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Tuesday Already?

I love short weeks!

I hope everyone had a nice weekend, we had perfect weather in the Northeast and now it’s raining so we don’t even feel bad about getting back to work.  Gas, gas and more gas was the topic of the weekend parties and even John Mauldin had a whole column on oil, which makes a nice overview to my more specific expose on the nuts and bolts of oil price manipulation.  Oil is certainly the new housing so good luck to all the speculators playing hot potato with those front-month contracts, it will be fun to see who gets burned

CNBC’s new party line for oil apology is to try to tell you that the oil market can’t be fueled by speculators because it physically settles but the TRUTH is that what settles on the NYMEX is just 30M out of the 7,000,000,000 barrels that are traded in an average month and those 30M barrels represent just 1/3 of one day of global consumption so the magical "settlement" that the "experts" at CNBC are pointing to is 1/100th of the actual global consumption.  Just $3.9Bn to control the price of the $332Bn worth of oil that is sold each month. 

That means that overpaying by just $800M on the NYMEX by traders for their "settlement" barrels will pump an extra $65Bn into the hands of their employers if they are working on the producers side.  These energy traders have the motive, means and opportunity to murder the global economy by raping us with energy prices yet no one is investigating the crime scene! 

The Asian markets burned through another 5% drop on the Hang Seng while we were closed although the Nikkei bounced back 203 points today after yesterday’s 350-point drop.  As is often the case with Nikkei "rallies" the gains all came in just 2 hours, the opening gap up and a big run from 1:30 to 2:30 so it remains to be seen whether it sticks.  Gainers in Asia were led by oil companies and banks as crude was pumped back up to $133 with the US market closed in light trading – we’ll see if they get a shot of reality once the pits open this morning as last week turned very ugly at the end for energy bag-holders.  The Shanghai composite hit a one-month low on Monday as investor have major concerns about inflation tightening measures that are being discussed including rolling back some gasoline subsidies.

SHI’s (refiner China Petroleum and Chemical) shares were suspended on Monday for a shareholders meeting and the stock dropped 4.5% on profitability concerns.  Sinopec’s chairman said Monday the government’s tariff rebate on oil imports covered less than half of the company’s refining losses. The company also said it may delay trial operations of a natural-gas pipeline from Sichuan to Shanghai by one to two months because of the recent earthquake.  A rationale person would think that would lower the use of gas for a few months but don’t expect a rational response from the gas markets.

Europe is also having a rough week so far with the FTSE at the 5% rule over 5 days and the CAC at the 2.5% rule and the DAX splitting the difference down 3% but looking like they are going for 5 as they fell off sharply through the 2.5% line this morning.  There was no particular news, just a general sense of inflation-driven malaise and there were strikes in both England and Spain as truckers and fishermen protested high fuel costs.   The time may be right for US equities to reclaim their position as the least sucky place to put your money!  Sure it’s lame, but it’s as good as it’s going to get under this administration

Very little happened over the weekend other than the usual attack from Rent-A-Rebel over in Nigeria attempting to support $130 crude.  We have consumer confidence (or lack thereof) numbers out at 10 and anything below 61 will be a disappointment.  New home sales are also at 10 am, with a very low expectation of 520K, which will be bad if we miss.  Tomorrow we have durable goods orders but Thursday is the GDP, jobless claims and the delayed crude inventories so not much matters until that morning.  We will finish the week with big data on the PCE inflation and the Chicago PMI as well as Personal Income and Spending so we’ll play things by ear, watching oil as the lower it goes, the better the markets should do this week.

Have fun out there, it’s going to be interesting!

 


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  1. billbigd

    Apple may begin subsidizing the iPhone to keep sales momentum-AppleInsider

    French iPhone users have been reportedly contacted by Orange regarding discounts for the next-gen Apple (AAPL) iPhone. Readers of French technology site PCInpact, say that they have been offered a direct swap or deep discounting which is significant since it represents the first instance of a subsidy for the new phone

    Our little Rebels are at it again over the weekend. 
    Sinopec- some say China’s goverment lowering of money given for refining might cause oil to head higher. But who knows. LOL

  2. alf

    Wonder who blinks first.
    The next step, of course, would be for the central bank to actually raise rates. Coming at a time when the economy is still weak and housing is falling, this would shock the markets – especially oil and other commodities where prices have jumped sky-high.
    Higher interest rates and fewer dollars in circulation could very well pop these bubbles. More important, they would also get inflation expectations back to their mooring.

  3. Shahir Ahmed Ahmed

    Forbes ceo agrees this oil bubble will burst. no lack of supply just very good manipulation.

  4. Phil

    Wow, I thought I was rich but SU just split!  8-)

  5. alf

    K1 didn’t mean to create more work for you. Had no idea WordPress causing those glitches. Thanks.

  6. RMM

    Phil:

    GM,

    wonder what AAPL will do today ?
    did you discuss low maintenance LEAPS now ?

  7. fredrang

    Boating
    I was talking to the Old Saybrook, CT police patrol boat guys on the water this weekend and they said not many drunk boaters because they can barely afford to buy gas for their boats so nobody is buying beer.  Kidding aside he said that boat traffic is way down in Long Island Sound.  Regular gas this weekend was $4.29/gallon in CT.

  8. Phil

    Low Maint leaps – You need to remind me on the weekend!  Going to be busy this morning I think but it looks like we played it right over the weekend.  DUG gapping up nicely!

    Going to get a general commodity sell-off I think, we’ll keep an eye on the dollar and our airline plays, which should respond well of oil breaks below $130. 

    VOD was strong in Europe and that should wake up VZ.

    QID puts are looking good but we need volume in an up move, not just an up move.

  9. Peter

    Morning all.
    Hope everyone had a great M-Day weekend.
    I whipped out the grill for the first time this year and had a juicy soy-burger thinking of you guys!

  10. Phil

    FDX $90s very cheap at $1.75, let’s grab 10 in $25KP and 30 in DTP. XXX

  11. k1

    Alf- no problem. Think of all the hassles it causes for Phil.

  12. fredrang

    Mark Haynes
    "What’s behind the slide in oil prices today?"….what a joke.

  13. billbigd

    AAPL- shakes of neg comments out of June 190′s

  14. albo

    GE – New yearly low.   Sure looks cheap to me!

  15. Shahir Ahmed Ahmed

    fdx jumped up too fast. dammit

  16. RMM

    Phil:

    what bis your view on AAPL?

  17. Phil

    Rolled GOOG $540 callers to $550s for $5.50, feeling better that $540 was a bottom so I’m happy to pay $5.50 for $10.

    AAPL – I think they end the month (6/20) around $190 so I’m covered with $180s until they prove me wrong.

    No action on YHOO causing a sell-off.    VLO with strange action.  X took a big hit.  OIH down with XLE at 1.25% rule….

  18. RMM

    VLO:

    thought when oil goes down, VLO goes up ?

  19. Shahir Ahmed Ahmed

    Are we looking for tgt on CAL? i just dont trust these airlines and oil relationship

  20. billbigd

    Sitting at the coffee shop and listening to guy talk oil, outsourcing, border issues, china.  If this is what middle america thinks we are in deep trouble.  LOL

  21. RMM

    billbigd:
    its not "if" we are,
    the views of the average American is so devoid of facts and rational thinking, what can we do with that society??

  22. Mark

    Lowest since Oct ’92…. ;)

    9:00 *NEW-HOME SALES IN U.S. INCREASED 3.3% IN APRIL TO 526,000 PACE
    9:00 *U.S. MAY CONSUMER CONFIDENCE INDEX FALLS TO 57.2 FROM 62.8

  23. Phil

    ANF doing well.  BA looking bouncy.  CY down with the solars.  GRMN selling off again (has been a good buy at $46), RIMM acting strange as usual, MEA moving up, WFR weak in a SOX rally, XOM getting hit very hard!

    Financials weakening, I don’t like that.  XOM and CVX killing the Dow though so not too worried. 

    New home sales better than expected, up 3% for the month but last month revised to down 11% so not much of a victory there. 

    Consumer confidence much worse than expected.  57.2 vs 61 expected, down from 62.8 last month.

    Oil down $3!    That trumps other bad news…

  24. Phil

    CAL – If they don’t pop right through $15 (doubtful) we should look to get out there.  They may get rejected at $14.50 but it’s all about what oil does.

    VLO – they should improve but the first instinct is for them to sell off with the oil patch, which works for us as we get a chance to take out the callers so let’s keep a .20 trailing stop on the VLO callers in the $25KP  XXX

    FSLR being nice and sucky for us!

    Wow, FDX gone wild!

  25. DanW

    Out of my FDX 85′s from Friday at +24%.

  26. RMM

    Phil

    oil, metals, agri, all down, clearly commodities selling off.
    where will the money go ?

  27. fredrang

    Gee…I’m shocked that gas demand would be down….I’m sure all the  traders are surprised as well.

  28. Phil

    ANF coming back nicely!

    Wow gold down $21!  Very nice dollar move that CNBC likes to pretend doesn’t affect oil.  Mentioning Nigeria over and over and over – someone at GE must be very on the wrong side of that trade!

    EBAY coming on for a change.

    FIG at $1.20, DD in $25KP if you didn’t already!   XXX

  29. windywheel

    General Morons is selling off it’s prime real estate.  http://biz.yahoo.com/ap/080526/general_motors_building.html?.v=2
    last year they sold GMAC.  not much left to sell now.  oh, i guess their cars.

