Guest View
User: Pass: | become a member


Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Fearful Thursday – Manic Over, Depression Sets In

The markets are clearly insane.

I diagnosed manic depression in the markets years ago but it’s been getting worse and worse to the point where we now have mood swings from week to week and sometimes even day to day.  Much of this is politically driven with the Conservatives currenly in overdrive – looking to "prove" that every single thing the Democratically-controlled Government does is nothing short of a disaster.  Nothing works, nothing will work and nothing proposed will work other than more tax cuts and "throwing the bums out" (the Democratic bums, not the Republican bums). 

There is a 24-hour television network that is slightly conservative and, if you look on the Fox web site, you will find out that 8% of the children in the US are born to "illegals," that cutting the World’s largest defense budget will make U.S. less safe (YOU DECIDE – they say), Democrats IGNORE ethics cloud by attending Charlie Rangle’s 80th birthday party, Democrats are using the Tea Party against the GOP (but don’t worry because "the tide is turning at the polls"), the drilling ban is crippling the Gulf, we’re "wasting" Billions of dollars by sending aid to other countries and, best of all, the page is sponsored by BipolarDepression.com!

Heck, after reading that page I’m ready for a few Xanex myself! 

The front page of the WSJ is not much better with the headline: "ECB Warns on Economic Recovery" along with their very accurate Page 1 print headline: "Markets Swoon on Fears."  Of course, if you actually read the ECB article, you’ll find what they actually said is "The sustainability of the recovery in global and euro-area trade will depend critically not only on a further strengthening of private demand, but also on the robustness and health of the global financial system" IN THE CONTEXT of an article analyzing the collapse of global trade in the wake of the 2008 financial crisis.  But that doesn’t make a great headline does it?  That doesn’t make you pick up the paper or stay tuned through the commercial so it’s ALTERED, spun to maximize the FEAR reaction in the readers – the one that is most likely to lead to a purchase decision. 

The European Union’s Eurostat statistics office, meanwhile, said industrial output dropped 0.1% from May and was 8.2% stronger than last June. Economists surveyed by Dow Jones Newswires last week had expected increases of 0.5% on a month-to-month basis and 9.1% on the year.  However, May’s figures were revised higher to show that industrial output rose 1.1% on the month and 9.9% on the year—the strongest annual increase since comparable records began in 1991.  This data is in THE SAME ARTICLE that is "warning" us about the recovery.

In Member Chat last night, we were discussing the latest "warnings" from uber-bear David Rosenberg, who asks "What Caused Bernanke to Shift His View?" which refers to the 11-word difference between the prior Fed statement and the one we got on Tuesday because Bernanke hasn’t said an actual word since then.  My commentary on the article was as follows: 

The Rosenberg is great but it is just the last straw as I see everyone (in my opinion) leaning way too bearish so that triggered my rant (an earlier post for members) on perspecitve.  My job (as I see it) is to be the captain of the ship and to steer us clear of the icebergs as we navigate choppy market waters – whenever we tilt the ship too far in either direction, I do my best to get everyone rowing on a better path.  What I don’t like to see is panic and hysteria – that doesn’t do anyone any good. 

If I thought the global GDP or even the US GDP was going to grow at 3.5%, then I would be way more bullish.  "Discovering" that the economy is rough and that having 25M people out of work is not a good thing really doesn’t shock my Socialist ass and it shouldn’t surprise you either.  As I pointed out in the last jobs report, ALL of the layoffs were in the government sector as the Conservative strategy of "starving the beast" is paying off in spades so why aren’t they partying in the streets?  This is what I mean when I call Republican policies insane – they are not well thought out.  Cut 4M people off unemployment - what happens next to the economy?  Cut 144,000 teachers - won’t that make unemployment go up and freak out investors yet again?  Let the states go bankrupt - won’t that cause a melt-down in the bond markets and freeze up credit again?  

Busting the unions and pulling benefits leads to lower labor compensation, unemployed people (shockingly) can’t afford to shop, especially in a July when oil prices shot back over $80 because oil is an instant tax on the poor.  Small business people have no access to credit because banks don’t lend.  Banks don’t lend because the Fed lends them money at 0.25% and they can put it in TBills and get 3% rather than risk lending it to small businesses or homeowners who might not pay them back.  Of course the NFIB survey reflects this – how many times have I said that small business is getting totally screwed over by Big Business, who are the same top 0.01% as the rest of the crooks that are destroying this country so they can add to their money piles? 

None of this is news.  I knew this was going to be a disaster the day Bush got re-elected for pretty much all of the same reason.  The only shock I had was how long it took this house of cards to collapse BUT – just because a house of cards collapses doesn’t mean I then extrapolate that the table it was built on is going to collapse or the building the table is resting on or the planet the building is on or the Universe that planet is in.   The World will keep spinning and this too shall pass and the fact that a new bunch of prognosticators suddenly realize the economy is in bad shape every time we dip negative in the market (where was this insightful stuff for the last 4 weeks?) us to get stampeded in and out of positions like a bunch of clueless sheep. 

On June 17th I wrote "Productivity and Prices are Peaking" and it took a month but now we got the Productivity report that confirms that.  Should I be FREAKING OUT because something I said was happening at 10,400, which made me bet against 10,700 being broken, was finally, officially reported?  Maybe my frustration is that no one seems to read my articles!  Or maybe they, like everything else, are simply forgotten the next day as this market environment turns everyone into day traders.

I will close this by urging new members, and maybe current members who forgot, to read my "Worst-Case Scenario:  Getting Real with Global GDP!"  I wrote that one 2 panics ago (June 6th), when we were bottoming out at 9,800 and (surprise) everyone was freaking out and calling for the end of the World, which made me decide it was a great time to start our Q2 Buy List (June 7th).

Maybe I’m wrong, maybe the World IS ending and it’s always good to get everyone’s diverse opinions on the subject but the problem is I sometimes just get tired of making the same points over and over again but, if I don’t – then the tone of the site gets ridiculously bearish – perhaps at the worst possible time

We are still in the middle of our trading range (9,700-10,700) so we could easily go in either direction and a real market panic could take us down to 9,000, which is why we are still 65% cash but my overview is that we’re at the point where the government (whether for election purposes or for some crazy notion of actually wanting to help people) needs to do something and that something is not going to be giving tax breaks to 13M people.  So the Conservative pundits are having a little hissy-fit and you will continue to get bombarded with negative news for the duration but, in the end, the people with money and researchers see the same thing as I do – putting money into equities is safer than bonds and there is plenty of money sloshing around out there.   The World is not ending and, while the economy may not be snapping back quickly – we certainly aren’t going back to the stone age — unless Palin gets elected. 

As I mentioned on Monday, Japan is going on vacation next week and today the Nikkei clawed it’s way back to 9,212 on a huge Yen dump that took it back to 85.79 to the dollar but the manipulation didn’t hold and we got our usual rise in the Yen from 3am as the Yen jumped back to 85.2 to the dollar.  These are huge moves for FOREX trading but they now happen EVERY DAY!  We have also had more than 1% swings in the Pound and the Euro both generally down today against our bouncing dollar (our trade ideas in Friday Morning’s Alert to Members was selling the UUP Aug $24 puts for $1 (now .20 – up 80%) and buying the Aug $23 calls for .40 (now .95, uup 137%).

The Shanghai fell 1.25% (2,575) and the Hang Seng gave up 0.9% (21,105) but India continues to hold that 18,000 line at 18,073.  I’m sure some stuff happened in Asia but it’s 9:15 and it’s all about us now.  Same goes for Europe where they dropped from a nice open and are now down about half a point after another bad round of Unemployment Data from us (484,000 Americans lost their jobs last week) and both Import (-0.3%) and Export (-0.2%) Prices were deflationary.  Tomorrow is the real excitement with CPI and Retail Sales for July along with Michigan Sentiment and Business Inventories. 

We expected to test our levels at Dow 10,200, S&P 1,070, Nas 2,200, NYSE 6,800, and Russell 635 and the Russell already blew it yesterday (but we expected that after last week’s horrific small business data we discussed).  Our QID spread from Tuesday morning’s post has already been rolled (up 369% in 48 hours) to the DXD spread I mentioned we’d flip to in yesterday’s post so congrats to all who played along at home! 

We had a few bullish trade ideas (and a CSCO spread that needs to be dumped right away!), trying to get ahead on some bottom fishing yesterday but so far, so bad on those!  Today we may actually be forced to join the bears if we blow 3 of our 5 bottom levels but I am hoping that this holds as it would be very nice to begin to establish what has been the mid-point of our trading range as more of a base.  

Is that too optimistic?  We’ll see…

 


Tags: , , , , , ,

Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!



Comments (reverse order)


    You must be logged in to make a comment.
    You can sign up for a membership or log in

    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

    Click here to see some testimonials from our members!

  1. haschade

    G’morning Phil --
    If you wanted to play Verizon (VZ) for a possible/pending iPhone carrier announcement in the next few months (and you like the 6+% dividend, how would you go about it?
    (I searched and could not find any of your previous rec’s on VZ…)
    Henry

  2. jthoma

    Phil- New to the site by about 2 weeks- GREAT site- savy people willing to help each other- congratulations- hope I can add value!

  3. barfinger

    One comment if I might. Pretty much everything done by politicians now is toward the end of gaining power. When in power, the winners take the spoils, moving things in their favored direction without hesitation or negotiation. Even though some of it is good, a lot of it is counterproductive crap. If the government is divided, the struggle for power will continue until the next election and nothing gets done. Some of us feel nothing is better than the over-the-top crap one side would produce if they gained a big power edge. Phil, you have some good ideas, and I think many of the things you wish for our country are shared by most of us. The methods you advocate are often extreme, and need to be negotiated.
     
    That’s all from me until the market closes again.

  4. hanna5

     Going to be opening considerably lower. Amazing how quickly sentiment changed…anyone gonna be looking at CSCO after this selloff? Put premiums should be pretty fat.

  5. skipper1946

    With all of the malarkey from the Obama administration about reaching out to small business, it seems it will do little if any good.  Here’s a report from NFIB about the collective mindset of the "jobs creation engine" who aren’t least bit encouraged by what the see on the horizon. 
    http://www.nfib.com/nfib-on-the-move/nfib-on-the-move-item?cmsid=52277
    Skip

  6. Pharmboy

    ShadowTrader Pivot Points for Today.

  7. Jbur

    hannah5- yes, I am looking at the CSCO spread Phil discussed yesterday (Sept23/24) and am surprised to find  the spread is priced at more than yesterday. That’s definitely changing in the next few minutes and I’m looking for a bargain. Have fun!

  8. yipcarl

    stick for now….sell later or tomorrow am

  9. Phil

    Good morning! 

    CSCO did not work at all but can be cashed out even – although I don’t mind keeping the short puts as I still like them. 

    Volume was a little better for a possible blow-off bottom (22M in 5 mins so far) so I’m liking this turn (I know, the eternal optimist) – so watch those short plays and don’t lose faith on the long side. 

