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Jobless Thursday – America’s Infrastructure Crisis

What a disaster!

Not only are our students failing to keep up with the rest of the World but America is close to getting a failing grade in Infrastructure.  That’s right, what was once the World’s mightiest and proudest economy, this once great nation of builders has been given an overall grade of D in the American Society of Civil Engineers report on our Infrastructure.

The 2009 Grades include: Aviation (D), Bridges (C), Dams (D), Drinking Water (D-), Energy (D+), Hazardous Waste (D), Inland Waterways (D-), Levees (D-), Public Parks and Recreation (C-), Rail (C-), Roads (D-), Schools (D), Solid Waste (C+), Transit (D), and Wastewater (D-).  Awful?  Shameful?  How about DANGEROUS?  Deadly even…

For one thing, The number of high hazard dams—dams that, should they fail, pose a significant risk to human life—has increased by more than 3,000 just since 2007, when there were "just" 1,000 dams at risk and 3,000 to pro actively maintain but the administration refused to fund the project, now the costs have tripled as the situation deteriorates but that’s nothing compared to what happens if just a few of them break completely.  1,819 dams are now in the "high hazard" category and, with the current budget, for every one damn that is reparied, two more become an emergency.  

In urban areas, roadway congestion tops 40 percent.  According to the report, decades of underfunding and inattention have jeopardized the ability of our nation’s infrastructure to support our economy and facilitate our way of life.  At risk of catastrophic failure besides the dams (including levees) are things like our drinking water, sewage systems, bridges, waterways, rail lines, airports, roadways (especially elevated ones) and, of course, our entire electrical grid.  Additionally, 7 Billion gallons of clean drinking water is lost every day through leaking pipes – that’s 23 gallons per citizen per day WASTED for want of $11Bn in repairs – don’t bother worrying about it, the last Administration wouldn’t fund it in 2001 or 2006 so why bother now – 10 Trillion gallons later? 

The ASCE calculates a 5-year $2.2Tn investment is needed to address the situation, that’s $500Bn (25%) more than it was 5-years ago, when they released their last report and nothing was done by the previous administration.  So, rather than having invested in America, putting people to work and improving EVERYONE’s way of life, we spent over $1Tn fighting a war, another $600Bn a year on our regular military operations and gave over $1Tn worth of taxe breaks to just 1% of the people who are able to fly over the decaying infrastructure in their private jets.  No wonder Obama is angry

You should be angry too.  Americans are spending 4.2 BILLION hours a year stuck in traffic, 1 Million people’s ENTIRE YEAR!  That costs the economy $78.2Bn a year or an average of $710 per driver – that’s the hidden tax we pay for NOT fixing just the roads.  Lack of uniform systems and regulations have led to high concentrations of hazardous materials and heavy metals in our nation’s landfills, which poses a significan threat to public safety.  One out of 4 of our nation’s bridges are either structurally deficient or functionally obsolete and the current budget of $10.5Bn is only half of what is needed just to maintain these disastrous conditions.  Travel by freight train is three times more fuel efficient than a truck but we are going to be taking tracks out of service if $10Bn a year isn’t dedicated to a $200Bn repair fund between now and 2035. 

Why is there no money to fix our infrastructure?  Possibly because the top 1%, who used to earn $1Tn a year (inflation adjusted) and paid 60% income tax in 1979 ($600Bn), now earn $2Tn a year (20% of all US income) and paid an average of 17% in income tax for 2009 ($340Bn) and that is nothing compared to the grotesque levels of tax evasion practiced by America’s corporations, who earned $6Tn and paid JUST $138Bn in taxes last year (2.3%), leaving the rest of the government’s $3.5Tn budget to be paid by everyone else in the bottom 99% – SUCKERS!  By the way. a lot of people will claim corporations earn less but that’s because they count the losses claimed by some corporations (AIG, FRE, FNM, GM, most airlines…) against the profits of other corporations and you KNOW that’s not the right way to look at it! 

The top 1% and the multi-Billion Dollar Corporations use our roads, they drink our water, they flush their waste which needs to be cleaned.  They dump their trash in our landfills and they pollute our air much more so than the average citizen in the bottom 99% yet they are not paying their share to support the system that makes them average salaries of over $1M per year (and that’s $17M a year for the top 0.01%).  Come on America – this is ridiculous!  I wrote about this in "Who Rules America" as well as "The Crisis of Middle-Class America" and you can click on the Income Share chart above to get to Slate Magazine’s excellent "Visual Guide to Income Inequality" so we can move on to other topics now…

New jobless claims actually fell by 27,000 last week to "just" 451,000 and it is JUST because, as I began to point out two weeks ago, there are 140M people working and 451,000/143M = 0.33% or 1 in 300 so your odds of getting laid off in any given 52-week year is about 1 in 6, which means the average employee KEEPS their job for 6 years.  It is difficult to maintain an environment of economic terror when, two years into the double-secret ultra high-stress red economic terror alert level, 90% of the people still have the same job they had in 2008.  I’m not trying to trivialize unemployment - I just want to keep it in perspective.  Meanwhile, we have 3M unemployed construction workers and $3.7Tn worth of infrastructure repairs that need to be done, that’s $1.2M worth of work that needs to be done FOR THE GOOD OF OUR SOCIETY in the EXACT skill set of 1/3 of our unemployed labor force.  Hmm, I don’t know what it is but it seems like there might be some sort of solution here…

On the whole, we were pleased with yesterday’s Beige Book – not "thrilled" but pleased and we not only maintained our bullish posture but we added a dozen bullish trade ideas in Member Chat.  In addition to XLF and UNG, which I mentioned in yesteray’s morning post, we took advantage of yesterday’s weakness to pick up 11 bullish plays on AAPL, HOV, TBT (bearish TLT), INTC, HRB, BSX, IRM, AMD, MDT, EOG and NSM.  Just ahead of the BBook, we took bearish covers with USO and the Qs, both of which made small profits before stopping us out ahead of the close so, all in all – a very good day (assuming the market agrees with me and moves past this jobs data).  Some of my comments on the Beige Book for Members were:

  • Same issues as last time, residential and commercial real estate are sucking up the joint but, we did not have this much green last time either.
  • Good demand for educated, skilled professionals (top 10%) egg sucking for the masses. 
  • This (poor spending on big-ticket items in Philadelphia, Richmond and Dallas) portends a bad Durable Goods report for August so let’s keep alert for that!  Auto dealers are "optimistic"????  When’s the last time that happened?
  • "Substantial gains"???  Has the World gone mad?  What kind of language is this in relation to the economy?  This is unheard of – somebody better spin this negative quickly or people might get excited…
  • "Existing HIGH levels"???  Are these cities in Asia???  "Healthy conditions"???  Whuck?  That’s not what it says in the Journal!  Is the Fed lying or are things perhaps not as bad as they seem?

So we move into the day cautiously optimistic.  Asia was mixed with the Shanghai dropping 1.4% but the Hang Seng was up 0.4% and the Nikkei was actually green for the second day in a row, up 0.8% and the BSE was it’s usual green, up 0.7% on the day.  Europe, on the other hand, is very excited, up about 1.25% and all indexes there well above our midpoints and testing their own 2.5% levels, which we can expect to see tested today in the US.  Those levels are: Dow 10,455, S&P 1,100, Nas 2,255, NYSE 7,000 and Russell 650.  Of course the Russell is our laggard but as long as they can hold our mid-point at 635 - we’ll call that progress.

Until we get green on 3 of 5 of our levels though, we remain very cautiously bullish and, keep in mind – the best time to initiate disaster hedges is when the market is going up, not down so any failure at our resistance points today is going to lead us to up our covers.  We get both oil inventories and natural gas inventories at 10:30 and the expectations are that we will see our first net drawdown in over 2 months as the tankers finally stop dumping crude (as I mentioned on Tuesday).  We’ve been long USO since last week’s dip but we’ll have no tolerance for another dip below $75 (our target is our sweet spot at $77.50). 

 


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  1. pahurik

    Morning! Kururi, yesterday we discuss about vxx trading.  You can buy vxx 19.05 and sell dec17 P and C for 4,55.  Or sell only dec 17P 1.15  30% profit 3 month.  Maybe little hedge to buy dec 20 VIX call 0.2 same time.

  2. pahurik

    sry VIX 20 put 0.2

  3. samz3700

    Phil -
    I am about as left as you get having gone to the new school to study critical theory – basically updated Marxism – in my 20s. So I agree with almost all of your point with regard to income inequality, etc and I love that you are a liberal who is also interested in the market.

    Over the last couple of months I have noticed a greater number of daily articles with political content. What’s going on? Is it that summer is slow and trading has really slowed down? Or are you just mad as he’ll or am I just off base.

    Seems like we can all agree that this country is going to he’ll in a hand basket even if we disagree on the causes – I guess the morning posts also go on seeking alpha so you are reaching a more conservative audience. Sorry for the rambling but I have just noticed this shift.

  4. lflantheman

    "My brother and I"      A really short story (before trading hours)
    John and I were born 18 months apart in Indiana.   We grew up together in a blue collar family with good parents, and obtained an average education in a country school.  Upon graduation I attended college, John went to work in a factory.  He enjoyed tinkering with cars.  I enjoyed reading.  We both loved sports, and played basketball whenever together.  John never had any interest in reading, or in college.  He went from job to job.  I went from university to university.   He tinkered.  I studied.  I love my brother.  I still see him often.  He’s out of work now so when we get together I fly to California, or I send him a ticket to fly to Maine.  He left here last week after staying 3 weeks.  I slipped some extra money in his suitcase without him knowing it.  He called me later and thanked me for showing him a good time, and for the money.  I could tell he was crying.  John is a really good man.  He’s considerate, kind, reliable.  He’s not lazy.  He’s smart, but he never had the drive or ambition I’ve had.  And he never liked to read.   We were born the way we are.  I was blessed with things like intelligence, drive, ambition, perception, perseverance.  John was also born the way he is.  He was given a beautiful personality, a happy disposition, a love for mechanical things, emotional intelligence, and a love for the simple life.  He doesn’t really care about money.  That’s good, because he’s never had any.   But he’s a really good man in so many ways.
    Sometimes I hear people infer that we, the well educated and the well-to-do, somehow have it all together, and that the less-fortunate somehow don’t have what it takes to do what we’ve done.  And that, I believe, is true.  But what I also believe is that we are who we are by mere chance.   I believe most of this success we have was there in our genetic makeup at birth.  No one in my family EVER suggested I go to college or try to become a professional.  It just seemed to be there in my mind.  And it just seemed not to be there in my brother’s mind, or his makeup.
    We are all very very lucky.  And that’s about all we are.  We are smart enough, driven enough, healthy enough to become educated and make much money in our occupations and (hopefully) in the markets.  Not everyone can do these things.  We just lucked out.  So next time you see a man with a family but no job, or a homeless person, or a disabled person, just try to think for a moment what I think for a moment………..he’s my brother, and he can’t help what he is, he’s not nearly as lucky as me, but I certainly still love him.  

  5. samz3700

    Maybee it’s because the Dems are a bunch of cowards who don’t know how to come out swinging and say it how it is.

  6. barfinger

     Absolute all-out class warfare now.
     
    Wake me up when the elections are over.

  7. yodi

    shadowfax
    Following up on your spanglish. I very well understand what you saying there. If you want to settle in an other contry the first thing you have to do is comunicate with the people of this country and learn their language. We have the same problem in Germany. Specially the Turks have problems as they want to reap the benefits but not participate in the customs of the country. Obvious some do some don’t. Living hear in Cancun as difficult as it was I had to learn to comunicate in Spanish. But in general you find the more uneducated class of people resist to learn the language. I think Australia is a country which is very stricked to whom they permit to settle.

  8. lflantheman

    Trading AAPL:  Good morning everyone.  The market is set to move upward today, and so is AAPL.  I’ll be getting in at the open with the Sept (monthly) 270s. 

  9. ssdirk

    Iflan – Great story!!  Thanks for sharing that.

  10. qcmike

    shadowfax
     
    Thanks for the story

  11. matt1966

    Wow.  Even for a crooked market this is bad.  FAS is up 4.34% since yesterday’s close.  It started in the last minute of trading.  A huge buy volume came in at 3:59.  By 4:10 FAS was up 1.6%.  Either someone knew the numbers ahead of time or this was all going to happen anyway.. or both.  I think both.  Anway, FAS has now recovered fully to Friday’s ridiculous high.. and the market hasn’t even opened yet!  This thing we call a market really is worse then a casino. 

  12. ed3524

     thank you lflantmant, very good story

  13. kustomz

    Stop polishing the brass on the boat..LMAO
    For the latest reporting week, nine states didn’t file claims data to the Labor Department in Washington because of the federal holiday earlier this week, a Labor Department official told reporters. As a result, California and Virginia estimated their figures and the U.S. government estimated the other seven, the official said
    http://www.bloomberg.com/news/2010-09-09/jobless-claims-in-u-s-decreased-27-000-to-451-000-last-week.html

  14. Pharmboy

    Matt – I was thinking the same thing.  Now, are they gonna dump it after everyone gets in.  No wonder most are pulling their money from it (from Cap’s info yesterday and many of the mutual funds data – net outflows from the market). 

  15. jromeha

    Samz- I’m thinking maybe Phil is just venting b/c he’s mad at how short sighted people are and how bad of memories they have. I think we can all agree that the stimulus couldve been spent more wisely, HOWEVER the repubs got 8 years to screw our country up and Obama has had less than 2 years to come up with solutions…. You can’t even count that since those dirtballs are fillibustering(mighta misspelled dat)EVERYTHING. I know many commentators are saying that the ensuing gridlock sure to follow the repubs takeover of the house will be good for the stock market but (I think this has been said on here a few times) it also means that all the problems Phil wrote about today and many others will not be solved. We can’t keep kicking the can down the road forever.

  16. qcmike

    lflantheman
    Correction
    thanks for the story

  17. exec

    Phil,
     
    You got my gander up again with this article.  First off…..why is it that every time something is underfunded, that you immediately conclude that the blame should be placed on the fact that the top 1% are not paying enough taxes.  Why is it that you ignore the indisputable fact that government is just a poor steward of taxpayers money and that if you gave them more, they would just have more to waste?
     
    We have a business that does contracting.  We do large publicly funded projects.  I can write a book on the waste and idiotic projects that we’ve been involved in.  I’ll give you one example.  A few years back, we build an overflow spillway and wetlands area.  The project cost about 5 million, most of which was attributed to the a wetland….aka….swamp….that needed to be built.  Now what’s interesting is the project was delayed for about 6 months while the government tried to determine if there were any endangered bats or some exotic rattlesnakes in the area that might be impacted due to the project.  (that’s right….rattlesnakes in northern Ohio)  anyway…..we build this massive swamp in the back yards of a large urban area and the day we flooded it, the residence (aka taxpayers) all went ape shit because we were in the middle of a major West Nile Virus epidemic which was allegedly spread by mosquito’s.  If it wasn’t true it would be comical. 
     
    So the real question is, why in God’s name would the government be building swamps in residential areas.  Christ, when I fly down to Florida, half the freaking state is a swamp.  Craziness!!!  This is just one example…..I can go on and on and on……you’ll be happy to know, we’re currently in the process of building another Wetland.  Ya…..they love there wetlands.  Don’t even get me going on the millions of work were doing on they’re CSO projects.   Which are the result of EPA mandated standards.
     