  30. Phil

    Where will money go?  Tech!

    Gas numbers from weekend driving may be shocking to speculators.  Fist time in XX years demand has fallen…

    If oil breaks back over $130 I’m killing the QID puts, huge profit there (40%).

    MRVL got slapped by GS to neutral from buy.  Not worth holding in DTP.   XXX

  31. windywheel

    the link above (GM) has a nice photo of the entry to the AAPL store at  5th ave. and central park south, a transparant glass cube.

  32. RMM

    fredrang
    for you gas = gasoline,
    if yes,
    gasoline demand is same as in 2007, no real change.

  33. Mark

    Biggest up sector today (currently) is discretionary.  whodathunk?

    BKS after the close.

  34. Greg (the Bagholder)

    Was at the lake we waterski on over the holiday weekend.  We were practically the only boat out there on Sat & Sun, finally Mon a few more boats joined us, but way below normal traffic.  Weather wasn’t very nice on Sat & Sun, but I think gas cost is a big factor too.  Highways were still crowed with weekend travelers returning home Mon afternoon.  Just another observation.

  35. mck

    CHL – Phil – what would you do with longs sep80 calls fully covered with jun80 callers? Stock dropped to 73+. Nice dip on the callers of course (now $1.1) but long loss is out pacing.

  36. Phil

    FDX – that’s enough in DTP but keep them in $25KP if you don’t already have day-trading status.  XXX

  37. DanW

    FIG – Is it the Sep 15′s on this? Is it still a good trade to get into at $1.30 right now?

  38. MJ

    CHL was downgraded by the crooks at GS yesterday

  39. billbigd

    RIG- still in business and another good jump off $150

  40. Mark

    funny to see sectors move, energy and materials start coming back, all otehr sectors come down…

  41. Phil

    CHL/MCK – Well you are done with your callers.  May as well roll down to to Jan $70s for $7 if you are looking to stay with them or just take a chance with the July 75s as an even roll (they were $6.50 on Friday) but I think it may be a while before CHL recovers as the competition is coming and that won’t be resolved for quite some time.  Also, if China floats fuel costs, say goodbye to a lot of consumer income over there.

    FIG – yes I like the Sept $15s at $1.30 as a new play too. 

    OIH with a very quick turn as oil cracked back over $130.  XOM may be next and that (with CVX) could give the Dow a big boost as long as oil stays close to $130.

  42. Phil

    VLO – $47 has been a good entry point, let’s keep an eye on them here!  XXX

  43. alf

    Real time quotes for Brent crude are free at CME, now you don’t have to pay $100/mo exchange fees to NYMEX.
    Free real-time quotes are now available on the NYMEX® Energy Futures and COMEX Metals trading on CME Globex®. Energy products include NYMEX WTI and Brent Crude Oil, RBOB and Unleaded Gasoline, Natural Gas, Heating Oil, Gasoil and Propane Futures. COMEX Metals products include Gold, Silver, Copper and Aluminum Futures. With this resource you can view: * Cash settled and Physically settled quotes and spreads going out 6 months * Outright market data – bids/asks 5 deep * Calendar spreads corresponding to the outrights displayed – limited to the 6 months * Total contract volume for NYMEX energy futures and COMEX Metals futures on CME Globex

  44. Mark

    Phil – trying to talk my Options Trader here on the desk to join.  He’s only been with my firm for maybe 2 months, but I’ve been sending him your morning posts and he’s loving it.  He used to work derivatives of a now defunct energy HF in Houston… he COMPLETELY agrees with your post form yesterday.

  45. Mark

    Phil – shot you email

  46. mck

    CHL – thanks phil, I’m not so keen on staying in it with the uncertainty so I might roll down to half in Jan and keep selling against those.

  47. Phil

    Nice Alf, thanks!

    GM at 26-year low!   That’s draggin’ the Dow.

    CVX $100 CALLS are a nice play at $2.50 but just to offset big gains on oil puts.  XXX

  48. Alex

    The VIX is still very High, what is there going on? hanging at 20

  49. Alex

    With that VIX at 20 it is a good idea to sell a bit premium, right?

  50. Mark

    In regards to the VIX, and multiple posts I’ve made the last few weeks about its usefullness, here’s an interesting blog post.

  51. Mark

    From Briefing:

    OPTNX: Early Options Activity

    Taking an early look at the options market, we found the following names that
    may be worth watching throughout the day for further indication of investor
    expectations given their options volume and implied volatility movement.
    Stocks seeing volatility buying: IDEV Jul 5 call are seeing interest with 2000
    contracts trading vs. open int of 0, pushing implied vol up around 17 points
    to ~130% — the co presents at the UBS Global Specialty and Generic
    Pharmaceutical Conference on Thursday (5/29)… Stocks seeing volatility
    selling: AHR Jun 10 calls are active with 1310 contracts trading vs. open int
    of 180, pushing implied vol down around 9 points to ~30%… CBOE Put/Call
    ratio: 0.87, VIX: (20.02, +0.47, +2.4%), VXN: (23.71, +0.35, +1.5%). (To find
    past options related comments in the archive, use the symbol OPTNX)

  52. RMM

    Phil:

    AAPL strategy:
    what will be your action:
    if it moves to 190 and higher:  roll the caller up,
    if it moves to 180 or lower: move the caller down,

    is that it ?

  53. Phil

    Mark/Options Trader – That’s the trick to oil.  We’re all options traders so we get how you can roll contracts forward a month and that’s not "settling" but most of the public, even the trading public, doesn’t understand that and that’s how CNBC can BS people with all this talk of contract closings and physical delivery.   We trade tens of Billions in stocks every week through options and I’d say this whole board probably doesn’t take delivery of more than a million – imagine if we could use that kind of leverage to influence pricing?

    Very poor volume today, don’t read too much into this action.

    VIX – 20 is a fair number for them, I think they should be at 22.50 on average.  Dont’ forget that’s pumping up your callers so your spreads look bad at the moment.  I think the VIX is up with the Dow because of the "wrongness" of the Dow’s move as what should be a positive move of 100 points is being dragged down by XOM, CVX and GM – that  would be my guess.  Yes, it is a good time to sell some premiums as we are generally bullish and think the Dow will go up and the VIX will head lower.

    We’d really like to see oil not get back over $130, that will trap them in a consolidation above a breakdown at $130.

  54. Peter

    Mark, you handsome devil, you.
    Thanks for the heads-up on those stocks.

  55. Mark

    BTW – does anybody read / have read Schaeffers Research?  Didn’t know if it was a good site for education / commentary?

  56. alf

    Schaeffers, high pressure sales trying to lock you in to yearly subscriptions. Had a subscription, VERY HIGH PRESSURE.

  57. Mark

    alf- ha!  cool, ty.  Don’t plan on signing up for a sub, just saw options commentary on bloomie from them and never been to their site.  Pressing Cnt-W right………..now.  ;)

  58. Greg (the Bagholder)

    Mark:  If Schaeffers ever gets ahold of your email, they will fill it with their spam.  Not worth the effort to separate the the good stuff from the junk.

  59. xian

    asked my friend in miami about memorial day boat traffic and he responded as such:

    "WAY less boat traffic…
    people are seling boats left and right due to high cost of fuel and a general slow down in economy….
    We recently bought a 35 intrepid which i gassed up on saturday…..
    1500.00 ouch!"
     
  60. alf

    Shcaeffers exactly, little bit of Cramer theater to entice you.

  61. alf

    Xian LOL. For $1500 you can ride the waves with Phil :)

  62. Peter

    Mark,
    I was a member for several years. Have to agree with ALF.
    Also, based on my personal experience, their recommendations were questionable, at best. IMHO,
    I do not hesitate NOT to recommend them.
    We have everything we need right here on this board.

  63. billbigd

    Mark- I think the market stuff is good, but the options trades SUCK.    I mean SUCK

  64. dday97

    Taking some OIH puts for a quick trade

  65. haksawmusic

    Mark,
    Agree with Greg. Took a trial sub. with them and it took me months to get off their list.

  66. Mark

    All – very nice ty.  Bloomie of course has commentary from every major research / news feed out there… stumbled upon them, "sounded" good but knew better to ask you kids before wasting my time.  Thanks again… I’ll just stick with my macro eco researchers.  :)

  67. Peter

    billbigd,
    SUCK, is a very good way of putting it….I was just trying to be polite, but I think you’re bang on.

  68. Phil

    RMM/AAPL – It depends on when and why it moves up.  Certainly I wouldn’t roll a $180 caller down just because the stock hits $180, that’s where I want it and if it jumpt to $190 on good news, that doesn’t mean I’m going to pay $5.50 to give up $10 worth of protection right away.

    Schaeffers – I owe my blogging carrer to Bernie Schaeffer as I used to be a subscriber and one day I realized that if people were willing to pay money for their awful advice, then mine must be worth a fortune!

  69. Phil

    Man, that $130 line on oil was a perfect market turn signal – investors are just not going to put up with it.

  70. rankxerox

    xian time to learn to sail…. It’s ecological..and cheaper ;-)

  71. billbigd

    Phil- remember you mentioning that before.    So we all agree.  LOL
    AAPL-sniffing around again

  72. rankxerox

    Sailing.. and way more fun must add..
    seems market do not wanna wake up ..indexes have turned down..

