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Which Way Wednesday – The Beige Book Boogie

The last Beige Book report was on January 13th.

At the time the futures were flying and we were bullish but Dow was looking toppy and I thought we were going too far, too fast and called for caution – despite our "Meatball Market" at the time.  Just like yesterday, I was not happy with the fundamentals to the point where I felt it necessary to keep pointing them out while the parade of analysts at CNBC et al told everyone to BUYBUYBUY at the 10,750 top.  I don’t like to be Chicken Little but sometimes the sky is actually falling!   The  January book had very little "good" news to report (see my analysis for Members that day) and we took our money and ran on the long side.  Although it wasn’t until the next Tuesday that we actually went down – it was a doozy and we fell over 500 points in 3 days, all the way to 10,165 (our 5% rule) and we continued weakly through 2/8, when we bottomed out at 9,900.

Dow Chart

Whoever said this charting stuff was complicated?  Just follow the 5% rule, draw some lines and PRESTO – we know what’s going to happen!  Well, at least we hope we know what’s going to happen because I’ve spent a good portion of my week so far telling Members NOT to trust the rally we’ve been having and to expect a downturn with today’s Beige book a possible catalyst for a correction.  From experience, we know there is not generally an immediate reaction to what is essentially a collection of anecdotal evidence about the state of the economy but it does give us an overview of the nation and I haven’t seen much news in the 6 weeks since the last report to make me think this one will be showing any great improvements. 

Housing CrisisIt’s a tough call at the moment because there is clearly a determined effort to get the markets to move up but we are loaded up with bullish plays from our visit to 9,900 so it pays to be a bit more bearish with our short-term plays as we test the top of our MAYBE range.  We have had some good news this morning with MBA Mortgage Applications up 14.6% as rates fell back under the magic 5% mark and, of course, that’s a rebound off of last week’s TERRIBLE showing, probably weather related

69% of the activity was refinancing, which is nice but it doesn’t move homes or employ any construction workers (nor does it require any commodities other than trees for documents).  "We are seeing positive signs of some form of life, but it is not significant and the recuperation period is going to be significant because these are dramatic declines" in housing and employment, said Vickie Lester, president of mortgage servicing at RoundPoint Financial Group. 

Other good news we got was the February Challenger Job-Cut Report with "just" 42,090 planned lay-offs and that’s a 41% improvement from January’s 71,482 and the lowest since July, 2006.  The ADP Jobs Report also came in better than expected with just 20,000 jobs lost in February vs, 60,000 in January but it should be noted that, in February, ADP told us that just 22,000 jobs were lost and this is a 172% upward revision from last month but don’t expect the MSM to tell you this because it doesn’t fit into a cute headline like "ADP job losses down 63% from January."  See how they manipulate statistics?  They make January look good by misreporting it by 172% and then they make February look good (possibly the same under-reporting) by comparing it to the upwardly adjusted January numbers – BRILLIANT

So we shall see what the day shall bring.  We are above our bounce levels and holding them will be technically bullish and we COULD rally back to the top of our range where I would absolutely cash out again and go CRAZY SHORT but, at the moment, I’m betting we are in for a month of consolidation into next earnings season.  We didn’t go crazy short yet but we did take advantage of yesterday morning’s rally to take on some disaster hedges ahead of the BBook and this week’s REAL jobs data – Friday’s Non-Farm Payroll Report (8:30).  Today we also have ISM Services at 10 and expectations there are for 51.3, up 1.5% from last month’s 50.5.

Asia had a generally good morning with the Hang Seng taking a rest at 20,876 but the Shanghai added .75% to 3,097 and the Nikkei creeped up to 10,253 and the Bombay continues to tear up the joint with another 1.4% gain to 17,000 on the button.   Asia is rallying on expectations that Greece will be dealing with their debt issues but the rally is still led by commodity pushers, which is still my least-favorite kind of rally and it’s kind of funny that we are rallying on Greece dealing with it’s debt while ignoring the fact that China is hiding mountains of local-government debt that threatens to push debt to 96% of GDP next year according to Northwestern’s Victor Shih.  

Surging borrowing by local-government entities, uncounted in official estimates of China’s debt-to-GDP ratio, is the key reason for Shih’s concern. Harvard University Professor Kenneth Rogoff said Feb. 23 that a debt-fueled bubble in China may trigger a regional recession within a decade, while hedge-fund manager James Chanos has predicted a Chinese slump after excessive property investment. 

By Shih’s count, China’s debt may reach 39.838 trillion yuan ($5.8 trillion) next year. His forecast for debt-to-GDP compares with an International Monetary Fund estimate for China of 22 percent this year, which excludes local-government liabilities. The IMF sees Spain at 69.6 percent, the U.S. at 94 percent, Greece at 115 percent and Japan at 227 percent.

Now, amid the risks of asset bubbles, soured loans and resurgent inflation, officials are reining in credit growth.  One focus of concern is lending to the investment companies set up by local governments to circumvent regulations that prevent them borrowing directly. Shih estimates that, already, borrowing by such entities may result in bad loans of up to 3 trillion yuan ($439 billion).  China’s mounting debt may hamper policy makers’ ability to maintain “many more years of high growth through stimulus, and slash growth to between 5 and 7 percent annually over the next decade,” said Michael Pettis, former head of emerging markets at Bear Stearns Cos. That’s “still healthy but much lower than the more than 10 percent growth rates of the past decade,” Pettis said.  

Over in Europe, they are excited about the Greece plan to save $6.6Bn by cutting civil service salaries and entitlements along with a 2% increase in the Greek sales tax.  This will, of course lead to more strikes so don’t expect this to be the last word but at least the government is trying, or pretending to try which, as we know from watching our own government, is about as good as it gets.  "This is what the cabinet has decided. They are painful but necessary measures that will appease our European Union partners and hopefully the markets," an EU official said. "The prime minister described it as a state of war," the official added. 

Now that Greece is "all better" we can turn our attention to the Ukraine, whose parliament collapsed yesterday as their own budget disaster boils over.   Let’s not worry about that today though (the China thing is a million times more scary anyway) as we continue to enjoy the "Somebody Else’s Problem" effect and our futures are up, led by rising commodities as the Pound and Euro recover and send the dollar below 80 for the first day in 10 with copper leaping back to $3.44, gold at $1,140, silver at $17.22, oil at $80.22 and natural gas at $4.71.

We have the oil inventory report at 10:30 this morning and, due to the storms, we should see a draw in distillates of at least 1M barrels while an offsetting 1Mb build in crude is expected along with flat gasoline numbers.  So anything more than a net 1Mb build will not support $80 oil and that’s how we’ll be playing (we took the short money and ran on yesterday’s short oil play) but I’ll be looking to short gold out of the gate with GLL, hopefully picking up the Apr $9 calls for about .65.

Be careful out there!

 


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  1. tradinv1

    Phil,  Yesterday I rolled up the short legs of the EDZ, DXD, SDS, disaster hedges.  They had significant embedded profits and the premium spread between the long and short legs had widened.  Two questions:  1. do you agree with this strategy and 2.  Would it be prudent given the tone of todays post, to buy puts at the long call strike price?  Thanks for your thoughts!

  2. ssdirk

    So everyone is excited that according to ADP we only lost 20K jobs last month.  Funny it was the same as last month, but now revised by -200% to -60k for January.  So the rally that ensued because we only lost 20k last month was false.  Same as this one.  What a crock.

  3. roberthjrfl

    Phil, Thanks for the great explanation last night on POT.  That was exactly what i needed / was looking for.

  4. TmDecay

    Freeport-McMoRan Copper (NYSE: FCX) Raised to Outperform at RBC.  Maybe we should write some more naked calls?
     

  5. ssdirk

    JRW, judah – I went against a rule and held TZA overnight and still in it.  Good luck to me.

  6. gucci

    Hi Phil, DIA mattress, I still hold 10 June 105 puts and I cover with 10 short 102 put , right now is about even, should I roll June long put 105 to 106 long put — when to roll short 102 put down, thx

  7. chaps

    tchay/craig/daveo – TOS cost basis spreadsheet
     
    Maybe I’ll do this in segments in multiple posts:
     
    Under Monitor/Account statement you can bring up order and trade history for any symbol over any time period, say V (Visa) since Jan 1, 2009. Once you do this, the export function (right side of the tool bar) allows you to export data into an Excel-readable CSV file.
     
    When you open that file under Excel, there’s all sorts of data, but all you care about is the Trade History data. If you do a "Find" search for "TRADE" in Excel, it will take you right to the trade history for V. I then copy all the trade history rows into a new spreadsheet.

  8. ssdirk

    Not liking the tick flow.  I’m out.

  9. jomptien

    Phil,
    I bought 300 BMY for 23.20
    Sold 5 June P for 2.12, now .48
    Sold 4 June C for 1.71, now 2.97
    I feel I should roll out of the puts as most of premium is up but unsure where to, any suggestions (calls also). thanks

  10. JRW III

    ss,
    OUCH !!

  11. ssdirk

    JRW – lost 0.08.  The RUT is relentless.

  12. tradansh

    PDLI / Phil – What do you think about their results?

  13. Phil

    Good morning!

    This should be my first article published in Forbes today!  I am now officially a capitalist tool…

    We’re still over all our bounce levels of Dow 10,300, S&P 1,105, Nasdaq 2,225, NYSE 7,100 and Russell 625  so you don’t have to worry about bullish positions unless we break those and you didn’t cover. 

    I’m sorry but due to the very lame nature of this rally so far, it is very likely going to be next week before I buy into this being a move back up over the bounce zone. 

    Oil is still unrealistic at $80.24 and gold is back to $1,140 with copper back at $3.45 but, so far, it’s lasting and we have a strong commodity rally and those can always go on longer than any rational indicators would allow. 

    GLL Apr $9s are coming in at .65 and I do like playing gold that way but give up if they break over $1,150

    FCX flew up to $80 and that’s a good chance to sell the $80 calls for $2.50 or buy the Apr $75 puts for $2.50 and again – if gold pops $1,150 and copper breaks $3.50 it will be time to give up on shorting commodities for the duration.

    Keep an eye on yesterday’s highs and let’s see if we break them on the morning rally, if we do, it will be time for some upside bets but this is another low-volume move and we did very well yesterday betting against it.  DIA $103 puts that we picked up at .80 hit $1 on the dip and today we should be able to reload even lower.