    I reject the argument that the reason the infrastructure is decaying is due to the top 1% not paying their fair share.  The reason is because you have elected officials controlling money that is not theirs.  I’d bet my paycheck that if the people making these decisions had to fund these projects out of there own person income, like the private sector does, there wouldn’t be any wetland construction.
     
    I’m sure your thinking, why the hell are you bitching about something that you’re benefiting  from.  Why???  Because it’s nuts, and because they’re going to bankrupt this Country building stupid shit while are buildings and dams crumble around us.

  18. kustomz

    matt, agreed I was glued to ES futures last night someone def new the #s

  19. flipspiceland

    @gel1
    Many, many more thanks for the MXN/USD trade.  Closed position this a.m.
    You can really make some decent go-to-hell money on this site.

  20. Pharmboy

    Nice – from Bloomberg – 9 states didn’t file claims data to the Labor Department in Washington because of the federal holiday earlier this week, a Labor Department official told reporters. As a result, California and Virginia estimated their figures and the U.S. government estimated the other seven, the official said. Wonder what the revision will be next week for that one!

  21. shadowfax

    yodi
    I have learned how to understand spanish to the point that I get most of what they are saying. I try to communicate with these people but they just refuse, they will not help you learn their language, I even tell them I know what they are saying but they want their secret code that is not spanish either. I have a friend that has lived in government housing for 3 years, the only other english speaking person just moved out. The rest practice enghish among themselves but if you say more than HI they play no comprendo, they are legaly here and been here along time, they hate Mexico but will not leave Mexican ways. There are a few that want to be Americans but around here it is only a few. Windows open you hear english, go outside, nothing or spanglish!

  22. matt1966

    Pharm and Kustomz, definately looking for the fade today.  Thanks for the link to the article.. even at a 27k drop this move is unwarranted.. let alone on suspect data.  More shenanigans by the con artists that run this market.

  23. David Ristau

    Hey all,

    I have a new Buy Pick of the Day in Lululemon Athletica (LULU). 

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

    Good Investing!

  24. flipspiceland

    @exec
    There is no way you are ever going to convince a partisan. Not with facts, data, science, emotion, flawless reasoning……never gonna happen.
    We have judges, all democrats, who make in excess of 175,000 a year plus who come to work at 11:00, leave at 12:00 for lunch for 2 hours, where they drink 4-5 heavy cocktails and then return to the bench to decide the prison fate of the criminals, miscreants and minors before them.  They have been doing this for decades and they can’t be removed from the bench with dynamite. After two terms they get to retire at over  $100,000 a years plus perks, and benefits.
    Faced with this horrendous record attorneys as always spot a way to get their clients out of jail because of this gross miscarriage of justice. 
    This town is filthy with democrats who are even more corrupt than Mayor Daley’s and other big city  regimes.  But don’t dare tell a lefty on this board about it. They will have some lame excuse instead of agreeing to throw all incumbents out, regardless of political party.
    And don’t label anyone a liberal or a conservative. Only they are allowed to do that.
    Menawhile, short WOR or sell the 17.00 December callsfor a quick 5%. 

  25. kustomz

    matt, they’ll rip your head off and poo down your throat if you try and short this market…the Fed has an agenda and failure is not an option…

  26. ynubiis

    Apple is no longer requiring developers to use Apple’s tools to create iPhone apps, which means they will allow Adobe to use their flash-based tools to cross compile apps for iOS. They’re also releasing guidelines for the app review process, which has been something of a black box until now. 
    All of this = more money in Apple’s pocket

  27. snow

    Freight / All – Phil mentions freight moving by truck rather than rail, above, but a trend I’ve noticed over the past decade or so has been the shift of freight, especially consumer goods,  from rail to long-haul truck. I once did a rough count while driving across I-80 through Iowa. If memory serves, 2/3 of the traffic was trucking. Something clearly shifted to favor the trucks over rails, which Phil points out is several times more economical in terms of fuel……anyone have knowledge of what that is?

  28. rn273

    Exec – Wetland development and CSOs have a sound scientific basis behind them – were the projects you were working on based on flawed scientific reasoning or plain mismanagement of funds? I can understand why you would want a 6 month study to look at exotic rattlesnakes and bats (even in N. Ohio – exotic would mean something out of the ordinary :) )

  29. exec

    Phil,
    Ok…..the real issue I wanted to discuss before I read that damn article was a question I had related to the leaps in your buy/write strategy.
     
    One thing I am not clear on.  If you were to sell a 2012 call on a position you had.  Is it typical that if the price goes up a lot, that the stock will be taken away before expiration?  I had a conversation with a friend about buy/writes and he was worried that if the stock continued to climb in price, you’d be missing all the profit because you were trapped by the call.  Is this true or is there a way you can squirm out of the position.  If so, how?
     
    Also, I was reading Sage’s book again and reviewing the section about collar trades in which he indicates that collar’s often form the foundation of a portfolio.  I thought I remember you commenting that you were not a big fan of collars.  Is that correct?  What is your issue with collar’s?
     
    Sorry about my previous post.  If you saw some of the stuff I see…..you’d understand.

  30. z401

    lflan
    what a wonderful story.

  31. shadowfax

    snow
    The issue is rail uses less fuel per ton, rail line is cheaper to build and maintain, and at 2 truck trailers per rail car and hundreds of rail cars per 2 engineers driving, less labor. Trucks as you mention fill the hiways and do almost all the road damage. Other countries use more trains and have better roads, a win win.

  32. gucci

    Iflan — beautiful story, about sept weekly APPL is that to buy  270 call right not sell the call, thx

  33. yodi

    Hi guys back to the market
    Good morning Phil.
    Yesterday some member refered to some div paying stocks. CODI, BKCC any opinion for buy write on them thks

  34. exec

    RN,
     
    Sound scientific basis????  Look…..why would you spend 1 cent on a swamp when you have a crumbling infrastructure?
    Let me ask you a question.  I your home was on the verge of collapse because the foundation was deteriorated, and you didn’t have any money, would you go out and borrow money to put in a new flower garden because you thought it might enhance the ecological system?

  35. Phil

    Good morning!

    Keep in mind that our 2.5% levels represent a 5% run from the bottom since last week so it’s natural that we get a 1% pullback from there so the key is to hold the 1.5% line – THAT will be our bullish indicator

    • Up 2.5% (we hope): Dow 10,455, S&P 1,100, Nas 2,255, NYSE 7,000 and Russell 650
    • Must hold at 1.5%: Dow 10,353, S&P 1,086, Nas 2,233, NYSE 6,902 and Russell 644
    • Middle Range (MUST hold): Dow 10,200, S&P 1,070, Nas 2,200, NYSE 6,800, and Russell 635.

    So we still have that S&P and NYSE leadership, which is good as they are both broad indexes and harder to manipulate than the Dow and the Nasdaq – where controlling 3 or 4 stocks controls the index. 

    Speaking of control – AAPL getting toppy at $263 so watch that as they will signal a downturn if they fail $260.  PCLN is out of control and needs to pull back (and the Sept $320 puts at $4.40 are a fun way to play them as a momentum trade)

    Oil inventories at 10:30 must have a pretty good net draw, at least 3Mb to keep the oil sector moving up – watch OIH, which must break $105 for the S&P to make any progress (1,028 and 1,045 are our next targets to the upside). 

    We had tons of bullish plays yesterday and, since they are the leader, I still favor SDS disaster hedges (see Tuesday’s post) but there’s no real need unless we fail at least 2 of our 1.5% lines.

  36. kustomz

    Watching MA, last time it came close to its 52 WL they ripped it higher by 5 points

  37. lflantheman

    gucci, yes buying the aapl calls.

  38. yodi

    Phil
    Does this translate to buy the 320 put ???
     PCLN is out of control and needs to pull back (and the Sept $320 puts at $4.40 are a fun way to play them as a momentum trade)

  39. exec

    JR,
     
    You trading today?

  40. minijoe

     Phil,
    Natural Gas report at 10:30 am ET 
    Oil report at 11:00 am ET

  41. Pharmboy

    Now they are pounding ARNA trying to shake people out.  Very interesting…

  42. Pharmboy

    Anyone have access to a short position service?  The free ones are all delayed by a day or two.

  43. 42laurel

    iflantheman;
    what is your sell on the sept aapl calls?

  44. gucci

    Iflan are you bying sept weekly that expired tomorrow or for the one expired next friday, it may be too late for me to scale in now

  45. mSquare

    ARNA – Will add some at $7.13 as $7.12 is the S3. I did sell some at $70.49 yesterday, so this is just going back to some more of it.
     http://www.livecharts.co.uk/pivot_points/pivot_points.php?symbol=ARNA

  46. 1020

    Flip/Liberal  I’m a liberal and you’re WRONG. Keep that broad brush in your pocket buddy…… :(

  47. lflantheman

    AAPL:    I’ve bought the Sept 18 exp. calls.  Probably not too late to scale in.  My plan for out will be 30% gain 1/3 out, 60% gain 2/3 out and let 1/3 ride into next week. 

  48. 42laurel

    iflantheman;
    aapl sept 270 monthly calls, sell point

  49. tuscadog

    Phil / Cheaper Oil   Great article from William Smead   http://seekingalpha.com/article/224369-should-10-a-barrel-be-the-real-price-of-oil   However, I think he is underestimating the growth in demand from china/india vehicle expansion and overestimating speed of penetration of electric vehicles etc., so I’m holding my oil majors for now, but nervously.
    ps Phil you always write 1028 and 1045 as targets rather than 1128 and 1145 (fat fingers!)

  50. rainman

    exec/called away — Once your call goes to parity, you can get out of the trade with 100% profit. Getting called away is the max profit you can make (modulo dividends). In general, options do not get exercised unless there is an arbitrage play. Dividends are often the reason calls get exercised early. Missing profits on large run ups is the potential downside for covered calls. Worring about missed profits is a hind sight problem and directly related to my rant yesterday. If you are extreamly bullish, you should not be writting covered calls. Sell puts on margin instead.

  51. rainman

    exec — Sorry, I just reread my post and think it might come across condescending. That was not my intention. It’s an artifact of my bad mood as of late. My appologies.

  52. jthoma

    Phil- don’t mean to repete but my comment was late yestaerday and many may have missed- relative to PCLN- have a close friend who owns a travel agency- he says much of PCLN sucess last quarter was due to buying companies in parts of the world with less competition for the business thus high margins- he fully expects this to go away as competition brings down margins throughout the world

  53. ravalos

    Impressive seeing how the Greeks in Options work.. I had, in June, sold Oct $230 Puts on APPL @ $9 in premium.. a week ago they were only $1.90 in premium and I had asked Phil whether I could replace them with short Jan $220 Puts for a net credit of $6.. so now I would have $6 in premium to work off in 5 months as opposed to just $1.9 in one. So, having done that, and with APPL continuing ascending, the premium on the Jan $220 Puts is now $5.90 while the premium on the Oct $230 Puts is $1.28. IMPRESSIVE but the longer term options have a much greater delta (less Theta of course) than the shorter-term options and as such, for every $1 in the underlying stock the difference is quite meaningful! As such, in just a few days I’ve already claimed the REMAINING $1.9 in premium from the Oct $230 puts BY HAVING short the Jan $220 Puts and just working the APPL up momentum!! What an interesting way to define a play using the greeks and taking advantage of short-run momentums..

  54. Phil

    Politics/Samz – I read the papers in the morning and then decide what to write about.  I write about whatever I consider tha most important thing to talk about that day and, coming into an election – it does often end up being politics.  In two months either this country is going to reiterate it’s intention to change the way it’s been doing things for the past 20 years or it will be back to business as usual and the top 1% will have dodged a bullet.  What happens at this election will very likely determine the fate of this country because we are standing at the edge of a cliff and there’s no more room for mistakes.  While I am bullish long-term on multi-national corporations, my outlook on the future of this country is far less certain.  It’s not something I could ignore without being extremely dishonest in my writing.

    Very nice example Iflan – thanks for sharing!

    FAS/Matt – Yeah but isn’t it fun?

    Estimates/Kustomz – Wow, that’s interesting.  So we could get a radical adjustment next week – let’s remember to watch out for that – good catch!

    Kicking the can/Jrom – People do NOT understand how critical our electrical grid is.  The last time the transormers were replaced was when those crazy Kennedy Democrats were in office 40 years ago and decided to spend money on improving America (they killed Kennedy and that was the last time it was suggested) and the average life-span of a transformer is 40 years.  We have had fairly mild summers lately (no 100-degree streaks in places that aren’t used to them) and people have cut back on electricity usage (due to having no money) including Cap Utilization down to about 65% at the moment so we haven’t stressed out the grid lately but I read a study that I think I’ve linked here before that says we are facing inevitable rolling blackouts that can last for weeks at a time if we get just a little bit unlucky with the weather.  These transformers are massive things and take weeks to replace IF one is available and when one blows it puts pressure on the surronding transformers, which have to step up to cover the demand, which increases the likelyhood that they finaly blow. 

    The entire US transmission system was designed as a regional system but funding cutbacks over the year have made it a national system which makes it much more systemically at risk, making a catastrophic failure much more likely in the near future.  But I shouldn’t talk about it because it sounds political since one party wants to fix it and one party wants to ignore it for another decade – as if either outcome is simply a matter of voter preference rather than a RESPONSIBILITY to make the kind of decision mature adults are supposed to make.  Oh wait – did that sound political?  Sorry…

    Why Exec – Well because it’s the truth.  I love the way you say YOU did the contracting and YOU did a $5M project and YOU build the thing and YOU turned on the water and flooded the area but THE GOVERNMENT screwed up by not taking into account people’s fear of West Nile Virus.  Imagine if all the people who stick their snouts in the Government trough did so ethically and cared about potential government waste!  What if the guy selling the $2,000 toilet seat had an ethical bone in his body and said "but of course you can get a $20 toilet seat that would also work"?  No, YOU have no responsibility to fix YOUR government do you.   You just take their money and complain about how they spend it – what a racket! 

    Yes, I’m sure if we let everyone do only what they want with their own money there would be no wetlands and no farmlands anymore for that matter and there would be no air to breatch or water to drink except for the very wealthy, of course, who can afford to have those things imported, whatever the cost.  Perhaps I should raise my children that way too – let them eat what they want and only go to school when they feel like it and stay up as long as they want and use whatever language they want and never clean up their rooms – just a life of selfish pleasures for them with no worries about the long-term consequences, right?  What could go wrong?  I mean really Exec – is that your view of the World, some sort of disgusting survival of the fittest death match where the public good is only what’s good for you? 

    Nat gas inventories a small disappointment at 58Bcf build.  That knocked nat gas down from $3.84 to $3.77, which is almost our buy point on the futures ($3.75) but a dangerous play ahead of oil inventories, which could take them down further if they have a build too – that report seems to be at 11.  Oil is now $75.65,

    Watch that RUT 635 – that’s our canary in the coal mine for the market if they fail to hold it.

  55. doro165

    Exec
    Those wetlands you saw flying over Florida are just a prime subdivision waiting to happen.

  56. chakra108

    Phil
    What do we do with our UNG Jan 5 calls? We bought those for $1.64. Thanks.

  57. rn273

    Exec – I think my post was not clear, so let me put forward my point of view again:
    Are wetlands necessary – Yes. Should wetlands be restored or should artificial wetlands be constructed – Yes. Given the choice between constructing an artificial wetland and repairing crumbling infrastructure, should we chose the wetland – Depends on the wetland and the infrastructure. Of course there is mismanagement and some restoration projects are carried forward for just brownie points, and should be below fixing roads, sanitation, etc.; but others are necessary.
    Let’s continue on this after hours (if that is ok with you) – don’t want to clog the board up.

