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Jobless Thursday – Productivity and Prices are Peaking

What a run we are having!

Of course we are thrilled because we flipped bullish last week, when it was still out of fashion and now we are following along the Trade Bot Omega-3 rally pattern that I pointed out in last Friday’s post:

Close enough, right?  Of course we don’t base our decisions on pattern matching (which can give you many false positives) but when we feel the fundamentals are the same AND the market movement looks the same, then we get pretty interested in watching how that pattern is playing out!  so today should be a flat day and we most likely flatline into expirations, which would be good as we still need to form a base but the question remains – do we have enough good news and data to take us back to the top of our range at 10,700 (1,140 on S&P)?

See Friday’s post for how this patten plays out for the next few weeks.  The TradBots are clearly in control of the market and the volume is back to anemic as confused retail bulls are now confused retail bears as the MSM scrambles to figure out how to tell you they were right.  Our friendbuddypal Jim Cramer was so wrong in his call last week that he had a little temper tantrum about it saying:

I am calling this a bad rally. This market has now become more depressing than Ethan Frome. Even the good days are now bad days. It’s almost as if the whole market is caught between 1st base and 2nd base. So we get an endless rotating short squeeze in oil, in the banks, in tech, in discretionary…. But once the shorts are done getting picked off, we’ve got no more reason to run. It is a rally that stops that a blast of future selling comes in. It is a rally that stops the moment the buyers just walk away. We used to have fundamentally based rallies – that’s not how this market works.  This market is stupid. And it is hated for a very good reason. The market seems rapacious, arbitrary, capricious and downright ridiculous. It is a tale told by an idiot, full of sound and fury, signifying nothing.

Wow, Jim, I’m touched that you would use my old literary references from January in your broadcast but we’re done with Shakespeare now and moving on so please stick with the plan, please – you already strayed from our path and got burned last week so just embrace the chart of the future and be done with it.  This market is moving on fundamentals, not momentum and there are limits to how far you can follow your trends before they run into real-world buy and sell signals.  Of course the bots are in control while we’re in the range but there are more fundamentals between the high and low end of our range than are dreamt of in your philosophy.  

I already said to Members at 7:42 this morning:  

Huge turn in the futuers since Europe opened.   They are up a point but copper is 2.95 so I’m worried it’s all window dressing now. 

Of course we have Unemeployment at 8:30 and that can send us up or down anyway.    PPI was deflationary (-0.2%) but only because of oil, ex-energy it was 0.2% so if CPI is not better (higher) than -0.2% it means they still can’t pass prices through to contumers and that’s no good.   At 10 am we get Leading Economic Incicators (0.4% expected) and the Philly Fed (20 expected) so lots of market movers this morning! 

I guess we could have been more aggressive and shorted the futures on this silly run because it’s 8:30 now and Jobless Claims were up to 472,000, which is 22,000 (5%) more than expected and the CPI was right at -0.2% but the core was only up 0.1% so margins are still being squeezed in corporate America.  Even worse for the evil Capitalists, Proletariat wages rose 0.5% in May and hours increased 0.3% giving us a 2.1% increase in Real Average Weekly Earnings since October of last year!  How was I able to title this article "Productivity and Prices are Peaking" and send it out in a newsletter BEFORE the data hit?  Because we pay attention!!!  Data shouldn’t take you by surprise, this is all trends we’ve been following for months.

Still, it was a huge surprise to the futures markets, with the Dow dropping over 50 points in minutes, pretty much in-line with the other indexes.  Copper dove, oil dove and gold shot up like a rocket ($1,245) so we’ll be shorting that again with GLL ($38) this morning as that’s always a fun play – maybe we’ll sell some puts…  Also not shocking is our bullish BP bets paying off but now we have to worry about a market pullback, especially if Leading Indicators or the Philly Fed disappoint us (and the jobs numbers suggest they will).

The Shanghai came back from their holiday and did nothing this morning, finishing down 0.4% despite the US markets running up 6% in the past 5 days.  The Hang Seng added a lethargic 0.4% and the Nikkei dropped 0.7% as they couldn’t get the Yen over 91.5 to the Dollar last night and even that was fake, Fake, FAKE as our currency trade that never fails (almost) won again and the Yen climbed back to 90.97 to the dollar on our Jobs news.  0.53 is A LOT for a currency move but you wouldn’t know it these days the way the Pound and the Euro keep hopping up and down that much every couple of hours.  Right now, they are both up so it’s the dollar that’s down and THAT will initially support both commodities and US equities as speculators speculate that we have no choice but to crank up the printing presses to avert economic catastrophe.

Europe was having a good old time this morning until they saw our jobs numbers and that threw a wet blanket on their party but still up over 0.3% across the board.  On day’s like this we like to watch copper, now $2.935, as under $3 means there’s no real faith in a global recovery.  Keep in mind that Europe is being led higher by BPs recovery as that is rallying the sector that it leads – without that boost, the EU markets would be negative already.  

EU is being pressured to publish a stress test for their banks, most of this pressure comes from hyenas who want to know why they can attack, of course and I hope the EU resists the urge to light the fire for a new financial witch hunt.  Speaking of witchcraft – It seems the cauldron is boiling in the Natural Gas pits as futures spreads on the $5.11 contracts widen to 43.3 cents.  This makes rolling over contracts prohibitive at the same time as inventories are approaching record storage levels.  Nat gas traders have been desperately trying to hang on until hurricane season and a cyclone warning in the Gulf last week got gas over $5 for the first time in almost 2 years but they need a major event that halts production for at least a week to even put a dent in inventories.  Meanwhile, traders MUST bite the bullet and roll their contracts over because, even if they take delivery, there’s nowhere to put the stuff.   The Burning Man festival doesn’t begin until September and there aren’t enough gas grills in America to do much to the supply over the summer so let’s be on the look-out for a fund or two folding their positions in the near future. 

It’s going to be an interesting day, the futures pump crew has been knocking themselves out to erase the 8:30 drop and give us a pretty open so it’s all up to the 10 am data.  We will certainly be taking some speculative puts into a morning rally as 6% is a big one-week move with no pullback and 7.5% is the most we see before profit-taking ensues. 

Be careful out there!

 


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  1. lflantheman

    Phil or anyone…..remind me please how to find old posts by certain members…….

  2. exec

    Phil
    I’ve read that Cramer is actually quite smart and connected.  I personally can’t stand to watch his theatrics and can’t help to believe that he’s the ultimate pump and dumper.  Do the heavy hitters in this forum pay attention to what he has to say?

  3. dosimetrist2

    memeber posts / Iflan – In Vista  I press the "Ctrl" and "F" keys simultaneously to produce a box in the the upper left of my screen that is labelled "Find:"  To the right of the box you can type in the first few letters of any word you are searching for and it find it for you.  There will also be a "Previous" and "Next" option to help you go back and forth between posts.

  4. lflantheman

    Phil…..Tell me it ain’t so.  You don’t spend your spare time watching Cramer  Mad Money reruns…….do you?   :)

  5. Cap

    Thursdays of OPEX are often flattish.
     
    If they can muster a rally today; I would look to short the highs based on the bad jobs numbers.

  6. chyer

    Phil/ 1105 looks like a likely target for reloading
    MACD on the day and hr charts are overloaded, needs a pullback, what do you think?

  7. fizz

    Phil--on "math play" was that technically a short straddle? (sell 2012 $12.50 puts and calls for 5.40)  I want to be able to go back to ebook to study on anything you give me.

  8. dbarakat

    I think that Cramer was the ultimate pump and dumper when he was a hedge fund manager.  There is even a clip of him admiting it somewhere (see Cramer’s recent interview with John Stewart). But today, since he’s got millions already and his show and his books, he doesn’t own any stocks.

  9. morxlntway

    Yup, i think those who haven’t been able to pay the mort are buying motor homes.

  10. chyer

     I give AAPL 285 287 tops before a large pullback

  11. exec

    JRW,
    What are you seeing today with IWM?

  12. nicha

    Iflantheman- have you looked at hishttp://www.streetinsider.com/Press+Releases/Hedge+Fund+Financial+Model+Predicts+Apple+Inc.+(AAPL)+to+Fall+80%25+as+Early+as+This+Fall/5737749.html

  13. David Ristau

     If you played WGO:

    Our Play of the Week worked out brilliantly for us. We got involved on Monday in Winnebago Industries Inc. (WGO) liking a number of financial fundamentals and chances for an earnings beat. The company looked to be a strong play over the week, but it played pretty flat all week as we continued to hold. My entry was at 11.25. The company reported earnings of 0.21 per share while estimates were consensus at 0.03. It was a gigantic 600% earnings beat. I am going to sell half at the open and wait and see what happens for another half to get a hedged final price.  Since the market is looking upwards, I think we can get a couple or few more percentages, but I am looking at selling at the open around 12.70 – 12.80 currently (that could go up or down). That would be an increase of about 12%.

  14. exec

    Awesome David.  I’m sorry I didn’t get on board with you this time.

  15. RussianQ

     David you’re the man! Again, thank you for the analysis

  16. David Ristau

    Exec -

    Its alright. I am doing a similar trade like WGO today for a mid-term trade, but I have not found my poison yet.

    Russian -

    Thank you!

  17. Phil

    Good morning!

    Wow, look at WGO!  Brilliant call by David! 

    Same old levels to watch but now it would be TERRIBLE to lose any of them:  Dow 10,250, S&P 1,100, Nas 2,260, NYSE 6,820 and Russell 666.  We really want to see NYSE 7,000 to get a little more comfortable (now 6,993). 

    GLL Jan $37 puts can be sold for $1.20, I like that play on gold going lower

    AAPL is up at the $270 mark where they make a temping short but I’d rather short the Nas with the QQQQ July $46 puts at .85 as it’s not as likely to kill you as AAPL is!

    Major data at 10 am so we may give up on shorts as quickly as that – mostly just protecting our gains.  

    Oh yeah, DIA Matress play (Sept $105 puts) can now be naked until we cross 7,000 on NYSE.  

  18. dbarakat

    David, great call on WGO!! 

  19. David Ristau

    Dbar -

    Thank you!

  20. RMM

    Phil: TBT should be a BUY ?? what trade do yoy recommend ?

  21. JRW III

    Good morning,
     
    IWM 65.28, 65.88, 66.36, 66.71, 67.20, 67.96

  22. brooklyn

    Phil – seems GLL July put  is 1.20 – Jan is $4.40.

  23. lflantheman

    David…Great call on WGO.  I played the July 12.50 calls on that for 110% gain!   Thanks!!!

  24. JRW III

    David / WGO
    Stellar !!

  25. lunar

    david, thanks for WGO…out at 12.95

  26. Phil

    Old posts/Iflan – No good way but Kwan thinks maybe we can add it to our Wiki project. 

    Cramer/Exec – I pay attention to anything that moves the market.  Cramer is a tool of GS and his other hedge fund buddies so he’s more of a contrary indicator than anything else, sterring the sheep into positions his pals are trying to wriggle out of.  I’d be very sad if he went away – that guy is MONEY for us on a regular basis as we simply assume he’s got an agenda and can’t be trusted and place our bets accordingly. 

    Whee already!  Nasty momentum if our 10am reports suck

    Cramer/Iflan – I’d watch Hitler’s speeches if he moved the markets…  Generally I just read the recaps (Cramer, not Hitler).

    1,105/Chyer – We shall see.  It depends what else is holding.  RUT is right on our 666 line already and we’ll see if Nas can hold 2,300, then our other levels. 

    Math/Fizzz – I forget what stock but no short straddles, must have included buying the stock. 

    AAPL June $270s can be sold for $3.10, 5 sales for $1,550 and buying 3 July $280s to cover at $6.75 ($2,025).  If AAPL goes higher, you have to buy 2 more July $280s and roll into a vertical with the $290s.

  27. goldman

    JRW – 48.01/48.46….bought the second I seen you posted 66.71…thanks for 1% in 2:30!!!

  28. David Ristau

    Lflan, Lunar, JRW -

    Congrats and thank you!

  29. concreata

    Phil – GS – Now that there’s more direction on fin reform bill (weaker than expected) and likely negative impact on earnings (max 20% strung out over protracted period – probably lobbied away over time resulting in a minimal loss) what’s your feeling on buy-write today and what strikes?

  30. lvmoda

    Phil,  AAPL IS killing me today!   Thought I was ok with short Jun 260 calls and was not able to trade yesterday, and of course I’m blown out on those contracts.  Rolled to the Jul 270 calls for .45, but I’m not very comfortable at all being short at that strike.  I also hold short Jan 180 puts and a small short Jun 270 put position.  Recommendations for hedging the Jul270C position?   

  31. lflantheman

    Phil….Previous posts….I was just wanting to find my post from 2 weeks ago predicting AAPL over 270 within a week.  OK, so I missed it by a week.  Anyway, just wanted to yank my own chain.  :)

  32. goldman

    Philly Fed 21.4 to 8 – WoW!

  33. Phil

    Philly Fed was TERRIBLE!!!   8 down from 21.4 – total disaster, LOVING THE SHORTS!  No need to have the July AAPL calls, naked short calls should work.

    May Leading Indicators: Leading Index +0.4% vs. +0.6% expected, -0.1% prior. Coincident Index +0.4% vs. +0.3% prior. Lagging Index -0.1% vs. +0.1% prior.

  34. bobhu

    Good Morning David Ristau,
     
    Great call on WGO yesterday.

  35. kevinb63v

    Phil,
    I assume you meant to say GLL Jul $37 puts can be sold for $1.20?

  36. exec

    JRW,
    You looking at TZA

  37. dezev

    Phil,
    IF the market can shrug off the 4 announcements today as it worked thru the bad news yesterday, seems like it can rock and roll  nes pas?

