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Will We Hold It Wednesday – Back At Our Bottoms

Wow, what a ride! 

As I mentioned in yesterday’s post, we expected the Russell to lead us higher and we picked up both IWM and TNA out of the gate but, of course, we like our leverage so my 9:46 Alert to Members was:

Bottoms WERE:   Dow 10,200, S&P 1,075, Nas 2,200, NYSE 6,800 and Russell 620.  As I said yesterday, "don’t forget there’s a 5% drop to support below these levels). 

For now, we’ll be watching the 2.5% lines at Dow 9,945, S&P 1,048, S&P 1,145, NYSE 6,630 and Russell 605.

My working theory is RUT is weakest because they are getting killed by cut-off of unemployment checks.  That means that an upside play on the RUT could go very well in case they extend benefits today.  I like TNA $37 calls for $3.20 and IWM $63 calls at $1.25.  These are risky of course because if the extension is defeated we could go further down so take quick profits off the table on half to make a buffer and make sure you do have some disaster hedges.

We bounced right off those 2.5% lines and got our $3 copper signal at 10:24 so we knew we were good to go as we took those calls plus GOOG, BAC, GS, QQQQ, IBM, TXN, AAPL, WFR and BIIB.  Other than BIIB, which is a long-term spread, all of our shopping was done by noon and the rest of the day we just said "Wheeeeeeeeeeeeeee!" as the market went up and up and up – and they haven’t even extended the unemployment benefits yet! 

I have been saying we need to keep an eye on copper $3 during this whole market breakdown as $3 copper is NOT the right price for a Global Depression, which is what the market has been pricing in and at 10:24 as copper hit our bull target, I said to Members: "Copper $3!  That’s like the little snapping sound when the bear takes the bait in the bear trap."  Now we are back testing our "bottoms" which, as I said yesterday, are really the middles of our 5% Rule range but our view of earnings season so far is that we shouldn’t be in the lower end of the range and the recent action, as I summed it up in yesterday’s post, was silly

Now things get serious as we need to hold our levels or it will be time to take the money and run on our short-term bullish plays (and boy, did we have our fun already – both the IWM and TNA calls went up 40% yesterday alone!) and look back at some disaster hedges – pretty much the same ones we’ve been using since the beginning of July

Asia was not sure how to take our finish yesterday but the Nikkei finally stopped falling at 9,278, almost 1,000 points below the Dow as the Yen barely held 87 to the dollar in overnight manipulations.   The Hang Seng went up 1% (222 points) to 20,487, finishing at the day’s high and the Shanghai was more subdued with a 6.66-point gain, but they are the leader back at 2,535 already.  The BSE continues to knock on the door of 18,000 – this is where we ran into trouble last time so we take everything with a grain of salt until we clear ourselves internationally. 

Europe is off to the races this morning with 2% gains across the board as they are a lot less worried about the upcoming stress tests than the MSM alarmists in this country.  FTSE 5,242 is just 8 points under goal, DAX is 51 over at 6,051 and the CAC is 40 over the line at 3,540 – nice recovery guys!  Note today’s moves are NOT reflected in the charts below but you can see we’re looking pretty good all of a sudden – even the Baltic Dry Index found a bottom of some sort:

We are looking strong again pre-market and it’s going to be a dull day for us if we keep going up as we did all our shopping below 10,000 for the past few weeks and nothing looks very cheap to us once we’re over 10,200.  As I keep having to remind people, I’m not bullish – I’m rangish so we tend to go long below 10,000 and go short above 10,500 and unless we get some really strong or really weak earnings, that’s not too likely to change.  For now, we’d be thrilled to establish a base at our "bottoms" that sticks for a change and gives us confidence to do a little more stock picking.  

So watching and waiting is our rule for the day.  We get more earnings from the Financial sector plus the EU stress tests next week so we’ll have to wait and see how much our $3.7Tn taxpayer contribution ($27,000 per taxpayer – so far) to that sector has helped their bottom lines.  Speaking of robbing from the poor to give to the rich – Brett Arends has an excellent article on income disparity, pointing out that the wealth gap in the US is, by far, the worst in the civilized world, far worst than Russia’s oligopoly and rising to a level that can only be compared to Zimbabwe, Argentina and El Salvador when comparing the lot of the average citizen to that of those in positions of power.

Bernanke gives his "Humphrey Hawkins" report to Congress at 2pm and there’s a warm-up hearing on TARP at 10:30.  Mortgage Applications were up 7.6%, countering the negative housing news we’ve been hearing.  MS had a huge beat as did WFC, HCBK and TXT and I hear APPL did OK too so let’s see what sticks today – there’s certainly no reason to be gloomy. 

 


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  1. lflantheman

     Phil…….Every morning that I turn on your site the same song pops into my mind.  "Mule Skinner Blues" by the Fendermen.     The first three words are "Good morning Captain……………..
    Go to iTunes and listen to it.  

  2. Jordan

    Phil, what do you think about buying USO puts when USO hits $35?  This was a successful setup last month.  USO hits, $35, then back down to $33.

  3. exec

    Phil….Question…..I must be stunod…….you said this:     
    For now, we’ll be watching the 2.5% lines at Dow 9,945, S&P 1,048, S&P 1,145, NYSE 6,630 and Russell 605.
    and this:  We bounced right off those 2.5% lines and got our $3 copper signal at 10:24
     
    What am I missing here????  We never got to these levels?  Can you explain what you’re talking about?

  4. snow

    5% solution/Phil
    Phil, it seems to me we’ve picked up enough new membership since you posted your original explanation of your 5% moves that it might be worth linking to that article. Since you’re Mr. Fundamental Analysis, if nothing else it’ll shock the new guys & gals to see even that bit of TA coming from your keyboard. Seems to me there was even something about Fibonnacci in there, and we’re not talking chambered nautilus or pine-cones (or is that e?).

  5. jomptien

    Phil, Is it time to close the Aug SDS plays? – 30/35 BCS and selling 32 puts? You can see I changed it a tad from yours as it seemed everyone was piling on and coulden’t get close enough your entrys.

  6. amatta

    Phil,
    I did not take advantage of most of the picks yesterday (GOOG, BAC, GS, QQQQ, IBM, TXN, AAPL, WFR and BIIB) as it is tough to determine from the posts if these are core portfolio holdings (25%) or short term plays. I left them alone as I am all the way up to 35% in long plays…. How can we better tell if these are short term recommendations or to be part of the long term holds?
    Thanks

  7. lflantheman

     Trading AAPL:   If any of you bought those July 270s yesterday get ready to close them out near opening.  

  8. diamond

    lflantheman – APPL :-)

  9. lflantheman

     Out of the 270s for 30% profit.  Might get more by waiting but too risky.   And diamond, yes…..:)

  10. jromeha

    Thanks Iflan you da man!

  11. Phil

    Good morning!

    We should test our levels and failing 3 of 5 is so bad that we should take bearish plays if we break 2 of 5.  Back to the RUT for the downside play with TZA $32 puts at $1.60 with a stop at $1.30.  If RUT holds 620 and heads back up, you might want to take a quick dime. 

    IWM is a little less crazy and the Aug $60 puts at $1.32 are good movers. 

    Levels are in the morning post but it’s time to cover already!

  12. chaps

    Phil: I think you meant TNA $32 puts, not TZA.

  13. samz3700

    Phil -
    It looks like we are at the top of that channel and heading down again

  14. doro165

    Phil, if you’re expecting a drop on the RUT wouldn’t you want TZA calls or TNA puts not the TZA puts suggested above?

  15. hanna5

    AAPL is up 3%, GOOG is up 0.5% and AMZN is green. Yet, the Nasdaq is negative. Doesnt bode well for the other nas stocks…

  16. chaps

    Phil: I’ve got short TBT Jan $43 puts with about $.84 in premium left. I’ve just been selling front-month calls against them. Would you do anything else?

  17. Pharmboy

    Mornin’ all.  Snow & Co. 5% rule here.

  18. RMM

    PHIL;
    have stock without cover: what to do with
    GE, MO, MRK , BAC: sell calls and puts or just calls ?

  19. Phil

    Mule skinner/Iflan – That is the first time I have ever been associated with country music…

    USO/Jordan – We have inventories at 10:30 so be careful but it’s a good play as oil is up at the moment on that China BS so any kind of bad news will spark a sell-off. 

    Stoned/Exec – You must be as the Dow hit 10,007, S&P 1,056, Nasdaq 2,159, NYSE 6,654 and RUT 605 or is it that you don’t consider it a level test unless every single level hits the exact spot you are looking for before turning up?  If you are going to look for mistakes – how about pointing out that I had 2 S&Ps and no Nasdaq!

    5%/Snow – If your remind me on the weekend I wouldn’t mind updating that post. 

    SDS/Jomp – I guess you withdraw that question by now.  If we hold our levels on this sell-off and turn back up then yes, it’s a good time to get out as the main danger seems to have pssed but someone is selling hot and heavy this morning.

    Volume is not that muc, just 25M on Dow at 9:55 but ALL negative – similar action to Friday and that did not end well so be careful!  It seems to me that someone is dumping out of AAPL into the buyers, maybe the same fund that liquidated everything but AAPL on Friday.  That’s dragging the Nas and spooking everyone welse at the moment.  Gap test on the Dow is about 10,700, S&P 1,070, Nas 2,190, NYSE 6,750 and RUT 612 – as long as we hold those, it’s not a big deal and I’m for taking those quick profits there on our short plays.

  20. matt1966

    Doubled down on my short at open.  Now even.  Quite a market we have.  Very indicative of a falling market.  Huge counter trend rallies.  Very tell tale. 
     
    Oops..,. now nicelye green! lol.

  21. Phil

    Doing a radio interview for a little while.

  22. hanna5

    People have been accumulating GS for a couple days…interesting.

  23. nicha

    Iflan- I wan buy a small position of puts for AAPL. Any suggestion. Thanks.

  24. rainman

    phil/exec/stoned — that’s funny, I took the misspelling to be ‘stupid’, not stoned! Maybe I don’t know exec well enough.

  25. jromeha

    Phil – what about the potential hurricane? It’s early but they are predicting it coming to the gulf if it does form. Im not long going into the inventory report but am considering buying a contract if the report is bearish…

  26. JRW III

    Good morning,
     
    IWM 58.86, 60.42, 61.61, 61.92, 62.49, and 62.92

  27. Phil

    Sell-off may be done! 

  28. dbarakat

    TASR is popping today.

  29. Phil

    Wow, this is taking longer than I thought – I must be very interesting…  8-)

  30. exec

    Phil,
    I wasn’t looking for mistakes, I just assumed that when you said it bounced off these levels that you meant it literally.  I didn’t realize that getting within 50 points was considered a bounce, rather, I thought you guys were working with some voodoo mathematic formula were DOW 9,975 actually meant something other than what it actually was.  That fact that you had two different S&P numbers posted really had me scratching my head.  I was like……WTF does that mean????
     
    On a lighter note, dude, who screens your calls????   How the heck does some punk kid get a direct line to you to ask about a billing question????  Man….the boy’s got my back.

  31. lionel

    USO/Jordan
    Nice play on USO. Bought AUG 34 PUT on your reco.
    up 10%

  32. gmarts

    Is there an easy way to track the price of copper metal, I used to use Kitco, but the prices reflected are much delayed.

  33. roscoe

    Pharmboy/ 5% Rule – Thanks

  34. mSquare

    RDY – Had posted about it a few days ago. Added to long I have held for a while. It reports tomorrow, so those not familiar with it may want to wait for that. 

    http://finviz.com/quote.ashx?t=RDY&ty=c&ta=1&p=d
     
    Good Indian Generics maker and I think a good risk/reward at this price in spite of almost 100% gain in the past year and a recent negative article or two.

  35. exec

    Man you guys…..Tony Soprano would be disappointed:  en.wiktionary.org/wiki/Talk:stunod

  36. dezev

    Released on 7/21/2010 10:30:00 AM For wk7/16, 2010

     
    Prior
    Actual

    Crude oil inventories (weekly change)
    -5.1 M barrels
    0.4 M barrels

    So the school of fish all run the other way.  Some of these reactions seem a bit much.

  37. chyer

     Phil/ STX and WDC on sale, PEs lower than FCX!! What was the basis for the downgrade on STX???
    Japan and Singapore did not get memo, down on a good day. Singapore has been an outperformer so far, stalled on the right shoulder mark on a one year H+S pattern

  38. jromeha

    Actually, this combined with the potential hurricane becoming ‘less organized’ (according to the national hurricane center) makes me bearish for the next day or so.

  39. diamond

    Phil – What radio station? What did they want to know? Did they ask about me? ;-)

  40. matt1966

    How bout BP getting called out for doctoring that photo!  Can you believe they would do something so stupid?  Just goes to show the level of ethics in the business world.  If they would risk getting caught do something as little as that when there was very little on the line just imagine what companies are willing to do when there is a lot on the line.  Pretty pathetic.

  41. dbarakat

    Doctoring a photo is just about the dumbest thing that they could have done. Almost certainty of getting caught and pretty much zero pay off.  What a bunch of knuckleheads.

  42. exec

    Matt,
    I didn’t hear about that and did a search on google but nothing.  Do you have a link?

  43. diamond

    Doctored photo? Oh No! The media can now obsess over something else silly!

  44. tuscadog

    Phil / Yahoo  Do you like it down 8% today?  I’m seeing more and more paid ads on all of my Yahoo pages lately.

  45. goldman

    diamond – Search "news" with "BP Photo"—>http://www.washingtonpost.com/wp-dyn/content/article/2010/07/19/AR2010071905256.html

  46. gmarts

    Re: copper, nevermind, Kitco.com has real time base metals charts

  47. matt1966

    Covered my FAS short.  Will wait till we break the LOD to uncover.