  58. acobra65

    Iflan/story Good post.  It is so true.  All people are not born with the same talents, interests and ambition.  The error in our thinking sometimes is to classify these "people" as "less than" those who have business and financial talent and high ambition to make money, money and more money There are many people today in this country that are learning that measuring everything by financial success "is not the way to go". To some people’s way of thinking… Mother Teresa would be a failure. Thanks for the post.   
    Phil’s/ Post: Doesn’t take a genius to understand Phil’s above data.  Simply, you have an infrastructure that is 50+ years old and if not properly maintained the cost to repair or replace can become dramatic. If, taxes collected today are far less than before to support our infrastructure, especially one that has been neglected, obviously this is a big problem.  To challenge this assumption with a single example of waste, waste, waste doesn’t respond to the problem.  It would be much more beneficial to advance the discussion (after trading hours) with examples of policy to correct the situation. There is waste both in Private and Public sectors which affect the taxpayer’s bottom line. Yes, I know, if it is private the market place will correct….. really?? The American public expects too much from government for less and less taxes to support it…. I believe, as with all human nature… this lesson will be learned to late….       

  59. jgwilson929

     Phil,
    I am a VZ stockholder but their internet service stinks.  Totally missed the PCLN puts.  Nice call!

  60. yodi

    jgwilson929
    The call on PCLN from Phil was good but not technically clear just wanted to confirm a clear meaning. Possible lots of politics took up the time. Yes possible now it is to late to buy the put.

  61. yodi

    jgwilson929
    PS the putter has gone up by more than a 1$ by now

  62. Phil

    PCLN $320 puts at $5.70 already and that’s over 20% so mission accomplished on a momentum trade (set stops).  If they bounce back to $330 they will be good for another go

    Google totally screwed up their system with this new search or at least it seems that way on my computer.  Maybe because I have a lot of streams going on but their new system is just grinding to a halt for me.   Anyone else?

    AAPL/Ynub – Does that mean they will now allow flash?  Good for ADBE if so, who are already popping. 

    Trucks/Snow – A lot of it is relative cost.  The freight trains have been full of coal and lumber for many years so simply no room for consumer goods.  Because of our poor rail system, we have a very low capacity for train traffic compared to most industrialized nations and, of course, the general lack of tracks to suburban areas makes the hub and spoke trucking operations more efficient, especially in this overnight freight world. 

    Calls/Exec – You rarely get a stock taken from you buy a caller but you often get a stock assigned to you by a putter.  Callers don’t generally want the stock, they buy the call for leverage and there’s not much benefit to them giving you the full price of the stock for their call that’s deep in the money (with dividend stocks being a huge exception as callers often want to take the stock before they go x-dividend).  A putter on the other hand, owns the stock and is generally buying insurance to make sure that, if the stock falls, they will be able to force some sucker (you) to buy it whenever they want at a set price – if the stock drops and they need money – expect them to come collecting.    As a rule of thumb, when the premium of a caller or putter drops below 10% of what it was, you run a pretty high risk of assignment but much more so from the putter. 

    Collars/Exec – That book was written 5 years ago in a very different market environment.  I am not a fan of collars at all, especially in a volatile market.  All a collar does is lock you into a stock at a price – if you have tax reasons to protect a stock until it’s considered long-term, that’s fine (perhaps a dividend payer that gained 50% and you don’t want to sell it) but the buy/write is a sort of a collar but with "only" 20% downside protection.  As to post, don’t be sorry, I like hearing about people’s personal experience but realize that’s your personal experience dealing with a flawed system.  The system is necessary so I see the solution as improving the system, not throwing it out completely.   My Father (not my step-father) was a systems analyst who built major systems like the City of Chicago’s accounting system in the 70s and many national systems for corporations and governments.  We both did consulting work all over the country and I see corporate idiocy and government idiocy all the time but nothing pisses me off more than all these "genius" critics who criticize the fraud and the waste and the corruption without getting involved and without working for change and without having proposals to fix the system they are so upset about – like it or not we NEED government. 

    I don’t know what fantasy-land country Conservative can point to where there is no government intervention and no taxes that has a thriviing economy and is a good place to do business so maybe it’s a good idea to build a better government in this country with these American people but that’s never going to happen if your starting premise is they are ALL incompetent and they are ALL corrupt and they should ALL be voted out of office – that’s just Anarchism disguised as reform.

    Oil down 1.8Mb, gasoline down just 245K and distilates down 400K so overall down less than 3M and a bit disappointing but that won’t stop the bulls from going for it on the first draw in 2 months (you have to work with what you’ve got, right?).  As to USO and the Oil Futures, TAKE THE MONEY AND RUN if they can’t break $76 (.50 trailing stop).

  63. ravalos

    Phil, I recall once reading an article on SeekingAlpha from somebody who was putting his whole next "Investment Theme" on Infrastructure companies for this country. Just like the tech cycle, the real estate cycle, etc, his next vision was the Infrastructure. He did warn though that it might take a VERY LONG time for an investor to reap those benefits, but that it was CLEAR that what the US had next to do is to invest in its own infrastructure. I read this article about 2 years ago, and it made a lot of sense ever since, but it’s something that as of yet has not picked up and so an investor has not reaped any benefits. However, for the really LONG-TERM investor, this is a no-brainer.. of course counting on the fact that the US Government will wise up on this and do THE RIGHT THING and invest in the infrastructure of America accordingly. So, here you can see the deviation of fundamental plays vs technical / momentum, where really the fundamental ones are for the really patient ones.

  64. samz3700

    Phil -
    I wonder what the unemployment rate is if you remove all the out of work construction workers and some of the finance people.

    It’s got to be much lower for college educated people not in services.

    Nobody ever reports that. It’s always the headline number.

    While Everyone who wants a job should ideally be able to get one, wonder how much of an economic impact the unemployed had anyway. I know you have said before this is why rep. Don’t care too much

  65. oakd

     Phil-do you think UNG will bounce, or should we roll, or just take the loss? thanks

  66. jomama

    Phil, thoughts on AET here? my apologies if you already answered this yesterday,

  67. jgwilson929

     Phil,
    wanted to get your take on this as someone brought it to my attention.  buying the sept. crude options, selling the nov. options on a bet that contango will shrink.  

  68. mikenyc

    New to the site and really like what I see.  Phil, thanks for the pcln suggestion.  In at 4.50 and out at 5.60.  Wish they were all that easy.  Hopefully it pops back to 330 and we can try again!  Not posting much because I am slowly realigning my portfolio with some dividend stocks along with call / put sales.

  69. roma_

    Phil,
    what is included in distillates?

  70. gmarts

    Roma, diesel fuel, jet fuel, heating oil, kerosene…….etc.

  71. exec

    Phil,
     
    This is futile and I’m going to discontinue discussing politics on this forum.  It amazes me how the Liberal mind works. 
     
    I’m a contractor , we build things, we build things that people are willing to pay for, both in the private and public sector.  I guess your point is, since we are bidding on the projects, and building the projects, then we are the problem.  The fact that the government initiates and funds these projects is irrelevent right?  We bid on projects that they put out for bid.  We have no control over what they elect to build.  Our only decision is whether or not we will bid on the project.  So using your logic, we shouldn’t  bid on projects if we believe it’s a poor choice of spending of the taxpayers dollar.  That’s a cop out.  I can spin this too…..we were the low bidder on these projects…..so given that fact, we saved the tax payers money because had we not bid on the project, it would have gone to the next highest bidder.  So be thankful that our company is more efficient that the next bidder because the swamp that you partial own would have cost even more.  By the way, you’ll be happy to know that your swamp is no longer a swamp because the government never maintained it like they said they were going to and it filled in with sediment.
     
    The bottom line is what I said earlier, you have people spending other peoples money.  Thus, they don’t really give a damn if it’s a waste of money or a stupid project.  I don’t know why you can’t acknowledge that that is a problem.  One thing is for certain.  Giving them more money by taxing someone more will not change there spending habits.  I don’t know what the solution is, however, its a problem and if they don’t figure it out soon, this country is going to go broke.
     
    Why is it that the government never have to play by the same rules that everyone else plays by.  It’s upside down.  If you need to fix bridges and roads and dams then you discontinue starting wars, and building swamps, and buying million dollar planes so the politicians can run around and campaign, and building monuments to honor themselves, and suing states, and funding people to not grow things, and paying people to not work, Christ….if your paying them, then put them to work!……you tighten your belt and spend the money that you have on the things that are most needed.
     
     
     
    It’s not a scam….it’s the way our system has evolved.  We employ a lot of people, buy a lot of equipment, pay a lot of taxes and construct a lot of things.  This would discontinue if we STOPPED bidding projects, and a lot of people would lose there jobs.  The issue and my point is not what we bid, rather what the government elects to spend money on.  You can’t go on bitching about how deplorable it is that the bridges and dams and all the other stuff that you outlined are decaying, without at least admitting that there is a lot of government spending that could be diverted to these items rather than the typical class warfare solution of taxing someone more.

  72. datuu

    Phil, a small assortment of questions--1) what do you think of the vxx--seems very low and i can’t believe we won’t see an increase in volatility?
    2) do you have a water company that you particularly like for long term?
    3) what do you think of mos? o any better ag plays?
    thanks

  73. pahurik

    datuu, I think VE is good long term investment, of course week ago was better price.

  74. tradinv1

    Exec,  I could not agree with you more.  The management skills and ability to prioritize need of our government officials is deplorble.  If we ran business the way they run the government, every person on this site would SELL! SELL! SELL!  I have plenty of wealthy friends that if they really thought someons was watching the store they would be happy to pay more to get us out of this mess – I include myself in this group.  As it stands it is very discouraging to see how our elected official go about their day to day business.

  75. exec

    Tradin,
    Thanks for your comments but I’m done talking politics around here.  Where’s this market going today?

  76. Flash Gordon

    It is amazing to me as a non American to see how blind Americans can be to their own predicament.  Most people on this board believe that the markets are gamed and controlled by the banksters.  However, it is abundantly clear that most people on this board do not understand that the political system is also gamed by the same people who control the banksters.   To think that one or other political party has all the answers is ludicrous!  America is the ruling world empire and is as such playing the games of empire.  That is why so much is spent on defence (actually warmongering on poor third world countries) whilst your infrastructure and social services lie in tatters.
    If one studies the history of empires one will discover that all empires eventually collapse from within.  What you currently have is the collapse within taking place.  Unfortunately for America, the system is so totally "gamed" and controlled by vested interests that it is incapable of reforming itself.  America is going down, but that does not mean that the stock exchange is going down as Phil has so clearly pointed out.  Remember what happened in Thailand earlier this year – rioters went on the rampage and burned down the stock exchange and what happened to the Thai markets?  They closed up that day! 
    Just like Phil has pointed out that he is neither bullish or bearish, but rather rangeish, so is politics.  Who repealed Glass Stegal – a democrat.  Who exploited it with even more largesse - republicans.  Who came up with this riduculous idea that poor people who could not afford homes should be allowed to buy them – democrats in the 1990′s.  Who exploited this situation – a republican regime that turned a blind eye to everything until sub prime blew up in their faces.  Who passed the Patriot Acts?  And more importantly have the democrats repealed them?  No of course not…..  To think that one party is different from the other is absurd.  And more importantly, to think that any one party is going to break the status-quo is even more absurd.  However, that does not mean one must be quiet and not try to educate people as to what is really happening and just how absurd and broken the system really is…..

  77. shadowfax

    exec
    Who started the wars? Who ignored roads water etc? Who got the money? Who stopped the changes to fix things? Who started stimulus and when? Who created TARP? Who sold toxic assets? The answer is the same for all and his name is not Obama!

  78. jomama

    exec – yup – gotta just skip over the political rants which i wish would be highlighted…..

  79. biodieselchris

    I have direct family members who were killed fighting Hitler and his book burning Nazi’s I don’t care about politics or whatever you burn books in this country you get the f*ck out and never come back.

  80. nicha

    Iflan: been out for a couple of days. Missed your AAPL $260 call :(

    can I get into the $270′s now?

  81. datuu

    thanks pahurik--ve still has a nice dividend

  82. exec

    Flash,
     
    Good comments.  Both parties are to blame and the partisans need to take of their blinders.  I had to laugh.  Last night I was listening to one of the political experts, and he was going on about how the Republicans would never repeal health care, even though they’re running around saying they will, because they will enjoy all the power that they get from it just like the other party.  They’re all to blame and ultimately they will be our demise, so Shadow, I wouldn’t be so quick to blame one party over the other.  I’ve been living in Cleveland all my life.  It’s been dominated by the Dems forever…and it’s a mess.  So if your logic was correct.  We should be booming.

  83. shadowfax

    Flash Gordon
    Your post was so true, the answer is not in either party, the answer is stop wars, military spending X half, take care of home and leave the world alone.

  84. roma_

    gmarts,

    thanks

  85. datuu

    flash gordon--i couldn’t agree with you more--by the way where are you from?

  86. tuscadog

    Phil / book burning.    Americans are supposed to be better educated and empathetic to the concept of civics. Imitating uneducated brainwashed peasants from places like Pakistan and Afganistan for ‘revenge’ is pathetic.  It highlights how ignorant the ‘so called Christian’ right is and why US politics are so messed up.  These are the same dumbsh..s who will vote for Palin, who would have difficulty qualifying as a teacher.

  87. shadowfax

    exec
    I don’t blame a party, I blame a president Geoge W. Bush, even his father disagreed with his ideas!

  88. morxlntway

    I dint know flash gordon wasn’t an american! Who’d a thought?

  89. DKGuy

    exec – I could not have said it better.

  90. microflux

    exec and phil selling calls: correct me if i am wrong but if you sell a covered call and the stock price shoots way up, the sold call goes way up too but not as fast as the stock because it looses almost all of its premium when the call strike moves way in the money. so at some point when you sell the stock and buy back the call you have made your profit from the premium way before its 2012 expiration. i have done this many times. Phil am i not correct on this ?
     
    thanks
    david

  91. shadowfax

    exec
    I also blame the fools who voted for him, but as stupit as he was, how bad his speach, he sure convinced a lot of people to do the wrong things.

  92. tuscadog

    Phil / Mkt play    How do we play this mkt going into the weekend?  I’m still 60% net long, been a decent run.  What do you see as the main mkt moving catalysts next week?

  93. 1020

    exec – I agree there is too much waste, It’s just odd to read a complaint about waste that you profit from…..

  94. 1020

    Nice comment Flash!

  95. shadowfax

    tuscadog
    Rule # 2 take the money and run. Phil did say a 1% correction is in the cards and I have seen IWM failing 64.08 the 50% retrace point. If we don’t get over that by 2:30 we may have a afternoon sell off.

  96. jgwilson929

     Phil,
    Early to scale in to MCD here?

  97. flipspiceland

    @Flash
    Sports guy chest bump!

  98. tuscadog

    Shadowfax / RUT  Thanks, So if no 640 on the RUT by 2.30 you think we get a sell off?  Phil mentioned 635 as the canary crossover point?

  99. shadowfax

    tuscadog
    If the RUT crosses 635 the canary is dead, hedge time!

  100. kustomz

    Flash, what would one expect since this country is ruled by the MIC, bankers and the elitists. Eisenhower’s farewell address  …9/11 has brought us closer to the day…
    This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence — economic, political, even spiritual — is felt in every city, every statehouse, every office of the federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society. In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together.

