdown in the energy sector. Every expected rebound falied to appear and CAT continued to give cautious guidance. That changed over the last several months.

The global economy is rebounding. There are massive construction projects now underway in China and Asia. The Eurozone is also seeing a resurgence in consrtuction. Commodity metals are booming and mines are reopening shuttered capacity and opening new mines. Everything is suddenly positive for CAT.

In December they guided for full year 2017 revenues of $38 billion "as a reasonable midpoint expectation." Analyst estimates for earnings of $3.25 were "too optimistic" according to CAT.

In January they guided for $36-$39 billion in revenue and $2.90 in earnings.

In April they guided for $38-$41 billion in revenue and $3.75 in earnings.

In July they guided for $42-$44 billion in revenue and $5 in earnings.

In April they guided for revenue from construction at flat to 5%. In July they guided for 10% to 15% growth.

In April they guided for revenue from mining at 10% to 15%. In July they guided for 20% to 25% growth.

In April they guided for energy revenue at flat to 5%. In July they raised it to 5% to 10%.

After the devastation in Houston, there were new estimates from analysts today for 17% or higher revenue growth in construction equipment.

Shares spiked at the open to a new high before fading slightly with the market. I believe revenue estimates will continue to rise because they are running out of year and their conservative guidance will have to become more accurate.

Earnings October 24th.

CAT is reactive to Dow movement but shares have ignored the recent Dow weakness. Today's close at $116.01 is a record high.

Update 9/13/17: In Tuesday's investor day meeting the new CEO said they were targeting $55 billion in revenue in 2018 with margins of 14%-17% compared to 12% in 2017. That would take them back to 2014 levels before the bear market in commodity/energy began. That is 28% above 2017 levels. He was careful not to call it a target but said that level was achievable if the current rebound in mining, energy and construction continued.

Update 9/18/17: UBS upgraded CAT from neutral to buy and raised the price target from $116 to $140. The analyst said the growing cash position, rising earnings and revenue projections were all bullish. CAT is expected to produce $10 billion in free cash flow over the next two years and return most of that to investors. UBS said a survey of 50 mining companies found that 60% expected to hike new equipment budgets in 2018 and 50% expect to rebuild their entire fleet.

Update 9/21/17: CAT reported a global increase in machine sales of 11% for August, down 1% from July. Total sales in Asia and the Pacific surged 44%, down 1% from July. Despite the minor declines, the business is very strong.

Position 8/30/17:

Long Nov $120 call @ $2.75, see portfolio graphic for stop loss.

SWK - Stanley Black & Decker - Company Profile


No specific news. The company revised its Q3 earnings date from the 26th to the 24th.

Original Trade Description: Sept 16th.

Stanley Black & Decker, Inc. provides tools and storage, commercial electronic security, and engineered fastening systems worldwide. Its Tools & Storage segment provides corded and cordless electric power tools and equipment, including drills, wrenches and drivers, grinders, saws, routers, and sanders; pneumatic tools and fasteners, such as nail guns, nails, staples, and anchors; lawn and garden products comprising trimmers, mowers, edgers, and related accessories; home products, such as vacuums, paint tools, and cleaning appliances; power tool accessories that include drill and router bits, abrasives, and saw blades; measuring, leveling, and layout tools; planes, hammers, demolition tools, knives, saws, chisels, and industrial and automotive tools; and storage products, such as tool boxes, sawhorses, medical cabinets, and engineered storage products. The company's Security segment offers alarm monitoring, video surveillance, fire alarm monitoring, systems integration, and system maintenance services; markets asset tracking, infant protection, pediatric protection, patient protection, wander management, fall management, and emergency call products; sells automatic doors, commercial hardware, locking mechanisms, electronic keyless entry systems, keying systems, and tubular and mortise door locksets. Its Industrial segment sells fastening products and systems comprising stud welding systems, blind rivets and tools, blind inserts and tools, drawn arc weld studs, plastic and mechanical fasteners, self-piercing riveting systems, nut running systems, micro fasteners, high-strength structural fasteners, and hydraulic tools and accessories; sells and rents custom pipe handling, joint welding, and coating equipment; and provides pipeline inspection services. Company description from FinViz.com.

With two disasters already and three more hurricanes heading for U.S. shores, there is going to be a significant jump in the number of tools sold over the next quarter. Investors have already lifted SWK to a new high but shares are holding right at the breakout level. The three new hurricanes are likely to give it that additional lift and produce a breakout.

For Q2, the company reported earnings of $2.01 that beat estimates for $1.96. Revenue of $3.229 billion also beat estimates for $3.17 billion. For the full year they guided to earnings of $7.18-$7.38, up from prior guidance of $7.08-$7.28. This is before the hurricane demand so guidance should rise again with the next earnings. Organic revenue is expected to rise 10% to 13% for 2017.

Earnings Oct 24th. Revised.