  48. diamond

    goldman – I already saw the story. How is this important? Oh I know … we will label it PHOTOGATE!

  49. Phil

    Holy cow, this interview is all over the place – still going.

  50. exec

    BP has to be "stunod"…..the media should have a feeding frenzy over this.

  51. goldman

    Phil – Tell Howard Stern we said HI! =)
    Diamond - yeah, I meant Exec…I’m still half asleep…

  52. exec

    Matt/LOD?

  53. jdub929

    Hey Phil,
    Did you field questions on the radio show?  
    I wouldn’t put it pass the bots to make today a total reverse of yesterday where the low was at the open.  

  54. rstuart4201

    Matt,
    FAS broke intraday low at 11:01…if you would just have waited one minute ;)

  55. matt1966

    Uncovered again.  Whheeeeee!

  56. matt1966

    LOD – low of day, HOD – high of day, oe – option expiration, fmd – free money day
     
    Will someone put these in the WIKI please?

  57. exec

    Thanks Matt

  58. amatta

     Matt, what do you use to cover the FAS?
    Thanks

  59. JRW III

    If the bears can’t push us lower here, I think "they" will take us Up !! (bounce off IWM 61.91)

  60. loopy

    JRW-
    I know you went over this before, so sorry if you have gone over this…but how do you calculate your S/R lines.  I have tried the pivot stuff but its not giving me anything useful as of the moment.  Any thoughts?  Much appreciated.

  61. matt1966

    Covering FAS short again.. banks holding the line while the indices continue dropping

  62. matt1966

    amatta anything that goes the other way!  You can either short it or buy $ equivalent of FAZ.

  63. Phil

    Wow, I’m back – did I miss anything?

  64. dflam

    Phil: I noticed that many of the high yield pipeline companies,KMP,PAA,EPD,EP, etc are all hitting new highs. Is this just a search for yield ?
    Have u had a chance to come up with a hedge for the DOW buy/write stocks in my IRA ? thank you

  65. matt1966

    My last position was actually FAZ.  Not FAS short.  But when I tried to cover FAZ by shorting it there weren’t any shares available.  Haven’t had that problem recently with FAS.  I think folks have loaded up on banks..

  66. JRW III

    In TNA at $37.61
     
    loopy / lines
    It’s a calc on how often a line has been a line over 6 months; easier just to read my morning post than to do it yourself !!

  67. Phil

    Nope, we’re at Dow 10,208, S&P 1,079, Nas 2,206, NYSE 6,791 and Russell 619 and we were looking for Dow 10,200, S&P 1,075, Nas 2,200, NYSE 6,800 and Russell 620.  Is this close enough Exec? 

    So that should be it for the bear plays if we’re lucky and it will be really nice to hold up here after this good level test.  Volume on the Dow after 2 hours is a light 57M so on a stickable track but way too early for that.

    QQQQ $46 calls are .76 and were $1 this morning so I like those now.

  68. matt1966

    JRW, if this is a bounce.. not much energy!  Not really buying it.. but on the sidelines for now.

  69. rstuart4201

    I’m waiting for one more LOD test before I unload FAZ….and as I type that we get a nice drop below it….

  70. SeanC

    Phil: you probably have had this discussion many times; but I am still not clear: in IRA account where there is no margin and full purchase amount has to be maintained in cash, does it make sense to sell puts?
    Another question: with buy/write, if the stock quickly runs up 15-20%, and you would obviously have lost money on the written call but overall it’s still a gain of 10-15%.  In that case, I should just sell everything and take the profit in stead of waiting till the call expires (that will only increase returns by a couple percentage points), correct?  Any other adjustment that I can make?

  71. jdub929

     TASR- up big and volume already surpassing avg. volume just 2 hours into trading.  I hope it doesn’t make a u-turn.

  72. SeanC

    Phil: how can we listen to your radio interview?

  73. matt1966

    JRW, here comes your bounce!

  74. rexx

    ready for some more BIDU? – Sep 83 Cs@3?

  75. matt1966

    Needless to say.. but this a very technical kind of day.  Someone goosed the IWM for a minute to show some leadership but that’s it.  No conviction.  Could be a trap-

  76. rainman

    SeanC/puts — I know you didn’t direct that question at me but I think it still makes sense to sell puts. Especially if you are scaling into a position. Also, if you have written a put and a call, only one can go "against" you so the other one is free money in my opinion. Having said that, I think your question is more about potential returns. Certainly some issues work better for selling puts than others. You have to dermine if the potential outcome is within your tolerance.
    Youre second question can be figured out by calculating the premium left on the option, and again, what your tolerance is.

  77. jromeha

    Anyone think we’ll get a pre-Bernake bounce?

  78. rainman

    matt/goose — that was on pretty pethetic volume!

  79. exec

    Is this close enough Exec? 
     
    Freakin Wiseguy…………..give me a break…..I’m used to working with JR’s numbers……+or- .01 points.

  80. goldman

    JRW – got $0.21 but I’m out…not sure I trust the "Speech Stick".  TBT predicted the spike this time by about 3 minutes.  Perhaps we will get a "Big Ben Stick" at 2pm today…

  81. edro00

    SeanC
    When selling puts in my IRA I look for bull put spreads that return about 0.50 in a month that cost no more than $2000 in margin (cash cover).  For example VLO August 15/17 bull put spread or UNG August 6/8.
     
    A return of 25% in a month is great.

  82. Phil

    Big builds whacked oil – that was not unexpected:

    EIA Petroleum Inventories: Crude +0.36M barrels vs. consensus of -1.3M. Gasoline +1.1M vs. consensus of +700K. Distillates +3.94M vs. consensus of +1.6M. Futures -0.68% to $77.05.

    CNBC not covering Congressional testimony?  I guess it’s too important for them to talk about…

    Core holdings/Amatta – If it’s a long-term buy/write – it’s a core holding.  If it’s a long-term short put – it’s a core holding.  Anything else is gambling!  If you already have 35% invested in things you are happy with, then you are full.  Every day there will be new plays and sometimes you may want to trade a weak performer for something new but, on the whole, once you establish your long-term plays – things should get VERY boring after that.  Patience is the one thing I can’t teach you – you need to practice that

    Good call on AAPL at 9:28 Iflan – ALWAYS sell into the intial excitement! 

    TZA/Chaps – Damn, that was TZA $32 CALLS – I screwed that one up, good catch.

    Good catch Hanna at 9:52 – you guys are getting good as smelling BS moves!

    TBT/Chaps – No, I think that’s a fine plan.  We’re not confident enough in TBT to roll them down anymore so just try to work them off to free trades and hope for the best. 

    What to do about stocks without Cover/RMM – Er, cover them.  Whether to sell puts depends on where you are in the scale.  To be clear on that, if you have a $1M portfolio then no position should be more than $50,000 and $25,000 is better but that means that NO entry should be more than $12,500 (scale 1) and your second entry will bring you to $25,000 (scale 2) and, if you end up doubling down again, then you would be up to $50,000 (scale 4) at which point there is no way you want to sell puts because you damn sure don’t want a single position to be 10% of your portfolio.  Also, just because you are early in a scale, doesn’t mean you absolutely want to risk another DD selling puts – we only do that for stocks we like.  I do like all 4 of those stocks though so – it depends how invested you are in them

    Stoned/Rain – Well I figured that kind of typo would lean me towards being stoned over stupid.  Consider it a testimony to my estimate of Exec’s intellect that I didn’t consider stupid.  8-)

    Hurricane/Jrom – Now that oil sold off it’s worth a toss to get back to $77.50 but I still think that’s the long-term "right" price.  I think Nat gas is a better long-term bet and UNG is down at $7.70 and you can sell Jan $8 puts and calls for $2.10 for a net $5.60/6.80 entry, which is not bad as they make a good long-term inflation hedge anyway

    Yay Obama!  Made us a whole .03 on the Qs so far..

  83. matt1966

    Damn, looks like I got some bad data at 11:37am on IWM.  I’m showing a 1 min volume of 1.1 million but on the 5 minute interval it’s only 571k total!  I think this is a trap.. and someone might have sent some dirty data to try and pull it off!

  84. Pharmboy

    Umm, VIX is rising FWIW.

  85. rstuart4201

    They can goose all they want.  Made me an extra 5 cents per contract on the options.  Back to studying for the BAR.  Good luck!

  86. Phil

    Giving up on Qs at $45, of course (Nas 2,200) if we can’t hold it. 

  87. jromeha

    Phil – what are your thoughts on copper today? Up .10 already, do you think it’s a good short for a daytrade? Every penny is 250$ and Im pretty tempted here….

  88. shadowfax

    matt
    Saw that spike now they took it away, what’s with that?

  89. matt1966

    Held nose and bought some FAS at 20.7!

  90. nicha

    Phil- the radio show. Which station? When will it air? Thanks.

  91. matt1966

    Shadow there is no telling what kind of tricks ‘they’ use to goose the market and save themselves a buck or two million.  Only the Shadow knows!

  92. lflantheman

     nicha….I wouldn’t buy puts on AAPL right now.   Wait for a better move upward.  

  93. shadowfax

    matt1966 seeing a shadow = 6 weeks of winter!

  94. willsons

    JRW     Thanks for all the education you have given us!!  We have had some fun and profitable trades:)

  95. diamond

    Phil – The market has been in a rally mode since you finished the radio interview … just a coincidence?

  96. Pharmboy

    Breast cancer indication for Avastin (Roche/Genentech) gets yanked.  Not good for them, not good for PDLI either, as it is believed to be $1B in market share for the mAb.  Might want to cover PDLI here after the nice run back up.  Aug 6 P for 30c make a nice protector.  Chart is rolling over as well, so worth the risk for me.

  97. JRW III

    Out of TNA at $38.28; TBT failing !!

  98. qcmike

     
    Pharmboy
    What do you think of King Pharmaceuticals KG?
    Thanks
     

  99. gel1

    Yodi
    You recently made an inquiry to the current status of CGA ( China Green Agriculture ), and I responded that I was still bullish on the stock. I still have it. I heard yesterday from an analyst that spends much time in China, and visited with the company’s new CFO – Ken Ren. They are growing very fast, and have recently added a new 88 acre research facility, almost doubling their HA based compound fertilizers for 2011. The analyst had no negative news to report.

  100. exec

    JR,
    When you exit TNA of example.  Do you usually go TZA immediately?

  101. JRW III

    Well, Lloyd snookered me on that one !!  Still, be careful around IWM 62.48 (a16 point S/R line)

  102. Pharmboy

    KG/qc – first glance, look ok, I need to look into the pipe and the % of animal feed w/ antibiotic is to sales.  I will look AH….

  103. JRW III

    exec,
    Depends on the situation; if we fail to break North of 62.45, I’ll be in TZA. I’m back to cash now as I got flushed just now.

  104. tuscadog

    All /  Yahoo  Is there a techie here who can explain to me what the Apple push to hand held browsing leadership will do to Yahoo, Microsoft and Google?  I’m long MSFT and GOOG and thinking about Yahoo.

  105. Pharmboy

    GILD whoas continue b’c of this:
     
    GlaxoSmithKline (NYSE: GSK) and partner Shionogi say they are bringing their once-daily, unboosted investigational integrase inhibitor, S/GSK1349572 into Phase III trials. According to an announcement, ‘572 will be the only such product so far along in development.

    The companies’ decision is based on promising results from two Phase IIb trials, SPRING-1 and VIKING, being presented this week at the XVIII International AIDS Conference in Vienna, Austria. If it performs well in tests, analysts believe ’572 could reach the market in 2013, according to Reuters. Furthermore, success with ’572 could signal the re-emergence of GSK as a significant player to rival Gilead in the HIV arena, according to Sanford Bernstein analyst Geoffrey Porges. As Reuters notes, GSK was a long-time leader in the HIV field, but ceded this position to Gilead.

  106. gel1

    Bought a long position in ICE (Intercontintal Exchange) buying December 125 calls.. Business is booming big time, and profits are soaring. The new fin-reg legislation will be a big boost for these guys ( as Joe Biden would say "this is a big f…… deal ). They  report earnings on Aug 4, and I am expecting superb earnings…. this baby is headed UP.

  107. JRW III

    Here comes The Push !!  And everyone goes green !!

  108. jromeha

    JRW, are you in TNA or still in cash?

  109. gel1

    I spent some time yesterday with a friend that is a very successful property developer. He is liquidating his inventory, as he said the banks will not touch a property deal with a ten foot pole. This guy has a 30 year history of success, and has thrown in the towel. I have to believe this same bank policy is prevalent throughout the entire country. This same bank conservatism also applies to any new business development. The entrepreneurial sentiment in the country is at an all time low. In order for this impass to break, I believe the government will have to act very pro-actively, probably sooner than later. I predict we will se QU-02 in the vicinity of $1 tril., and if this becomes reality, we will see a huge move up in the equity markets immediately. It would be time to jump in long on the ultra ETF’s

  110. JRW III

    In TNA at $37.66 average

  111. rainman

    gel1/CGA — thanks for that tidbit. I’ve been long CGA for over a year.

  112. RMM

    Phil: have SPWRA stock  with a net 5.3$/share loss, (made 3.5$/share with covers,),
    1x oct 10 putters went from 1.9 to 1.06$, 44 % green
    4/7 x oct 15 callers went from 2.16 to 1.34$, 38%green,
    what adjustment makes sense ?

  113. JRW III

    That’s $38.66, of course.

  114. samz3700

    anyone have the link to the article on deflation that phil posted a couple of days ago -
    cannot seem to find it with a search -
    I thought it was a lunch time read – thanks – I finally have time at lunch but no luck

  115. diamond

    samz3700 – RE: lunchtime reads

  116. rj_jarboe

    Phil,
    Do you feel it is too late to go long on CCJ?