  73. Courtney

    VZ seems to be unimpressed with VOD’s action.

  74. Bronek

    G-Day
    Ref Subs. My preference is The Kiplinger Letter. They mostly report key economical numbers, with some synthesis into few actionable LT suggestions. Sub <$100/yr. Some free info on their website http://www.kiplinger.com/businessresource/ and also free access to restricted subscriber site. I like their analysis.

  75. Phil

    I’m not giving up, mostly a commodity sell-off with stronger dollar worrying exporters.  GOOG and Apple hoding on and Finacials flat is nothing to panic about.

    VZ – I have faith in the long-term (2010 $35s at $5.45).

    Kiplinger – Now him I like!

    V is hurting!  MA no better.

    Dow not holding 12,500 is very bad….  Watch S&P if they break 1,375.

  76. Courtney

    TIE looks tiggety-tasty here – bottom of the channel, and at the $17 support.  I missed your last entry, Phil.  Would this be a good second chance?

  77. jomama

    VOD is unimpressed with VOD’s numbers.  (I know it’s the CEO story)

  78. Mark

    V – speaking of, look at that huge volume go off at noon selling thru 75 (needs  big volume)… no news with it so trend down… same with SPX.

  79. Stevey

    OT
    Does anybody  here use "Investor/RT" charting service? I’m currently using Stockcharts, but looking for real time streaming.

  80. Phil

    TIE – Last position I took was Jan $15s at $3.48, now $3.90 so I do still like them here, watch them around the $17 line.

    What a turn on the OIH!  That’s pretty impressive…

  81. irished

    COST looking pretty good. Earning Thur and store is packed, especially now. Do not know about forecast but up to earnings might be good.

  82. dday97

    Anyone play fixed return options?  It’s like playing the over/under, just another thing to stave off boredom.

  83. dday97

    Added on OIH 210 puts for 7.55

  84. Mark

    dday – FILM’s been talking about those the last few weeks.

  85. DB

    Go GOOG – BIDU

  86. xian

    fixed return options- i think those r things film was talking about last month.  i dont like them. they make the market look more like a casino than it already does.

    i just dont c the hedging they provide- surely they can b used as hedges, but very useful b/c of the "all or nothing" aspect

  87. xian

    woops…

    i meant  "…NOT very useful b/c of the "all or nothing" aspect"

  88. dday97

    Mark – ahh, I’ll have to do a search.  I’ve been in/out for the past few weeks.

  89. occam

    Solars having a Dedalus day.   SOLF should have another trip down with the GS downgrade--no?  TIE’s 60 min chart looks ok.  but 1 day chart – some selling momentum that may overwhelm the hourly calm.

  90. Peter

    Sorry. I missed the memo! What are fixed return options?

  91. dday97

    xian – I’m a big casino fan so that doesn’t bother me :)  .  But just looking at them I don’t see the big advantage over regular options except it may limit risk somewhat but your potential profits definately have a ceiling.

  92. designcurve

    Fixed Return Options (FROs) – http://en.wikipedia.org/wiki/Fixed_return_options

  93. bigs

    SAFE INCOME STRATEGY – Phil I spent some time over the weekend studying the safe income plays.  I was thinking about buying C stock, buying the Jan ’10 40 Put, and selling the July 25 Calls.  But I was thinking for the entry for this play would it make more sense to set up a calendar put spread and try and get assigned to boost yield for the entry.  So buy the Jan 10 40 P and sell the Jun 22.5 P.  Hopefully I get assigned and pick up 40 cents premium.  Then I would have the play setup and could sell the call.  What do you think?

  94. dday97

    Peter – Here is the quick explanation.
    http://en.wikipedia.org/wiki/Fixed_return_options

  95. dday97

    haha, I’m too slow

  96. Phil

    Real-Time charts – I love my Esignal, not too expensive I think.  Power ETrade is not bad either but ETrade sux.

    COST – the danger with them is their club prices on gasoline.  Sometimes they blow the hedges and end up losing a bundle on that end but that’s a buying opportunity as it usually comes right back the next Q but with the jump in prices last Q, I think that may bite them.  Business is great otherwise…

    CVX perking up nicely!

    Fixed return – no thanks!  TOO much like the over/unders.  Good point Xian, makes the market look like a joke (not that it isn’t but I hate to be ashamed to tell people what I do for a living!)

    Dedalus day – Good one Occam but he’s the one that lived…

    Not happy seeing VNO and BXP weak, mostly a reaction to the housing numbers I think, hopefully they hold $95 – one’s above and one’s below.

    Check out JOSB!

  97. dday97

    OIH – I never got filled for the 7.55 put price.  Oh well, I still have them at 7.75….now dive.

  98. xian

    dday- i dig it, but when im in the casino, i want my drinks compt…LOL

  99. Peter

    Thanks dday97 and designcurve.

  100. dday97

    My Agricharts just went down, this might be a short day for me.

  101. Phil

    Actually if you think about it, an FRO for GOOG on the $600 puts (GOORT) pays $1 on .85 bet that GOOG won’t break $600.   It’s a bit more loss limited than selling the $670 calls for .28 but I can’t see why I would want to do that.  In a smaller stock like C, if I’m reading this correctly, I can sell $22.50 calls for .56 and buy $22.50 FROs for .33 so I am guaranteed to get .23 from my caller against, say my July $22.50s at $1.05 but, if C breaks $22.50, I get a .67 bonus payment – that could be interesting…

    C/Bigs – Buying the put and selling the calls is betting against yourself!  You are very likely to get assigned the 2010 $40 puts at some point but, as you say, that’s no tragedy as you have putters to buffer your shorts.

  102. Yev

    iPhone country count at 67
    http://digg.com/apple/iPhone_Country_Count_at_67

  103. bigs

    C – Phil why would I get assigned the 40 Put if I’m long the 40 put.  I’m the only one who can force assignment.  What I’m trying to setup is a collared dividend play.  So I eventually want to own C paying a 6% div yield.  I want to hedge out my downside with the 40 Put which has no premium and then sell way out of the money calls to increase yield.  Like the BAC play you outlined in the fall.  I was just wondering that if instead of doing the stock put initially if you do a put calendar to try and get assigned the stock.  After you’ve been assigned you sell the call.  This is essentially a slight modification of the safe income strategies laid out by you in the k1 project.

  104. occam

    Dedalus – my bad for using the modernist conflation of Daedalus and Icarus:  a pun on the modern era’s attempt to revitalize civilization after the Dark Ages [civilization's Icarus descent] with the Renaissaince [its rebirth, or Daedalus-like continuation of flight], yet still "Ded" because of a dark view on the rapacious nature of civilization.  That is, a modernist rejection of the enlightment view of progress, especially with the gradual decline of the British Empire bogged down by wars in the 18th century. 
    This is all to say, ive been pwned.  but hey, how about solar thermal is Daedalus, and photovoltaic is Icarus?  We’ll see.

  105. Phil

    FSLR – darn, we may have to roll down that poor caller again!  Let’s take out 1/2 the $270 callers, the move is paid for by just the drop in margin, which is tying us up anyway.   XXX

  106. bigs

    FSLR – Phil I never got the initial roll down so I’m still in the 280 callers.  Should I buy just 1 out or both?
    Thanks,

    Bigs

  107. Demetrius Michael

    Occam you read too much

  108. Demetrius Michael

    way above me

  109. Bronek


    Phil. Ref TIE. I have Jan09 -$17.5C naked. IMO TIE will trade within a narrow range, maybe lower for next 2 months. I am thinking of selling Jul 17.5C and rolling Jan17.5 to Jan15 for <$.3 net Db. I have ½ of this pos, so I can DD and roll-up caller if TIE decides to go up before Jul expiration. Please comment. Thx.

  110. Peter

    DM.
    My head hurts now!

  111. Mark

    Man nice and stormy here in Dallas today… love when I park 3 blocks away and leave the umbrella in the car.  :(

    What are you guys up to / watching today?  Playing around with the API functionality in IB right now… fun fun.

  112. sevnseat

    13:06 — Fed’s Yellen says doubts commodity price surge a bubble. — DJ
    I always knew she was a little off, but WOW… She gets my idiot of Fed award, which has been held back since Greenspan!

  113. Peter

    DM
    HOLY CRAP!
    That video was scary!
    I’d hate to see what he had hidden if he opened his zipper!!

  114. biodieselchris

    In Jan-09 MA 270 puts for 29.
    I love hating this company and they love burning my puts.   :(

  115. dday97

    Picked up MON calls, look playable at the moment.
    Off to lunch for me

  116. xian

    commodities- what if we have it wrong?

    maybe this has already been pointed out, but i think a key to making the ‘futures markets r manipulating prices" argument stick is to show that the "perpetual rolling" behavior is correlated/associated with the recent price hikes.

    we need trading volumes/OI info on the futures markets before the CFMA 2000.

    if the rise in rolling OI is concomitant with price surges, then we have something to point to.

    i think the masters’ testimony had a table that compared 2003 OI and 2008 OI, but it would b best to have many more time points in OI.

    also, the ratio of OI to delivery might b a good measure of this relationship- the ratio should explode along w/ prices if we r right about the mechanism of manipulation.