    If the indexes break and hold 1.25% gains then that’s going to be a bullish sign and we may creep along to 10,700 again but, for now, this is much ado about nothing. 

  14. chaps

    TOS spreadsheet Part 2:
     
    Each row of the spreadsheet corresponds to a leg of an option trade or a stock trade. Let’s deal with options. The data you care about in the row is whether it’s a buy/sell, the number of contracts in the leg and the contract price. TOS lists buys as negative numbers (e.g., -14 means you bought 14 contracts) and sells as positive numbers (12 means you sold 12 contracts.)
     
    I prefer to think of profit as a positive number and loss as negative, so sells minus buys are my profit. So let c be the number of contracts (which is negative for buys and positive for sells in the TOS data) and p the contract price (which is always positive in the TOS database.) Then f = -c x 100 x p is the financial impact of the transaction represented by an option leg, without commissions.
     
    Commissions are always a negative, whether you’re buying or selling. Say d is what you pay per contract in commissions. Then f – abs(c) x d is the financial impact including commissions, where abs(c) is the absolute value of c. This is the formula that you apply universally to every option transaction.

  15. jromeha

    Phil, how do you feel about DBA down here?

  16. judahbenhur

    SS/overnight.  Even when I make money on those overnights, I regret having made the play.  I’m looking for a RUT sell-off if it doesn’t make a move higher soon.  It’s having a hard time holding 650.

  17. Phil

    Hedges/Trad – I think it’s a fine strategey but I prefer to take profits off the table if possible and leave cash for adjustments.  I look at the hedges as an entry here – just in case – and a heavier bet at 10,700 if we re-test that. 

    Crock/SS – Nice summation!

    POT/Robert – It’s always worth asking.  Sometimes I have the time to turn an answer into a lesson! 

    FCX/TM – GMTA!

    DIA/Gucci – I would take out the $102 puts, at .57 they have little more to give you.  If we pop over 10,450 then you can sell 1/2 the $105 puts for $1.50, which is $1 of premium and can be rolled to 2x the $103 puts, which can be rolled down to Apr $99 puts even so no worries there and $1.50 pays for most of 2 rolls up. 

    BMY/Jomp – You have a nice winning trade and you want to turn it into something risky, right?  I’d add 5 Jan $25 calls for $1.65, take out the puts and wait to see if they break over the 50 dma at $25, where you can roll the calls to 2x the Sept $25s, now $1.25 or, if we head lower, you can stop out of the stock with your gains and let the ratio call spread ride.  Either way, if you get a pullback, sell more puts and if we don’t get a pullback and break $25, sell 1/2 the June $25 puts, now $1.60. 

    PDLI/Trad – The earnings were disappointing but revenues are up and I don’t think it makes a long-term difference.  I’d be more concerned about how their pipeline sales look and hopefully Pharm is around to answer that as I didn’t get a clear picture from the report but, obviously, someone found them a bit disappointing. 

  18. ssdirk

    JRW, judah – yeah, that’s why I should obey the rule.  In the end, I think I had the right idea, but I forgot who I was betting against.

  19. dmankoff

    Phil, how do I track your "long plays from when we hit 9900"  i don’t know how to see those on this website..
    thanks
     
    and do you like TBT now for a new trade ?

  20. chuaeu

    Anybody see any news to explain the 4% pop in SPWRA this morning?

  21. chaps

    TOS spreadsheet Part 3:
     
    For stocks, which I don’t trade much, just make the appropriate adjustments in the formula.
     
    Anyhow, when you add up these calculated numbers for each transaction, what you have consists of two components:
    1. The P/L of all closed out trades.
    2. The financial impact of entering trades that are still open (active).
     
    Within TOS, you can see the current liquidation value of your open positions. So add the two numbers, and there you are.

  22. jromeha

    Chuaeu – Im thinking its b/c solar has been kind of beat up the past two weeks and Suntech reports tomorrow (people assuming it will be good).

  23. chuaeu

    Thx jromeha. Yeah, solar’s been trashed, with decent earnings leading to selloffs

  24. phlit

    Hi Phil, I sld the fcx April 75 call for 5 and bot the 90 to cover.  Now…….whats next?   thanks, phlit

  25. Phil

    DBA/Jrom – I picked them last week.  I like them for a vehicle to sell against as I don’t see them going below $20 and they should keep up with inflation, even if the gains aren’t exciting.  They are very dull but no reason not to buy the 2012 $25s at $3.50 and sell the Apr $25 puts and calls for $1.10 with a plan of just rolling the loser and re-positioning each month.  You only have to win once a quarter to collect $1.10 against your $3.50 long for a very nice 125% ROI.  Of course you need to be ready to DD on the longs in case there is a big spike and you have to be willing to own it at net $23.90 (although you can roll down another $2 most likely) but it’s a nice, steady ETF with a firm base (people have to eat)

    Longs/DMan – Under the portfolio tab there is a Buy List with 42 trades.  Also, in the weekly wrap-ups we review about 50 trades a week that included many, many long plays that were made in comments during that time.   TBT is always a good trade under $50 and $46.50 is still our sweet spot (now $47.50) so I guess I would sell puts at the moment to initiate and entry like the Apr $47 puts at $1.08 but we sold them for more than that last week. 

    Too-big-to-fail firms should be dismantled over time, says Dallas Fed President Richard Fisher. It’s "the disagreeable but sound thing to do," and while unilateral action isn’t bad, the situation really calls for an international accord to break up TBTFs.

    Removing the Fed’s regulatory powers would be "unwise" and would make another financial crisis more likely, says Philly Fed President Charles Plosser. "The proposals for regulatory reshuffling, at best, miss the point of what is required for meaningful reform and, at worst, weaken the current regulatory framework."

    The unraveling of Toyota’s (TM) reputation for quality could only be good for Detroit, right? Ford (F), for example, enjoyed a sales boost last month. Toyota’s resorting to incentives, however, raises the worrying prospect of a price war.   Cramer was banging the drum for F so hard that I was very tempted to short them at $12.50

    Mortgage rates may be near half-century lows, but that doesn’t do much good for homeowners who can’t refinance because their home equity has fallen too far or their income has declined.

    Feb. ISM Non-Manufacturing Index: 53 vs. 51 expected and 50.5 prior (>50 denotes expansion). Prices index fell to 60.4 from 61.2. Employment rose to 48.6 from 44.6. New orders rose to 55 from 54.7.  Still deflation but a pretty good report.

    SPWRA/Chuaeu – Just moving with the group.  Happy to see $80 oil holding up.

    AMZN $126!  Hopefully they get to $140 and we can short them again!

    Oil inventories coming up, USO Apr $36 puts at .64 are a good way to play if you want to risk going short ahead of the report – any build is bad for $80 oil.

  26. Pharmboy

    PDLI – this shows the royalty revenue.  One is down which could be part of the miss.  Hard to tell.  Here is the pipeline:
     
    Bapineuzumab – WYE/PFE/Elan – data coming out this year I believe for Alzeheimers.   Not sure this will work.
    Solanezumab – LLY/Imclone – competitor to above.  Not sure it will work either.  This one does not cross into the brain, PFE does.  
    Motavizumab is an experimental, humanized monoclonal antibody that is currently being investigated by Astra Zeneca/MedImmune for the prevention of serious lower respiratory tract infection in high-risk infants caused by respiratory syncytial virus (RSV). THis one appears to be better than current treatments.
    Teplizumab LLY – is an experimental, humanized, anti-CD3 monoclonal antibody being investigated for the treatment of individuals with newly-diagnosed type 1 diabetes mellitus. Interesting and a $1B deals.  Chances are ok and data due out in 24 mo (from 2009).
    Trastuzumab-DM1 – Roche/Genetech – this one could be a doozy for metastatic breast cancer.  Shows encouraging results.
     
    They should be fine from what I can tell. 

  27. ssdirk

    JRW, judah – you guys in either?

  28. Pharmboy

    CRIS is flying….ARNA is getting more coverage….
     
    And HK is now moving into the sweet spot from the bottom last week…..we will have to see which way they go.

  29. Phil

    LOL – Up 4Mb of oil, gasoline up 773Kb and distillates down 843K on the last big week of winter.  Demand is totally destroyed – hopefully we’ll see $77.50 again

    EIA Petroleum Inventories: Crude +4.034M barrels vs. consensus of +1M. Gasoline +773K vs. consensus of +700K. Distillates -843K vs. consensus of -700K.

  30. gel1

    MDVN failed in its Phase 3 trials, My ratio spread has paid off  – lots of disappointment by many on this one.

  31. pstas

    RUT- Phil, can you suggest a good day trade/short on RUT?

  32. tradansh

    Phil, Pharm – Thanks for your comments on PDLI. Just debating whether to play PDLI for the 50c dividend next week. 50c on $7 stock is pretty sweet.

  33. ssdirk

    Phil – with that oil inventory report, can you make any sense of the price action?

  34. stockbern

    USO dipped for a whole 2 minutes. Totally BS

  35. judahbenhur

    SS, Waiting to see if it moves to 65.32 or so.  I suppose the smart play lately has been to buy at the open and let it ride until you make a buck. 
     
    JRW, You still playing support at 64.85 and resistance at ??

  36. judahbenhur

    JRW,  It was 65.15, right?  Looks like a good line to watch today.

  37. ssdirk

    Kind of seems pointless to have an uptick rule.

  38. aclend

    I’m still in the June 107p, completely uncovered as I cashed out 104c yesterday morning for a .50 profit. Should I be half-covered at least? This doesn’t seem like a good spot to sell a short put though.

  39. Phil

    FCX/Phlit – I’d take the money and run on the $90s, those will never be in the money and don’t provide much of a cover $15 up from your caller.  You can roll the $75s to 2x the $80s, which can be rolled about even to the May $85s but I’d wait to see if FCX can actually hold $80 first as you do have 45 days.

    Damn Pharm, that is some database you have! 

    Oil fell to $79.50 and then emergency buys came in to drive them back over $80, which is very interesting because they had all morning to buy below $80 and didn’t want it then and suddenly, after a crap inventory report, it became life and death.  I love the smell of desperate manipulation in the morning! 