  117. fjd10595

    The chairman can only tell us that the economy continues to be weak and he will be accomodative as long as is needed which means stocks up bonds down and a summer rally.

  118. rj_jarboe

    Phil,
    Do you feel it is too late to go long on CCJ?

  119. Phil

    Go TASR!

    50 points/Exec – I was just busting your ass.  Did you ever have a really good taper recorder that measured sound levels?  They had these bouncing lights from low to high octaves and would have a line where the recording levels peaked out and your goal was to adjust the recording so the highest peak of the group would just touch the red line.  That’s kind of what the indexes are like.  If one index hits and tests and they all turn around – that was your level test.  I means that the one break hit a trigger in a program that initiated a buy program that led that programs and others to "adjust the levels" and begin shifting their dials – in this case from selling to buying.   Just like with a tape recorder, you keep your hand on that dial and watch some more and maybe tweak the knobs one way or the other until you get comfortable and leave the damn button alone for the rest of the song.  That sums up the market quite nicely…  As to screening, your guy ended up talking to my accountant’s office and his girl gave him my number – persistence pays off! 

    Copper/Gmarts – Sign up for a Paper Trading account on TOS and then you’ll have live futures.

    Stunod/Exec – OK, I’ll give it to you – you can be stunod if you want to.  8-)

    STX/Chyer – I don’t get the hatred of these stocks.  What analysts don’t get is drive prices are down to the point now where STX and WDC are more like chip manufacturers than finished product makers and they haven’t really adjusted their models to reflect that.  STX is a great buy at $13.39, selling 2012 $12.50 calls for $3.80 and the Jan $12.50 puts for $1.40 for a net $8.19/10.35 entry that has a quick, 6-month margin release and leaves you with a very cheap stock to sell calls against for many years

    Radio/Diamon – Some internet radio guy I forgot I said I would talk to.  I will get the link later I guess.  Just the usual nonsense – I tried to explain options strategies to people who have no idea and then I told them how to fix America and called on the masses to rise up and overthrow our corporate overlords – same old, same old… 

    Doctoring/Matt – And the funny thing is we sit here waiting for their earnings reports as if they contained an actually realistic veiw of the businesses.  As far as BP goes – I doubt it was anything sinister – they paid for a photograph and the guy took pictures and they wanted to make it look more interesting – hardly a cover-up.

    YHOO/Tusca – I haven’t like them at any price for at least a year.  You see more ads but you don’t know what they are paying per ad.  I’d stay away.

    Europe gave up a lot into the close.  DAX fell way back to 5,990 (bad) FTSE (5,214) and CAC (3,493) also gave up their levels in very shapr sell-offs that coincided with our open.  Not sure what all that means yet but very strange action…

    Questions/Jdub – There were no callers or anything, just the host, who was a nice guy, asking general stuff.  They were fascinated with the idea of selling options – guess it never occurred to them….

    Perfect timing at 11:14 JRW! 

    Pipelines/Dflam – Yes, I think they are nice, safe(ish) big dividend payers.  You don’t want to gamble on the price of oil but betting on the use of oil is hardly a gamble.  On the IRA thing – I got busy last night but my best solution is to collect $2.50 for 1x the DXD Jan $29/25 bear put spread and spend $2 on 2x 25/31 bull call spread so you are risking $5,500 (for example if 10 DXD bear puts cost you $4,000 to pay off) to buy $12,000 of upside protection.  This is a LOSER if the Dow goes higher at all so make damn sure you are making plenty to cover your loss as you own nothing at the end of this one but it’s a good risk/reward that pays very nicely on a small move down in the Dow.  Of course you could just buy $4,000 worth of the $25/31 spread and that pays $12,000 at $31 but the break-even is better on the condor.  Perhaps buy $2,000 of the spread and add more $25 calls as the Dow falls?

    Selling puts/Sean – It makes sense when the math works.  You can sell BAC 2012 $12.50 puts for $2.35 for a net $10.15 entry.  That is (laying out $1,015 to make $235 in 18 months) vs. buying $1,366 worth of stock and selling 2012 $12.50 calls for $3.60 (net $1,006 to make $244).  So, it’s close but it makes more sense to buy the stock (plus the small dividend tips it over for you).  With WFR, the stock is at $10.93 and you can drop that to $8.70 selling the 2012 $10 calls with $1.30 of upside or you can sell the $10 puts for $2.10 and you have to hold $790 to make $210 so clearly here, the naked put sale is a better play.  You have to do the math to see where you get the most bang for the buck.  And yes to taking early profits off the table.  If you make 15 of 20% in 2 months and have to wait 5 months to make 5% more – what’s the point?  I’m sure we’ll find something else to trade tomorrow if you are "stuck" with cash profits

  120. David Ristau

    Hey all,

    I have a new Overnight Trade for all of you in Reliance Steel & Aluminum (RS). The stock looks very strong moving into earnings tomorrow. 

    Check out my analysis, entry, exit, etc. here!

    Good Investing!

  121. Pharmboy

    1020 – San Diego housing market…..FWIW:  Housing Market Stumbles on the front page of the WSJ (and Building Supplies Drag Retail Sales on page A4). Year-over-year comps are now starting to look distinctly brown-shooty with unsold housing inventories in various California municipalities up anywhere from 15% (L.A.), to +33% (San Diego) last month.

  122. tuscadog

    Gel / QE2  Gel, do you think QE2 is politically feasible before Nov?  Also, QE without a major infrastructure spending initiative will have little impact.  We need natgas push, fibre network, infrastructure build and patriotic mercantalism to bring jobs home.  I don’t see the votes to implement this, so you may be early with the ultra’s.  See my post yesterday to Phil re DDip. 
    Phil, I’m still 50% long and 50% cash and that’s worked better for me than my earlier sceptical 90% cash!  The housing and unemployment disaster will continue (and jobs ain’t coming back from China and Mexico until we become selfish mercantilists again), so I still see a nasty DD, with neg GNP, without major new QE (extended unemployment helps maintain some spending but doesn’t kick start growth).  RUT profits can’t grow without significant GNP growth.  The problem is that handing out money, like UI, just sends more money to China via WMT.    Hard to see a bullish catalyst after earnings in July, other than a major QE initiative.  Even record low mortgage rates are making no difference to housing.  So, it may now be about you timing the move to going back to cash or net short sometime in July?
    I’m thinking money to be made going short again at some point, then going long when things look grim enough to support China style QE and infrastructure push in both US and Europe to exit depression / deflation?  However, you’re the timing expert.  Thoughts?

  123. bps2002

    It is not likely that the FED does anything with rates as long as unemployment is > 8%.
    The only thing that will make the banks lend is they quit paying them to keep reserves high (the rumor form yesterday); though this is what I think will happen soon, like in September. The rumor was probably a test for market response,
    That is they will lend if they can find borrowers; hard to do these days. 
    Only my opinion.

  124. SeanC

    thanks for you answers Phil.  To the second question: I guess i could also roll the call to higher strike, right?

  125. JRW III

    Out of TNA at $38.46 average; not going for TZA just yet !!

  126. Pharmboy

    FWIW and againg, deflation is the norm…
     
    CORPORATE BONDS TRUMP EQUITIES
    The stock market trades off the income statement and we highly doubt that margins can expand further with nominal GDP growth rolling over to justify a consensus view of 35% profit growth in the coming year. (According to data cited by the WSJ, current earnings estimates implicitly assume margins that are 50% above historical norms — right).
    But the credit market trades off the balance sheet and in the broad corporate sector it is as strong as any other time in the past five decades. There is a massive $1.84 trillion on the nonfinancial corporate balance sheets — up 26% YoY. This is a huge buffer against default risk, which, after all, is what matters for the credit space. But what this pile of cash means for earnings — or for perceived rates of return on new investments — isn’t good.
     
    Oh…and Japanese Investors Snap Up U.S. Bonds (page 20 of the FT). For all that talk about a foreign buyers’ strike… fuggetaboutit (PHIL YOU ARE GETTING QUOTED HERE)!! In the nine weeks to July 8, Japanese investors have bought a net $88.3 billion in foreign bonds, mostly U.S. bonds. This is a great article (if you’re a bond bull in particular). The article quotes one portfolio manager saying, “no one in Japan is afraid of low rates … The reasons to buy bonds — economic risks, regulation, deleveraging, risk of policy mistakes — all these themes are very common ones for Japanese bank portfolio and asset liability managers.”

  127. samz3700

    thanks diamond – will have to read after work – but much appreciated

  128. doro165

    Gel, are you feeling ok? Quoting Joe Biden and advocating QE2 sounds like a page out of the wrong playbook! JT

  129. RMM

    Phil: I see you go out all the way to 2012 in selling puts and calls when you take a stock position: why so far out, what is your criterion ?

  130. lflantheman

     Here’s a GOOG trade I’ve been working on:      Believing that GOOG trends upward in the near term, and wanting to take advantage of the new weekly options………..Buy Sept 480 calls at present price  (about $21).    You may already have these based on Phil’ rec earlier this week.   Place a sell order for equal number of July 290 calls for $2.50.       For such a trade the max. profit is 33% (that’s in 2 days!) with breakeven at 478 and 509.     I believe GOOG holds under and close to 490 by close Friday.    Don’t accept less than 2.50 for those calls, higher if you like, but 2.50 is likely to occur today if Bernake’s talk gives us a market surge.     

  131. tuscadog

    Pharmboy / DDip  You made good points supporting deflation and DDip.  I’m still having difficulty getting my brain around Phil’s point that Gov’t will head this off with QE2 given the political climate.

  132. exec

    Phil,
     
    I had to laugh……my son told me last night that he talked to some Phil guy at Phil’ World……I’m like……what the hell are you talking about. 
     
    Apparently the girls at the office saw the charge on the CC and gave the boy the task of figuring out what it was.  He said the first guy gave you right up……then said you asked……"how’d you get this number"……..laugh…..man I hope they don’t have any dirt on you…..there’s no tellin what they’ll give up with a little pressure.

  133. gmarts

    Volume drying up like an Arizona mud puddle. It’s hard to stay awake with all that lunch in me…

  134. jvest

    RMM/2012 – I suspect part of the reason for selling LEAPS options is to pay a lower capital gains rate. You could maybe make more money by selling short-term options but you have to manage it more, pay more trading fees, risk more short-term moves against you, and pay tax at your earned income rate instead of long-term capital gains rate.

  135. exec

    JR,
    Which chart do you overlay TBT on?

  136. gel1

    tuscadog
    I believe QE-02 is very feasable before November. The longer we go without any hope for a better recovery, the more impatient the country is, and the concern builds for a DD. I believe we will see a joint effort between the Fed and the Treasury. The control of the Fed is with the easy money folks and Ben falls into this category. He absolutely fears deflation, and is not too concerned about inflation at the moment. Politically, I see no problem of a bill passing, as long as tax concerns and incentives for small business and entrepreneurs are aggressively addressed.  When looking at the charts going back, it is very clear from the charts the markets flew up (along with gold ), every time we had a strong dose of QE. In order to break the unemployment pattern at the prresent level ( some say it is realistically 22% when you include those that have given up looking ), there will have to be a focus on incentives for small business, and a dose of hope for big business. In the "great" depression, unemployment was at 25%, so we are very close at the moment. The last of the big spenders have taken over the government, so I do not see any insurmountable reluctance to the concept of much more easing – just give the repubs their selective tax breaks, and it will be a done deal.

  137. 1020

    Pharm/San Diego  Thanks for that. I just know to be buying when they’re crying. Who knows, I might be able to get them to furnish the place as well….. :)

  138. jvest

    Actually, I may be wrong on capital gains; the rules are complicated.
    This link
    talks about it in detail.

  139. matt1966

    Sold FAS at 20.93.  Still not convinced we’re ending up today  Looking for FAZ entry..

  140. matt1966

    BTW, volume is beyond anemic!

  141. matt1966

    gmarts, you got that right!

  142. 1020

    Gel1/QE-02  Did someone slip a little Kool-aid in your morning O.J.?  ;)

  143. JRW III

    exec / TBT
    I have it on the 3 min conformation chart; I don’t want too much on my main trading chart.

  144. tuscadog

    Pharm / QE   Good points.  But the GOP don’t want to help the Dems in Nov, so blocking a Treasury QE initiavtive for now may be politically expedient – unless they get the quid pro quo of a $Trillion gift of Bush tax cut extension – which could trigger a sovereign debt crisis. In other words your right, but may be early with your timing.  My gut says we tank first based on DDip before we get constructive political initiatives forced by crisis, which as you explain always pumps the mkt.

  145. gmarts

    Waiting for Godot…………………..

  146. gmarts

    My Dinner wirh Andre’ ……………….

  147. gel1

    doro…. Yes, it might be time for another visit with my therapist. I abohr the idea of additional debt, but when one considers the alternative of further malaise in the economy, one has to consider which is the worst of two bad choices. It is sad for me to observe the recent remedial action of the past year, as plenty of money was spent to turn the economy around, but it was squandered in the wort possible way, considering the objective.  Most all of it went to pet "pork" projects for the folks in charge. If you tried to do a worse job, I can’t imagine how. Incentives work, as proven in the past. The tax code is the easiest and most effective expedicious method to adjust the economy’s direction. The government needs to "get out of the way" and not "stand in the way"  Joe Biden… ya, I’m glad he is there for the laughs – otherwise so many of us would be crying!

  148. lionel

    Jromeha/ Copper
    Good call on copper. Down 75c since your post.

  149. diamond

    "If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring." — George Soros
     
    Yawn … I MUST be making money …

  150. DKGuy

    Gel – any thoughts on EW. I think their earnings are coming up tonight.
    Oh, and I hope your not weakening and thinking of going over to the "Dark Side"

  151. knuklhead

    Phil-
    A couple of quick q’s:
    Do you ever look at high/low IV/HV to get a sense of mkt sentiment?
    On buying stock and selling p’s and c’s against, what is the downside of replacing the stk with a long term call.  Some of the good one’s are little out of my price range (for now).
    Thnx

  152. gmarts

    Lohengrin ……….