    Our levels are:  Dow 10,200, S&P 1,070, Nas 2,200, NYSE 6,800, and Russell 635  and we’re on the 3 of 5 rule here.  Keep in mind these are the middle of our range so a 5% move to EITHER side is no big deal in the grand scheme of things but I have been leaning more bullish after earnings and that means I want to see this set hold as a bottom so, eventually, we will be able to raise our mid-range targets and commit a little more cash to the upside. 

    The problem with trading today is, even if we get a big run – how can we trust it over the weekend? 

    So I favor cahing out the short-term, short-side plays here and let’s hope it’s a real bottom.  If we blow 3 of 5, we will add more disaster hedges but let’s try to accentuate the positive this morning and look for a move back to 10,450 and 1,100.

    This morning I like the DIA $104 calls at $1 with a stop at 10,250 and looking for 10,450, which should be about $1.75 but, of course, we’re thrilled with $1.25+! 

  10. matt1966

    Same old same old.  Exactly as planned.  The only question is do we turn down once closing the gap or continue up.  Based on the volume, I say continue up.  Based on the speed at which we closed the gap I say turn down.  Ooohhh I’m tingly with anticapation waiting for the next manipulated move of the market!

  11. tuscadog

    Phil / Cisco  Should I buy now, off 10% and 10x next years p/e?

  12. ben1be

     STX and WDC,  which have been discussed as plays by Phil, had relatively solid days yesterday and after the gap down this morning are recovering. Maybe they are finding a bottom.

  13. lionel

    Pharma/ Thank you for your answer on yesterday post.

  14. rn273

    Closed IWM 62 calls sold as cover to the 64 calls bought yesterday for 0.36 (had sold for 0.81). Now need to sell something more to get back even on the 64 calls…

  15. matt1966

    Going long FAS(20.1) with a 20.05 stop

  16. yipcarl

    looks like were getting the stick……..sweet…. 100% shorts sold except for a slew of Oct puts.  waiting for rebound today or tomorrow am to go back in.

  17. exec

    Matt,
     
    Doesn’t it suck when a bear gets stuck in a bull trap???

  18. Phil

    VZ/Hasch – $30 is the sweet spot to me and I favor owning them due to the dividend.  I like the stock at $29.80, selling the Jan $29 puts and calls for $3.60, which is net $26.20/27.60, a nice 7% discount to the current price if put to you.  In theory, you can just roll the losing side along to the 2012 whatevers and pick up another $4-5, which would put the long-term basis down to a very comfortable $22ish into next year and run the net dividend up over 8%.  You can also go artificial with VZ with the 2012 $22.50/30 bull call spread at $5 and sell the $25 puts for $2.50 and that’s net $2.50 on the $7.50 spread that pays 200% at $30.  The marrgin on the put spread should be about $5 so a very nice return on capital and worst case is you own 1x of VZ at net $27.50.

    Welcome Jthoma! 

    Politicians/Barf – It is possible that not everyone in the World is motivated purely by greed and lust for power.  Perhaps you can’t imagine this to be true given your own world-view and instincts but as someone who detests the kind of politicians you describe and as someone who has met many of them – I would have to say that some of them are either incredibly good at fooling me (by doing sneaky, devious things like standing up for principles or keeping promises that offer them no direct benefit or helping people who really need it) or perhaps not as bad as you think. 

    CSCO/Hanna – I think that being able to sell the 2012 $22.50 puts for $3.90 is a gift.  TOS says net margin on that is $4.30 so you either make 90% of your margin commitment in 18 months or you own CSCO at net $18.60.  Another way to play the drop is the Jan $20/22.50 bull call spread at $1.40, selling the $20 puts for $1.30 for net .10 on the $2.50 spread that’s $1.50 in the money and worst case is you own 1x at net $20.10.

    Education for Skipper:  GOP Blocking Small Business Help

    The small business bill  would create a $30 billion fund to help unfreeze lending for credit-starved small businesses, and provide about $12 billion in tax breaks aimed at small businesses. Senate Republicans have blocked it from coming up for a vote.  "There’s been a fundamental lack of seriousness on the other side," Obama said. "We’ve spent the last 20 months governing; they’ve spent the last 20 months politicking."

    The bill is endorsed by the Chamber of Commerce, which "doesn’t go out of its way to say nice things about me.  And yet we still can’t get it moving through the Senate," the president said. Of Republicans, he said: "Their basic theory is, we don’t want to do anything that helps the president move the country forward because they’re thinking about the next election instead of the next generation."

    Gold at $1,215 and gold bugs will be very disappointed if the world doesn’t end this weekend.  GLL Aug $39/40 bull call spread is .50 with .02 of premium so a nice way to bet we fall back to $1,200 and you can sell the $38 puts for .25 to sweeten the deal.

  19. yodi

    Good Morning Phil.
    Well it is a iffy day today and Im am looking at the positions of short Aug mattress plays holding 100p 103p 104p 105p and 106p shall I wait till next week to let expire or start rolling especially 105 and 106 putters your thoughts pls

  20. matt1966

    Would you believe we NOW have a free money day to the upside?  Stranger things have happened..

  21. exec

    Matt,
     
    I’m taking your word for it……but I’m not convinced yet.

  22. jromeha

    THat is an awesome comment from the Prez! He needs to take off his gloves and start swinging at these chumps. He’s already wasted over a year trying to compromise rather than just giving the middle finger to the repubs and jamming his bills through like Bush did for much of his presidency. I want to see more anger from Obama!

  23. cmsosa

    Hi to all !!
    Phil, i am in a 270/280 bull spread in AAPL for 5.70 net and it’s hurting yhe portfolio a lot, the spread is now at 3.6, any ideas to salvage or improve the trade? thnx

  24. Phil

    Anticipation/Matt – Like this?

    STX/Ben – Now that’s a data storage company I CAN get behind!  $11.10 for the stock and you can sell the 2012 $10 puts and calls for $5.40, which is net $5.70/7.85.  Their maket cap ($5.7Bn) is less than 1x sales ($7.5Bn) which means any company that feels they can drop 10% to the bottom line would find them a very easy-to-swallow purchase at this price.  

    IWM/RN – Oh thanks.  Of course buying back the Aug $63 calls, now .15, is a good idea!!!

  25. cmsosa

    sorry, detail, the spread is AAPL 270/280 Jan2011…

  26. yipcarl

    Are we getting a TBT uncoupling?  IWM did not follow it down? total divergence today so far..

  27. humvee4me

    Barf:Politicians--Unfortunately what we have are professional politicians and their primary job is to get re-elected; they will at times please the people that voted them in and at other times the special interests, but its always towards the longer view of staying in office.   The power and money may motivate some, but I think most go to Washington with good intentions but become intoxicated by the environment there (Rangel comes to mind), then the arrogance grows and finally contempt for the electorate develops, but never does their primary goal leave, getting re-elected.  Non professional politicians is what we need, but will likely never get.  IMO

  28. matt1966

    Well.. I sold my FAS long at 20.3 but then I tried to reload at 20.15.  Now out and short.  Will cover if we breach the day’s high.  They are being sneaky about selling off again!

  29. matt1966

    Phil / Anticipation:  EXACTLY!
     
    exec, sorry, that’s why I set tight stops!  When you trade that close to the wheel your gonna get burned sometime.

  30. 42laurel

    humvee4me
    Until term limits and minimum poltical contributions ie $1,000 per politician per person is imposed the US citizens will continue to be pilaged by Washington and state politicians.
    I absolutely agree that the intoxication occurs, but what can we do other than be strong armed into paying more of our paychecks in taxes whether we agree or not.

  31. ocelli7

    Phil, are we in a place where oil is playable?

  32. cmsosa

    Phil, given that oil has gone south and the stock market as well it might be worth to have a look at EPD, it has suffered from both down-trends and it seems to me that at this price (35.88) it`s a BUY, what do you think about it?

  33. yipcarl

    Matt… I think they are being sneaky about going higher when most people think it’s going lower.  I think it’s a slow wind up for a stupid parabolic bot driven run up.  I’d love to see us touch 10500 I would LOAD THE BOAT.  I’m hoping to see this 10450.10500 later today early tomorrow am.

  34. matt1966

    It’s all about creating a market to either buy into or sell into.  They move the price around to make it appear like there is a firm top or bottom.  It’s at these points that people set stops.  Either hard or soft ones.  They then lazily work the price around to make it look like the point has some staying power.  Then, more stops are placed.  Finally, they lazily move the price back towards the stop and by the time they get there there is a much greater pool of buyers or sellers, which ever the case may be, for them to sell to or buy from.  They are in effect, creating demand for whatever it is that they happen to be doing.  It’s a gradual process… but hey, they’ve got all day and computers don’t need coffee/pi$$ or lunch breaks!

  35. kinkistyle

    Weekly op-ex max pain strikes are about 2% – 3% above here, so look for the drift upward if we don’t get much market participation today and tomorrow…

  36. yipcarl

    IWM – TBT – recoupled….lol

  37. matt1966

    yip, it’s still possible you are right.  The really hard days are when they use the tactic going both ways (before and after a reversal).  Those are days when it’s  just best not to be trading. 

  38. kinkistyle

    matt:  yep. gotta keep the two factions warring so the arms dealers have someone to sell to.

  39. humvee4me

    42laurel: right you are- rather than term limits i’d rather see a return to a part time legislative branch, eliminate of ALL special interest group (PACS, Unions, Business coalitions, etc) contributions but we’d need a constitutional amendment for that, so I’m thinking its more likely we have a revolution first. 

  40. savitri

    RN--I have the IWM calls also--are selling weeklies to try to get to even?
    Tx

  41. kinkistyle

    AAPL weekly 250 puts asking 1.70 with one day till expiration and a weekly max pain strike of 260.

  42. rn273

    IWM/Savitri – Yep. Had sold weekly $63s yesterday for 0.62, bought back at 0.36 yesterday mid day. Then sold weekly $62s for 0.81 and bought back this morning for 0.37. Now waiting for the going up, before possibly selling weekly $63s again for a full cover (if needed, depends on how IWM behaves today) for 0.3 or so. My current basis is down to 0.52

  43. jomptien

    Phil, Do you like GLW down here at 17.59 – thinking of a bull spread. Thanks

  44. yipcarl

    Matt heck it’s always hard…haha.  I just think after all that down, which was a welcome dose of reality, its now simply going to be driven up again, contrary to most dumb money’s logic.  Up again to suck in the suckers before they wash it out further lower again. looks like that’s what’s happening. I seem to be on it lately…this does not happen often…..

  45. JRW III

    Good morning,

     

    I see my original post didn’t make it to the board, sorry.

     

    IWM 60.45, 61.25, 61.96, 62.38, 63.09, 63.33, and 64.41

     

    I am on vacation with only one laptop utilizing mutiple programs; as a result, i am not able to post with my usual frequency

     

    JRW III (premium)

    exec,

    In recent history, if it opens gap down, it recovers higher; if it opens evenish it closes lower:; if it opens gap up it’s a DOJI.