  38. kustomz

    Money started coming out of bonds at 9:45 that didnt last too long, if it were not for opex and Euro ..markets would be down at least 2.5% off todays lousy numbers..

  39. lflantheman

    Here’s a sure-fire trade for today on AAPL.  If you own calls or stock,  or just want to margin,, sell the June 280 calls for  .40   It aint much, but it’s 99.99%  sure to be in your pocket within 36 hours.

  40. Phil

    Oh well, they are using AAPL to prop up the Nasdaq at the moment.  Now spread is $7.35 for the July $280s and $4 for the short June $270s – still very nice but scarier looking!

    TBT/RMM – They are always a buy below $40.  $38.50 seems to be the new floor and I do like selling July $38 puts for $1.

    GLL/Brook – Damn, I meant the July $37 put, now $1.40 on that crappy data… 

  41. escohen5

     Direxion just announced a reverse stock split on TZA…..5 to 1.

  42. Maya1

    Phil,
    I apologize, but your earlier comment:
    ‘ No need to have the AAPL July calls. naked short calls should work.’
    Does that mean, We should be SELLING AAPL July calls in hope they can be bought back cheaper as you are bearish on the stock?
    If so, why?
    They seem to be minting money out the wazoo, (forgive the french expression)!!!!

  43. escohen5

     ….as of July 8th.

  44. jdub929

     Could get ugly here if the RTH continues to slide

  45. JRW III

    Out of TZA at $ 6.52 for 14 cents; bottom of channel

  46. EricL

    Gold coming back to the top of its channel. It will break out one of these days and burn the shorts quickly, IMO.

  47. bobhu

    Good Morning Phil,
     
    What do you think about V? I got some at 69.36.  Should I sell it now?
     
    Thanks.

  48. tuscadog

    Phil / Double dip      Doesn’t  jobs/housing starts/foreclosure overhang/philly just confirm double dip unavoidable?  Time to rethink investment strategy?

  49. Phil

    GS/Concreata – I still don’t like them.  I think you should at least wait to see if they can hold $140 first…  Next time the VIX is over 30 (maybe this afternoon!), we can look at a conservative entry like selling 2012 $130 puts and calls but I’d strill much rather be in JPM than GS.

    AAPL/LV – I’d ride it out at the moment (but take the June short puts off the table).  AAPL has been used to pump up the Qs, that’s the only reason they were flying like that.  Now the game is over and they should settle back and you are probably better off rolling your July callers back to the June $260s at the moment (would have been better $3 ago though).

    Good call Iflan but does a spike count?

    IF/Dez – That’s a big IF!

    TZA/Escochen – Thanks!

    AAPL/Maya – No, that’s the naked June short calls left over from that spread.  Only good if you have the margin for it (which is quite a lot)/  In other words, if someone took the initial spread and paid $6.75 for the July $280s, we were able to sell them for a quick $7.25 and leave the naked June $270 callers because we don’t think AAPL is going to hold $273 (where we’re even) through tomorrow so no need to cover.  If it does, well then we are big boy (as you have to be to have the margin in the first place) and we can lose $1.  I love AAPL but that doesn’t mean I think they are a buy at every price…

    V/Bob – Absolutely, the data today is awful!

  50. matt1966

    So let’s see.. the number of people on the unemployment roll is rising.. the number they bandy about doesn’t even include the 5.7M people who are on extended unemployment (71 weeks!)… and 90% of the job gains last month were due to temporary census workers.  Hmmm..  rally time!
     
    It’s days like this that make it almost impossible for me to suck it up and go with the flow.  It’s very clear they want a lot of the putters they sold to expire worthless.  Wouldn’t be suprised if we rallied hard tomorrow. They’ve been hamtrung by bad data for the last two days.  Geeze!  Can’t a poor manipulator get a day without something bad being announced?  

  51. David Ristau

    Bobhu -

    Thank you.

  52. exec

    Same JRW out 6.52 14 cents……see it’s falling through though…..what to do?

  53. goldman

    Phil – UNG crashing 5 minutes before the EIA NG report…hmmm, how is that possible….hmmmm?

  54. Pharmboy

    Matt – where U been buddy?  I have been holding the fort for you!

  55. yodi

    Look at FSLR they are on fire . A while back I was worried about my short 95 Jun putter, stk up 4.20  trading 123.10

  56. redlog

     Phil:DIA Mattress  Going naked on the Sept 105 puts.  Just want to understand the rationale for buying back short puts at this point.  thanks 

  57. kinkistyle

    Matt:  The street has been throwing everything at this market in order to keep up through friday.  I was actually thinking they could pull it off.  Guess too many straws on that camel’s back.

  58. brooklyn

    Phil – do you still like the GLL July 37 put (seems to be at $1.25)

  59. humvee4me

    Phil:  The Yen keeps moving up (i sold some futures expecting the opposite move); how high is high?

  60. Phil

    I’m done with short plays here.  Not going long but that’s a lot of money already and I’m not greedy.  We’ll see if we hold this 1% dip first.

  61. yodi

    Phil, your remarks earlier on Mattress Sept naked. Is it not on the time to slowly start selling some Jul 101 and or 102 putters ? thanks

  62. nicha

    EricL- I buy GLD and GDX to play gold. What is your opinion?

  63. Phil

    QQQQs hit $1.05 so tha’ts very nice, GLL I still like, AAPL I’m willing to be naked short on the $270 calls but now a stop if AAPL gets back over $270.50, TBT right on our floor (hopefully).

    DIA Matress should be 1/2 coverd with July $103 puts at $2.30.

  64. JRW III

    Tails at S1
     
    In TNA at $46.80

  65. EricL

    nicha,
     
    I do too; I buy verticals on both, and also have a ‘core’ position of leaps. I was not well positioned for today’s move though since I had only my leaps on. I’m going to watch and see how it acts at 1250. If it breaks over, I’ll wait for it to come back and touch that level and go long. Otherwise, I’m going to hope it pulls back again so I can add more.
     
    I still think it will pull back.

  66. David Ristau

    Hey all,

    My new Midterm Position story is finished in Jabil Circuits Inc. (JBL). I like this company as a hold for the next 3-4 days moving into the company’s earnings report on Wednesday morning. 

    We are looking to gain 4-6% on an entry of 13.50 – 13.60. Check it out now!

    Good Investing!

  67. robo74

    Pharm,
    Great call on XHB yesterday! Looks like it still has room to go on the downside.
    Robo

  68. jdub929

     Hi Phil,
     
    I don’t know if you follow Doug Kass.  But I just a tweet and he’s shorting the $IWM above $67.  Are you in the camp that small caps will underperform vs mid caps and blue chips in the next 6-18months? Is this your logic for the TZA hedge vs. maybe other inverse leveraged etfs that "accurately" try to track the market (SDS, QID, DXD)?
    Thanks!

  69. pstas

    FTR- anybody follow this co? The current S&P report says they " are planning on reducing the dividend". I cannot find any specifics on this.

  70. Pharmboy

    Robo – RTH is another that I have shorted based upon Opt ANF plays and BBY miss.  I think this is gonna get real ugly after the triple witch…….

  71. Pharmboy

    People must be buying lots of jelly and basic foods, cause the SMJ is up 6% and grocers are also up….

  72. japarikh

    Phil,
      Need help adjusting my TBT positions. Here is what I have:
    5 (long) Jan 42 calls for $7.95 (now $2.69)
    5 (long) Sept 44 calls for $5.64 (now $0.70)
    -5 (short) Sept 46 puts for $2.46 (now $7.85)
    Thanks.

  73. nicha

    EricL- let meknow when you get back in, please. Thank you

  74. amatta

     Phil I placed the AAPL call shorts after your email. Sold at 2.55 stop 20% exit profit 30%… is this how you play it?
    Thanks

  75. Phil

    Double dip/Tusca – I never thought we were coming out of the recession at all.  This (S&P 1,100 +/- 10%) is what the market is worth in a prolonged US/Global recession so there’s nothing for me to rethink but feel free to panic out of stuff as I am looking to finish up my top 20 buy list…  8-)

    Tomorrow is your day Matt – No data expected and we’ll have the world markets to ourselves after 11:30 – lots of time for shenanigans!

    UNG/Gold – Just one of life’s little mysteries, I guess.  Inventory data wasn’t bad.  Wasn’t good, but not bad.  They can hold $5 but I’m more worried (actually anticipating as we have USO puts) about oil holding up because they are also hitting rollover day on Tuesday so tomorrow or Monday should be a nice sell-off as there are still 115K contracts open for July delivery and they need to get rid of over 80,000 of them in the next 3 sessions.

    Damn, AAPL stopped me out at $2.45, still, not bad for a quickie!

    FSLR/Yodi – That is one crazy mofo stock!

    Mattress/Red – Because I thought the market was going lower.  Now it went lower so I want to sell again (1/2 cover with July $103 puts).  Sometimes, it’s nice to pick up a few dimes on a momentum trade..

    Staws/Kinki – No camels backs are broken yet.  This is a two hump market and we just dipped between them.  We expected a 1% pullback to the 5% line after a 6% run – perfedctly normal.  The reasons don’t matter that much in this case

    Now I like TNA $47 calls at $1.20, stop if RUT fails 660.

  76. robo74

    Pharm/Phil,
    Looking at homebuilders, a couple months ago I was shown some numbers by a fellow investor regarding P/E and future earnings for a number of individual companies (DHI, HOV, TOL, KBH, LEN. . . ).  Making a few assumptions based on recent earnings and sales, in order for these companies to achieve a P/E of 10 and a net profit margin of 4%, there would have to price or volume increases of above 200% in all case and as high as 600% in the case of TOL. Obviously we have seen a slide in all of these stocks since March, but there still seems to be a lot of optimism about how they will perform in the future. What am I missing and why would I not want to short these with a longer term horizon?
     
    Thx, Robo

  77. matt1966

    Hey Pharm,  just been busy with work.  It was easier when I was just managing my own time.  Now I’m managing others, too.  I’ve got plenty of headaches without involving the market.  That being said, I still jump in every now and then-
     
    More good news:
    The Gulf oil spill hasn’t even begun to be priced into this market-
    Neither has the UK banker bonus tax.

  78. japarikh

    Phil,
      I have the 2012 EDZ 50/75 bull call spread, selling 2012 EDZ 35 put as a disaster hedge. With this recent run up, I was thinking of rolling down the 50 call to the 40 call for $2. That’s $10 in position for $2. What do you think?

  79. salvum1

     PHIL/FAZ
    SO i bought back my short puts yesterday for 40% of what i sold them for.  Now I have a Oct 9 long call and Oct 11 short call spread.  Any adjustments since I took of those short puts?  If not, I am going to let er ride.  thx

  80. judahbenhur

    EricL, Looks like there may be another chance to defend 1100, though maybe this is the defense at 1102-1103.

  81. amatta

    The GLL Jan play, is that a typo? 37 puts are 4.2…

  82. humvee4me

    Yeah amatta, he corrected himself to the July

  83. dezev

    HI Phil,
    No response necessary.  My optimism abounds and see all future indices basing for last 40 minutes.  Bad news digested or so I think.  Can now work higher or so I think.  Will now pull for your Copper!

  84. chakra108

    Test

  85. Phil

    Yen/Humvee – Other than going long at 3am (betting USD/JPY to fall) and taking the quick money.  I would not touch that trade.  90 is a very defended floor on the Yen as Japanese exporters freak out if they can’t get 270,000 Yen back for a $30,000 Toyota. 

    Mattress/Yodi – Man, you are getting good at this! 

    Kass/Jdub – good call by him today but I don’t agree with him long-term.  There is a major stimulus coming that will be aimed at small business so I wouldn’t bet against the RUT for more than a quick trade.   If there is not stimulus, then I do think the RUT will collapse and that’s why I do like the disaster hedges, in case the administration gives up on Keynes and let’s us find a real level. 

    TBT/Japar -  I would buy back the Sept $44s and that leaves you in the Jan $42s at net $3ish.  The Sept puts can be rolled to 2x the Jan $39 puts ($4.20) or 1x if you are nervous as you collected $2.46 so if 1x expires worthless you are only out $1.60 on that leg.  I would certainly invest $1.10 to roll down to the Sept $39 calls and then wait for a nice move up to sell another cover. 

  86. gel1

    Phil/TBT
    Nice play on the July 38 puts. I sold them for $ !.08… That is free money down the road.  Question….. Do you have a correlation model between TBT and Euro weakness? Thanks!

  87. exec

    JRW,
     
    You looking for a bounce down from the .36 level?

  88. pahurik

    TBT jan12  40 puts possible sell 8.05

  89. kinkistyle

    Stimulus/Phil:  I’ve been thinking that, according to the Shock Doctrine playbook, it would take a big dip in the market in order to get a 2nd stimulus through Congress.  Republicans and Tea Partiers have been trying to tie stimulus with "bailouts" and Americans in general might be becoming more jaded with fiscal policy.  Something like another revisit south of 1000 on S&P might rouse some panic in order to push through more stimulus and QE. 

  90. JRW III

    exec
    Yes, 66.21 should now be the floor. In TNA average $46.66

  91. jdub929

     Thanks Phil!  Kass did just tweet that he covered his short.  So I guess it was a day trade.  As for Keynesian economics, no way Obama and big Dem majority led Congress(for now) give that up.  I like the idea of a major stimulus for small business although timing is totally off!!  This is where that original stimulus should have been initially directed to and not bailing out states and fill their budget gaps and stupid pet projects.