  153. Pharmboy

    Bush’s tax cuts will be extended so you can buy the dividend stock gel!  As for more fiscal stimulus – that is a coin flip.  If it is passed, Dems are voted out as people see it more for the banks than for them.  So tax cuts extended (working on), unemployment benefits extended (check).  QE don’t see it – yet.

  154. matt1966

    In FAZ at 15.17… we’ll see if it was a good move shortly!

  155. gel1

    1020… Predictions of QU.02 sounds like I have lost my mind, I guess. That Kool-aid does go well with the OJ though!

  156. amatta

     JRW, 
    Breaking the 62.49 convincignly now, it seems. Is this a buy for a stick with TNA?
    Thanks

  157. jromeha

    Thanks Lionel – been doing pretty good daytrading futures the past few months (of course following JRW helps to! :) )

  158. jromeha

    Im taking the opposite track Matt, I shorted the 30 year at 128’05.

  159. 1020

    Gel1  :)

  160. amatta

     oops, that reversed quickly!!!

  161. 1020

    Phil, should I feel "lucky" with BYD @ 7.77?

  162. kinkistyle

    yikes closed the Q’s with a .04 cent gain, but that was an ugly reversal!

  163. matt1966

    Whheeeeee!  Jromeha.. not exactly opposite track… treasuries?  Or at least I hope not!

  164. rainman

    Ohhhh….. Anti stick for uncle Benney?

  165. srfrog

    IWM –  I have an upward sloping support trendline connecting the lows from today and yesterday on a 5 min chart.  Ooops, we just sliced right down through it!

  166. amatta

     What was that?? ROBOMANIA…

  167. matt1966

    Sold FAZ at 15.44

  168. JRW III

    amatta,
    NOOOOOOOOOO!!!!!!!!!   They CAN’T break out of the Zone. TBT DESTOYED!!!!!

  169. jromeha

    Hehehehe, good call Matt. I was just referring to my bet being more bullish while yours was bearish in nature.

  170. matt1966

    Do NOT go against me today.  I am in a zone!  And I should quit while I’m ahead…  8-)

  171. Pharmboy

    They broke out of the Zone alright!

  172. Phil

    Selling puts/Sean – Also, on selling puts.  If you do sell, for example, C Jan $4 puts for .50 and C drops to $3.50 and the puts go up to .80, you can roll them to 2x the 2012 $2.50 puts for .40 each (guessing) by adding just $1 of margin but you lose nothing unless C falls another 33% – that ain’t gonna happen if you buy a covered call! 

    And what Edro and Rainman said.

    +/-.01/Exec – Spoiled! 

    Copper/Jrom – $3.20 is a spot you can short but $3.10 is way too in-between, I think.  3.075 was the 2.5% line so 3.15 is the next stop if they get through 3.10 (psychological resistance) or, if we bounce off $3.10 then 3.075 is where you would look to see it hold up for a bullish attempt over or a breakdown.  

    Radio/Nicha – I’m waiting for the guy to send me a link.   I’ll post it then.

    Rally mode/Diamond – Well I did pick WFR as my favorite play, so I’ll take credit for that.

    45 minutes to Bernanke.  Dow volume just 80M, about 15M behind schedule.

    AAPL/Tusca – It’s about eyeballs.  GOOG, MSFT and YHOO project growth in ad revs based on expectations of caputring a share of eyeballs.  If AAPL has a phone that’s owned by 1 out of 4 people and ropes those eyeballs off – then the projections are called into question.  That’s why they are already screaming monopoly etc. at Jobs – if he can really control the platform and the environment – these guys will have trouble.  If I were Jobs, I’d be working very hard to come up with a better search engine than GOOG because that would be quickly adopted by AAPL people and it would shut GOOG and MSFT up really fast as they won’t want him coming into their market.  Also, if it runs on a Mac server farm – that’s another Bazillion dollar of sales Apple can rack up.

    Entrepreneurial Sentiment/Gel – I agree 100%.  Major corporations are making $6Tn in profits, that’s $50,000 in PROFITS for every single working American and no one has the balls to TAKE IT FROM THEM.  Profits are the prize in capitalism and, in theory, they are there for the taking by anyone who is willing to do more for less because, in theory, capital will flow to the most efficient provider.  My real estate data business started in my basement and we took out a $5Bn competitor who had 100% of the local market and eventually bought us out to get rid of us (my non-compete is over now, that’s the business we’re restarting as soon as we get the financing done).  It just takes hard work and business smarts but there’s no reason the idle American labor force can’t take back their country - the will to do it has just been beaten out of people.  

    SPWRA/RMM – Not much to do, they are on target and you stand to make another 50% or more in 3 months.  Why do you think you need to adjust?

    CCJ/Rj – Well it’s late compared to our entry but they cleared the 50 dma at $27.50 so this is where we like them for another move up and, very long term, we like them anyway.   As a new entry I’d go cautious though, maybe buy the stock for $24.11 and sell the 2012 $22.50 calls for $5 and the $20 puts for $2.35 for a net $16.76/18.38 entry for a nice 25% discount back to where we really like to buy them

    QE2/Tusca – I think it’s very hard, in an election year, to find 40 Senators who will vote against direct aid to taxpayers.  They approved the Bush stimulus and they will be slammed as partisan obstructionists if they go against a similar measure under Obama.  The Republicans have very neatly painted themselves into a very tight corner where they need the economy to fail under Obama’s Socialist regime or they will look like idiots yet to make sure the economy fails, they have to pretty much stop every bill the Democrats put on the table and there are little earmark riders on every bill that may seem like "bridges to nowhere" to you but they are jobs lost to the people of each city and county the Congressmen filibuster against helping out.  Effectively, the Republicans are going to be running on the "Things suck now and we want you to tighten your belts a little further to pay for our tax cuts" platform.  We’ll see how that goes for them…

    Borrowers/BPS – Plenty of people want to borrow but the requirements are now set so high that few people qualify.  Homes can’t be sold because savings have been wiped out and the Corporate MSM has run a great propoganda campaign to villify 5% deposits to make sure poor people can’t buy homes while they are cheap and all the sheeple who watch FOX and sneer at FRE and FNM as if it was all their fault don’t realize that there is a distinct trickle-UP effect on homes and that denying a guy with a $3,000 a month job who’s already paying $1,300 a month in rent the ability to buy a $1,000 mortgage on a $200,000 home because he can’t come up with a $40,000 deposit is hurting themselves as much as they are hurting the lower-priced home sellers.  Barnum said you can’t fool all of the people all of the time but it’s been 3 years of this BS and I see very few people who aren’t baffled by the BS that is spouted by MSM on this issue.

    Rolling/Sean – Of course right. 

    Japan/Pharm – No one in Japan is afraid of low rates because they’ve now had an entire generation of investors conditioned to think that 0% is the norm and that the rest of the world is just "getting with the program."  The major shock will come when that goes the other way as Japanese investors are as poorly positioned for inflation now as US investors were for a housing collapse in 2006.

    2012/RMM – The higher the VIX is, the more the longer sales get attractive but it’s also a question of insurance.  Last week, we were pretty sure the already low price was adequate protection so we were more aggressive, selling Jan combos but it depends on the stock too.  There have been some very attractive Jan combos in the past week where you can average over 10% a year on a conservative spread in this wacky market – why not do that and be happy?  Also, not everyone has time to sit and stare at the screen all day so 2012 plays are more attractive to people who work for a living.

    GOOG/Iflan – Good strategy with the July 23  $490 calls at $2.50 (not the $290 calls!).

    Giving it up/Gel – You are right, I need to find new accountants! 

    Almost $90M on the Dow coming into Uncle Ben at 2pm.  This is day one of 2 days of testimonly so much uncertainty until EOD tomorrow but expect the speech to be like the minutes, which sent us flying down so it’s all about what we hold while he talks.

    LOL Diamond!

    Sentiment/Knukl – We watch the VIX all the time.  It helps but more lagging than leading.  Downside to buying calls is the premium you pay.  Our goal is always to sell more premium than we buy but tell me a stock or two you want and I can give you a cheap trade idea for an entry.

  173. Pharmboy

    Mr. Ben seyz: (We) The Federal Reserve stand ready to take further actions if the U.S. economy slows significantly or falls back into recession, Fed Chairman Ben Bernanke told Congress on Wednesday. Bernanke did not elaborate on what further steps the Fed might take. The outlook is "unusually uncertain," he said, adding that he expects moderate economic growth and low inflation. He said it would take some time before lost jobs would be regained.

  174. JRW III

    In TZA at $36.76; Thaks, matt !!

  175. jromeha

    hahahah ok, TODAY I will not go against you.

  176. exec

    Nice.  .68 TZA

  177. gel1

    DKGuy/EW
    I have no word on them… I do not know of any negative sentiment. I still am in it long term…. Oh no, the dark side is not for me – only sunshine and lollypops in my future!

  178. JRW III

    It seems I just can’t type worth a d*** today 8-)

  179. tuscadog

    Phil / Bernanke    So he confirmed what we already know, the economy is awful and I’ll have to keep rates at zero for an indefinate period (and I’m not going to criticize the deficit spending anymore).  What’s the surprise here?

  180. exec

    Is Ben going to talk his way out of this?

  181. matt1966

    Wait a minute.. Unlce Ben has been telling us things were going ok.  WTF changed?  Oh yeah, his grand experiment with our nation’s future isn’t going so well!@#

  182. DKGuy

    Gel – Thanks and glad to hear you will continue to be a voice for Hope and Change. :-)

  183. dbarakat

    So with low volume, does it look like there are good chances that we see a post 3pm stick?

  184. fjd10595

    Bernake said that the outlook is uncertain.  This is exactly what any rational person would have expected him to say, and that he ‘stands ready to assist.’   Presumably investors everywhere know the same thing, yet the sell off.  There is much irrational behavior in investing.

  185. matt1966

    tuscadog, nothing is different.  This is just providing cover for the selloff that began in April to heat up a little more.  It’s all about cover.  Except for yesterday.  Where they had no explanation for that ridiculous move.  That was just a set up.

  186. gmarts

    Bailed out on the QQQQ’s, Ben’s such a Debbie Downer.

  187. lflantheman

     Bernake news = No News= "Bernake Dip" won’t hold.   Looking for stick.

  188. loopy

    Bailed out on the QQQQ’s, Ben’s such a Debbie Downer.
    Now that’s good comedy!!

  189. JRW III

    We are at the 200 sma, the Pivot, the 8EMA, and a trend line; if they can’t break North here, we go to IWM 60.42.
    The PPT seem to be trying, we shall see !!

  190. humvee4me

    Bond buying is slowing down, perhaps the hysteria is abating?

  191. Phil

    BYD/1020 – I like them actually.  They dumped a huge amount of SG&A and it didn’t impact their revenues too badly.  NJ is messing with AC big-time under Christie and they are about to give away the Meadowlands to one of Christies buddie’s for nothing in a fire sale.  The state too away local control of the casinos (and the money), which is a total screw-job for the people of Atlantic city, who got all of the pain and none of the benefits of the casinos and now they are having their land confiscated without payment.  Too funny really.  Anyway, so I like BYD LONG-term and you can buy it for $7.60 and sell the 2012 $7.50 calls for $2.50 and the Jan $7.50 puts for $1.35 for a net $3.75/5.63 entry and, if you get your release in Jan – you are sitting on a no-margin double in 12 more months.

    Qs/Kinki - Yep, they turned south fast but I’m still hoping that, when Ben stops crying, we can turn back up as the volume (104M at 2:20) is stiill way low.  Note the Qs have not made 2 consecutive 10-minute candles below $45 and that the Nas is still holding 2,200 so not quite dead yet

    Surprise/Tusca – No surprise at all, just filling in the gaps for test #2. 

    Volume/Dbar – Low volume means we CAN have a stick but not that we WILL have a stick.  It’s more useful as a good reason not to be too bearish into the close than anything else. 

  192. amatta

    Phil, 3 out out of 4 levels broken… is this a moment to add protection? buy additional calls in the SDS/DXD spread? Or is this a blip while Ben speaks?

  193. gmarts

    Ben Bernanke makes Alan Greenspan look like Billy May!

  194. matt1966

    JRW, after careful consideration and evaluation of all facts considered……   see ya at IWM 60.42!

  195. Phil

    In his semi-annual monetary policy report to the Senate Banking Committee, Bernanke says the Fed is prepared to take more policy actions as needed and that the economic outlook is "unusually uncertain." He sees "moderate" economic growth and low inflation with significant time needed to restore jobs. Treasurys: 30-year +0.24%. 10-yr +0.04%. 5-yr +0.01%.

    10:00 AM On the hour: Dow -0.03%. 10-yr +0.03%. Euro -0.57% vs. dollar. Crude +0.28% to $77.80. Gold -0.06% to $1191.00.

    11:00 AM On the hour: Dow +0.03%. 10-yr -0.01%. Euro -0.47% vs. dollar. Crude -0.62% to $77.10. Gold +0.14% to $1193.40.

    12:00 PM On the hour: Dow +0.02%. 10-yr -0.08%. Euro -0.46% vs. dollar. Crude -0.26% to $77.38. Gold +0.08% to $1192.60.

    1:00 PM On the hour: Dow -0.04%. 10-yr -0.04%. Euro -0.56% vs. dollar. Crude -0.48% to $77.21. Gold +0.04% to $1192.20.

    2:00 PM On the hour: Dow +0.01%. 10-yr -0.01%. Euro -0.51% vs. dollar. Crude -0.8% to $76.96. Gold +0.17% to $1193.70.