  117. occam

    That was a great video!  
    Here’s an Iphone’s demo that you might not have seen, as we’re coming up on the event next week.  
    http://www.youtube.com/watch?v=zlAFvdiZD9g

  118. Phil

    C/Bigs – Oh that makes sense then but why not just buy the stock and sell closer calls and roll them?  If C does drop further it would be because they cut the divident so that’s a catch 22…

    Occam – "A man of genius makes no mistakes. His errors are volitional and are the portals of discovery."

    FSLR/Bigs – same deal, yes I’d take them both out as they are doing you no ggod as protection, you’d be better off trading them in for a single $260 put if they break below $165.

    TIE – I just took out my callers ($17.50s), if they don’t bottom out here I’ll sell 1/2 the $15s but BA is up 1.7% and what the heck do people think they are going to make the planes out of?

    ROFL DM, that’s like when I have to make my daughter put things back on show and tell day! 

    Xian – all good thoughts or you could look at the production cost, which is under $40 to the delivery cost at $135 and note that this is 8x the average spread and figure there’s a game there that’s going to end badly.

  119. bigs

    FSLR – Phil so you meant I should buy 1 260 Put instead of selling 1 260 call if it drops below 265?

  120. Phil

    This is a funny IPod video:  http://www.youtube.com/watch?v=FcicJ3eDFi8&feature=related

    Very sideways treading day, nothing really outstanding but the VIX is up 3.5%, could be a good snap tomorrow.

    FXI $145s for $7.15, 5 in the DTP  XXX  We’re going to roll and keep after these if we have to.

  121. Mark

    Notice the top 10 of the Naz 100 index (Q’s) and their weightings…

  122. Phil

    FSLR/Bigs – Oops sorry, I meant you are better off taking out the 2 $9.85 $180 callers and replacing them with a single $19.35 $260 but only IF it breaks down, for now I’m looking for the turn back up.

  123. occam

    Oil –   well, the Middle East is calming down w/ peace talks breaking out between Europe and Iran & Israel and Syria; so peace is no damn good for oil; and if the Nigerian attack didn’t keep the price up, that’s no good.  And maybe some traders exited their bubble, mingled with some average americans, who told them they are cutting down on their energy use, and suddenly--demand destruction is real.
    That’s interesting about holidays, they often allow the markets to encounter the real world.  

    In other news Syndey Pollack has died if you’re a fan--maybe that’s why FilmFan is absent.

  124. xian

    production cost v delivery cost- that’s a huge red flag- BUT the apologist would say that demand is driving the spread. this becomes a "too little" capacity problem.

    which is a dangerous apology to make b/c it says the producers r being slow to expand cap b/c of the profit margin. this is a whole other story.

    the "huge demand" response is ubiquitous.

    i think the clincher is to link the futures markets action to the "huge demand" that people believe exists. if we can show the demand is  - as masters puts it- "virtual", then people will c the "demand" is bogus (which is the main justification for high prices).

    and then we sit back and watch as people "take to the streets"….if only they could….sigh

    hey everybody!

    Recession still likely in US, says Greenspan

    The US is still more likely than not to have a recession in spite of the relative stabilisation in the economy in recent weeks, Alan Greenspan has told the Financial Times.

    The former chairman of the Federal Reserve said: “I still believe there is a greater than 50 per cent probability of recession.” But, he said, “that probability has receded a little and I think the probability of a severe recession has come down markedly”.

  125. xian

    phil/tomorrow snap- u mean snap down, right?

  126. Mark

    RIMM taking off.  V snapped back 5% from it’s bottom at the noon volume surge (with no news).

  127. k1

    xian- I was watcing CNBW yesterday (CNBC’s Asian markets edition) and listening to a guy from Singapore (Pearl Energy) talking about the oil situation. His overall view was that we were seeing a speculative bubble, but the thing I found interesting was that explorers and producers are currently forced to contract drill rigs long before they need them in order to ensure availability. That caught my attention, because availability of facilities and labor was a major issue in hot final days of the tech bubble, as well as the housing bubble.

  128. xian

    "we always suck…" LOL

  129. Mark

    RIMM news… don’t know if this is encouraging the surge up or not, but closest news to the volume spike…

  130. jazzkool

    Phil, couldn’t access the U-tube skit on "I screwed."  I could use some humor. 

    Jazz

  131. xian

    k1- that’s great info on the rigs. these guys r contracting them assuming a lot- just like the housing/tech u cited.

    i bet california gold speculators were driving up the cost of picks/axes due to their own assumptions.

    i hope that a major catalyst to promote the oil debate (and get info circulating) will b the general election- still a ways off.

  132. xian

    is it me or is the USO acting to the market in a big way?

  133. occam

    Had no idea AAPL was such a huge % of the Naz 100 — last time i looked it was large, but not 13.38%--what’s the use of having the Naz 100?  why just have an index,  "AAPL & eight other stocks" or call the Naz 100, "AAPL, eight other stocks, and ninety other names we think u heard of."

  134. Mark

    Anybody use IB?  Just messing around today, been playing with different things (API, charts, etc).  Downloaded Bracket Trader and pretty nice the way it works.  Haven’t tested it live, but can simulate all you want. 

    Anybody use now / in the past?  Comments / Concerns?

  135. xian

    woops….

    "…acting OPPOSITE to the markets…"

  136. Mark

    occam – ding ding ding ding ding!!!!!!!  It’s like that EWZ etf… you look at hte holdings and 50% of it is TWO companies…

    This is what the Stat-Arb firms do all day trying to find minute differences in the underlyings and the ETF, etc. 

    BTW, here’s Doll’s Commentary for the week.

  137. k1

    xian- major catalyst: that is my thinking as well. The Pearl Energy guy’s comments really caught my attention. I remember how hard it was for startups around San Jose to find space, buy gear, and hire people. And in the housing peak, materials and crews were hard to find. The key thing for me is that in both cases, I observed the scarcity of key production elements for a significant period of time before the bubble actually popped. So we could easily be in for 6 more months of energy craziness.

  138. xian

    mark- i got to know…what’s up w/ "hte"?

  139. xian

    mark-forget it….THE DERRRR

  140. dday97

    Mark, I don’t know how in deph you are in futures and/or commodities but agricharts is pretty cool.  You can get the delayed pricing for free but the real time pit prices is where it’s at.

  141. occam

    IDCC has been on an escalator this past month-- now testing DEC 07 highs on 3G mania.

  142. dday97

    OIH is getting to where I need it to be, a little lower and I’ll get at least that buck I was looking for.

  143. billbigd

    XIAN & K1- Look at rhe difference in different type on rigs.  IMO

  144. FilmFlam

    Sad news about Sydney Pollack.  I was out because I am not totally available right now.  Large AAPL position and moving up the stops at EOD.  Looking at other stuff, but nothing major.

    The FRO’s are pretty illiquid with wide spreads.  Won’t be playing those for a while.  But, I like the potential for buying calls 2-3 days before expiration or selling puts after a pullback.

  145. alf

    OIL 128

  146. Mark

    dday – ty!  I will look into it immediately.  Don’t know if my firewall will let me, but will check just the same. 

    I like the way bracket trader looks / works (it’s simplicity), but don’t know if it’s the most efficient thing out there (I only have IB, and can’t move brokerages for now…).

  147. windywheel

    just spoke with my rep at etrade, and he told me that they just finished closing down one of their centers and consolidating it with another branch located somewhere else (he told me where, but i’ve already forgotten).  part of an assignment to cut back 10% of costs and task force that they are on target with. 
    he also said they were just rated #1 by smart money magazine, to which i asked:  what’s the name of that magazine?
    apparently they don’t hire based on sense of humor….

  148. xian

    bbd/k1- i saw some bloomberg this weekend also and i think someone mentioned that the demand for rigs was mostly the deep water rigs (the more expensive ones).

    im forgetting if the demand was for already built rigs or demand for ordering newly built ones- BUT definitely a shift to deep water rig demand.

  149. k1

    BBD- not totally sure what you mean. Are you saying that some kinds of rigs are under incredible demand, but others are sitting unused in a lot somewhere?

  150. Phil

    Very nice, we’re heading to the NYMEX close at $128.50!   Bigger drop in USO today than on Thursday.  Too bad SU split, they would have been good for a nice fall today…

    Greenspan – I ignored that this morning, he is simply becoming a non-story with his ridiculous bond pimping…

    Snap = Snap up!!!

    Sorry Jazzkool, I’m not YouTube tech support!  8-)

    Rigs – It’s just a lot of stupidity.  They are way overpaying for rigs.  The top was called when PBR said they were just going to build their own rather than renting last week, shows you how out of control the rig rates have gotten.

    Nas 100 is a great joke butt that’s what makes QID trading so profitable, you only have to watch a couple of stocks to play the whole index.  It’s not Apple’s fault that they tripled while the rest of the index played dead is it?

    Lots of selling into the NYMEX close!  May not take as long as you think for this thing to unwind…

    LOL Windy!

  151. Mark

    xian – LOL.  I’m typing at the same time as doing other things, and I ALWAYS seem to put the "h" in front of the "t"… hte… I’m an idiot.

    AAPL bouncing off it’s 89, looking to test R2 again?

  152. Phil

    CROX Sept $12.50s at $1.20  XXX  DD in $25KP

  153. occam

    CHL should be interesting in this week and next, as we’ve dropped 20% about from last week’s prices.  Does that get a ding ding ding?