     

    I am currently in TNA at $35.26

  46. matt1966

    But they use TA points to their advantage as well.  For instance, in FAS right now, they sold into resistance to make a new low and then they reversed at a 50% retracement of the opening stick.  Did the 50% retracement level really provide too much support for them to break or was it just a point they picked to make it appear like there was support?  I don’t know how to tell while it’s happening.. only in hindsight.  The keyy is to pick entry/exit points near those points so that if you are wrong you can quickly get out to correct the situation.  Right now, I’m still clinging to my premise and I sold some more FAS long at 20.17.  If we break the the next resistance level, 20,31, I’ll now I"m wrong and get out.  Typically I don’t like having to go under water .15 to find out my answer but sometimes you’ve got to take what they’re given if you want to play.  Good luck!  We’re  both still right.  But history is on your side.

  47. savitri

    RN--could you post when you get in--I am still learning--would like to reduce my cost also in IWM
    Tx

  48. exec

    JR,
     
    You trading today?

  49. hia_5

    Phil,
    Bought the IWM Aug 64 calls at .88  dd at .67 now they are .34
    Bought the QQQQ aug 45 calls at .88 now .75
    Percentage wise a huge drop.
    What do you recommend now.

  50. exec

    Oppps……didn’t see your post……until I updated…….where you been hiding?

  51. exec

    Looks like you were right about the day after.

  52. yipcarl

    Matt that makes sense and certainly helps limit risk….

  53. yipcarl

    JRW… You got in TNA at 35.26?  LOL.  I’ll never know how you do this.

  54. matt1966

    Covered my FAS completely.  Gotta get some work done!

  55. jdub929

     news coming out on GENZ-deal is off

  56. JRW III

    yip

    I said yesterday that if it gapped lower this morning it would likely go higher through the day; so I bought at the open.

    I assumed everyone would !!

  57. Phil

    Mattress/Yodi – I don’t understand why you have so many positions.  Our current stance is 1x the Dec $110 puts with a stop on 1/2 at $9.50 (now $9.70 – .50 trailing stop) and 1/2 the Dec $102 puts, now $5.45 and those are covered with 1/2 the Aug $104 puts, now $1.90 as the $106 puts hit our stop ($2.50) yesterday.  My comment at 10:02 yesterday was:

    Mattress plays – If you sold the Aug $106 puts (now $2.30) as a 1/2 cover for about $1.50, the move now is to sell the Aug $104 puts (1/2 cover) for $1.30 and put a stop on the $106 puts at $2.50.  That would be a $1.20 loss on 1/2 (.60) at 10,400 but the Dec $110s are up to $8.75 and if we head lower we add 1/2 Dec $102 puts (now $5) and stop out 1/2 the Dec $110 puts at $8.50 as that’s a very nice gain we want to protect.

    If we get back over 10,350 then it’s a good idea to sell another 1/2 the Aug $104 puts and that will also have stopped out 1/2 the $110 puts so we would be at full cover with 1x the $104 puts at about a $1.50 avg and our goal would be to concentrate our firepower on rolling the $102 puts higher as we make money on the short puts ($1.50 pays for at least 6 rolls up)

    Gloves/Jrom – Oh they are coming off.  I’m excited about my trip to DC this weekend – lots of good stuff going on…

    AAPL/Cmsosa – Were you buying premium or selling it?  Buying premium often leads to negative results.  Since you chose to make this a guessing game, I’m going to go with January as your strike month.  You took a very targeted play that was all premium on the assumption AAPL would go up forever and put you in the money so no one would realize you were speculating by paying about $20 for the $270 calls (just because you found an even bigger sucker to pay you $15 for the $280s doesn’t make you "wise" – it’s called the greater fool theory and you only put yourself in the position of being the lesser fool by finding a greater fool than yourself.  These plays are VERY hard to fix but I’d roll the $280 callers ($12.70) to 2x the Sept $270 callers ($6.80) and you can buy 1x the $310 callers to lower the margin (still $40) as your long delta would be .32 vs .40 for the callers and they have 3x more theta decay than you so hopefully you wipe them out but still retain most of your value and you can get out of the trade.  If AAPL gets higher, you just roll the callers back up and adjust.  If you can’t afford to make adjustments like this – then you shouldn’t be messing around with verticals in stocks you can’t afford to manage and you should strongly consider cashing out and switching to something more sensible like the CSCO play.

    Ah ha!  I was right on the Jans!  8-)

    TBT/Yip – Everyone is panicking into the dollar gain so temporary disconnect as nothing can stop TBT from going down when Euros and Yen are flying into TBills. 

    Oil/Ocelli – No because we’re closing in on next week when they have to dump their Sept contracts.  We could see a very sharp sell-off but, then again, there could be a stimulus announcement that sends them flying up so too risky to bet right now. 
    There are currently 184M barrels worth of contracts scheduled for September delivery with low demand and record inventories.  At the best of times, they can only deliver 40M actual barrels to Cushing but Cushing is full and it’s doubtful they will clear room for more than 25Mb by a week from Tuesday so 160M barrels have to be rolled or dumped.  Oct has 208Mb, Nov has 128M and the big problem is there’s already 190M barrels on order for Dec.  As a rule of thumb, 300M in the front-month is max so they may be able to lay off 180Mb this month into Oct and Nov but what the heck are they going to do when they need to push close to 600M Oct/Nov barrels into Dec which is already at 200Mb?  It’s going to be an exciting end to the year at the NYMEX!

    Also, on the oil chart.  Notice BACKWARDATION between Sept and Augand some other months where the longer contract costs are getting LOWER than the front-months.  Imagine if it were cheaper to buy AAPL Jan $250s than AAPL Oct $250s – that would probably indicate that something very bad is expected to happen to AAPL between those dates, right?  That’s what backwardation is in the futures….

    Contributions/Humvee – I think all political campaigns should be Federally funded and people could contribute to a blind trust if they wish but it would all be equally distributed with no money whatsoever going from private business or citizens to politicians.  Candidates who make it onto the ballot are given $1 per voter they represent to campaign with and if people want to help them – then they can volunteer their time – not their money.

    So far so lame on the markets.  90M Dow shares at 11 is pretty good volume but now it died out and we’re stuck down about half a point.   Oil still sucking at $76.50, nat gas took a small hit back to $4.32 on so-so inventory build, gold is holding $1,216 and copper is $3.28.  The Yen is back to 85.86 and what a ride that’s been so a lot of the negativity here is dollar strength as well as the EU still getting out of the Nasdaq.  Once we clear those suckers out – hopefully we can go green.

  58. kinkistyle

    Holy mama we going green!

  59. jdub929

    GENZ--sorry for that looks like news I got was an overreaction--prospects of hostile takeover is unlikely.

  60. hanna5

     Long AAPL, short AMZN with ATM options 

  61. yipcarl

    O snap! love this stick!

  62. roberthjrfl

    Phil, could you post a link to where you get the oil data?  TIA.

  63. Phil

    IWM/Hia – I take it you did not 1/2 cover with the weekly $63s?  You are in for .77 and IWM is at 62 with the calls now .40, Your only real choice is to DD or wait patiently for a bounce.  Once you commit to a DD at 20% you are committing to being in 2x the position already down 10%.  At that point, if you go down another 20% (.50ish) you are then down 30% on 2x and a DD leaves you in a (full) 4x position, down 15% with the calls at about 1/2 of where you entered.  If that is not your goal when you are down 20% on 1x – then doubling down was a poor decision from the outset.  Same for the Qs, at this point you just need to wait as it’s no longer worth a DD – you MUST have the commitment to take that DD (ALWAYS into the intial excitement) otherwise the opportuntity slips away very quickly.  If you are not an experienced day trader – I would recommend opening up a paper-trading account to practice for a couple of months so you can get used to the ebb and flow of options contracts. 

    GENZ – LOL, that’s great!   Nice job for all who sold those $70 calls!  See, sometimes fundamentals DO win out…

    NFLX continues to be even more amazing than PCLN. 

    Oil/Robert – It’s linked in the middle of the paragraph. 

    Bye bye you silly EU bears – time for us to have some fun! 

  64. Phil

    Great Report on "Understanding Mobility in America" (yes, I am getting into full political mode ahead of my trip!):

    The key findings relating to intergenerational mobility include the following:

    • Children from low-income families have only a 1 percent chance of reaching the top 5 percent of the income distribution, versus children of the rich who have about a 22 percent chance.
    • African American children who are born in the bottom quartile are nearly twice as likely to remain there as adults than are white children whose parents had identical incomes, and are four times less likely to attain the top quartile.
    • The difference in mobility for blacks and whites persists even after controlling for a host of parental background factors, children’s education and health, as well as whether the household was female-headed or receiving public assistance.
    • By international standards, the United States has an unusually low level of intergenerational mobility: our parents’ income is highly predictive of our incomes as adults. Intergenerational mobility in the United States is lower than in France, Germany, Sweden, Canada, Finland, Norway and Denmark. Among high-income countries for which comparable estimates are available, only the United Kingdom had a lower rate of mobility than the United States.

    Key findings relating to short-run, year-to-year income movements include the following:

    • Since 1990-91, there has been an increase in the share of households who experienced significant downward short-term mobility. The share that saw their incomes decline by $20,000 or more (in real terms) rose from 13.0 percent in 1990-91 to 14.8 percent in 1997-98 to 16.6 percent in 2003-04.
    • The middle class is experiencing more insecurity of income, while the top decile is experiencing less. From 1997-98 to 2003-04, the increase in downward short-term mobility was driven by the experiences of middle-class households (those earning between $34,510 and $89,300 in 2004 dollars). Households in the top quintile saw no increase in downward short-term mobility, and households in the top decile ($122,880 and up) saw a reduction in the frequency of large negative income shocks.
    • For the middle class, an increase in income volatility has led to an increase in the frequency of large negative income shocks, which may be expected to translate to an increase in financial distress.
    • The median household was no more upwardly mobile in 2003-04, a year when GDP grew strongly, than it was it was during the recession of 1990-91.
    • Households whose adult members all worked more than 40 hours per week for two years in a row were more upwardly mobile in 1990-91 and 1997-98 than households who worked fewer hours. Yet this was not true in 2003-04, suggesting that people who work long hours on a consistent basis no longer appear to be able to generate much upward mobility for their families.
  65. 42laurel

    I own Pactiv, ptv, is there some news , stock moving up fairly quickly

  66. kustomz

    Phil those EU bears may be setting us up, Euro strength into their close may wane and dollar heads higher weakening our markets. The dollars been weak since 8am (you’d think we would see more market strength) and due for a bounce

  67. chaps

    portfolio margin play on LOW (currently $19.75): Jan 2012 $17.5/20 bull call spread combined with selling Jan 2012 $15 puts for net $.45 credit. Gross portfolio margin of $1.60, so net margin of $1.15. Returns $.45 between $15 and $17.5, rising to $2.95 at $20 and higher.
     