  101. Pharmboy

    OK, if the 30 yr auction goes well, I think this market goes DOWN…..yield is dropping, so they must be bidding it up…

  102. rn273

    Pharm – is it a good idea to buy ARNA today for selling early next week? Also, are you selling next week fully or only partially, with the remaining protected through protective puts?

  103. Phil

    Son of a bitch!  I just lost my comments again.  Something strange is happening with my computer where I go to look up something on one screen and it ends up opening it on the main window, where I’m commenting.   Sorry about that.  My bad for not hitting submit sooner too.   I now have no idea where I left off….

  104. lflantheman

    nicha/AAPL:  You can get into the 270s but this play is not nearly such a sure thing as the 260s were a few days ago.  We’ve come up 10 or more points since then.  Please note that today’s play is not a conservative play.  None of my AAPL plays are.  If you do the trade I’ve described, keep your stops in place and get out with a reasonable profit when you can. 

  105. Jordan

    Government – the company I work for has as clients both the government and some private companies.  My experience has been that the government is a lot more careful about exactly how much money they spend, and about accountability of how the money is spent.  With our private clients, it could go both ways, but the government is usually very strict about what how much money gets used and what it is used for.

  106. Pharmboy

    ARNA/rn – yes.  I am trying to get in on another pullback at 7.10.  1/2 position, then full if they can push it below 7.  I expect the stock to be back at 7.50 next week, if not higher.

  107. tuscadog

    Phil / Mish   Amazing survey report by Mish  http://seekingalpha.com/article/224415-65-fear-double-dip-71-say-us-is-fundamentally-broken-net-32-expect-to-reduce-spending?source=hp_latest_articles
    Hard to reconcile the incredibly gloomy consumer survey outlook with the current retailer stats???  The survey says Depression ahead and no hope, yet, apparently, folks are still spending.  I’m baffled?

  108. Pharmboy

    NFL starts tonight TUSC, BWLD is on my radar for that spending spree.  Beer, wings and nuts (the eating kind)!

  109. Flash Gordon

    datuu – South Africa

  110. shadowfax

    Phil
    I asked yesterday if anyone is having trouble. Last night for the first time a found a bug in my windows 7 system and the usual XP right click error. My suspect is from etrade, no problem today! You use pro as do I.

  111. shadowfax

    Hey All
    We just dropped below the pivot point on IWM!

  112. Phil

    Wow, I am freaking pissed.  Sorry for the quick comments but trying to re-answer while I can still remember.

    CODI, BKCC/Yodi – I like CODI better because they are on the $15 line so selling the Feb puts and calls is a reasonable way to play but I don’t know them well enough to know if they are worth $15 or net whatever in the first place.  Also, the options are so thinly traded that you are essentially trapped in the position (major bid/ask penalty to get out) so make sure you REALLY want to own them for the net before doing anything with them. 

    Science/Exec – Yes, have you heard of water tables or the food chain?  I’ll bet you slam your powerboat into the coral reefs just for fun too…  Unforutnately it only takes a few people to destroy everyone’s environment but it’s a big planet and we’ll probably be dead before it’s completely destroyed so not our problem, right?   Your example is ridiculous – how about would you borrow money to fix a hole in your roof before the whole house is flooded with water? 

    PCLN/Yodi – Yes, but a bit late now. 

    S&P/Tusca – Hmm, maybe sub-consciously I’m much more bearish than I think I am…  We will cut our oil use tremendously in the next 20 years (unless the oil lobby gets another President in office) but $10 doesn’t seem likely. 

    PCLN/Jtom – I agree, no way are they worth $330.  Which is not to say they can’t get to $350 but I think they can be shorted with the Jan $420/380 bear put spread at $30, selling the $380 calls for $15.50 which is $14.50 on the $40 spread and TOS says $20 net margin on the short calls, which can be rolled to Apr $420s (now $15).

    Greeks/Rav – I had no idea I thought of all that!  8-)

    UNG/Chakra – Very disappointing storm season so far.  I’d say let’s remember to check the forecasts over the weekend and then decide.  The oil report has now been taken as a disappointment and is killing the rally across the board.

  113. yodi

    shadowfax
    Re problems funny now you say so running this PSW on the XP I had problems submitting comments as it brought up error mesages. Only after reloading I could send the message. So what I did I copied the message before sending, this way not losing the content of the message 

  114. exec

    Phil/Son of a bitch!  I just lost my comments again.
     
    I hate when that happens.  It never comes out the same or as good the second time you type it.

  115. Phil

    Well said Acobra.  Unfortunately I lost a big point I was making on what’s happened to America and our changing attitude about taking care of this country since the WWII but it was way long so remind me later if you are interested.

    VZ/JG – Is that Fios?  I think every system is stressed out by video on demand and all the other nonsense the web is now used for.  My kids use my new IPhone to send text videos to their friends – soon, no more 1K SMS messages, now multi-gig videos will be sent millions of times a second – madness!

    Patience/Rav – Even I am not patient enough to invest in infrastructure.  If the Dems lose control in this election, you are better off shorting insurance companies, who will end up paying for a lot of stuff as things start to fall apart….

    Unemplyment/Samz – Either this weekend or the one before I had a post with a great chart that broke down unemployment by catagory.  From the BBook and something I think I linked in yesterday’s post, jobs for educated, skilled workers are still in demand – the top 10% is only 3.5% unemployed and they have 40% of the money anyway (and 60% of the assets).  Even if 20% of the bottom 90% are unemployed, that’s only 12% of the income missing and the government makes up half of it and the other, employed drones are generally so underwater that they spend every penny they make immediately anyway so 20% unemployment is only a 6% cutback in consumer spending and none of that affects a Park Avenue doctor who doesn’t accept insurance anyway…

    UNG/Oak – I think if you have the Jans that it’s only Sept so 4 months to go is too early to panic but we invested on a hurricane premise that is not shaping up so keep asking! 

    AET/Jo – I like them and you can go artificial with the 2012 $17.50/25 bull call spread at $5.50 and sell the $22.50 puts for $2 and that’s net $3.50 on the $7.50 spread and worst case is you own them for net $26 but, since you have the calls, the b/e above $17.50 is $21.75, which is 26% of natural protection on 1x and, if your attitude is you would DD at $17.50 anyway (about the crash lows) then this one is pretty much a no-brainer.

  116. matt1966

    Flash Gordan.. .where the hell did you come from?  It’s weird how folks just seem to come out of the woodwork on this site when topics get heated..  but I digress.  Well put!  As an independent, I’m disgusted by both parties and politics as a whole.  There is far too little common sense injected into politics.  As a lifelong voter who has never missed an election, I am simply distraught as to what to do this November.  I may simply abstain from voting.  But what will that prove?  Thanks for your articulation of the problem.  Just wish I could strap people down, stick a syringe deep inside their skulls and inject them with what you wrote.
     
    Exec, good point.  I don’t blame you for bidding on a wasteful project.  As long as you don’t lowball just to get the job..
    Politicians are like teachers.  Those who can do.  Those who can’t become politicians.

  117. shadowfax

    We are loosing another support. I am no JRW but we need to hold 63.40!

  118. nicha

    Phil: MMYT – Indian travel company. Recently had an IPO. Any thoughts?

  119. matt1966

    Damn!  While I was catching up with what’s been written today and adding my own $.02 the bottom was falling out in today’s wundermarkt!  Nice fade be-atch!!!

  120. boobearsdad

    matt1966,
    As a teacher who’s also a professional software engineer, I’ll try not to be insulted by the insinuation that teachers are people who can’t do…..

  121. kustomz

    Wish there was more volume to the selling (clear sign of direction and not just HAL testing support), looks like the same program as yesterday just a bit earlier in terms of selling

  122. chaps

    Bearish back spread play on AMZN: Long 3 April $130 calls. Short 5 Oct $140 calls.

  123. rn273

    Thanks Pharm – entered another half position into ARNA at 7.1

  124. blue

    What just happened to SKX?

  125. Flash Gordon

    Very strange – copper down first earlier on today and now both bonds and equities down.  It is either bonds or equities down.  I wonder which one is wrong………..

  126. exec

    LOL…..no way Phil…..I wouldn’t want to chance scratching the solid gold propellers that we purchased with the exorbitant profits we made on government contracts by under paying our illegal alien workforce on those pesky coral creatures.
     
    It’s much more fun to  simply drag a 200 pound anchor across the reefs to disrupt all the tranquil sea life then toss dynamite into the water to see if any of them can survive the blast.

  127. deano

    CODI/yodi – it was me with the question yesterday, as I’m looking at some of the BDCs due to their div yield and decent premiums. You may want to check out PSEC, which has a monthly payout so the dividend should generally be lower than your option premium. I’m looking to benefit from both the option & the dividend. BTW PSEC is also near a decent strike. Thoughts anyone?

  128. matt1966

    boo, it’s a generalization.  Not an absolute.  Besides, it’s not a slam.  We need teachers.  They’re an essential element in our society.  I’m married to one.  But I wouldn’t want our country run by someone who only had teaching experience.
     
    I’m curious, were you first a ‘teacher’ or a programmer?  If you were first a coder and then decided to teach on the side you are not who I was referring to but rather exactly who I would prefer to take lessons from-

  129. lvmoda

     Aetna CEO comes on CNBC to discuss how healthcare insurance rates will be going up next year "because insureds will be getting more benefits" from Obamacare.   When asked if Aetna’s margins will be going up, he tried to sidestep it but realizing he was speaking to investors he said YES.    I will be surprised if premiums come down anytime in the next few years…in fact they will increase since healthcare is a profit-making enterprise and insurers have no incentive to become more efficient.  And, they can pass on their costs pretty much at will.

  130. Jbur

    blue:
    SKX got a downgrade this morning.

  131. jthoma

    PHARM – you might need to further clarify the "eating kind of nuts" as you still left it open to interpretation- lol!

  132. Jbur

    Pharm and all
     
    Nuts. Reminds me of when a friend visited from Michigan many years ago. We went out for some nice dining, and when I asked him if he would like to try some Rocky Mountain Oysters as an appetizer, his response was "No thanks, I’m not really in the mood for seafood."  ;)

  133. amatta

     Is there a problem with the site? I tried posting a long question and it got wiped out!! Arghhh is that what happened to you exec? 
    I’ll try again, but I lost all I had written… frustrating!

  134. Phil

    Crude/JG – Contango is betting oil gets cheaper which is a good bet coming out of the summer BUT, we’ve had super-low demand and oil is still holding $75 AND we’ve worked off almost 2/3 of the tanker inventory so I’m not really thrilled with the risk on that one. 

    Welcome Mike!  Glad your first trade was a good one.  Good time to retire and brag about your perfect record!  8-)  I strongly advise going back and reading the last 30 days of posts and comments (use the Phil tab to make it easy) as that will give you a good idea of who everyone is and what stocks we follow closely. 

    Distillates/Roma – Pretty much everything that isn’t raw crude or motor gas.  Diesle and AgGas are distilates so gasoline is just passenger cars and trucks. 

    SQQQ is a nice ultra short on the Nas, pretty cheap at $53 and good for a pop IF we fail to hold levels (still all about AAPL holding $263).  Oct$55s are $3.90 and were $7.60 last Friday.  You can play momentum on them by selling higher calls for $3.90 on the turn to keep a free ride for the next turn.  It’s a momentum play for the Nas failing it’s level and, of course, the 3 of 5 rule in effect on the 1.5% levels

    Bidding/Exec – No my point is you are an intelligent human being who knows the business and says he is concerend about government waste so did you write a letter or go to a meeting or in some other way protest the project you bid on?  Using my logic, which you reject, I tell people that they should sell option rather than buy them.  After that, I feel much better about selling people options because it’s not like I diidn’t warn them.  Obviously, not the same people etc. but I do try at least.  By your logic – it’s OK to hand the government a bill for $2,000 for a toilet seat because – if they pay it – then you did no wrong.  By that same logic I can deal cocaine or do whatever the hell else I want since I have no responsibility on my end if there’s a market for whatever I sell.  Again, I can’t argue with you since you seem to know that EVERY SINGLE PERSON in government doesn’t give a damn about waste and fraud and corruption.  If that’s what you believe then I’m just very sorry for you. 

    Your use of the famous "paying people not to grow things" is another indication that you don’t even have the slightest willingness to acknowledge the merits of resource management, which is a primary function of government, who we appoint to act "in loco parentis."  Also, you are again in some circular arguement - Government projects you do are wasteful but if you stop doing them then people would lose jobs.  Why is that?  What if ethically, all contractors refused to do "wasteful" government jobs and instead went out in the private sector and competed for the "non-wasteful" work there.  That would stop the government from spending money on jobs that you geniuses have decided don’t need to be done and the extra competition in the private sector would lower the costs and provide a benefit to all.  Yes, there is a tremendous amount of government spending that could go to infrastructure – it’s called our $1Tn "Nation-building" project in Iraq – a nation that needed to be rebuilt after we blew it up looking for weapons that didn’t exist while sending all our troops to a country we were sure Osama Bin Laden was not in – yeah, gimme 4 more years of that lunacy! 

    VXX/Datuu – When and if we do break over 10,700, 1,145, the VIX will be below 20 and will likely stay there for quite some time.  The VIX is historically in the low teens, the last 3 years have been very strange.  No, I don’t have a water company because of the pipe situation.  Over 1/2 the water processed in county is wasted and that can be cut down significantly with a relatively small fix so I keep expecting it to happen – but it never does, which I find amazing.  I don’t like the Ag plays, especially now that they all have POT fever, very overpriced group but scary to bet against with China now on the prowl for acquisitions. 

    Skills/Trad – Pay a mayor 10% of what he cuts off the budget each year.  Pay Governors the same way and you’ll see some new blood get in the game and they will make some pretty quick changes.  If you want top-notch executives running your government then you need to compete for their services with private enterprise.  I’d love to be a Senator but I can’t live on that salary and I’m too honest to use the position for personal gain - there are plenty of other people with that attitude but, systemically, there is no effort at all made to attract quality leadership.  This is reinforced by the top 1%-controlled media, who make being a politician sound sleezier than being a drug dealer and, of course, they relentlessy attack them all and rip their lives apart and make the whole thing so miserable that only crazed, immoral egomaniacs will be interested in running and those are exactly the kind of people the top 1% know how to control. 

    Good point Flash, although I blame the top 1%, and only think the Dems are the lesser of 2 evils as they tend to be the (slight) opposition party to the Reps, who don’t even bother to pretend they are not whores to big business anymore.  

    Europe closed up a point – our sell-off seems a bit unwarranted.  Volume on Dow is only 84M at 1:50 so very light and very stickable.  Oil fell $2, all the way back to $74 and that was the catalyst that sent us down (compare USO to the other indexes) altought the RUT gave us a heads up with their first dip.  

    V has been getting whacked all day, along with MA so people are very down on that consumer credit report but that is misleading because most people are switching to debit cards which means we can no longer rely on the MasterCard Spending Pulse reports either.

  135. exec

    I haven’t had any issues but others have mentioned problems.

  136. jgwilson929

     Phil,
    Yeah FiOs…ugh…actually could have still gotten it at 5.20 and still made a dollar on it….

  137. shadowfax

    amatta
    Lost msgs were Phil yodi and me!