    RUT/Pstas – On the actual RUT?  I’d just take the May $620 puts for $16 and sell the March $630s, now $4.30 for no less than $4 if RUT keeps going over $650 as they can be rolled down below the Apr $600 puts for a nice, cheap spread.  If they drop to $2 then you can roll up for about $3 and sell the Apr $640 puts for $13 (now $15) and you would be in the May $630/Apr $640 spread for net $4.  I also like selling the March $650s for $10 and you can cover with May $680s at $11.50 so you are in for $1.50 and if RUT goes higher you can do an even roll to the May $690s at least and that puts you in a bullish $10 spread for $1.50 against which you can take some aggressive puts.

    Making sense of oil/SS – This would call for another episiode of "Elaine Bennis Explains the Market Action."

  40. b1ll

    is  this a point to start scaling into EDZ ? @ 4.97 ish

  41. JRW III

    ss, judah
    I’m in TNA ( 1/2 possition ) ; support 64.85, resistance 65.16

  42. Phil

    DIA/AC – I’d wait to see if the Nas can crack yesterday’s high of 2,292.  MSFT made some cautious outlook comments this morning that have been ignored by the MSM but don’t forget that, above 10,450, you can sell the $105 puts as a mo play using that as a stop line

  43. b1ll

    wow look at SU take off what do you think its time to get out Phil?

  44. japarikh

    EDZ <$5. Time to load up? Need some hedges against my longs. Any other suggestions (aside from GLL)

  45. Phil

    EDZ/B1 – If it’s an initial entry, I really like selling the Apr $5 puts for .60 but I’m also liking the Apr $4/5 bull call spread at .60 – which was pretty much yesterday’s play (the combo).

    Holy cow – oil flying to $80.50, maybe running to $81 again, which is what they did yesterday before crashing back to $79.50.  

    I can’t believe this rally is over the ADP report.  That’s amazing but I guess the move up in ISM is a good reason to be encouraged.  If we do get good NFP numbers on Friday, we could be off to the races so doesn’t pay to be too bearish.  I’m not seeing any bullish plays I feel good about after picking up so many 500 points ago and I’m sure not going to be feeling good about them for the next 250 points either if we keep going up so I have to stay short here – just out of principle to protect what I think are ill-gotten gains on our longs.

  46. chakra108

    Phil
    Can I have an email id that I can discuss an off-topic matter with you. Thanks.

  47. chakra108

    I can be reached at subahu108@gmail.com

  48. matt1966

    Another financial crisis is not only possible.. it’s inevitable so says an independent commission.  At least there is some sanity out there.. it just doesn’t have any power!  Of course, Larry Summers is already congratulating himself on immenent passage of the most significant financial reform in our lifetimes.  Meaning.. it’s not as significant as the reforms that came out of the depression.  Those were real reforms.  What they are doing is a mockery.  More of the same old failed policies and systems.  Let’s see.. the fed had a major hand in causing this crisis so if we just give them more power maybe they can do a better job next time.  They obviously think we are idiots!
     
    http://abcnews.go.com/Business/economists-warn-financial-us-economy/story?id=9990828

  49. palotay

    USO – Phil, I’m in the Apr 37 Puts, should I be doubling down here?

  50. jcmcn5

    Phil,  I own the TZA April 7.5 calls.  I’ve been averaging into them since they were spoken of here on Monday I think.   At this point my average cost is probably $1.28, so with them at $1 now, I’d say i’m pretty much under water.  I’m not sure I want to buy more in an effort to lower the basis because I’m tired of throwing good money after bad.  Are there any other adjustments you’d make to protect the position?

  51. matt1966

    Phil, this rally has nothing to do with the ADP numbers.  It has everything to do with deploying the massive liquidity banks are sitting on and creating the appearance of a healthy market to lure bagholders in.  What else are they going to do with the cash?  Make loans?  BWAHAHAHAHAHHAHAHAHAHA.
     
    They are simply using freshly printed money that we are either going into debt to supply them and/or suffer the consequences of massive inflation as a result of so that they can outright take our money in the market if we bet against them.  And if it so happens, through some extrinsic upset to the system, they screw up.  They’ll put us further in debt and/or cause further massive inflation after we bail them out. 
     
    The system is so far lopsided in their favor that it is laughable.  When will this be figured out????????

  52. samz3700

    phil – double down on uso puts?

  53. Phil

    You are right Matt but clearly the market is not concerned at the moment.

    USO/Palotay – I went to April because I wanted to be able to get a cheap roll so that’s the first move – just .30 to roll up $1.  I’d rather do that 2x to the $39 puts before doing a DD

    TZA/JCM – They are crazy low right now and it takes just a .30 move in TZA ($8.50) to put those calls back to $1.25 so I’d say patience is a virtue at the moment.  If they break lower here ($8.10) then you can sell the $6 calls as a mo play and use that $2 to roll out to the July $5 calls (now $3.20) and wait and see how the spread plays out (and I’d be happy to sell some July $6 puts for .60, now .25, as well).  OR – you can just be patient as we have 45 days and this is just one of them.

    USO/Samz – See above. 

    BAC/Pstas – My target is $22.50 to $27.50 by Jan. 

    I haven’t changed a thing in my aggressive (and very short) portfolio.  So that’s how I feel.  So far, so wrong but, as I said, we’re in a very early inning.

  54. gel1

    It is now official – Canada has confirmed their economy is cranking at 5% and inflation is at 2%. Look for an interest rate increase soon, as 2% is their benchmark to entertain a rate increase. The US economy is not a mirror of our neighbor to the north, but this could have an effect on our TBT positions. Personally I am building FX positions long the CAD.

  55. pstas

    HERO- more upgrades. New targets range from $5.50 to $7.
    AKAM- upgrades; targets $30 + ; Now getting on the "value added services" band wagon and recognizing the non-commodity nature of their business model. I could have told them about that long ago.

  56. dmankoff

    phil, i went to Portfolio, and there is no tab that shows the Buy List, j ust lots of comments, please advise how i can see the current owned stocks in the buy list,
    thanks.    David

  57. Phil

    More fortuitously timed trades: a $21M profit on Medivation (MDVN -67%) put options bought yesterday at 3:59 p.m. (ahead of today’s bad drug-trial news).

    The IMF welcomes the new Greek austerity as a "very strong" step in a multi-year process. Fitch and Moody’s approve of a "more credible" approach.

    As the ECB tries to withdraw emergency measures, sources say it may lend covered bonds to banks for a fee to ease access to funds.

    Dollar got crushed this morning, down 1% against the Euro ($1.373) and Pound ($1.51).  We’re way down at 88 Yen again so that same EWJ play should work again with the $10 puts back at .08.

    Copper looks like if finally got tired at $3.47 (now $3.455) and gold touched $1,145 (now $1,142) with silver at $17.29.  Oil topped at $81.23, now $80.85 and Nat gas is $4.75. 

    There is absolutely nothing other than Greece and the ISM report (and, I suppose, the ADP BS) to give you any indication whatsoever that things should be bought.  BBook is 2pm, Jobless Claims (-515K expected!) and Q4 Productivity are before the bell tomorrow with Factory orders and Pending Home Sales at 10 (and all home sales data has sucked this month).  

    Friday is the big NFP and the thing I wonder about is where the hell are all those census jobs?  We’re supposed to be hiring 2M census workers by June 30th for a count that has to be done by like Oct 31st.  So ADP doesn’t measure government jobs and we SHOULD be hiring 500,000 people a month for the census which means there are probably a lot of people betting on a huge upside surprise on that jobs number and they are betting that people are too stupid to differentiate out the census jobs and they are probably correct.  

    So we can’t be too short tomorrow afternoon but I’m still betting we get volume selling again into today’s close but this time I will take the money and run as clearly we can’t trust the overnights. 

    ACI is flying – remember how that went the wrong way on day 1?

    CAD/Gel – That’s a good idea.  We went long on Australia for the same reason last year.  Canada is very oil dependent though.

    Buy List/David:  http://www.philstockworld.com/2010/02/06/the-buy-list-q1-2010-members-only-update/  You go to the Portfolio Tab on the top of this page and click on it.  You will see an article that says $100,000 Portfolio…  That is NOT it.  If you look down one more article, you will see, in big letters, "The Buy List – Q1 2000," which is what I just linked above.  Please let me know if there are any other links you can’t find after looking for 2 seconds so I can track them down for you as well.

    From The Economist:

    • Is the glass half empty or half full for world trade? Figures released on March 1st by the Netherlands Bureau for Economic Policy Analysis (CPB), which maintains a close watch on global trade volumes, point to renewed vigor at the end of 2009. Trade volumes rose by 6%, quarter-on-quarter, in the final three months of the year.
    • But these figures also underline just how severely trade was affected by the global recession. The CPB reckons that volumes shrank by a staggering 13.2% during 2009. They have fallen in only two other years since 1961, when comprehensive data begin. But those declines—by 1.9% in 1975 and 0.9% in 1982—pale in comparison with last year’s huge drop.
    • Still, a revival is clearly under way. The volume of trade went up by 5% in December alone. Weak growth of 1.2% in October and 1.1% in November might have suggested that the recovery which began earlier in the year was faltering.
    • Unfortunately, it may be too early to be sanguine about a sustained recovery in trade and thus in the world economy. Figures from the World Bank, which track the value rather than the volume of trade, point to a deceleration in the final quarter, not the acceleration that the CPB’s data suggest. According to the bank, the value of exports from a sample of 56 countries making up the lion’s share of world trade continued to rise in the final quarter, but at a slower rate than in the third quarter.
    • December is typically a good month for global commerce because of holiday spending in many parts of the world. Strength in December is therefore by no means sure to have continued into the new year.
    • Looking ahead, it is not hard to see threats to trade’s recovery. Global demand is still being propped up by government intervention on an enormous scale. Its withdrawal, if mistimed, would pose fresh dangers for the global economy, and with it for trade. As Caroline Freund of the World Bank points out, “There is a risk of stagnation in 2010, as restocking is completed and effect of the stimulus on demand growth wanes. While the stimulus will continue to boost trade volumes in 2010, any growth effect will be much smaller.”
    • By the end of the year trade values had risen by almost 30% from their nadir last February. However, the World Bank’s economists point out that they were still 20% lower than before the crisis. They think they are 40% below where they would have been had the crisis never happened. World trade may be on the mend, but its recovery is far from complete.

    Oh and have I mentioned — Wheeeeee!