I considered buying the short-term October $150 call for $1.95 with shares at $148. There are five weeks before expiration but without a strong rally, the premium could deflate quickly since it expires before earnings. I elected to go with the next available strike in January at $155. That is farther out of the money than I usually go but we will have an earnings premium in the option when we exit before earnings. That will keep premiums from deflating.

Position 9/18/17:

Long Jan $155 call @ $3.20, see portfolio graphic for stop loss.

TER - Teradyne - Company Profile


No specific news. Shares closed over $36 again with a decent gain. Maybe this gain will stick.

Original Trade Description: Aug 30th.

Teradyne is a leading supplier of automation equipment for test and industrial applications. Teradyne Automatic Test Equipment (ATE) is used to test semiconductors, wireless products, data storage and complex electronic systems which serve consumer, communications, industrial and government customers. Our Industrial Automation products include collaborative robots used by global manufacturing and light industrial customers to improve quality and increase manufacturing efficiency. In 2016, Teradyne had revenue of $1.75 billion and currently employs approximately 4,400 people worldwide. Company description from Teradyne.

For Q2 they reported earnings of 90 cents compared to estimates for 86 cents. Revenue of $696.9 million beat estimates for $684.2 million. They raised revenue guidance to $455-$485 million and analysts were expecting $445 million.

In just the last 30 days analyst estimates for Q3 have risen from 38 cents to 43 cents. Full year estimates have risen from $1.88 t $1.97 per share. Zacks rates the Electronics Testing Equipment sector as #6 out of 250 industry sectors. Every new electronic device manufactured needs a new set of testing equipment.

Earnings October 26th.

Shares have been stuck under resistance at $35 for six weeks and broke out today. Analysts believe they will continue higher and make new highs. The $36 level is the next resistance.

Position 8/31/17:

Long Oct $37 call @ .90, see portfolio graphic for stop loss.

VIX - Volatility Index - Index Profile


Mixed markets but the VIX declined again. The VIX traded under 10 for the 44th day this year.

We still have plenty of time. North Korea, Iran and Venezuela are still a factor and could erupt at any time.

This is the fourth longest period in history of the markets without a 5% decline. While it does not look likely today, it could happen at any time.

Original Trade Description: July 12th.

The CBOE Volatility Index (VIX Index) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. Since its introduction in 1993, the VIX Index has been considered by many to be the world's premier barometer of investor sentiment and market volatility. Several investors expressed interest in trading instruments related to the market's expectation of future volatility, and so VX futures were introduced in 2004, and VIX options were introduced in 2006.

The VIX closed at a 24-year low on July 14th at 9.51. The index has been spending a lot of time under 10 over the last three months and this is highly abnormal. The VIX typically trades up to 20 or more three times a year or more. That has not happen since the days before the election. This period of abnormal volatility WILL eventually end.

With the Trump administration getting more desperate to achieve some legislative goals there is always the risk they will go to extremes to get them accomplished. Add in the unknown but rapidly expanding Russian probes and anything is possible. We saw the Dow fall triple digits intraday on just the release of 5 emails from Trump Jr. If the probe actually uncovered something material, it could cause a major market meltdown.

The debt ceiling and the budget expire on Sept 31st. If Congress cannot get a budget passed and raise the debt ceiling, the government would shut down on October 1st. We have seen this before. The last time it happened the U.S. lost its AAA credit rating and the market declined sharply for more than a week.

What about North Korea? Military force could be used at any time but North Korea seems dead set on testing another nuke and expanding its ICBM tests. If fighting breaks out between the U.S. and North Korea it would cause a significant market decline because of the geopolitical concerns and the potential loss of life in Seoul, South Korea.

Even if none of those events occurred, there is always the risk of a 10% market decline just because we have not had one in a very long time. With August and September the worst months of the year for the market, the potential for a correction this year could be higher than normal. The Nasdaq is already up 18% and the Dow 9% for the year. The FAANG stocks are at record highs, which many say are unsupported by fundamentals.

There are so many potential opportunities for a market disaster. It only makes sense to take out some protection while the volatility is at record lows. I am recommending a November call to get us past the Aug/Sep period and the potential for a debt ceiling event in early October.

Position 7/20/17:

Long Nov $15 call @ $1.85, no stop loss, see portfolio graphic for stop loss.

XRAY - Dentsply Sirona Inc - Company Profile


No specific news. Shares held support and rebounded again despite the weak market.

Original Trade Description: Sept 9th.