  92. kinkistyle

    I meant to say south of 1050

  93. japarikh

    Phil,
      I’m long the Sept 44s so I’m down $5. I’m also long the Jan 42 call on which I’m down ~$5. Finally, I’m short the Sept 46 put on which I’m down ~$5. I can roll the Sept 44 call down to the the Sept 39s for $1.5.

  94. deankara1

    Phil, after studying your main strategy – selling calls and puts and companies that will the test of time. (next 5-10 years) I have come to conclusion that the best time to enter these trades is when the VIX is over 30-35.  While the VIX has more room to rise , we can scale into positions and exploit the excessive premium.  Eventually , the market will become oversold and the VIX will fall.  At that point, we lock in (short term profits) once the VIX falls.  Bottom line it is a better entry point. 

  95. Phil

    AAPL/Amatta – Yes, see strategy section – any time you make 20% in a day or less you should be thrilled to take it off the table.  Try doing the math on making 20% on $1,000 on 200 trading days during the year.  Even if you just kept taking the $200 and banking it without compounding you’d have a $40,000 ROI!  Since that is WAY better than we are likely to over the long haul – doesn’t it make sense to be very protective of those quick gains because they can only bring up our overall average…

    Builders/Bob – You are missing a ton of things like cash flow and assets that need to be marked down and outstanding loan balance and price competition in an industry where there used to be 3M homes built and sold a year and now they will be lucky if it’s 600,000.  Then you have tight credit conditions and the possibility of FRE and FNM (who make 80% of all home loans) shutting down and it’s not a sector you want to go long on, that’s for sure!  They are hard to short though because housing stimulus is another likely tactic for the government to take so you can get very badly burned by the short too.  Other than accumulating HOV as a buy, we have pretty much lost interest in that sector. 

    EDZ/Japar – We were done with that weeks ago you know…  I agree with the roll if you intend to stay with it but make sure you get a nice pay-off somewhere if emerging markets do take off. 

    FAZ/Salvum – That’s another one we gave up on as XLF is very firm around $14.50.  Since you don’t have the downside risk of the putter and you are well in the money, I wouldn’t worry too much.  It’s not like we think the banks are going to fly up but they only have to move 10% to put you in trouble.  It looks like your spread is now $1.30 out of $2, just make sure you set a .20 trailing stop so you don’t get burned. 

    Copper/Dez – Good point, took a nice bounce off $2.90 and makes a tempting long here!  

    Actually, that’s a good idea.  Copper futures (/HG) at $2.9085 with a stop at 2.8890 – keep in mind copper is $12.50 per .0005!

  96. jdub929

     Speaking of shenanigans, I sold 6 FSLR Jun 130 calls at the open for .68.  Covered 1/2 right now for .31.  Stops set for remaining 3 contracts for .50.  Theta working in my favor.  Hoping for IV to cooperate until at least before the final 30 mins.  If I get stopped out, will look to put these on again if it approaches its 200 SMA.  Risky and eats up a lot of margin but I’m watching it like a hawk.

  97. Phil

    TBT/Gel – Sure, Euro or Yen weakness chases money into dollars which lowers the rate that has to be offered on current 20-year notes which raises the basket value of old 20-year notes that TBT tracks.  TBT is about protecting the cash we have in our portfolio from rising rates (lowers the relative value of old fixed-rate notes) or inflation (lowers the forward cash value of old notes). 

    BP survived the first half of the hearing – possible rally fuel but I wish we didn’t as we’re likely to set a technical double top if we test it again.

    Stimulus/Kink – Don’t forget it’s an election year and it’s tough to run for re-election with a bunch of no votes on jobs bills and small business loans, especially when Reps will have yes votes on big business bailouts and no votes on finance reform.  The Dems will be excecising their control to float a lot of bills that will paint Reps into a voting corner if they can.

    Mystery stock/Japar – I’m going to guess TBT and say roll down the longs and wait for a bounce to sell the puts and the Sept $46 puts you can roll to 2x Jan $39 puts even or see my above comments to… oh wait, that was you too!

    VIX/Dean – You are totally right, which is why I pound the table on those stocks when the market is in panic mode.  The trick is you don’t want to wait too long for that because, despite recent evidence to the contrary, VIX over 30 is a rare thing.  Which is why we take advantage of it with long-term sales.  When the VIX is below 15, I’m more inclined to just buy cheap leaps and make a little selling front-month calls. 

    And now it’s an upside wheee – what a ride!

  98. samz3700

    JRW -
    I had support at 66.25 and 66.50 – I think from yesterday – seemed to have pauses around there

  99. robo74

    Phil,
    Thanks, I think we are saying the same thing. Seems there is no good way to short the homebuilders given the possibility of gov’t housing stimulus, is that correct? What about a LEAP ratio directional straddle or a put spread?

  100. lflantheman

    In DIA  July 105 calls.

  101. JRW III

    samz
    My morning post is for major S/R’s; I’ve got WAY more than that going on on my charts !! (66.21 and 66.51)

  102. Phil

    Done with TNA at $1.60 – just scalping dimes today.

  103. goldman

    JRW - When you get a chance to reply - I bailed (got flushed) after doubling down to 46.64 ( -$0.08…yeah, missed $1.20!)…what gave you so much confidence  to hold?  How did you obtain 65.88 (my line was 66.07 which is why I sold…) 

  104. willsons

    Phil   Thanks for the TNA play.  That was fun:)

  105. Pharmboy

    Rob/Phil – My reasoning for shorting homebuilders is due to lumber prices, which continue to fall like a rock, telling me that they are not building, and thus they will not make their numbers after this Q.  Land in CA is still high (falling buy high), but no one can afford the houses (still)….nothing has changed in my view.  San Diego is unique beast due to its breadth of jobs, but I still do not see the recovery in the sector. 

  106. JRW III

    Out of TNA at $47.91 for $1.25 or 3%

  107. JRW III

    exec
    Because "they" are NOT going to give up the 200 day now !!

  108. Phil

    Oh, copper stopped out of course, bounced back off $2.92! – Another reason to stop being long again.  

    Builders/Robo – Yes, tempting but too dangerous to short.  Same goes for the crazy REITs (many SRS-aholics on this site).  I just don’t like playing them at all.  If they have a huge run, then yes, I’d want to short but this is just the low end of their range so what’s the point?

    Builders/Pharm – TOL just gave poor guidance this morning and it only hit them to the 5% rule (now bouncing).  To me, that’s not a very shortable group. 

  109. gel1

    jdub/stimulus
    With Congress embarrased by the total failure of the last stinulus version, I doubt they will have success trying to pass another, unless it is comprised of tax cuts for small business. Two thirds of the small businesses are pass through sub chapter entities that are impacted by a rise in the marginal rate increases as projected.  Small business owners are fearful of the tax increases that are coming, and the last thing they want is more burden hiring additional liability in an economy that has been weakened. The current administration is ignorant of the dynamics that incentivizes growth in small business, because NONE of them have ever been in business. They are all "theorists" having read books, but void of experience.

  110. flipspiceland

    TBT/38 short put.
    Thanks Phil, just paid for my 3 month ‘prescription’ for the members service, in one and half hours.  

  111. flipspiceland

    TBT/38 short put.
    Thanks Phil, just paid for my 3 month ‘prescription’ for the members service, in one and half hours.  

  112. kustomz

    Xie said the government may cap electricity supplies in some areas, and that any subsidies provided to energy-intensive industries must end immediately. The Chinese government has set an ambitious goal of reducing China’s energy intensity-a measure of the energy consumption vis a vis GDP-by 20 per cent between 2005 and 2010. Energy intensity has fallen since 2005, but a Western diplomat said that it looks like China is unlikely to meet its goal by year-end.
    http://blogs.ft.com/beyond-brics/2010/06/17/chinese-government-to-further-curb-energy-consumption/

  113. judahbenhur

    For a Dow 200 point day today, we’ll need 10,520 or 10,240.  Hmmm…which way to play.

  114. Pharmboy

    Juda – how about 10400 to 10300 and back to 10400……that’s 200!

  115. diamond

    Info: ERY; DRV; TZA & TYP 1-for-5 reverse split on Wednesday, July 7, 2010.

  116. JRW III

    judah,
    Rejoice, it has already been proclaimed; "There is only one True Direction" !!

  117. goldman

    JRW – I’m glad to see you sell at 47.91…NICE 3%!!!  I had a triple line at 66.67 from Wed Fib 38.2%, and two pivot lines…where I "would have" sold also…grrr 

  118. kustomz

    VIX pretty lame but gold speaking the truth today…hallelujah

  119. Phil

    Whee, there goes oil! 

    OIH $104.10 puts at $2.02 are a fun way to play oil heading south and possibly nasty noise out of congress.  Stop at OIH $102.50 (now $102.44).  Remember – we just want a couple of dimes!

  120. jdub929

    If Copper futures cost per tick scare people, you can try the mini copper futures.  Tracks Copper futures but tick sizes are wider.  

  121. judahbenhur

    Pharm, JRW,  Okay, then. One more little dip then and up up up for the day.  In Lloyd We Trust.

  122. gel1

    Phil/TBT
    I agree with your thesis regarding the effect of a weakening Euro and TBT strength. I am planning to bail on all of my long TBT positions prior to the late summer anticipated weakness in the Euro. Bank of America analysts are saying the next major "problem" country to be engulfed in debt problems is Italy, with its debt at 115% of GDP. Bloomberg predicts Italy being the first to exit the Euro. Greece is still far from being out of the woods – The IMF and EU loaned Greece $144 Bil, which puts them $211 Bil under water. There is NO WAY they will ever be able to pay this debt, and default is inevitable. This will tank the Euro.
    With regard to Euro weakness going forward, the "BIG KAHUNA" of debt that is out of control, and is facing imminent default is none other than France,  one of the strongest members of the Eurozone. France holds $1 Tril of PIIGS debt, and default by any one of them could trigger a sharp decline in the Euro, or even its demise.
    France is ridden with massive debt – 248% of GDP, and by the end of the year it will represent the highest level in 50 years. With a weakening economy, the default of France would be the end of the Euro. Germany has indicated they are not interested in helping any more countries. France will be announcing their 2nd quarter GDP results in mid August, and no doubt they will be disappointing, and this could be catastrophic for the Euro – therefore we may very well see a precipitous drop in this cerrency soon, and the rush of money into US treasuries could be dramatic for TBT.

  123. lflantheman

    Phil….Technique I use to increase profits on covers during the final 2 or 3 days before options expiration.  "Rolling toward the higest  time value"   Some members might be interested.  I hold GOOG anchors Sept 500.  Had covers 510 calls, sold at 1.75, now .60.  I see GOOG headed down and probably not coming back to 500 tomorrow, so bought back 510s  for .60 and sold 500s for  2.40.  Catch a lot more premium that way.  If for some reason it spikes tomorrow I’ll just roll it up or up and out again.  I’m sure most know this, perhaps some don’t.  For this particular trade I’ll increase my profits by a factor of 4X, most likely. 

  124. pahurik

    jeah right GEL1, US and States debt is all ok. All people speak European debt, not US. If euro weakenes, its good for export and not good for China and US.  Euro was 0,86 dollars and we have a long way to this levels.

  125. fortep

     Phil—new body here. TBT a popular item today so I’ll throw my approach in. Am now wanting to scale in for the long term. Planning on a buy/write with the Jan 11 45 call and selling the Jan 12 35 put for net 31.08. Not wanting to cap the upside for next year when TBT could well take off. Does it fly?

  126. Phil

    Discount/Flips – Nice! 

    China/Kustomz – Good catch, that explains the dip in oil.

    I like Pharms zig-zag plan – perfect for expiration week.

    Wow, BP questions turning ugly…

    Mini-Copper/Jdub – Good suggestion!

    248%/Gel – That seems high to me, I was under the impression it was no more than 100%.  Do you have a link to that?

    Rolling/Iflan – Good tip!

    It is starting to look like this is our flatline into expirations:  Dow 10,350, S&P 1,108, Nas 2,300, NYSE 6,950 and RUT 660.  I’d prefer if we got back to 10,250 ish (1% down) and held that but "THEY" seem scared to test any lower

  127. Cap

    IWM … I see 65.83 as a distinct possibility sometime today if the lows of today break …
     
    JRW … favor to ask … I use SSPRO also; could you send me a chart template or 2 for the IWM via email .?
    .. would like to see what you look at & maybe use it.
    thx
     
    capcube @ gmail

  128. lapper

    Of course US debt does not matter!  Look at the charts.  Market recovered around 40% of the fall, TLT-TBT did not even bounce.  Today for a relatively small pullback in equities TBT is down whopping 70 cents.  MSM keeps drilling into everybody’s heads the safety of US treasuries.  Apparently there is huge amount of (insert a word) that buy into this BS and they buy paper that is GUARANTEED to lose purchasing power if held to maturity.  Long bond will lose huge amounts.  But for now it’s a nice game of musical chairs.  Sooner or later ‘they’ will pull the trigger.  It has been done in every country before.  Russian president assured everybody that there will be no default hours before they defaulted.  People in the know made billions, everybody else got fleeced hard.  Here too, once everybody is in, bonds will collapse.  This is 100%++ trade in days for them.  And this is not a stock with only so much float, liquidity is huge.  The only question is when, not if.

  129. Cap

    JRW … IWM … my daily chart shows 200 day EMA at 63.59 ….

  130. lapper

    CAP, He is talking S&P which is today’s lows roughly.

  131. matt1966

    Maybe enough folks jumped on the ’1040 Is The Bottom’ bandwagon.. snapping up calls left and right to  move the point of max pain lower this month?  Not lower then 1040 but lower then here?  It’s quite possible that come Monday we’ll continue the correction after this bounce induced rally only to use earnings in July as an excuse to drive the market back up.  But rest assured, after Q2 earnings are behind us.. loogout below.  Phil, with all due respect, I think the multiple you’re using to establish your range is too high.. imho.