  58. mrmocha

    Cap – you still short SLG?  I followed you in but it’s still going up…

  59. mrmocha

    NFLX – still short and doubling-down, which should push it to $75, but can it really go up forever?

  60. DKGuy

    gel1, whats a ratio spread ?
    Thanks

  61. ssdirk

    Phil/Census – Here is a good link that shows the effects of census hiring for the last 2 that were done.
    http://www.calculatedriskblog.com/2010/03/census-2010-impact-on-employment.html

  62. doro165

    Remember on play above EDZ reverse splits tonight 10-1.

  63. tradansh

    ThinkorSwim Users – I had a question for ToS users. Do you use ToS to trade Mutual Funds? Are you satisfied/happy? How’s their service? What kind of fees do they charge? How does it compare to other brokers like Fidelity?

  64. gel1

    Executed a Buy/Write on COV (Covidian) buying stock and selling a short strangle for a 9% discount. Sold Oct 50 p and Oct 55 c. Long term hold with a company with very good fundamentals and in a growth industry.

  65. Phil

    Census/SS – Thanks, that is perfect!   Interesting that we started out slow in Jan but still expecting 25K at least tomorrow I suppose.  I didn’t realize how sharp the layoffs were in June – that will be interesting! 

    [CensusImpactJan2010.jpg]

  66. dmankoff

    phil, there has to be some goood downside plays on the Russell, for someone like me, who is completely in cash?  recommendations?   like a Iwm put or put spread, or buyng TZA call spread, TZA is so low now

  67. ssdirk

    Phil – it seems I recall Obama giving a head fake in a recent month where he said the jobs data was bad and it turned out to be better than expected.  Could this be another.

  68. Phil

    Fourteen states and D.C. had double-digit unemployment (sortable table) last year, above the national 9.3% average. Michigan and Nevada topped not only those rates, but also the biggest Y/Y increases in unemployment.

    Paper Economy blog, "Bounce, Crackle and Pop!: 9 Down… And Counting," which reveals that even the dead cats aren’t bouncing in the residential real estate market.  Another report, "Job Fair Cut in Myrtle Beach for Lack of Jobs," from The Sun News, a newspaper based in a part of the country that has traditionally been a major economic hotspot, provides a stark example of just how bad things still are in the labor market.

    I liked this article from the first paragraph:  Like earthquakes, Goldman Sachs can strike anytime. Its work can slumber undetected for years, only to erupt, unanticipated, with catastrophic consequences.

    Downside/Dman – I like selling the TZA $8 puts for .29.  Margin is not too bad with PM and even with regular TOS margin it’s net $1,400 to make $280 in 2 weeks (20%).  You are starting out 5% in the money and there’s an obvious roll to the Apr $7.50s (now .38) so your net entry is about $7, down 15% from here or a 5% move up in the RUT.  Meanwhile, anything flat or down is a winner

    Head fake/SS – I wonder.  I was hoping we’d crash today and tomorrow and we could go long from 10,200 into Friday but, so far, this is disappointing. 

    FCX rounding off right at $80.  Still $2.50 for selling the $80 puts or buying the $80 calls.

  69. judahbenhur

    SS/head fake.  I recall it was Gibbs, the press spokesman, who made the comment at his 1:00 daily press briefing, and the markets sold off on the comment.  Then, the next morning the jobs number was a surprise on the upside.  But, as you pointed out first thing this morning, I think there was a subsequent downward revision of the jobs numbers, so Gibbs might have been right all along.  ;)

  70. Pharmboy

    MDVN – FAILED….told ya’

  71. Pharmboy

    I am really irritated my puts did not fill yesterday on them.  ARRGH.

  72. ssdirk

    Pharm – so is it safe to say that this is not you: http://www.zerohedge.com/article/presenting-secs-enforcement-pleasure-21-million-medivation-insider-trading-profits

  73. Pharmboy

    Thx ss for rubbing it in……I COULD BE VERY HAPPY TODAY…..and here full time had those filled.

  74. jomptien

    Phil,
    What do you think of a buy/write on FTR now to capture the dividend? If so which options would you write? thanks

  75. tradinv1

    Pharm,  What are your thoughts going forward for generics companies like MYL?  they have had a good run, is it overdone?

  76. dmankoff

    phil, how about buying TZA  April 6 calls and selling the March 8 calls for  $1.71, lock in 30cents profit above 8, and if below, break even at 7.71, and can then sell the April 8 calls also  if March 8s expire worthless?

  77. Pharmboy

    I think generics are gonna do very well (MYL), but Teva is in a class of its own.  I like PRX  better has a lower PE, little debt, has a great growth potential, and is growing faster than all the rest..  I would tend to focus on them rather than MYL, as their PE is very high.  PRX is also less than 1B, so they could be scooped up by a larger rival.

  78. ssdirk

    gel – did you see that NBG was put on Downgrade Review by Moody’s?

  79. samz3700

    Phil -
    FCX – did you mean selling calls or buying puts? – You are not really going long are you?

  80. yodi

    Hi Phil Must in deed congratulate on the AAPL jan 11 spread of the other day 180c + 200c- 180p- thanks great job

  81. samz3700

    FCX – It hard for me to see how you can lose selling the 80 calls – it’s an easy roll to April 85s – and it’s a ton of premium for two weeks left. It worries me that i don’t see the down side – yes it could explode on you and go to 90 but how much higher can copper go right now? I guess one should not underestimate commodity rallies

  82. yodi

    Hi EricL  are you still in the EL condor trying to fill at 2.65 I think you were higher the other day ?

  83. Phil

    This is just TFF – The Cleveland Fed explains TBTF!  Your tax dollars at work.

    MDVN/Pharm – If you had filled, you’d be under investigation too!

    TZA/Dman – Sure you can also do the much riskier trade with a lower margin of error.

    FCX/Samz – LOL!  Yes that was SELLING calls and BUYING puts!!!!  And you are right, never underestimate the insanity of the commodity markets.

    AAPL/Yodi – Glad you’re in it!

    T Boone’s holdings:

  84. tradansh

    PVR – Does anyone know why is it getting smacked today? Down almost 5%? Any bad news?

  85. jomptien

    Phil, Repeat of 12:59 post.
    March 3rd, 2010 at 12:59 pm | Permalink  
    Phil,
    What do you think of a buy/write on FTR now to capture the dividend? If so which options would you write? thanks

  86. Phil

    Beige book is out and, as usual is being treated as good news.  Expansion noted in 9 or 12 districts this time and they are blaming snow for anything bad.  Consumer spending ticked up, manufacturing improving, CRE still a disaster, labor still soft.   I’ll have more in a little while….

  87. gucci

    Hi Phil question on a bear put spread open last week when GOOG was heading south, Sept 510/570/550 strike, my question ahead is if GOOG start to take off let say above 550, how to do convert to a bull call spread-- do you sell 570 set long put and buy set 530 long call — please help

  88. oncmed

    Phil,
    I am thinking about a WHR play given its recent run up.
    Sell Apr 90 Calls 2.30
    Buy Jun 95 Calls 2.80
    for a net debit of .50. The plan is to exit in Apr if WHR stays below 90 by selling the Jun 95 for whatever premium is left over.

  89. dmankoff

    how is my tza trade more risky, less margin for error?  same as selling naked puts
    and
    how do I check portfolio current holdings?  didn’t work just going to p ortfolio tab

  90. Phil

    Beige Book with my notes (and I like to highlight the Fed’s BS modifiers) and highlights:

    Reports from the twelve Federal Reserve Districts indicated that economic conditions continued to expand since the last report, although severe snowstorms in early February held back activity in several Districts. Nine Districts reported that economic activity improved, but in most cases the increases were modest. Overall conditions were described as mixed in the Atlanta and St. Louis Districts, though St. Louis noted further signs of improvement in some areas. Richmond reported that economic activity slackened or remained soft across most sectors, due importantly to especially severe February weather in that region.

    Consumer spending improved slightly in many Districts since the last survey, but severe snowstorms in early February limited activity in some Districts. Tourist activity was reported as increased or mixed, with some improvement in hotel occupancies. The demand for services was generally positive across Districts, most notably for health-care and information technology firms. Of the five Districts reporting on transportation, three characterized activity as improved over the previous survey. Manufacturing activity strengthened in most regions, particularly in the high-tech equipment, automobile, and metal industries. Residential real estate markets improved in a number of Districts, although several Districts noted that activity softened or remained weak partly due to extreme winter weather. Most Districts characterized commercial real estate and construction activity as weak or having declined further, but some Districts noted slight stabilization and a few signs of modest improvement. Loan demand remained weak, and lending standards remained tight across the country. Harsh weather continued to negatively affect agricultural activity, although some Districts reported favorable crop conditions. Districts reporting on energy activity said it continued to strengthen, particularly drilling for natural gas.

    Price pressures were mostly limited, with the exception of some increases in raw materials prices. Even with input costs rising, selling prices remained stable due to competitive pressures and limited pricing power. Although some Districts reported an uptick in hiring or a slowdown in layoffs, labor markets generally remained soft throughout the nation, which resulted in minimal wage pressures.

    This is 3 books in a row where input costs rise and cannot be passed on.  This is a serious problem for manufacturers and does not bode well for their Q1 earnings although, fortunately, we don’t really have any manufacturers left in this country…

    Consumer Spending and Tourism
    Consumer spending showed signs of improvement in many Districts since the last report but was hampered in several regions by severe weather conditions in early February. Retail sales improved in the Chicago, Minneapolis, Dallas, and San Francisco Districts, and New York said sales were well above year-ago levels in January and met expectations in February despite inclement weather. Philadelphia also reported that sales were moving up slowly until snowstorms hit in February. Boston and Cleveland characterized sales as mixed but slightly higher overall than year ago levels. Sales were lower than expected in the Atlanta and Kansas City Districts and were down from year-ago levels in the St. Louis District. Several Districts reported that sales were strongest for lower-priced items, while sales of luxury and big ticket items remained sluggish. However, San Francisco noted scattered reports of increased discretionary spending, and Cleveland said some retailers noted a broader, if still slight, increase in demand across a variety of products. Inventories were being managed carefully and held at fairly low levels in most Districts, but Chicago said rising sales were leading retailers to begin rebuilding inventories from low levels.

