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Thrill-Ride Thursday – Can the Dollar Drop Fast Enough to Keep the Markets Up?

Wheeee – this is fun!

The dollar dropped to 76.5 this morning and that gave us a nice pop in the futures which is fading now (8am) as we move towards our 8:30 Trade Report along with the PPI and, of course, the usual 450,000 weekly pink slips handed out to the few remaining US workers (135M and dropping almost as fast as the value of the dollar).  

As you can see from Pharmboy’s excellent chart, our market "rally" is ALL about the declining dollar.  We are not used to inflation in this country – it hasn’t been much of an issue for the past generation but that’s what we’re seeing here as we are experiencing lower wages, lower demand and flat prices – THAT IS INFLATION or, as we used to say in the 70s – STAGFLATION.  A stagnant (or declining) economy plus inflation is a disaster for the people, even while it may be a boon for Big Business as they squeeze whatever dollars are left from the pockets of the consumers while paying their workforce less and, through the benefit of worthless currency, cleaning up on foreign sales as it’s much easier to sell an IPhone at $199 when $199 was 167 Euros in May and is 142 Euros in October – a nice 15% discount (for foreign buyers) heading into the holidays!  

Since AAPL makes their IPhones in China – using the remaining FoxConn employees who haven’t killed themselves to escape their torturous working conditions (one improvement that’s been made is they now have bars on the windows to stop the workers from escaping by leaping to their deaths) and, since China’s currency is pegged to ours, their production costs stay flat and net profits (when priced in dollars) look pretty good.  

In fact, I had been getting bearish because I thought corporate profits weren’t going to be so good this quarter, what with the lack of sales and all, but I was wrong.  I was wrong because corporate profits are priced in dollars and dollars are worth 10% less than they were the last time corporations reported.  

So silly me – all profits are inflated by 10% and that 10% is the E that gets divided from the P and gives us a much better price/multiple to hang our hats on and that gets investors to BUYBUYBUY and, as I said yesterday – they may as well because Lord knows it’s utter foolishness to leave your money in a bank and just watch it lose 2.5% of its buying power EVERY MONTH.

Isn’t the declining dollar good for exports?  That’s what they keep telling us, isn’t it?  Well, it’s not.  What do you think – that AAPL is making IPhones in China and then shipping them to Cupertino and then shipping them back to Hong Kong and Tokyo to sell?  No, that would be silly.  AAPL is a big multi-national corporation that has an office in Cupertino but manufactures almost everything overseas.  

And why wouldn’t they?  Despite a 20% pay raise at FoxConn (and it’s nice to have a 3rd party employ 100,000 workers for you so you can still claim your 34,000 person work-force is mainly American) Apple’s labor cost of producing an IPad only rose from 2.3% to 3% but that’s in Yuan, which have declined 12.5% with the dollar since May so even-Steven for AAPL! 

Oh yes, exports (sorry, I went off track):  So, exports were up just 0.2% as the dollar crashed.  Why?  Because we don’t make anything here – there’s nothing to export.  As Michael Snyder points out in his excellent "24 Statistics about the US Economy that are Almost too Embarrassing to Admit," despite inventing the television in 1927 (Philo Farnsworth for you trivia buffs), NOT ONE (ZERO) of the 211 MILLION televisions sold in the World in 2009 was made in America.  In fact, overall manufacturing is down 60% in the past 40 years and the US has lost over 30M factory jobs since Al Gore lost his.  

Only 12M Americans, not even 10% of our workforce, now work in Manufacturing so EVEN IF a 10% decline in the dollar boosted manufacturing by 10% and EVEN IF making 10% more stuff got US Corporations to hire 10% more staff – that would add just 1.2M workers.  That’s not very likely when FoxConn is happy to ramp up with workers who make less money per day than a US worker pays for lunch at a roach coach…

IMPORTS, on the other hand, were up 2.1% to $200.2Bn.  That is a net deficit of $46.4Bn or a pace of well over $500Bn a year that we ship overseas.  Adding insult to injury, we bought a lot less stuff this month – we just got charged more for it as our dollar depreciated.  Getting less for more is something the middle class has gotten used to this decade and, as we’ve pointed out before – food inflation does not even take into account the shrinking size of almost everything you buy at the grocery store, yet another way we get less for more as our economy collapses in stealth mode.  

Well, not entirely stealthy as 462,000 pink slips were handed out last week to US workers which was 20,000 more than expected so that’s knocking our futures back down a bit, as is the 0.4% increase in September Producers’ Prices (what inflation, right) which is 300% more than the 0.1% predicted by the same idiots who tell us how great the economy is and how we shouldn’t worry about inflation and how Quantitative Easing is a clever policy… 

I will say this again.  Devaluing the dollar by 12.5% costs US Citizens $3.75Tn of their Dollar-denominated assets in the past 5 months and even if we did hire 1.2M factory workers because it boosted exports (it didn’t and we didn’t), that would still be costing us over $3M per job!  That’s a pretty hefty cost to pay to make sure the government doesn’t waste any money on additional stimulus, isn’t it?  

The top 1% don’t care because they are hedging with commodities but the bottom 99% are getting raped repeatedly at the rate of 2.5% of their wealth removed each month, just to maintain unemployment at the current crisis levels.  This is, as the Joker and I mentioned on Monday, a horrifying plan!  

We are trying to get bullish, truly we are and I did send out three new high-return bullish trade ideas in yesterday’s morning Alert to Members but the one I liked best was the bearish play on the Russell, using TZA in a spread that pays 1,000% if we get back to our September lows.  I am trying and trying and trying to get into party mode but I just cannot get my brain to switch off so I’ll be hitting the bars this weekend and seeing if I can get my judgment impaired enough to join in with all my bullish media colleagues.

"I am not judged by the number of times I fail, but by the number of times I succeed: and the number of times I succeed is in direct proportion to the number of times I fail and keep trying." – Tom Hopkins

 


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  1. Maya1

    Phil
    Thinking of a quick play on Yahoo before Oct options expirations to take advantage of this news on them(private equity firms approaching News Corp and AOL to buy Yahoo)
    Sell some calls?

  2. ravalos

    Phil, there’s a rumor of talks between China and US where China might agree to some Yuan appreciation in exchange for the US to hold off on QE2. This, if true, would be huge. After knowing that China continues to increase their reserves by buying more US Treasuries, I think it makes sense they are pursuing this.

  3. ben1be

     Charts today:

    SONC…FCX…SYMC…EBIX
     
    also pictures of the REAL Ben
     
    http://ben1be.tumblr.com/

  4. amatta

    Phil,
    I still have 25 oct 23 DXD puts from the old hedge (I closed the spread a while back). What do u recommend now that they have gone in the money w only 2 day left?
    Thx

  5. kimisk

    Phil — I am still in the UUP Nov 23 calls that you mentioned a bit ago, at 0.20. They’re now at 0.13. (I probably should have bailed earlier… but my sell discipline is lousy.) Would you suggest that I roll them, or hang on? I guess this cuts to the crux of the weakening dollar discussion. Many thanks.

  6. ben1be

     Phil,
    Hyperinflation on its way?
    http://pointsandfigures.com/2010/10/13/inflation-commodity-bull-this-rally-aint-over-yet/

  7. rn273

    What do the weekly unemployment numbers mean? That we had 462000 people who lost jobs the past week? So this does not include any job creation (ie, if we also had 462000 people getting jobs, would the number still be 462000 or 0)?

  8. willsons

     Ben1be     Nice site and charts!

  9. Savi

    Phil--weird day for me yesterday--did everything upside down and inside out
    I meant BAC not BA(I wish) 1000 at $16.80--should I move to C or XLF?
    Tx

  10. Pharmboy

    Private Equity Thrives Again, but Dark Shadows Loom – didn’t we just go through this a few years ago??

     

    Takeaway from the article…SK Capital buys nylon manufacturer last year….now, The nylon manufacturer has announced plans to issue about $1 billion in debt, of which $922 million will be used to pay a dividend to SK. For SK, which paid $50 million in cash for the business, that is an astonishing almost 18-fold return in a little more than a year.

  11. alik

    Hi Phil, you are not quite correct. Specialty chemicals sector still produces in USA, and does not move jobs elsewhere. This fact is reflected in the recent stock price dynamics of these companies.

  12. pstas

    the US has lost over 30M factory jobs since Al Gore lost his
     
    Well, at least something good came out or it.

  13. pstas

    CQP- Pharm- you mentioned them in a post last night. I like there MLP’s- any background you can share on this one?

  14. doubled

    Phil,
    I am shut out of my premium account so I can’t see your posts.  Can you please ask someone there to look into my status.  I had to change a CC number due to a replacement and that may be the problem but I just updated it in MY ACCOUNT.  However, I would really like to read your posts this AM
    Thanks
    DD

  15. Pharmboy

    CQP/pstas – don’t know anything about them.  Just through them up for an idea.  I will have to dig in a bit to see ‘who’ they are.

  16. matt1966

    Good job PPT.  You f-heads.  Leave the market alone!!!

  17. pstas

    Kimisk- UUP- I am in these also but got in a bit better @ $.18. Still a disappointment as I expected a pop in the $ short term which we may still get so I am going to hang on a bit to see what happens. My read is that the USD will continue to weaken but may have fallen a bit to fast . Also awaiting Phil’s comment.

  18. Pharmboy

    Matt – not just the PPT, but Japan as well….unless you consider them one in the same.

  19. fortep

     Kimisk/pstas/UUP:  originally Phil said to put a stop at .10 on UUP. I got stopped out the morning.

  20. hanna5

     OK Guys, With PPT data this morning, you have to imagine that the fed will be forced to temper their language on Nov 3. They do not want to create stagflation based on runaway commodity prices without wage growth. And, all this is before QE2. 

  21. Savi

    Phil--just got out of my short FSLR puts for a 20% gain
    Tx

  22. matt1966

    These banks are so screwed.  I love how they continue to use the excuse that they were unprepared for the amount of foreclosures they were besieged with to justify the fraud they perpetrated.  "Ohh… it was just too much work so we had to bypass the law".  It’s a similar argument corporations used to make about protecting the environment.  "Ohh.. it cost too much money to clean up our discharge..".  Where are the consumer activisits here?  Where is USPIRG?  They should be friggin flippin out right now…

  23. matt1966

    Pharm, how is Japan involved with this supporting our market?  They are trying to push the dollar up..

  24. Pharmboy

    Hanna, the Feds don’t care…..top 1%ers are out of the country with their money, just like many corporations.  Remember when Bush/Congress gave the tax breaks for bringing in $$ for corporations tax free??  Pfe bought the side of a mountain in La Jolla, JNJ bought the PFE consumer division, etc etc….I am moving more to gel’s camp on a QE2, and believe in the gold rush, but do not believe the market will hold up after Q4.

     

    From the pharma front:  Biotechs are shuddering around SD, and VCs are having a hard time finding funds.  They are moving things in the portfolio for breakeven if they can.  Interestingly, even successful companies that are VC funded are conserving cash.  Big pharma is just waiting things out.

  25. Phil

    Good morning!  

    I made a lot of comments at the end of yesterday’s post in case anyone is interested. 

    Guy named Hefty on CNBC (9:39) is making an excellent bearish case explaining the Fed and QE etc.  Of course they are cutting him off…

    I apologize for being all ranty this week in the posts but I very much feel it is important for us to really look at the global situation and not delude ourselves into thinking the markets are rallying when what is really happening is the dollar is collasping.  Should GLOBAL EARNINGS REPORTS not look good to GLOBAL INVESTORS, they will start bailing on those stocks and, guess what, people will panic into the dollar and that will knock commodities and our markets down VERY FAST.  Global companies that make a lot of their money selling to America are getting their margins trashed as they get paid in dollars that are worth less (worthless?) and then they have to report how many Euros they collected and their balance sheets do not look as pretty as our US companies do.  

    Will this happen for sure?  No way to tell.  The Fed can dump the dollar and pump the markets almost forever and we haven’t even looked at the still possible government stimulus package so it’s either cash (which sucks) or playing the market in both directions, just trying to stay ahead of inflation/dollar devaluation ("all" you have to do is make 2.5% a month).