  132. Cap

    i see… thx lapper

  133. JRW III

    Cap
    lapper is right; I sent you an e-mail.

  134. knuklhead

    Just wanted to say hello to all – joined PSW last week.  Like drinking from a firehose!
    Phil – any thoughts on DSX?  I’ve made some $ on them in the past.  They’re one of the strongest dry bulk shippers.

  135. pahurik

    France is ridden with massive debt – 248% of GDP, Gel its abs. BS

  136. JRW III

    BTW, in TNA at $47.34

  137. goldman

    JRW – If possible, can you send the chart to thegoldmanrule@gmail.com 

  138. dflam

    gel 1 : yesterday u said you liked XOM. What’s your 12 mo target price? What about CVX w/their 3.8 % dividend as a bonus to selling Jan. $75 puts & calls ? thanks

  139. shadowfax

    A TBT question, I have a spread 35/41 and 34putters, if I were to increase should I expand these Jan11 or start something completely different?

  140. flipspiceland

    Pharmboy/Phil
    Just exercised my $23.00 calls on BMY, 3,000 shares.   I’ve made decent returns for two years selling covered and uncovered calls, puts, from 17.00 up to 27.00. Have had up to 5,000 shares.
    Any ideas for juicing my yield going forward would be appreciated.

  141. jdub929

     Flatline into expirations.  Interesting thought given how CNBC has promoted triple witching. Maybe we just whip +/- 3 pts on the SPX from now until 4PM tomorrow.

  142. lionel

    Gel/ Extrenal debt
    Gel, you are using external debt to GDP ratio. Public debt of France is 77.6% of GDP in 2009.
    As for many Euro countries, their external debs are quite high because of intra-eurozone borrowing by banks and public bodies (if you remember Phil s chart about Euro cross lending by countries). I wouldn’t consider it as a weakness but more as a result of financial integration of the Eurozone.

  143. bobhu

    Phil,
     
    I sold BIDU Jun 73 Call(Thanks to you), should I cover(now 0.75/0.90)?  I don’t think so(I think it’s going down), do you?
     
    Thanks.

  144. pahurik

    Debt external http://www.indexmundi.com/g/r.aspx?c=fr&v=94

  145. Phil

    "Governments have become like a cancer," Marc Faber says, intervening so much in markets since the crisis started that they are affecting the health of the world economy. Government stimulus packages create volatility in stock markets because they distort economic indicators, Faber says, predicting that the U.S. will implement another stimulus.

    The Treasury will sell $108B in notes next week – $40B in 2-year notes Tuesday, $38B in 5-year notes Wednesday, $30B in 7-year notes Thursday – down from an April peak of $118B for similar auctions.

    So far in the financial-reform conference negotiations, the battles have been along party lines, but that could shift today to a turf war between the Fed and the CFTC on oversight of clearinghouses and systemically important exchanges.

    The EU will publish its "stress tests" on Europe’s banks in the second half of July, says EC President Herman Van Rompuy. The ECB’s Axel Weber says future tests would be more extensive and might include bond markets.

    The mayor of Milan, Italy, says the city is likely to approve artist Maurizio Cattelan’s controversial sculpture of a "crippled hand," missing all fingers except the upraised middle one. Cattelan insisted the sculpture be placed in front of the Italian Stock Exchange.

    Spain raised nearly €3.5B in a sale of hard-to-peddle 10-year and 31-year bonds, although the average interest rates on the bonds were far higher than in recent offerings. Still, the healthy demand should quiet down some of the fears of a financial crisis in Spain. Euro +0.7% vs. dollar at $1.2379.

    With the U.K.’s announcement that it will abolish the FSA and turf new powers over to the Bank of England to prevent the build-up of financial system risk, BoE’s Mervyn King says his job is now to "turn down the music when the dancing gets a little too wild."

    UBS (UBS) and Credit Suisse (CS) are facing substantial credit and market risks, says the Swiss National Bank in its annual Financial Stability Report, and the profit outlook for the broader Swiss banking sector is looking subdued.

    Bank of America (BAC +1.1%) and other banks prepare to impose new fees on basic services and eliminate free checking to replace revenue lost to new regulations. To avoid fees, customers would need to maintain certain account balances or frequently use other banking services, such as credit and debit cards, ATMs and online accounts.

    The SEC offers new proposals that would require target-date funds to put allocation taglines by the fund’s name stating the proportion of cash, bonds and stock, among other new disclosures.

    Another reason for tanking housing sales: Buyers know they hold all the cards, and more last-minute demands for concessions are leading to collapsed deals. Buyers who "learned their moves from the World Wrestling Federation… think the final smackdown occurs at the inspection, where the seller will be reluctant to refuse any demand because the alternative is putting the house back on the market as damaged goods.”

    General Motors says nine of its 11 U.S. assembly plants will forgo traditional summer shutdowns to help meet buyer demand for popular models. The decision is expected to generate up to 56,000 additional vehicles.

    Ford (F) is "really well-positioned to make even more money," says executive chairman Bill Ford Jr. He says that he’s still backing a gas tax, that it was important the automaker kept its wholly owned credit business, and that the company sees better opportunity in China than India.

    AT&T (T) is close to getting regulatory approval for its planned $2.35B purchase of Verizon’s (VZ) rural U.S. wireless licenses. A favorable vote could come within weeks, but the process has been a lengthy one, and the FCC’s relationship with major telecoms has deteriorated.

    Forget the $20B escrow account. BP’s (BP) costs could climb much higher than that if the Justice Department chooses to file criminal charges against the company.

    Jim Chanos is short big oil (especially companies that are bleeding cash and "in effect liquidating"), but not BP (BP -0.9%).

    Three lunchtime reads:
    1) Girding for an antsy stock market
    2) BP Will Be OK
    3) Forbes: Stop mark-to-market horror before it starts again

  146. gel1

    Phil/Debt
    I checked my figures, and the current debt as reported by offical French statistics is at 80%, however most economists in the know have stated it is more like 100%. My figure is their current debt load plus the cost of servicing the debt of those nations that will surely default on their obligations. The other problem that is simmering , is the fear and expectation of the rating agencies dropping their AAA rating on the debt. IMO, this is inevitable as the economy in France is unable to sustain enough strength in order to service this amount of debt. They are unable to follow what we are doing here in the US, by having the Fed buy the Treasury debt.
    Following lappers comments, I believe the US is also weak, but we are able to buy the time necessary to get everyone into the treasuries and then pull the plug. I am liquidating my TBT positions on the next jump up to 40, and then will get back in after the Euro takes its big nosedive and wait for the US bonds to die.

  147. diamond

    The mayor of Milan, Italy, says the city is likely to approve artist Maurizio Cattelan’s controversial sculpture of a "crippled hand," missing all fingers except the upraised middle one. Cattelan insisted the sculpture be placed in front of the Italian Stock Exchange.

  148. yodi

    JRW
    You are popular please if you do not mind send a copy of this chart as well to my email yodiet@live.com thank you
    goldman
    June 17th, 2010 at 1:20 pm | Permalink  
    JRW – If possible, can you send the chart to thegoldmanrule@gmail.com 

  149. gucci

    Hi Phil — to add some comment from Iflan — instead of anchor sept 500 call and sell front month call and roll raw hide if need to to collect premium.  I have a position in sept GOOG 510 short put — could I do the same in the front month as Iflan describe sell the call and buy back like he was doing or I have to closed the position and buy sept 500 call and then sell front month call to collect premium.  Thx I flan and Phil

  150. jdub929

    Hi Phil,
     
    Do you (or have you) trade the SPX cash index?  I’m looking at June way out of the money puts 2.7%+ from where we are can be sold for a decent premium. Just a day trade since today is expirations.  Judging from the way things are trading today, I think 1110 is where they want to park it today.  And if things get ugly, I doubt they allow this to fall below the 200SMA.  So for those who can take on risk, selling the 1105 for 2.45 aint bad.  Uses up a lot of margin but an 1105/1110 P credit spread for a 1.00 might be a good idea.  Uses up $400 in margin accdg to TOS.

  151. gel1

    diamond/hand…. now that is a good laugh!

  152. lapper

    gel1, if you count like that, then US is what 40-50 trillion, including medicare, pensions, etc.  There is zero way out of this.  Somebody, most likely all, will get screwed.  The tape says you might be making the right decision.  The problem is when they pull the rug, it will be very fast.  TBT will jump $7-12 fast, chasing would seem crazy, most will sell at least part.  Then you will see price of bread quadruple in next 3-4 days with all the consequences.  When people say that gold will trade at $5000, they don’t mean that it will go there with everything else staying the same.  But if bread is $20 loaf, where would the gold be?  TBT?  Funny part that people long GLD might wake up to Brits confiscating the vaults in ‘National interest’ or something like that.  I realize it’s extreme scenarios, but it has happened before, it most likely will happen again.

  153. Pharmboy

    Speaking of zigging and zagging.  How about up today and/or tomorrow, and then make a killing on the shorts for the quarterlys!  That’s a plan.

  154. Pharmboy

    I am going to buy a 101 JunQ P and sell a 104 Jun P for even.  The 104 Jun can be rolled down to the July 96s as part of the cover for the DIA mattress JIC.  I think the ‘day" Matt refers to is next Monday or Tuesday.  They need to squeeze the shorts out and the VIX is moving down.  Any better ideas Phil?

  155. gel1

    lionel/debt
    Yes, you are right, however the problem in France is they hold debt that is unlikely to ever be paid. As the efforts of austerity take hold, the economies weaken further. The default then becomes a domino effect, and I fear for France as they hold so much of this toxic debt. They are not in a position to swallow the losses.

  156. kustomz

    Its obvious too few have control of this market and relying solely on EUR/JPY for market direction doesn’t sit well with me

  157. judahbenhur

    JRW, Can SS and I get whatever template you are sending out?  I’m at knowanother@gmail.com and ss is at dowupdown@gmail.com.  Thank you, and thank Lloyd for me next time you talk to him.  Riding DDM today.

  158. robo74

    JRW,
    If it is not too much to ask, I would also be very interested to see your chart. My email is info@robnadeau.com
    Many thanks!!
    Robo

  159. JRW III

    Out of TNA at $48.51.5

  160. humvee4me

    JRW:  well i’d love to have it too:   humvee4me@yahoo.com
    thanks

  161. gel1

    lapper – Gold will jump precipitously as soon as the first default in Europe becomes reality, as the dominos will continue to fall. This contageon could kill the Euro, as the countries will exit the Euro in favor of printing their own currencies in order to pay the debt on their books. $5,000 gold is realistic, should this scenario play out.

  162. matt1966

    Cramer is right.  This market is an utter joke.  Nice to hear him say it.  The only difference is a month from now, when his trade is working out again, he’ll say that the market it right.  I won’t.

  163. JRW III

    All,
     
    Cap has yet to tell me how to do that with SSPro; and that is only my conformation chart. I have posted my settings for all charts in the past, but I can redo after hours.

  164. Cap

    Warning … 4-10 point squeeze predicted by one of my algo buddies …. to upside

  165. lflantheman

    JRW…forget the charts.  I’ll just send my people out to integrate your computer with mine.  I’ll go golfing while you do the trades.  :)  

  166. Cap

    JRW … haven’t had a chance to check my email yet …. I will look and respond as soon as I can … thanks … still adding to my SSPro knowledge base as well. 

  167. David Ristau

    The Daily Discourse – Sports and the Amazing Increases in Money and Investments

     

    In the past twenty years, the average household income has increased just under 80% from just under $29,000 in 1989 to $52,000 in 2009. The large increases in income has come from an amazing run for and American economy that has strengthened from globalization, the invention of the internet, and the modernization of industry and our economy. At the same time, one industry has had one of the most amazing runs of all: the sports world.

    Marked by its physical prowess, large contracts, glamor, fame, the sports industry has become one of the most profitable industries in the American economy. In the past twenty years, the average salary of an MLB player has increased 650%, while an NFL player’s salary has increased 500% – a significant increase over the average salary of an American. The average salary of an MLB player in 2009 is $3.25 million while an NFL player is $1.8 million. Top top salaries in the MLB topped $35 million for a single year. 

    The stories of the sports world is one full of success and competition, but in reality, the sports world is the top dog for investing. The Houston Texans of the NFL, for example, were bought in 1999 for $700 million. The team, today, is now worth nearly $1.5 billion. The company makes revenues over $250 million a year. In ten years, the investment for Robert McNair has turned 100%. The Tampa Bay Devil Rays were bought in 2005 for $200 million by Stuart Sternberg. The baseball team at the end of the 2009 season was worth $315 million. In four years, the team has returned 60% for Sternberg. Even the NBA has had tremendous results, as well. One of the newer teams is the Toronto Raptors were bought in 1998 for $125 million, and they were worth $386 million at the end of 2009 – an increase of 200% (all numbers from Forbes).

    Obviously the average investor cannot get involved in this high capital, high return industry that requires millions to finance, but sports money is amazing. It extends to every single sport, as well. Soccer has seen amazing results overseas. The NHL has become less of the gritty sport all about play to a money making giant. Golf payments have become outstanding. 

    The success of all these sports is something we all watch at with gawking eyes. The salaries are ridiculous at times itappears, but these players are paid because of human demand. That demand is something that has waned some in the latest economic crisis but will soon return. In 2009, the MLB saw its attendance decline 6% from 2008. The MLB sees 2010 declining around 2% from 2009. Even with this decline, it is slowing, and 2011 should see increases. 