  154. Phil

    SHLD Sept $80s at $11.80  XXX

  155. bigs

    FSLR – Phil I should I cover before today’s close?

  156. Phil

    CHL – fundamental change in competitive climate, be careful!

  157. alf

    FSLR, If oil continues dropping what are the expectations that FSLR gets over 275.

  158. billbigd

    PBR-Please read more than headlines PHIL.  LOL  I will just leave it at that

  159. fredrang

    RMM
    Been away today…what does your comment gas = gasoline mean and no demand is not the same as in 2007, it is down.

  160. MJ

    CHL — need to do more reading, but this fall could be suspicious especially with the GS crooks downgrading it to sell.

  161. Mark

    Tech / Industrials = up, financials taking off let’s see if this push thru the SPX HOD will keep…

  162. Phil

    Yes!  Closed the NYMEX at $128.50 – very nice!

    XOM and other integrateds and VLO etc refiners are down over demand destruction as weekend numbers are already coming through.  Thursday might be quite the freak-out for that group if we get a big build in gasoline as they probably bought into their own BS and ramped up production into the holiday weekend (and utilization numbers were already creeping up).  If they overshot the mark and get embarrassed with a ton of leftover gas, it will dovetail with a lot of data coming out about how much less driving there was over the weekend.  This could get very interesting but, on the whole, lower oil prices are still good for VLO, it just has to come down faster than gasoline…

    FSLR – they do look super sad down here don’t they?  I’ll be looking for a retest of at least $275, maybe $280 so I’d hold off for the night.  Really the only need to recover is if they break below $265 and we should sell 1 (per 2) $260 call or roll down the 1 $270 call to a $260 call. 

    PBR – Why BBD, what did you read?

    FDX like a little energizer bunny now!

  163. xian

    this market is so tied to oil- when r these crooks going to get long stocks already?

  164. xian

    GS/CHL- doesnt GS own some of CHL- or is that the china bank?

  165. MJ

    hmm, I really don’t think the bastards would have refined more crude. They desperately want to pull gas prices high, may be $10 /gallon and bankrupt as many as possible.

  166. alf

    AAPL looking for 185?

  167. Malai

    phil,
    Apple callers, are u leaving them or should we take them out?
    Thanks.

  168. MJ

    GOOG closing above 560 will be cool.
    Rolled my Jan’10 440 to Jan’10 600 few days back. This morning sold june 600.

  169. FilmFlam

    Don’t look at me, I told you your AAPL callers are going to kill you this month.  

    Does anyone have a way to chart IV for a option intraday?  I can’t seem to get it to work on TS of ToS?

  170. xian

    we so dont need this…

    Atomic Monitor Signals Concern Over Iran’s Work

    PARIS — The International Atomic Energy Agency, in an unusually blunt and detailed report, said Monday that Iran’s suspected research into the development of nuclear weapons remained “a matter of serious concern” and that Iran continued to owe the agency “substantial explanations.”

  171. rider

    Just thougth I’d put my 2c in for the CROX players out there: I am mom of 3 little kids 4,3, 1. Lots of anti CROX stuff coming from schools and summer camps… saying don’t send your kids here in sandals, CROX (specifically!), etc… I think they will hang tough in the adult world (especially hospitals) but I see the trend fading with the kids and that is bad! Just my observations…

  172. alf

    NYMEX after hours trading? Looks like 128.30 and dropping

  173. xian

    film- JUL 220s r back in effect-last week was sweet dip on them. i think u said last week that u thought the drop was "it" and it’s rally into the conference.

    am i making that up?

  174. dday97

    CROX – Yesterday my 4 yr old walked into the house with new crox on that my wife got for her.  So either tell my wife that the Crox fad is over or make her shred the debit card please.

  175. MJ

    Assuming crude has not turned yet, I am thinking of opening some calendar puts, Long Jan’10 120 put on HES and sell June 120 put. The bastards are not going to let go so easily, especially with all the big guys on their side including politicians

  176. alf

    LOL Cramers new headline. What to buy when Oil Drops

  177. Phil

    GS on the march, whole XLF moving finally, C making a good move, BAC too.

    AAPL tearing it up now.   As to callers, I don’t generally react to one-day moves on no news.  We roll into earnings next month so that should be a nice fat premium and the $180s roll to the July $190s at least, possibly the $195s so I’m hardly going to panic at $185.  I mean really folks, other than 5/13 & 5/14 AAPL was last above $190 on Jan 4th but was at $175 48 hours ago and has spent most of the year well below $160….

    CROX – that is bad Rider.  What’s the reasoning?  Just a general concept that they don’t like sandles?

    Well I’m waiting for CNBC to tell us that, since there is no speculation in the oil markets, that global demand dropped 4% today or maybe global production increased 4% over the weekend – yeah, that must be it….  What a bunch of tools!

  178. rider

    dday,
    The kids (mine included) still love them, but when the schools tell me they can’t wear them, well, I’m not gonna spend $25 on kids shoes that they only wear for 6 mos (max) till they outgrow them AND they can’t wear them to school… I’m just sayin’…

  179. xian

    USO- if this is just a retreat before a trip to 150 oil, then the chart tells me we r looking for a test of the 20DMA at 100ish (rising at 0.60/day).

  180. Mark

    FILM – AAPL IV, what do you need to see?

  181. billbigd

    PBR-They are still contracting out Rigs and drillships but in later years they will get them built in Brazil.  They will not be building them..   If I tell you that I have over 110B in orders coming ( the first round of orders) don’t think you would fight me where you need to build them.

  182. occam

    xian – the important part is near the end of the article, not the headline:
    ——————

    Still, Javier Solana, the European Union’s foreign policy chief, announced in Brussels on Monday that he would go to Iran soon — possibly “within the month” — to present a new offer of political, technological, security and trade rewards for Iran if it halts its uranium enrichment program.
    Mr. Solana will travel with senior foreign ministry officials from five of the six countries involved in the initiative — Britain, France, Russia, China and Germany — but not the United States, which has refused to hold talks with Iran. The incentives, agreed on by the six countries in London this month but still not made public, repackaged and clarified an incentives package presented to Iran in 2006.
    Iran rejected it at the time, saying that relinquishing its uranium enrichment program was non-negotiable. After the London meeting this month, the Iranian foreign minister, Manouchehr Mottaki, said the new package should not cross Iran’s “red line” — shorthand for its uranium-enrichment program.
    ——————
    Basically, you have all the powerful nations in the world (except US) begining a peace process and the more dangerous Iran looks the better for all the negotiators (iran included); and all these countries combined are more powerful than the US who would look pretty bad attacking Iran before peace talks.  So this is an oil negative article, I think.
    Also, if I were a us oil exec, I’d take this as a sign that foreign co’s are going to get the contracts and not me; which is also a neg.

  183. xian

    C- ive been marveling all day…last week was a gift

  184. troy

    Phil,
    I’m holding GOOG Sept 560 naked.  thinking of rolling to a spread.  Your thoughts would be appreciated – thx.

  185. fredrang

    Crox,
    What I’ve heard is a growing movement that they make your kids lazy and obese as they can’t be active like in sneakers.  My kids school has the no open shoe policy since they don’t protect your feet.  Not saying I agree but that’s behind the backlash.

  186. FilmFlam

    Mark, July 220′s please.  That chart rocks.  If AAPL hits 220 before Jun expiration, I think I could afford bloomberg.  FOR A WEEK.

  187. David

    xian – With you on C sentiment.  As for the Atomic Monitor story,  It looks to be "Written to Order"?

  188. rider

    Phil,
    CROX: my kids school says too many problems with the CROX: not good for PE,  and playing and climbing outside. I was just telling you about letters I have recently gotten from 2 different schools and 2 summer camps-- then tossing in my logic when I go to buy new shoes for the kids… I will buy them shoes that will fit the most uses, especially with prices right now.

  189. xian

    occam- true. i like to read news backwards, too- strangely, the facts r often there (but im paranoid).

    i just thought the spin was nasty.

    the US definitely doesnt want to negotiate- u can tell by the non-starter they propose as terms for negotiation:
    fist stop enriching uranium and then we’ll negotiate about ur uranium enriching. so basically, "do what we want b4 we discuss this"

    and the whole time, iran is under open nuclear threat- US/iran negotiation is a unicorn,

  190. RMM

    Phil:
    this am, I had the notion that GOOG would move up, big miss of mine.

    With $$ coming out of energy and other commodities, now financiALS LOOK BETTER.

  191. Mark

    FILM – July 220′s:D

  192. occam

    xian Iran negotions continued – - actually the most disturbing part of this story is that Ger, Russia, UK, France & China (the former Communists and the "Free World") is now a coalition; and it, not the US is attempting to solve the world’s problems.  Do you remember another instance of this happenning??

  193. RMM

    Mark,

    like the chart you refer to at 3:12,

    what is it, what programme ?

  194. Mark

    BTW, very unfortunate 15 min delay on all my option charts.  Since we hired our Options Trader on the desk though we’re in talks with bloomie to get real time options / futures data feeds… will hopefully FINALLY get this sh*t on my desktop.  Then I’ll be unstoppable ROFL. 

  195. Mark

    RMM – the one, the ONLY!!!  Bloomberg.  The title on this website says it all frankly… ;)

  196. Phil

    Cramer – Wow, that guy flips so fast he’s like a quantum event – I think the act of observing him changes his opinion!