    Our 10% lines are 4 of 5 green this morning – just waiting for another 100-point gain on the Dow:  

    • Up 10%Dow 11,220S&P 1,177, Nas 2,420, NYSE 7,500 and Russell 700
    • Up 7.5%: Dow 10,965, S&P 1,146, Nas 2,365, NYSE 7,280 and Russell 672
    • Up 5% (must hold): Dow 10,710, S&P 1,123, Nas 2,310, NYSE 7,140 and Russell 666 

    Like the restaurants in Italy in the early 80s, I just have to get used raising my price targets on an almost daily basis as inflation becomes the norm because, if the dollar doesn’t turn up here – we almost certainly have another 5% left to fall and that is 10% on UUP on Pharm’s chart (see top of post) and that could be a 10% move up in the S&P (1,300) this seems nuts but so did paying 1,200 lira for a coke on Friday when it was 1,000 lira on Monday but that’s what vacations were like in Italy at one point when they attempted to balance out their trade imbalances by printing more money.  Some things you just have to accept and I will be doing some soul-searching, and drinking, this weekned – trying to get in the right frame of mind to party like it’s 1999 if this nonsense is going to continue but, right now – I still don’t think it will and this is one MoFo of a house of cards we have built  :

    $USD WEEKLY

    This line is CRITICAL on the dollar and we tested it back in Jan and survived but the Fed wasn’t jawboning the dollar down in January like it is now.   

    We kept the DIA puts yesterday (or at least 1/2 depending on which strategy you used) and those are in good shape.  We have enough bearish positions where all we can do is sit back and relax and watch what they do with us into options expiration tomorrow.  September 1th and 17th were pretty flat days at 10,600 and it amazes me that we are 5% over that in this expiration period – it’s very unusual to gain more than 2.5% between periods so we can’t discount a massive pullback into tomorrow.  

    Be super careful – things can go very crazy but, if we hold up here – it may be time to buy Yahoo again (they were $300 in 1999).  

     

  26. Pharmboy

    Matt – Japanese Finance minister said they would defend the yuan buy buying bonds, dollars and even equities….go figure.  Can’t find the quote now….

  27. Pharmboy

    Meanwhile, one of our faves (SPWRA) does have love and life after all.   Wonder if GE is looking at them?

  28. 42laurel

    Phil;
    Yahoo, buy or sell?

  29. 1020

    Good interview with Mickey Levy on CNBS. Does not think QE2 will help and failure would hurt the Fed’s credibility……

  30. boobearsdad

    Phil,
    A heck of a beatdown for APOL today after their earnings report last night.  At what point (if any) does that become an opportunity?

  31. geomancy

    Is DBA too chasey here? Goes without saying it is ridiculous but there seems to be no reason it can’t go higher….

  32. Pharmboy

    IMGN moving well today, going to look at a bull call spread with a P sale to maximize this one. NVS signed a deal with them a few days ago, so these guys are getting ready to rumble. 

  33. Pharmboy

    Someone asked about DCTH yesterday, and the takeover rumors are just that, rumors.  If anyone liked the technology, then I would put TEVA (unlikely, but would be interesting b’c they could make generic chemo drugs), JNJ, MDT, and BSX in the mix.

  34. Phil

    Oh yes, I forgot to mention.  Oil minister said he was "comfortable" with oil’s current range and I was thinking my usual "that bastard" thoughts but then I realized that oil is actually still at $75 in real money (not ours) and it is not OPEC’s fault that it’s going up despite weak demand.  They are making all the oil we can use, there are no shortages, they are not even storing it in ships anymore – it’s just that oil is priced in dollars and dollars are declining but oil is actually MUCH LESS expensive now than it was in early May ($87) to everyone on earth BUT US.  

    YHOO/Maya – It was, of course, a sell into the initial excitement opportunity but nothing more.  Maybe it’s real, maybe it’s not but nothing smacks of 1999′s idiocy more than a rumor that AOL will buy YHOO – perhaps aiming to form the Worlds largest disappointment of the dot com era. 

    China/Rav – Everything is rumors right now.  The FOREX guys make the stock manipulators look like saints and you can’t trust anything you hear.  I have pointed out in the past that there are certain foreign ministers who get paid to make market-moving statements that are totally untrue for the benefit of whoever is cutting their checks so try not to trust anything you hear that doesn’t hold up for at least 3 days.  China is a HUGE net exporter and their factories work on razor-thin margins – how are they supposed to bump their currency up even 5% when that could wipe out 1/2 of all export profits?  

    Why would they do that?  Why would any country put up with this BS from the US?  When we devalue our currency, we also discount our debt, don’t we.  We owe China about $2Tn but that $2Tn is only worth $1.75Tn since May so we STOLE $250Bn from China in 5 months yet we are pointing fingers at them and crying Shenanigans because they don’t want to play ball with the rest of the World and bend over while we rape them with our currency policy.   

    All the normal breaks on a nation devaluing it’s currency are thrown out the window here as our own Fed is buying our own Treasury’s debts which artificially keeps interest rates down and maintains the illusion that everything is fine while we flush our currency down the toilet.  The biggest scam is being run against the US middle class – who are economically not educated enough to understand what is happening to them from a global perspective and have no means at all of hedging themselves against the debasement of their assets.  

    Oops, there I go with t he depressing talk again.  Woo-hoo, party time, AAPL $500 – let’s go!!!!  How’s that:?

    Charts/Ben – Nice, fun site.  If you click on your link on top of the comment box, that’s where you can add your web site so it always links from your name.  

    DXD/Amatta – Weren’t in the money for long were they?   Since we think the market is heading lower the roll isn’t very appealing so I’d offer .10 to get rid of them today.  It doesn’t look like we’ve got enough volume for a big down day but we’ll see what happens to oil shortly.  

    UUP/Kimish – I think that’s worth a DD as long as you are scaling in and not in too deep.  DD at .12 is avg .17, where they were on Tuesday so won’t take much of a bounce to at least let you get 1/2 out even and leave you back at 1x with the lower basis.  From .17, you can actually roll to a Jan $23/24 bull call spread (.18).  Of course you need to look at what you pay in commissions as well as that will bump up your costs but, if you are prepared to stick this out – it’s not a bad way to play it.  

    Hyperinflation/Ben – 0.4% PPI 2 months in a row is early stage hyper-inflation.  If that number ticks up again, I will be negotiating to buy Gel’s gold at a bulk discount next month!  

    Unemployment/RN – The weekly number is layoffs and the Non-farm Payroll is net of hires.  I have said before, with 135M people, losing 450,000 jobs a week means the average person KEEPS there job for 300 weeks, or about 6 years.  I don’t know about you but, other than companies I’ve owned, I’ve never stayed in a job for more than 6 years anyway.  

    Nat gas was up 91BCF – in-line with expectations but nat gas flopped to $3.60 on the news, which is a buy on the futures to me!  

  35. microflux

    Morning Phil, remember when i pointed out that platinum has been the same price of old only like 2 times since god knows when and if we should buy when it was $900 ? You said that there was no instrument to trade it and kind of let it go, at least tell me you remember so i feel a little better :P i remember looking at the charts and price for a couple weeks and scratching my head, god how i hate when i miss things that i actually realize at the time, which happens very very rarely lol, which is why i guess i didn’t believe myself :)

  36. microflux

    thats gold not old

  37. exec

    Hi All….back to reality.
     
    Not sure if you’ll saw this.  It’s not a problem if the Bots rob us, but god forbid you rob the Bots!!!
    http://m.cnbc.com/us_news/39664612/1

  38. lflantheman

    YHOO……fun play…..a few Oct 16 puts (one day to expiration) for .30   Expect to lose it.  

  39. Pharmboy

    Exec – guess we should pump sumpin’ at PSW and C what we can create.  1M shares of CRIS…buy at 10:30…..LOL! ;)

  40. nicha

    ben1be – nice site. I have bokmarked it.

  41. matt1966

    Pharm, well if the Japanese finance minister is trying to deflate the Yen buy buying US equities.. no wonder they have been unsuccessful.
     
    Phil, while I personally enjoy your rants for the common man.. I’m curious what has changed in your mind since the very beginning of this crisis?  Back then, you were the first person I heard say that the only way out of this financial mess was for the Fed to inflate.  So… they are trying to inflate.  We should have been positioned for this better then anyone.. by buying gold and not TBT.  Sorry to call you out on this but if there is anything I do consistantly.. is to try and keep it real.

  42. lapper

    Pharmboy, if ARNA does not get approved is the company dead?  Like penny stock?

  43. matt1966

    Pharm, for the record.. even though I know you get what I was trying to say, lemme rephrase that if the Japanese finance minister is trying to drop the Yen’s value by buying US equities.. no wonder they have been unsuccessful.

  44. Phil

    BA/Savi – Oh they suck!  Down 2% this month vs up 9% for C and up 2% for XLF.  Better chances with XLF and you got a nice dip today so you can risk owning 1,000 at net $14.03 by selling 10 2012 $14 puts for $1.87 ($1,870) and buying 10 $13/17 bull call spread for $1.90 ($1,900) and, even with 50% margin requirement (TOS says net $3.60 cash and margin), you would still be left with $5,000 to play with in CONSERVATIVE plays.  The upside there is collecting $4,000 at $17 and the downside is you own them at .50 below today’s price.

    SK/Pharm – Wow, what a scam!  That is seriously insane and should be illegal.  In fact, I’m pretty sure it is but it’s hard to tell these days.  That’s what this whole market is like right now though, a lot of hit and run investing by the people who have cash and assets against those who don’t – much like the LBO days.  I’m seriously concerned that this country won’t be left with enough to build back from at this rate.  12M factory jobs in America!   Not even 10% of our workforce produces something – how long can this last?  

    DESCRIPTION

    It’s not just us – it’s anyone who’s not China – even Japan but you can see why Germany is the strongest overall economy and why they want a strong Euro – they export mainly to the EU!  

    Oil down 400,000 barrels.  Gasoline and distillates both down exactly 1.77Mb?  That’s an amazing coincidence but, whatever, oil should re-test $84 and hopefully we get a short later as we can now play Nov USO puts ahead of this month’s contract rollover next week.

    SLW making 52-week highs!  

  45. randers1

    P,
    Do you still like the PCLN Oct 350′s or do the Nov 400′s offer better reward/risk at this time?

  46. trident

    Phil,
    I’m thinking money printing = commodity mania meaning natural resource equities will be bid up as well. Would options on nat resource etfs be a good way to play this?

  47. yodi

    Hi Phil
    UUP read your comments holding Jan11 21 c long and 23 short pd 2.43 now 1.34 and sold 23c for 1.23 now .29 on 10 contract I am only 130.00 down but when will they stop printing $$ I ask myself shall I bailout. I as well agree with your comments on Oil at real 75.00 not 83 I made a simular comment on gold yesterday gold is very much still the same only the $$ is down down down Your recomments pls

  48. ravalos

     Phil, on the following position: I have long 6x Mar 2011 $50s on DECK @ 4.46 (bought them in order to sell front-month calls against) with a full-cover of 6x Oct $50s @ $1.90 .. the stock is now on $53.24 with no premium left (I was just waiting for a pullback to do the roll but it seems this pullback won’t come for DECK today or tomorrow).
    I can simply roll the Oct $50s to Dec $55s and convert it to a bull call spread, but I think I’m better off if I not only do the roll from Oct $50 to Dec $55, BUT ALSO roll up my long calls from Mar $50 to Mar $55, the whole move would net me $2.60 in cash and would end up with long Mar $55s full-covered with Dec $55s.. HOWEVER, the idea is that if Deck finishes below $55 in Dec, I would get that premium and if DECK falls to $50 or below it, I could take advantage of the leverage in options and IMPROVE my position by rolling my Mar $55s down to Mar $50s for $1.9 or less! Then I can wash, rinse and repeat (selling front-month calls).. it’s a beautiful way of using leverage in options and also to retire them when the intrinsic value + premium on my longs get significantly higher than what I paid for them.. what do you think? 

  49. gel1

    pstas
     
    Paper trading these pairs for a period is a great idea… The Dealbook platform is very powerful and can do miracles, but it does take some time to get acquainted with the features and benefits.
     
    When I entered the NZD/USD, I clicked on the pairing ( or you can right click the chart ) A trading screen comes up and I most often set up my positions with a P & C ( Parent and Contingency ) either buy or sell the pair. I either buy at market or set a limit buy. I then set my hard stop and my limit stop. You can also do a trailing stop ( pips ). Some long term plays, I just buy and watch with no stops. If you set a stop, you can place your cursor on the stop line and drag it in either direction when on the chart. A window opens up and you confirm the change. Now that I am familiar with the platform, I have to say it is the most amazing tool I have ever seen for trading. The features are endless, and I am still discovering them.
     