    If you leave out the "crazy spike" in Q1 2009, real low during the financial crisis was about $16. Put-to price on the trade is $14.55.

  68. Jordan

    I am setting up for camping in this spot until next week’s opex.  Selling puts and calls on DIA (I hold straight DIA stock).

  69. HHFIV

    kinkistyle: Can you explain your comment "Weekly op-ex max pain strikes are about 2% – 3% above here". Thank you.

  70. chaps

    Follow-up on LOW trade. The stock was over $28 in April.

  71. JRW III

    Out of TNA at $37.02

  72. cmsosa

    AAPL/adjust
    sorry Phil, did you mean to roll the Jan 11 280 (now 12.85) short calls to 2x the Sep 260 callers (now 6.40)? you said the 270`s but they are at 3.25…is this correct?

  73. Phil

    Thursday’s economic calendar:
    1:00 PM Results of $16B, 30-Year Note Auction
    4:30 PM Money Supply
    4:30 PM Fed Balance Sheet

    Notable earnings after Thursday’s close: ADSK, DV, JWN, NVDA

    08:00 AM On the hour: S&P -0.39%. 10-yr -0.16%. Euro -0.43% vs. dollar. Crude -1.45% to $76.89. Gold +0.6% to $1206.40.

    09:00 AM On the hour: S&P -0.94%. 10-yr -0.02%. Euro -0.32% vs. dollar. Crude -2.37% to $76.17. Gold +1.34% to $1215.30.

    09:30 AM At the open: Dow -0.73% to 10303. S&P -0.9% to 1080. Nasdaq -2.05% to 2163.
    Treasurys: 30-year +0.1%. 10-yr +0.01%. 5-yr -0.04%.
    Commodities: Crude -2.24% to $76.27. Gold +1.36% to $1215.50.
    Currencies: Euro -0.26% vs. dollar. Yen -0.2%. Pound -0.35%.

    10:00 AM On the hour: Dow -0.65%. 10-yr -0.07%. Euro -0.23% vs. dollar. Crude -1.82% to $76.60. Gold +1.35% to $1215.40.

    11:00 AM On the hour: Dow -0.3%. 10-yr -0.17%. Euro -0.12% vs. dollar. Crude -1.65% to $76.73. Gold +1.4% to $1216.00.

    12:00 PM On the hour: Dow -0.39%. 10-yr -0.22%. Euro 0% vs. dollar. Crude -1.61% to $76.76. Gold +1.33% to $1215.10.

    Initial Jobless Claims: +2K to 484K vs. 465K consensus. Continuing claims -118K to 4,452,000.

    Jul. Import Prices: +0.2% vs. +0.4% expected, -1.3% prior. Ex-energy -0.2% vs. -0.5% prior.

    EIA Natural Gas Inventory: +37 bcf vs. consensus of +34 bcf. Futures pare losses, -0.8% to $4.29.

    The euro/dollar currency pair, the most liquid and heavily traded duo, posted a 2.4% daily loss yesterday, marking the biggest daily decline since October 2008. The hit was reflected in the performance of the currency ETFs.

    It MUST be a depressionSmartphone sales jumped 50% in Q2, says Gartner, but sales of mobile phones generally were up just 13.8% and average selling prices fell by more than expected amid intense competition. Symbian phones from Nokia (NOK) took 41.2% of the smartphone market, followed by BlackBerry (RIMM) at 18.2%.

    The U.S. Department of Agriculture cuts its world wheat-SURPLUS estimate by 6.6% on the back of heatwaves and droughts in Russia, Kazakhstan and Ukraine. Wheat futures +2.4% to $7.4225.   That’s SURPLUS!!!

    Russia doesn’t expect to get any significant rainfall until at least the end of August; if there’s no rain before Sept. 5, many Russian regions will skip winter grain sowing altogether. Wheat futures +2.4% to $7.4225. (see also)

    The federal deficit is growing at alarming speed as the gap between GDP and debt becomes a chasm, former Reagan budget director David Stockman says. Consider this, he says: Nominal GDP is only $100B higher than in Q3 2008, growing at only $4B/month while new federal debt has been growing at $100B/month.

    Obama’s plan to let lapse the Bush-era tax cuts for upper-income Americans would have little effect on those taxpayers, according to the Joint Committee on Taxation. The 3.8M filers who fall in the $200K-$500K income range would pay an average of $532 extra, the study says.

    Double-dip fears are "good for the global market" because it will pressure central banks to stay liquid, Templeton’s Mark Mobius tells CNBC. His bigger worry is the rapid rise in IPO activity, which could eventually put downward pressure on prices.

    Former St. Louis Fed president William Poole says Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) should be phased out to allow the home mortgage market to stand on its own. A fully private market "would bear the losses from its own mistakes in pricing and insurance. The proper government role is regulatory oversight and not direct operation of financial firms."

    More on mortgages from John Carney, who points out a provision in Dodd-Frank that exempts FHA-guaranteed mortgages from banks’ 5% risk-retention requirement; regulators expect Fannie (FNMA.OB) and Freddie (FMCC.OB) also will be exempted. "Unbelievably, the two entities whose mortgage market follies led to their collapses may well be given a pass when it comes to managing risk."

    Another week of all-time lows for mortgage rates, according to Freddie Mac’s survey. Thirty-year fixed-rate mortgages fell to 4.44%, while 15-year rates slipped to 3.92%. Five-year hybrid ARMs fell to 3.56%.

    The IMF’s report that the U.S. needs to grow at 14% in perpetuity to close its fiscal gap leads Laurence Kotlikoff to conclude that "our country is broke and can no longer afford no-pain, all-gain" Ponzi solutions. Hard-core Keynesians who say any short-term stimulus won’t affect our ability to handle long-term deficits are "wrong as a simple matter of arithmetic." (also)

    Europe’s central banks have reportedly bought up two-year Irish notes after a week in which the securities plunged – lowering yields (for now). The premium investors want for Irish debt over German bunds is "ridiculous," says Irish central bank governor Patrick Honohan.

    It’s inevitable: The aging demographics of the developed world will lead to a 40-year-long slog for house and stock prices, James Saft writes. "Put simply, young people save assets while older people eat them."

    The Education Department will release its figures tomorrow that will indicate the effect of its student-loan eligibility requirements on for-profit colleges. An index of for-profit schools fell 1.7% yesterday and is down 18% in the past 12 months.

    Bad for BIDUChina Mobile (CHL +1.9%) and Xinhua News Agency agree to build a new internet search engine company. The two declined to provide additional details, but have set an ambitious task, as the Chinese search market is already dominated by Baidu (BIDU -2%) with a 70% share and Google (GOOG) with 24.2% of the market.

    General Motors, revving up for its IPO, posts Q2 revenue of $33.2B and diluted EPS of $2.55. "We have delivered strong product, maintained cost discipline, progressed strategic initiatives such as restructuring Europe and acquiring AmeriCredit, and delivered two consecutive quarters of profitability and positive cash flow," says CFO Chris Liddell. (PR)

    JA Solar (JASO) is getting a boost from an Auriga upgrade to Buy from Hold, with a new price target of $8 vs. $5.75. "We simply cannot ignore the low valuation nor the expected upside in shares of JASO… as management has ramped capacity considerably faster that we previously modeled." Shares +5.8%.

  74. rn273

    Is this one of those days where we go down around lunch, drift till later, with a stick in the end?

  75. kinkistyle

    max pain/HHFIV:  The Max Pain strike is the price of a stock at which the most options expire worthless and thus the best price for option sellers.   You can find the max pain strike with a calculator like this site:
     
    http://www.optionistics.com/f/strike_peg
     
    So, on these low volume summer trading days, it wouldn’t be hard for the street to move prices to max pain and book their option premiums.    Its just a good indicator of which direction the Street would probably like the market to go.

  76. Phil

    EU/Kustomz – Money is moving out of bonds.  It’s a possible indication that we’re staging for a rally but TBT stopped dead at $35 and we’re pulling back to on not to much volume (just over 15M since 11).  If people do start buying – there aren’t many sellers…

    LOW/Chaps – A very nice play and they make a good hurricane play too.

    AAPL/Cmsosa – Oh sorry, the $260s then.  The idea is just to put them into shorter-term premium but if AAPL gets over $255, you may want to take 1/4 off and another 1/4 off over $260 to set up for a 2x roll on the 1/2 that is left. 

    One of those days/Rn – Hopefully!  It would be nice to have a "normal" day – even if the normal is the same old manipulated BS we’re used to…

  77. rainman

    Wow, crazy busy this morning after being at the beach most of yesterday.
    Bought bargains in GE, VLO and XOM.
    Bought back calls against tech, CSCO, EMC, and TXN
     
    I had to laugh at your opening comment Phil: "The markets are clearly insane". I think some of the emotional people on this board should listen to your comments last night and start looking at a larger time frames. It’s probably extra hard on these people because they read this chat everyday, see all kinds of trades going on and feel they have to do something. Just because things move fast in the chat, doesn’t mean things have to happen fast in a portfolio. Fundamentals haven’t changed, market manipulation hasn’t changed so why panic? Some NyQuil might help slow things down a bit (Lewis Black link should be here but couldn’t find a good clip). Enough NyQuil and the blur gets more interesting. A bit more and you’ll become agnostic and won’t care about these short term moves! When you come down, things will be more or less the same as where you started (unless you wake up married to someone you’ve never met).

  78. rainman

    Oh, forgot that I also made a quick 20% on a IWM trade on that incredibly strong open.

  79. willsons

    JRW   Did the Grave Digger Doji on IWM signal an exit on that trade?

  80. dbarakat

    Head and shoulders pattern forming on IWM.  WE’RE ALL GONNA DIE!!!!
    :)

  81. yipcarl

    HH
    he is referring to option expiration.  he is saying maximum pain if the market moves 2-3% higher.

  82. David Ristau

     Hey all, 

    We have a new position we are getting in as a Buy Pick/Overnight Trade (if it comes to that). We are looking at one of our Long Positions in Nordstrom (JWN). 

    We are looking to get involved at 32.90 – 33.10.

    Check out my analysis and more here.

     

    Good Investing!

  83. tuscadog

    Phil / Plunge Protections Team     Per our discussion yesterday, looks like Timmy’s team is at work – easy on a day with low volumes.  Seems to me he just can’t risk a mkt collapse as this would be the final nail in the economy’s coffin.  It just amazes me that there is not more discussion / exposure of the size of Treasury’s holdings of equities? Must be huge.  How do they keep news of this activity so quiet?
    Surely Tim is working beaverishly with Larry on a major fiscal / structural initiatives announcement, or the elections will be bad for Dems?  Maybe you’ll get a feel this weekend?  Good luck. 

  84. JRW III

    wilsons / doji

    IWM 61.96 was looking more like a ceiling than a floor; strange given the lack of volume. I was thinking we go to IIWM 63.09 and then fall back a bit to close, but "they" have to breakout first; shouldn’t be a problem but we’ll see  !!!