    ISRG making a move, in the S&P on Monday I think.

    LOL on RIMM, those guys are all over the place!  Such an efficient market…

    PBR – Well of course they have to have them built by someone.  That’s what I said last week, let’s find out who’s getting that contract.  It’s the buying vs. renting thing that interests me, it indicates that the rig rates have finally pushed things too far.  That will be a great collapse to bet on 20 years from now as production cycles down (hopefully because we switch to solar etc) and there is a huge glut of rigs on the market.

    Good point on Iran Occam.  I think the whole bomb Iran thing is a non-starter, it would be the death of the Republican party, even psycho neo-cons have to see that this would be the absolute last straw for voters and it’s just not worth it to slip a war in for 6 months if it costs them the White House, Congress and even the Court for the next 20 years.

    GOOG/Troy – I’d just sell the $560s for $20 and spend $11 of it to roll down to the Sept $540s.

    CROX – I wonder how big the kids segment is?  We’ll have to check that out, maybe abandon ship or sell the $11s.

  197. xian

    cramer/phil/uncertainty- ROFL!!!

  198. Mark

    AAPL / RIMM commentary from Minyanville… well mostly AAPL.  don’t know this guy or his research, just putting stuff out there for everyone to disect.

  199. Phil

    Speaking of coalitions – Russia and China teamed up to not so subtly tell us that we’re not putting a missile shield in Europe and they seem to be seeing eye to eye on a lot of things.  Apparently Medvedev was an acceptable choice to China, who had some old bad blood with Putin as they’ve been having several very productive meetings in the month he’s been in office.  I would say that having Russia and China form an alliance as we alientate both nations may be looked back as the single biggest foreign policy failure of the Bush administration – but it’s a crowded field with lot’s of stong contenders…

    SUN $45s at $1.65, 20 in DTP, 10 in $25KP, 10 in $10KP XXX

  200. xian

    occam- i cant think of one?

    what is worse, what happens if that bloc u mentioned solidifies ties to the east and middle-east? we’ll b left out of the loop on a relatioship between energy producers and new energy consumers.

    all the while, everyone  looks at us slack-eyed b/c we owe them so much of our cheap money.

  201. dday97

    OIH – looks like I had gotten stopped out on the puts at 8.45.  I’ll take the .70 daytrade.

  202. billbigd

    PBR- Ok we will can move on.  The contracts will be split. as not one supplier can supplie all the equipment needed. "  That will be a great collapse to bet on 20 years from now as production cycles down,"  I am not betting on the next twenty years.  LOL

  203. xian

    the forces r aligning to count us out of the future. from 2 weeks ago

    `BRIC’ Nations Summit Seeks to Turn Economic Might Into Clout

    May 15 (Bloomberg) — First came the booming economies. Then came the rush of investors. Now the so-called BRIC nations — Brazil, Russia, India and China — are talking about forming a political alliance.

    The four largest emerging economies are sending their foreign ministers to Yekaterinburg, Russia, to meet on May 16 for the first time outside the venue of the United Nations. On the agenda are such non-economic issues as weapons proliferation, counter-terrorism, energy and climate change.

  204. troy

    Phil – interesting thought.  I was considering rolling up as it looks to me like Google could easily rally 50 points plus.
    I’ll run with your move.
    Thanks,
    -Troy

  205. dday97

    AAPL – I have the Oct. 180′s vs the Jn 180′s.  A little green on that spread but not by much…for now.

  206. troy

    as if you didn’t know it was me posting :)

  207. xian

    more forces, more alignment

    South American Presidents Meet on New Bloc as Mistrust Builds

    May 23 (Bloomberg) — Leaders of 12 South American nations will set aside growing mistrust and ideological divisions today in Brasilia to sign a treaty to create a continental bloc modeled on the European Union.

    The agreement to create the Union of South American Nations, or Unasur, is unlikely to bear fruit, given increased antagonism over Venezuela’s alleged support for Marxist rebels in Colombia and the countries’ divergent economic policies, said Michael Shifter, vice-president of the Washington-based policy group Inter-American Dialogue.

    “Unasur is a pipe dream for now,” Shifter said. “The irony is that economic conditions in the region have never been riper for this sort of integration.”

  208. RMM

    Phil:
    what is your vision for DIA ?

  209. Peter

    Phil,
    Technical question.
    How do you calculate how much time premium is lost every day till expiry for the GOOG 600′s?

  210. Mark

    SPX at R1 of 1387.5134… stall here or keep following the trend (ma’s)?

  211. Andy

    Phil, just wanted to understand the logic on the SUN trade sorry if I am missing something obvious…

  212. RMM

    Mark;

    I assume you need a subscription with Bloomberg to get this?

  213. windywheel

    i’m wondering what it takes for someone to be booted out of the DOW, specifically thinking of General Morons, and how much lower might that take them?

  214. Mark

    RMM – yes, truly don’t know how much it costs.  I’d assume the standard workstation is prob around $2,000-$2,500 / month.

  215. FilmFlam

    Mark, thanks for the chart.  Figured out how to do it, just need to talk to their tech people at TS as they want me to input about 8 values with no definition of what they are looking for.  Powerful, but not user friendly.

    Cramer and the uncertainty principle.  Thanks Phil.  I needed the laugh, now I can go run errands while replaying that joke in my head. Definitely in a good mood.  It doesn’t hurt that AAPL’s making me look smart today.   Hope it sticks.  Great move on the indexes, especailly the Q’s bouncing off the 200dma.  Snap-Up for sure….

  216. occam

    Missile Shield – I wrote a hs paper on how that was impossible; and i think it will always be for several reasons; the easiest one to think about is this--computer scientists can’t make a spam shield, and we want to stake our lives on the fact that they can make something that shoots down missiles:  Could you imagine--"Dude, I guess there was a bug in a line of code." 
    It’s so friggin ridiculous.

  217. Phil

    DIA – I had the puts sold against 1/2 and that’s fine for now, I’m just waiting to see how the rest of the game shakes out.

    FSLR – Oops, those $160 calls should have been sold!  XXX  Full cover until it stops going down.

  218. FilmFlam

    xian, I think we need to start looking atthe IV on the July 220′s as every morning the contract hits the high for the day on the IV pump from eager newbies.  Still under the high for the day.  Even with the stock higher.  Something to look for.  Basically, an IV divergence intraday to sell and buy back in.  Ideally, would have a buy back in at a higher stock price, lower option price.

  219. FilmFlam

    Last little thought on OCcam’s comment.  Defense workers are getting set to retire en masse starting now.  Hoping that the military-insutrial complex will get reigned in by cuts to progrmas that facilitate retirements.  I believe 50% of the workforce is set to retire between now and 2012.  

    sorry keyboard batteries re dying….  And I am lazy.  ye for now.

  220. dday97

    Peter – Theta equals time decay so check that out and it will tell you how much a position is gaining or losing per day.

    Later all

  221. Phil

    Time premium – for the Goog $600s there’s 2 ways to look at it, either include the gap from $580 to $600 or not but either way just take that number and divide by number of business days to expiration.

    FSLR – LOL, they turned right when I said it so no need to sell over $265 but if they fail, we do want to sell the $260 puts and it’s also worth $5 to roll our $300 callers down to the $280 calls.  XXX

  222. Snow

    Film, here is a link to a free service through ‘Optionistics’ that has some interesting tools.  Data delayed 1 day though, unless you are a member.  Click on the strike you want and you can pull up all kinds of data, including IV and HV.
    I also use ‘Marketwatch’ for intraday historical charts on options.  Link here.  Hit the strike you want and make your way to ‘advanced’ charting, as in this page.
    I use IB for my broker, but their charting is cumbersome.  I use TD Ameritrade’s charts, which appears to be the same program as Qcharts.  TD doesn’t chart historical data for options though, although they have a usefull tool called ‘options 360′.   fyi.

  223. xian

    film- when u can, please explain that. i think it means sell high IV and buy low IV- but im wondering if there’s more to it- like the "divergence"- low/high stock price is relative to what?

  224. xian

    AAPL- close at HOD

    C- sort of HOD

    USO- sort of LOD

    r these things connected?

    alright folks!

    peace oUT!

  225. occam

    Have a great late afternoon/evening folks!

  226. Phil

    SPX – they need to break over 1,385 or under 1,375 but if we can keep oil down around $125, I think up is in the bag.

    SUN is a refiner and is being hurt by high price of oil.  Over the course of a month, crack spread trumps demand destruction.  I pointed out last week that something had to give because the refiners were no longer making money on the refined product so, if we hit the wall I predicted (there is not enough money in the world to pay for $135 oil) then the thing that had to break was the price.  If all goes well, barrel prices will fall hard while gas prices drift lower, which should put the refiners back on track.

    GM – they are totally ruining the Dow!   I just don’t get it, they need to be replaced by TM plain and simple.

    Missile shield – If we had better lasers then it would work (think Missile Command) but we’re talking WAY better lasers.  Anything that relies on ballistics is doomed to fail I think but a kick-ass James Bond-style laser could fry everything that moves long before it reached a target.

  227. Peter

    Thanks dday,
    So the theta is -0.327.
    Am I multiplying this number by the bid or the ask in order to get the amount of daily decay?
    e.g. : bid =$5.50 x -0.327 = 1.79 (Is that $1.79 divided by the number of days to expiry?)