    By the way…. many months ago, I made a statement that I believed the USD will take a dive. I believe we are in that decline, and the Dollar has a long way to go in the Southward direction. I will put some cash toward UDN today.

  50. dclark41

    Phil:
    Phil:
    I have TLT DEC 102 Puts buy (in at 2.27 now 2.55) and NOV 105 Calls sold (in at 2.3 now 1.05). Can I get your opinion on TLT? Do you think I should hold or take what I got and be happy? Thank you.
    dclark41

  51. David Ristau

    Hey all,

    I have a new Overnight Trade available for you in Webster Financial (WBS).
     
     
    Good Investing!
  52. gel1

    Phil
    I respect your opinion regarding MOO… The chart is toppy for sure, and I think many have bought the ETF for dollar protection, anticipating inflation. Look at RIO today… up over 3% – a move that has some inflation defence built in. I am in MOO, but am watching it carefully ( I think it is safer than buying the components individually )

  53. pstas

    Gel- thanks for the info. I assume the Dealbook platform is from another trading firm- what is the website and do you know if they have "trial" version for paper trading?

  54. datuu

    maybe some impact on the USD????
    Reuters:
     
    Over a quarter of all loans to Chinese local government financing vehicles are at
    serious risk of default, regulators concluded after a probe into what some
    analysts see as a liability for the economy …
     
    According to the investigation, 24 percent of the debt incurred by the local
    financing vehicles is fully backed by revenues from the projects they have
    funded. 
       
    A second batch of loans, about 50 percent of the total, will not be recoverable
    directly from the projects they have funded, but will be covered by secondary
    sources, such as government revenues. 
     
    The third batch is the 26 percent that are in serious trouble.
     

  55. Pharmboy

    BRCD getting some love and starting to swing up.  Watch those Apr $6 C for 60c or so.  All premium, but buying is picking up on the stock.  P/C ratio is 0.04.

  56. pstas

    UUP- Phil, to clarify -  you are suggesting that the $ line is 76.50  for bailing on the Nov calls? I.E., at least short term is it breaks below that line- then look out below?

  57. nicha

    Pharm- thanks for BRCD. I have a small IRA and am looking for stocks like these to do covered calls. After ARNA dissapeared with my profits I have decided to stick with covered calls and buy writes in IRA.

  58. novice

    Phil/ SPX
    I had shorted the SPX with a OCT 1150/1170 Bear Call Spread. I am in the red big time, but still have conviction that the S&P will turn around and correct sometime. How should I buy time. Was thinking of the NOV 1160/1180 Bear Call Spread with a -$5.20 debit. Do you have a better suggestion as I need to make this trade today. Thanks…

  59. lapper

    Pharmboy, if ARNA does not get approved is the company dead?  Like penny stock?

  60. JRW III

    Good morning,

     

    IWM  67.92, 68.34, 68.67, 69.22, 69.98, 70.41, and 71.62

  61. David Ristau

     Hey all,

    If you follow the Longterm Ratings at all. First Solar has been given a new price target but maintains a Hold rating. The new target is $188 per share. A small drop in price would make the stock become a Buy. It has to be below $144.

    Check out my latest update here.

    Good Investing!

  62. Pharmboy

    nicha – UR not alone on the ARNA trade.  Huge, huge disappointment.  IMGN is another, as is CRIS.  

  63. Pharmboy

    lapper, most likely $1, so yes 100 pennies.

  64. David Ristau

    Hey all,

    Here is an alert I just sent out to all my Oxen Alert members about the $5 List:

    Three of the stocks on the list have moved into the $5 range: ENTG, KKD, and LIOX.

    Any of the three are good buys here at these levels, but I find the most attractive to be Entergis (ENTG).
     
    $5 Buy: Entergis (ENTG) -
     
    The company has traded the highest out of the three in the last 52 weeks. The stock has the highest market cap and does the most business. Entergis is involved in the semiconductor industry for supplying, transporting, and purifying the most critical and dangerous chemicals and substances used in the semiconductor sector. The company, therefore, operates in the semiconductor equipment industry.
     
    We want to pick up some shares here and hold onto them for a bit. The company is reporting earnings in several weeks. For reporting purposes, the $5 Buy List Portfolio will be a new addition to the reporting I do each month.
     
    I am picking up shares here at $5.03. 
     
    Good Investing!
  65. Phil

    Specialty chems/Alik – Yay, we have a sector!  Actually though, my Stepfather is a big-time polymer chemist and I do know that we have moved the manufacturing of a lot of stuff overseas (exporting our pollutants) as the grandfathered (under toxic regulations) manufacturing in this country is pretty maxed out.  

    Buying puts/Foolish – Oh yeah, we talked about that last week.  That’s what’s been going on, "THEY" jam the markets up, drive down the VIX and load up on puts – then they can dump their stocks with impunity, wiping out all the bagholders who then panic at the bottom and "THEY" take their put profits and buy back the stocks at the new floor – it’s a great game.  In fact, as I said last week too, I feel kind of bad because we are doing exactly what "THEY" are doing this cycle…

    Gore/Pstas – As long as that math works for you…

    Access/DD – I understand that is fixed now? 

    PPT/Pharm, Matt – At this point, it takes an entire Global village to maintain this charade.  

    UUP/Fortep – Stops are very important but you do have to be careful not to get forced out on a blip.  If you must set hard stops, I would suggest stopping out (in this example) 1/4 at .12, which would warn you that your stop is close and then watching that .10 line very closely to see how it holds up and, of course, giving up at .08 for a .09 avg.  That is, of course, if you are not scaling in, where you lower your basis as the options drop and that lowers your stop level.  Notice there are 136,000 Jan $24 calls active – that’s a pretty massive bet that we are going UUP.  On the stock our original entry was $22.50, now $22.20 so hardly worth sweating – it’s only the leverage of the contract that makes this dip seem so severe.   

    FSLR/Savi – Nice job and nice discipline!  

    Mortgages/Matt – I talked about this with Cap yesterday.  Incompetence is not fraud.  The penalty is they don’t have the right to foreclose and that costs them cash.  Unfortunately, as we well know, it really only ends up costing the taxpayers cash, which is why I am calling for a nationwide mortgage protest.  Imagine 110M homeowners not sending in $2,000 checks for a month ($220Bn), then another, then another – if we could organize that, we could demand some actual changes in this country! 

    YHOO/42L – Stay away.  Bad company driven by rumors.  If MSFT or someone competent were buying their traffic and ad base, I would like it but AOL is just as dumb as YHOO so they’ll end up overpaying and underperforming (if it’s even real, which I doubt).  

  66. gel1

    Pstas
     
    It is GFT and the platform is Dealbook 360. Is that the one you are using ?, as I do know the paper trading accounts are available. The opportunities are heating up in the currency markets, and next week looks good. I am up 6.6K on the NZD so far, so it is headed in the right direction.

  67. kinkistyle

    Just wanted to give a big "Welcome Back" to our friend the VIX. Where you been, we missed ya!

  68. 1020

    PMI group up 9%…..

  69. Savi

    Phil--do you think on UUP Jan 23/24 bull/call spread mentioned earlier would be a good new entry trade--if so would you sell the Jan 22 puts also?
    Tx

  70. novice

     Phil, 
    Can you comment on my SPX trade when you get a chance. Thanks.

  71. ban2

     Hi Phil
    With the banks down big today on the mortgage foreclosure mess is there a play  that you now like on C?
    C is down same amount as the group and may be overdone as the larger exposure is with  BAC; PNC and JPM.
    Attached article indicates there’s a possibility that Fannie and Freddie may make these guys repurchase a boat load of mortgages.
    http://www.housingpredictor.com/foreclosure-investigation.html
     
    thanks
    NB
     

  72. JRW III

    pstas / UPP

  73. 1020

    Phil – PMI up, Financials down. What’s you take?  Thanks

  74. pstas

    Gel- Dealbook- No, I am just on TOS for now for paper trading fx- will go the GFT site to see if I can get a practice version.
    Thx

  75. kustomz

     Banks are only going to weaken along with insurers, HD LOW..practically anything tied to housing. Quite a few of these stocks are in the DOW and S&P

  76. pstas

    JRW- UUP- 76.90 it is. I must be learning something. I had a support line at 76.91. I hope a bit of your mojo is rubbing off on me.

  77. JRW III

    Ffom Jesse, and well said !!

    It is important not to exhaust yourself expecting a trend change before it is ready to happen, and one cannot anticipate exogenous events by definition. Still, the time is ripe for one to have a significant effect should it occur.

    The long term trends are all intact, but we have reached a position where we might be looking for intermediate tops and consolidations.  The Fed is not infallible or omnipotent, but rather determined and capable within its limits.  The combination of government and the monied interests is powerful and ruthless.  Manage your money tightly and wait for the market to reveal its intentions if you are trading.

     

  78. lflantheman

    If for any reason you think there will be a big sell-off tomorrow…..the QID Oct 14 calls are 10 cents.

  79. jvest

     Phil, what do you think about shorting TZOO? At a PE of 41 it’s even more overvalued than PCLN.

  80. jvest

     Actually, TZOO doesn’t seem to have any options. Not sure I want to bother shorting the stock itself.

  81. jvest

     Speaking of shorting, here’s an interesting take on the recent bull run:
    "It’s the topic that has everyone wondering what the heck is going on with this bull run in the market. Stocks across every sector are making 52 week and all time highs. Gold is repeatedly hitting new highs. Commodities are soaring. Is this the result of QE2? The November Elections? A sudden hope that the stagnant economy will suddenly revert to the glory days gone by? Hardly! The answer to this bull run is quite clear, and it can be found in the SEC’s November 10th deadline for market makers to implement the new modified uptick rule."
    -- Read the rest at:
    http://seekingalpha.com/article/230017-bears-are-extinct-buy-puts-to-protect-your-gains?source=dashboard_macro-view

  82. hanna5

     Amazing that with so many negatives, and the bank weakness that we are only down 0.5% today. Who is going to lend money to get the economy moving if all the banks are dealing with another foreclosure mess….Have a handful of SPY 118 october puts to hold for the rest of the day and overnight. Risky.

  83. matt1966

    Damn!  I’d maxed out my account yesterday averaging into my short position in FAZ.  I was well under water by 2pm but came back some with the afternoon drop.  This am I got a $164 maintenance call.. even though I was solidly in the green.  I just sold half my position and am flush.  The other half is FAS short.  But I just tried to average back in and my broker said I had insufficient funds.  For the life of me, I can’t understand these new margin requirement rules.  The bottomline seems to be that you need to cash out everyday in order to have any buying power the next day.  Seems like that only adds to the daytrading fire.. which is what I think they were trying to avoid. 

  84. ravalos

     hanna5, important to note this:
    It is important not to exhaust yourself expecting a trend change before it is ready to happen, and one cannot anticipate exogenous events by definition. Still, the time is ripe for one to have a significant effect should it occur.

  85. goldman

    Well hellooooozzz everybody!
    So after two months of selling my plasma, I now have enough money to sign back onto the forums for a few minutes..perhaps even a few days!!! (and in doing so I crashed the markets a monumental 0.5%!).  Unfortunately, my arms are so sore I can hardly type now…maybe I’ll sell some ‘other’ fluids next week!  Ok, perhaps that isn’t the case…instead I was busy negotiating new contracts for my farmland investments, and some other projects.    Therefore I must give my kudos, perhaps even a shout-out, to Lord Bernanke…. as his inflation driven master plan has done wonders for grain prices and farmland rents.  Unfortunately, I must inform you that your corn flakes will soon be $8/box, especially after the new 15% ethanol standard was passed this week.  And although the 15% mix will damage a substantial number of engines built pre-2006 and ethanol actually wastes more energy to create and transfer (can not be transferred via pipelines…thus has to be trucked) than what it provides…perhaps as a silver lining a few new manufacturing jobs will be created in the process.  Hmmm… peaking at the price of silver today… a copper lining would be more appropriate…=D
     
    Anywayzzz…below is a hero story to read to your children tonight, how the small investor beat the "robots"!  Just leave out the part about them going to jail for being too small to succeed.   And just when we thought the markets couldn’t mimic Vegas any closer…"players" are now being thrown out of our "El Casino De Markets" for "counting cards" and beating the system…ironic, isn’t it?  Come to think of it…in order to be good citizens…should we also turn in JRW for figuring out a way to beat the TNA/TZA bots, as I’m sure our expert SEC porn analysts could use a few good scapegoats before mid term elections…if they are not too busy taking care of business as usual…=D 
    Per http://www.cnbc.com/id/39664612
    Norwegians Convicted for Outwitting ‘Trading Robots’
     
     Two Norwegian day traders have been handed suspended prison sentences for market manipulation after outwitting the automated trading system of a big US broker.
     