  85. datuu

    phil, what do you think of selling either the XOM Jan, 2011 60 puts for $3.95 or the Jan, 2012 60 puts for $8.40?
    thanks

  86. srfrog

     kinki – excellent link!  very informative…  in your experience about how often does price end close-or-at the max pain level?  Do some stocks/etfs tend to gravitate more towards these levels than others that you noticed – if so, which ones?

  87. gel1

    Adding to my gold positions today – GS forcasting gold will be over $1300 by year end, assuming the fundamentals stay about the same in the economy.  I believe we will see $1350, as I am anticipating we will experience additional easing before year end. Ken Fisher is predicting a robust second half of the year ( he is a perma bull and must be believed with that in mind )

  88. rexx

    Phil on the SQQQ, was able to buy back 52 puts I had sold against call spread; puts were down 90%.  Your rule about taking the money.

  89. srfrog

    kinki – for my questions I meant at OpEx dates of course…

  90. ocelli7

    Phil, great educational response to the oil situation…….still learning here but will try and incorporate those metrics you mentioned into my thinking.

  91. kinkistyle

    max pain/srfrog:  Look at the graph Phil posted in the middle of this comment and you will have your answer: http://www.philstockworld.com/2010/08/11/worrying-wednesday-can-we-hold-support/#comment-343731
     
    Weekly options are a recent phenomenon, but so far during this summer, we seem to be moving back to the same 1100 on the S&P 500 every week for the past month or so (take a look at the S&P dailies).
     
    As far as I can tell, AAPL, GOOG, AMZN, and SPY seem to respect the weeklies, but I am sure if there is some sort of news or some big volume participation comes in, no amount of market manipulation is going to have an effect.

  92. rainman

    datuu/XOM — that’s the exact trade I took this morning.

  93. datuu

    rainman--which XOM trade did you take?
    thanks

  94. stjeanluc

    Gel, the problem I have with GS forecasting gold at over $1300 is that once everyone jumps in between $1200 and $1250, they’ll take a profit at $1250 with the consequences that it will have on the market. I might of course be paranoiac by now! 

  95. pahurik

    Today NVDA earings, if somebody wants long play: Jan2012 5/7,5 bull call spread 1,65; sell 7,5 put for 1.35 . 2,5 spread for 0,3 deep in the money.

  96. rainman

    datuu/XOM — the trade you mentioned, bought XOM ($60.25), sold Jan 15 calls (3.91) and puts (3.90) for a 12.8% return in Jan if XOM > 60 or an average entry of 56.27 in jan.
     
    This is the second time I’ve been in this trade. Last time I entered it was 6/24 (XOM $60.38) and closed it on 8/9 when xom was about 62.50 for 7.8% in 6 wks which was about 40% of the potential profit.

  97. datuu

    thanks rainman

  98. HHFIV

    chaps: On Monday you posted a portfolio margin trade for PG. It still looks good. What are your thoughts?
    "Buy the Jan 2012 $57.5/60 bull call spread and sell Jan 2012 $47.5 puts for net credit of $1.57. Gross (portfolio) margin is $4.71, so net margin is $3.14.
     
    The trade pays $1.57 between $47.5 and $57.5, and pays up to $4.07 at $60 and higher.
     
    If put to you, you pay around $46. At its very worst in Q1 2009, PG touched around $45."

  99. jdub929

     PHIL!  How bout LQMT?!?  LOL

  100. bobhu

    Phil,
     
    EMC looks interesting here, thoughts?
     
    Thanks.

  101. gel1

    stjean /gold
    You have GS figured out, but I think the gold market is bigger than GS.  One must remember the market is fragmented into a lot of different plays ( miners etf, etc ). Worldwide fear of black swans, inflation, pestulance and political malaise to name just a few drivers can overwhelm a few buys by GS, IMO.  Each and every one of these multiple drivers surface from time to time, so I believe I am insulated from risk through diversification of fundamental forces. I have at least 10 different plays on the bullishness of gold. ( same for silver and platinum for the same reasons ) I guess you could say I’m nearing "bug" status!

  102. mSquare

    SNY – Sold Sep 30s against Sep 27.5 Puts (bought when they were cheaper).
     http://finviz.com/publish/081210/SNYc1dl1325.png
    Longer we do not hear about the 20-billion deal, the better. I already own some stock too…

  103. gel1

    I am not real sure of the strength of the equity markets lookiing forward, but I am sure of the continued growth in wireless communications – expansion is inevitable worldwide. To capitalize on this growth, I entered one of the best companies that concentrates in the development of this technology – InterDigital, Inc.  (IDCC) I entered selling the December puts for a discount on the entry. The fundamental are fantastic – great revenue growth, net income and liquidity. At the current price – this one is really on sale.

  104. kustomz

    130m on the DOW no stick today

  105. Phil

    Not good that we can’t even get back to yesterday’s lows.

    Having to do something/Rainman – Very good point.  I used to say to people "Don’t just do something, stand there," to illustrate step one in crisis management – Calmly assess the situation.  Step 2 is "look for oppportunity" and then we get into the whole Chinese "crisis/opportunity" thing. 

    H&S/Dbar – LOL, I hate it when that happens!

    JWN/David - An interesting call on the heals of strong results (and guidance) from M.  I’m liking 5 Oct $35 calls at $1.70 ($850) covered by 4 Aug $34s at .82 ($328) for net $522 or $1.05 per long.

    PPT/Tusca – They don’t need to buy anything directly.  They just need to work with the Fed to make sure their primary brokers have FREE MONEY at the discount window and they need to make sure it is understood that the free money spigot is contingent upon certain market action (up) that they wish to see.   GS et al can move the market up, down or sideways at will so it’s all about motivating them properly.  Of course, part of what they do to force a rally is set bear traps to draw retail bearish retail players in because that accomplishes two things – it gives them more bang for the buck when they force a rally and get the bears to cover and it also takes firepower out of the bears hands, which makes it safer for them to play their games. 

    At 11pm we had 90M shares. Now it’s 1:28 and we have 128M traded on the Dow – just 38M shares in 2.5 hours, a virtual nothing since the open.  Did they run the bots early and use up their firepower or are we just waiting on the big stick?  We are getting a bit volume heavy for the day for a stick save so this may be one of those times that the big move up comes after the market closes and we gap over yesterday’s lows tomorrow.  Either that or a last minute stick but if we are still red at the end of the day, we’ll want a good cover – just in case.

    Dow is still good for a drop and the DXD Sept $26/27 bull call spread is .90 and the $25 puts can be sold for .45 so that’s .45 on the $2 spread which will make nice weekend protection even if we do head higher.

    XOM/Datuu – I’d wait to see if oil firms up.   Per above, I think we may break lower on oil and that will take XOM back to the lows where I would be much more enthusiastic about selling puts.  With the 2012 sale, not as big a deal as net $51.60 is a great price regardless…

    Gold/Gel – I certainly hope it’s not at $1,300.  That price is not likely to accompany a healthy economy. 

    SQQQ/Rex – Nice job.

  106. jdub929

     To those who love talking politics:
    http://www.cnbc.com/id/38670867

  107. datuu

    thanks phil

  108. jvest

     DXD Sept $26/27 is not a $2 spread .. did you mean Sept $26/28

  109. gel1

    For those that are playing FX…. here is a play I entered – Buy USD/ZAR at market, Stop @ 7.165, take profit @ 7.80. This is a tech play on the Rand.

  110. fortep

     Gel—I remember back in ’08 when oil was at $150/b and GS said it would trade to $200 by the end of the year, no sooner does it start dropping back below $100. GS’s bullish forecast for gold makes me want to rethink my GLD positions although I still think the physical stuff is worth having around, just in case. 

  111. chaps

    HHFIV/PG: If you mean do I still like it, yes. All that’s changed since then is a higher VIX, which means more net credit and more net margin. Of course, if you enter the trade, your net margin will fluctuate daily as a function of the stock price and the VIX. So, with these sorts of trades, it’s best not to get fixated on the net margin as your absolute "investment."
     
    But for me, when I know I can get a net credit of $1.82 on net margin of $3.08 (currently) on a blue-chip trade that has little downside, I’m comfortable.

  112. tuscadog

    Phil / TBT   Doug Kass is now buying TBT and says "A 2.72% yield on the 10-year note is priced at a P/E multiple of 36.5x vs. the S&P’s P/E multiple of under 12x
    But, how can one short the 10 year when the Fed has promised to buy em without limit to push interest rates and mortgages down to historical lows?
    I’ve kept comparing us to Japan, 1%, which is why I’ve stayed away from TBT.  Sadly, we are looking increasingly like Japan, so I’m still not tempted yet by TBT.

  113. HHFIV

    chaps: Thank you for your help.

  114. rainman

    Stick!

  115. Phil

    LQMT/Jdub – Well I do love their work.  Any particular reason you are looking at them?

    EMC/Bob – What is it with you guys and the storage companies?  I said this yesterday – doesn’t the fact that we get two or three people a day wanting to chase these things alone make you worry?  Where are they being touted as such fantastic investments that people keep asking about them?  EMC is trading near their ATH with a $32Bn market cap and their best quarter in 2 years was just now at $426M profits so a p/e of 20 is generous compeared to STX, with a p/e below 10.  So this is not a company I would pick for anything other than a short if they get back to $21.

    It would be encouraging if they can hold 10,300 and 1,080 but still lame if we can’t get green after such a massive sell-off over 3 days.  We’re down 3.7% since Monday’s close with the actual 5% drop line at 10,165.  Tues we bounced off 10,560 (1.25%) and yesterday we couldn’t take back 10,432 (2.5%) and now we’re looking at 10,298, which is 3.75% down so it’s possible we’re stepping down in a controlled drop to the 5% lines and that means we need to look at the 4% line (10,272) as that will be our bounce zone anyway and that is about what we bounced off this morning

    Oil is holding us back and gold and copper aren’t really helping the miners because no one is buying the move.  We can’t have much of a rally if people are worried about commodities and the SOX are still TERRIBLE but bounced off the 10% line at 319.50 (down from 355) but so what if they can’t break a 20% (of the drop) weak bounce at 330 (now 325)?  

    Refined products are dropping faster than oil and that’s spooking VLO as well as other refiners and integrated oil.  Financial fell 6.66% from $15 to $14 and they need to pull it together as well.  So far, we have no sector leadership and I’m starting to wonder what the catalyst will be?  So either a fake, BS rally or drift along out mid-point is in our future and I think the volume (now 140M at 2pm) may have gotten too heavy for a fake, BS rally today if they don’t pull the trigger now (before the usual 2:20 trigger).

  116. matt1966

    August 12th, 2010 at 9:43 am | Permalink  
    Same old same old.  Exactly as planned.  The only question is do we turn down once closing the gap or continue up.  Based on the volume, I say continue up.  Based on the speed at which we closed the gap I say turn down.  Ooohhh I’m tingly with anticapation waiting for the next manipulated move of the market!
     