    January 2009 was the worst retail season since 1930 – what the hell kind of comparison is this?  Is that our benchmark?  When you hear things like this jammed into a report, you know they are reaching really hard to come up with something nice to say.  St. Louis is DOWN from a year ago?  How is down even possible?  Also, sales were strongest for lower-price items but COST and BJ both had poor profit reports this morning because – as I just said in the last note – they can’t pass through prices to the few people who are buying things! 

    Auto sales were generally reported as flat or down, with a few Districts again noting that some of the sluggishness was likely due to poor weather conditions. New York, Cleveland, and San Francisco all noted some softening in new auto sales, though New York cited brisk sales of used vehicles. Chicago and Kansas City also reported declining auto sales, while Dallas noted some seasonal softness and Atlanta said sales remained weak. Some Districts reported modest improvement in auto credit conditions. Cleveland noted that many consumers remain reliant on manufacturers’ incentives, and auto dealers in the Chicago District blamed part of their recent sales decline on reduced factory incentives.

    Districts reporting on tourism said that activity was either rising or mixed since the last survey period. Ski resorts in the Richmond and Kansas City Districts reported at least modest rebounds in activity from year-ago levels, while Minneapolis characterized skier visits to a Montana resort as flat. New York said hotel occupancies in Manhattan were up considerably from a year ago in January and Broadway theatre activity was robust before falling off due to weather in February. Atlanta also reported rising tourism activity related to several successful major sporting events and a well-attended Mardi Gras in New Orleans. San Francisco noted increases in visitors to Hawaii and Las Vegas and said hotel occupancies stabilized in some other areas.

    Nonfinancial Services
    Nonfinancial services activity was reported as steady or improved by the majority of Districts. Boston, St. Louis, Minneapolis, and San Francisco reported generally solid demand in health-care services, although Minneapolis noted continued weakness in elective procedures. New York indicated that a growing number of service firms planned to increase capital spending in the months ahead, but investment expectations diminished among high-tech companies in the Kansas City District. Richmond reported that service revenues fell due to the record snowstorms, but a few contacts saw a slight pickup in demand, particularly architectural firms, hospitals, and financial service professionals.

    In transportation services, Cleveland, Atlanta, and Kansas City reported an improvement in activity since the last survey, while Dallas said activity was mixed and St. Louis noted large job cuts in the industry. Regional rail loadings were above year-ago levels in the Atlanta District, especially for autos, chemicals, metals, and some construction-related equipment. Intermodal firms in the Dallas District reported no change in cargo volumes, with a rise in exports being offset by a decline in imports. Although shipping volumes increased, Cleveland noted that margins remained depressed due to over-capacity issues, limiting investment in new trucks.

    Nothing exciting here but, believe it or not, this is greener than our last BBook!  Unfortunately though, it’s just what we expected – essentially the same blah report that allowed the market to fall from 10,750 to 9,900  – we have made virtually no progress since!

    More to come…..

    ….. and wheee! 

  91. yodi

    Hi EricL  Have you looked at the AMED to set up an iron condor 65/60/55 ??

  92. JRW III

    I’m back and it seems fortuitous that I cashed out at 9:00.

  93. judahbenhur

    JRW, Welcome back. I’ve been on TZA since 12:00.  Just trying to figure out to whether to cash out of play for a sell-off.  Oh, that was a nice drop.  I’m playing the sell-off with stops above 65.16.

  94. ssdirk

    JRW, judah – don’t you hate it when you are right, but get shaken out too soon.  Would have been hard to hold on from tip to stern.  Good luck.

  95. JRW III

    judah / TZA
    Nice play, you got short at the same time I cashed out long ! ( had to go ) I’m in TZA if we break 64.84

  96. judahbenhur

    SS, I know exactly what you mean. This is the best ride I’ve had in a while.  We’re back to yesterday’s support level.  If it breaks here…

  97. tradinv1

    Anyone, how tight a trailing stop can you get at TOS?

  98. cwan120

    Hi, chaps,
    Thank you so much for sharing that procedure of downloading data from ToS platform.  Really appreciated.

  99. judahbenhur

    JRW, That’s how I see it.  If it holds here, I’m out.  If it breaks, then wheeee!

  100. morxlntway

    sup wit PARD?

  101. agourgy

    Phil,
    I am down 30% on USO March 37 put position, should I bail out, roll, or just leave it?
    Thanks.

  102. Phil

    Manufacturing
    Manufacturing activity increased further in most Districts, although Minneapolis, Dallas, and San Francisco characterized overall activity as flat or mixed. Philadelphia reported widespread production increases across most industries, and manufacturers in the Cleveland District reported a general rise in capacity utilization. Many Districts reported strong production in metals, and the Boston, Dallas, and San Francisco Districts noted strength in high-tech equipment, particularly semiconductors. Cleveland, Chicago, St. Louis, and Dallas noted solid improvements in auto-related manufacturing. A consumer goods company in the Boston District said European sales were at healthier levels. Contacts in the Chicago District reported strong growth in Asian exports but remained concerned about China’s underlying economic strength. Dallas reported that exports for natural-gas based products remained strong, but weak demand for refined products has trimmed margins and cut capacity utilization further. Construction-related activity remained weak in the Chicago and Dallas Districts, and new orders for commercial aircraft and parts were sluggish in the San Francisco District. Philadelphia and Richmond noted productions delays due to the winter snowstorms in February, but some factories were able to make up the losses with longer work hours and extended shifts. Several manufacturers in the Philadelphia District said production gains could be limited due to continued tightening in credit markets and adverse developments in taxes and regulations. Plant managers in a few Districts reported that a large number of customers were simply restocking inventories, leading to concerns about the sustainability of the increase. However, contacts in most Districts remained optimistic for future months, with several reports of planned increases in capital spending.

    Man, this one was going so well and they ruined it with "a large number of customers were simply restocking inventories."  Inventories had gone tragically low and we knew they would bounce eventually.  Contacts remain optimistic but that can fade very fast if the orders stop coming in

    Real Estate and Construction
    Residential real estate markets improved in a number of Districts, remained weak or softened further in the New York, Atlanta, and Chicago Districts, was little changed in the San Francisco District, and characterized as mixed in the St. Louis District. Richmond also reported overall housing activity as mixed, but one contact noted that absent the harsh weather, market conditions might have improved. Adverse weather conditions also hampered home sales and construction in the New York, Philadelphia, and Atlanta Districts. Most Districts attributed stronger home sales to the home-buyer tax credit, with several contacts apprehensive about future sales once the credit expires on April 30. Philadelphia, Cleveland, Kansas City, and Dallas reported that sales were strongest for low-priced and starter homes, while Dallas cited financing difficulties for high-end homes. Home construction was down or stagnant in most Districts, with the exception of the Minneapolis, Kansas City, and Dallas Districts. Atlanta said the most pronounced weakness was among Georgia homebuilders, and San Francisco attributed weak construction activity to elevated home inventory levels. Home prices mostly remained flat or declined slightly, but signs of improvement were noted in the Boston and San Francisco Districts. A real estate agent in a relatively upscale area of the New York District said prices have continued to drift downward but that short sales were relatively rare and most transactions were still above the mortgage balance.

    Commercial real estate conditions remained weak or declined further in most Districts, although some Districts noted slight stabilization or modest signs of improvement. Commercial real estate activity weakened in the Richmond, Minneapolis, Kansas City, Dallas, and San Francisco Districts, though Dallas noted that leasing fell at a slower rate and San Francisco cited increased leasing in some segments. Boston and Philadelphia said conditions remain weak, but both noted some improvement in sales of commercial space. New York reported softer activity in the New York City area but some steadying in vacancies and rents elsewhere, while St. Louis said activity remained weak throughout the District. Several Districts also noted that many tenants were pushing for, and in some cases receiving, concessions on rents. All Districts reporting on commercial construction said that activity remained weak or slow, except for some moderate boost from federal stimulus projects and other public construction. Credit for commercial development and transactions was still very difficult to obtain in several Districts, though San Francisco noted a slight improvement in financing availability.

    Once again CRE is a total, unmitigated disaster!  How is it possible that this sector is not near it’s lows but is instead up 200% since last March despite absolutely no improvement in conditions (and, arguably getting worse)?  I challenge you to read these two paragraphs and write up a buy premise that doesn’t include "Well you would think things couldn’t get any worse."  Don’t forget, these (CRE) are cash-flow operations and these rent concessions will haunt them for years and, should anything happen to the low-interest free money train that is keeping them solvent – things can fall apart very quickly! 

    Banking and Finance
    Loan demand remained weak across the country. New York, Cleveland, and Kansas City reported decreased demand for most types of loans. Other Districts said loan demand was unchanged but soft. Richmond and Chicago noted that the weak economic outlook was holding back loan demand, and San Francisco said caution about hiring and spending plans was keeping businesses from seeking credit. However, Philadelphia and Richmond reported banks were receiving more inquiries from businesses about loans, and Dallas said contacts were hopeful that loan demand would pick up by the end of the year.

    Most Districts indicated that banks remained cautious about lending. New York, St. Louis, and Kansas City reported somewhat tighter credit standards on commercial real estate loans, and New York noted tighter standards for commercial and industrial loans. In other Districts, credit standards were little changed but remained tight. Atlanta reported that banks had ample liquidity but were reluctant to reduce cash reserves. Chicago said a leveling in asset quality was causing large banks to become more interested in lending to prime borrowers, but strained balance sheets were holding back lending by mid-size banks. In the Dallas District, smaller banks reported that regulatory requirements were limiting their ability to expand real estate lending. Loan quality remained a concern but showed signs of stabilizing in some Districts. New York, Dallas, and San Francisco cited further declines in loan quality. In addition, banks in the Philadelphia and Kansas City Districts were reported to be slightly less pessimistic about future loan quality than in the previous survey.

    I gave "slightly less pessimistic" some green just because I was starting to feel bad for these two paragraphs!  The banking sector is giving CRE a run for it’s money at the most horrifying-sounding section of this report… 

    Agriculture and Natural Resources
    Harsh winter weather continued to dampen overall agricultural activity, although crop conditions were still generally favorable in most Districts. Minneapolis, Kansas City, and Dallas reported that livestock were stressed by severe weather and that producers provided supplemental feed due to poor grazing conditions. Atlanta commented that cold temperatures caused minor freeze damage to vegetable and citrus crops. Despite below-average temperatures, Kansas City reported the winter wheat crop was in generally good condition. Dallas and San Francisco said that heavy rains and snowfall improved soil moisture for this year’s crop production, though some contacts were concerned that spring planting could be delayed if fields remain too wet. Crop prices edged down following the bumper fall harvest, but Chicago noted that high-quality grain was selling at a premium, due in part to strong export demand. Hog and cattle prices strengthened and dairy prices were flat. Kansas City noted stronger farm incomes from crop production, while agricultural lenders in the Minneapolis District expected farm income and spending to decrease.