      The two men worked out how the computerized system would react to certain trading patterns – allowing them to influence the price of low-volume stocks.

  86. hanna5

     ravalos – thanks. and, yes, i agree. However, i happen to think that this trend change will be swift and of large magnitude, such that before we can average in, it may be largely over. Because this is totally based on exogenous events is exactly why i think that. I.e. if bernanke gives a talk and soft peddles QE2, the DOW will open down 200 and drop quickly from there….Thus, I am averaging into November short positions. If we are still up after the Nov 3 Fed, then I will roll out to january. This is with one quarter of the account, the other of which is invested Long with covered calls.

  87. Jordan

    Remember all the "market up on strong earnings from JPM, INTC and CSX" yesterday?  Well, right now the market is  below these levels. But no stories about that.

  88. kustomz

    hanna, GOOG after the bell is helping keep the bulls in the game and dollar gets sold off anytime it gets anywhere near 77..Bernanke is fuel for the dollar carry trade which is in full swing

  89. Jordan

    And we lost the S&P levels…

  90. matt1966

    goldman, you’re really buying farmland?  If so, good for you!  I’ve been too busy today to comment on the Norwegians but absolutely, that is a heart warming story to be sure!  Wonder how much it cost them to do their sensitivity analysis on the model to find out what makes the bots tick? 
     
    jvest, I don’t buy that guy’s argument about the implementation of the uptick rule causing the market’s rise.  The program’s are still fully in control.  AT ALL TIMES.  Which includes the times they are out of control.. but in reality, they are still in control.  Just not behaving as they were intended.  Anyway, I think a more plausible explanation, and one I hadn’t thought of before, was what the first commenter on that article mentioned.  And that is, bears have learned not to fight the Fed but to go with it.  Not by buying stocks.. that would be disgusting.  Instead, they simply buy gold.  By buying gold, they are in effect shorting the dollar.  What a great way to look at things! 

  91. Phil

    APOL/Boob – They are nice again for a long-term play but let the downgrade police have a crack at them first.  

    DBA/Geo – I think so.  Up about 25% since July.   The thing commodity bulls fail to remember is that, ultimately, you need 6Bn people to be able to afford your stuff and that may not bother Gel and others who are sitting on million-dollar piles of gold and have no idea how much a loaf of bread or a gallon of milk cost and don’t consider the ramifications of what it means when food goes up 25% in 4 months but to 4Bn families on this planet who make less than $2,000 a year – it’s a fairly major issue and just because they will starve to death if they don’t eat, doesn’t mean they can afford to eat so they starve, and less food is sold and suddenly there is a glut and grain is rotting in the silos and the farmers are panicking and the prices drop like a rock.  There’s a very good floor on food because those 4Bn people will always earn $2,000 a year and they do like to eat but it also limits how much they can afford to buy so speculators can certainly have their day, but the backlash is always there in the end.  

    If you want to establish a tentative DBC inflation hedge, you can buy 10 2012 $27 calls for $1.90 ($1,900) and sell 10 Nov $25 calls for .76 ($760) and that’s net $1,140 for 10.  If they drop, then you have a cheap long-term inflation play and if they go up, you can add 10 more at (guessing) $2.75 (the price of the 2012 $25s) and then you have 20 for avg $1.94 (with a .81 profit) and you can roll the callers along for a year.  

    Nice 100-point drop in the Dow since we took those DIA $112 puts, now $1.50 (almost double).  If we can’t get below 1,170 on S&P and 700 on the RUT – it’s not worth risking them as they expire tomorrow.  

    Platinum/Micro – I don’t remember as that had to be a while ago, but they now have that PPLT ETF so it is playable these days.  Not now, of course, I think $1,700 is quite enough but I’ve been wrong about gold since $1,150 so maybe platinum too…  It’s not worth worrying about the things you miss but it is good to bank the experience and say "next time I see X+Y I’ll be more confident in what will happen next."   

    Wow Exec, that is intense!  Also BS as that’s exactly what the Bots do to us, and to each other, every day:  

     

    Norwegians Convicted for Outwitting ‘Trading Robots’
    Financial Times | October 14, 2010 | 05:29 AM EDT
     
    Two Norwegian day traders have been handed suspended prison sentences for market manipulation after outwitting the automated trading system of a big US broker.
     
    The two men worked out how the computerized system would react to certain trading patterns – allowing them to influence the price of low-volume stocks.
     
    The case, involving Timber Hill, a unit of US-based Interactive Brokers, comes amid growing scrutiny of automated trading systems after the so-called “flash crash” in May, when a single algorithm triggered a plunge in US stocks.
     
    Svend Egil Larsen and Peder Veiby had won admiration from many Norwegians ahead of the court case for their apparent victory for man over machine.
     
    Prosecutors said Mr Larsen and Mr Veiby “gave false and misleading signals about supply, demand and prices” by manipulating several Norwegian stocks through Timber Hill’s online trading platform.
     
    Anders Brosveet, lawyer for Mr Veiby, acknowledged that his client had learnt how Timber Hill’s trading algorithm would behave in response to certain trades but denied this amounted to market manipulation.
     
    “They had an idea of how the computer would change the prices but that does not make them responsible for what the computer did,” he told the Financial Times. Both men have vowed to appeal against their convictions.

     

    Chchchchanges/Matt – The first thing I said to Geithner is "Why don’t we just inflate our way out of this mess" and the bottom line is the administration, because they are nothing but lap-dogs for big business as much as the Republicans are, have no interest at all in driving inflation properly – through wages.  More money chasing products and services which creates demand and drives hiring and drives more wage hikes and home hikes and lets the average person get out of debt by simply not increasing their spending until fixed debts shrink to a manageable level is what we did in the 70s and it worked spectacularly well.  Unfortunately, it doesn’t work well for the rich, who are the people who we currently owe money to.  They don’t want to get paid back in worthless currency so they demand the government A) Fight inflation and B) Pay their debts.

    This, of course, is a total disaster for the working class, who have access to less capital, get paid less and have proportionally less and less cash than the rich, who are able to outbid them for all commodity classes.  So I don’t like this kind of top-down inflation at all and it will likely lead to a collapse but, amazingly, even after our experience of just 2 years ago – the rich don’t think they need the poor to sustain a market.  We are up on the same myths of infinite Chinese demand and infinitely rising corporate profits that we were having shoved down our throats in 2007.  I didn’t like gold and I did like TBT because I thought we were smarted than that and I should have listened to Homer (Simpson, of course) who said "Never underestimate the power of stupid people in large numbers." 

    PCLN/Rander – Well I like selling the Oct $350s for $2.40 that expire tomorrow and I like selling the Nov $380s for $8.90 that are $33 out of the money (10%)

    Nat Rec/Trident – Logically yes but look at everyone capitulating here.  As I said yesterday, I really, really think this is the top but, sadly, that doesn’t mean we’re going to turn down right away and it doesn’t mean we won’t go higher – just that I think that, even taking into account another $500Bn of QE and better earnings and a declining dollar – its all priced in at this level and the higher we go the shorter I want to get.  The hardest thing for me to do is trying not to name 100 things to short right now….

  92. kustomz

    Bad 30y bond auction, how long before we have an all out failed auction.

  93. Phil

    Speaking of TBT – WHEEEEEEE!  

     Long bonds continue to lag the debt rally, as the Treasury sells$13B in reopened 30-year bonds at 3.852% (.pdf). Bid-to-cover ratio of 2.49, vs. a recent 2.81; indirect bidders take 32.4%, vs. a recent 36.6%. Direct bidders take 9.1%, vs. a recent 17.6%. 

    That’s 3 auctions in a row where interest is seriously waning!  

  94. goldman

    JRW - three sentence email reply…grrr  So riddle me this… should bail on my TZA due to the MASSIVE 12:57 RUT spike…as team pomo might take my profits before I finish this sentence.  Exiting at the IWM 200 SMA elsewise…wait…never mind, back down we go, not even close to the 200 SMA…wow, excellent…just missed getting flushed!   At 7.4% VIX…even team pomo might go short today…as long as Ben didn’t sent them their QE2 Pomo credit cards yet before announcing…

  95. biodieselchris

     Phil, feels like your on board with my DOW 22,000 by 2015 idea. All on inflation, nothing more. That was the theory. It’s going to be a period where long calls are the new dot-com’s money printing machine.

  96. jromeha

    Jvest- I’m sure Phil knows better but TZOO seems dangerous to short. They have a smaller scale (but expanding) program very similar groupon that they are working on. I think it’s only available in select cities right now but as it expands it should help TZOO’s price appreciate even further…

  97. kustomz

    Dollar will have to rise with yields, not good for any market

  98. reza99

    On the Norwegian heroes story a cynic might say:
    Well, imagine the same weakness, among many other ones, had already been detected and profitably used by other big-league trading bot-shops quietly and profitably.
    Additionally, would it be possible for this very same trading bot-shop to had been manipulating prices the same way? injecting volatility for its own use?
    Hmmmmm

  99. jthoma

    Guys- the opportunity of my lifetime- the banks go to zero and then we have to bail them out all over again- buy enough puts that when they take your tax money to do so- you at least made money!

  100. gel1

    pstas…. Here is another currency trade for you… I got in about 20 minutes ago
     
         Sell –  USD / SGD…. Set you stop at 1.3110, and let it ride. I’ll let you know when to take profit.

  101. gel1

    jthoma / Banks
    I like that one a lot…. where have you been all my life?

  102. gel1

    Phil…. Is NOW the time to recover TBT losses and get even?

  103. rainman

    Trading Bots — Ya know, it would seem to me that there would exist a conflict of interest to have a unit of Interactive Brokers write a trading program. What do you think the chances are that they used(use) trading data from their retail clients in order to perfect their trading platform? Nah, that would be unethical…

  104. jvest

    matt – I also agree the rise in stocks is primarily due to the weak dollar. Still, the thoughts about the uptick rule were something I hadn’t heard here before, and maybe it is contributing some.

  105. jomama

    GILD still creeping up. 

  106. Pharmboy

    Rainman – that is too funny, and way true.  Why do you think the banks are getting rid of the traders and signing on with the trading platforms for retail..so they can scalp/front run and know where retail is buying. 

  107. jvest

    Phil/PCLN – I’m holding the Oct $350 short call. The only thing that worries me about shorting it for tomorrow’s opex it is that Morgan Keegan upgraded it yesterday. The timing of the upgrade, 2 days before expiration, makes me wonder if they or someone paying them, is holding all the PCLN long calls.

  108. JRW III

    goldman,

    Welcome back !!  Lots of good reasons to be in TZA; right now the best one is that my chart says it’s going up 8-)

    I would ignore the 1:00 spike; I see no buy programs. But there is a supporting ascending trend line at IWM 70.18

  109. gel1

    Phil
    Gravity always brings the level of water to the point where it is balance with nature…. rain water falls in a downward direction as do the rivers – likewise with balances within our economy ( if not tinkered with by the regulators, Congress  etc ). In free markets prices follow this same theory, so if prices of necessities rise, then wages will accordingly rise in sinc, and the inverse is true, as well, unless manipulated by outside forces that are repugnent to free markets. Wages and the price of goods and services rise and fall in a pattern that is dictated by free market forces, and are therefore always fair ( assuming no manipulation )

  110. HHFIV

    Phil: Several weeks ago I sought help with -10 SDS PUTs leftover from a disaster hedge. I rolled them to -10 DEC 28 PUTs. Yesterday the pain of this ‘up trending market’ really came to bear on me and I bought 2 back. Margin is not an issue. I feel like I am unnecessarily starting to panic. After stepping back and waiting a day, my thought is to hang on to the SDS PUTs and continue to roll them down and out. I also considered an idea we touched on – converting some of the PUTs to CALLs. Your thoughts?