    With the benefit of hindsight.. it now appears that the first scenario I outlined above is the case.  But then there is always the stick to fear..

  117. ravalos

    Yip LOL nobody posted in 40 minutes because you were looking at yesterday’s member chat!

  118. yipcarl

    omg.. I realized that Rav.. I have NO IDEA how I got on that page?  I don’t touch anything. 
     
    Weird.  Long TNA at 36.15, had a stop at 35.99. 

  119. matt1966

    Furthermore.. the 50% retracement of the opening 5 mins of FAS acting as support.. was just that.  Acting!  More manufactured malarchy to get us to nibble.
     
    Sorry guys.. I’m not feeling the stick today.   

  120. bobhu

    Great point on EMC, Phil..
     
    Thanks.

  121. Pharmboy

    OPEN – big movement in the 45 Oct P, and 55/60 Oct Bull call spread.  Gonna try a few for a net debit of 30c (sell the P, buy the spread).

  122. rainman

    matt/stick — yeah, that looked like the start of a stick but now it looks to me that there is still warm bloods meddling about and I think that makes for a shy stick. If the volume drops off and stays there, I think there still can be one but volume appears too erratic.

  123. jthoma

    new to the site by two weeks- seems like may savy guys all willing to help each other- congrtualions Phil on a GREAT site- hope I can add value

  124. jthoma

    need to learn to type tho

  125. Phil

    IDCC/Gel – Nice pick.  I like a 4/5 backspread on that one with 4 March $27s at $2.25 ($900) selling 5 Dec $28s at $1.10 ($550) for net $350 on the spread.   If they break over $27, you just buy some more calls.

    GMTA Kustomz!

    $100K/Jdub – I’ll bring a market to DC, in case I get the opportunity.  8-)

    DXD/Jvest – Yes, I did mean the $26/28 spread!   Thanks,

    TBT/Tusca – That’s what I was saying earlier.  Bonds make no sense from a valuation perspective compared to stocks.  Once you stop terrifying people out of stocks and into bonds, a simple normalization should rally the market.  As to the TBT part of it – the reason Japan got away with 1% for 2 years is because they were the only ones doing it and they are an export economy.  We are THE import economy so our money needs to be constantly valued in terms of what we buy – we don’t have as much flexibility as Japan right there.  

    Also, now you have the whole world trying to print funny money to paper over their debts with every country auctioning off tens of Billions of debt every month (and we’re way over $100Bn per month).   At some point, this ponzi scheme will come crashing down because the amound of bonds we are selling is going to outpace the supply of available capital.  We don’t have to have a failed auction but if Germany (already failed 3) or another EU nation can’t borrow money until they offer higher rates – then the farce will begin to become obvious if we continue to sell long-term notes for 3% when Europe has to offer 5% and, just to keep up appearances in the Fiat Currency scam – we would have to raise rates to a slightly more realistic level. 

    What’s really scary is Bill Gross can tople the entire global currency market with a word – he’s possibly the most powerful man on earth right now although that power is based on the fact that he’s the top guy on the pyramid so he’s about the last person who would blow the whistle on this fraud – his job is to keep pulling the rubes into the tent. 

    It’s kind of a boring play but the XLF Aug $13/14 bull call spread is .85 and that makes 17% next Friday if XLF holds $14.

  126. rainman

    Phil/PPT — so are you saying that the PPT doesn’t do their own proping but has GS do it? That would be even more scary!  I thought the PPT would have their own bot.

  127. Pharmboy

    OK – off to try and hit a few small balls with dimples around a course…..OH MY!

  128. Phil

    01:00 PM On the hour: Dow -0.33%. 10-yr -0.25%. Euro -0.13% vs. dollar. Crude -2.04% to $76.43. Gold +1.33% to $1215.20.

    02:00 PM On the hour: Dow -0.72%. 10-yr -0.14%. Euro -0.27% vs. dollar. Crude -2.58% to $76.01. Gold +1.45% to $1216.60.

    The Treasury sells $16B in 30-year bonds at 3.954% (.pdf), lowest yield since March 2009. Bid-to-cover ratio of 2.77, vs. a recent 2.44; indirect bidders take 46%, vs. a recent 38.3%. Direct bidders take 18.6%, vs. a recent 16.7%. Treasurys remained slightly lower: 30-year yield +0.02 to 3.93%, 10-year +0.02 to 2.74%, 5-year +0.04 to 1.47%.   Remember the panic of March 2009?  That’s what TBills are like again

    Consensus expert opinion in the bond market is still doing some catching up to the reality of an extended low-rate environment.

    Prolonged periods of economic weakness are, with almost no exceptions, associated with falling inflation rates, Paul Krugman writes, so the Fed should do more to pump up the economy. "But what you see instead is many people at the Fed… saying ‘Look, we don’t have actual deflation, or anyway not much, so we’re achieving price stability. What’s the problem?

    The yen, of late surging to a 15-year high against the dollar, pulls back on comments from Japan’s central bankers, spurring speculation they may intervene to cap gains. Now: yen -0.66% against dollar.

    Growth will actually pick up going forward, Richard Berner at Morgan Stanley (MS) says, since the weak Q2 numbers were largely attributable to the European debt crisis that "triggered a sudden, temporary tightening in financial conditions and increased uncertainty about the sustainability of global growth."

    LOL – As I’ve been sayingNow individual investors just can’t be trusted. The latest AAII sentiment survey has them changing their minds yet again, going 39.8% bullish and 30.1% bearish – the fifth such reversal in five weeks. (previously)

    Just over halfway back to normal for hotels, whose occupancy increased 6.7% to 70.2%, average daily rate up 1.6%, and RevPAR up 8.4% (chart).

    The Justice Department asks Hewlett-Packard (HPQ -1.6%) to provide internal records in connection with an international probe of allegations that the company paid bribes in Russia.

    Three lunchtime reads:
    1) The great stock myth: Returns may never recover
    2) The compensationless recovery
    3) The other mortgage crisis

  129. kustomz

    Ponzi Phil, if you take a step back and look at all the wasteful spending and the precipitous rise in deficits all the while destroying the ability to create wealth in this country as they raise the cost of living…you would have to believe they are stripping this country, raping and pillaging and leaving the scraps to minorities that will in the next 30 years be the majority. The guys making it possible know this farce can not sustain itself for much longer, and have already planted their flags in Asia, where growth and debt will be growing on a more sustainable level.

    Not to say this country doesn’t have resources that could be exploited and gained from but its pretty obvious that’s not their intention at this point of the game. This isn’t something I’ve been dwelling on just a quick thought (mindless to some im sure)

  130. gel1

    fortep / gold
    There a lot of moving parts to the move up in gold. The fundamental driver at the moment that is have the most influence is the purchases being made by the sovereign entities, such as China, Switzerland and many others. China is the largest producer in the world, and 100% of their production is purchased by their government. There is an underlying reason for this bullishness – concern for the increasing debt at all levels throughoutthe world, that in the end dilutes the currencies vs. gold ( gold has a finite supply whereas currencies are printed at will ). Gold, whether we want to accept it or not, is regarded as a currency as so many have accepted it as an asset of sustainable value. Currencies – just paper that depreciates endlessly. Gold is also a commodity, but is not renuable and is for this reason stable. Oil is a commodity as well, but is easily manipulated, and changes in value relative to the strength of the economies worldwide – not so with gold.

  131. tuscadog

    Phil / TBT  OK I get it, but, since the Fed has said they’ll continue pushing rates down with more Treasury buying, if you’re saying rates only rise starting with a failed European auction, due to exploding supply, we may initially see US rates decline further as people panic (again) out of the Euro.  So, probably still too early to buy TBT.

  132. srfrog

    IWM:  61.63 seems to be formidable resistance so far today…

  133. yipcarl

    SRFROG…yes sir.  I’ve had that as a level for weeks.  It’s also just above the S1 Pivot

  134. gel1

    IDCC/Phil
    I like that play… that one alone pays for a years membership at PSW.

  135. rn273

    Sold IWM 63 call (monthly) for 0.56 to again partially cover 64 calls (sold 15 for 40 – pretty random ratio)

  136. kustomz

    Buy Motorola Call Options on Expanding Market Share, Morgan Stanley Says
    http://www.bloomberg.com/news/2010-08-12/buy-motorola-call-options-on-expanding-market-share-morgan-stanley-says.html

  137. yipcarl

    Where will the stick end?  How much gas does it have……

  138. Phil

    CAVM is sharply down on panic over CSCO (who are hiring, by the way) and I like the short March $20/25 bull call spread at $2.85, selling the $22.50 puts for $2.40, which is net .45 on a $5 spread that’s $3.50 in the money and worst case is you own 1x of a pretty good semi for net $23, which is about the current price

    NETL is also getting hit hard and they are fabless, with just 500 employees and nicely growing sales.  I like them for a quicker bounce with the Sept $25/27 bull call spread at .75, selling $22.50 puts for .70 for .05 on the $2 spread (but out of the money at $24.55)

    Oh yay, they found a new virus to scare everyone with! 

  139. srfrog

    IWM:  So much for that

  140. srfrog

     Yip, they are messing w/ our heads… my GUESS… still down from here…

  141. JRW III

    The market is NOT acting as I expected, I guess that’s what I get for having expectations,or perhaps Lloyd didn’t get my memo !!   8-)

     

    In TNA at $36.52; playing for Mr Stick  ( I know, I know !! )

  142. dbarakat

    Boring XLF play/Phil:  Why wouldn’t you want to sell the $14 puts for 0.18 along with the bull call spread (entry of 0.69)?

  143. srfrog

     IWM:  I have a trendline connecting highs starting from about 11 am yesterday through today – now that is providing resistance (right now) … If we break through there then maybe the stick will win out…

  144. chaps

    IDCC/Gel: Nice one.

  145. yipcarl

    SR…not sure I’ve waiting it turn positive all day.. maybe so were most people.  They keep it down all day then in the 11th hour BOOM. 

  146. deano

     Boring XLF play/Phil:  How about something more exciting for sept?

  147. Cap

    Can someone explain to me why NFLX and PCLN are the trading toys du jour ?
    People are nuts …

  148. deano

    Phil
    What’s the best way to unwind this play, as profitably as possible, take out the 12′s and go naked on the 17′s?
    Long – BGZ Oct10 12 Call
    Short – BGZ Oct10 17 Call
    Short – BGZ Oct10 11 Put 
    Thx

  149. JRW III

    All

    A break above 61.96 will mean we are going for Russell 630 !!  ( A failure, well…………….)

  150. rainman

    Impressive! Extra credit if they all go green.

  151. rainman

    Cap/toys — I’d say because retail knows those names so it’s easier to get the lemmings in line.