    Energy activity generally strengthened since the last survey period. Kansas City and Dallas reported increased drilling activity, especially for natural gas, and Cleveland noted increased natural gas-related investment. However, producers in the Kansas City District were concerned that a boost in supply from shale gas production could lower natural gas prices later in the year. Minneapolis reported that oil exploration expanded in February, while oil production was stable in the Atlanta and San Francisco Districts. Coal production in the Cleveland and Kansas City Districts remained below year-ago levels. Minneapolis reported brisk activity in metal mining and continued energy construction.

    Commodities mixed at best and no mention of actual demand for any of this stuff other than Ags.  That is very suspicious. 

    Employment, Wages, and Prices
    The pace of layoffs slowed in most Districts, but hiring plans still remained generally soft. New York cited a slowdown in layoffs at a securities firm and noted a pickup in hiring in what was still characterized as an exceptionally weak legal industry. Staffing firms in the Boston District also saw a strengthening in demand, particularly from the financial and manufacturing sectors. Several manufacturing and construction firms in the Cleveland District began recalling workers, and temporary staffing accelerated in the Richmond, Atlanta, and Chicago Districts. However, Chicago said demand for permanent workers was low, and a manufacturing contact in the Richmond District held back employment due to productivity improvements. Layoffs were also reported at several retail and manufacturing firms in the Dallas District, and Minneapolis said companies in the medical insurance and financial services industries reduced employment. Wage pressures were minimal, but Boston and Cleveland noted a lift in salary freezes and Richmond said wages rose at service and retail businesses.

    The majority of Districts reported limited price pressures, although several noted rising input costs due to higher commodities prices. Boston, Cleveland, Chicago, and Dallas noted an increase in metals prices, particularly steel, and Chicago and Kansas City said the upward pressure on some raw materials prices was likely to continue. Lumber prices rose in the Cleveland and Richmond Districts due in large part to weather-related supply issues. On the other hand, San Francisco reported commodity prices were stable or down, with declines in natural gas, copper, and aluminum prices. Some contacts in the Boston District said customers sought fewer price concessions from vendors in order to better ensure reliable deliveries. But nearly all Districts reported limited pricing power, with many firms unable to increase selling prices due to competitive pressure. Retail prices were stable in most Districts, although San Francisco noted heavy discounting. Districts generally expected stable prices overall heading forward.

    I made the San Francisco comment blue because I have to figure out what they are smoking over there during a month Copper prices went up 20%.  Employment does sound like it’s at least bottoming but the deflation issue is very serious and if we start missing earnings expectation in Q2 – LOOK OUT BELOW!

    We still face either deflation or, at best, stagflation and neither of those are good things.  Keep in mind this stuff is anecdotal and clearly the Fed was cherry-picking some "good" news to offset some generally bad reports.  I am not excited by this Beige Book but it’s nothing I didn’t expect but, of course, I expected our range to be between 9,900 and 10,400 so I don’t have anything to be disappointed about here

  103. oncmed

    cwan
    you could consider getting some software to accomplish the same effect with a few more bells and whistles
    I use Tradelog and I like it. It keeps track of all your trades, allows you to dissect by security, expiration etc, and keeps track of wash sales rules. Especially at this time of the year it makes doing taxes a cinch with a schedule -D generated in minutes. With over 2000 trades/yr it makes recordkeeping easy.

  104. tchayipov

    Judah/ TZA
    how you play it? with options or just trade index?

  105. judahbenhur

    Phil, What do you think--selling pressure too much for the Stick today?  I’d really like one more down leg, but I respect the Stick.

  106. tchayipov

    oncmed/
    does tradelog work with TOS? and where can I find it?

  107. jburgess

    Gel/CTL- executed CTL buy/write that you mentioned yesterday. Valueline Survey likes the company, says dividend pretty safe. Nice conservative strategy. Thanks.

  108. judahbenhur

    Tchay, I play it the way JRW plays it.  I just day trade TZA and TNA.  Typically up to 25K shares of TZA or 5K shares of TNA.  JRW trades many more shares than I do.
     
    JRW, Out with my .20.

  109. chuaeu

    Seems like the bots latest orders are to expend minimal effort to defend 10400, but not to push beyond. Wonder what this is setting up for?

  110. diamond

    tchayipov – Yes, it works wit TOS:
     
    TradeLog Software
    http://www.armencomp.com/

  111. jromeha

    Pharm – do you know what’s going on with CLDX? Granted they were near their 52 week lows in mid-Feb but since then they are up 25%.

  112. yodi

    Hi Phil and jburgess is it wise to buy the stk CTL before div date 3/5/10 ???

  113. morxlntway

    re software – i am using Gainskeeper.  I think i am happy with it but i wish there was a community based help. Everything downloaded fine but there are discrepancies that have to be researched. I’m a bit nervous since this is the 1st year i will file with a whole years worth of option trading

  114. Phil

    PVR/Trad – They just went ex-dividend, maybe that’s why.

    FTR/Jomp – They have AWFUL premiums to sell, like not even worth it.  The Aug $7.50s ate .40 with the stock at $7.61.  You are better off not owning the stock at all and selling the Aug $7.50 puts for .70, which would pay you $700 agains $1,400 in net margin or 50% in 6 months - that’s way better than the dividend and you don’t need to own the stock or sell the calls.

    GOOG/Gucci – Gosh it’s hard to help someone who is bearish on GOOG.  Well, there’s a certain amount of money you make below $540 right?  So your hedge or upside should be to try to make something when GOOG is above $550 like the Apr $510/530 bull call spread at $15, selling $510 puts for $5, which makes you $10 if GOOG fails to fall below $530 and breaks even at $520 and, below that, you should be very happy with your bear spread.  Just try to find a good balance there between the two spreads.  The nice thing about this is, it can work out for you in April and June and you still might do well if GOOG tanks into Sept…

    WHR/Oncmed – Zachs just featured them, which gave them this last pop so I like the idea of selling the $90s but take a stand and go 3/5 and just DD if they break $87.50.

    TZA/Dman – Ask me after hours.  As to portfolio holdings, what portfolio?  There is an aggressive $100KP that is updated on WSS, there is the mellow and safe $100KP, which is updated under the portfolio tab and there is the mellow and safe(ish) buy list, which is also under the portfolio tab. 

    Stop/Trad – Generally they let you place a stop at whatever incriments you can buy the contract at.  You can use Mark, Biid, Ask, Last or Average Price.

    PARD – YAY!!!!  I have no idea why but YAY!!!!

    USO.Agourgy – If you didn’t roll to the $38 puts when it was cheap, there’s not much to do now unless you want to DD, in which case you drop your avg loss to 15% and you get out at .35 on any kind of dip.  You could also roll out to the Apr $36 puts at .58 (+.30) and sell the March $37 puts to some other sucker to pay for it. 

    Stick/Judah – Yes, you must fear the wrath of the stick!  Volume is just 130M at 3:30, very stickable but there does seem to be a volume seller dumping into any stick move and Mr. Stick seems determined not to fund this guy’s exit like he did yesterday – should make for an interesting close.

  115. tchayipov

    diamond/
     
    thanx, but I’m Mac user, do you know something like this for Mac?

  116. dflam

    Oncmed:  How difficult is Tradelog to set up?

  117. drumkeerin

    morxlntway,
    with optionsxpress there is still a problem with gainskeeper. seems that the problem is 2010 options closed out in 2009.  

  118. chaps

    I made the San Francisco comment blue because I have to figure out what they are smoking over there
     
    since when is what they’re smoking in SF a big mystery? :)

  119. jburgess

    Yodi/ CTL-- I just received 3.30/share selling July 35 straddles on CTL, purchasing stock at 31.25… which makes entry of 31.52/33.12. If they would like to take me out in several weeks to get .72 it’s ok with me.

  120. dflam

    Hi Phil : I have LYG at $4.86 ,now $3.22 and sold April $ 5 calls for $.75,now $.20  Any suggestions?

  121. chaps

    software:
     
    TOS has recently adopted gainskeeper. they’ve got a whole bunch of my trade records screwed up. we’ll see how it goes…..

  122. jburgess

    Yodi, stock purchased at 34.55!!

  123. Phil

    CTL/Yodi – You can buy it and it will probably drop about the same as the dividend you get – no big deal.  You can buy it and sell the July $35 call for .90 and then buy him out on the dip but that’s about all the fun you can have because, like most big-dividend stocks – they have terrible call premiums to sell. 

    Atlanta Fed President Dennis Lockhart: With mixed news lately, he reiterates his forecast for the more modest, not-very-V-shaped recovery – and he backs language on keeping rates low for an extended period. Recovery is possible but "unlikely to prove durable" without rebalancing fundamentals like public finances and investment/consumption.

    Consensus recommended bond allocation has been floating around 30%, hanging around a good ways up from precrisis levels – though the long bond itself is trading around where it was in the 2003-2007 rally.

    Fed’s Beige Book: Nine of 12 Fed districts say economic activity improved modestly in February despite severe winter weather. Credit conditions remained in bad shape. Consumer spending showed signs of improvement. Retailers continued to keep a close eye on inventories. Wage or price pressures muted except for commodities such as lumber and raw materials.

    A study of the yield curve tells us that bonds aren’t as risky as critics claim. "History strongly suggests that investors who now hold only ‘safe’ positions in cash substitutes will earn far less over the next year or two than those who own the longer maturities or funds in both the taxable and municipal markets."

    Obama asks Congress to press ahead with a health-care reform bill, calling for an "up or down [vote] with nothing more than a simple majority" in the next few weeks. (Text) (ETF: PPH)

    Ever wondered just how many of your Google (GOOG) searches are tailored to your personal information? Apparently about 20%.

    A draft version of Volcker Rule legislation would ban banks and restrict other "major" financial companies from prop trading and from investing in or sponsoring hedge funds and private equity funds. Financial firms would not be allowed to grow through acquisition above 10% of the liabilities of the financial system.