  111. goldman

    matt1966/farmland – I "am farmland"…as I grew up on a farm, had a relatively small inheritance from my grandparents in high school that I used to buy some small farms and mineral rights, and then made a deal with Peabody that would make Donald Trump proud in college…in which I did a like kind exchange for land in another state that was 9 times cheaper than what I sold to Peabody (which by the way they owe me the land back in a few years for about $1/acre…they really needed my land, and I got creative with the contracts)…and then watched that land appreciate 5x to date (and now hoping that wall street and Jim Rogers and company will create a farmland bubble so I can slowly off-load some farmland over the next few decades as my global warming research has me concerned in 12-15 years, as the weather patterns are starting to conform to the predictive simulations).  All said and told, the small inheritance has grown 19.2% over the last 20 years, including the original small farm mineral rights transaction,  land appreciation and crop revenues.  The new farms I bought have absolutely no basis and I own 95% of the mineral rights, thus I really can’t sell very much ground as the tax man would me to the cleaners…so I’m what they call in farm country "land rich, cash poor" relatively speaking. Almost 80% of my assets are farmland…not very diversified but it is what I know best…plus I sleep well at night.  It isn’t an easy sort of venture unless you have experience or pay a farm manager, I just told my best friend, who sold a software company recently and wants to buy farmland, to instead invest with a hedge fund that specializes in farmland across the globe (Africa, Brazil, U.S.)…as you almost have to have been a farmer to deal with farmers…and not make costly mistakes, get taken advantage of, etc.  Also as you have to deal with the government constantly.  Just recently I had to destroy 20 acres of soybeans that was mistakenly planted in a govt program plot that was to be laid out in grass…not only did I loose money on the crop inputs, the govt would not let me donate the crop to charity…and instead forced me mow the crop into the ground.  I have had the govt cancel signed contracts that were half completed…so this is my final year dealing with govt programs to improve land, it simply isn’t worth the hassle and red tape.  In summary, stick with the funds…=D

  112. pstas

    Gel- USD / SGD – OK- in on paper. Will be watching. Thx.

  113. goldman

    JRW/Levels – Your older level at 70.55 is looking more significant…with IWM trending right at the 200sma at that level.  So do we go to 71.14 or down to 70.09…hard to think we will stay in the middle so far away from the historical confluence levels.  I stick can’t take my eye off the vixx…it is looking pissed off today…LOL!

  114. exec

    JR/Shadow,
     
    I have a question regarding buying/selling programs.  Yesterday Shadow made a comment about a huge sell program.  How do you distinguish between a buy program and a sell program???  If someone is selling, isn’t someone buying?

  115. goldman

    ^^^wow, I used the word "stick" instead of "still" above.  My subconscious keeps seeing the huge yellow sticky not on my monitor that says "Buy Stick!!!  1:30 -> 4:00pm"…not good today, down goes the stick note for 24 hours…

  116. jvest

    exec – I’m no expert on that but my guess is you look at the Bid Size vs the Ask Size. If you go to the mall and no one’s there buying anything, chances are the stores are still open trying to sell something. In stocks that would correspond to a large Ask Size and small Bid Size. Likewise, when people are lining up outside Apple to buy something that’s not even for sale yet, you’ve got a large Bid Size and zero Ask Size. Hope that analogy helps.

  117. gel1

    Pstas… I follow a guy that is based in London and is considered one of the best currency experts in the world.  I acknowledge his credentials, but I do not always follow his direction. His research, however is some of the best.  He is currently a Professor in Economics at Oxford.  I just received an email from him… and he is now bullish on TBT ( our old friend ). He also is entering a bearish stance on equities ( not sure I agree, as the earnings are good, and I believe other forces re in play that makes this questionable )….. however, I’m going to open some TBT positions, if nothing else, just to see if he is right.

  118. Phil

    UUP/Yodi – My take on this, and see above auction results is that we can’t just go ahead with QE2 if the rest of the world won’t put up with it.  Rates cannot stay low when there is an expectation of inflation – it’s simply not possible.  Rates cannot stay low when there is an expectation of the currency the notes are based in losing value over the repayment period – only a complete fool would buy them and while Bernanke is as complete a fool as we can get – even the Fed has limits to how much bad debt they can buy before they lose credibility and then we begin to spiral out of control  So UUP is simply a play on rational action occuring over time.  Sometimes that does not happen but that’s why we went with Jan and not Nov – to give it time.  

    Everything right now is driven off expectations of a weak dollar that is a very dangerous premise to base a multi-trillion dollar stock and commodity rally on.  In fact, if people try to cash in their gains what happens?  THEY NEED DOLLARS!  Lets say you have $10Tn worth of dollars and $2Tn worth of commodities and, over time, $2Tn of those dollars are used to buy enough of the commodities that the price of commodities goes up to $3Tn and there are $8Tn worth of commodies left.   EVEN if you print another $10Tn, you still have a 9:3 ratio of cash to commodities where before you had 10:2.   Now, lets say the commodity bulls are right and the $3Tn worth of commmodities gets bought up to $4Tn.  Now you have $5Tn in cash and $4Tn in commodities.  

    Suddenly cash is as rare as commodities!   That’s a simplification because, in reality, some cash is always released back into the pool from the transactions but, as we can see from the markets, it only takes a very small inflow of cash to push up the price of stocks and commodities on any given day but, over time, that’s what happens and when people turn around and try to sell their commodities – they realize there isn’t enough cash in the world to cover their paper gains.  I don’t even know why I have to explain this – it’s exactly what happened to the housing/stock/commodity bubble of ’08.  When people finally decided to sell – they found out that their stuff wasn’t worth the paper it was printed on.  

    DECK/Rav – Unless your premise has changed into earnings, why not just roll across to the Nov $50 callers at $5.20?  What do you care that they are in the money if they are going to pay you another $2 for another month?  Now you’ve collected $3.90 against your now $7.90 longs.  You know me, I’d be rolling up the long $50s to the $60s and taking $4.50 off the table too.  March is a long way away and those rolls will still be there.  The point is, you are up 80% on your longs and now your downside risk there is huge and you haven’t done a damn thing to take cash off the table.  Unless you are dead set on holding DECK long-term through thick and thin, isn’t 80% enough of a gain to lighten up on?

    TLT/DClark – Well you are up 50% on the ones that can hurt you so why not cash them and then you have a $1.02 basis on the $102 puts and you can stop them out back at $2.02 with a nice enough $1 gain on the overall trade if it turns on you.  I did call a top on TLT and I stand by that but that doesn’t mean it won’t whip around again.  You made a fast $1.25, why not keep it and next time they are at $2.30, you’ll know it’s where you want to be for another sale.  

    MOO/Gel – Certainly safer than the components.  Just please tell me you have a hedge in case the dollar comes ripping back when the BOJ announces they will transfer $100Bn of cash to their reserves.  

    China loans/Datuu – Old story they cycle around when they want the financials to go down.  Working today.  

    UUP/Pstas – I’d say if we close below that then it’s very likely that the dollar will fall back to $72.50, which was how we got our big pop into October ’08 but then that led to a global collapse (as all the people who sell us stuff got screwed and their economies started falling apart, then banks, etc.) so, if that happens, we need to take a break – make some bullish bets and ride this market up until it’s exhausted and then go short again. 

    SPX/Novice – You know, the combination of the words SPX bear call spread and "novice" in the same paragraph is sort of like a triple red flag with sirens right away.  This is VERY dangerous stuff and not to be taken lightly.   I don’t like bear call spreads because you are the sucker paying premium and, as you can see, you are screwed by the much smarter guy who sold you premium.  If your "solution" is to spend $5.20 MORE money to put yourself into another $22 of pure premium that will bleed away in 30 more days – no, I don’t like it at all.  In fact, I hate it.   You owe $20 on this spread pretty much and I don’t know what you lose but let’s say it’s $10 – that’s all you should try to get back.  To do that you can buy the Nov $1,200 puts for $43 and sell the $1,190 puts for $37 for net $6 on the $10 spread and you can pair that with the sale of the $1,250 calls at $2.25 so you can’t lose more than $3.75 more until the S&P is up another 80 points and, between now and then – you should probably cover with some SPY calls.  

    FSLR/David – I can only pray they hit your target so I can sell my house to short them!   ENTG is an very nice looking play though.  

    ENTG has an interesting play where you can commit to 1x with the May $2.50/5 bull call spread at $1.75 and sell the $5 puts for $1.15 which is net .60 on the $2.50 spread.   Your commitment is to own 1x at net $5.60 but, because of the $2.50 calls, your break-even is between the two at $4.05, about 20% below the current price.  TOS tells me they only need $0.175  net margin on the put side, plus the $1.75 cash for the spread is $1.93 to make up to $1.90 by March if ENTG holds $5.  

    VIX/Gel – Pretty big move against a drop that isn’t even taking us below Tuesday’s close so far.  

    UUP/Savi – Well it’s just .16 for the spread so I do like it but there’s no sense in selling $21 puts (.15) now because you are a month away from being concerned about the spread and the only way you are likely to be concerned is if $22 doesn’t hold and, if $22 doesn’t hold then the puts will get more expensive and THEN you can decide to sell them.  Meanwhile, you can take a small, scalable risk that pays 6:1 if it works out and if it drops in half, you can spend another .16 to roll it and then you’ll be looking at 4:1 if it works out and if you roll it again, you’ll still get 2:1 if it works out so lots of chances to win without adding the risk of a put at the same time as you take the trade.  

    Fannie/Ban – Hey that’s right!  Those banks are very likely in violation of covenants from the GSEs!  Wow, that would mean the administration has the bankers by the balls!  

    Good chart JRW! 

    Financials/1020 – Ban’s link should be taken seriously.  That could be very bad for financials and, until resolved, could spark a lot of rumor selling.  

    And what JRW said!  

    QID Oct $14 calls for .10 – a great trade idea by Iflan! 

  119. fortep

     PHIL:  I have some November 111 long puts on OIH that hedges a Jan 2012 bull spread that’s currently 100% itm. I’m down about 40% on the net for the puts and was thinking of DD today. Any thoughts on the timing or strike? 

  120. drcraig

     Exec – If I may attempt to answer your question. On the one minute chart it is the very sharp sig rune on "volume" that indicates a buy or sell program. For it to be a "program" the sig rune must occur over about 30 seconds or so. I haven’t seen any today. All of the sig rune upstrokes occurred over minutes, not seconds. I’m sure JR with critique. 

  121. biodieselchris

    the fact there has been no pullback in SLV is insane.

  122. ongba

    Is anyone planning to play GOOG earnings?  I was looking at the 500/510/520 Oct put butterfly and the 560/570/580 Oct call butterfly (both aprox 5% OTM) with net debit of $1.65

  123. gel1

    Entered a large order to sell TBT puts ( Mar 33 )… I think we have seen a number close to the bottom…. China is buying emerging markets, and passing on more of the Treasury junk… the party, like most, do not last forever.

  124. JRW III

    goldman,

    I think the supporting trend line will fail; a hesitation at 69.98 and head towards 69.22 !!

  125. fortep

     Anybody shorting emerging markets? EEM is up over 17% since early Sept. and 7% above it’s closing highs from last April. Typically it has a high correlation with the SPX, in the .90′s, and could fall really hard when/if we correct. 

  126. biodieselchris

    gel1, I closed a short TBT put (Oct-33) recently – might join you in the Nov contracts, but waiting a bit to see how the Nov 2-3 meeting from the Fed plays out could be a good idea? My basic premise is the market is already priced in major QE action and the Fed will proceed more carefully (unless they are just simply no longer paying any attention), so interest rates should rise somewhat in the short term as you suspect. This is sort of a delicate meeting as the election is also on the 3rd, so there will be ample pressure to maintain a status quo and not spook the minions at the very last second (in fact, in a Dem controlled administration this would break in favor of protecting Dems, so whatever that means in terms of what the Fed might say on Nov 2 or 3… for example, they may announce MORE EASING in order to create MORE JOBS, but then never actually pull through because it was just for optical purposes for the Dem base, which will temporarily push rates down but then come back faster in Dec-Feb).
     
    But anyways, once rates do (and frickin’ finally!!!) start to rise, it be an inexorable and relentless freight train, so need to waste a bunch of money trying to time the bottom when so much can be made on the way up.
     
    My two cents (which is about all I have left). Good luck!
     