  138. yodi

    Phil, I do have some questions  on your coffee intake this morning
    PCLN/Jtom – I agree, no way are they worth $330.  Which is not to say they can’t get to $350 but I think they can be shorted with the Jan $420/380 bear put spread at $30, selling the $380 puts for $15.50 which is $14.50 on the $40 spread and TOS says $20 net margin on the short calls, which can be rolled to Apr $420s (now $15)
    surly you are not double selling the 380 put I take it you actually talking about to sell a Jan 11 380 call for 15.50 ???? thks

  139. qcmike

    After the TOS update, I thought this job posting was interesting
    Director – Technologies Data Management
    Company: Ameriprise Financial
    Location: Minneapolis, MN
    Date Posted: September 08, 2010

  140. exec

    This is shaping up to be an ugly candle.  IWM bounced right off the 200dme

  141. boobearsdad

    matt1966,
    Mine has been kind of a long, winding road:
    * First, I was a graduate student, planning to be a career academic.
    * Next, I got disillusioned with academia and went off to get a regular job instead.  (It helped that it was the late 90′s, so plenty of jobs in IT to be had; it was tough to want to be an academic when IT was going gangbusters.)
    * After that, I got disillusioned with a regular job, because I got the feeling that my work was mostly just lining other people’s pockets.  (What I didn’t realize at the time was that entrepreneurship was an antidote for that, but live and learn.)  I also missed the teaching I used to do as an undergrad and grad student.  So I quit coding and ended up teaching at a university for several years.
    * Finally, I got married, bought a home, and actually needed significant income again, so I took a "day job" as a software engineer, while continuing to teach.
    So, all told, seven years in software and ten years as a teacher, with a fair amount of overlap.  The teaching, I think, is not likely to last much longer, as budget cuts are threatening my job on a yearly basis.  Sooner or later, the cuts will go deep enough to cast me aside — or I’ll cast myself aside, tired of waiting for the other shoe to drop.  And there’s still that entrepreneurship bug, though that’s a lot harder when you need income!  (Why can’t we understand these things when we’re young?)

  142. jvest

    Wow, terrible timing buying SKX the other day. Phil, would this be a good time to double down into the initial panic?

  143. jvest

    …and that goes along with my terrible timing of thinking I was only buying INTC, who then crammed $7 billion of MFE down my throat only a couple days later… It’s a little disheartening to see your Discount Entry price tested after only a few days, although I guess it’s still better than paying retail.

  144. newbie_trader

    Phil,
    Newbie trying to understand you B/W strategy. Any thoughts on V @66 bouncing off 08 support and writing Jan12 65c @11.30 and 65p @ 10.15 would lower cost to $55.35

  145. JRW III

    Good morning,

    IWM 62.58, 62.95, 63.40, 63.76, and 64.37

    Delayed jet lag, sorry !!!

    I doubt we go below IWM 62.95 (+/- 0.1), so maybe a buy; look at TBT

     

    Flash Gordon,

    Good observation and a great post !!

  146. amatta

    Phil, 
    I am trying to setup my portfolio for Long-Term as per your recommendations last week. Thanks again for the long and thoughful response…
    I am trying to be at 30% of the investable cash. Where I am having most trouble is accounting for the synthetics. How do I account for a position such as: 
    80 C 2012 4/5 Spread with 2.5 P for net $1,166. This obviously is a minuscule position in terms of cash outlay and so what do I count for the Long position. With the buy-write it is simple as you only take the Net… but in this case??
    Thanks

  147. jromeha

    Yes Flash, good post! I had the same question that Matt did, where the hell did you come from?

  148. dbarakat

    Phil/SKX play:  
    I bought the SKX play that you mentioned the other day, buying the Jan11 22.50/28 bull call spread and selling the 22.50 puts. On a day like today where the SKX has fallen 12%, on a downgrade, would it be wise to buy back the 28$ calls and wait for it to recover?  or is that too risky?

  149. Cap

    Exec … right on brutha !
    And what flip said !
     
    As my rabbi said in his sermon today (the subject being "Religion and Politics") the key to these type of arguments is to disagree RESPECTFULLY.  Disagreeing with the ideas w/out personalizing it makes for a more serious and respectful dialogue.  My thoughts came to some of the discussions on this board.  And, also to certain professional politicians who can’t advance their arguments, ideas or agendas without blaming others … no respect there.
     
     
    Infrastructure debate.  The problem is that the "crumbling infrastructure" argument is a straw man.  In most cases, its nothing more than a device to steer pork projects and jobs / bennies to union supporters of the Democratic party.  Digging ditches and filling them in, or paving and repaving the same roads or painting bridges is little more than make work; provides temporary jobs to a certain targeted voter , er worker, class and pumps up union coffers so they can payoff, er, donate to their favorite politicians.
     
    In NY, fixing a lot of this stuff is the responsibility of state or local govts; or in other cases "authorities", litke the MTA or the Port Authority or some other non-governmental body that is full of appointed political hacks that are generally accountable to no one.  They pay inflated salaries and benefits and when they go broke, they sock the users, the taxpayers with more tolls or more taxes or cry to the Feds for bailout money for their incompetence.
     
    This is no way to run a country folks ….
     
    For an education on infrastructure, pork and so forth, I highly recommend the book Power Broker by historian Robert Caro about Robert Moses, who "built" practically all of NY’s infrastructure and was an unelected political powerhouse for more than 40 years.   Its a fascinating read on many levels, especially about power, politics and corruption.

  150. Jbur

    TBT: Hopefully it has put in a real bottom. Low hit 8/26 at 29.77. Good basing volume between 8/19 and 8/31. TBT is now above both the 5 and 20 EMA’s. I have my fingers crossed.

  151. Jbur

    TBT: Hopefully it has put in a real bottom. Low hit 8/26 at 29.77. Good basing volume between 8/19 and 8/31. TBT is now above both the 5 and 20 EMA’s. I have my fingers crossed.

  152. 1020

    exec/sealife  That was funny!  (I’m a liberal with a twisted sense of humor)  :)

  153. Phil

    Book burning/Tusca – Did I start that topic?  I don’t even think it’s worthy of discussion.   We’re Americans – we don’t burn books or witches anymore or did I miss a memo that says we’re regressing back to the stone age? 

    Calls/Micro – That’s right until the caller runs out of premium and it’s delta hits 100, which is usually pretty deep in the money.  There is no upside danger to selling calls, or puts for that matter – which is the premise behind the buy/writes.  You buy a stock you think will go up and you do a buy/write because your principle worry is it will go up so fast that you won’t get a chance to sell as many calls as you wanted to.  The protection aspect of the play is a nice bonus but I ended up with that strategy after years of call-selling and realizing it was just too much bother compared to a "set and forget" system.

    Speaking of set and forget – we’re still "Home on the Range" from my post last Thursday so here’s that chart:

    We got rejected at the Fib today, which means we’d better respect those lines

    Next week/Tusca – Well, I just went over all those market movers yesterday didn’t I?   Retail Sales is big on Tues, Industrial Production and NY Fed Wednesday, PPI Thursd and CPI, Philly Fed and Michigan Sentiment on Friday so lots of data and I do hope you have a disaster hedge in place (all of Tuesday’s ideas have better entries today) at least over the weekend.  We’re going to need a BTE Retail Report to ease the jitteres enought to punch us through the cluster of resistance the S&P has to fight through above 1,110

    MCD/JG – If you go back 2 years, you would think I was paid by MCD to promote their stock.  They divested of CMG and went after SBUX and those were good moves which I approved of (but I did not have enough faith in CMG by themselves) and they’ve worked out but $70 is really pushing it, I think.  If you want restaurants, I like EAT (Chilis, Maggianos) who have a lot more room to grow over time and a much easier to cover price point at $17.79 and are a super value compared to my old favorits CAKE and YUM, both who are up so much that I’ve lost interest.  So, my restaurant play for 2nd half of 2010 is EAT at $17.79, selling Apr $17.50 puts and calls for $4.45 for net $13.34/15.42.

  154. shadowfax

    JRW
    Your post was mucho thank you, just got ou at 63.05, nice ride down but now what? TBT is trending lower.

  155. tuscadog

    Jvest / SKX    I’ve just read the Susquehanna downgrade report (it’s posted on the Yahoo SKX website).  It doesn’t jive with what I found on my store visits and discussion with store personnel.  They expect ‘shape-ups’ to be huge at Xmas.
    I’m suspicious that this is a hedge fund short play.  Someone has bought over 4 million share today.
    For what it’s worth I’ve bought another 4000 share at these incredibly low prices and will hold long term as co is also going gangbusters internationally.

  156. 1020

    lvmoda/Aetna  I heard that while on my walk  :(   No need for those businesses……

  157. Cap

    Flash:  Your comment here is false and deplorable ….  America is the ruling world empire and is as such playing the games of empire.  That is why so much is spent on defence (actually warmongering on poor third world countries) whilst your infrastructure and social services lie in tatters.
     
    Try to imagaine, if you can, what would France, Germany, Italy and Japan be today w/out America’s commitment to defense.
     
    What would be of Eastern Europe ?
    Would we have Russia or the USSR ?
     
    I could go on.  America is far from perfect.   However, the world is a far better place thanks to America and the sacrifices it has made for freedom at home or abroad.
     
    Your comments about empire are rather tasteless IMO; sorry.

  158. JRW III

    Matt, This chart’s for you !!

     

  159. Cap

    Shadowfax; not intending to call you out, but you are a perfect example of my rabbi’s sermon.  You disagree with certain policies.  You have personalized them to GWB.  That is simply childish.

  160. yodi

    deano
    Thanks for coming back. I trust you have seen Phil’s comments. On all these stks the div is great, the question is do they hold their value. PSEC buy the stk and sell the 7.5 Feb 11 call for 2.30 open interestis only 30 so you got your money back up to 7.47 One can gamble a bit more by selling the Feb 10 putter for 1.08 giving you a greater cussion covering you between 6.65/10.85 Just to seal it off I would buy a 7.5 Feb putter for .15 Just in case the bottom drops out.
    Meantime enjoy the interest any once opinion pls

  161. jthoma

    Phil- a better explantion on your PCLN suggested trade- sorry for my lack of follow with the prices you used?

  162. Cap

    While it feels like the Bottom is falling out of the market, the market is still UP for the day thanks to the robots and pre market pumping.

  163. acobra65

    KustomZ/MilitaryComplex: Well said !!! Eisenhower was knowledgeable and should know the subject matter….. But, nobody is listening.  MY CONCERN…. "Only an Alert and Knowledgeable Citizenry"…..I wouldn’t be holding my breath………  even Education doesn’t equate to knowledgeable. Look how many economists and scientists can’t even come to a consensus on solving problems…….. ie. stimulus v. deficits and global warming issues. The conclusion to all this nonsense will not be pretty…. We, as Americans seem to think we are "the exception" to the rule in solving all these matters. We obtained our "greatness" with very little competition….. that is not the case today.   

  164. exec

    Phil/Bid:  Jesus we need to let this go.  Simply concede that the government spends a lot of money on stupid projects for political reason that could be better spent fixing our infrastructure issues.  Like the bridge to nowhere.  Now without going into a big dissertation about why that is, I generally believe it’s because of what our government has evolved into…….and that is…..spend taxpayers money to get reelected, regardless of whether it makes sense or not.
     
    To answer your question about whether I’ve written letters or attended meeting to express my view on the waste.  Yes, however, there is this interesting phenomenon that occurs when you criticize a government agency.  You immediately become the enemy and they go to great lengths to punish you.  So it didn’t take very long to learn that if you want to continue to bid public work, you best not point out deficiencies in the system, otherwise, you will be sitting on the sidelines watching your competitors do the work that you need. 
     
    I understand where you’re coming from when you say it’s inappropriate to bitch and moan but not do anything to fix the problem.  From my perspective, it feels like it has gotten so out of control that a single individual in helpless to do anything about it.  It will be fixed.  But only after there is a political will to fix it, and that doesn’t typically occur until something really bad happens.

  165. Cap

    White House getting involved in this stupid FL pastor’s Koran burning ?   Why ?  Makes no sense.  The guy is idiotic; he has the right to burn books if he wants to; its stupid; but you have a right to be stupid.  But the White House is only inflaming the issue by even commenting; Obama is on the tape saying "Koran Burning could lead to suicide bombings".
     
    That is simply irresponsible of Obama.  End of story.  
    Guess he wants to blame some guy in FL for the next terrorist attack on the US; instead of his own policies.
     
    Fact of the matter is suicide bombers and these Islamic radical terrorists don’t need this dude as an excuse.  They will commit their terror anyway b/c that is what they do and they are fanatics.
     
    Next thing you know, he’ll blame the Tea Party.   Or someone opposed to the Health Care bill (like Bloomberg did w/ the Times Sq bomber ).

  166. tuscadog

    JRW  / graph   Help, I’m not a techie, does that mean we still have room for more upside before we fall?

  167. amatta

    Somebody tell me if I am dreaming? But there is a huge misprice of BAC Jan 12.5 calls… I just bought 70 for .67 and Sold 70 15 for .64…????!!!!!!

  168. pahurik

    12.5 is 1.89

  169. exec

    Flash,
     
    Great perspective on our predicament from an outsider.  Just out of curiosity, what do you think about the tea party movement?

  170. Cap

    amatta; I don’t see that mispricing; one of the strikes you bought or sold must have a different multiplier or a cash component or something….

  171. yodi

    jthoma
    September 9th, 2010 at 2:30 pm | Permalink  
    Phil- a better explantion on your PCLN suggested trade- sorry for my lack of follow with the prices you used
    Buy the Jan 11 420 put sell the Jan11 380 put and sell the Jan 11 380 call

  172. exec

    JR,
     
    Can you explain what that chart is?

  173. Jordan

    amatta – BAC Jan 2011 calls on my screen:
    Strike $12.5 are $1.98
    Strike $15 are $0.65

  174. bobhu

    What happen to SKX?  Any news?

  175. dbarakat

    Skx was downgraded

  176. David Ristau

    Hey all,

    I have a new Short Sale on a medium term schedule in Lennar Corp. (LEN). 

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

    Good Investing!

  177. Cap

    Tea Party movement.  Another perfect example.  Why does Obama go to such great lengths to attack or demonize them; calling them racists and so forth ?   Its abhorrent.
     
    It would be perfectly fine for him to disagree with their ideas … but he doesn’t.  Why ?  B/c they represent a political threat to his power and agenda.  So he demonizes them.   It is simply classless.   And this goes for much of the rest of his party.
     
    They did not treat Bush w/ respect; they don’t treat the other party (Repubs) with respect; they don’t treat the Tea Partiers with respect.  Is US against THEM.
     
    And Obama wonders why his poll numbers SUCK.   He has alienated more than half of the country, including many that supported him.  Only the true believers remain.   This is not how he sold himself; and its not what people want from the "leaders".  In his case, it is beneath the office of the Presidency.

  178. 1020

    Cap – You make me laugh!  You call out someone for personalizing GWB then back to BHO Blah Blah Blah…..Must be a bitch keeping all that glass clean in your house!!!  :)

  179. shadowfax

    cap
    I am against everything GWB did and I expected everything that happened, I sure hope it stops or we will all fall off a cliff. If you care everytime change was almost, the markets went up, now that we may go back to GWB ways the market goes down just like it did all the time he was in office, pick any chart it is clear. The rest of the country is very different than NYC! I travel through there almost every year by car or truck and it is true that they have been fixing the same roads for so long the fixed parts need to be fixed. That is very sad and you can say the unions slow down work there but in the Rocky Mountain states there are few to no unions and nothing gets fixed here either. Problem here is stimulus required matching funds that broke states coud not match and I suspect it is the same eveywhere including NYC.