    Stocks lower after Bernanke’s comments: Dow -0.89% to 10139. S&P -0.98% to 1073. Nasdaq -1.15% to 2197.

    Nice shootin’ Ben! 

  196. gmarts

    Uh, Billy Mays….

  197. amatta

     JRW, what is the PPT?

  198. JRW III

    If we’re going down, the levels on IWM to watch are 61.61, 61.33, 60.93, and 60.42

  199. matt1966

    If I had a big position long and I knew the PPT was trying to defend the market from what the Chairman was told to say by Summers.. I would dujmp, dump, dump into them.  You know they’d stand there and take it.  Afterall, their agenda is to spend as much money as possible!

  200. Pharmboy

    Deflating….POP!  Even gold is not so shiny anymore…..

  201. JRW III

    amatta / PPT
    Plunge Protection Team !! ( The White House)

  202. exec

    Matt,
     
    If you weren’t always so bearish I’d dive in with ya.  What facts are you referring to?

  203. loopy

    Plunge Protection Team….or the NY Fed markets group…

  204. alik

    Would you recommend a bear play involving TZA or VXX now, or it is already too late?

  205. jromeha

    Are you still in TZA JRW or cash now?

  206. Jbur

    Iflan/Goog
    The weeklies trade looked like a great one. Didn’t get in in time and it looks like it’s gooooooonnnnee! Thanks for sharing it!

  207. JRW III

    Out of TZA at $38.22

  208. Phil

    Stocks are in a "spasm of despair… looking for some form of concrete action from Bernanke, a commitment to do something. All we got was that they’re aware of the risks and are prepared to take as yet unspecified actions." Dow -0.84% to 10144. S&P -0.9% to 1074. Nasdaq -1% to 2200. Treasurys: 30-year +0.54%. 10-yr +0.13%. 5-yr +0.1%.

    Despite some buzz around the idea of the Fed suspending interest on reserves to stimulate further growth, economists think the move could backfire; the Day One story "would be ‘Fed Moves to Support Economy’… The Day Two story would be ‘Analysts Call Fed Action Futile,’" exactly the story Bernanke should avoid.

    Bernanke has been assailed for doing too much to bail out Wall Street, yet Congress is sure to ask him this week why the Fed isn’t doing more to boost the economy. The Fed could buy more Treasurys, trying to push yields lower, but that could backfire. With deficit worries abound, buying Treasurys could provoke cries of "they’re monetizing the debt" and push up long-term rates rather than lowering them.

    The Dodd-Frank Act is now law, making official the biggest overhaul of banks since the Great Depression. Financials are still mixed as a sector, with Morgan Stanley (MS +9.8%) cruising after its strong earnings report, but BofA (BAC -1.3%) and JPMorgan (JPM -1%) down on heavy dollar volume. (Obama remarks)

    They will be missed, not: S&P, Moody’s and Fitch are refusing to let bond issuers use their ratings until they get a better understanding of their legal exposure created by the new financial overhaul laws. It could be the beginning of the "end of the rating agency paradigm," Zero Hedge says.

    Construction in the U.S. has lost more than 2M jobs in four years. Terrible, yes, but better than might have been expected, and maybe about to get worse.

    More wheezing support for a housing bubble? Anecdotal RealtyTrac evidence in a number of regions points to banks holding high-end foreclosures off the market.

    THIS money, they DON’T spendThe Treasury plans to end a long-delayed and never-used $30B TARP program designed to boost small-business lending, as it winds down TARP earlier than planned under Congressional orders.

    More from the SIGTARP report: The Treasury’s housing relief efforts have been unimpressive, with "anemic" participation numbers that have failed to "put an appreciable dent in foreclosure filings."

    Copper’s up the most in three weeks as Freeport-McMoRan Copper & Gold (FCX +3.5%) says "we feel very, very positive" about the metal and that their order books are filling up strongly. Copper has been rising on lower inventories; futures now +2.8%. (FCX earnings)

    JPMorgan updates its ratings on tanker companies, upgrading Frontline (FRO +2.7%), Overseas Shipholding (OSG +1.4%) and General Maritime (GMR +2.7%), and downgrading Tsakos Energy Navigation (TNP -1.7%), Ship Finance International (SFL -3.1%) and Capital Product Partners (CPLP).

    Kazakhstan’s move to fix a budget deficit with an export-tax increase may not deter drillers like Chevron (CVX), the country’s biggest producer: The reserves may be too valuable. Taxes of about $2.73 a barrel begin next month.

    Investors looking to go short volatility can now do so via the just launched Barclays ETN+ Inverse S&P 500 VIX Short-Term Futures ETN (XXV). The iPath S&P 500 VIX Short Term Futures ETN, VXX, has become one of the most heavily traded vehicles during recent market turbulence, with an average 22.5M shares traded daily despite only $1.4B in assets under management.

    Notable earnings after Wednesday’s close: ADS, AMLN, BIDU, CA, DOX, EBAY, FFIV, FNF, ISIL, NFLX, QCOM, RHI, SBUX, TEX, TSS, WDC, XLNX

    Three lunchtime reads:
    1) Double dip in the Baltic
    2) Deflation: 1931 vs. today
    3) China land prices

  209. JRW III

    Capt.
    You’re getting good at this !!

  210. lflantheman

     Jbur….Yes the GOOG weeklies trade is probably history, but here’s one that isn’t:
    http://www.reuters.com/article/idAFN2116872620100721
    BP says they could have the first relief well done by the coming weekend.  Just as the capping of the well caused a surge in the stock price, I believe completion of the relief well will cause another surge.    Consider being long BP.

  211. matt1966

    exec, facts?  Covered my FAS short.  It’s clear what their intentions are to me.. they are just very good at disguising them.  I don’t care to be dragged underwater while they play their games!

  212. Phil

    DIA $104 calls at $1.12 were $1.50 this morning so I like them with a stop at 10,100 (about $1.05).

  213. gel1

    Ben says unemployment will drop to the mid 7′s by 2012. No explanation why! . This is wishful thinking at its best. The administration is killing the domestic oil business, pissing off all business in general, pushing for increased union membership ( sending jobs out of the country) and hyping tax increases. All of this is counter to creating employment. Without a change in this direction – the unemployment will be over 25% in 2012, thus beating the all-time high of the great depression. – Yep, "hope and change at its best. We can only hope FOR change!

  214. Pharmboy

    Phil – SPY premium  on the weeklys is outrageous.  Expire EOD tomorrow I believe.  There’s gotta be a premium eat there for us to trade!  Looking at the Aug 110 SPY buy and 108 SPY weeklys sell……debit 95c.

  215. exec

    Matt,
    I hear ya.  I’m think about going TNA for the close.  Need some conformation that they’re going to stick it.

  216. diamond

    The PPT has an off-site address for cover. ;-)
    (Notice the post office address?)

  217. Pharmboy

    Oh, and follow the money….bonds best asset class in 2010 YTD…..Treasurys: 30-year +0.54%. 10-yr +0.13%. 5-yr +0.1%.

  218. rn273

     SPY/Pharm – have you considered doing the same on the IWM? I sold weeklies on monthly calls, worked out pretty well. I also did a couple of regular calendar spreads (buy Aug, sell weekly), worked out to be 10-15% a week then.

  219. jomama

    PHARM, what are your thoughts on this new GSK HIV Rx?  I have quite a few common shares in my retirement account….Is this a serious threat?

  220. tuscadog

    Phil / Bernanke   I smell fear.  This guy couldn’t sell me a bale of pine needles!

  221. amatta

     Boy theyre taking all our bets! that was a 45 second entry and exit into DIA’s 104′s

  222. Pharmboy

    No I have not RN, but will look at them.  I have been short SPY for a while now and the weeklys have helped ease the pain….when we go up for no reason, although they are making out like bandits now on them.

  223. gmarts

    These guys are depressing enough to make Spuds McKenzie go hang himself in the basement!

  224. jomama

    PHARM, if GSK’s new HIV is a serious threat, than why isn’t GILD in the crapper today.   That news combined with their "tepid" earnings would waarant another haircut (one would think?)

  225. jomama

    PHARM, if GSK’s new HIV is a serious threat, than why isn’t GILD in the crapper today.   That news combined with their "tepid" earnings would waarant another haircut (one would think?)

  226. gel1

    Phil/Business Plan
    I love it !!!!  Go for it, and I’m sure you will do it better, and in the end swallow your competition. The timing, for sure, could not be better as we recover (I hope)

  227. humvee4me

    is it conformation or confirmation

  228. JRW III

    In TZA at $38.62

  229. Phil

    Adding protection/Amatta – I don’t hear Bernanke saying anything here that deserves a 150-point drop.  When a move seems illogical, I try not to chase it but there’s no telling how low we can go again if this keep us through the close and then tomorrow unemployment looks bad so if we don’t get green into the close, THEN I want to get more bearish.

    LOL Gmarts! 

    Damn, there goes the Dow already.  That was annoying…  Now I’m looking to buy the DIA $103 calls for about $1.20 (now $1.40) if we keep heading down and hopefully get the .07 back on a bounce.

    TZA/Alik – Too late for today but if we don’t hold, let’s say Monday’s lows – then we need something.  The Russell is no good to the downside as it’s lagging the others, down about 3.5% below our other indices so they would be our upside play.  SDS is still the best downside protection and you can just take a $35/38 bull call spread for .90 and sell 1/2 Sept $31 puts for .95 and that puts you in the $3 spread for .43 so $430 pays $3,000 (plus you have to roll the Sept putter along if you are wrong)

  230. Pharmboy

    I think that news Jo on GSK was built into GILD.  I really think if GSK wants to do something, GILD is the word is the word is the word …..

  231. kinkistyle

    Jim Bunning is like a huge splash of freezing acid on the market.  On the bright side, Phil’s Buy List and Blue Chip list will be viable again. Yay!

  232. roberthjrfl

    Pharm, what thought process did you use to select your long strike?  Weeklys are ATM – why did you pick an OTM as the long?  Is the OTM strike better than the ATM strike?  Thanks for the guidance.

  233. Pharmboy

    Robert – using delta, they were about the same, but the gamma on the weeklys make it erode very fast.  if we hold here or even go a bit lower, I make money on both.  I have not done the trade FYI. I am thinking of it and may do it EOD.

  234. JRW III

    matt
    You are dead on the money today; I’m playing WAY too cautiously !!
     
    Out of TZA at $38.92

  235. matt1966

    NOW WOULD BE THE TIME TO DO THIS THING!  JUST RIP THE BANDAID OFF ALREADY!

  236. acobra65

    tuscadog:
    My thoughts exactly… The markets pay attention to "What" he says, but, how he says it and his expressions are worth a million words (need to check his pant leg) ………. can you guess what he will say at the next meeting to the Senate and Congress.  His last performance before the Senate wasn’t much better…. BUT, you can sense the direction of the economy "According to the Fed"……… Not a rosy picture. 
     
    And Buning says…. "GOOD LUCK"…….. REALLY… Good Luck… It should be, "God be with you"….

  237. Pharmboy

    Robert – sorry, theta, not gamma…..

  238. fjd10595

    Bernake "mulling new easing steps".  That has to be bullish

  239. jromeha

    JRW – it’s easy when you give us the levels! STuck around a little too long and lost a good chunk of my TF gains but still a fairly positive day.  Bought oil at 76.36 hoping for a stick :)

  240. Pharmboy

    Phil – with matt’s prognostications and you saying Europe gave up a lot into the close.  DAX fell way back to 5,990 (bad) FTSE (5,214) and CAC (3,493) also gave up their levels in very shapr sell-offs that coincided with our open.  Not sure what all that means yet but very strange action…we shoulda seen this one…..

  241. Pharmboy

    OK, SPY Aug 110 C buy, July weekly 108 C sell for 94c debit…….

  242. matt1966

    Phil, what’s the rule about the PPT?  Don’t they need to stand down at 3:30 or something?

  243. Pharmboy

    I know Phil just said he did not like YHOO, but the Jan11 16 C and 12.5 P can be bought/sold for 10c credit…..  Lot’s of wiggle room there……

  244. rainman

    Gee, would you look at that, Dow High 10,265.54, Low 10065.5  Hmmmmmm…….

  245. kinkistyle

    Democrat comes up, markets go up.  Republican comes on, markets go down.  So funny.

  246. jromeha

    Rainman – 387 toothpicks! 387 toothpicks! sry, felt like typing that :)

  247. gel1

    kinkstyle… good observation re the markets. I good dose of easing will blast the markets upward – taking money out of bonds, and generally helping most long investors – not to mention PSW TBT positions.

  248. tuscadog

    Republicans & QE2    Listening to these guys there will be no QE2 before Nov.  They want us to crash and burn so they can push the tax cuts agenda as the national saviour.  God help us all.

  249. tuscadog

    Republicans & QE2    Listening to these guys there will be no QE2 before Nov.  They want us to crash and burn so they can push the tax cuts agenda as the national saviour.  God help us all.

  250. tuscadog

    Republicans & QE2    Listening to these guys there will be no QE2 before Nov.  They want us to crash and burn so they can push the tax cuts agenda as the national saviour.  God help us all.

  251. rainman

    jromeah --  246…. there’s 4 left in the box of 250

  252. gmarts

    Hey Kinki…….
     
    Your slip is showing  :-)

  253. humvee4me

    30 yr Bonds up a full point today, huge move; sucking money from abroad and from equities; if we get a double dip we’re heading to 2.5% yo Bond (imho); now i’m hoping for QE2

  254. humvee4me

    30 yr Bonds up a full point today, huge move; sucking money from abroad and from equities; if we get a double dip we’re heading to 2.5%  Bond (imho); now i’m hoping for QE2

  255. diamond

    [after Ray spills a box of toothpicks on the floor] 
    Raymond: 82, 82, 82. 
    Charlie: 82 what? 
    Raymond: Toothpicks. 
    Charlie: There’s a lot more than 82 toothpicks, Ray. 
    Raymond: 246 total. 
    Charlie: How many? 
    Sally Dibbs: 250. 
    Charlie: Pretty close. 
    Sally Dibbs: There’s four left in the box. 