     
    PS – speaking of Dems — predicting a bank-bashing party over the next three weeks so they can appear to be "doing something" about this hyper-toxic mortgage-foreclosure uber-mess.

  127. JRW III

    drcraig,

    Nice summary 8-)

    Well, we’re on the line; either we get the 2:45ish buy program of they let it fail !!

  128. fortep

     Anybody shorting emerging markets? EEM is up over 17% since early Sept. and 7% above it’s closing highs from last April. Typically it has a high correlation with the SPX, in the .90′s, and could fall really hard when/if we correct. 

  129. goldman

    JRW- Sold 1/3 TZA at 70.14…looking for a blip around 69.82 and then perhaps a fall to 69.28.   Or back to 71.17 we go…via massive stick save in last 25 minutes…spin the wheel and pick a number!
    Phil- I’m baaack.  I believe I owe you some dancing monkeys…http://www.youtube.com/watch

  130. matt1966

    The banks haven’t even bought back the problem loans FNM and FRE KNOW ABOUT!  FNM was trying to recoup about $16B in bad loans the banks sold to them in the last two years and the last I heard they’d only collected on about $2B.  They will literally have to sue them to get their money back.  Is that gonna happen?  That’s why some folks are already talking about a TARP2.  It’s a friggin mess and guess who the ultimate bagholders are?
     
    I seriously think they should claw back every single friggin banker bonus in the last 4 years and every year going forward until this mess is resolved.
     
    Phil / Banks / Incompetence / Fraud:  Signing off on something that requires you to legally review something before you sign off on it is not incompetence.  It’s fraud.  And since they disregarded their own employees who were trying to raise a red flag, it’s willful fraud.

  131. reza99

    Phil:
    I have short QID Oct 15Ps ($1.09), to mitigate my potential losses, I am thinking of purchasing 3X  QID Oct 14Ps ($.18).
    Your advice on this or a better trade is much appreciated.

  132. biodieselchris

     If playing GOOG (which I’m not), I’d say those butterflies are good, or sell a call spread.
     
    I bought a 530 put yesterday (5.40) and will sell it Thursday at 3:55 PM. The usual M.O. — play the run-up.

  133. biodieselchris

     Matt – let out all the 1 ounce pot smokers and prep the cells for the bankers. Let’s roll!

  134. goldman

    Matt/farmland - if you read the post above, the "19.2%" was per year…grammer isn’t my strong suit…

  135. Phil

    TZOO/Jvest – I guess so.   I don’t think much of shorting stocks when you could be selling calls instead or buying puts to limit your downside.  They do look a little nuts but you never know.  Oops, I see you agree with me! 

    Nov 10th/Jvest – Also priced in at this point.  AAPL needs to put out an IFusion Reactor at this point in order to put more good news into he market… Of course GOOG gets a swing tonight…

    Duck season/Rabbit seasonSpeaking of earnings – good so far but no upside guidance this week.   Not everyone gives it but HST and LSTR guided down while 7 companies guided flat.  The other half didn’t say.  AMD tonight along with GOOG and some guys we don’t care about (well, I don’t) and tomorrow morning is SCHW, FHN, GCI, GE (who we’d better care about), GPC, INFY, KNL, MAT and WBS and then WDFC after the close (must be hiding something to schedule earnings for Friday night).  

    Monday morning is C, HAL, HAS, MMR, EDU and PETS with AAPL on Monday night with CCK, IBM, INFN, PKG (buffet loves them as a leading indicator), STLD, VMW, WERN and ZION, who are always interesting.   Then things go nuts with about 50 on Tues and close to 100 on Weds and Thurs and then it is officially EARNINGS SEASON

    Flush/Matt – That’s why they do them – stop out as many people as they can before the real move begins.  Margin rules are essentially there to screw small investors and increase the advantages held by funds who, of course, were very instrumental in "helping" to write those regulations.  

    This is what happens when people like Hank Paulson get a piece of paper that says he can’t be prosecuted for anything he may do while in office!   

    Welcome back Goldman!  I understand that tomato juice is very good in rebuilding those blood reserves… 8-)

    News/Jordan – It’s only news if it fits their premise.  

    Interesting point on Norway.  They are prosecuting these guys because they take advantage of the bots that control the markets yet they still deny that bots control the markets…  Error… Illogical….   

  136. gel1

    biodieselchris
    You have is figured out… nobody really knows what the hell will take place. It is all about speculation based upon what you hear, see and read. I am betting the Fed will ease, as they do want som inflationary pressure at the moment. They, I believe will raise interest rates to keep this tsunami in check, and to passify some of the hawks on the Fed   – so we, I believe, we will see both. Talk about a balancing act !!. If the rates go up, as I believe will be the case, it will do nice thing for TBT. This move is necessary to assist in the effort to encourage the sale of Treasuries, which lately are looking rather "shop worn" The Fed easing will give the signal that inflation is imminent, however an adjustment in the rates will temper the fear in the minds of the suckers that are buying the Treasury junk…. just my thoughts, and assuming this is how it will all play out. – Og by the way… I am going out to March on the short puts for some time insurance ( and premium)

  137. dclark41

    Phil:
    On TLT, I got giddy and took the profit on the run up (made 56%). Thank you for your help/advice. Do you still like your XLF trade with all the risk in the banking/financial sectors? would you enlighten me on what you are thinking when you have a chance?
    Thanks again.
    dclark41

  138. kustomz

    CNBC going to have Boston Fed President Eric Rosengren who is one of the more dovish
     

  139. barfinger

    SPX 1170 calls, $4 – trade for another hour, one point out of the money. (settle with the sum of SP500 opens on Fri).
    Once again, I couldn’t resist selling some, with an implied $5 premium.

  140. barfinger

    and yes, I wouldnt be surprised to see a stick.

  141. cmsosa

    Phil, AAPL announcing earnings on monday, how woul you play it? consensus is again an upside surprise!

  142. gel1

    I am "gung ho" on the Apple franchise and the iPad success. It is estimated Apple has sold 8.5 million of these dudes, and projections are for sales to reach 45 million in 2011 ( yep… that is right ). Additionally many other companies are coming out with similar products – Dell, Toshiba, HP ( I know for sure ), so notwithstanding I have shares in AAPL. I am adding a new company today, buying stock and selling March 5 puts. The company I am investing in is a primary supplier for the componentry of these devices – cotroller chips for flash-based storage devices which are used in smart phones as well as tablet devices ( computers ) The company is SINO ( Silicon Motion Technology Corp ) Taiwan based, and has more cash on hand as a percentage of market cap than AAPL…. Good growth company with a reliable customer base.

  143. gel1

    Goldman… nice to have you back… where did you  come in contact with those vampires?

  144. kustomz

    gel I think you mean SIMO, good luck

  145. goldman

    Rut Pack/JRW/Drcraig - so was that a "Sig run" on the 1 min IWM chart centered @ 3:12?  Perfect sideways "Z", but not much volume until 3:13
    There is a decending trendline starting at 2:00 that IWM reversed south around 3:23…a second test program seems to be testing the line right this moment…(3:33)

  146. drcraig

     Goldman – Too spread out based on my understanding of a sig rune that indicates a buy program. It starts at around 15:06 and completes at 15:12. We’re looking for something much quicker. 

  147. goldman

    gel1/vampires - usually the vampires come for me around April 14th…fortunately, I have fended off their attempts so far to suck me dry…=D

  148. JRW III

    Out of TZA at $23.10 average; 1/2 in TNA at $52.54

  149. manta

     I own some MWE which currently pays 6.7% dividend.  I am bullish on the stock, but would like to increase my yield.  I know you have previously described a strategy for selling puts or calls to increase yield but cant find it.  Do you have a link, or any ideas on this stock?

  150. deano

     Phil
     
    So, let’s say we’re inflating, what’s the typical low risk, long term playbook – bull call spreads across multinationals? Is there a better asset class to do it with?
     
    Thx

  151. goldman

    TNA - the current pivot is @ 70.26…exactly at the 200sma again.  Waiting for a break above this area before I dump my the last 2/3 of TZA (although my "last 25 minute stick save" comment an hour ago has me pondering)….

  152. escohen5

    Gotta like that "kick me" sign on the back of TLT.

  153. kinkistyle

    Impressed by the selling pressure rushing in to meet and greet with Mr. Stick.

  154. Pharmboy

    Just remember that every time there is a bounce in TBT, the emperor looses his clothes.  Rates will continue to go down and the bond junkies make a killing on buying them in here, and TBT will move with it.  Someone is still buying, no matter how absurd it is.

  155. Phil

    Inflation/BDC – Like the judge said about pornography: "I’ll know it when I see it."  We are not there yet and I’m not yet convinced that we can sustain inflation without wage inflation and we won’t get wage inflation with 10% unemployment or even 7.5% unemployment so all we have now is dollar devaluation, which should not be confused with inflation.  As I keep warning EVERYBODY over and over and over – the Dollar remains the World’s reserve currency as well as the flight to safety currency despite it’s problems and the prices being charged for commodities now are unaffordable.  This is not natural, sustainable inflation so I wouldn’t go too nuts until you see those TBills failing (rates going up) and raises being handed out.  

    TBT/Gel – It’s a long-term hold to hedge on inflation.  Could be now, could be next year, could be (more likely) 2013 but, at some point, you will probably be glad you have some.  

    Ethics/Rain – ROFL, that’s a good one – using ethics and bankers right in the same sentence like that!  

    PCLN/Jvest – Well that was yesterday.  Didn’t work, did it?  Of course if you are not willing to roll out and hold it then don’t but the Nov $390 calls are $6.30 so unless you think that upgrade will get them to $400 in 36 days – not a lot to panic over.  

    Fair/Gel – Yes but by the time the water come back to neutral, sometimes everyone on the high side has drowned already. 

    SDS/HHFIV – It’s an hour later and I bet you are happier now, right?   Sure, if you want, you can sell some calls to offset but, as I say again and again and again – NEVER sell puts on something you are not REALLY willing to own at the net strike.  If you REALLY wanted to own SDS at net $26, then why would the $28 puts bother you?  Not to mention they can be rolled down to March $26 puts so that’s net $24 and those can be rolled down to the 2012 $20 puts and if you don’t REALLY want to own SDS at net $18 (being short on the S&P at about 1,370) – then why the heck would you have sold short puts at the $28 strike?  Again, you have to have your own long-range premise and plans to balance out your portfolio but, if the S&P is at 1,400 a year from now and you have SDS put to you at net $18, even if it’s at $14 – don’t you think having $14,000 worth of SDS as a hedge (which you can always sell some calls against) is going to be a pretty good idea to cover your bullish bets on S&P 1,500?  As a rule of thumb, as long as you are willing to roll, then you don’t really need to do so until the puts are down to less than 50% (of the cost of the put) in premium.  In other words, the Dec $30 puts at $3.35 ($1.35 premium) are worth considering for a roll to the 2012 $23 puts at $3.50 but, as long as the roll is about even – there is no hurry there either.  

    Nice insights Goldman, thanks! 

    OIH/Fortep – Those are pretty out of the money, how about spending $1.10 to roll to the $115 puts and raising your delta, which puts you in position to sell puts and then roll up or out (or both) if it keeps going poorly.  Since you spend $1.10 to go from $2,  $111 puts with .25 delta that you are out .80ish on to the $3.10 $115 puts with a .37 delta, you are still down .80 but now you just need a $2 move down in OIH to get even.  It’s cheaper than doubling down and you are less out of position if  it goes the wrong way and you can still DD if they test $120 (assuming you still want to) or just add 50% more for about the same as you are willing to commit now.  

    Buy program – There has been no buy program today until about 3:15 – just the termination of sell programs for brief intervals.  Someone sophisticated and big seems to be lightening up but they are not going to fight Mr. Stick as it’s to their benefit to start again at a higher level or, like yesterday, to take advantage of Mr. Stick by selling hard into the close.  

    GOOG/Ongba – If I had an inkling of a clue as to what they will do, I’d play them but I have no idea at all!  A neutral spread on them could be buying 5 weekly (next week) $560 calls for $6.40 and 5 weekly $520 puts for $6.40 and selling 4 Oct (tomorrow) $560 calls for $3.80 and 4 $520 puts for $4.60 should do pretty well on a flat-line and not get in too much trouble on a bigger than $20 move as you can surely roll into a vertical.  Risky of course as GOOG is a crazy stock

    Emerging markets/Fortep – great idea! Our old friend EDZ is way down at $23.46 and you can sell the Apr $19 puts for $2.70 and that will pay for 1/2 x Jan $19/22.50 bull call spreads ($1.70) for net .35 per $3.50 spread that’s 100% in the money to start!  