  180. yodi

    amatta
    Bac Jan11 12.5 c is .69 and 15c is .17

  181. yodi

    Getting these error messages again site is as slow as a snail

  182. JRW III

    tuska,

    It means that we are in a DOWN TREND; we can still go higher, but until we break that black line I’m not buying any buy-wrights !!

  183. Phil

    Ike/Kustomz – Wow, that’s strange.  That was the long rant I lost earlier.  Ike was put up to be the Conservative puppet candidate (highly electable empty suit, like Reagan/Bush2) but Eisenhower was nobody’s puppet and spoke out against the BS that was going on in this country at the time (top 1% taking over). Interestingly, Wiki points out the following:

    In the penultimate draft of the address, Eisenhower initially used the term military-industrial-congressional complex, and thus indicated the essential role that the United States Congress plays in the propagation of the military industry. But, it is said, that the president chose to strike the word congressional in order to placate members of the legislative branch of the federal government.

    Also F. A. Hayek mentions in his 1944 book The Road to Serfdom the danger of a support of monopolistic organisation of industry from WWII political remnants:  "Another element which after this war is likely to strengthen the tendencies in this direction will be some of the men who during the war have tasted the powers of coercive control and will find it difficult to reconcile themselves with the humbler roles they will then have to play [in peaceful times]."

    Noam Chomsky has suggested that "military-industrial complex" is a misnomer because (as he considers it) the phenomenon in question "is not specifically military."[He claims, "There is no military-industrial complex: it’s just the industrial system operating under one or another pretext (defense was a pretext for a long time)."

    What happened is that, after WWII, Europe was trashed but has been so since the 30s and they continued to blame rampant Capitalism for their troubles and went essentially Socialist.  That chased the "pure-breed" Capitalists out of Europe and they landed in America, where they were determined not to allow the US to follow Europe’s path to Socialism so they used the propoganda techniques of WWII to push their agenda on the US citizens and they came up with things like the "Red Menace, the Domino Theory, Creeping Socialism" etc to keep the population in total fear and on the straight and narrow towards the glorious Corporate Kleptocracy we have today. 

    Of course much of the 19th and 20th centruries were already dominated by the top 1% attempting to destroy all monarchy’s, not out of some idealism of democracy but because you can’t sieze full control of a nation while the people still have even a figurehead to look up to.  That’s why Rupert has not one but 2 British Papers, a television station and a satellite network that does nothing but dig up dirt on the British monarchy every day – he can’t rule if someone else is sitting on the throne…

    Government/Jordan – I agree but I doubt it will convince anyone.  Despite all evidence to the contrary, there is still a Flat Earth Society… 

    Survey/Tusca – I’ll look later but Mish must have been caught short because he’s been on a real mission to tell us why we’re doomed lately.  I don’t put much stock in sentiment polls because the media has been driving the negative story home relentlessly and then they survey their readers and find out, shockingly, that they are worriied about the economy – pretty silly.  What were the actual questions?  Note the slant on the results though:

    • 42% say that they or their spouse has had wages or salary reduced
    • 34% say they or their spouse lost their job or has been laid off
    • 33% have taken on more hours or another job to try and make ends meet
    • 28% dipped into a planned retirement account like an IRA or 401K because they needed the money
    • 14% say they have been forced to sell or liquidate a major asset like their car or home
    • 9% have had their house foreclosed on
    • 8% had their child delay college (or graduate school) or drop out to save money
    • In terms of their own personal finances, 2 in 10 expect say they will recover by the end of 2011 (20%), 3 in 10 say after the end of 2011 (27%), and a quarter say their personal finances won’t ever fully recover (24%).

    So 17% unemployement means 34% will say they OR another person lost a job, same goes with salary reductions, you are doubling the apparent number by simply asking the same question 2x for each item.  Notice that 76% of the people they surveyed felt they would recover at some point but that’s not at all how they presented the data.  Anyway, I don’t know if this is a good or bad survey but it’s not one I would have written an article about without knowing a lot more about the methodology and seeing the actual questions.  Strategy One is owned by Dan Edelman, a huge PR firm that pimps for WMT, tobacco companies and, worst of all – Republicans.  He is the inventor of fake blogs where he pays people to say nice things about companies in their "personal" blogs so forgive me if I take his surveys with a grain of salt..

    BWLD/Pharm – A little high for me.   Good to short into football excitement.  What’s TUSC?

    Trouble/Shadow – I think I have XP.  What’s the problem?  Can I fix it? 

  184. jvest

    amatta, are you sure you didn’t buy these calls? They deliver partial shares and partial cash and they’re priced around 0.68 – 0.71 right now.

    Jan 11 12.5 *

    Cash
    $13.71
     

    BAC
    85
    shares

  185. JRW III

    exec / chart

    It’s the S&P 500 weekly withh Elliot Wave and fib analysis.

  186. Jordan

    comments gone – I got a timeout message when trying to post just now. post is gone. Phil, please have your programmers look at this, seems to be a common issue and it’s frustrating (as you know). 

  187. exec

    JR,
     
    Are you talking about the 1229 black line?
     
    By the way, I hope you’re not offended by the fact that I refer to you as JR rather than the full JRW.  JR has a nice ring to it like the rich JR oil tycoon on that old tv series.  I was going to refer to you as "W"…..pronounced Dub-ya…..but figured Shadow would blow a gasket.  :)

  188. Cap

    1020 there is a big difference.  If I call Obama a heroin user, drunk, stupid idiot, corrupt, dummy, loser, moron, Nazi, etc.  as my criticism it would be a different matter. 

  189. Cap

    I am critical of Obama’s agenda, his policies, his ideology and his mean spiritedness (the us vs. them philosophy) and his poor judgment.

  190. Cap

    Wow, shadow, you must have some crystal ball … you should set up shop as a psychic.
    You foresaw "everything" and were against "everything".  Really ? 
    That is incredible.

  191. yodi

    Error messages it is not the web site it is all the political comments during trading Obama does not like Please reframe after trading thks

  192. JRW III

    exec / 1229

    Yes, and J.R. is fine, but if you have a question, please bold it so that I don’t miss it !!

  193. snow

    Trouble / Phil – but it’s just been in the last two days or so? If true, then what changed? And, no, you can’t fix XP, it’s beyond fixing ;-)

  194. shadowfax

    cap
    again and again you missrepresent Obama’s first blaming was last weekend, he should have started in 2009 as you accuse

  195. Cap

    Highly Electable Empty Suit … perfect description of BHO.
    Thanks Phil.
    Its sad; and a problem for both parties.
    But make no mistake; that’s who we have in the Oval.

  196. ed3524

     Phil,what do you think of this very speculative idea:
    ORCL will announce earnings on 9/16 4:00pm (Exp day, after market close). as was discussed here before, September options may be exercised Friday after the market close (depending on brokerage firms).  SEPTember  24 straddle is expensive now, but what do you think of buying ratio spread in calls x 23:2x 24, and puts x25:2x 24p? or buying 25call, and 23p?

  197. Cap

    shadow, I have no idea what you just posted !  :grin:   
    Seriously.

  198. Cap

    :grin:    ?

  199. Cap

    what’s up w/ the emoticons ?

  200. Phil

    Losing comments:  It does happen sometimes and a routinely copy my comments before attempting to send them.   Doesn’t help if the whole computer crashed but a life-saver if you get one of those paging errors and you can just re-post.  Unfortunately, the problem I’ve now had two days in a row was not while I was sending a comment but while I was writing it and both time it seems to be that I went to open a page in a new window or clicked on a page and my main page suddenly switched to the thing I wanted to open.   This never happened before so it’s either the mouse or some update issue.

    MMYT/Nicha – I strongly have no opinion whatsoever on an Indian travel company that just went public.  Sorry.   If you remind me on the weekend I’d be happy to check them out though. 

    SKX/Blue – Wild!  CROX got killed too – There were downgrades but it looks like someone is bailing on a huge retail position ahead of next week’s data (probably also to do with V and MA tanking today).

    Strangeness/Flash – Money comming out of bonds, that’s for sure.  I think we’re staging for a move up and that we’re shaking out the weak hands at the moment but we can’t afford to ignore technicals either – not the easiest place to trade coming into a weekend. 

    Reefs/Exec – You know way too much about ways to damage them!  8-)

    Oysters/Jbur – I’m betting his responsedidn’t change when you explained what they were, did it? 

    Wipeout/Amatta – See above.  I copy my text before I submit – just in case.

    PCLN/Yodi – Damn, sorry, that was selling the $380 CALLS, not puts.  I’m so used to writing puts I didn’t catch it.

  201. amatta

     Jvest, 
    Yea I realized that a few minutes after… its not well done on Schwab, they don’t differentiate between the 2 options clearly… trying to unwind now. 

  202. JRW III

    It’s either 63.75 or 62.95 on IWM; 63.38 direction from this line will give us the close!! I’m betting UP

  203. Phil

    Oh no – it’s ROUBINI!!! Everybody run for cover!  8-)

  204. gmarts

    CNBC:  Here comes Roubini to pee all over everything…… This is so predictable as to become merely pathetic.

  205. shadowfax

    Phil
    I think it is fixable you or your programers need to do a clean up as I did yesterday, XP and windows 7 are working OK for me today, first day this week. It is easy for me as I don’t have anythig I have to save and I suspect you do. Good Luck and again I think the bug came from etrade pro and it may return if they didn’t already catch it.

  206. kustomz

    acro…its about the agenda, citizens being servants and control. Your not allowed  to have an opposing view..I watched a video of the 68 riots in Chicago…the video contained a clip of a military reservist cocking a 50 caliber machine gun and aiming it at the crowd!!! If our Gov thinks they are losing control they will do everything in their power to squash the opposer, including killing its own citizens over a few burnt cars and broken windows.

    Obama puts a friendly face on Government when in reality they lie, cheat, steal and murder to retain/gain control of what ever situation they deem justifiable. WMD’s? None under here, wait maybe over there..nope none there…just watch the pompous ass’s in the crowd laugh..this is the United States of America….shamefull…brave men and women and innocents died…for what…so these POS can get a laugh at a $1000 a plate dinner? They are all the same and arguing about who has best served us keeps them in power longer…we need to wake up!!
    http://www.youtube.com/watch?v=f_tFKa2_YBQ&feature=related

  207. tuscadog

    Phil , JRW   /   RUT    Why is RUT down when S&P is well up?

  208. Cap

    Robots not paying Roubini any mind…

  209. exec

    Tusca,
     
    I’m no expert, but I’ve noticed that the RUT usually leads the S&P and DOW.  In fact, I was contemplating buying some DXD with the expectation that the DOW might dip tomorrow.
     
    JR.  What’s your view on this?

  210. 1020

    Cap – I won’t take the time to look for prior BHO comments…. btw, do you get many of those black birds flying into your home like on the Windex commercials?  :)

  211. shadowfax

    cap
           You suffer selective perseption syndrom!

  212. JRW III

    exec

    Just remember the Russell is less GLOBAL than the others.

  213. Phil

    TOS/QC – LOL!  I hope they fill that fast…

    Roubini is just not convincing me to sell. 

    SKX/Jvest – Not until we understand WHY they are selling off.  There’s no news supporting this move so it’s hard to take seriously at the moment.  Very low volume day (Jewish holiday).  The SKX play was the Jan $22.50/28 bull call spread at $3.20,  selling the $22.50 puts for $1.90, which was net to $1.30 with 323% upside at $28 and a put-to price of $23.80 but above the $22.50 calls, the b/e on the play is $23.15 so a drop to our b/e is concerning but not devastating.  This is, however a nice chance for others to take advantage and sell the Jan $22.50 puts for $3 for a net $19.50 entry.

  214. ben1be

     Phil,
    Last month you discussed raising membership fees. You said you would probably design a reduced fee for members who chose not to post because dealing with the posts was the time killer for you.
    What about a graduated fee, like a tax, for people that post obsessively. It seems unfair that we all pay the same fee, when most of us (even real contributors like JRW or Chaps can get their business done in 6 or less posts a day) while others use the board as a form of public psychotherapy.
    How about everyone gets six posts a day (9:30 to 4:00), then after that they pay $25 extra for each post. That way people that post a lot pay a lot, people who don`t post a lot pay less. You waste less time on the obsessions and have more time for the market.
    Thanks

  215. jthoma

    Phil- thanks on the PCLN clarification- I have been scratching my head thinking myself dumber than normal!

  216. rainman

    rocky mt oysters — only thing those are good for is to hang them out on the gate at the end of my drive. Works better than a no trespassing sign!
     
    Yodi/halfs — I think you were asking me about the half hour sticks last week. Check out the half hours today on the IWM.

  217. exec

    Ben/Posts:  No more posting for me.

  218. morxlntway

    Phil – EOG trade from yesterday looks doable today. Are you still happy with it? (Apr 85/100, selling the 80s)

  219. jasu1

    David Ristau:
    Any new info on NSM; just saw it tank again….
    Thanks

  220. tuscadog

    Phil / stick    Does this finish make you more bullish about tomorrow?  Seems the bots have total control with no volume?

  221. Cap

    guy on TV (economist) citing Recovery.gov says 4 of 5 jobs from stimulus were gov’t jobs.
    gov’t spending to grow the gov’t..
     
    even Maria B is on to it … "a lot of the spending benefits union jobs and thats who he wants to vote for him.

  222. yodi

    ben1be
    If we cut out all the politics and as you call it public psychotherapy, we would reduce the usage of the site by 50%.
     
    Any one wanting to carry on after ours is welcome to do the washing!

  223. Pharmboy

    So, been away for meetings, and wow, wow, wow, wow…oh, and wow.  Politics – don’t look back...

     

    Nuts – gotta love Rocky Mountain Oysters….(not).

     

    TUSC/Phil – was a reply to tusc.

     

    ARNA – holding the line.  Get Ready!

  224. Pharmboy

    IMGN – if one missed the initial entry…now is a good time to get in at 5.46, selling the Jan11 $6 P/C for 1.80 or better….

  225. Cap

    You go Maria !  You go girl …. too much class warfare … want the Prez to represent everyone; not just one group.

  226. Cap

    Is AAPL signalling $260 for Friday weekly options ?

  227. yodi

    Just sold DB 55put for 1.60

  228. Phil

    Better than retail/Jvest – Absolutely!

    V/Newbie – I like them at $55, a little wishy/washy at $65.  I have been wondering how thye have been holding up so well considering FinReg is going to be eating into their profits and then I assumed at some point the banks would turn around and demand better splits on the fees but they just kept holding up since the April drop so I’ve stayed away.  I still feel that way.  Now if you REALLY want to cut costs on V, I would suggest the stock at $66.66, selling the 2012 $60s for $17.50 and the $50 puts for $4.60 for net $44.56/47.28 and you still have $15.44 upside (34%) at $60.  If they do well you can always roll the putter and caller up to higher strike combos to give yourself more headroom but, short-term, you lock in the low entry.

    Synthetics/Amatta – Count on being assigned 8,000 shares of C at net $2.70 or whatever it works out to.  If you stay conservative like that in your allocations since, realistically, not everyone will go BK on you and cost you the whole amount – you’ll always have some cash on the side to grab shorter-term fun plays like the SKX short puts when an opportunity comes up. 