  228. Peter

    Phil,
    Your explanation for time decay is the gap from 580 to600 (I assume you mean the bid gap?)
    If so it would be $10.9 – $5.5= $5.40 divided by number of business days to expiry. Is this correct.

  229. Phil

    Decay – It depends what I’m using it for.  If I’m selling a naked call or deciding whether I should buy out a caller, I include the gap because that gives me an idea of what he needs to gain each day to put him in the money.  If I’m comparing the caller’s premium loss to my own premium loss to determine if I have a good spread, then I’ll generally just compare the premiums (the amount of the contract that is out of the money) of each over the number of days each have left.

    That’s why in my spreadsheets, you see the column Exp, which is days to expiration, this is a critical item for tracking any of your option postions.

  230. Andy

    Phil, thanks for the comment on SUN

  231. Emotrader

    Phil,
    How a $125 oil will impact NG and coal?

  232. bigs

    FSLR – Phil your selling the 260 Puts and going to have naked 280 puts?

  233. Peter

    Thanks Phil,
    re: decay
    I’m just trying to figure out the following:
    These are naked calls in a small account that is play money.
    I am making the call that GOOG will rise in value, but that it will not end up ITM at expiry ($600+),
    I am trying to see if it is possible to figure our at which point to ride out any increase in the underlying stock until the time decay becomes greater than the increase in premium for the option.

    Obviously this is a moot point if GOOG goes South, but this is just an exercise I’d like to go through for my personal edification.
    I’ll let you know how I do.

  234. bigs

    FSLR – Phil you also said roll down our 300 callers.  We don’t have 300 callers we have 300 calls don’t we/  I’m pretty dang confused by where you have this play right now.  I currently have the 3 original legs without any callers.  I will sell the 260 callers but what are you doing with the other legs?
    Thanks.

  235. alf

    bigs. FSLR pdf of all adjustments to FSLRfly

  236. bigs

    thanks alf.  Yeah the comments you have in there are all the ones I saw also.  So i was trying to clarify what he meant, because I think he was in a rush and said something different than what he meant.

  237. Sohrab

    Phil – I have the original FSLR condor.  Have been out last  two sessions and noticed that you have moved your positions.  I have only $55 in buying power.  Is there anything that I could do or am I screwd?

  238. alf

    Bigs, some of Phils replies had typos in dollars but you get the drift 160 means 260 or 165 means 265, those aren’t the actual numbers but you get the drift.

  239. bigs

    Yeah I get that the numbers were off, I’m not confused on that.  But if we sell the 260 put we will be short 280 puts naked which requires like 30K in margin for a 10K portfolio it isn’t doable.  Also I’m just curious because I assume he meant to roll down our 300 calls, but he said callers, which is his terminology for short calls.  Adjustments are expensive so I want to clarify what he meant with those final posts.  The one that came end of day after he discussed selling the $260 calls.
    So he may have meant sell the 260 calls.  If that is the case then I’m less confused.  But we do own 260 puts so that’s what I was trying to clarify.
    Phil
    May 27th, 2008 at 3:56 pm  "FSLR – LOL, they turned right when I said it so no need to sell over $265 but if they fail, we do want to sell the $260 puts and it’s also worth $5 to roll our $300 callers down to the $280 calls.  XXX"

  240. alf

    FSLR, didn’t trade it, but only put the pdf together to keep track of it and try to follow and understand it. Actually may have confused me more. Rather I just separated it and looked at call and callers separate from puts and putters.

  241. FilmFlam

    Phil, just in case I understood you correctly, don’t forget that AAPL is now reporting after the July expiration (at least for the last year or so.  The July callers would not have extra premium for earnings, so they should fade uniformly.

  242. Kwan

    alf, did k1 ever approve your pdf version of the info he’s collected?  we really need a wiki…

  243. FilmFlam

    xian, The point I was making on the IV and the July 220′s was that if you look at the chart Mark posted (July 220’s, thanks again Mark), you will see that intraday, the IV spiked up as the call buyers got very excited.  I will see if I can track this on a chart along with the overall IV on all options.  But, the point is that the IV on the close Friday was 42.08%, when it started trading today, the IV gain was the larger part of the move, not the stock price gain, also the volume was very low, all good indicators that maybe you should sell that excitement.  It might lead to some whippy daytrades if the price continues to climb, but I think there is something there that would help if you were trying to daytrade that position.

  244. xian

    18min video

    Meredith Whitney, an analyst at Oppenheimer & Co., talks with Bloomberg’s Carol Massar and Margaret Popper in New York about the turmoil in credit markets, credit-card lending rules, mortgage securitization, and the outlook for consumer liquidity and financial job cuts.

    main points: credit cards will kill banks worse than currently accepted

    banks’ "kitchen sink" approach to writedowns and planning to make it on cashflows assumes that consumer credit cashflow stays nice- but consumers r dying b/c consumes cant access more credit via securitization markets.

    since 2001, ratio of banks’ on balance sheet mortgage debt to securitized mortgage debt is 1:7.  consumers have no liquidity from securitization.

    consumers will also have less access to credit cards ($2Tn less than before)

    credit business will b less profitiable due to regulation in effect of JUL 4 (90% probability of passing)- major players JPM C BAC

    she likes AXP b/c they r better card company ("less worse")

    C says credit cards business was a big point on their restructuring- relying too much on it.

    run rate of mortgage securitization was $200B/qtr- recently $33B/qtr

    dimon said credit markets have seen the worse, but we have 33% of serious recession

  245. alf

    Kwan, Didn’t get any feed back on the pdf. Would be nice to have a trade and click on the symbol and have all relevant posts pop up, wonder if that could be done. Search capability for the blog now is a little cumbersome.

  246. xian

    thanks film

  247. k1

    alf, kwan- the issue with the PDF is twofold. First, all of the material in the PDF belongs to Phil, not to me, so Phil has to be the one approving publication outside of the site. Second, there is the matter of upkeep. Alf can probably attest to how much effort went into constructing the PDF in the first place, and I guarantee that it is now out of date because of material I’ve filtered in to the existing discussions. Without constructing a system to generate a book/publication out of a group of articles, I don’t know of a built-in feature of WordPress that would allow us to do that.

    On another topic, let’s talk about how we want the wiki to work. I’ve seen the proto for it, and it looks, well, like a wiki. But as a group we should talk about how we want to organize material so the wiki is useful to us and doesn’t get out of control. As a silly example to foster discussion, let’s imagine Alf’s desired search feature existed: a box we type a ticker into, and up pops every article and comment incorporating that ticker. For example: GOOG.

    Using my WordPress superpowers, I can tell you that there are 6740 comments as of this moment (oops, make that 6741) that incorporate that string. A bunch of them are not actually about the stock GOOG, but include a link someone posted that has a google search, or somebody just saying that they "googled" a topic. That doesn’t seem helpful.

    The wiki software does seem to have a search capability. As of this moment, it appears to filter out any query less than a certain number of letters long, evidentally 4. So good luck to the newbie searching for ‘XXX’ or ‘DD’, even though those terms have a place on the nascent Terminology page I created.

    Unfortunately, i don’t have great answers for these issues, which is why I bring them up for discussion. As those of you who have collected your own personal set of links know, the task of librarian is a difficult one, involving a bunch of arbitrary choices. The arbitrariness of those choices is not a big deal when the collection is for your own personal use, but those choices become important and significant when the material is intended for a broader audience.

  248. k1

    xian- on the subject of banks cash flows, I saw an item in the paper this weekend about McClatchey buying back 300M of their issued bonds at a 15% discount, paying for them with new bank credit. It appears that the credit markets are beginning to work well enough that some companies can get credit, and are taking advantage of the dislocation in the credit markets to reduce their long-term cost of capital.

  249. xian

    k1- the firms and the people w/ cash and good credit can do that. whitney’s point is the regular consumer credit card user who is revolving their credit will not have access to credit and will start defaulting on the cc obligations and possible regulation will make the business less profitable

  250. xian

    film- have u figured out how to get tos to show IV on an options chart? im using prophet and checking the option volatility box but the panel is blank.

  251. k1

    xian- good credit: yes, but that was my point (sorry, not totally on topic for your point). The thing I find interesting is that the bottom fishing seems to have begun. As to Whitney’s point, I believe DM pointed out the massive growth in consumer CC use a couple months ago. I’m not sure whether we’ll see new regulation or not, that would mean Congress rolling back last year’s new bankruptcy laws.

    Charting IV: the only place I’ve seen this is on optionistics. But ToS just added option charting in the recent release, so they might have IV on the roadmap. Easy to send them a feature request on the remote chance they haven’t already thought of it (or the more significant chance that it’s already there).

  252. xian

    k1- thanks for the input, and ur point makes sense w/ whitney’s as the stronger debtors begin accessing the credit markets before the weaker ones (or even as the weaker still whither) 

    true that. i think i remember DM did call the cc out- along with his "kiss of death/its all over" technical sell trigger- i think.

  253. FilmFlam

    I think the wiki should be as compact as possible.  So, I vote for no spaces in text.  Itwouldmakeeverythingsomucheasiertoread,don’tyouthink?