  156. matt1966

    I must say for the record, the EPA’s allowance of 15% ethanol in fuel for ’07 and newer vehicles is perhaps the best proof to date that this administration is in it for big business and not ‘Joe Sixpack’.  The impact of ethanol on pollution is a big NEGATIVE.  The impact of ethanol on vehicles is a big NEGATIVE.   The impact of growing corn costs the government money because it’s subsidized.  So, using ethanol is bad for the environment, it’s bad for vehicles and it costs the government more money.  Who is it good for?  The corn trust. 
     
    How is it that in today’s US, this type of $hit continues to happen over and over again?  We are too smart and it’s too easy to disseminate the truth today for this to happen.  SO WHY IS IT STILL HAPPENING????????????????????????????

  157. goldman

    Out TZA 22.76…wow, what a ride…

  158. gel1

    kustomz  right you are     – it is SIMO…. sorry for the tpyo

  159. Pharmboy

    Man I miss U matt! 

  160. drcraig

    Wow, late stick. Ugly too. 

  161. JRW III

    Out of TNA at $53.25; closing at IWM 70.41?

  162. JRW III

    No, higher; I hate it when that happens !!

  163. drcraig

     Once again Birinyi released their statistical report on GOOG behavior post earnings. Odds seem to favor a drop whether they beat or not. I’d buy puts if not for the golden hand of the fed holding up the market. 

  164. Phil

    Fraud/Matt – It’s not fraud because they are only harming themselves.  The consumer is not harmed because the bank abrogates their right of collection through whatever means, be they willful or otherwise.   The fraud would occur (and this is why the banks are "voluntarily" stopping if the banks swear out foreclosure notices based on documentation they know is insufficient.  

    QID/Reza – I don’t see how you risking 3x .18 is going to mitigate your losses.  Just one would do that, the rest is reverses your original bet, which is often a bad plan, especially when you can just roll the $15 puts down to the Nov $14 puts fro about .40, which is just .22 more than you are willing to throw away on a 1x cover.

    Wow, what a stick here at the end.  Over 50 points and still going – maybe they can close us green so they can report how we had yet another up day in the market.  

      

  165. deano

     Phil
    I’m in HOG for net $25, with OCT calls sold at $27, the stock has shot up on me, any suggestions on a good roll to some leaps? Thx

  166. drcraig

     WOW LOOK AT GOOGLE GO!

  167. rn273

    GOOG traded 6% up in ET before results are out?

  168. drcraig

     WOW LOOK AT GOOGLE GO!

  169. Phil

    XLF/DClark – I still like it because I don’t think, in the long run, they are going to let the banks fall.  The banks would be rallying with everyone else if it wasn’t for this foreclosure thing but I could solve their problem by tracking and unwinding the swaps to drop the property back with the original bank who would clearly have the right to foreclose.  So if I can solve it, you bet they can be even smarter than that and it will all blow over and then they will rise.  

    Rosengren/Kustomz – Good call.  There must be some way to get their guest list ahead of time…

    Wow, GOOG popping the Nas after hours, hitting $575 on earnings up 32%

  170. goldman

    matt/ethanol scam - in 2008, I made 85% more than any year previous due to making a bet that the ethanol fad would spike corn prices to the $4 range.  I’ve have a physics, science, engineering backgroud…and happen to have  grown up on a farm, so I know corn and understand the process and science behind ethanol.  I have read the white papers, and I can tell you it is a feel good scam that is too complicated for the average Joe to understand, much less care about.  It is putting money in the pockets of farmers, ethanol manufacturers, and even big oil companies…a bribe for votes, with a green "feel good" spin for the taxpayers and voters.  Sugar cane ethanol is feasible, but we grow corn here.  Switch grass works even better, but we can’t scale the process…yet.  Corn stalks is where I have my biggest hopes…as we chew them up and spit them out the back of the combines.
     
    JRW - Well, the mini-stick didn’t hit the 71 mark, but half way there! 

  171. kustomz

    Rosengren, got out of FAZ (+3%) as soon as I heard his name mentioned on CNBC..it pays (literally) to pay attention

    Go GOOG

  172. Savi

    Phil--I have FCX short Nov 100 calls @ 2.60 (now$5.00) --should I roll now or wait? also
    Tx for the input on uup

  173. jromeha

    Matt-  Obama is doing NOTHING different than ALL politicians have when it comes to farm and ethanol subsidies. Carter started it and nothing has changed in 30 years, republican or democrat. With Bush’s Energy Security and Independence act of 2007 aiming to increase our production 450% by 2022. A little unfair to single out Obama for Ethanol when all presidents have supported it. I do agree though that it is complete BS and I hate it. I just wished more people knew that you get worse fuel economy with Ethanol and would realize that the 10 cents per gallon they THINK they are saving by buying ethanol blended gas is actually costing them 30 cents + in less fuel economy.

  174. matt1966

    goldman, I don’t think the harms of ethanol as a fuel substitute are too hard to explain to the public.  Although I have an MS in evironmental engineering as well as PE license, I don’t think I’m projecting onto Mssrs. 6Pack that:
    a) ethanol burns hot and damages seals in engines, bad
    b) gal for gal, you get fewer miles per gallon using ethanol, bad
    c) growing corn causes massive erosion, bad
    d) refining corn requires energy, bad
    e) the government spends billions every year subsidizing agribusinesses to grow corn, bad!
     
    This is not complicated.  The problem is we have an apathetic public.  A public that as long as they are getting theirs they really don’t care.  Things in this country really need to get worse before folks start paying attention.  Much like Lindsay Lohan, we still haven’t hit our rock bottom where we finally see the light.  But I tell you what.  Inflation will do it.  There is NO BETTER WAY to get into the heads of even the most disinterested folks then to start charging them more for their everyday needs.
     
    I still remember to this day, back in the mid 70′s an old lady I was trying to collect $ from for her newspaper that I delivered bitching about the cost of orange juice, coffee and newspapers going through the roof.  Imagine telling a 10 year old that she was going to have to quit the paper if it kept going up.  As if!

  175. Phil

     AAPL/CMS – Like GOOG, I wouldn’t play AAPL because who the hell knows.   It’s a total wild-card, probably overbought but also with such stunning IPad numbers that they could knock the doors off the estimates.  Looking at GOOG now – clearly things that are up can go up much further.  

    SIMO/Gel – A nice one.  You are right, the IPad is the new laptop – good enough for almost anyone who needs one.  It’s like replacing fountain pens with a ball point:  Fountain pen people can talk all they want about how it’s a superior writing instrument but, as history proved, for the average person and, eventually, everybody, it just wasn’t worth the hassle to stick with a fountain pen.  I was at the AAPL genius bar last week and while I sat there pretty much every single person who had a defective or broken or whatever IPhone or IPod ended up agreeing to pay even more money to exchange for the newer models.  AAPL has a "recycling" program that really encourages an upgrade path and they don’t even push it but, when the mention it, people’s eyes light up at the excuse to get a new model.  Not the kind of company you bet against.  

    Inflation/Deano – Well the safety dividend payers like KO, PFE, MMM, JNJ…  We should go back to update the old Dividend Payers List that I put up last time we were toppy but thought we should buy SOMETHING.   Remind me on the weekend.  

    Why/Matt – Because Fox news is the nation’s #1 news source?

    HOG/Deano – They are very affected by earnings.  Nasty with the calls but they are $5 and can be rolled to 2x the Jan $32 calls at $2.80 for .60 in your pocket.  So, rather than give them $5 you get .60 and you can buy the 2012 $35s for $4.60 to cover.  This works best if you are able to stop out of your stock on a dip (leaving a 1:2 backspread) or if you can just risk 2x the 2012s without the stock and simply buy more calls or roll the calls down if HOG takes off.  

    FCX/Savi – it’s $5 of pure premium – why pay it?  

    Ethanol – total, shameful scam I thought we were done with.  Americans NEVER learn!  

  176. Phil

    Here’s a simple explanation:

  177. jromeha

    Goldman – It does seem to be a nice feel good scam. Switchgrass is still constrained by scope/scale issues, technological issues (enzymes that break it down are too expensive), and resources – still requires water (although less than corn). Most biofuels are bullsh!t. Sure sugar is better b/c there are less steps in the process but clearing rainforest for sugar is hardly good for the environment. Same can be said for Oil Palm and Jatropha. Algae seems like the best right now if the technological issues could be worked out. I have no environmental degrees but my thesis is a retrospective look at alternative fuels & feed stocks and why they’ve failed. I’m doing a little cost analysis angle as well (since that’s my degree program).  The Fischer-Tropsch process would be the best for us if we could find a way to actually do ‘clean coal’.

  178. ravalos

     As a result of GOOG’s earnings, ALL internet stocks are up.. of course, we have to count on PCLN hitting $355 AH..

  179. jromeha

    hahaha Phil, nice  cartoon by Andy Singer – I used that as one of my intro slides during a thesis briefing.

  180. goldman

    matt- "Lindsay Lohan" stories is what keeps the populace numb to the complexity of our world in which most would rather remain blissfully ignorant than be depressed and/or angry understanding the facts.  I do believe that inflation will smack everyone in the side of the head in the near future.  I remember as a kid getting 14% CD rates, as my parents farm loans were at 18%.  Many farmers lost everything…we ended up selling most of our misc non-essential equipment, working multiple jobs plus farming, etc…I even loaned money from my personal accounts to my parents, and I was in High School at the time…banks as they were "mafia-like" and had their own agendas back in the 80s, no different than today.  I’m always amazed how many trust the govt on all matters, without question…

  181. drcraig

     Phil – I have a spread question for you. I followed Lflanthamen’s strategy and bought 10 AAPL Nov 300 calls, and sold 5 Oct10 calls against them in two rounds. I made 50% on the first round, but I still own the second round, and the stock looks to be rising faster than I had hoped. What would be the best strategy to manage this position given my expectation that AAPL will rise, and may reach 330 on Tuesday morning based on past performance. My plan right now is to wait for end of day tomorrow hoping for a $300 pin, although that may be tough to come by with the excitement over Google’s earnings. If it looks like they’re going to be ITM, I could buy them back, or roll to the Oct Wk4 calls for about $1.80 (based on today’s prices). If I were really slick, I’d sell some puts too, but I don’t trust Steve’s health *that* much. What do you think?

  182. biodieselchris

    holy crap I thought GOOG’s earnings were tomorrow (I thought today was Wednesday). I held 2 Oct-550 calls I had absolutely no intention of holding through earnings that just went up big time. 
     
    Here’s to being a total moron and still making some $$$. Cheers!

  183. drcraig

     Biodieselchris –  Hahahahahahahahahahaa!
    We’ll see what happens tomorrow. They are usually flat to down from open to close after a beat and gap up. 

  184. goldman

    jromeha/algae ethanol - algae ethanol in quantities would be a real breakthrough and it has a virtually unlimited potential, especially if we can harvest the red algae toxic blooms that could grow exponentially due to global warming…=D
    IWM - So we hit 71 in AHs…Friday will be fun!

  185. ravalos

     STX stock was halted to announce this:
    Seagate Technology announced that it has received a preliminary indication of interest regarding a going private transaction. The company is in discussions with the party from whom it received the indication of interest, and its board of directors is evaluating the indication of interest and other strategic alternatives. The company has retained Morgan Stanley & Co. Incorporated and Perella Weinberg Partners LP to provide financial advice and Wilson Sonsini Goodrich & Rosati and Arthur Cox as legal counsel. There is no assurance that the company will receive a formal offer or that any transaction will take place. Neither the company nor its representatives will be providing any additional comments regarding the preliminary indication of interest.     