    Why we need an independent consumer financial protection agency, says Barry Ritholtz: "During the boom years… how many Americans actually understood the mortgages they were applying for? Did they calculate the costs, obligations and risks of their Refis, HELOCs and piggyback loans? The answer for the vast majority of U.S. citizens is an emphatic no." And here’s a more offbeat endorsement from past and present SNL stars. (Warning: not exactly G-rated).

    The past decade was unkind to many mutual fund families. Biggest wealth destroyers: Janus (-$58B), Putnam (-$46B), AllianceBernstein (-$11B). Top wealth creators: American Funds ($191B), Vanguard ($189B), Fidelity ($153B).

    Two very ugly charts show employment for adult males hitting record lows.

     

     

     

     

     

     

     

     

     

  124. chuaeu

    chaps,
    Good one about SF smoke – only question is whether it’s legal or street

  125. Pharmboy

    CLDX/jero-  now has coverage from Roth ( I noted last week at $5), and now Stansberry Research.  They must be reading us here!!!!

  126. diamond

    tchayipov – No I do not. 
     
    I am also a Mac user, but I also have a PC for compatibility issues with some clients. Therefore, I use the PC with the TradeLog Software. Armen Computing Ltd. said they will be working on a Mac version sometime in the future if there is demand for it … so you may want to contact them about such a product version.

  127. EricL

    yodi,
     
    AMED isn’t a stock I follow, but the price looks decent for selling that condor. It also looks like the stock has been relatively range-bound for a few weeks, which is good too. One thing I would watch for would be a close below about 57 or above about 62, either of which could indicate a break out of that range. But otherwise looks like a good candidate.

  128. tchayipov

    diamond
    thanks I will contact them

  129. oncmed

    I found tradelog very easy to set up. It required some reconciliation in trems of matching trades, I would guess about 5%, as an up front cost. But once its good to go, I have found it quite efficient and easy to use. Its not as refined as a Quicken or Quickbooks, but it does the job and is geared for options recordkeeping.

  130. EricL

    yodi,
     
    I’m also still in the EL condors but not feeling very confident about it; the stock does not look very strong today. I’m going to keep it just for some upside exposure, but I wouldn’t be enthusiastic about entering here.

  131. diamond

    tchayipov –  You may try VMware or Parallels software:
     
    http://www.apple.com/macosx/compatibility/
     
    It should allow the Mac to run the TradeLog Software.

  132. Phil

    LOL Chaps!

    LYG/Dflam – You really have LYG for net $4.11, now $3.22 less .20 you owe a caller.  Their premiums have dropped to nothing so there’s not much to do here but keep in mind that .10 per month on a net $4.11 investment is a 25% ROI so just keep selling the damn calls and letting them expire.  If they dip to $2.50 and you can sell $2.50 puts for .50+ then your put-to is $2 and that would drop your average to $3.11 – that would be worth it but, other than that, a 25% ROI is not the worst fate in the world while you wait for them to get back to $5. 

    Whee, what a wild day!

    Hope everyone had fun….

  133. chaps

    Quicken:
     
    I had to abandon it when I started heavy options volume. Unless things have changed, it chokes on large volume. Reminded me an image of a skeleton with cobwebs, etc. sitting in front of a terminal with the line, "how’s response time?"

  134. tchayipov

    BRK/B is creasy today, is it any good news?

  135. cwan120

    RE: TradeLog.
    I have TradeLog, too.  This is the first year I subscribe to TradeLog.  I am using it for tax reporting, and haven’t used it for trade tracking yet.  Thank you for reminding me to look into the trade tracking feature.
     
    RE: Gainskeeper vs TradeLog,
    They both use the per-year subscription business model.  You have to pay an annual fee to use their software.  You can go to their web sites and sign up for a 1-month trial.  Do a google search to find their web sites.  (Hey!  If you are long GOOG, use it!!)
    I tried both for a month, and decided on TradeLog.  Here are my reasons going with TradeLog:
    Gainskeeper is an on-line service.  You use your web browser to  log into your account, load up your data, and they do the computation.  Everything is web-based.  When you are ready to file your tax returns, you download tax data into your PC.  I don’t like it because it’s too behind the door.  I entered a few trades that I knew would trigger the wash sale rule.  Gainskeeper didn’t give me the right tax report.
    TradeLog is a software you download and install on your PC.  You run the software on your PC, and you input data into it locally.  Again, I entered those trades, and it gave me a decent tax report.  For that reason alone, I bought it.  Although TradeLog runs on your PC, after one year of use, I think you have to pay for another year and get a license key to turn it on.
    BTW, they both support data inputs from a long list of brokers.  Again, go to their web sites and make sure they support your brokers.  Worse comes to worst, you can input data manually.

  136. Phil

    Oh here’s Dylan yesterday throwing a Tea Party guy off his show – too funny! 

  137. pstas

    From  a CNBC interview yesterday on the health care bill:
    "We’re just going to focus on costs and we’re not going to dream up 2,000 pages of other things. . . . Get rid of the nonsense."
    Now, are we all not just fed up with those mean spirited, obstructionist Republicans and those knuckle dragging tea-party nay-sayers holding up progress on President Obama’s reform proposal?
    Wait, what’s that? Who said that?
    Oh, never mind.
    http://online.wsj.com/article/SB10001424052748704548604575097890295186772.html?mod=djemEditorialPage_h

  138. cwan120

    Hi, chaps,
    Your comment on Quicken is quite interesting.
    I’ve been using Microsoft Money 2003 ever since I bought it.  I didn’t upgrade because I saw reviews on amazon, and people complained about bad experiences on all subsequent versions.  By now, Microsoft stopped selling and supporting that product.
    Microsoft Money 2003 has been running well, even with my much increased trading volumes.  I just don’t know if there is a maximum limit in the software.

  139. pyern

     FYI on Tradelog. Fidelity customers get at 20% discount.
    You have to go through a link from Fidelity website.

  140. matt1966

    Phil / Dylan / Tea Baggers:  If you think about it.. the guy from the Tea Party was doing what you need a 3rd party to do.  Stand up to those who want to impose their will on your agenda.  I’m guessing here but I would suppose the Tea Party (of which I know very little) is trying to push a lower tax, greater freedom message.  Dylan was trying to get him to bend to his own agenda.  And as we know, any 3rd party will have to be STRONG ENOUGH to withstand the withering assualt of the special interests trying to impose their agenda upon the party.  So I actually think the party was being tested by Dylan and they passed with flying colors!
     
    Ok… maybe I’m stretching things a little.  8-)

  141. cwan120

    Hi, Peter D.
    I hope that you’ll read this post later in the day.  Here is a question for you:
    Yesterday, you said "there is a 27% chance that the market can blow through +10%/-10% in any two months period."  May I ask where did you get that information from?  I’m interested in such statistics on 1-month, 2-months, …, and +/- 5%, +/- 10%, …, etc.
    Thanks.

  142. cwan120

    Oh, My God!
    I can’t believe that we talked about Wilt yesterday (March 2), without mentioning his record of scoring 100 points in one game exactly 48 years ago on March 2, 1962.
    See: http://www.cleveland.com/ohio-sports-blog/index.ssf/2010/03/this_wilt_chamberlain_record_i.html

  143. Phil

    BRK/B/Tcha – The report was very nice.  Now that they have options to sell they are a stock that should be in everyone’s portfolio.  They are a bit high now and if you missed our very nice entries a few weeks ago I’d play them a bit bearish now with the 2012 $75s at $15, selling June $82 calls for $4.70 and June $75 puts for $1.60 which is net $8.70 on the $7 spread.  Ideally, they fall back to near $75 and you can roll down to the 2012 $65s for $4 at which point I’d switch to 1/2 covers.

    Health Care/Pstas – I told you guys last week that it was a done deal.  Buffett was totally right and he’s an advisor to Obama anyway so no surprise that this is their plan – simplify it and pass it. 

    Tea/Matt – You didn’t see the beginning.  Dylan was pre-outraged that the tea party allows racist and Nazi banners at their rallies.  The guy was pretty much arguing that they were an "inclusive" party and Dylan’s point was that allowing Nazis and the Klan to gain legitimacy under the banner of being part of the Tea Party movement should not be tolerated by the organizers.   I don’t know if I would classify the anti-Klan, anti-Nazi "faction" as a "special interest" that should  be fought off by the Tea Party so they can stay true to whatever it is they represent when they allow those people into their tent. 

    Of course, this is the price you pay when you move to a multi-party system.  Europe has communists and the NDP, which is pretty much a Nazi offshoot and then they have the greens and people who are so liberal they even make me sick – people’s heads would explode if we actually start electing people from alternate parties and there is no way anything would ever get done in Congress.  Hmm, maybe that’s not a worst-case…   8-)

    Wilt/Cwan – That’s interesting.  I wonder if that’s how he came up in the first place – some tidbit of information that was buried in the back of our mind that ended up dropping Wilt Chamberlain into our conversation on that exact day.  Or maybe, as Sting says:

    A connecting principle
    Linked to the invisible
    Almost imperceptible
    Something inexpressible
    Science insusceptible
    Logic so inflexible
    Causally connectible
    Yet nothing is invincible
     

    Effect without a cause
    Sub-atomic laws, scientific pause
    Synchronicity……
     

  144. gel1

    Away from PSW most of the day, so late replies
     
    DKGuy/Ratio … This term is usually with either put only or call only spreads, however I have an alternative nomenclature that is applied to my trade. In this case I sold a short strangle, selling 2 puts for each three calls with different strikes and dates. I was looking for a pop on the put side and a drift downward with a profit on the call side if everything went to hell.
    SSDirk/NBG… thanks for the "heads up" .I saw the doungrade yesterday and sold the stock, but could not get out of my short puts. I think the bank is solid as it has not much exposure to the debt at the government level, and it will in the long term survive well, however until all this blows over then the road will be rocky and I will roll down and out on the puts.
    jburgess/CTL…. A hedgie I know told me about it – he is 95% right on everything, so I in it. Their earnings are up, and just announced an increase in the dividend. Through a merger in 2009, it has created a lot of synergy, and has doubled its size. Expected earnings per share in 2010 are 3.20/share. The company expects to increase dividends going forward, so I have positioned the stock as a long term hold. This is a well diversified Telecom with cable telivision, broadband, telecom and they have 2 million subscribers in over 30 states.- I feel very safe, and the dividend is about 1 times what I receive on CD’s – may even sell some covered calls for additional inome.