    SKX/Dbara – It’s a fine plan but better to understand what happened first.  Did something fundamentally terrible happen to retail or is a fund liquidating retai positions (and, if so, do they know something?).  The speead is still $2.15, down from $3.20 but it’s the puts that look scary as they are up to $3 from $1.90 but keep in mind that’s all premium because SKX is NOT below $22.50.  If I’m going to spend money to press a drop, I’d rather spend it on rolling the calls to a better strike than giving $1.50 to a hopelessly out of the money caller.  $1.50 can roll you to the $20s (not really worth the risk for +$1) but I’d be more likely to want to roll the calls (not the caller we sold) out to the Apr $20s at $5.85 (+$2.25) and roll the $22.50 puts out to the Apr $20 puts for .30 so that would be spending $2.55 to move to the Apr $20/Jan $28 spread at net $3.85 that’s just out of the money with $4 of upside and, of course, the obligation of the short puts at $20 for net $23.85/21.92 on the trade.  As long as you can plan a comfortable escape – there is no need to panic, right?

    Power Broker/Cap – A good book but, as someone said about Moses "At least he got it built!" I wouldn’t mind if the do-nothing party had some actual solutions other then putting their heads in the sands and pretending there is no problem in the first place. 

    TBT/Jbur – Cross hard! 

    Personalizing/Cap – Did the rabbi also mention "Let he who is without sin cast the first stone?8-)

    Wow, I’m so behind today, only up to 2:30!!  Oh well, dull day on low volume but up is up

    RUT a bit disappointing but got back to 634+

  229. kururi67

    Sold some SKX Apr 15 puts for $1.10

  230. jomama

     Wow, that was a powerful downgrade from sesquanah regarding SKX.  I bought back 28 SKX Caller per our earlier spread.  There should be some juicy premiums closer to earnings which is after OCT expirations.  Sold OCT 22.5 Puts which are in addition to the OCT 27 puts.  You think i would have learned my lesson after CROX, but i see sketchers everywhere – in the hospital, at lego land, all of my kid’s friends, etc.

  231. Cap

    Fed’s Bullard on Boob Tube w/ Maria now

  232. Cap

    Casting Stones …. nope.
     
    It was more geared to stuff like this:  "I wouldn’t mind if the do-nothing party had some actual solutions other then putting their heads in the sands and pretending there is no problem in the first place. "
    See, you disagree with the other party, so to you, you dimimish them w/ name calling "do nothing party" "putting their heads in the sand" "pretending there is no problem".
     
    This is an argument that is not based on the merits … not the merits of your argument; nor the merits of those you disagree with.
     
    Which party are you talking about anyway ?   :wink:

  233. jromeha

    Wow, NSM getting destroyed, do you like them at 12.20 Phil?

  234. ben1be

      Phil,

    On the pay for post plan:
    Exec managed  14 posts today = $200
    Cap managed 18 in three hours = $300
    I`m sure they can afford it, but $300/day is $9k/ month.
    That`s more than they`d pay if the tax cuts expire.
    Or you could rebate the money to us poor folk. Or we could donate it to Revtodd`s shelter.

  235. yodi

    ben1be
    It would be much more interesting if you would count the post which are trade related. I think that is what this site is for

  236. datuu

    Phil,
    I read you are tired of YUM--i have a question on this partly to clarify my thinking and make sure i am not missing anything--YUM stock at $43.85--buy the 35/50 2012 bull call spread for $7.83 (you are $8.85 ITM)--sell the 40 2012 puts for $4.70 so you are net $3.13--you are +297% on cash if it holds where it is, +469% on cash if its called away at $50--worst case its put to you at $35.30 and your are net into the stock at $38.43 which is still a discount of 12% from today’s price and they have great growth in china
    thanks

  237. ekor

    Cap, 13 posts in 1 hour, & you’re all over the place.  Taking one side, critizing Phil for taking the other, & "the Prez"
    "BHO" for not taking both sides !  Get real.  what shadow said 3:27  &  ben1be 3:29

  238. matt1966

    JRW, thanks for that!  It’s interesting that Elliott wave starting in April has the same shape as the one at the end of 2007.. and that was a doozey!  Not sure I understand the numbers (1 & 2) but that’s ok.  From what I’ve been hearing we’re supposed to be in the 3rd wave of the 3rd wave or whatever the hell that is supposed to mean.  But there is just no question we are in a downtrend with no impetus for up in the near future.  I think we will blow through July’s lows before the election.  Afterwards, assuming the Rs take back at least the House.. I’m not so sure. 

  239. jromeha

    Yodi – on slow trading days its fun to deviate from only trade talk….Even if it just turns into Cap & Gel rehashing their tired conservative points…

  240. shadowfax

    cap
    If you have no idea who Phil is talking about you should buff up before making another comment. Your last post sounds like your head is in the sand! If you say you don’t understand this time, your posts will loose all members interest as it is just bashing as you accuse others.

  241. jromeha

    and patting each other on the back for ‘good points’

  242. pstas

    Pharm- I posted this late yesterday- not sure if you saw it.
    Very interesting charts. Seems to be playing out as suggested- perhaps. Most interested in your comments? Agree/disagree?
    Actionable or just noise?
    http://www.philstockworld.com/2010/09/08/the-long-term-bond-yield-channel-2/

  243. jvest

    I like the idea of pay-per-post…. it might drive Cap bankrupt though.

  244. yodi

    jromeha
    I hate to see a busy day as I got some answers only 2 hours later

  245. shadowfax

    yodi
    Phil’s system is giving him trouble and even on busy days without trouble you must realize he looks up the stock, computes and all that takes time, others help but sometimes nobody ellse has a clue what to say. The politicall rants will continue but nobody is anything but dead serious about trading some agree some disagree but I believe everyone is serious every time.

  246. Cap

    Guys, it would pale in comparison to the value of my posts; so I should get paid per post !
    :wink:

  247. Cap

    pstas … hey, only 50 years to figure that out !

  248. jromeha

    Hahahahah funny man Cap! Repubs definitely have a sense of humor…Guess that’s why you selected your RNC Chairman and ran Palin as a VP! In reality I dont think Cap and others overpost. Ya’ll remember Yip and early on in his mancrush on JRW phase? He was posting 20-30 times many days….

  249. Phil

    Bridge to nowhere/Exec – But at least is was a bridge!  LOL!!!   Sadly, something bad did happen and we didn’t get anything done – our economy is still in tatters and we have clearly lost the ability to manufacture in this country but, if PRIVATE ENTERPRISE (all bow 3 times and wave hands in supplicating circles) decides it’s not efficient to keep high-paying jobs in this country – then it must all be for the best, right?  I wonder where that line gets drawn – they have decided not to make things here and they have decided to stay in this country but not pay anything to support the running of the country (good deal if you can get it) and they have gotten the unfettered right to buy any politician they want so now they can start lowering health and safety standards and air and water quality standards and turn this country into a third-world wasteland but that’s going to be good because the corporations say it is more efficient and more profitable that way. 

    Sorry Exec, this is OUR country and the people (as in We, the people) get together and elect a government to look out for THE PEOPLE’s interests and those interests are NOT the interests of private enterprise or we wouldn’t need governments at all, would we?  It is amazing to me that thousands of years of human progress towards a great democratically elected form of representation is being dismantled and villified right in front of our eyes but because the people doing it control the media and wrap themselves up in a flag – we just let them stomp all over everything this country was built to prevent from happening when the colonies were exploited for the benefit of British merchants. 

    Yes Cap, Obama stating facts is irresponsible.  Better to lie to Americans and treat them like children….

    BAC/Amatta – Yes, it seems to me like you bought the BAC specials, which are only 85 options per contract and have some sort of cash obligatin or something like that, and you sold the regular calls.  I have no idea how to calculate that but I would point out that the special $10s are only $2.10 with BAC at $13.50 so a very significant reduction from expected value due to the restrictions/obligations.

    Comments/Jordan – Programmers looking into it.

    Wow Cap, do you really think that’s some clever way to attack Obama while saying what you wouldn’t say.  I am back to considering moderating your posts as you are once again becoming just generally offensive and you also have the very negative effect of dragging all political conversations into the mud so we go from friendly conversations to unpleasant and bitter disputes.  We get it, you don’t like Obama – anyone clicking on your name and reading any random post on your web site would probably pick up on that too but that doesn’t mean we need to hear the constant mud-slinging you wallow in over here. 

    Look at you – Comment, comment, comment, comment with jokes (funny to you), jabs and insults but  very lacking in actual content.   You show up at 2:15 and congratulate the righties and then you tell us your Rabbi said not to personalize things and at 2:25 you tell Flash he is tasteless.  In the first post you call the FACT of crumbling infrastructure a straw man – not because you have a study or even a reference but "because you say so" as I said to Exec before – if you are determined to call all Government officials "hacks" with "inflated salaries and benefits" and incompetent, again with no facts – then what’s the point of either talking to you or listening to you – you can be replaced entirely by a caricature with a couple of word ballons like "Obama Sucks" "Government sucks" "McCain makes a good point"… 

    2:37 you decide the White House shouldn’t comment on a potential international incident that our army’s general has already stated poses a life-threatening danger to our troops and then you try pre-blame Obama so that if he’s right and your Florida Pastor is wrong, it’s still Obama’s fault, in your not at all humble opinion.  Not content with that, you resort to your typical tactic of making up something that never even happened ("Next thing you know, he’ll blame the tea party. Or someone opposed to the health care bill") now pre-supposing that we’ve already been attacked and that Obama is out lookiing to blame someone for his huge mistake in policy.  It’s a very slick tactic, I’ll give you that but it’s also a despicable one and does nothing to further the debate.  This is not your private fantasy hate-camp where you and your friends can see who can villify people the most if they should dare not to have your myopic world views.

    You were totally annoying for months coming into the last election and I was sick of it then and I’m already sick of it now.  Learn to leave your BS on your own site or I will put a stop to it because even I am sick of politics when it’s the brand you practice. 

    Trouble/Snow – I don’t know why but when I went to look something up, while I was making a comment.  I did what I usually do and went on to a new screen (same computer) and looked something up but suddenly, the thing I was looking for jumped to the window I was commenting in and knocked out the comments.  That never happened before yesterday and I was totally confused until it happened twice – now I’m confused and annoyed. 

    ORCL/Ed – I think you get exercised at the closing price, not the after hours price.  I’m not seeing any great business spending pick-up and they just got a big pop off the HP thing so I’d sell the Sept $24s for .69 and buy the Dec $26s for .66 and see what happens.  If you are lucky, ORCL drops ahead of earnings and you take out the callers for .05 or less and THEN you sell the Oct $26s (now .23) or maybe 1/2 the $25s (now .52) and you can’t lose with no put obligations. 

    RUT/Tusca – I can’t figure out the RUT anymore.  In theory, it should be well-behaved as it’s such a broad index but somehow it seems like it’s being manipulated as a leader either up or down (doesn’t make sense that broad-market premise on small caps would take them from leader to laggard and back several times over).

    Post Tax/Ben – LOL, I like that idea but we don’t generally have a big issue and, as you can see from my comment to Cap, I do get annoyed sometimes…  In general, if someone has a question they have a question and it’s been working fine for 4 years now so I don’t think we need any major changes just yet. 

  250. 1020

    Phil/Cap  Phil, in honor of your well deserved rant:"Kobe, Tell Me How My Ass Tastes" by Shaquille   :)
     

  251. 1020

    My apologies to all for my obvious lack of class…. :)

  252. Cap

    While I apologize for my perhaps too many posts this afternoon, I stand by my opinions; and despite your diatribe above Phil, I don’t believe that I said anything that was remotely offensive. 
    Feel free to disagree with my opinions that you don’t like, but please do so respectfully, as I try to do with yours.  That was the point of the sermon.
    I am too straightforward to resort to whatever was meant by  "slick tactics" and I am confident that nothing I said was "despicable" and I take issue w/ such characterization.  
    Don’t get annoyed; I still luv ya (except for your politics !).  Just say (like you did) "cool it on the political posts."
     
    Jrohema:  As I have said a billion times, I am an independent….but yes, I do have a sense of humor; just sometimes people can’t tell when I am displaying it !  I didn’t pick Palin, McCain did, but I support her right to have been elected governor and to run for VP.  I didn’t pick McCain either; thought he was a terrible choice to run.
     
    But then again, I am anti-most politicians these days.
     
    I did go to an interesting event this week where the speaker was former AG Mike Mukasey.  That was very interesting and informative.   I won’t rehash here b/c it will get Phil even more upset.

  253. Cap

    And what 1020 said !   :wink:

  254. Pharmboy

    Bonds/TBF – pstas – apologies, I did see it, but forgot to comment yesterday as I was side tracked with ARNA data.  From my limited knowledge, the bond traders use the 20 yr to leverage the 30 yr notes.  The fed did not sell the 30 yr notes for a while, and have now resumed.  My bond expert thinks the 30s will hit 3.5%, which means the 10s should hit 2.2 or lower.  TBT, TBF, etc, are all 20 yr shorts….

     

    Bond yields are going down in that trend, so playing for an up trend on a short term trade may be worth it (buy a few short term Ps on TLT, although TLT has hit support 1.  I may actually go long here for a 1/4 entry, and DD at 98 where the next line of support is.  bonds, Bonds, BONDS…..and BIOTECH!!!!

  255. Phil

    EOG/Morx – Yes, nothing changed other than poor reaction to inventory report. 

    Stick/Tusca – A stick that fails to retake 635 on the RUT or $263 on AAPL is not really positive – possibly desperate as they both fell just short.  Volume ended up at 163M, which is normal for a program trading day, just a little light. 

    SKX/Jo – They were only downgraded to neutral from buy! 

    Based on conversations with retailers and SportScan POS [point-of-sale] data, we have concerns over sluggish volume trends, and more recently the significant increase in Shape-ups discounting unfolding over Labor Day weekend," Susquehanna said in its research note.

    The stock finished down 12.6% at $23.02. Volume of 9.4 million was more than four times the issue’s trailing three-month daily average of 1.9 million. At current levels, the shares are down nearly 50% since hitting a 52-week high of $44.90 on June 21.

    Susquehanna is still confident in its estimate for a profit of $1.15 a share in the company’s current fiscal third quarter ending this month, but it believes the fourth quarter and beyond could be challenging.

    "[W]e suspect there is some risk to 4Q and FY11 sales and earnings (we are meaningfully below consensus on both)," the firm said. "We feel that it will be difficult for Skechers to grow the category in the U.S. during 1H11 given recent volume trends, retailers need to discount product (pricing integrity) and [there are] difficult comparisons from March through May."

    The current average estimate of analysts polled by Thomson Reuters is for earnings of $1.17 a share in the September quarter. For the fourth quarter of fiscal 2010 and the whole of fiscal 2011, Susquehanna is projecting earnings of 53 cents a share and $3.32 a share, respectively. The current prevailing estimates on Wall Street are for earnings of 68 cents a share in the December quarter, and $4.24 a share for fiscal 2011.

    In its note, Susquehanna said it thinks a recent 20%-off sale on the Shape-ups that ended on August 4 may not have been as strong as initially expected, and expressed consternation about the company’s decision to go to a minimum advertised pricing, or MAP, policy for toning/fitness products for its retail partners at the end of August, rather than sticking with a minimum allowed retail price, or MARP, policy.

    "The MAP policy sets a minimum price to be used in all advertising for toning product," the firm said. "That said, retailers are allowed to sell the products at lower prices in-store."

    Sam Poser of Stern Agee & Leach, which makes a market in Skechers’ stock, took a different view of the Shape-ups discounting in a phone interview with TheStreet, saying he thinks what the company is doing reflects a "well-planned" approach to managing the transition away from first-generation Shape-ups.

    "There’s so much new product coming," Poser said, citing the company’s XF Accellerator and SR Trainer models. "They are doing what they have to do to work inventory down to the right amount."

