Q. In times like this, I wonder what the things are that we take for granted that will be completely different in five years. I’m thinking about email, and some of the computer services we use and take for granted… I’m also thinking about driverless cars, and what potential there is for a recurring revenue based model of subscription service for tailored transportation. get up in the morning, tell Siri to have you a ride to work at your door by 8:00, then a driverless single person car pod shows up and whisks you off… Pay a subscription similar to a car lease in amount… anyway, I would love the collective thoughts from this community on out-of-the-box ideas for the future. I believe my kids will live in such a reality, especially regarding cars. Further, I believe we’ll laugh nostalgically at how societies wasted whole blocks on parking garages…
A. Great thought process. I like where you’re going. Wearable and speakable and movement recognition computing is going to be huge. Driverless cars only exist because of all the taxpayer money spent locking us into “paved roads” and “cars with wheels”. If the idiot Republican/Democrat Regime would allow a true free market to play out in transportation with no subsidies or protection, we would already be zooming back and forth from each other’s houses using our teleporter like in Star Trek or The Fly.
Q. Cody, you’ve said this ” Its not the direction or the magnitude of currency movements that causes me sit up and take notice, its always the velocity of currency movements. That is, extreme short term volatility can indicate something underlying that actually matters.” Could you please explain in laymen terms? Thanks!
A. With Treasuries and with currencies, the trends can stay in place for a rather steady long time vs. say stocks and commodities. And so I rarely factor dollar/currency movements into my analysis and outlook for the stock markets and other markets we invest in. But when the dollar and/or a currency suddenly changes direction and/or puts on a big move in one direction over a small time frame (say measured in days instead of a slow turn or slow big move build up over months or years), then I start to dig a little more on what might be causing that movement with such velocity. Make sense?
Q. So what are you reading into the current velocity of movement?
A. Simply that there’s some serious banksters and traders out there that are flipping out about the debt resolution and/or something else. Something’s got the dollar spiking contra its recent trend. Nothing to freak out about yet, but something to note, as I’d written earlier.
Q. Cody – if one did not hedge as you were rightly recommending last week, is your advice to sit tight and wait for the next pitch?
A. Yes exactly. I don’t like the buying or the selling of much of anything right here right now. We will have plenty of future trading opportunities to both capture gains and to hedge our portfolios. That said, if you are stressing out about the big market pullback this week, you might want to consider just trimming back a little exposure and raising some cash so you can think straighter.
Thanks Cody, but not stressed. Thinking straight using your guidance to keep me focused.
“Not stressed. Thinking straight using your guidance to keep me focused.” That is exactly the idea behind the TradingWithCody.com service. Rock on and thanks!
Q. Hi, Cody: Three quickies: 1. Do you believe in/advise against/no opinion on using stop losses with option buys? 2. How about ECTYQ? Time to give up? 3. Could you please expand a little on that quixotic “Note the dollar” alert? And, OK, I have four: 4. Now that Yellen will probably be the next Fed chief, still predicting higher rates by year’s end? Thanks!
A. 1. I don’t use stop losses on options cuz they’re too volatile and I trust my own analysis to work out over many trades. 2. Probably will given up on the ECTYQ in the next few trading sessions. Mea culpa for sure so far. 3. More on the dollar in a minute answering a similar quesstion. 4. Yellen is as much a tool and product of the corrupt Republican/Democrat Regime and its Fed/TBTF banking scam as her Greenspan and Bernanake predecessors were. These people do what the TBTF banks tell them to do. Yellen is as corrupt and stupid and hypocritical as any C-level executive at any bank and as any Republican/Democrat politician. They are not on your side. #EndTheFed And like I’ve said, there’s nothing these FED idiots can do besides completely disassemble their corrupted system of stealing your money with monetary policy.
And like I’ve said, there’s nothing these FED idiots can do to change the end-game of this system besides completely disassemble their corrupted system of stealing your money with monetary policy.
Q. Got it — but bottom line, still higher rates by year’s end? IEF is a place to stay?
A. Rates are already higher than they were last year. I expect that is a long-term steady trend that will be in place for years. Probably the next 90 days will also have higher rates as the path of least resistance, but 90 days is all you’ve got til year end now and that’s starting to cut it close on the timing from here.
Q. Sorry, Cody: still looking for an answer to my “wither-rates-by-year’s-end under Yellen?” question (even though she’s a scoundrel, too, as you lay out) — especially now that you’re seeing significant dollar/currency movements. Still think they’ll be higher? Are my IEF puts still worth holding onto? Currently down on $95 January ’14 puts and modestly up on $106 January puts.
A.I don’t think unless there’s something broken or crazy between now and year end that you’ll make money on the $95s. But the $106s are probably good risk/reward into year end. I do think rates will be higher into year end.
Q. Phew! Fast and Furious Q & A!
A. No joke – fast and furious indeed! My fingers are blistering and smoke is coming out from the keyboard on my Mac. I’m Wall Street’s Ace Frehley, no? KISS Ace Frehley Guitar Smoke RARE 80’s
Q. Love the KISS cut! My Scutify Q: I can’t seem to add to my Scuttle list. Seems to have come pre-loaded with GOOG and AAPL, but EDIT doesn’t offer a way to add, far as I can see. Bill/whomever can respond to my TWC or Scutify address. And if you’re a sailor, “Scuttle” ain’t exactly a great name for the list!