  145. gel1

    jburgess…oops … that should read 10 times what a CD pays

  146. jburgess

    Gel/ CTL-- thanks for info. I have spent a little time on this company before.. they are one of the larger players in the rural  telephone business: rebranding to CenturyLink. I figured even if I get taken out of the position in 4 months,  approx. 9% + approx. 2% from dividends is an annualized 30-33% and not too shabby!

  147. Peter D

    cwan,
    I got those stats by downloading the monthly historical data from Yahoo.  With a few formula in a spreadsheet, we can figure out the possibility of touching and expiring +10/-10% in any one, two or X months period.  Since Yahoo data is based on the calendar month, the assumption is that the statistical data for OpEx is similar to calendar month.  Otherwise, you can download the Weekly data and compiling them into the OpX data (I haven’t done this yet), then you can produce all kind of stats.

  148. chaps

    cwan:
    re:
    "there is a 27% chance that the market can blow through +10%/-10% in any two months period."
     
    Peter may have a better source. What I’ve done is downloaded S&P500 historical data from Yahoo Finance. You can download it aggregated over various periods. Then I went to town constructing spreadsheets. So, for instance, I have probabilities that S&P 500 finishes with +/- x% during a four week period, two-week period, etc.
     
    It’s really freaky to see all the "Black Swan" outliers in the Fall of 2008 – "fat tail" distributions, as Nassim Taleb would say. Makes you understand having margin to DD and all that if you do index strangles/iron condors. You really have to avoid being lulled into complacency thinking such things won’t happen, because they haven’t happened lately. I think that complacency in investing is called "anchoring."
     
    As they say, past results are not indicative of future results.

  149. cwan120

    Peter & chaps,
    Thanks a lot about downloading from yahoo.
     
    BTW, I spent a better part of an hour reading the following long article about Wilt.  Very poignant.  People misunderstood him because he was too great and people expected too much of him.  Read this sentence, copied from somewhere in the middle of this article: "The worst thing in sports is to be expected to win, and then to lose. The second worst thing is to be expected to win, and then to win."
    http://sportsillustrated.cnn.com/basketball/news/1999/10/12/wilt_at_50/
     
    Oh, my!  What the hell am I doing??  Reading old stories with tears in my eyes..
    Hey, Phil, we must be getting old!

  150. gel1

    Cwan… Who can forget Wilt… He did for basketball what Tiger did for golf. Also put Kansas on the map in the basketball world !

  151. gel1

    jburgess
    Another stock I have that has a similar model to CTL is WIN (Windstream), which also concentrates in rural areas – hey,those farmers need everything we have here in the big city !. They also pay about the same dividend – 9.63 %, and also a good entry at this time, IMO

  152. jomama

     gel, I like WIN.  I usually buy it around 10$ and sell longer puts for a 1$ win it hits 10$.  My inlaws in ashland,ky use them.  People in rural areas also still use hard phone lines due to coverage issues.

  153. jomama

     gel, i like SELLing puts on big dividend payers – as there is usually a high premium to pay to protect those dividends.  Look at the premiums for PM Jan premiums for out of the money puts are not bad.  Rather do this than buy the stock for dividend payout – If you are worried about tax rate – dividend (long term) vs short term then just hold for a year and sell 2012′s and close out after 1 year.

  154. jomama

     Gel, unlike Tiger, Wilt was pretty genuine and didn’t hide behind handlers.  He was a womanizer but didn’t pretend that he wasn’t.

  155. gel1

    Jo
    Good strategy on selling puts and time line… nice discount. I am restructuring my entire portfolio in order to acquire stocks that I hopefully will keep long term. I like dividends a lot, as I have been advised the government will not be targeting dividends as they soon will raise taxes on about everything else. In order to have "qualified dividends", you have to have held the stock more than two months. Not selling the underlying stock and targeting good dividend payers will keep taxes lower, The way I see it, for every dollar that goes to tax, that is one dollar that will never again be invested. For some time I have been a subscriber to "High Yield International" which is a research firm that uncovers a lot of great stuff. Had one last year that paid 50% so I was able to get the dividend tax treatment, and was able to take a loss on the stock after it dropped X-Div, but on balance it worked out great after tax. All of the recommendations are at least 8%. I’m looking at one now at 13.3 % – a Brazilian company – Tele Norte (NYSE: TNE.) I will check it out and post.

  156. pstas

    Health care- Simplify? Unless I missed something, appears they are pushing forward on the Senate bill with possibly some tinkering on the edges. So, I read Buffet’s comments quite the opposite. Anyway, you have probably gotten the party line talking points issued to you along with the marching orders so I will defer to your interpretation.

  157. Phil

    Hey – it’s not an island but someone just offered to sell me this hotel in Brazil for $3M:  http://www.angrafashion.com.br/index.asp

    Crying/Cwan – Its common to be touched by tales of fallen heros.  The greeks figured that out long ago!  By the way, The Lightning Thief was a fun movie with the kids this weekend, was a great way to start teaching them about Greek mythology and pretty good special effects.  They are also remaking Clash of the Titans this summer.

    Busy day ahead – Thursday’s economic calendar:

    5:00 Monthly Retail Same-Store Sales

    6:00 Monster Employment Index

    8:30 Initial Jobless Claims

    8:30 Productivity and Costs

    9:00 RBC CASH Index

    9:00 CFR Corporate Conference

    9:15 Fed’s Bullard: Fed at a Crossroads

    10:00 Factory Orders

    10:00 Pending Home Sales

    10:30 EIA Natural Gas Inventory

    1:00 PM Fed’s Evans: Current Market Conditions

    3:00 PM Panel: CEOs Meet the Economists

    4:30 PM Money Supply

    4:30 PM Fed Balance Sheet

    David Leonhardt: “The economy’s biggest problem has not changed. When bubbles pop, they wreak enormous, lasting damage. Credit stays hard to get for years because banks need to rebuild their balance sheets.”

    Fannie Mae’s (FNM) gross mortgage portfolio sank by an annualized 44.8% in January, to $735.2B. While delinquencies on single-family loans rose 0.09 points to 5.38% in December, the multifamily delinquency rate fell 0.03 points to 0.63%.

    The Fed proposes more rules to protect credit card users from unreasonable late payment and other penalty fees. Among other things, the new rules would: prohibit issuers from charging penalties that exceed the dollar amount of the consumer’s violation, ban inactivity fees, prevent issuers from charging multiple penalties based on a single late payment.

    Congrats Cap!  With Charles Rangel stepping down (temporarily or otherwise) as head of the Ways and Means Committee amid an ethics probe, the fate of a number of tax issues is back up in the air – from Bush-era tax cuts to the expired estate tax to proposed carried-interest levies.

    Look Ma, I’m Spinning – WSJ headlineFed’s Beige Book:  Economy ImprovingThere doesn’t need to be a "conspiracy" when people with Billions in assets are put in charge of newspapers is there?  Is it in Rupert’s interest to uncover the truth about the economy or to perpetuate the myth that his vast real estate holdings and advertising-driven properties are on their way to a full recover while taxes can remain super-low as Global debt is somebody else’s problem?

    Ryan Chittum notes that Steven Pearlstein shows how you do a corporate welfare column (on Northrop Grumman’s (NOC) relocation to the D.C. area), while Thomas Friedman shows how not to.

    Take-Two (TTWO): 1Q2010 EPS of -$0.31 beats by $0.20. Revenue of $163M (+9.3%) vs. $125M. Guides Q2 EPS above consensus; Q3, FY10 EPS, revenue in-line. Shares +5.3% AH. (PR)   This should help GME continue to recover.

    In casinos, MGM Mirage (MGM) plans a third-quarter IPO for its Macau venture with Pansy Ho. MGM closed today +1.5% and is up 19% YTD. And Wynn Resorts (WYNN) will provide $250M for its planned riverfront project in Philadelphia; WYNN +0.6% AH.

    Firms are realizing that sitting on great piles of cash may make for a good cushion, but not good returns – and are starting to tap the record stash to go shopping. Nonfinancial S&P 500 companies have $932B in cash and equivalents, up 8% from Q3 and up 31% Y/Y.

    Employment to Population Ratio for Men 25-54 Years Old:

    Good article by Barry on "Why a Consumer Protection Agency is Necessary" (for Finance).

    Arms Advisory March Market Assessment with good charts.  I hate this Scribd thing but damn they have a lot of stuff you never used to be able to find!

    Although they do seem to have a nice way to do slide shows.  Here’s one on Intro to TA and also a short paper on Fibonacci

    It’s looking interesting this morning – Shanghai down 2%, Hang Seng and Nikkei down 1% (yay EWJ again!).  Our futures are down about 0.3% so far

    Gold dropped back to $1,135 (go GLL!) and oil is still stubbornly above $80 but I’m thrilled with our puts and I’m short the futures here ($80.38) with a stop at $80.55 following normal mo trading rules.

  158. Phil

    Good morning! 

    Oil bottomed out at $80.10 but pulled a reverse since and is now back to $80.80 so no new trade until they test $81, where the futures can be played at that line.   Gold made it down to $1,131 but just lept back to $1,140 as we are back to bouncing around on the basis of whatever greek rumor hit the news last. 

    Futures are up half a point off their lows – back to about even and Europe had opened down half a point but the FTSE has rocketed back to even – we’ll see if these things can withstand our jobs numbers.  We also have same-store sales coming in this morning.

    The Monster Employment Index was up 10 points to 124 but that’s off the worst month of the last 12 in Jan and is 2 points higher than last Feb, which was a month when the data sent the S&P to 666.  BUT, today they are calling it a reason to rally because people watching the MSM will believe anything the talking heads tell them because they don’t get shown the actual results and they trust their talking heads to have checked the facts carefully, rather than make them up, which is pretty much what they do.

    Wow, while I wrote this oil hit $81.  It’s a tough play here as they went to $81.23 yesterday so a very small entry at the line with a DD at 80.20 and out at 80.25 for a .15 loss is the way to play.  Keep in mind that this game is played for nickels and we set a stop at $80.96 when we hit $80.95 and increase our stop by .01 per .05.  If we stop out, we reload at $81 again and, after a couple of successful plays that build up a profit cushion, we can get a little more aggressive.

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 Sector Performances (Today)

 Thermal Imaging