DENTSPLY SIRONA Inc. designs, develops, manufactures, and markets various dental and oral health products, and other consumable healthcare products primarily for the professional dental market worldwide. It operates through two segments, Dental and Healthcare Consumables; and Technologies. The company provides dental consumable products, including endodontic instruments and materials, dental anesthetics, prophylaxis pastes, dental sealants, impression materials, restorative materials, tooth whiteners, and topical fluoride products; and small equipment products comprising dental hand pieces, intraoral curing light systems, dental diagnostic systems, and ultrasonic scalers and polishers. It also offers dental laboratory products, such as dental prosthetics that include artificial teeth, precious metal dental alloys, dental ceramics, and crown and bridge materials. In addition, the company provides dental equipment, such as treatment centers, imaging equipment, and computer aided design and machining systems for dental practitioners and laboratories; and dental implants and related scanning equipment, treatment software, and orthodontic appliances for dental practitioners and specialists, and dental laboratories. Further, it offers healthcare consumable products, such as urology catheters, various surgical products, medical drills, and other non-medical products. DENTSPLY SIRONA Inc. markets and sells its dental products through distributors, dealers, and importers to dentists, dental hygienists, dental assistants, dental laboratories, and dental schools; and urology products directly to patients, as well as through distributors to urologists, urology nurses, and general practitioners. Company description from FinViz.com.

Dentsply reported Q2 earnings of 65 cents that missed estimates by a penny. Revenue of $992.7 million missed the estimate for 1,004 million. Sales in the U.S. fell 9.7% but sales in Europe rose 2.5%. They guided for the full year for earnings of $2.65-$2.75.

The stock was crushed on the miss with a $9 drop over the following week.

However, there was a reason for the miss. Effective September 1st, they moved from a single distributor to multiple distributors. The existing distributor slowed purchases in the quarter in order to reduce inventory before the change in the distribution model.

The CEO said "In September, we should begin to benefit from the expanded distribution of our equipment in North America which should drive growth in the back half of this year and beyond. As we work through the distribution transition and integration initiatives, we are strengthening our foundation for the future. We believe that this should translate into more consistent growth and strong double digit earnings growth in the back half of the year creating momentum exiting the year going into 2018."

Shares have begun to rebound and should return to their highs on the "double digit earnings growth" guidance.

Earnings Nov 8th.

There are no Nov/Dec options. I am using the January but just because we buy time does not mean we have to use it.

Position 9/11/17:

Long Jan $60 call @ $2.70, see portfolio graphic for stop loss.

BEARISH Play Updates (Alpha by Symbol)

MNK - Mallinckrodt - Company Profile


No specific news. No rebound today and we had a lower intraday high. I know that is grasping at straws but every little bit counts.

Original Trade Description: August 19th.

Mallinckrodt public limited company develops, manufactures, markets, and distributes branded and generic specialty pharmaceutical products and therapies in the United States, Europe, the Middle East, Africa, and internationally. The company's Specialty Brands segment markets branded pharmaceutical products for autoimmune and rare diseases, including the specialty areas of neurology, rheumatology, nephrology, ophthalmology, and pulmonology; and immunotherapy and neonatal respiratory critical care therapies, as well as analgesics and hemostasis products, and central nervous system drugs. This segment offers Acthar, an injectable drug for various indications, such as neurology, rheumatology, nephrology, and pulmonology; Ofirmev, an intravenous formulation of acetaminophen for pain management; Inomax for inhalation; Therakos, an immunotherapy treatment platform; and Exalgo, a form of hydromorphone. It is also developing StrataGraft, a full-thickness product for severe burns and other complex skin defects. Its Specialty Generics segment provides specialty generic pharmaceuticals and active pharmaceutical ingredients (APIs) consisting of hydrocodone and hydrocodone-containing tablets; oxycodone and oxycodone-containing tablets; methylphenidate HCl extended-release tablets; and other controlled substances, including acetaminophen products. The company markets its branded products to physicians, pharmacists, pharmacy buyers, hospital procurement departments, ambulatory surgical centers, and specialty pharmacies. It distributes its branded and generic products through independent channels, including wholesale drug distributors, specialty pharmaceutical distributors, retail pharmacy chains, hospital networks, ambulatory surgical centers, and governmental agencies; and APIs directly or through distributors to other pharmaceutical companies. Company description from FinViz.com.

MNK is in trouble from multiple angles. Early this month a District Court invalidated 11 patents for the drug Inomax as competing companies prepare to launch generic copies. MNK said they planned to appeal but the patents expire anyway next October so it is only about 12 months before the onslaught of generic copies. Inomax represents 15% of revenue for MNK. The next generic challenge for MNK is the drug Acthar, which accounts for more than 50% of their revenue.

MNK is also under investigation on its marketing of opioid medications. States are becoming stricter about how companies sell these drugs off label. For instance, if a drug is approved for post surgical pain and the company also markets it for back pain or arthritis that is called off label. It is an effort to convert an entirely new class of patients into addicts.

Nobody knows if MNK is guilty of anything but the Missouri Atty General is expanding their probe.

Earnings Nov 7th.

Shares have been declining for months but they accelerated after the court ruling on Sept 1st. They closed at a historic low on Monday.

The November options just appeared today and the premiums are high and wide. I am going to reach out to the January puts. Just because we are buying time does not mean we have to use it.

Position 9/19/17:

Long Jan $30 put @ $2.30, see portfolio graphic for stop loss.

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