  256. matt1966

    Well, we’ve had big volume since 2pm.  It’s drying up now.. but there has been ample opportunity for someone looking to get out to get out.  The market is being protected right now.  My hunch is we’ll close at the lows.. but it could be they’ll want to stage a rebound.  I’m short but with my finger on the trigger.

  257. gmarts

    "Banks  have access to all the capital they need"   Yeah, but where’s that leave all the small businesses who NEED that capital?

  258. matt1966

    Tusca, absolutely.  It’s in the Republicans best interest to tank the markets.  Nothing brews a throw out the incumbent mentalilty among the populace than a falling stock market and a lousy economy.

  259. jromeha

    Phil – stick or anti-stick?

  260. JRW III

    What a mess; since 3:15, nothing but Bots shredding traders.  I’m still in cash !!

  261. kinkistyle

    TBT and Dow/S&P diverging… 

  262. matt1966

    Isn’t it time for the PPT to catch the Metro?  I hear there are big delays on the Red line… you’d better hurry!

  263. exec

    Good move JR….I’m sitting here too looking for a entry…..might have to sit out the close.

  264. JRW III

    In TZA at $38.54; TBT failing !!

  265. Pharmboy

    VIX bounced right on that bottom support line at ~23….Uncanny and predictable.  DIA P/C ratio is 0.7.  SPY is 1.6!  Something is going on, or the weeklys are gonna make some move…..down…???

  266. tuscadog

    Phil / Levels    So it looks like we close way below the levels you said we must hold. Should we be selling longs and adding shorts (protection) aggressively before the close in anticipation of bad unemployment and neg sentiment going fwd?

  267. acobra65

    The Republicans have nto changed there tune from the beginning….. It’s go for broke….. but most recent polls state the public might be more supportive to the democrats, now that the Republicans position on jobs is known… "Enough is Enough", this will be a verey interesting "Going into the Close"… meaning the November elections…. 

  268. matt1966

    Looks like they heard me! 
     
    Someone is gettin put to!

  269. RMM

    JRW III: EMA8 slope: how does the slope influence your decisions ?

  270. acobra65

    Obama’s Administration and Congress missed the boat after the "Crisis was Fixed" early in 2009.  Everyone knows that small business is the engine of growth.  GREAT EFFORTS should have been directed to creation of direct lending through the SBA similar to lending programs to farmers and ranchers many years ago….. Not through traditional bank lending channels.  That we are talking today, 15 months later about waht to do with small business is ABSOLUTELY CRAZY…

  271. humvee4me

    acobra: that polls was not of people likely to vote; off year elections swing on percent turnout

  272. gmarts

    "Always look on the briiiiiiiiight side of Liiiife"

  273. JRW III

    cobra
    Small business owners are NOT part of Obama’s constituency !!

  274. srfrog

     JRW – liquidating your position?  Huge spike in IWM lol…

  275. Phil

    Administration is killing the domestic oil business/Gel – LOL.  You have been listening to way too many conservative talk shows!  Oil companies do business with people who blow up their pipelines and pirate their boats and kill their employees and confiscate their wells and reserves without warning.  They deliver so much cash to dictatorial assholes that Saddam Heussain had over $100M in cash just stuffed in the walls of his house and you think Obama’s enforcement of some environmental regulations is going to chase them out of the United States – REALLY? 

    SPY/Pharm – Well, you don’t want to gamble too much but I do agree that it’s a bit much so you can buy the Sept $108s for $3.55 and the Sept $105 puts for $3.60 and sell the July 23 $107 puts and calls for $2.10 and that’s net $5.05 and if you can sell $1 per week for 6 weeks you win

    Volume at 3:40 is 148M on Dow so was stickable but nobody punched the button. 

    Business Plan/Gel – Not much of a plan – just restarting same kind of business with new tech.  Pretty much same people too but the point is that this is what all unemployed people should be doing – getting together and pooling their skills to take business away from big corporations.   You may not be able to compete against Chinese workers making $2,000 a year as a source of labor but the company that fired you is making a $50,000 profit on that Chinese worker so all you have to do is the same job for $40,000 a worker and you undercut them by 20% and you can outdo them on quality, shorter supply line etc…  That’s what capitalism is really about, isn’t it? 

    Europe/Pharm – We did see it, that’s why we took the short play early but that doesn’t mean it isn’t overdone. 

    PPT/Matt – No rules that I know of.

    Hmmmm/Rainman – Hmmmmm.

    Good observation/Kinki – I keep telling people Dems are better for the markets….

    Wow, seriously – AAPL is only up $3 on those earnings.  That’s just funny.  There’s no other word for it.  People are simply clueless…  How can you take anything seriously when AAPL has earnings like that and is trading 5% down since last month? 

    Republicans/Tusca – I agree with all three statements! 

    FXP may get some action if we finish red.  China hasn’t had a big sell-off for a whole week.  $39 puts can be sold for .88 and they are very rollable while the $41 calls are .82 so a credit play there and if FXP goes up, you can sell the $42 calls for .82+ and buy the $39 puts back at a profit and that leaves you with a free $1 spread.

  276. tuscadog

    Phil /  Any guidance on covers / protection prior to the close

  277. matt1966

    1, 2, Whee!

  278. chaps

    gel:
    re: not to mention PSW TBT positions.
     
    Just a thought. From what I’ve read, a lot of any additional QE would be done by the Fed buying more Treasuries at longer maturities. That (in isolation) would drive TBT the other way.

  279. jvest

    re: Phil> "this is what all unemployed people should be doing – getting together and pooling their skills to take business away from big corporations"
     
    How can the little guy expect to do this when the deck is stacked in favor of big business (free money from the fed) that they aren’t lending to small businesses? You just said yourself the other day that big companies get money by playing golf with the CEO of Citibank, while small businesses can’t get a loan.
     
    Not trying to sound overly cynical, but it’s a lot easier for you to start a business that you’ve already run once before.

  280. dflam

    Pharm: Any preference between DR. Reddy and TEVA?

  281. exec

    Phil,
    What’s the advantage of your buy/write strategy over standard covered calls? 

  282. Phil

    Stick/Jrom – As I said earlier, no reason to push the button with another day of testimony ahead as well as Leading Economic Indicators tomorrow at 10 and the Unemployment Data at 8:30.

    Levels/Tusca – Need to be neutral at the moment (short-term trading).  I’ve said before, major levels are 2-day events at least.  It won’t mean much if we pop back over tomorrow other than hardening the floor for support in the big picture but the same is true if the bigger picture is we tried to punch over but failed.  We won’t know what we’re looking at until we have a couple more days of context.  As to guidance – nothing really.  I was still trying to buy those DIA calls as my last trade but they never got cheap – which makes me think the move down was bogus. 

  283. kururi67

    Ah yes those NFLX Aug 135 calls I shorted today were just sent to hell.

  284. hoss18

    Took the SDS hedge at the end of the day to get a little more bearish.  My neutral stance from last week held up very well and I managed to cover some previously written puts for nice profits on the run up through yesterday.  But feel if we’re not putting it together with Apple blowing it out, a little more protection not a bad call.
    Bought the SDS 35/38 Bull Call for $0.88 and sold 1/2 SDS Sept 31 Puts for $0.97 so net entry of $0.39 on $3.00 spread that covers a 3.5% down move in S&P to 1,030ish between now and Aug 21.
    Also, since I know you like these…I bought JPM in March(prior to joining your sight).  My initial entry was $45.79, through yesterday, I’ve now written enough calls/puts to bring my basis down by $9.42. 
    I’m WAYYY slower on the math for these plays, but I’m starting to feel like I have a better sense of how to structure them.  Thanks for your input.

  285. JRW III

    5%+ on the day; 80% of that should be credited to matt for the timely entry into TZA at 2:00 !!
     
    Thanks, matt !!

  286. exec

    JR,
    Did you hold your TZA for the night?

  287. amatta

     Phil,
    FXP are you talking about the Weekly expiration? The August are $2 and change… Unfortunately if that is the case Schwab doesn’t offer those for trade…

  288. exec

    Matt,
    Good call.  I jumped in too…..just jumped out too soon.

  289. JRW III

    exec / over-night
    You’re kidding, right?!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  290. fjd10595

    phil, I was watching the same thing and waiting for the Aug DIA 103′s to come down from around the 1.40 level.  I was amazed that they hardly moved and seemed to be ‘stuck’ around 1.40, even as the selloff got a bit worse.  I bought some anyway, because I see it as a medium term trade into August and my market view is a rally between now and then. 
    I was still trying to buy those DIA calls as my last trade but they never got cheap – which makes me think the move down was bogus. 

  291. jromeha

    Not sure if anyone else on here trades oil futures but the potential threat of a hurricane forming on Thur/Fri was downgraded to medium or (30-50%) chance of forming within the next 48 hours. After today and potential bad news tomorrow Im definitely not holding my contracts overnight.

  292. garbon

    Folks,
    I noticed today that a few people were scratching their heads about what to do with positions they taken based on Phil’s recommendations. As a new subscriber, I’m looking for a spot in the website that provides a summary of (1) stock buy recommendations, with their hold recommendations, and/or later sell recommendations and (2) options buy/write recommendations and associated exit recommendations. Because I can’t find this, how would I know what to do with my positions if I didn’t read every thing written every day?
    Along the same lines, I saw that David Ristau talked about an overnight RS trade. When the market makes a big move, does he ever send out an email alert recalling his recommendation, or confirming to stick with it?
    Thanx for putting up with my questions………….GARBON

  293. JRW III

    exec,
    I appologize, I now see another of my posts didn’t make it; I bailed TZA even at 3:50, sorry !!

  294. kinkistyle

    NFLX down 9% AH on disappointing rev and guidance

  295. jdub929

     NFLX--tanking!!

  296. Pharmboy

    TEVA vs RDY/Dflam – we like both, I prefer TEVA at this point but others here like the growth prospects of RDY (I don’t disagree).  RDY has moved up 100%, and Teva is steady as she goes…we have a Teva play where selling the Jan12 45s for 3.45 (price now, was 3.50 I think) and bought the Jan12 50/60 bull call spread for ~4.35 (now 4.70), so we are in for about $1.  Still a good trade, or move the Ps up a strike to 47.5 for almost a net 0 (with margin).

  297. loopy

    I pushed around a lot of money but only ended up 1.5%.  I should have listened to Matt!!

  298. hanna5

    YAY!! Kept a long term put position in NFLX!!! Hope it sinks to $50, which is about where it should be trading :)

  299. jdub929

     Nice one Hanna! I’m in it too but only short term.  
    So my trades into the close are working out so far.  
    NFLX Aug. 105 P: Should be good tom.
    QCOM: Bought Jan 40 calls and Sold Aug. 32 P.  Plus I have a LT holding on this at about the price Phil mentioned on one of his buy list articles.
    BIDU-Had 6 Aug. 65 P for avg. of about .88 but took 3 off when it tanked after the fake drug sites news.  let’s see what tonight brings

  300. flipspiceland

    PHIL:
    "…Wow, seriously – AAPL is only up $3 on those earnings.  That’s just funny".
    As you (and many others have urged), "Sell into the excitement". I did it, at the opening and paid for 3/4 of my second quarterly subscription.
    I’d have thought that this is exactly what you expected.  What am I missing?  You don’t  like to be right?

  301. jdub929

     Unbelievable! 
    http://www.youtube.com/watch?v=DwX9RXFRJD4

  302. exec

    JR
    Wasn’t kidding. Do you never hold overnight?

  303. JRW III

    exec / overnight
    On 3 day weekends following a BIG move, I will take a 1/2 position in the direction of the move. That’s pretty much it !!

  304. matt1966

    JRW, you’re welcome.  Consider it a little payback on behalf of those you provide levels for… which may be me at some point!  It would be nice to have a little more going for me on my calls besides what I’m seeing on 2 charts (1 min, 5 min both with volume).  I’m the first to admit my system is not very sophisticated! 

  305. dflam

    Pharmboy/Teva:  Thanks.I’ll go with TEVA for my IRA.
    On YAHOO ,keep in mind there is $2.70 cash /share and 35% stake in Yahoo! Japan and 29% stake in Alaibaba.com (China) is worth (per Yahoo!)  $8/share which total $10.70 /share so all of remaining Yahoo is worth $ 3.20. That’s dirt cheap,especially for an Internet company. It’s kind of a cheap China play with Yahoo! thrown in at a deep discount.

  306. Pharmboy

    Thanks Dflam on YHOO.  Should be a good trade then. Just did a few options, and can do more if it looks like the 13.5 area holds for support.

  307. jerriodmb

    hope we get  a doug kass bounce again

  308. Phil

    Little guys/Jvest – This country was founded by people who had to compete against wealthy foreign companies that had access to global resources and financing and shipping and transportaiton – all the advantages in the world and we totally kicked their asses in 100 years.  As a person who has started several businesses from scratch and consulted for a hundred others I am ever-optimistic because I’ve done it over and over again.  The problem with modern American workers is they are (on purpose) narrowly trianed to do specific functions in specific companies so they are of little use to anyone else.  This specialization of human parts makes it difficult for people to swtich jobs and changing carreers mid-life is a real rarity these days – how does that help America adapt and stay competitive?  If all you do is train people to be simple tools, then all you have is a useless collection of tools when demand slows down. 