  152. kustomz

    40 Min to go and they cant hold 10350 they better try harder or the downtrend continues to be your friend

  153. mattlev32

    Why doesn’t CNBC and Bloomberg just hire telemundo girls with low cut blouses and get it overwith. The women on these networks are so clueless; I can’t believe they’re allowed to express an opinion. The men are bad too -- Cramer is completely full of it. I’m just amazed at some of the superficial commentary by the female hosts.

  154. JRW III

    Out of TNA at $37.02;  I just don’t see the power !!

  155. pstas

    mattlev32 – Clueless; full of it; superficial commentary – At least they are being paid.  I guess you have not had the pleasure of attending one of our nightly political debates?  :)

  156. JRW III

    yip

    Nice entry, BTW !!

  157. chaps

    mattlev32 – Clueless; full of it; superficial commentary – At least they are being paid.  I guess you have not had the pleasure of attending one of our nightly political debates?
     
    Yeah, plus most of don’t look so good in low-cut blouses either.

  158. chaps

    meant: "most of us"

  159. pstas

    mattlev32 – Clueless; full of it; superficial commentary – At least they are being paid.  I guess you have not had the pleasure of attending one of our nightly political debates?  :)

  160. yipcarl

    I never see entries like that until it’s too late, I caught one.  I need to focus on playing off a major support with a stop or stop target.  Getting out as you do I have not mastered. Plus…it can increase the odds of a good entry at an extreme point with stop below.

  161. Phil

    Welcome Jthoma!   Don’t worry, I can’t type OR spell but they let me in here….  8-)

    PPT/Rain – No, it would be too scandalous if the government directly bought stocks.  They have something called the "discount window" that allows eligible institutions to borrow money from the Fed pretty much for free so someone like GS can sell $50Bn worth of stock to drive SPY down from 110 to 105 (average exit $107.50), hopefully forcing a panic near the bottom.  Then they can step in and use that $50Bn plus borrow $100Bn more to buy SPY back up to $110, ligtening up along the way to pay back the $100Bn they borrowed and, if they are left with $50Bn worth of SPY that they bought for an average of net $107.50 or less – they are ready to start the cycle again.  They only have to make 0.2% on the whole thing to pocket $100M – which is what they make on a good trading day. 

    Ponzi/Kustomz – It’s just traditional slash and burn capitalism.  Plunder, develop, exploit, squeeze and leave.  The cycle usually runs about 200 years and has been run about 100 times througout history with various colonies and we’re simply coming to the end of ours.  The problem is there are no new lands to plunder so I’m not sure what’s going to happen when they’ve run they cycle on China and India because the only resource Africa has is very hungry people and that’s hard to exploit.  Maybe it is time to head into space….

    Gold/Gel – Your buddy Cramer was giving it the big pump today so now I’m really calling a top!

    TBT/Tusca – Oh yes, we’re off that now.  It could stay down for ages and we’ll probably have a pretty good advance notice once things do start to fall apart and put them in play again. 

    IDCC/Gel – Hey you found it, I just liked it and found a play!

    MOT/Kustomz – I’m kind of off them as they screwed up so badly last go around but I did used to love them so maybe time for another look. 

    Stick/Yip – Not much point to it if we can’t go green.

    TNA/Gel – Very nice little move you picked up.  Out by now I suppose on .50+ run. 

    XLF/Dbar – Not a good enough risk/reward for .14.  It’s not a play you want to be double screwed with if the financials collapse.   To me, it takes a nice 17% in a week with no margin and turns it into something you have to worry about. 

    XLF/Deano – If we make it though the weekend. 

    NFLX/Cap – They are changing into a content providor so hard to say if the new value is wrong.  PCLN is just madness, there is no way that the hotel and airline data back up a $300 price but da boyz have it and they will use it like a weapon as a new Nas horseman. 

    BGZ/Deano – On the Oct $11 putter – unless you need the margin, you can just let them expire.  On the $12s at $3.50, you can take that off the table, roll the $17 caller ($1.40) to  2x the Aug $15s at .70 and cover with Oct $18s at $1.20.  With any luck, they stay around here next week and the Augs expire about worthless but you retain at least $1 of the $1.20 on the longs and you can then you are out with net $3.10 on the long side.  You can also risk going naked on the $17s but if you are going to do that, why not roll to the Augs anyway to burn the premium faster as they can be rolled to Sept $17s.

    Name recognition/Rain – Good point.  That and they haven’t already been used to screw people over like RIMM, AMZN, BIDU and GOOG have. 

    CNBC/Mattl – One of them is OK, I forget which though..

    LOL Pstas!

  162. pstas

    mattlev32 – Clueless; full of it; superficial commentary – At least they are being paid.  I guess you have not had the pleasure of attending one of our nightly political debates?  :)

  163. Phil

    3:00 PM On the hour: Dow -0.49%. 10-yr -0.25%. Euro -0.29% vs. dollar. Crude -2.86% to $75.79. Gold +1.44% to $1216.50.

    Fearmonger #1 tries to stop the rallyIn an "unusually uncertain" world, short-term news can have an outsized impact on market valuations, Mohamed el-Erian writes. "Deflation traps are nasty," and any new piece of data that indicates a greater likelihood of falling into one "will have an amplified impact on markets." So we can expect markets "will remain nervous and volatile in the weeks ahead."

    Fearmonger #2:  Gary Shilling says Americans are right to believe the economy hasn’t bottomed yet and that it’s just the beginning of a prolonged period of economic malaise. His forecast is for average 2% GDP growth for the next decade – not terrible, but far from the 3.3% he says is necessary to keep the unemployment rate steady.

    More rationalWhile the stock market may look like it was panicking over a possible double-dip, this week’s selloff may mean nothing more than normal volatility in a range-bound market. Don’t draw any meaningful conclusions until after investors come back from summer vacation, market pros say.

    Business as usualWall Street bonuses likely will rise this year, despite regulatory pressure over compensation, as the financial sector recovers from recession faster than the broader U.S. economy, according to a study from a compensation consulting firm.

  164. pstas

    I have no idea why that comment re-posted.

  165. dflam

    Phil : Dia $104 at $.92  still like them?

  166. Phil

    From the land of totally meaningless indicators:

  167. yodi

    Phil
    I like to pick up om gel’s backspread IDCC
    Gel talks about selling Dec puts and it looks like you are talking about calls. A call backspread as I understand is sell 1ITM call and buy 2 OTM calls. Puts are the same sell 1 ITM P buy 2 OTM p
    Please explain  

  168. Phil

    DIA/Dflam – Not overnight on this failure into the close

  169. Phil

    IDCC/Yodi – I like to change up the ratios based on what I think the risk/reward is for the targets.  It’s exactly what I said it is, buying 4 March $27s and selling 5 Dec $28s (CALLS) for net $350.  Obviously (I hope) if they head over $27, all you have to do is buy one more March $27 call for about $2.75 (delta is .50 so $1 move adds .50) and you are then in a even diagonal calendar spread for net $6.25 or $1.25 per long with a $1 position advantage and 2 more months to roll the callers. 

    I’m still liking USD as an upside play.  The Sept $27/30 bull call spread looks like $1 now (was $1.15) and Aug $25 puts can be sold for .60 for net .40 on the $3 spread.

  170. pahurik

    PCLN 300:D I think its possible to fly 320-330

  171. JRW III

    If we open lower tomorrow, we’re going lower; if we open above IWM 61.97 we’re going higher, IMHO !!

  172. loopy

    Thank you JRW, that is very pointed, thanks for sticking your neck out.

  173. exec

    Thanks JR,
     
    It should be interesting to see how the talking heads spin it tonight.

  174. yodi

    THANKS Phil,
    got it IDCC/Yodi -

  175. shadowfax

    JRWII
    Thanks recovered to Monday today hope your open 62.97 is on and that will make a good week!

  176. Phil

    Well, that was disappointing but the view from 5,000 feet is that our drop slowed significantly and maybe we put in a floor today. 

    Hard to imagine Asia getting all confident into the weekend based on that close though but at least they got the Yen back to 85.9 so over 86 by the Nikkei open should give them a little something.  If Asia does well then Europe can hopefully find their own bottom, which they might have done today and they all held their magic numbers (FTSE 5,250, DAX 6,000, CAC 3,600) so it won’t take too much to give us an up day tomorrow but I would think it would take something…

    Possibly oil runs back to $77.50 into the weekend (now $75.80) and that can spark a commodity rally but we hate those. 

    At the close: Dow -0.57% to 10320. S&P -0.54% to 1084. Nasdaq -0.83% to 2190.
    Treasurys: 30-year -0.24%. 10-yr -0.26%. 5-yr -0.23%.
    Commodities: Crude -2.81% to $75.83. Gold +1.43% to $1216.40.
    Currencies: Euro -0.28% vs. dollar. Yen -0.79%. Pound -0.46%.

  177. nicha

    Phil/Ponzi- just like you said it has been going on for ages. My take is it will never end. After india and china it will be another country. In a cycle that which is in the bottom today has to come to the top sometime and the plundering repeats again.

  178. jromeha

    Nice to have you back JRW!!!!

  179. JRW III

    All,

    Well, I was hoping for a 10+% day based on history, it turned out to be 6%; I hope most of you took advantage !!

     

    If my wife lets me, I’ll see you all tomorrow; it should be an opportunity whichever way it goes !! Now my daughter needs to go sailing.

  180. snow

    Ponzi/Nicha/Phil – the question is when will the US be in bad enough shape to be used as a colony again.  I believe the Korean Peace Corps sent a disaster team to New Orleans after Katerina.

  181. rainman

    That was an impressive battle today! It almost looks like the market wants to consolidate here but I’m dubious. It still looks like some warm blooded footprints in dow are indicating selling pressure. On 3 minute volume of the DJI, removing the open and close parabolas, most jumps over 10k were on downward sticks and the 12:00-2:00 range didn’t look like just the bots trading punches. Tuesday in the same period felt like carbon based life forms pushing downward as well. Bots seem to trade in a 20 pt range during lunch. 3 consecutive down gaps doesn’t bode well either.
    Cheers!

  182. shadowfax

    HEY ALL
    Never forget the powers don’t want the market crashed this week tomorrow on the evening news or on the Sunday morning news shows. It will not take very much to make a silk purse out of bad week! Lets hope JRW is right again and we open over IWM 62.97.

  183. jromeha

    Shadow, not trying to be a smart@ss, just wanted to make sure you read JRW’s post correctly. He didnt say he thought we would open over 61.97 he just said that if we open over he thought we will probably go higher and if we open under we will most likely go lower.

  184. roma_

    Phil

    The market has moved from bottom 07.06 to the high 08.05 almost a month and from the high only 5 days. It is very unlikely that the correction is over
     

  185. hoss18

    Question on TOS, I’m paper trading to learn the platform, but love it so far. My question though, does the risk analyzer accurately account for short ETFs when analyzing portfolio vs Index? Meaning, I see the expected value of my portfolio for a given range of SPX prices, say from 1040 to 1125. Does it take into account that SDS or DXD is inverted to market?