    So, we can’t buy teams, and sports teams are privately owned. Is there any way we can make $34 million contract…unfortunately no. Unless you can command a 100 mph fastball against 250 pound swatting experts on a consistent basis. I don’t think any of us can. Therefore, we have to stick to investments. The sports market is making great strides, and it is growing at alarming rates. Therefore, we have to think outside of the box to take advantage of its success.

    One company that is seeing its value growing with the NFL and MLB and its success is Under Armour (UA). Since its IPO in 2005, the stock has grown from $25 to $37, a nice increase of 50%…a pretty similar return to Sternberg’s Tampa Bay Devil Rays investment. Then there are companies like Electronic Arts (ERTS) and Take Two Interactive (TTWO) that has been able to make the sports world come alive in our own homes, so we actually can live like Alex Rodriguez or Jerry Jones … if it is just for a few hours. ERTS in the past five years has not been a great investment after it lost 2/3 of its value during the recession and failed talks to buy out TTWO. Yet, it has increased some 1600% in the past twenty years. TTWO has increased 100% since its inception in 1997. 

    The final comment is a question. Do you think we overpay players? They wouldn’t be paid without demand. Is it all just business? Does high pay negatively impact the games?

    Let me know what you think.

     

    Good Investing,

    David Ristau

  168. humvee4me

    Gel:  with such a doomsday scenario you must be loading up on EUO; I think your scenario is very possible, but hopefully won’t come to pass.

  169. gel1

    In a "sideways market" that we seem to have today… here is a nice dividend play. The fund strategy is to profit from covered call writing.  It pays 13.26% – Nicholas Applegate International Strategy (NAI)

  170. lapper

    Another thingt, now that Freddie and Fannie are delisted, would people keep buying their bonds without a second thought?

  171. Cap

    JRW … check your email.

  172. gel1

    humvee…. Yes, I have re-entered EUO  today with a spread – Nov 20/30 call spread, and sold Nov 26 puts. – Phil probably has one he would prefer.

  173. Pharmboy

    Nice cup w/ handle in the DIA 5 min dailys.

  174. Phil

    Welcome Fortep!  I wouldn’t be greedy with TBT because rates have been stubbornly low.  If you buy it here for $38.41 and sell the 2012 $35 puts and calls for $15, you are in for net $23.41/29.21 so a 20% discount from here is your worst case and you get called away with a 50% gain.  Why take a risk when you have that option.  A riskier way to play TBT is to sell the same 2012 $35 puts for $5.50 and take 2x the Jan $34/40 bull call spread at $3.10 so you are in the $6 spread for net .35 each with $11.30 of upside (on 2x) at $40 and your only risk is owning TBT at net $35.70 in 2012 (and, of course, it can be rolled).  This play carries about $1,700 in ordinary margin requirement to make $1,130 in 7 months (66%) and a crazy upside potential of 1,615% on the .70 per set cash you lay out.

    When/Lapper – I agree.  At some point someone will point out the Emperor has no clothes. 

    Multiple/Matt – I’ll be happy to adjust if earnings prove me wrong but I’m not seeing it.

    BRK.B up at $78.68, going very well!

    Welcome Knuklhead! (good name)  I’m not too in love with the shippers right now but DSX is a nice one with lots more cash than most.  I don’t see any growth though so you are at the mercy of the BDI, which has been dropping like a rock and you should let that guide your entry – probably they will hold 2,500.  Maybe around $10 for the stock they get more interesting.

    TBT/Shadow – Only add money that buys you more time or gives you lower strikes.  Think of it like investing in home improvements – some things are worth spending money on and some are not.  If you want to increase, I’d go with the short 2012 $35 puts and see how that goes.  If TBT takes off, it’s a free $5.50 and if TBT goes lower, then you have a good chance to improve your calls cheaply. 

    BMY/Flip – If you don’t mind owning another round at net $21.25, why not sell the Jan $22.50 puts for $1.25 and sell the $25 calls for $2.20.  That drops you net another $1.10 so your net assignment plus what you have should be right about $22 for $6K and, worst upside case, you keep the 3,000 x $3.45 ($10,350) plus you get paid another $25 if called away ($75K) which is not a bad ROI for a 7-month hold….

    BIDU/Bob – That’s a tough one as they are right on the line.   Just stay realistic about a stop, maybe $1.20 to make sure you don’t blow gains if we have a stick rally this afternoon. 

    Volume is very light with just 80M shares on the Dow at 2pm so VERY stickable but I would have to short into a stick save at this point as we shouldn’t be going up other than some desperate window dressing that can be quickly unwound.  I’m, surprised oil is selling off harder – that would have given us a nice dip.  30 mins left to NYMEX trading and we’re at $76.95.

    LOL Gel – So your "facts" are based on defaults that haven’t happened?  Forgive me if I don’t bet the farm following your investmet premise…  There’s only a very small window of time where the US can look any better than Europe and all these bets you are looking at are relative ones.  Just like when LEH and BSC collapsed, many smart people had many great reasons why this bank or that bank would be fine and would even benefit from the destruction of the weak – what actually happened?   This is one gigantic global house of cards and if Europe goes, we go a week or two later so you’d better hope they can keep up the charade or there may not be anyone answering the phone at your brokerage one Monday morning as the entire global economy chokes and dies…  You can bet on it but I kind of thing they don’t let it go that far.

    Oh, and what Lapper said!

    GOOG/Gucci – Sure you can do that, it’s just momentum trading with a back-stop, or anchor, as the case may be.

    SPX/Jdub – I very rarely play the S&P futures but the cash indexes are just another step into the casino that I don’t take.   I think that 1,115 should not be broken to the upside tomorrow so I would lean towards thinking a short position is safer between now and tomorrow’s close but, on the whole, I’m just expecting us to drift in and piss off all the speculators, maybe back down to today’s lows. 

    FRE,FNM/Lapper – They are just off the NYSE, not sure if that’s such a big deal – GM survived it. 

    EUO/Gel – I’m still short on it. 

  175. Cap

    upside squeeze looks negated for now;  I should have stayed w/ my instinct and to stay short index; but algo guy is usually deadly.
     
    Day is not over; can still see up and down.

  176. Cap

    very rangebound feel here anyway; like I said early this morn.

  177. srfrog

     Phil – do you still recommend those APOL July $55 calls?  They are down to about $1 right now…

  178. Cap

    quiet here now.
     
    I am ticked at myself; I top ticked market to go short; but covered based on someone else’s info for more upside.
     
    Should have stayed with my own reasoning …

  179. EricL

    This is the part where HAL 9000 shakes out those of little faith.

  180. Phil

    So Hussman, Grantham and others think equities are 20% too expensive? Andrew Smithers uses cyclically adjusted P/E and Tobin’s Q to argue the S&P 500 is 48% overvalued.

    Jon Stewart’s video on our energy dependency is funny but also sad, Paul Kedrosky says; we can’t wean ourselves from oil because competitive technologies aren’t yet feasible and people are not willing to adjust habits. "Pretending that this is about Republicans, Democrats, or random acts of presidents is, however entertainingly intended, part of the problem."

    The FCC votes 3-2 along party lines to move ahead with regulating broadband, setting the stage for an eventual legal showdown. Supporters include internet-dependent firms such as Google (GOOG) and Microsoft (MSFT), while phone and cable companies object, saying tighter regulations will raise costs. It’s a "terrible idea" that would have "negative consequences" for decades, Verizon (VZ) CEO Tom Tauke says.

    The U.S. passes foreign competitors in auto quality, according to J.D. Power’s annual automobile quality survey. Toyota (TM) fell to 21st place from sixth, and Ford (F) made its first foray into the top five and ranked highest among mass-market brands. Top four performers were luxury brands: Porsche’s (POAHY) namesake vehicles, Honda’s (HMC) Acura, Daimler’s (DDAIF) Mercedes-Benz and Toyota’s Lexus.

    You have to love Republicans – they always have a sound bite:  Highlights of Tony Hayward’s testimony today before a House panel: BP (BP) took "extreme risks" and "cut corner after corner" to save a few bucks, Rep. Henry Waxman scolds, while Rep. Joe Barton calls it "a tragedy… that a private corporation can be subjected to… a $20B shakedown."

  181. EricL

    Like Cap.

  182. matt1966

    Phil, please update the quote above to read..
     
    So Hussman, Grantham, Matt1966 and others think equities are 20% too expensive? Andrew Smithers uses cyclically adjusted P/E and Tobin’s Q to argue the S&P 500 is 48% overvalued.
     
    Tanks!

  183. kustomz

    SCHW just got whacked with a 2×4

  184. gel1

    Phil… I am placing my investment resources on "probability" and not "certainty". If you wait for the time it is "certainty", then, I believe the train has already left the station. The question then is – do you believe this debt in Europe will ever be paid? I do not, and I also realize there is nobody that will bail out the debtor countries. The rating agencies are in the wings waiting for the most opportune moment to confirm my convictions. Do you in your best analysis, believe this debt that is soon to be in default, will be paid?  If so, then how?  If it is not, then what are the consequences?

  185. drcraig

     Pharmboy- DSCO is $0.25, time to load up? I have a small position, 2k shares at a basis of $0.44- totally speculative play. 

  186. Cap

    So much for that upside squeeze … LOL …. sorry guys.  Not my fault

  187. EricL

    HAL is running out of time here.
     
    I’d say /ES1103.5 needs to hold in the next few minutes.

  188. Cap

    still having a good day …

  189. cwan120

    What happened to SCHW?  Maybe because I hated their platform so much and stopped trading there?

  190. exec

    JRW,
    I’ve been tracking you’re R/S levels for IWM and find them to be remarkably accurate.  Interestingly, you levels change slightly from day to day.  What chart duration and time frame do you generally use to plot your levels? 
    I’m curious why you didn’t use 67.09 today?
    I’m sitting cash at the moment.  Any feel for the close today?
    Thanks for your help

  191. matt1966

    Did I say this market is nuts?  What I meant to say is it is a highly sophisticated model for accurately determining value!  Can I get a  Whhhheeeeeeeee!

  192. exec

    JRW,
    I was reading earlier post.  Are you using SS-Pro?

  193. maxim

    What do you think of deep in the money artificial buy writes? For example:
    Sell SP500 emini AUG 1040 put, buy 1050/1060 bull call spread for a credit of $17 and margin requirement of $1000 per contract
     

  194. shadowfax

    cwan120
    SCHW Do they free trades in ETFs? I have wondered if they free trade JWR’s TNA, TZA?

  195. sydney99

    should we buy the qqqq 46 dollar puts
    first time user

  196. Phil

    APOL/SrF – Not here.  Maybe if they get back to $47.50 again but we already got the bounce we were looking for and I don’t generally go back to news plays twice.

    Reasoning/Cap – I know, it’s very hard sometimes…

    We all know you said it first Matt!

    Default/Gel – I do not think there will be default.  As I told you the other day, Europeans have a tremendous bank they have built up by investing in Socialism and it is possible for them, through sacrifice and austerity to tighten their belts and pay off their debts in a way that this country can not, as all of our excess human capital has already been sucked dry by corporations and paid out as dividends and bonuses to the top 1%.  I put up a chart for you last week showing that the bottom 90% of this country lost 20% of their wealth in the past decade while the top 1% took it from them.  Your problem is you are in the top 1% and can’t concieve of any situation in which this inequity can be meaninfully addressed.  Europeans do not have your tunnel vision.  If you want to bet against a country, bet against this one becaue the bottom 80% of the population has nothing left to give and the top 1% would rather set fire to them all than bite the bullet and address the nation’s concerns – your visions of doom are correct but it’s the mirror you need to be looking at…

    SCHW/Cwan – Very strange, I see nothing in news. 

    OIH finally falling..

    USO falling but mostly after the close.

    Volume at 3:15 is 99M on Dow, still super-stickable so take those short profits!

  197. escohen5

    Hi Phil --
    I’m new here….is your target on a typical trade like USO July 33 Puts (n at .51) a 20% gain?  We are close to that…

  198. JRW III

    exec / levels
    It’s all about confluence; I posted something in the last couple of days.
    Right now I’m set up for a bounce off 66.36 for a close above 66.90, but we’ll see !!

  199. dezev

    Relative to the Hussman info, the article doesn’t compute Tobin’s Q correctly.  I’ve been tracking it for some years and it goes as follows:   
    Relative to Tobin’s Q, it is taken from page 105 of the Flow of Funds report for June 10, 2010. It’s actually page 112 of the PDF. Line 35 divided by line 32 is the calculation which is 1.04.
    The numbers for line 35 and line 32 are respectively 13100.1 and 12593.3.
    The lowest ratio in recent years was .63 Q1 2009.

     

  200. cslanson2

     SCHW is probably reacting to the announcement that Merrill Lynch is starting an online service

  201. bobhu

    What with BIDU today? I don’t see any news and yet it drop from 76 to below 72???
     
    Anybody knows?

  202. JRW III

    In TNA at $47.18

  203. Phil

    Deep spreads/Maxim – I think they are fine but don’t think it’s riskless.  The S&P can totally blow you out of the water by Aug and what I don’t like about the Eminis is you can get margined for a lot of cash for those and you don’t even own a stock or ETF that can recover in the end.  Our rule of thumb here is NEVER sell a naked put that you don’t REALLY want to own AND have the ability to own the Stock or ETF of long-term.  

    Welcome Sydney!   Do you mean the Q play from this morning?  No way, that is toast.  Don’t ever chase old positions.  We have new ones all the time and, as with the Qs, we’re usually out of the things once they get a pop.