    Take the real estate data business I’m restarting.  We worked 10 years and took over 1/2 the state and then got bought out by our competitor at 10x earnings.  What did they do once they bought us?  They laid off half the people so they could do double the work with 75% of the people so they could "make a profit" on the transaction.  That led to very poor quality service and very dissatisfied customers who can’t wait for us (all the fired people) to come back and provide the service again. 

    That’s true in many businesses out there.  All those laid-off financial people are forming their own companies and stealing clients from the big boys (one of the reasons IBanking took a hit this Q).  There are millions of laid-off construction workers sitting around waiting for a construction company to hire them but wouldn’t it make more sense for a 12-man crew to approach a person who wants to build a home and quote the job for 30% less, cutting out the builder’s mark-up on their labor? 

    It’s the defeatism (which is drummed into people by the MSM) that is killing this country.  What the hell happened to people that they now think there is no way to make money unless someone hires them – that’s why China kicks our ass – they have more entrepreneurs in China than we have people and they start their companies with nothing.  India too – there are millions and millions of small businesses and people do whatever it takes to fill in gaps and they work hard and struggle to make a living – what used to be the American way we were so proud of once upon a time…

    Buy/Write/Exec – As I said about calls vs. naked puts, it’s math.  Sometimes it works better, sometimes it doesn’t but one thing about the buy/write is its an automated way of scaling in when you first enter a position.  Buying MON for $57.50 and selling the 2012 $57.50 calls for $10.25 is net $47.25 with about a $10 profit if called away.   If that’s all you want, that’s fine but let’s say you have $50,000 to spend on the positon.  If you buy $28,750 worth of the stock (500 shares) and sell calls ($5,125), you’ll make $5,125 in 18 months (22%) and you have 18% downside protection.  If instead you sell the $55 calls for $11.40 and the $52.50 puts for $8.30, you drop your net to $37.80/45.15 so you make $7,500 if called away at a 5% lower price and your break-even is also 5% lower so 50% more profits at a 5% lower price with 5% more downside protection on that trade would have me leaning towards the buy/write.

    Woo-hoo on NFLX!!!  They just turned this into a very nice day!  Congrats to all who took that focus put play

    SDS/Hoss – It’s a good play but keep in mind that you don’t want to take too many short-term insurance plays as it’s kind of like spinning the chamber in Russian Roulette over and over again – eventually, the damn thing is going to blow your head off.  Generally, we go with one-month hedges when we think we are very stretched and due for a pullback or very worried about an event.  It’s fine for now and maybe through the weekend but you don’t want to ride it to zero if it isn’t working next week.   Very nice job working it on JPM.  This is what I try to convey to people – after a while, you can have a whole porfolio full of "free" stocks that have no basis and you can just sell calls and generate an income with very few worries. 

    Thanks Matt/JRW – That’s why he gets the red box!  Someone’s gotta man the bear side of this game…

    FXP/Amatta – I see what happened, I must have been looking up FXI and forgot to turn back!  There are no weeklies on FXP.  Same strategy on FXP would be taking the $40 calls for $1.40 and selling the $37 puts for $1.70 and the goal is to sell the $41 calls for $1.40 and buy back the $37 puts and have a free $1 hedge

    Hurricane/Jrom – You can’t short-term bet on storms, you need to make longer-term bets on storm season but, as I said earlier, nat gas is a better way to play as it’s still dirt cheap anyway. 

    Postions/Garbon – I do not track every position.  We have a Buy List under the Portfolio Tab and that is updated as needed and we added 9 more Dow Plays and WFR to that list and THOSE are the trades I track long-term.   If you want to see how they are tracked, go back in time to older Buy Lists and see the updates, which are usually done once every month or so.   For the other 100 Trade Ideas I publish each month (or week sometimes) it is up to you to follow the strategy (see strategy section) and I am here almost every day to answer questions you may have on any individual trade but if you don’t know when to buy or when to sell or what to do without being told – stick to the Buy List because you shouldn’t be trading short-term anyway.   The same goes for not having time to follow trades every day – stick to the Buy List, as it has only long-term trades that are low maintennance.  As to David, there was a 12:50 Email sent out on RS and you need to go to the Oxen Group tab, where he has his own chat under the most recent article.  Have you read the New Member’s Guide since you joined this morning or are you just skipping ahead to the good parts?

    AAPL/Flips – Congrats.  The fact that you should sell into the excitement is simply playing the odds.  Especially with options, it’s very rare that you get a much better price than what you get when a stock first rockets higher or falls back on news.  Of course, it depends on the news etc. but, playing the percentages, getting out it the right move 3 out of 4 times.  So just because I think AAPL should be higher than $254 after those earnings in now way changes the fact that you should take $265 and run after a positive announcement.   Also, just because I think AAPL should be over $260 doesn’t mean I would buy it at $260 – that’s just where I think the investing public should be valuing it but, as I’m sure you’ve noticed – they are idiots…  8-)

    BP/Jdub – Damn, that guy sounds like he knows what he’s talking about, which makes it very scary but the fact that he’s short on the stock makes the whole thing very suspect.

  309. Phil

    4:00 PM On the hour: Dow -1.53%. 10-yr +0.22%. Euro -1.04% vs. dollar. Crude -1.59% to $76.35. Gold -0.55% to $1185.10.

    At the close: Dow -1.07% to 10120. S&P -1.28% to 1070. Nasdaq -1.58% to 2187.
    Treasurys: 30-year +0.93%. 10-yr +0.33%. 5-yr +0.17%.
    Commodities: Crude -1.51% to $76.41. Gold -0.61% to $1184.40.
    Currencies: Euro -0.89% vs. dollar. Yen +0.17%. Pound -0.65%.

    Market recap: Stocks tumbled after Bernanke poured cold water on hopes for quick Fed action to boost the economy despite an "unusually uncertain" outlook. Financials rallied on a strong report from Morgan Stanley (MS +6%), while Yahoo’s (YHOO -8.5%) weak quarter dragged techs lower. NYSE decliners led advancers by about five to two. Treasurys and the dollar rose.

    Legg Mason’s (LM) Bill Miller says large-cap stocks are significantly undervalued compared to bonds, and sees it as a "once in a lifetime opportunity" to buy quality companies at bargain prices. "The last time [stocks] were this cheap relative to bonds was 1951."

    WSJ’s quarterly survey of housing market conditions shows inventory levels growing and newly signed contracts plunging in many markets. The housing tax credit was a "clear and unequivocal failure," Calculated Risk says: "Not only did most of the benefit go to people who were going to buy anyway, but the credit didn’t reduce the overall supply… a textbook example of bad policy."

    Despite Obama’s promise of "no more taxpayer-funded bailouts," TARP’s Neil Barofsky says the economy remains on government life support. His new report says federal aid to big banks and housing is up 23% this year, at $3.7T from $3T last year.

    The attorney general of Connecticut says 37 states have joined his investigation of Google (GOOG -1.1%) and that he continues to seek information about whether privacy laws were broken when Google’s Street View collected the personal data of unsuspecting Internet users.

    Goldman Sachs (GS -0.5%) may need to look over its shoulder after Morgan Stanley’s (MS +7.9%) Q2 trading revenue doubled to $3.1B from a year ago and dropped a mere 10% Q/Q vs. Goldman’s 36% plunge. Morgan Stanley also won in return on equity, 12.2% annualized return vs. Goldman’s 9.5%. But Morgan draws flak for choosing not to disclose a tax windfall that accounted for a quarter of its Q2 earnings.

    Despite BP‘s claims of progress in its efforts to stop the Gulf leak, Matt Simmons says BP is covering up much bigger problems: "What we don’t know anything about is the open hole which is caused by the drill bit when it tossed the blowout preventer way out of the hole… and 120,000 minimum of toxic poison has now covered the floor of the Gulf of Mexico."

    Exxon Mobil (XOM), Chevron (CVX), Royal Dutch Shell (RDS.A) and Conoco Phillips (COP) are expected to announce that they will form a joint venture to design, build and operate a rapid-response system to capture and contain catastrophic deepwater spills, in a bid to regain public confidence in the oil industry.

     

    • Qualcomm (QCOM): Q3 EPS of $0.57 beats by $0.03. Revenue of $2.7B (-1.7%) vs. $2.6B. Shares +3.2% AH. (PR)
    • Total System Services (TSS): Q2 EPS of $0.25 beats by $0.02. Revenue of $434M (+5.3%) vs. $425M. (PR

    • Robert Half International (RHI): Q2 EPS of $0.08 beats by $0.01. Revenue of $769M (+2.6%) vs. $759M. (PR)

    • Amdocs (DOX): Q2 EPS of $0.58 beats by $0.01. Revenue of $753M vs. $758M. (PR)

    • Amylin Pharmaceuticals (AMLN): Q2 EPS of -$0.28 beats by $0.01. Revenue of $164M (-17.2%) vs. $173M. Shares +0.6% AH. (PR

    • Netflix (NFLX): Q2 EPS of $0.80 beats by $0.09. Revenue of $520M (+27%) vs. $524M. Shares -9.4% AH. (PR)

    • Alliance Data Systems (ADS): Q2 EPS of $1.38 beats by $0.06. Revenue of $670M (+46%) vs. $657M. Shares -0.5% AH. (PR

    • F5 Networks (FFIV): Q3 EPS of $0.66 beats by $0.07. Revenue of $231M (+45.7%) vs. $218M. Shares +4% AH. (PR)

    • Fidelity National Financial (FNF): Q2 EPS of $0.61 beats by $0.26. Revenue of $1.5B (-3.8%) vs. $1.4B. (PR)

    • CA Inc. (CA): Q1 EPS of $0.45 beats by $0.03. Revenue of $1.1B (+4.5%) in-line. Shares -1.4% AH. (PR)

    • eBay (EBAY): Q2 EPS of $0.40 beats by $0.02. Revenue of $2.2B (+5.6%) in-line. Shares +2.4% AH. (PR)

    • Starbucks (SBUX): Q3 EPS of $0.29 in-line. Revenue of $2.61B (+8.7%) vs. $2.55B. Raises dividend to $0.13 from $0.10. Shares -2.4% AH. (PR)

    • Intersil (ISIL): Q2 EPS of -$0.48 may not be comparable to consensus of $0.09. Revenue of $220M (+49.3%) vs. $218M. (PR

    • Baidu.com (BIDU): Q2 EPS of $0.35 beats by $0.04. Revenue of $282M (+74.4%) vs. $276M. Shares +0.4% AH. (PR)

    • Western Digital (WDC): Q4 EPS of $1.13 may not be comparable to consensus of $1.35. Revenue of $2.4B (+23%) in-line. Shares -2.6% AH. (PR)

    • Xilinx (XLNX): Q1 EPS of $0.58 beats by $0.05. Revenue of $595M (+58.1%) vs. $569M. Shares +1.1% AH. (PR)

  310. dflam

    PhiL : I don’t want to be a pest,but on the IRA hedge, would the SDS Jan $37/$45 bull call spread currently priced at $1.93 work? I could sell puts in the IRA if you recommended it since there is lots of cash.I’m looking for an additional 10 % hedge to my existing buy/writes of approx. $ 400 k. so if my calculations are correct, I would need to spend $9650 to get $40k of insurance.
    Thank you again for your help & patience with me. If you ever publish on book on hedges,I’ll buy the first one.

  311. humvee4me

    Jobs: Would love to see the entrepreneurial spirit rise like a Phoenix; trouble is the nanny state keeps telling everyone that only it can create jobs.   300 years ago, we didn’t have a government safety net to ease the pain (an empty stomach is a strong motivator).  The 12 man construction crew still needs a leader and organizer and a guarantee that they’re going to make more than extended unemployment benefits (oh the unintended consequences of governmental policies).

  312. Phil

    SDS/Dflam – Well let’s think that through.  You have $400K of buy/writes that make, I hope $60K if the S&P holds up through Jan.  So you are good for a 15% drop in the S&P – not happy but even and even is good when you can afford to go shopping at a 15% discount.  That means think about what you REALLY need to cover.   Anyway, so all you care about is that SDS does not rise more than 30% (15% S&P drop) to about $45 and $45 is even for you so it’s really the amount OVER $45 that needs to be covered.  Presumably, if the S&P drops 15% to 910, then you will be even on your buy/writes and you effectively have $400K of cash (if you choose to get out) to go shopping with.  While it sucks not to make money for 6 months, it is great to have money when no one else does! 

    So another 10% down for the S&P would cost you $40,000 at about S&P 820 and that’s another 20% up for SDS to $54 so your damage zone is from $45 to $54 – any coverage you pay for ABOVE that level is really a bit excessive, especially if you sincerely like your positions enough to not be bothered by the fact that they are down 10% with the S&P at 800 (by the way – it’s good to know what strike each of your positions were at when the S&P was at 800 and 900 to get an idea of what kind of damage you could be looking at).

    Once you look that far out of the money, hedges get very cheap indeed.  The SDS Jan $45 calls are $2.75 and you can sell the $53 calls for $1.75 so that’s $1 for the $8 spread so $5,000 of those gives you $40,000 insurance.  That’s our "base case" and we then try to improve on it.  If we drop $5 to the $40/48 spread, that’s $1.30 so that sure seems worth it and the $35/43 spread is $2 so THAT’s getting too high so let’s say the $40/48 spread is optimal.  So that’s going to set you back $6,500 for 6 months for 50 of them.  Not to bad to hedge $60K in hopeful gains on the bull side.  Can we offset it?  You can sell 15 March $30 puts for $3.20 and raise $4,800 but that obligates you to buy $45,000 worth of SDS at $30. 