    Poser, who has a buy rating on Skechers with a price target of $52, also noted the hot summer may have played a part in a slowdown in unit volume, and says he doesn’t view discounts of in the range of 12%-25% as significant for the first-generation product given where they are at in the cycle. He added that Shape-ups aren’t for kids so they can’t be expected to see a bump from back-to-school season.

    You know what – even at $3.32 a share (25% below avg estimates) I still like a stock at $23 with a p/e of 7!  A lot of analysts don’t "get" retail, I have a feeling the girl from Susqehanna is one of them…

    As to the lesson of CROX – it was really buy 1,000 at $20, DD at $10 (2,000 @ $15), DD at $4 (4,000 @ $9.50) triple that at $1 (12,000 @ $3.83) and then cash out at $8 for a $50,000 profit – the VERY HARD WAY!

    NSM/Jrom – I like but do not love them.  Certainly like INTC better.  Don’t forget NSM was a save play yesterday from someones existing position.  While I thought they are attractive to pick up hedged – why would you buy NSM if you don’t already have INTC and WFR? 

    Payments/Ben – Hey I’m sold!  How many is that for you on the subject?  8-)

    YUM/Datuu – They are very China growth focused so big risk on China’s economy (not that that’s bad but an unknown risk) and also trading way higher than ’08 highs while others are far cheaper.  Your math is fine until the put-to price.  You sold the $40 puts so you get the stock put to you at $40 so that’s your basis PLUS the $3.13 cash you put up so $43.13 but you do have the $35 caller so your break-even is $39.07 (the average of the two) BUT if you fall below $35, all the way to zero, your cost of entry returns to $43.13.

     Busy/Yodi – That wasn’t about being busy, just that I lost over an hour’s worth of answers during the day.

  256. ben1be

     Phil,
    Two posts. If I get fined $25, the dog and  I  don`t eat this week.

  257. jromeha

    Phil – non poli question, NSM, you like them down here?

  258. jromeha

    Oops, didnt see this past post

  259. datuu

    Thanks Phil--i really appreciate the help

  260. yodi

    Phil,
    I am not here to critizise your web site. You as always have my admiration for the way you analyse all questions put to you. It is just as one is looking for an answer one has to pile through a mountain of political chit chat. I as well understand as one of our members says, on a boring day one has to do something to pass the time.
    But I still feel the political parts to answer will take a lot of you normal valuable time to study positions and as well avoid from making mistakes. In the end it is your site and you are the one who has the final say.
    The value of this site is non replaceble and I surely appreciate it. Thank you

  261. Cap

    Some amazing runs (perhaps ridiculous runs):
     
    AMZN  122.50 on Aug 31;  over 141.00 today   (and 96 after it reported what supposedly were disappointing earnings).
    PCLN 287.80 on Aug 31; over 334 earlier today
    NFLX 121.81 on Aug 31; almost 150 today
    AAPL  237.20 on Aug 25;  $265 earlier today
     
    To me, these type of moves suggest a market in trouble that could break down big at any moment.
     
    Just once, I would like stocks that I own to have these type of moves !  (I do own a little AAPL – but hedged).

  262. Pharmboy

    Cap – AMEN….although if you bought ARNA (maybe you did)…you would have went from 2.90 to 7.15!!!!  CRIS baby, CRIS.  I have a good feeling about this one….

  263. boobearsdad

    I have a question on position management.
    There was a conversation recently about early exercise of options, which does indeed happen.  But I’m curious about the other side of it.  Is there ever a benefit of "self-assignment" of short puts (i.e., buying back the put and buying the shares) if the premium is exhausted and there’s little benefit in a roll (not much extra premium in the later-expiring options)?
    Case in point: I’m short October PBI 25 puts at the moment — part of a buy/write that didn’t turn out as well as I’d hoped.  Their premium is effectively exhausted, the stock is beaten-down, and they pay a very nice dividend, so would there be any value in swapping the puts for shares (effectively assigning the shares to myself)?
    I could roll the Octobers out to April for .80, but the dividend in that time would be .73, and taking on the shares would also allow me to sell calls (e.g., the January 23s for .35) along the way and continue to whittle down the cost basis.  So this seems like the right move.
    Wisdom appreciated, as always.

  264. jromeha

    Cap – please enlighten me as to what issues you are more ‘independent’ on? Gay rights? Abortion? Gun control? legalization of drugs? PLEASE, tell me how you are independent? I dont care what you classify yourself as, I want to know what is your stance on various issues where you would have the opportunity to show your ‘independence’

  265. rn273

    Pharm – you are buying CRIS?

  266. Cap

    jrohema … I am not a Dem and not a Repub, I am an independent.  I will vote not according to party lines or litmus test issues, but I will vote for a candidate who I think is deserving of my vote and is most consistent with my views or outlook.
    I don’t vote for candidates b/c they are pro marriage or anti gay marriage; or if they are pro life or pro choice.  Now it is unlikely that I will support candidates that run on a platform of wanting to legalize drugs (you should have seen all the ads in the local papers in Colorado for marijuana dispensaries) but it is possible.  I would vote for a cross dressing gun toting gay transvestite if I thought that person was best suited for the office he/she was running for.
    Why do those issues you identify show "independence" ?  What makes being for or against any of those "independent" in your view.
    I have some core issues that I view as important that ought to be well known to you by now (strong defense, pro freedom, cut deficits, lower taxes, rein in spending and government).  Most pols are squishy on some of these issues so I choose those who I believe have core values; and are true to them; and are not phony.  Sadly, voting for almost any politician these days is an excercise in holding your nose.  I tend not to favor big spending, big government, nanny state types; or grievance mongers.
    But I don’t vote on any party line; and I would have no problem voting for a third party candidate if I thought it made sense to do so.  I also don’t give money to politicians.
    Are you suitably enlightened now ?

  267. Cap

    Pharm; I do need to follow some of your picks more closely.  What is the 50-word story on CRIS ?

  268. yodi

    boobearsdad
    PBI
    This is one of the stranges sugestion I have seen. You must be in love with the company.
    I would positively let the putter run its corse if you like the company that much. but possible roll to a lower 20 putter to get still some money out of the original putter. You do not indicate what you received. Adding stock I would set up a new buy write where you let the caller pay part of the buying of the stock Sell the Apr 20 call for 1.40 here you have already a discount of 1.40 and selling or rolling the old putter to April will give you another 2.10 minus the cost of the rolling. 
    It looks like the lowest point of this stk was march 6 2009 at 18.02 now being 19.90 does not say much about improvment. They never managed more than break the 25$ ceiling. So you must love the stock good luck

  269. rn273

    Cap – 50 words? you mean you just want the entry, exit point and timeframe on CRIS? :P

  270. Cap

    rn273; the Cliff Notes version …  I don’t need more than that to "get it".

  271. barfinger

     The political stuff is better suited for a live chat. Can this site support that in addition to the regular business? I would be happier to switch between them than to have it all mixed up here. It will come as no surprise to Phil that I disagree with his solutions at the same time I agree with most of his problem descriptions.
    I do not believe you can address the problems of the regular people by punishing the top 5% (and yes, I know, the top 0.1% is always used as the whipping boy for the argument) but its the top 5% Obama is after. I’m going to be that less than 15% of the top 5% voted for him. Lots of money, lots of opponents. Good target for a dem.
     
    All I really have to say, ever, is that taxes are one thing, and what the money does when the government takes it – that’
    s another.
     
    Flat Tax anyone?

  272. rn273

    MMYT/Hanna & Phil – It is a trifle overpriced now, but has an excellent future. I would wait for a significant claw back in the Indian markets – should happen sooner than later, and then get in around the $18-$20 range. A good way might be to wait till options come out. Many people look at it as the Priceline of India – however, a large component of Indians still use human travel agents (not just companies, even individuals); and most hotels are not on the online radar yet. It will boom as internet penetration increases, but seems too high now.

  273. rn273

    Cap – yes, it was a joke :)

  274. boobearsdad

    yodi,
    Thanks for the response.
    I’m definitely not in love with the stock, but I am trying to see if there’s a way to salvage what turned out to be a lousy position — was looking fine until the 20% drop after their last earnings report, but now here we are still 20% down from 25 at 19.90.  My net on the shares (including commissions and fees) is now 21.38/23.26.
    Since I see an essentially 100% chance of being assigned next month, I figure I’ll have to deal with it at some point.  Being fairly new to all of this, I’m trying to think of all the ways to work on the position; the idea of buying the shares (to allow me to begin selling calls against them a month earlier, if I decided that I was going to accept assignment anyway) struck me as a possibility, so I thought someone here might either be able to talk me into it or out of it (quite likely "out of it").
    It’s clearly not a growth stock, but they do pay a 7% dividend, so the position seems salvageable with patience.  (Or I may want to kill the whole thing and eat the loss, but I’m looking for the ways to fix it first, then I’ll decide if I can do better by moving on to something else.)
    Rolling out to April 20 puts puts me at net ~24.66/22.41, so that’s an .85 improvement over six months.  But I can do better by April by taking the shares (now or at October expiration), taking the .73 dividend, and selling April 22 calls for .60 (net 21.94 at April expiration, essentially break-even if called).
    Lots to think about.  Thanks for the ideas.

  275. jgwilson929

     Thanks Phil on EAT.  Wish I had asked you about MCD on Tues. where I could have taken adv. of dividend.  

  276. snow

    Drugs/ Cap – as a radical rather than an independent, maybe I can persuade you to change your thinking on illegal vices. In my public health practitioner mode, I can tell you confidently that it is much easier to care for people with health problems of any sort if the cause of the problem is legal. So my stance on ‘drugs’ is make ‘em all legal! Take a look at Vancouver
    http://www.usatoday.com/sports/olympics/vancouver/2010-02-15-vancouver-safe-house-drugs_N.htm
    that’s workable and saves lives. Sure, you’ll have people who kill themselves with drugs, just as with alcohol. But you have a better chance of being able to help them, and keep them from getting blood-borne diseases in the meanwhile. And while we’re at it, prostitution should also be legal. No silly business with certificates or anything else that will encourage a black market, but let’s do a decent job with health reform (preferably European model single-payer – you see why I’m a radical?) and the women will be able to get their health taken care of without getting "pre-existing conditioned" to death.
    Now granted, all the current operators of these businesses will be unhappy, and I don’t have a solution for that – job retraining, perhaps? Rebuilding our broken infrastructure? Anyway, there you are.
    - also, full disclosure – my great-grandmother ran a bar in the Broad Ripple district of Indianapolis all the way through Prohibition. She did get jailed three times, overnight, but that was for marching for the vote.

  277. Cap

    Drugs / Snow; I’ll leave that for another day.
     
    Everyone w/ cable … tune in to the History channel now; and for the next 2 1/2 hours.

  278. yodi

    boobearsdad
    Coming back to your PBI.
    You talk about a buy write so I do understand you hold shares right?
    These shares will produce div. it looks like a regular div of .36 per quarter. At your last buy right you will be stuck with the OCT 25 putter. Now you look at april where you automatically roll the putter to a 22 Apr put gives you 3.40 minus the difference of what you received for the 25 Oct put, which I do not know. But rolling and rolling the putter keeps you out of being assigned. If the stk has not come up to 22 by April you can start rolling the putter again. You can with your first roll be otimistic or pessimistic. You can even take on the April 25 putter again. It does not cost you any extra margin but the stk could come out of the woods as it was already 24.98 in JUL 10, only 3 month ago
    So this way you do not worry about assignment. At the same time you sell the April caller. You seldom get much premium on stk which pays resonable div. So you say you in the stk at 23.26 the 23 caller pays only .40. But you will not be called away below 23 and you can always receive div on the stock. Sometimes one buys a lower putter to stop the bleeding. But looking at the April lower putters even the 17 putter demands still a hefty .90 indicating that not to many people have great confidence in the stk. That is about all I can say to it possible Phil could put his magic stick over it. But not all one picks are winners. good luck  

  279. jromeha

    No CAP, I’m not. Why did I pick the social issues you ask…. Hmmm …. Maybe because it’s obvious you are not an ‘independent’ when it comes to economic issues so I thought maybe you had some social issues that you were more liberal on. Call yourself what you want but you’re FAR right when it comes to your postings on here.

  280. boobearsdad

    yodi,
    Thanks for taking the time to respond.  I appreciate it.

  281. yodi

    you welcome, hope I could help

  282. ed3524

    Phil,
    thank you for response

  283. ekor

    Cap,  I don’t like paying for our super-sized, wasteful  "defense" budget.  Especially for the way Bush ran it : "he tried to kill my Dad",   &  Dick wants their oil  http://www.zerohedge.com/article/dick-cheneys-oily-dream  .
      So you pay my Bully the World  taxes,  & I’ll pay your Build America  taxes.   :)

  284. pstas

    Peter/Chaps/Stranglers- I have been unloading Oct putters with the Vix drop anticipating opportunity to reload in a pull back off this recent uptick.
    Anyone else looking at the same scenario?

  285. ed3524

    boobersdad,

    if your short put has no premiums, you are risking to be assigned stock after ex-dividend date, especially if the dividend is large. So be careful, sometimes it makes sense to buy the stock, and close the put to get the dividend, and after that you may sell call, or again sell stock,  and a put. I may be wrong, wait for Phil’s response.

  286. boobearsdad

    ed3524,
    There are no dividends left between here and expiration, so I figure that I’m in danger of assignment any day, which is why I was thinking about just self-assigning.  Thanks!

  287. Pharmboy

    CRIS – in bed with Genetech (b’f Roche) with a hedgehog inhibitor for cancer (cancer docs are VERY high on this pathway).  20 clinical trials ongoing for many different types.  They were beaten down b’c they failed in one trail (very hard cancer to defeat) and they are waiting for others to come along.  ONE hint of working, they are at $3.  One other, they are bought.  Here is a good, concise writeup on them.

     

    rn – I am already in them. I have DD once from 1.7.  I will again soon.

  288. z401

    PHIL
    Is your step dad improving? I hope so.

  289. yodi

    boobearsdad
    To follow up on yesterday, I wish to comment that you should not to greatly panic about puts. Principle you only sell a put if you wish to buy a stock cheaper. I give you some examples with puts. DB dropped yesterday considerable for a German bank stock. I sold the Oct 55p for 1.60 lets see what happens.
    RIMM a typical example not for every once play. It has been all over the map. I sold the Jan 11 Strangle 90/55 call for 4.16 and put for 6.54 Rimm dropped like a rock to 45.00. The put went up to 11.72. I sold the caller cashing 4.00.
    The putter has still 4 month life. At 11.72 the putter has still 1.72 of premium. So wait and see is my policy. That is the most important part do not panic. As long as if there are still .20 of premium few people will buy so I keep an eye on it possible until Dec. On the other hand if you would be worrying you take that putter and roll it to say Mar 50 if you have any hope they survive. Out of my pocket I have to pay for the roll 3.00. That 3.00 comes out of my cash of 6.54 I already received. So I left with 3.54 plus the caller 4.00 and my new putter has a value of 8.75. I obvious can go to 47.5 or even 45 Mar putter without losing money. I do not have the stk. The secret here is plain calm and wait. I hope this helps you.

  290. pstas

    Pharm – follow up on the earlier bond question- re: you comment on support-
    although TLT has hit support 1.  I may actually go long here for a 1/4 entry, and DD at 98 where the next line of support is.
    Are these TOS chart support lines? If so, what study are you using. Looking to follow along here.
    Thx.

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