    If so then that’s an amazing platform. Can really see the premium and where my portfolio is going. For me that’s awesome b/c I’m a visual person, so have a harder time with just seeing numbers.

    Also, Phil, the DXD hedge you put up, was the 25 put the Sept? Think it had to be, but just checking.

  186. jromeha

    Mattlev – I know you’re not trashing on my girl Maria Bartiloma!!!!

  187. shadowfax

    hoss18
    After 35 years of investing I know one thing for certain, don’t believe anything esp. if it is free. Those programs giving those solutions are part of the system to loose your money. You need to use their charts and whatever with advise you will get here to see the way things will probably go or useually go and then you will do better than average which is over the last 10 years loosing money!

  188. shadowfax

    jromeha
    Maria is eye candy that will send you to somewhere bad, if I could have a Maria?

  189. kustomz

    IPads for the talking heads on Fast Money, wonder if AAPL’s paying for the advertising..each one of them have an IPad on a stand right under their noses..prefect product placement.

  190. jdub929

     Phil,
    LQMT-Just scanned for top gainers and saw it. Actually played it with 1K shares and gained .31--Nice scalp which I only was able to do with successful /TF trade.  
    $100K-LOL!!

  191. mSquare

    WFR – I know many here are long this stock. Here is an article on it in case you missed it
    MEMC Insider Buying Versus Active Put Options
      http://247wallst.com/2010/08/12/memc-insider-buying-versus-active-put-options-wfr/

  192. shadowfax

    kustomz
    Apple has been on a roll but please make money on their desparation payoff the media to reduse the bad facts that they now have problems. I expect their stock price to continue downward.

  193. Jordan

    hoss18: I think TOS does account for it accurately, at least from my experience.  I trade with InteractiveBrokers but input my positions into TOS to check the parameters of my portfolio, and it is very accurate.  I think the way they do it is they calculate the historical correlations between the various securities (or between securities and an index such as the S&P) and that way they can link any security to any other security accurately.
     
    My portfolio is now with almost zero delta, that goes positive if we fall and negative if we rise, and with a very high theta, meaning gaining every day if we stay where we are.

  194. Jordan

    shadowfax: Now Maria B. on CNBC is the one where I truly have no idea why she got to where she is. I mean, that squeaky voice! And I have heard almost no original thought come out of her in a long time.  It is sad if she got all these high profile access interviews based only on looks, but I can see no other reason.

  195. jvest

     hoss18/thinkorswim analyze - "Does it take into account that SDS or DXD is inverted to market?"
     
    Yes. For example, suppose you have a DXD hedge. Punch in DIA at the top of the Analyze tab, then in Price Slices lock the upper price at 107 and the lower at 102 (those are Phil’s current ranges). Now hover over the P/L Open column on the 102 slice; you’ll see a tooltip that says View Trades. Click it, and a popup will appear that shows, among other things, your DXD long call gaining when DIA loses. On the 107 slice, you’d see the reverse, DXD losing when DIA gains.

  196. shadowfax

    jordan
    I am single and Maria would fill a desire but I might actually need viagra to do the ???????????????????????

  197. exec

    If my wife lets me, I’ll see you all tomorrow; it should be an opportunity whichever way it goes !! 
     
    JR,
     
    I’m going to pretend you didn’t write that!!!! 

  198. Jordan

    shadowfax, hah, well I’m not denying she’s pretty but as I said, she annoys me for several other reasons.

  199. morxlntway

    mSquare re WFR – does put activity differenciate btwn long and short? Maybe they are also seeing all of us who sold puts?

  200. hoss18

    Thx all. Appreciate the responses.

    Lol JRW, you know where your bread’s buttered.

  201. shadowfax

    jordan
    She is eye candy but really those eyes blow her story, she is totally ful of "What to say" that I would need drugs to do her!

  202. shadowfax

    Remember all I had a wife, she died, and the significant other didn’t work out. Know a woman who wants a partner that is self supporting,  possable good times, lives in dream land?

  203. shadowfax

    Hey all
    There is eve a person called Vicki my sister’s name, I hve told my sister for years to fix me up eith her friend Susan a computer programer but no way my cat JOSE!

  204. Cap

    Phil really, this empty rhetoric from Obama is pointless; why are you posting this ?  It doesn’t prove anything or mean anything.  It just shows how smallminded and divisive Obama is.

  205. Cap

    Tonights entertainment; I urge you all to watch:
     
    http://www.wpix.com/videobeta/579b8848-fa3a-472e-8de4-9c2eda90fd66/News/Lionel-provides-a-primer-on-the-Fed-
     
    http://www.wpix.com/videobeta/28cfa8b6-7c40-4ac9-bb55-fb75dfba8b08/News/Lionel-on-Rangel
     
    Both of these rants are spot on … this guy is a riot (on the local news in NY) and he kinda reminds me of Phil.
     
    The guy is good …
     
    The Fed:  What is the Fed exactly ? It drains wealth from our govt and redistributes it to the mega wealthy … accountable to no one — it is mathematically impossible to pay off the US debt.  Economic 3-card monty – the UST carry trade.
    Rangel: Politicians – the grandiosity of power – narcissists – pork = good governance — the insidious delusion that you are untouchable …. obsequious fawning lobbyists ….

  206. Cap

    JRW – I really blew it today w/ TNA.  Was going to jump in at about 35 pre market and didn’t.  Missed the move entirely.
    Didn’t do much all day – bottom ticked an energy name and flipped it.  Tried the same later in the day w/ EOG, but it continued lower into the close (that’s one to look at for tomorrow; can be a good mover if we get a decent crude and overall market tomorrow).
     
    Big picture, after "everyone" was looking for 1130-1150 just a couple of days ago; now they are looking at 1070 or 1050 as possible bottom tests; and "watch out" if it goes lower.
    Me ?  I have no idea !   1070 is roughly a 50% retrace of the bottom to top rally since early July.

  207. jromeha

    Cap, Really!!!? Small minded and divisive!? Seriously, all I can say is WTF you talkin’ bout Willis!!? He has TRIED to compromise this entire time. Now it looks like he finally is awake to the fact that republicans would rather see this country go down the toilet and be ‘right’ than actually work on finding a common ground & getting this country back on a track to prosperity.

  208. Cap

    Oh My !  Even the Wash Post’s Dana Milbank is criticizing Obama …
    http://www.nypost.com/p/news/opinion/opedcolumnists/prez_his_perks_UaQCGCN3DAX0hDtW53lJrJ
     
    Doesn’t he know that O is NOT RESTING until he creates millions of jobs and cleans up the Gulf ?
    It is simply not possible that O goofs off as much as he claims when we KNOW he is not resting, not playing, he is doing the people’s business !.
     
    :wink:

  209. Cap

    Jromeha …. sorry man, I must call BULL on your compromise claims. 
    O’s efforts of compromise are to try to persuade one liberal republican like Snowe to vote with him while offering nothing.

  210. Cap

    wake up man, the dude is bankrupting us !

  211. ekor

    wake up man GW bankrupted us

  212. shadowfax

    cap
    I don’t think your stupid but really GWB gave away the money,started wars, made the country afraid, and his solution was put those who object in jail. Do you really want to go back to that? Fact is the country is still there and still trying to get away from the mess he made. Wake up buddy that was his stimulus plan his bank bailout plan that hasn’t fixed what he created. How is ripping off people who paid 17% tax for retirement security going to solve anything? Trickle down didn’t work, non of his lieing BS did anything but break us and make the world hate us, he even pushed the 9/11/01 to happen, his lawyer is charged with murder. I want to hear how your ideas will save us backed by facts instead of crap. Why do you believe the imposable?

  213. cwan120

    Holy cow! JWN missed and went down 4.37% after hours.

  214. Cap

    Shadow; you are a good dude, but I have learned that it is pointless to argue with an ideologue.
    Obama is an ideologue.  As are you.  As is Phil.
    How can one argue w/ nonsense like "his solution was [to put] those who object in jail" ?  I don’t even know what the hell that means.
    Fact is FNM, FRE, GM sinkholes are all Obama & Dem doings.
    Porkulus is Obama / Dem doings.
    Trillion dollar deficits are Obama / Dem doings.
    Tax increases on the horizon are Obama / Dem doings.
    Socialized Health care debacle is Obama / Dem doings.
    Card check … same  [ if they have the balls to try to pass ]
    Amnesty … same  [ if they have the balls .... ]
    Cap and trade [ if they have the balls.....]
    Muddled foreign policy; alienating friends [britain, germany, israel, etc]
    Coddling / capitulating to enemies [nkorea, china, russia, iran, hugo chavez etc] … same
    100 days of Gulf dithering … same …
     
    Why do you think Obama’s poll #s are in the toilet  ?   Despite a supportive and compliant media (for the most part and in contrast to the ongoing demonization that GWB was subject to) …. down so far and so fast …. all George Bush’s fault ?
     
    Its getting old, shadow …..
     
    Jimmy Carter redux, only worse.
     
    Tell me shadow, what exactly is Obama doing / done / proposing that is so wonderful and effective ?

  215. humvee4me

    Well apparently these women don’t have IPhones:
     
    http://www.usatoday.com/news/health/weightloss/2010-08-12-weightorsex11_ST_N.htm?csp=hf

  216. Jtiff

     Cap- Saw your last post about all the things you think Obama has done and I’m pretty sure that you are off on a few.  I believe that FNE and FNM went bad under GWB and were bailed out by his administration.  Along with nationalizing AIG.  And directly infusing billions into private companies.  GM, though, will end up being a win for Obama.  The deficit increased more during the Bush presidency than any other.  No president in history ever pushed for such extensive tax cuts and fought two major wars.  And the comparison to Carter is dead wrong.  What, exactly, are the similarities?  Perhaps on foreign policy where they both carried on with the existing policies.  But I don’t see any big progressive legislation or any big social changes during the Carter administration.  Carter actually cut corporate taxes and reduced funding to a lot of social programs.  And he had a democratic congress.  As did Reagan.  And they still managed huge tax cuts from 1978-1990.  Both sides drank the corporate/top 1% cool-aid as soon as WW II ended when tax rates began their steady march down to GWB levels.  Obama is no socialist.  He has barely succeeded at being something close to a Democrat.  I think, if you need a modern president to compare Obama to, LBJ fits the bill nicely.

  217. amatta

     Phil, 
    As I mentioned I am in Europe for 2 weeks, have not been able to completely stop reading and following the markets, as I am nervous about this craziness up and down… The hedges have held my portfolio somewhat (down 1.5% in the last week)…
    You mentioned that the August $1 spread QID had been rolled to the DXD play? I am not sure I follow which DXD you are talking about? I already have a DXD Oct hedge and the Jan SDS hedge (hasn’t done much at all with this big drop though…)
    Thanks

  218. jvest

    morx--you can’t sell puts without buyers. It doesn’t mean the buyers are right though.

Dashboard

 Sector Performances (Today)

 Thermal Imaging