    Now, we could consider that there’s nothing wrong with owning $45,000 of an S&P hedge long-term in a $400,000 mostly bullish portfolio so keep that in mind.  Another interesting way to play this is to sell 5 SDS $45 puts for $13.  That puts $6,500 in your pocket and you are obligated to buy 500 shares of SDS at $45 ($22,500).  If the S&P goes up 15% to 1,229 then SDS drops to $25 and you are out $10,000 but, of course, you can roll it to 2x or 3x or 4x the 2012 whatevers for your next hedge.  But, if SDS goes up and you hit your spread, you are more and more profitable the lower the S&P goes and that’s a nice offset…

    How about we get completely out of the box and think of how to raise $6,500 by selling puts in something you WANT to own, even if the S&P does drop 30%?  Maybe GE?  You can sell 50 2012 $10 puts for $1 ($5,000) and, if GE goes that low and stays there, you own 5,000 shares for $50,000.  Of course, as long as GE doesn’t go BK, you can roll to lower 2013 or 2014 puts anyway.  How about UNH?  They had great earnings and you can sell the 20 2012 $25 puts for $2.70 ($5,400) also against owning $50,000 worth.  You could also just sell a few extra puts against your favorite long positions to raise the cash – there’s no rule that you have to sell the same thing you buy… 

    UNG is a good one and you can decide now to buy 3,000 shares for $9 (current price $7.58) in Jan and collect $6,000 for the Jan $9 puts.  VLO is one of my favorite dip buys and 2,000 shares of that at $17.50 in 2012 will cost you $35,000 but you get $7,400 to play with while you wait by selling the 2012 $17.50 puts for $3.70.  So lots of ways to have the trade paid for by selling puts in stocks you strongly feel will move up with the S&P (which hurts the SDS) and, of course, if those stocks are put to you, you did win your $40,000…. 

  313. snow

    Small business/Phil
    I’d like people to start considering co-ops more – they’re not just for hippie grocery stores; they come in all varieties and can be very effective. The place where I’m retiring, Korea, uses co-ops a lot, in all sorts of fields. Who has the time to read, but Kim Stanley Robinson’s excellent eco-future book "Antarctica" gets into possibilities in a very entertaining fashion. Also, his book "Escape from Kathmandu" is hilarious to old Peace Corps vols such as myself….all the stupid things I did with one or another crazy local….good time, good times.

  314. garbon

    Phil
    You wrote yesterday: We have a Buy List under the Portfolio Tab and that is updated as needed and we added 9 more Dow Plays and WFR to that list and THOSE are the trades I track long-term.   If you want to see how they are tracked, go back in time to older Buy Lists and see the updates, which are usually done once every month or so.
    Sorry to say I’ve gone to the Portfolio tab and, on the first page, find only articles in "Archive for the ‘Portfolio Review’ Category" from July 7 back to May 1. Looks like I need more help.

    You also pointed out the Strategy section, which I read and then forgot about. Rereading it goes along way to clearing up the "what to do with positions" questions I had.
    GARBON

  315. gel1

    Phil
    I know you do not support my position on the government’s destruction of the domestic oil business. My position is based solely on fact, and not influenced by opinions of the media.  California ( my state ) has huge reserves that are off limits to drilling,  Some of the largest reserves within the US are in Alaska, and they are now not available because of federal government edict.  The Gulf is now in moratoriunm status, and the production potential is on hold temporariy, but the industry believes it is permanent.  The bottom line is: the United States has enough proven reserves to be self sufficient, but drilling is not permitted because of political and environmental gobbly-gook.  This is facuual and not speculative. Even if we are not allowing domestic production….. then why would we not contract with Canada for their oil sands production as an alternative…. guess what  –  the Chinese beat us to the punch, and we are too late. Nice, eh?

  316. gel1

    Chaps
    My feeling regarding QE-02 and the Fed activity related thereto, is focused on their buying the debt of the bankruptcy prone states, and other troubled assets.  I do not see the Fed attempting to buy more treasuries, unless there are no buyers. The only solution for the diminished demand for the treasuries is to raise the yield rates, as I believe we do not want to overlook the need for outside money. The rate level is the hook.  TBT should be OK, as sooner or later the rates have to go up to attract suckers. The equities will jump if we get further easing, as this is positive for growth, and if nothing else, will drive inflationary pressure. 

  317. jromeha

    Gel- what ‘fact’ are you basing your opinion on? Everything I’ve read shows that we don’t have enough domestic supply to keep up with demand and that drilling in the pristine artic refuge won’t fix our supply problem.

  318. yodi

    gel1
    HI have been away for a few days, sorry I did not respond earlier but thanks for the info on CGA good memory boy,
    still in the play and hoping this stk will bounce thanks !!!!!!!!!!!!!!!

  319. jromeha

    Yeah, you’re right Phil, it definitely is hard to be short-term on oil. Cant help it though, Im no JRW but have been doing VERY well trading oil contracts.  

  320. shadowfax

    Obama incouraged offshore drilling until BP blew up a well. The reason it blew up is related to Bush oil men, we need to make the MOST money. I have to deal with people from Wyoning working for Cinthia Lumis who were more interested in sex than regulating safe oil production. Look it up, check it out you fools, eventually the shit hits the fan!

  321. shadowfax

    Correct that, until the oil polutes the gulf!

  322. deano

    Pharm
    Do you still like LLY as a longer term hold?
    thx

  323. gel1

    jromeha
     The proven oil reserves that exist domestically, have been documented by many, however I base my data that is provided by the formost expert in the energy sector – Dr. Kent Moors. This guy is well known by all who are engaged in the oil and gas business worldwide. You mentioned you follow the Nymex, then he is somebody you follow. He has stated many times over the US could be energy  dependant on no one, if we only pursued the existing reserves we have domestically. California has enough proven reserves alone in its Monterey Shale deposits, that stretch from San Francisco to Los Angeles to supply our needs for 20 years without the need for any imported oil. The technology exists to extract the oil in a totally environmentaly safe manner ( no chemicals). Occidental Pet is now engaged. Add in the other known reserves in Alaska, the Gulf and East coast offshore and we are energy independant – but for the interference of our own government. All this consternation about imbalance of payments for energy imports is BS – we do not need to import one single barrel. We need to export the ignorant politicians, IMO

  324. Pharmboy

    Deano, No, I like BMY, MRK and GSK better.  LLY is only until year end at most.  Too much uncertainty in their pipe.
     
    KG/qcmike – I looked into King Pharma (KG) and there is nothing there that really excites me.  They have a pain killer up for review in Q4, but it is a rebrand of a drug, so not much to be excited about.  They could be a takeover target for a mid-tier pharma, but there is nothing that is driving the growth (which is falling).  Here is their most recent few Q data on their big guns;
     

    Branded Prescription Pharma Revenue ($M)
    1Q-2010
    4Q-2009
    1Q-2009

    Skelaxin®
    $90.9
    $96.1
    $100.6

    Thrombin-JMI®
    36.9
    44.1
    47.3

    Flector® Patch
    33.5
    42.9
    16.8

    Avinza®
    23.2
    32.5
    39.0

    Embeda®
    9.1
    5.6
    0

    Levoxyl®
    15.4
    18.9
    19.6

    Other
    32.5
    36.6
    54.4

    Total Segment Revenue
    $241.5
    $276.8
    $277.7

  325. Pharmboy

    In short, they are all going DOWN.  I would rather risk money in something like QCOR (makes money) or CRIS (potential to have one winner in 19 tries).  Anyway, that’s what I think.

  326. gel1

    Phil
    To one entrepreneur from an another – With good preparation and a spirit of enthusiasm, coupled with the desire to succeed, and the esprit de corps in full dress, it prevails every time. I have taken on the bigest of the big and proved it could be done. The big guys are complacent and do not have the agility to move as quickly as you, and they take their position for granted – very vulnerable in all cases  The new guy on the street with new and better ideas is at an advantage. .I wish you much success, and I would expect no less!

  327. Pharmboy

    Well, let’s vote ‘em all out gel!  You, me, 1020 and JRW to the govenor’s mansion and then beyond (I will let you decide who’s whom)!  If we can turn around this state, then the US should be easy! 

  328. gel1

    shadow… Safe sex and safe oil production are not interchangeable… I do not see the correlation.

  329. Jbur

    Phil, I read, re-read, and then printed out your 6:43 post to Dflam on hedging. Very nicely laid out, and very much appreciated. Why in the world does hedging seem so counterintuitive, so unnatural? Like doing acrobatics. Are we that programmed to think the market will only go up?

  330. kustomz

    Not going to cloud anyone’s judgement, will keep my thoughts to myself….take a look at the 3 year chart on MA….ok i’ll say it…scary if you ask me. Lots of charts bouncing against the 50 day, recent action doesn’t evoke much confidence. If markets take off from here it would be the ultimate head fake.

  331. kustomz

    Corning announces new capacity investments
    http://www.digitimes.com/news/a20100722PR203.html

    Apple to challenge top chip buyer in 2012, says iSuppli
    http://www.digitimes.com/news/a20100722PR201.html

     

  332. Fabregas

    Phil,
    Some option issues have 2 sets with different prices, e.g. VZ has 2 sets of 2012 $20 LEAPs, one trading at $8.5 and the other at only $6.7 (almost no premium!).  Why is that?  What’s the difference?  Thanks!!!

  333. fjd10595

    You are forgetting something.  When we burn the oil, we put carbon in the air that will affect the climate of the planet and thus will affect the lives of or kids and grandkids for a long time to come.  Is that factored into the equation.  Also, Shale oil cannot be extracted in a clean safe manner.  It uses tons of water and I wouild be surprised if it used no chemicals.  In other words, we need to move off of oil.
    He has stated many times over the US could be energy  dependant on no one, if we only pursued the existing reserves we have domestically. California has enough proven reserves alone in its Monterey Shale deposits, that stretch from San Francisco to Los Angeles to supply our needs for 20 years without the need for any imported oil. The technology exists to extract the oil in a totally environmentaly safe manner ( no chemicals)

  334. fjd10595

    The domestic oil business has gotten a free ride from the government and society for the past 100 years.  I could say a  lot, but I will give you one item.  The price of oil does not accout for the massive environmental damage that occurs through its usage.  We don’t properly tax oil so  that we all have cheap fuels, and so that the oil companies can continue to make the maximum profits for as long as possible and take a blind eye to the fact that posterity will inherit a damaged world.  It is more of the same- stealing from the future so that we have a largess today.  It is abhorrent. 

  335. qcmike

    Pharmboy
    Thanks for the infor,  nice work.

  336. jromeha

    I’ll look him up Gel. Although I definitely am a liberal guy, Im by no means anti-drilling. My father’s business is in the sister industry of waterwell drilling. I am one of the believers in climate change and feel we need to spend heavily in R & D for alternatives (ie non food based ethanol, biodiesel, ect).

  337. dflam

    Fabregas/VZ options:
    The VZ options (adjusted) reflect the .24 shares of FTR that VZ holders got as a spinoff of VZ landline business to FTR.The other option is the option that was in existed prior to the spinoff and will be priced lower. 

  338. Cap

    BIDU if anyone is interested, from an analyst at a small research firm:
    Baidu, Inc. (Hold)
    While BIDU’s Results and Guidance Beat Consensus, Upside to Stock Price Becomes Limited
    Baidu, Inc. (BIDU, $73.31, $25,581mln Market Cap, Hold, $79.00 Price Target)
    BIDU (Hold) reported strong 2Q10 results that beat sell-side consensus estimates and provided 3Q10 guidance exceeding consensus expectations. We believe the earnings results and guidance have unified sell-side consensus and buy-side expectations. The unification, in our opinion, could signal that the stock has reached its upside potential. Therefore, while we believe BIDU can grow significantly, as we have modeled, due to aggressive sales force expansion and improvement in its search technology, we believe upside to the stock is limited. We maintain our Hold rating and price target of $79. In addition, we believe there is a fundamental issue in BIDU’s business operation — the lack of a thorough and effective system to prevent BIDU from becoming involved in illegal businesses conducted online, which presents an ongoing risk to the business and stock.
    · 2Q10 results exceed Street expectations, credited to FIFA event — BIDU reported strong 2Q10 results with revenue of $282.3M, 48% Q/Q growth and 74.4% Y/Y growth, above the high-end of guidance of $268.1M – $274.0M and the Street at $276.7M and our $272.5M estimate. GAAP EPS of $0.35 beat consensus of $0.31 but was in line with our estimate. The revenue outperformance was driven by the World Cup event, which generated additional traffic that led to a higher number of clicks. BIDU ended the quarter with an average of 254K active online customers, 15% growth from 1Q10 or 33K new customers while ARPU increased about 29% Q/Q to RMB7,533 from RMB5,852 in 1Q10.
    · 3Q10 guidance above consensus — BIDU guided 3Q10 revenue to a range of $324.4M – $333.3M, representing 15% – 18% Q/Q growth, versus consensus of $321.6M (16% Q/Q growth) and our estimate of $325.2M (19% Q/Q growth).
    · Tweaking top line, 2011E EPS remains unchanged — We have made slight upward adjustments to our top line projections. For 2010, we slightly raise our revenue estimate to $1,174.0M from $1,147.6M and for 2011 to $1,660.0M from $1,610.0M, representing growth of 79.2% and 41.3% Y/Y, respectively. Our EPS is unchanged at $2.08 in 2011, and our 2010 EPS estimate goes to $1.45 from $1.44.
    · Unification of views regarding BIDU’s growth from both sides of the investment community — We believe prior to BIDU’s earnings, the Street consensus was relatively more conservative in its projections for BIDU’s growth than the buy-side (consensus was based on the company’s guidance, which turned out to be conservative). However, post earnings, we believe the gap is likely bridged. As such, we believe the expectation for BIDU’s growth could be fully reflected in its stock price, and upside is limited.
    · Valuation — We maintain our Hold rating, as we remain concerned with regulation risks pertaining to BIDU’s business. Our $79 price target is based on a 38X PE multiple to our 2011E EPS estimate of $2.08.

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