A. More KISS and Ace Frehley: ACE Frehley Smokin’ Solo. What a showman. What a rock star. I got to meet the rest of the band over the years, but I have never met Ace. Favorite Ace song? “Shock me.” Best Ace post-Kiss solo song? “Rock soldiers” Coolest KISS song of all time? “Back in the NY Groove” Here’s my band, The Muddy Souls, turning “Back in the NY Groove” into something a little more New Mexico-y: Muddy Souls Alcove
Q. Back in the NY Groove…you added a Ry Cooder touch…I like it.
Noticed the Ry Cooder thing, too, and agree. Cody — group still active?
A. Yes, we’re always making more music and collaborating with random people. I’m even working on some music with Bob Weir from the Grateful dead for the Muddy Souls.
Q. Loving Scutify! Is it legit to ask a tech-y question here? Don’t believe I got an answer by asking it onsite.
Q. I have some AAPL Jan 14, strike price $500 calls and some SSYS Jan 14, strike price $100 calls. Should I continue to ride these calls?
A. I can’t really feel comfortable giving you that much detailed guidance on those two positions without knowing much more about your risk-tolerance, your net worth, your income, your goals, etc. I do think that both of those will likely be worth more in January than they are right now.
Q. Hi, our Oct 500 calls are set to expire next week should we roll or sell them? If we roll what would be the best ones?
A. It’s a coin flip on the AAPL $500 October calls into their expiration. I’d probably look at AAPL common instead of calls right now anyway.
Q. Hi Cody, what do you expect from AAPL earnings on 28th? Does the alleged ER date change surprise you, or it’s normal?
A. ER dates are meaningless. I expect AAPL to beat bottom line because of strong margins and iPhone 5S sales. No idea yet what to expect from the stock after that report.
Q. TQNT – how is management? Can they execute?
A. Management has not been impressive nor has their execution in the last few years and that is probably the biggest risk we have with our TQNT position — can they execute? I am betting they can.
Q. Do you like the 1/15 $10 call on TQNT for $1.10?
A. Yes, I like it.
Q. Hi Cody, If INTC is such a good buy would you consider Jan 2016 call options? They seem really cheap here.
A. Yes, but again, if INTC were to sit here in the low $20s over the next 18 months, you’d lose pretty much all or most of your capital put on that trade, whereas the common will simply be about even if that were the case. Careful either way, but obviously options are very risky, as you guys know.
Q. Jan 2016s have 27 months remaining! That’s a lot of time.
A. Yes, that is a LOT of time for little capital risk overall on the call option.
Q. Which equity/call option are you and Olivepetunia talking about? I lost the string.
A. She’s talking about the January 2016 INTC calls.
OK, I figured it out — it’s the INTC call.
Q. Hi Cody. I understand that you aren’t in the buying mood at the moment, but could you give us a list of the top 5 names you’d consider buying based on the most recent pullback and your projections moving forward? For me CIEN, FB, JNPR?
A. Hmmm, it will depend on the price, the action, the politics, the markets, the economy, etc. I think most any of our stocks are still very good for the long-term, but that for the near-term it could be ugly for a while. Feet to fire, I ‘d probably say AAPL and FLSR and INTC are in the top 5 names I’d consider buying right now.
Q. I don’t think I’ve ever seen you buy VIX puts, Cody. It would seem to make sense as a pair trade of sorts when you are selling VIX calls to buy VIX puts. Can you give us any thoughts on that as a strategy in general and here right now? Thank you.
A. I don’t remember the last time if ever that I bought VIX puts. I wouldn’t look to buy VIX puts unless the index spikes closer to 30 or so giving you some serious downside in the VIX (and profits in your puts) if the fear in the markets recede. I could easily see the VIX staying between 15-22 or so for the next few weeks or even months or even spiking closer to 30 before the next move up in the stock markets begins.
Q. Hi Cody, thank you the terrific calls you made on PCLN, P,TSLA– big wins all and I am grateful for your advice. I am holding a series of GDX calls ranging from Jan – March strikes 25 to 32– and SLV same time frame 23 strike–best to hold patiently and wait for a turn or cut losses and wait for a better time?
A. The GDX sure needs some sudden spiking if we’re gonna end up making money our GDX calls. I am holding my GDX calls steady for now, but have lost some confidence in their ability to pay off for me by early next year. Lots can happen before then tho, of course. I’d rather have silver coins and bullion than the SLV if you’re looking at the next few years. I don’t trust the SLV long-term. I do think SLV will rise with silver in the next few months before your SLV options expire. But of course, all options are VERY RISKY and you can lose all of your capital on options trading. 🙂
Q. Facebook – why is it so strong? Is he making money from Instagram?
A. Read this about the FB juggernaut and why it’s been so unstoppable since their last earnings report.
Q. Cody, per a note on the board, what is your exit strategy on the Pandora puts? I ended getting out of PCLN, YELP, NFLX puts with big profits. The current profits on Pandora are smaller, didn’t drop as much and I’m concerned P might run back up. Did you note that phenomenon and have any concerns that might happen and erase our current paper gains?
A. I think P is in a long-term downtrend anyway and I plan on being mostly short P common or long P puts for at least a year or so.
Q. Cody you mentioned some interest on the board in adding to JNPR…It’s not been a subject that has come up, but I do see it on your list as an (8). Would you consider adding common or calls in the near future?
A. Not interested in JNPR or much other buys just yet.
Q. Not sure why my 8 in parenthesis turned into an emoticon…that would be weird if you ranked your positions with emoticons…
A. Haha. I think that’s a deeper thought than we realize – “that would be weird if you ranked your positions with emoticons…”
That’s all folks!