    Jokes aside, I would prefer that the wiki have links as reference for those wanting to see the original text and maybe look back at the broader discussion that spawned it.  I would personally find it annoying if I went to the wiki to see VixDex and ended up having to click on 6 links to get the whole story.  I think it should have much more cut and paste to it, and when someone wants to add stuff or delete stuff then they can do that in whatever fashion everyone agrees on (voting, automatic, automatic with trail, whatever).  For things that are already answered well on wikipedia, we should just link to that rather than reinvent the wheel, right.  (Definitions of Delta, for example, could have a link for definition, but could then quickly jump into, "Delta is important because if your caller (link) has a higher delta than your long (link?) then you could get fubared (link!)."

  254. FilmFlam

    xian, been trying to get it to work on Tradestation as I haven’t ever found an option chart on ToS.

  255. alf

    ToS Option chart, on the trade page, suppose you want to enter a position, right click and it will give a menu with quick chart as a choice, select quick chart and there you have your option chart.

  256. FilmFlam

    Thanks alf, that got me halfway there.  I wasn’t putting a . in front of the option symbol.  But, I can’t get implied volatility to show up on the chart.  I want it to look like Mark’s chart (see 3:12)  -- Funny aside, I thought that looked like a scripture reference, so I looked up Mark 3:12, "But he sternly ordered them again and again not to tell people who he was."
    I thought it was funny.

    Anyways, I am trying to figure that out, but it doesn’t seem to be working yet.  Will keep working on it tonight, and will call both ToS and Tradestation support in the morning to get it working.  Otherwise, you just have to sit there and mentally note the IV as it updates every second.  I can’t do that right now, I need the chart….

  257. Kwan

    FF – so essentially a  good (starting) format would be what k1 has now organization-wise but with links to other blog posts replaced with an inline version of the text to eliminate the extraneous clicks.  and maybe a link to the original post as well in case someone wants more context (e.g. what was the original question that generated Phil’s response?)

  258. xian

    Edward Morse Says U.S. Oil Reserves Should Be Higher: Audio
    Edward Morse, chief energy economist at Lehman Brothers Holdings Inc., talks with Bloomberg’s Tom Keene about global strategic petroleum reserves.
    says- oil goes to $80 in 2009 after demand falls off at the end of the summer
    interesting stuff
    (Source: Bloomberg) May 27 (Bloomberg) --

  259. xian

    film- tos options chart- just type in the ticker into the prophet field

  260. xian

    tos options chart more- also, when viewing options chains in "trade" tab, u can right-click and select "quick chart"

  261. xian

    oil price catalyst- also, maybe the china olympics might b a peak- dont know why, but whatever

  262. xian

    oil chart- it tells me that if any pullback is to occur in an orderly fashion (ie not an AAPL JAN08 performance), then 120 and 110 r the levels to look for as support/resistance.

    110 is the stronger one in my estimation, and a rally from there looks easy is it consolodates in a channel.

    this puts USO at 89 and 97 for 120 and 110, respectively.

  263. xian

    woops…

    NOT respectively….

  264. occam

    xian – oil chart – it depends what fractal you are looking at:  if you go to stockcharts.com and look at the monthly graph it looks pretty crazy:  http://stockcharts.com/h-sc/ui?s=USO&p=M&b=5&g=0&id=p57501347821

  265. occam

    linkable USO monthly chart

  266. occam

    that doesn’t work it seems:  but suffice to say, (1) the montly ADX -DI is at 8.7 (the lowest since since the graph records data [1994]) and the Standard Deviation indicator is at 13, 50% higher than the highest standard dev. last recorded:  the 10 month moving average is 76, upper bollinger 95, and basically looks very toppy.  (2) I will work on uploading images from stockcharts.com

  267. Yev

    Interesting blog about general traffic this past weekend
    http://bigpicture.typepad.com/comments/2008/05/trouble-in-the.html#comments

  268. xian

    occam- thanks for the charts

    traffic this weekend- i saw a car get repossessed (not really)

  269. mck

    k1 on the wiki - I agree with earlier comments, search is difficult on Worldpress. I bet a very common task for anyone here is to find all posts related to a particular ticker. You think goog is bad, try searching for ticker SU. Is the wiki intended to in part address search on the blog? If so,it seems we need a shorthand to denote ticker whenever a stock is mentioned. Or, if tagging is an option (indexing) we need a script to enforce post tagging where at least one tag is the ticker. For instructional examples (and the PDF Alf did may be just that), I tend to do the same – pull in all the posts to a common document, and also pull in option chains so pricing can be checked.

  270. k1

    mck- agreed, search is difficult in WordPress. I think the only way to address that is with custom development, which is out of the question for the time being. Also, the notion of tagging articles and comments for reference within the wiki or elsewhere sounds to me like custom development. Of course, I could be totally wrong because I know very little about WP’s internals.

    The wiki will not address search within the blog, it will simply give all us members a place to record and organize ideas and comments. As Film pointed out, we can post a snippet of a comment that explains a concept, with a link back to the original (ala k1p) as reference.

  271. alf

    WordPress search?
    Understanding and Fixing WordPress Search
    There is a lot you can do with WordPress regarding searching your blog. You can use the built-in search capabilities, replace it with a search from Google or Yahoo (or whoever), or use an awesome WordPress Plugin called Search Everything to really get full advantage of searching your blog.
    Let me explain what and how the built-in search function works with WordPress, for those left confused and frustrated as I was.

  272. alf

    Demo of  WordPress search Plus Plus with code at bottom, in Chinese, regardless type Google in to the field and search.

    Wp-spp, or "Wordpress Search Plus Plus", is a C++ project to create an effective search engine for WordPress. It connects to MySQL database via interface routines provided by MySQL++ and uses boost library to handle keyword searching and highlighting.
    Compiled CGI code of wp-spp should be at least an order of magnitude faster than its PHP competitor when using complicated searching logic.
    Features include (not a complete list):

    • search on both posts and comments
    • highlight search results
    • compatible with UTF8 encoding
    • controllable context length before/after highlighted keywords
    • suppress HTML tags in search results
    • display posts and comments in a tree structure
    • paging
    • support various search strategies for multiple keywords

    For download and installation, read wiki page
    http://code.google.com/p/wp-spp/wiki/Installation
    A demo of wp-spp can be found at
    http://limiao.net/search.it

  273. alf

    Ooops. Geez why do they post something the above in the Wiki and then no code.

  274. xian

    agricultural production/trade report archives
    http://www.fas.usda.gov/archive.asp

    Featured Reports (Production, Market and Trade) – 2008
    http://www.fas.usda.gov/current.asp

    cool stuff like-

    May 2008
    Fish and Seafood Products
    Summary

    fish and seafood product exports top $4.1 billion. China remains the top fish and seafood exporter.

    Fish and Seafood Product Exports Top $4.1 Billion

    fish and seafood product exports were valued at over $4.1 billion in 2007, an increase of 1 percent or $34 million compared with 2006. Exports increased in three of the five top markets, which account for 85 percent of U.S. fish and seafood product exports. U.S. exports to China of $537 million increased more than any other market, up 21 percent and $98 million. Salmon exports of $776 million, up $144 million, increased more than any other fish and seafood product.


    China is the Top Fish and Seafood Product Exporter

    fishery product export to China increased 21 percent to $537 million and 13 percent in volume to 259,000 tons, in 2007. China is a fast growing export market for fishery products, with huge potential. Top products include salmon, sole, cod, and squid.

    China is the leading fish and seafood product exporter and China imported over $3.5 billion of fishery products from the world in 2007; nearly doubled the value of imports just five years earlier

  275. xian

    uh oh

  276. Kwan

    uh ohes what xian

  277. xian

    Fear, Rumors Touched Off
    Fatal Run on Bear Stearns

    The 40 top Bear Stearns Cos. executives listening to Alan Schwartz over lunch had spent the morning of March 13 watching the firm’s stock plunge. Rumor on Wall Street had it Bear Stearns was strapped for cash.
     
    The chief executive, surrounded by the comforting luster of wood paneling in a 12th-floor dining room, calmly assured his lieutenants that Bear Stearns would weather the storm.
     
    "This," he said, "is a whole lot of noise."
     
    Out in the audience, Michael Minikes wasn’t so sure. The 65-year-old Bear Stearns veteran had spent much of that week fielding calls from worried clients. Some had yanked large sums from their Bear Stearns accounts. The worst news had come when Renaissance Technologies Corp., a major hedge fund and trading client, said it was shifting more than $5 billion to competitors.
     
    "Do you have any idea what is going on?" Mr. Minikes asked, cutting off his boss. "Our cash is flying out the door. Our clients are leaving us."

  278. Phil

    FSLR:  Sorry about the confusion on FSLR.  Current position in $10KP and $25KP is:

    2 June $260 puts with 2 June 280 puts sold against them – that’s our original put spread.

    2 June $280 calls (rolled down from the $300s for + $4) with a single June $260 call sold against it, that was rolled down from the single $270 caller we had in the afternoon.  As it look like FSLR is heading lower, it may be time to sell the other $260 call!

  279. Mark

    7:04 *DOW CHEMICAL TO RAISE PRICES ON ALL ITS PRODUCTS BY UP TO 20%

    FILM – Mark 3:12 – now that is very funny.  I need to look up other biblical references so I can start quoting them to my friends… it’d be great, they won’t know what I really said until they look in a bible.  Hell maybe they’ll become more religious ROFL

  280. Mark

    7:30 *U.S. APRIL DURABLES ORDERS FALL 0.5%; EX-TRANSPORT JUMP 2.5%

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