    Targets/Esco – Please take time to read the New Member Guide and the Strategy Section.  Yes, my target on any short-term trade is to make 20% (mentioned to someone else in earlier comment).  20% per trading day, not compounded is 20,000% annualized – unless your typical returns are higher than 20,000% annually, then you should probably consider making 20% in a day OR ANYTHING OVER 10% to be very lucky and take the money and run!  8-)

    BIDU/Bob – It’s a manipulated joke of a stock.  Why would they need a reason to drop 3.5%?  When there are actual reasons for it to move, then you get 10% in a day!

  204. cwan120

    shadow,
    If you have an account at SCHW, they offered free commissions on the ETFs they created and managed.  I didn’t follow up on that offer.  I don’t know if they still have that offer.  And I forgot what those ETFs are.  Go to their web site.
    Maybe I’ll take a look tonight.  Sigh… I have too many things going on in my life…

  205. judahbenhur

    The Stick really is a matter of faith.  As we used to say about the Mets when I was growing up on Long Island in the 1960s, Ya gotta believe.

  206. shadowfax

    cwan120
    Thanks but their own basicly answers the question.

  207. maxim

    Gotcha on the riskiness of the emini sp500 fops, i’ve been burned in the past. Any suggestions for more appropriate underlying to test drive deep in the money spreads – I guess we’re looking for a low volatility underlying?

  208. Pharmboy

    DSCO/dr – I posted last week (Thurs I think) that DSCO has delayed everything for a year…so no, i would not load up, but maybe redeploy.  Currently, I am looking at HNAB as a speculative play, but I am reading more into their info.  At 17c or so, they may be worth the gamble with play money.  They have a cancer drug that is up for review…..I think I will buy 1K here, and see where it goes with my DSCO money.  17c offer, no more.

  209. Phil

    Faith/Judah – How can you doubt?  BEHOLD THE POWER OF THE STICK!

    Spreads/Maxim – Try my plays that turn "$10,000 to $50,000 by Jan 19th."

    LOL – Look at what candle we’re forming today and compare it to the Feb 19th candle in the morning post.  We are still right on that track!

  210. EricL

    Kneel before the power of the HAL 9000 trading computer!
     
    (It helps to say that in a Darth Vader voice, even though it was a different movie.)

  211. matt1966

    No, I was right the first time.  Utter nonesense market.

  212. JRW III

    Out of TNA at $48.06 for 2%

  213. Pharmboy

    Thank you for that 200 pt move…..zig zag….

  214. ssdirk

    3 for 3 on the day, but absolutely absurd!!

  215. ocelli7

    JRW III,
     
    I usually don’t have time to day trade (mostly in options), but I do watch what you have been doing.
     
    We have a few minutes left before closing but we are close enough for me to say that it’s scary how accurate your prediction was to rise to 66.90 off 66.36……

  216. goldman

    JRW – Super impressed by your accuracy today…you have to be up at least 8-10%…one word…WoW!  Keep the data flowing if possible…you helped me make a large chunk of money today…thanks man!

  217. Cap

    Well; that was crazy; and there was the short squeeze … what BS !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  218. exec

    JRW,
    Great call.
    In 47.18
    Out 48.08

  219. 1020

    BROTHERS AND SISTERS!!!!
     
    CAN I GET A FAKE! FAKE! FAKE!
     
    AMEN….  ;)

  220. dflam

    Phil : I want to open a buy /write  position in INTC .With the VIX at 25, is it best to sell jan.2011 options or 2012 ? Thanks.

  221. Phil

    Wheeee, that was a fun day!

    Good job nailing the moves everyone – especially JRW, nicely done…

    I’m still looking for a big drop in oil at some point tomorrow or Monday.

    The SEC proposes rules establishing a series of thresholds for breaking "clearly erroneous trades" in which prices diverge away from a "reference price." This latest proposal aims to complement the circuit breakers that now temporarily halt trading, first put into action this week in the sudden spike in Washington Post (WPO) shares.

    Pimpco agrees with Gel:  Pimco’s flagship Total Return Fund raised its market value weighting in U.S. government debt to 51% at the end of May from 36% in April. Emerging market debt rose to a record 9%, and non-U.S. developed nation debt was cut to 6% from 13%.

    Banco Santander (STD +1.6%) would earn the highest rating in the ECB’s stress test of 25 major European financial institutions, El Pais reports. Zero Hedge reaction: "Does anyone even pretend to believe these Tim Geithner-inspired lies? What can one do but laugh."

    After yesterday’s selloff, contrarians eye FedEx (FDX -0.5%) as oversold. The company is "still seeing strong volume growth," and "international air freight load factors are higher than they have been since 2000." CFO Alan Graf says the "mark to market" requirement for pension fund levels is weighing on the company’s outlook.

    In a possible sign of a liquidity problem, BP (BP) may sell up to $10B of corporate debt as early as next week. Plans have not yet been finalized, but reports say the sale likely would involve bonds with a five- or 10-year maturity. Dennis Gartman believes it would be well received: "I think every distressed bond portfolio in the world will say, ‘I get to own BP as a distressed bond issue?’ I think that will fly."

  222. lionel

    JRW/
    Thanks for your strategy comment at 3.20pm
    It helped me to follow your trade idea better than with entry/exit levels.
    Mr Stick’s End-of-the-day wave was a great ride!

  223. exec

    JRW,
    Diddo Goldman’s comments.  4% on 2-20 minute trades beats the heck out of the CD rate.

  224. flurboz

    Omega 3 tradebot to the rescue. 

  225. shadowfax

    FAKE! FAKE! Every prediction today came true, Highs Lows and a cracked stick!

  226. gel1

    Phil… It is Socialism that put the Eurozone in the debt mess they are experiencing. With Socialism, there is no incentive for efficiency or growth. Nobody benefits, therefore reversing the downward spiral is inlikely. Their attempts at austerity will produce civil strife, union resistance, and the enthusiastic participants will be few and far between. It is the profound philosophical ingrained weaknesses of Socialism, and the understanding of it that has helped me to formulate my projections.

  227. goldman

    Phil – Hey can you give JRW an "Lloyd Sticker" today…go back and check out his accuracy, I’m starting to think he IS Lloyd!   =D

  228. dezev

    Phil,
    Sometimes even a blind hog finds an acorn.  In this case the big IF worked out.

  229. kevinb63v

    Phil,
      I’m looking to repair a pre membership buy of Petrohawk (HK) at 24.47. Your previous advice to me regarding repairs was to try just to get even, which inclines me toward selling the HK Sep puts/calls for $4.18, but it seems to me that you also have advised the greater premiums of Jan 2011 and beyond. The Jan 2011 HK puts/calls are at $6.38 last I looked.
      I still like the stock, although having another round put to me would be a bit overweight, but that’s OK as there are many ways to deal with that.
      Any advice you would care to offer would be greatly appreciated.

  230. jromeha

    Phil, for those of us who don’t quite understand charts yet, if this is the same as Feb 19 what can we expect? Also, since this is after hours now I want to refer back to flipspiceland wrote at 1212 and second that! Im not a high roller like many of the people on here and paying 10-20% of my portfolio’s total value was.. hard to justify initially, but this site is definitely worth it (best site I have ever found and I will be a lifetime member)! Between the Godfather aka Phil delivering great profits on like 90%+ of his trades, David with his traditional gains of 10% on the overnight wonders, and JRW with his 5%+ daytrading gains (I made another 5% so thanks!) daily Im beginning to develop a serious mancrush on all ya’ll! hahaha . If any of you need help moving or a ride to the airport Im your man! lol. Ok, I know Phil knows he’s the man and his site is the shiznit so I’ll shut up now! Adios muchachos!

  231. pstas

    Socialism- I agree there will be no default in Europe. They are all going to just cheerfully cash in their Happiness Bonds to pay off the government debt.

  232. JRW III

    7 1/2% on the day for the portfolio
     
    I was only 1/2 in the TZA play; It’s hard to play the downside as you need sooooo many shares of TZA but the upcomming reverse split should be a great help, back to the days of Q4 ’08 !!

  233. Phil

    INTC/Dflam – Not much point in owning them is there.  May as well go artificial with the 2012 $17.50/25 bull call spread at $3.55 and sell the Jan $20 puts for $1.55 so you are in the $7.50 spread at net $2 and you can sell more puts for 2012 if all goes well.   That way, you commit way less cash and your worst case is you own 1x INTC at net $22 in Jan (ignoring the obvious roll to 2012) while, on the upside, if INTC holds $20 through Jan, you are out of your margin requirement with $2 in an INTC call that’s at least $2.50 in the money with another $5 of upside

    Socialism/Gel – The growth was the growth of services available to the people.  The growth was the free education and universal health care, the growth was in the liesure time that is afforded to the average citizen who doesn’t feel the need to kill or be killed their entire lives for fear of ending up in a dirty apartment eating cat food because, once they are no longer "useful", they have a government that doesn’t cast them aside as human waste.  There are people on this planet who value having time to spend with their families and friends more than having burnished walnut on their dashboard.  There is no ingrained weakness to socialism but it’s something you’ll only learn as you watch how Europe and the US handle the rest of this decade.  

    That was some very insane sticking today – you can see why I’m so quick to take profits off the table!  Obviously, there was no news or any other justification for it – it’s just a goose to make us look positive so the international spin cycle can continue into Friday’s close so Nomura can make their numbers, and CS and BCS can make their numbers etc.

    Note the Russell is once again at 665.85 – those last 0.15 points are still too much for it.  NYSE at 6,982 and they haven’t hit 7,000 yet.

  234. jdub929

     Hi Phil,
    I’m looking at the SPY and the massive volume on the call side (all before the 415 deadline but after the market closed) for tomorrow’s trading day.  Massive number of contracts being sold from 108-110 strike price.  I can’t ascertain whether these are initiated positions or these were previously held positions that they made profits on already.  If it’s the former, we could see a good sized drop tomorrow.
    Am I reading it correctly?  You have so much more experience in this area so wanted to get your thoughts on it.

  235. Pharmboy

    SPX Iron Condor from TOS – Sell the July 1160 C and 1040 P and buy the July 1165 C and 1035 P for a credit of $1.92.  Break-even points on this trade are $1038.08 on the downside and $1166.92 on the upside.   According to TOS, there is an 80% probability in this trade at July options expiration that the SPX will be above the $1040 and 82% probability below the $1160 by expiration.  There are only 21 trading days left until July options expiration. 1/5 allocation.

  236. tenger

    Socialism/Gel – After much soul searching I’ve set my sights on moving to Canada and the attitudes I’ve found there have tempered my enthusiasm for independent entrepreneurism, a hotbed of which the US is often portrayed. It’s true that there seems to be less desperate gambling for financial advancement in the Canadian mindset (I’m from NY, TX, MA, and CA and reflect the US go-go mentality) but there remains a strong desire to do well for community, an attitude which would seem unachieveably utopian except that the Canadians in my target communities (Vancouver Island) are actually doing it. They ARE willing to make sacrifices that go beyond their high tax rates, and they are not complaining even in private. I don’t know how Canadian "socialism" compares to European, but it seems pretty well established: gov’t health care, gov’t education, gov’t subsidies for the poor.  US-style private enterprise is not doing nearly as good a job as Canadian style socialism in supporting a stable, cohesive, and promising economy. Not only do Canadian laws seem more fair, they’re also more enlightened in the support of competition and free enterprise, at least in my field of health care. The clincher for me is that there are virtually no police on the streets because the citizenry obeys both the spirit and the letter of the law without having to be told. I still find the whole experience of visiting Canada odd and somewhat disconcerting. They’re just TOO nice! For me and probably most Americans the idea of "doing whatever one can get away with" has become part of the national psyche. I’ve even spoken to social service people here who tell clients how to circumvent the rules as a matter of policy. The sense of being a victim seems closely tied to American capitalism, and while I’ve seen it in Canadian business behavior and politics, it seems largely absent from their socialist esprit de corps. This is all to say that one cannot easily compare low taxes with happy people, nor an unregulated market with a fair market or a strong economy. OTOH, Europe is a different beast by virtue of the EU’s implausible collaboration of traditionally independent and antagonistic cultures. The whole EU thing has always struck me as an 18-legged potato race. It would be one thing if the German’s paid for the German’s flaws, but the idea of a single currency for multiple economies sounds too much like another banking scam for me to have faith in the EU’s future. Sorry if I’m wandering.

  237. gel1

    Phil/Socialism
    I know there are benefits (entitlements) granted to many, but who in the end pays for it? If you guessed increased debt, then you are right. If we can find the few, then, they are probably packing their boxes and looking for a country to live in that offers opportunity, in order to build wealth. Countries like Mexico and others, that had to build walls to keep their citizens IN, thought this kind of economic system was utopia, until the productive tried to get the hell out.  In the final days, we will  see a judgement day for the failed economic imbalances, and VOILA – France is soon to see the result – FLAT BROKE !  It will be a very interesting summer.

  238. fizz

    Pharm (or somebody) need some help with acronyms--absolutely hate them when trying to learn something new--would you be willing to tell me what FWIW means?? you used it on 6/14 in reference to a straddle trade for JAZZ.  THanks.

  239. diamond

    fizz – FWIW = For What It’s Worth

  240. goldman

    JRW - If you get a chance to reply - I bailed (got flushed) after doubling down to 46.64 ( -$0.08…yeah, missed $1.20!)…what gave you so much confidence  to hold?  How did you obtain 65.88 (my line was 66.07 which is why I sold…)
    PHIL- Are the EOD large volume chunks indicative of anything for the following day?  For example, TBT moved 2.75M shares in one order EOD @ 38.5813 (50% of previous days volume)…and now TBT is down to 39.42 AH.

  241. JRW III

    fizz
    For What It’s Worth, you can Google any acronym

  242. diamond

    fizz – See: Shorthand

  243. fizz

    thanks guys--I was sure it was something really brainy coming from Pharm! lol.
    JRW--Didn’t know you could google them--thanks for that info!  Congrats on your trading day--I’ve been having to only catch parts of the day, so can’t do it with you right now--but taking notes, and looking forward to it.

  244. JRW III

    goldman,
     
     
    JRW III
    June 17th, 2010 at 12:03 pm | Permalink  
    exec
    Because "they" are NOT going to give up the 200 day now !!
     
    As to 65.88, it’s the strongest S/R on the chart currently at 24 points !!

  245. flipspiceland

    tenger/socialism in Canada (‘Stralya, and others)
    The socialism in Canada is being underwritten by a pernicious, self-destructive, 366/24/7, insidious influence:  The canadians apparently do not suspect that they are hollowing out their country. Natural resources in both Canada and ‘Stralya are being dug up, cut down, and shipped out of the country.  One day all that will be left will be a waste land.
    That would be like you taking out the copper from your house plumbing, the electrical wiring, the lumber bit by bit and  inch by inch, to get money for your producing nothing, but still expecting your home to remain standing in a few decades. What utter fools they be to think you can get something for nothing (Socialism).  Generations hence will bewail the legacy that canada, australia, africa, now afghanistan and other resource rich countries have left for their children.
    How is it so few who tout the advantages of socialism cannot see this obvious fact?

  246. flipspiceland

    tenger/socialism in Canada (‘Stralya, and others)
    The socialism in Canada is being underwritten by a pernicious, self-destructive, 366/24/7, insidious influence:  The canadians apparently do not suspect that they are hollowing out their country. Natural resources in both Canada and ‘Stralya are being dug up, cut down, and shipped out of the country.  One day all that will be left will be a waste land.
    That would be like you taking out the copper from your house plumbing, the electrical wiring, the lumber bit by bit and  inch by inch, to get money for your producing nothing, but still expecting your home to remain standing in a few decades. What utter fools they be to think you can get something for nothing (Socialism).  Generations hence will bewail the legacy that canada, australia, africa, now afghanistan and other resource rich countries have left for their children.
    How is it so few who tout the advantages of socialism cannot see this obvious fact?

  247. flipspiceland

    Is there any way to delete double posts?

  248. bps2002

    tenger,
    Comparing Canada to the US is silly. Where we live  (SE USA), community is still alive as well. The strong work ethic thrives and we even get along. I guess the grass is greener there (except in the winter) in Canada. Look at the population densities and the latiude differences. Few people;many resources.  The closer to the equator the more people, the more people, the more demand on the social system. Who settled Canada? The French/Germans and Dutch mostly (enought said about that).  Their socialsim (if that is what you want to call) is Eurpoeon Socialism with the benefit of the USA. To the extent that Canada’s laws reflect an enlightened free enterprise; it is not socialistic it is libertarian and perhaps a vestige of a past system than a fact future prosperity.
    This country is young and we have many problems. We will overcome them. I am sure not without difficulty. Why all this beating down our way of life.
    I have working within a few door of my office 2 engineers who immigrated from Canada to get away from their brand of socialism. I suppose you have looked into Canada’s strict immigration standards. How they just open the border and say come one come all and get your benefits.
    I don’t think the Euro will fail as a currency. I am wondering about the dollar though. I do agree with Phil that there is no ingrained weakness in socialism. But I do think there are ingrained weaknesses in men that we allow leaders/rulers/tyrants to manipulate our guilt to remove our wealth building capability through excessive taxes that never will or never were intended to go the the bottom 20%.
    Regards.

  249. doro165

    flipspiceland
    June 17th, 2010 at 5:57 pm | Permalink   tenger/socialism in Canada (’Stralya, and others)
    The socialism in Canada is being underwritten by a pernicious, self-destructive, 366/24/7, insidious influence:
     
    But look at the benefits, they apparrently figured out a way to get an extra day in the year!!

  250. goldman

    JRW – I have a lot to learn yet…anything you could send (links, web seminars, charts, etc) would be appreciated (thegoldmanrule@gmail.com).  As for your discussion  today with Cap about chart output, if you need to output anything on your screen (or web site pics, etc) "Snipping Tool" comes standard on Windows Vista and Windows 7, a program that can be opened, and then it creates a box in which you can take a picture of anything on the screen to save as a Jpeg.  Thanks again for the s/r data today, and especially the commentary such as  "Right now I’m set up for a bounce off 66.36 for a close above 66.90, but we’ll see !!", "S1 Tail", etc.

  251. Pharmboy

    Well, I have complied a sheet for all on FDA decisions – forgive me if it does not post right…..I would like to do a rolling spreadsheet like Opt…but am not HTML savvy.
     
     

     
    Drug
    FDA Advisory
    FDA PUDFA

    VVUS
    Qnexa
    15-Jul-10
    28-Oct-10

    MELA
    MelaFind
    26-Aug-10
     

    ARNA
    Lorcaserin
    15-Sep-10
    22-Oct-10

    JAV
    Dyloject
     
    3-Oct-10

    HGSI
    Zalbin
     
    4-Oct-10

    PLX
    Uplyso
    27-Oct-10
     

    ALXA
     
     
    11-Oct-10

    JAZZ
     
     
    11-Oct-10

    ALKS
     
    16-Sep-10
    12-Oct-10

    BIOD
     
     
    30-Oct-10

  252. Pharmboy

    yeah…that was a failure!

  253. Pharmboy

    Here

  254. Cap

    Kevinb …HK will be good over time.  In the meantime, you can sell covered calls — July 24 or 25.  Or go out to Sept 26 or 27.  Or Jan 28.

  255. Cap

    JRW, another way to play the downside in IWM is thru RWM.   Its a one time short; but you can buy 3X amount, that should give you same bang, no ?

  256. Cap

    Phil, why do you feel compelled to defend Socialism every time it comes up ?  :grin:
     
    As for those Europeans and their "family" life; the welfare state folks have no family life as they have the lowest breeding rates on the planet.  Something like 1.3 kids per family.  Europeans are dying out and being replaced by large family Muslim immigrants from Africa and the Middle East that will just help bankrupt Europe’s welfare states faster.

  257. Cap

    That was a ridiculous stick today.  And the weird thing was, there did not seem to be much if any participation by individual stocks.   So it seemed to me.

  258. Cap

    You can make your own claim for damages to Barack Petroleum (BP) here:
     
    http://www.bp.com/sectiongenericarticle.do?categoryId=9033791&contentId=7062345

  259. flipspiceland

    @doro165
    That be Leap Year.

  260. diamond

    Pharmboy – The spreadsheet that Optrader uses is: EditGrid, which is free.

  261. JRW III

    Cap
    Sometimes I use TWM but the reverse split should fix all that

  262. JRW III

    goldman
    I’m working on chart transport; in the meantime, take the levels and play them based on my indicators ( stoch, RSI etc )
    seems to me, you’re doing really well !!
    Good hunting

  263. gel1

    tenger…. I believe I can help in some way with your desire to make a decision that might very well be the most important decision one can make in their life. I have dual citizenship – both Canada and US as a naturalized citizen of the US. I was born in Canada, but my father was an industrialist who was affilliated with a very large US based company, and upon my birth, I was registered with the US State department and eligible for US citizenship, which was done for me. Because of my birth in Canada, I automatically was a citizen of Canada.. Before entering my senior year in high school, I tried to get an athletic scholorship to a university, which at the time seemed likely,however one of my applications was accepted (immediately) and I trotted off to college, having skipped my senior year of high school. I entered college in the US, picking up a year sooner than expected. I often wondered what my future would have been if I had stayed in Canada, as I felt at the time the best opportunities were in the US. After college, I became the ultimate entrepreneur, having started businesses and eventually took one public.
    Had I stayed in Canada, I doubt I would have had the opportunity to acomplish my very aggressive goals, as the country is very conservative and banks do not endorse risk, and my style would have been repulsive to them.
    As a place to live, western Canada can not be beat. I have always had second homes in both Victoria and Vancouver. Victoria is very staid and conservative in the British tradition. I had a beautiful waterfront home there that I sold a few years ago (wife was bored with the slow pace) – sold it to Steve Nash, the MVP from the NBA. ( he grew up in Victoria ) and I moved on to Vancouver ( best city in the world ). I just recently sold my home there and I’m regretting it, as I would like to move back and get away from all the putrid political destruction of this country by the current administration. Maybe I should wait, as the popularity quotient is shifting, now that we know what these folks are up to. Hope you can believe in!

  264. jromeha

    Gel, you’re right about Vancouver, BC being one of the most beautiful cities in the world. I grew up not too far away (in Mt Vernon, Wa )and travelled there frequently.

  265. Cap

    Speaking of Putrid Political Destruction, today in Obama Fantasyland, O and his thuggies are jumping all over Rep Joe Barton for telling it like it is :    Obama shook down BP w/ out due process …
    Plouffe Blasts Barton, Calls for his Resignation from Energy and Commerce Committee, from @SunlenMiller: http://bit.ly/dlTn8M
    Biden on Barton: "outrageous" and "astounding" http://bit.ly/d2ZTXC
    Barton was told, ‘Apologize, immediately. Or you will lose your position, immediately,’ House GOP aide said. http://bit.ly/dxLnaj
     
    Much ado about little.   All Barton did was speak truth to power.  But it deflects attention from Obama’s abysmal performance of shakedown artist in chief.
     
     
    So instead of, say, crooks like Charlie Rangel being ousted, they jump all over Barton b/c they smell an opportunity to deflect well earned criticism of Obama for his complete mishandling and lack of urgency regarding the Barack Petroleum oil Spill.
     
    So what’s the real story here:
     
    A Republican criticized Obama for unseemly heavy handed tactics (and BP deserves to pay damages);
     
    or Obama & Governments inaction and incapacity and waiting 8 weeks plus to even meet w/ BP ?

  266. lflantheman

     This bill will have a bullish effect on the markets for the next few days to weeks, I believe.news.yahoo.com/s/ap/20100617/ap_on_bi_ge/us_congress_spending

  267. pstas

    Chicago politics – anyone interested in a quick lesson on how practical Chicago politics is practiced should read this column:
    http://www.chicagotribune.com/news/columnists/ct-met-kass-0617-20100617,0,7953921.column
     
    This is where our Expander in Chief earned his street cred.

  268. Cap

    Yeah, but who kicks ass ?  http://www.youtube.com/watch?v=yghFBt-fXmw&feature=youtu.be

  269. kustomz

    Lots of competition and pressure on margins..FREE NETBOOKS!!
    Although Europe’s bond crisis impacted shipment performance in April and May, since brand vendors including Hewlett-Packard (HP) and Acer started increasing their notebook orders in June, makers are turning optimistic toward the third quarter. HP plans to push a bundle deal of its Compaq series notebooks with a printer, while several vendors plan to offer buy a notebook and give a netbook away deal, sources from notebook players noted
    http://www.digitimes.com/news/a20100617PD214.html

    Global LED TV shipments to reach 31.6 million units in 2010, says Digitimes Research
    Global LED-backlit LCD TV shipments are expected to reach 31.6 million units in 2010, up from 3.6 million units in 2009, according to Digitimes Research.
    http://www.digitimes.com/news/a20100617PD220.html

    ATHR BRCM
    International networking chipmakers, including Broadcom and Atheros Communications, have reportedly shortened the delivery lead times for WLAN chips due to recent downward shipment adjustments by notebook and netbook vendors, according to industry sources in Taiwan.

    The possibility is high for Atheros to also adjust downward its quotes during the second half of 2010 as the company is now targeting to push sales of its networking chips to the consumer electronics segment in addition to holding on its leading position in the notebook sector, the sources noted.
    http://www.digitimes.com/news/a20100617PD208.html

  270. snow

    Don’t bash Phil for coming out for socialism  – he’s bringing some balance to the board, point 1, and also you guys who are so committed to the opposite philosophy are making investment decisions based on that viewpoint and could therefore shoot yourselves in the foot. FYI, I also have dual citizenship, US & Korea, thanks to my mother-in-law who included me in the family register. I participated in President Lee’s Peace Corps Volunteer revisit last fall, and was blown away by the country despite having visited since my term as a volunteer in the early 70s. We plan to retire there shortly to a family farm/orchard. My one problem is that day trading the US exchanges would mean I’d have to be awake from 10:30 pm to 5:00 am.

  271. Pharmboy

    Diamond.   Thanks a bunch.  Got it!!!  Link is above.

  272. tenger

    gel1 – canada (was socialism)… thanks for all that, I’m very much in "sponge" mode and I consider all voices. I can relate to everything that’s been said. I too am suspect of Canadian conservatism, at the same time I see the most liberal (in the good sense) academic work being done outside the US. The Perimeter Institute in Toronto being an example of a collection of forward thinking physicists who did not find welcome in the US. All of us here would probably agree that we’re most disturbed by the institutionalized destruction of the social and economic fabric of the US through what I can only describe as a kind of virus… or something. It’s bizzare the extent to which the rot has consumed the vine, is there an HONEST politician in the house? It’s as if the empire mentality ran out of new lands to enslave and so has turned to enslave the homeland. It’s an old theme of Western culture. "In a time of peace the warlike person attacks himself," quote Nietzche. Well, maybe we would not agree, but we’d all feel aggrieved at the idea. But the REAL question is: what’s the market going to do tomorrow?

  273. tenger

    RE:my comment institutionalized destruction, developed further at "What do BP and the Banks Have in Common? The Era of Corporate Anarchy" at
    http://www.zerohedge.com/article/guest-post-what-do-bp-and-banks-have-common-era-corporate-anarchy

  274. tenger

    RIMM? In the interest of full disclosure I do not own a Blackberry, but i did just get an Android after considering Blackberry as an alternative. I have been a programmer of complex, GUI-based financial applications for a couple of decades and I was appalled by the poor interface of the Android. I mean it’s OK if you don’t know anything about the design of a GUI, but it’s not good. The big problem is that I guess no one at Google knows that GUI design is a science. If there’s one thing Apple did right it was to support GUI design, teach it, and enforce it. I’m not too surprised the Google, a newbie in OS design, isn’t very good at it. But here’s my question: if Google is poor, then Research In Motion (RIMM) is going to be even worse when they get around to it. And they’d damn well get around to it because these GUI+computer+PDA phones are going eat their friggin lunch if they don’t. So I look at the last 6 months of RIMM"s price and see that it’s done pretty well: better than Google and better than Nokia (NOK). But I think that since they don’t have any product that can compete with the iPhone, or the Android, that they’re going to quickly recede into the rear view mirror of technology. Yeah, I know they say they’ve got a graphic based phone in the works but, like I say, I suspect their inexperience will result in it sucking. So what do other people know about RIMM, and might it be a short opportunity? I would say that in the event that it ran up, and at such a time as corporate earnings are to be released, it might be.

  275. goldman

    JRW – Yes I am doing well day trading…because I’m mooching off your lines and data!  I have been away from investing for about 11 months due to other ventures…so a little rusty!  I can only hope to pay you back with some investment research some day…once I get more time at these forums, I’ll attempt to give more suggestions, as has been the case with many other members.  Science, math, and physics are my background…which is why I was suggesting to buy June $38 puts for $0.58 on BP two weeks ago after researching some university white papers.  It is exciting to see such a diverse group of individuals…the investment "think tank" possiblities are endless…
    tenger – I’m not sure politicians have gotten "worse", I sometimes wonder if the Internet and the widely dispersed digital MSM has simply exposed the common political flaws that have always existed.
    gel – Vancouver is definately the place to live in Canada… on my list of places to live "near" America.  My only wish would be 10 degrees higher average temperature http://www.weather.com/weather/wxclimatology/monthly/graph/CAXX0518 

  276. goldman

    tenger – the second version of android has improved GUI features…my Droids don’t have it yet, but I like the reviews so far.  My only complaint with the droids…frequent lock-ups (forced closures during multi-tasking).  I’m just glad the battery can be removed easily for reboot!

  277. Phil

    Yay, options expiration day! 

    This is our favorite day as all of our callers and putters for June are wiped out (hopefully) or, at least their premiums are…

    SPY/Jdub - Most likely it’s just Mr. Stick (buybot program) painting the close.  Notice an equal volume was sold in the morning to equal effect.  This is the game almost every day – they buy up the market on thin volume after causing a panic so they load up at the bottom, say they buy 40M SPY at $111.70 average.  Then they sell it off the next day for $111.80 average and they make $4M.  Of course, they are doing this across the entire market on thousands of stocks so those dimes really start to add up.  It’s not to different to what we do when day-trading, scalping dimes, but they do it on a cosmic scale and they can make the market move – we can only follow!

    Canada/Tenger – I love Vancouver but it is tough for us New Yorkers to deal with the "niceness," it kind of feels like the beginning of a horror movie and you keep waiting for something terrible to happen.  As to the EU, let me tell you the story of another Union they said would never work out – Philadelphia, Baltimore, New York and Boston were great trading ports with strong artisan/craftsman (what passed for manufacturing at the time) bases in their colonies and had little in common with the poor farmers in the Carolinas (who couldn’t get along with each other and split north and south) or Virgina.  Slaves made Maryland, Virginia and South Carolina wealthy (slaves were 60% of the population there and almost 1/4 the total population of all the colonies) but many other colonies were against slavery (what could possibly go wrong?).  Rhode Island (called Rhode Island Plantations at the time) and New Hampshire were dirt poor and had to be subsidized and Georgia had so little  in common with the other 13 colonies that they didn’t participate in the first Constitutional Convention and did not initially send delagates to the second one.  The people of New York couldn’t get along with each other and northern farmers in the state split off and called themselves Vermont while Virgina split apart into West Virgina and Kentucky, which I am still not certain is really part of America. 

    In 1775 there were 2.5M colonists and 85% of them were from the UK (not united at the time) and Ireland with the rest German and Dutch.  Benjamin Franklin worked from 1754 (Albany Congress) onwards to try to get the colonies to come together and form a Union and it took 22 years and a war of independence to finally unite them!  The war lasted until about 1783 (Treaty of Paris) but as late as 1786 the Annapolis convention failed to end in a vote to form a united governement but a year later the Constitutional Convention in Philadelphia (the one people do talk about) got the ball rolling but the states fought for 3 more years to ratify and we finally held an election with a unified Union in 1789 and Rhode Island didn’t even vote to join until 1790.  At the time, the states still printed their own money and all were deeply in debt from the war and all the speculators in Europe thought they would never survive and bet against them and wouldn’t accept their currency as legal tender and 75 years later, the differences betwwen the states was still so bad that the whole Union actually disolved and went to war with each other.

    So, when people sit there on TV and talk about how the EU will fall apart the minute they hit their first crisis – I feel very sad for them as they clearly have no concept of history…  People who are weak and who lack the convictions to fight for what they believe in project that weakness on others – never underestimate what people can accomplish when they believe in something…

    Interesting Summer/Gel – I wish I had such a simple view of things as you do.  I wonder what direction my life would have taken if I viewed those who need help as worthless leeches who are just out to get the stuff I worked for.  To be honest, I can’t even write that line and buy into it for a second so you and I are never likely to agree on even something as basic as how a government should function because, when I read this:

    We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

    I think We means ALL the People and not just the ones who are on top.  I think Justice means fairness and equality, I think the General Welfare literally means providing welfare for those who are unable to care for themselves and I think by Posterity, those 2.5M people who signed onto this piece of paper meant ALL of the 300M great-great grandchildren that live here today.  In general, these were all religious people for who tithing was an absolute given.  The 20th centtury United States did not invent poverty – it’s been around for thousands of years, you know… 

    Of course we had already declared that all of God’s children were created EQUAL and that they have the unalienable rights to Life, Liberty and the pursuit of happiness but I already know that the right to life does not include any of the time after you are born if you can’t afford it, right?  If you don’t consider being born into poverty the denial of a person’s liberty and and impediment to their pursuit of happiness then we’re never going to agree on what to do about it.  What really cracks me up is your gleeful "VIOLA" that France is Broke, as if that repudiates Socialism when France is sitting in the cat-bird seat compared to the total disaster this country faces.  Can you really not see that simply because you are the beneficiary of this country’s excesses?

    This is justice for all?  Give me a break!  American-style Capitalism has simply become a guilt-free way of exploiting human capital (a much prettier term than slavery).  Of course you don’t want to see it that way because it taints your wealth, doesn’t it?  You want your money to be a clean and shining trophy to demonstrate what you have accomplished – it’s wrapped up in your identity and it "proves" you are a winner in this great game and that’s not as much fun if you think that 80% of your opponents had both arms tied behind their back from day one and it’s certainly no fun if you begin to believe "There but for the grace of God go I."   

    If you begin to believe all men are truly created equal you might feel bad about the fact that some of them can’t afford to eat.  7M people starved to death during the Great Depression, when we had half as many people in the country.  We currently have 3.5M homeless people who eat in soup kitchens and one out of 8 US citizens are classified as too poor to afford adequate food, shelter and clothing.  Are these people all "failures"?  Did you win and they lost because they didn’t want it as much as you?  If you run a company and 10% of the employees are "failures" isn’t it possible we should blame upper management for their failures to train and motivate these people?   Shouldn’t we invest money to bring our workforce up to a certain standard, to make them as productive as possible or should we view them as disposable and replace them with cheaper imported labor (don’t say slaves!)?

    EOD/Gold – Sometimes meaningful, sometimes not.  I find them more useful in retrospect.  Volume on TBT was buying volume, not selling so drop after hours probably means buyer was institutional (buying into market hours) and smaller players (day traders) took profits after hours.  I think the problem a LOT of traders have problems understanding is that there are people, LIKE ME, who are THRILLED to take a 1% gain off the table on a stock in a day move.  As with options, if a stock goes up 1% in a day, that’s over 200% a year (trading days) and that’s more than I project to make so, clearly, the gains are a statistical aberration and not likely to continue at that pace. 

    The biggest problems most of you guys have (and that goes for your question to JRW too) is perspective.  If you stare at the 1-minute chart – every move looks like an emergency that requires action, if you look at the day chart, it’s rare anything happens that’s worth worrying about in a single day.  Even in my day-trades, I use the 10-minute chart (ESignal) and the only time I switch to a 5, 3 or 1 minute view is AFTER I have decided to enter or exit and I’m trying to finesse it.  When I have a target, I don’t trigger a buy or sell unless I see MORE than one 10-minute candle form at my strike.  Of course, I also know how and why candles form so when I saw the low volume at 3:19, even though we were still forming a red candle for that period, I decided that would be the last one and called the turn.  That takes practice – it’s kind of like a captain can stand on the bridge of his ship with his eyes closed and tell you how fast it’s going but, if you pay more attention to the FEEL of the market and less attention to the LOOK of the short-term charts, you will learn the rhythms eventually (most people can dance)

    Canada/Flips – And the US does this differently how?  I guess I’d better point out a little oil spill you may have missed in one of our national resource extraction points…   As to double posts, you can’t delete them, Greg does sometimes but not a big deal unless they are somehow in the way of things. 

    Spreadsheet/Pharm – It might work in a post.  Won’t work in chat – different system.

    Socialism/Cap – Probably because I’m a Socialist!  As to Europeans being outbred by Muslims – You should read Lovejoy’s study on slave control in South Africa – maybe give you some pointers on how to deal with undesirable humans…

    Stick/Cap – Total window dressing, makes me worried we tank next week.  Thanks for the BP link, I’m going to complain that I can’t take my kids to the beach on our vacation in Texas so they owe me a trip somewhere nice!

    Barton/Cap – I guess you missed or ignored the later testimony where Haywood said (specifically referring to Barton’s ridiculous statement) that he was in no way coerced or forced into this agreement and that it was a compromise that was good for BP.  Even the GOP told Barton he was out of line and they bitch-slapped Barton and he was apologizing for his asinine statement about an hour later but let it live on in your mind as a shining example of Conservative power because that’s why you guys will once again get your asses kicked in the next election.

    Fund/Iflan - I think that’s the tip of the iceberg in upcoming stimulus measures. 

    LED/Kustomz – Yeah but is that simply replacing CRTs? 

    Anarchy/Tenger – Good article.

    OK, now I can get to what I was going to say an hour ago!  Futures pretty flat but oil trending down as expected.  We expect oil to spike down as people dump contracts and then climb back up so nice opportunities to buy when we hit the bottom (might not be until Monday).  Shorting USO puts is a good way to be bullish.  Copper hit $2.85 again and bounced off it but that’s super weak and does not speak well of global demand.  

    Once again the Yen would not go down all night long, peaking out at 90.95 and now, of course, down to 90.68 – no big spike usually means no big dip with them.  Euro was rejected at $1.24 but still $1.2377 and the EU markets are up about half a point.  The pound hit $1.4885 but fell back to $1.4826 – these are more normal for currency moves than this penny a day nonsense we’ve been having.   

    I’m worried that this is one big window dressing and we may even sell off after the EU closes or they may start a sell-off by profit-taking into the weekend so let’s be really careful today!

  278. exec

    Phil,
    Interesting that you typically look at a 10 minute chart.  I’ve always liked 5 minute charts.  The double pincers on a 5 minute signalling a reversal.
    It’s also interesting that you should mention the word "feel".  I’ve been reluctant to ask if anyone has a feel to where the market is heading.  It’s scary how many times I’m watching the screen and I can feel the shift.  There’s nothing scientific about it, but it happens a lot, and I could kick myself for the number of times I didn’t listen to my gut and got burned.  With that being said, I dusted off a few of my TA books and have been reading up on the studies that JRW use.  I never truely understood how momentum, RSI, Stoch and some of the other tools that JRW uses work.  But judging by JRW’s sucess, I figure they must be useful in this enviroment.

  279. Cap

    European Union.
     
    The only problem w/ your thesis Phil is that nobody in Europe ever believed in or cared about the idea of a European Union other than a group of unelected powerhungry socialist Bureaucrats who now hang out in Belgium.  Then European countries joined by various means thanks to bankrupt country pols who used whatever undemocratic tactics to lie to their people and otherwise force the unwilling to "join".   Even when countries said, "enough of this BS" and voted the Union down, the unelected politicians in Belgium just kept on manipulating countries; threatening others with consequences of not joining in so on, until they could simply ignore the no votes and force the EU into existence.
     
    It was never a popular exercise.
     
    Just another political and economic resource power grab from morally bankrupt politicians.
     
    Unlike the nascent US states that had much in common; these countries have little in common (culturally or otherwise) except they live near each other and could form an economic block.
     
    Like all other socialist experiments, the EU was doomed to fail; just few expected it would fail so quickly.

  280. pstas

    "if I viewed those who need help as worthless leeches who are just out to get the stuff I worked for"
    Yep, that about sums it up. The view atop the moral high horse is, indeed different.

  281. bps2002

    It seems like a great leap to consider that those who would protect thier own property as those who also consider everyone who needs help as a worthless leech. Not the case.
    There are worthless leeches in this world who will take your stuff and they are not always poor and need help. They often come in business suits and under the authority of government that is not really we the people.
    To assume that the general Welfare clause means the type of welfare that we think of in our day (entitlements to the public purse) is to ignore the changing meaning of words in the english language.

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