  186. HHFIV

    Phil: Thank you. As someone who is new by comparison to the seasoned members of PSW, I need to be constantly reminded about the short/long term commitments implied by each trade and my willingness to ACCEPT the obligations of the trade (e.g., sell puts then obligated to buy underlying at strike price of option). At the outset, the SDS hedge I set up a bull call vertical designed to protect X dollars of long stock positions. When the market started heading north, I closed out the calls that comprised the bull call vertical and held onto the PUTs (Originally OCT 30 that I held onto too long before rolling to DEC 28s -didn’t follow your roll advice). I understand the obligation when one writes a PUT contract; however, understanding and acceptance are an aspect of options that I’m still working on. It’s curious to me how easily I accept the obligations of the trade with the expectation that it will be successful. Unwinding a trade that goes against you suddenly tests your commitment ($$$) to the obligations of the trade. It’s easy to design a position and punch the keys that make the trade go when your real commitment to the obligations are weak (i.e., too focused on a successful trade). Going forward, I’ll take more time to reconcile with the obligations of a trade that goes the wrong way and be certain that I won’t have second thoughts when reality sets in. To new traders – the importance of a trading plan or some sense of where the exits are cannot be overstated.
    That said – I’ll continue to improve my position in the PUTs by rolling out in time and down in strike using your rule. Your mention of a potential upside to owning shares of SDS at S&P 1300 or 1500 isn’t something I’d really considered. My focus was stuck on the present. Adjusting it to a time in the future and under different circumstances was helpful.
    Lastly, I like your style. I live in Colorado were the pace of life is a little slower than that which I was accustomed to growing up. One thing I miss about the east is that people just tell you how it is. There is no soft delivery. I’ve got a younger brother that lives in Philly and parents outside the city because it scares the sh*t out of them. I love it and look forward to each and every visit.

  187. biodieselchris

     Dr. – GOOG might have some ‘pull through’
     
    Since I have 2 contracts, I’ll do off with one in the morning (6:30 here, suck), and one at 12:55 PM.
     
    It’s a nice problem to have!

  188. hoss18

    Gel1 – in regards to your thoughts on the moves in the currency markets, and the currency war….I saw this article today on Zero Hedge:
    http://www.philstockworld.com/2010/10/14/plaza-accord-20-is-it-coming-is-it-here/ 
    And thought of you because of your currency plays and research in exchange rates.  I found it interesting that there are two ways out of this mess, a chaotic, mass destruction one, and a more organized de-valuation of the dollar.  The arguments he presents I felt were cogent, insightful and thought provoking. 
    His conclusions are also where I had kind of come to in thinking through a currency war:  precious metals, commodities(soft & hard), and other basic inflation plays and short financials and retail(will get creamed).
    Then I asked myself, how would we know if a backdoor agreement had been made?  Well, he says look at China…but I wonder what about Japan?  If we don’t see them come in and intervene directly again soon, maybe that’s the tell that the deal is done. 
    Then, if the Fed then stands down Nov 3…….look out below…..

  189. hoss18

    Don’t really need a parachute….
     
    http://www.youtube.com/watch?v=wcW_Ygs6hm0
     

  190. Cap

    Well how about that GOOG.   Just when we held out some hope to get a good sell off going…..
     
    Gotta a good short play for y’all …. MBI  (MBIA).   Major short squeeze today right on schedule for options expiration.  Courtesy of the banks foreclosure problems, which could possibly benefit MBIA and Ambac.
     
    MBIA is a dead company.  Whatever the short term impact is of this squeeze, $13 will be an excellent short entry.
     
    When junk companies like this get moving, you know we are at or near a top !

  191. augrusot

     If GOOG holds this AH price action and closes above $580 tomorrow, someone is going to be out about $1M.
    http://www.schaeffersresearch.com/commentary/content/will+google+inc+rally+ahead+of+tomorrows+option+expiration/trading_floor_blog.aspx?blogid=102888

  192. matt1966

    "Filling up an SUV with ethanol takes as much corn as it does to feed a person for a whole year."
     
    Wow.  That really puts it in perspective.  I forgot to add all the pesticides and fertilizers used to grow it in my list as well.  Both are terrible for ground water / surface water.  I pray for the day they can make switch grass and algae viable.  But I can’t help but think ‘they’ will keep a lid on it to preserve the status quo.
     
    Nice job Goog!  (Bio, even a blind squirrel occasionally finds a nut!)  Way to breath a little life back into the market so I can short from a better vantage point tomorrow when my buying power returns.. er, I should say selling power.  8-)

  193. Cap

    Another short idea  (riskier) is to short PCLN tonightafter hours at $355 up $6 from the close on Goog’s report.

  194. lflantheman

    Trading AAPL……….If GOOG pops like this, well what do you suspect will happen with AAPL?     If you really don’t know what to do tomorrow in preparation for AAPL reporting  then sell some calls……………………………………………………………………. and I’ll buy them from you.      :)

  195. gel1

    Matt / Ethanol
    Your list of negatives is totally accurate…. Not too many really understand how this scam evolved. It was back many years ago that ADM ( Archer Daniels Midland ) and the CEO – Andraeson were in bed with the Republican Party, and specificially the Congressmen and Senators from the Midwest. This whole ethanol scam was about making the US independant from the Middle East oil thugs ( also to give the corn farmers in the Midwest a helping hand ). It was promoted by the POLITICAL thugs who were bought in toto by the ADM thugs ( knew many of these operatives and this is the WHOLE story how all of this became reality. The science is totally flawed and the implimentation of this scam has done way more damage than could ever be achieved in projected benefits. ( inflation in food products for just one ).

  196. gel1

    iflan… I have come up with the worst trading idea of the year – short AAPL going into earnings – bet you can’t think of one that beats it !

  197. HHFIV

    Matt1966: I have  BS in civil engineering and my PE (Colorado license). For most of the last 15 years I’ve worked as a water resource engineer on acres and acres of commercial, industrial and residential land development projects. My work was decimated by the housing crisis. I can think of numerous projects that made it through the development review process and will never make it to construction (Maybe Gel1 is out there buying these projects at fire sale prices). For the past three years I’ve been working as a independent consultant. My niche is innovative stormwater management practices. This includes designing projects that involve lesser amounts of hardscape and more surfaces that absorb water (roof area, concrete and asphalt). The way I see it – it’s not gold or iPads or oil that we will all be fighting over some day. It’s water. If given the choice, I bet most people would rather give up water than their iPhone for four days. Few realize that the same water we drink is also used to water our lawns. Dual systems are met with significant resistance and rarely make it past the conceptual design phase. It goes to show you how much we take for granted that water ‘just’ comes from the faucet. I’m sure several members of the PSW board have traveled in undeveloped or impoverished regions of the world can comment on the availability of clean water. So, one goal of my work is to assist clients in the design of developed areas that lessen the impact of our built environment on the one resource that is truly necessary. Well – clean air is nice too.

  198. gel1

    Hoss – Yes it is definitely a currency war… and the many participants are working their strategies. We will see some unexpected moves from the many players as they try to re-position. This is a very large chess game, and the directions can change very quickly.  Japan, I believe will be the first to move in a big way… but still they are hedging their bets, wondering if they have been spoofed by the US… we al are but mere observers, trying to handicap the outcome. It is a lot of fun, and I hope PROFITABLE ( keep the stops tight )

  199. biodieselchris

    even with GOOG running I would be cautious with PCLN, they are up 60% in 3 months and that is just plain nuts.

  200. Jbur

    HHFIV
    Where in CO are you. I have been seeing Pikes Peak out my front window for the past 28 years.

  201. HHFIV

    Jbur: Fort Collins. I have lived here for the past 20 years and only wish that I could look out my window at Pikes Peak. I know the mountain. Ran the Ascent a few years back. Brutal. I have respect.

  202. gel1

    HHFIV
     
    Nope, I’m not interested in buying any properties, but I have had for some time been interested in one of the world’s most precious resources – WATER. As a scientist that is thoroughly schooled in the shortages of water and the need for conservation, I believe you will agree with me. I am acutely informed of the issues, as I have a home in California as well as Nevada. Last month I had a $2000 increase in my water bill for the month ( was a small leak in the pool that was not noticed, and the automatic filler kept running ) I shut the whole thing down, and will wait for the rainy season to fill it up.
     
    Like you, I am very interested in water related investments, and have done the following research - 
     
    71 % of the world’s surface is covered with water, but only 3% is fresh water, that is suitabe for human, animal or crop usage…. And guess what – 70% of the source is locked up in frozen glaciers. Many countries rely, therefore on ground water, or surface water, that is subject to pollution of all sources.
     
    I have targeted China for an investment in this rapidly diminished resource, as they have a rapidly expanding need for clean water., and the supply is becoming depleted. – Also China has 21% of the world’s population, and only 6.2% of the renewable water supply. I look at this as an investment opportunity.
     
    The World Health Organization has announced that 75% of all disease in China comes from water pollution – with related deaths at over 100K per year.
     
    China ( the government ) is very much aware of their problem, and I understand they will be spending upwards of $500 Billion over the next few years to address the problem. There are some companies that are in this field with the necessary expertise – SI ( Siemens ) fron Germany, which I have a position in, and another that I really like as it is based in China, and is a terrific position to benefit from this investment – RINO – Rino International Corp.. HHFIV… with your expertise, you no doubt could offer your help as a consultant, as it appears they are definitely in need. California is also in a bad way when it comes to water…. but monitary and political problems are in the way of any solutions, I’m afraid. 

  203. jthoma

    Phil= Does anything stop the bank stocks from going to zero short of another bailout?

  204. HHFIV

    Gel1: My apologies. There is someone else on the board that mentioned work I associated with land development.
    Water. I’m at a loss these days. Politics and money stand squarely in the way of assuring the long-term availability of potable water (which we water lawns and pavement (urban slobber from poorly designed and mismanaged irrigation systems) with in this country). When I reflect on the past three years, it surprises (and saddens) me how much of my time was spent convincing people that we NEED to change our land development practices. Would anyone want to do anything that involved contact with surface runoff from a Wal Mart parking lot? Our current practices do not work. Our surface water is a mess.
    Many people are short sighted (of which I’m guilty in my options trading) and unwilling to implement changes today that will payoff for years to come. Why do we fear change? Many of the ideas I propose are only new to us. I often mention examples of innovative land development practices that I saw in Europe.
    Where is your place in Nevada? I enjoy running and did a nice race along the Tahoe Rim Trail several years ago. What a beautiful course with great views of Lake Tahoe.

  205. biodieselchris

    I think, more specifically, FRESH WATER is what we’ll be fighting for. Salt water is everywhere. And yes, once the sun does it’s massive amount of work (evaporating water out of the ocean and dumping it on land as fresh water) we do a terrible job guarding this precious resource. Rain barrels for lawn/garden watering and ‘dual systems’ (toilets that run on ‘dirty water’ as opposed to heavily cleaned water that comes from the faucet) seems like a no brainer to me. 
     
    Corn/ethanol – TOTAL scam. It only returns 1.2 units of energy per unit of input (the difference being the work done by the sun to create carbon-carbon bonds). Biodiesel returns 3.2+ units so it’s far better but still not viable overall solution until non-agricultural methods like algae become a reality. I think its worth spending money on though, to crack the algae nut, so to speak. Any any talk of ‘global warming’ aside, for me its about energy independence, and national security. I could care less about the global warming "debate", and whether you "believe" in it or not is irrelevant . It is most certainly NOT EXCUSABLE to discuss these issues in the absence of national security considerations simply because "global warming" has hijacked the debate (which is so frustrating and stupid).

  206. biodieselchris

    Rain water: If you have a 4,000 sf property (~0.1 acres), and it rains an average of 36 inches a year (3 feet) then:
    4,000 * 3 = 12,000 cf of water falls * 7.48 gal/cf = 89,760 gal of water. 
    I’m a meter reader, we use about 80 gal per day on average, or 29,200 per year, and 3 times that, worth some $2,500, falls on our heads and goes down the drain.

  207. drcraig

     Gel – You do NOT have a $2000+ water bill. WTF?? You should catch rain from your roof, if that were legal in California. I remember hearing something about it being illegal in Sacramento to collect rainwater on your property. 

  208. revtodd64

     VXX- I’m doing a little work with selling weekly covered calls in my IRA and found this idea in a book I’m reading.  Buy the VXX ETN and then sell at-the-money calls when the VIX is down under 25.  Trading it today generates about 4% income per week as long as the VIX does not drop.  For my full thesis click on my user id.  Doing this 4 times in a month creates decent downside protection if the VIX falls, but has great profit potential as an income trade if the VIX is steady or rising.

  209. nicha

     bio: in India some cities have encouraged/enforced residents to build water tanks on the roofs to collect rain water as there is a huge shortage of water. This has worked well for all the people who have built the tanks. 
    gel: there are some interesting companies in India that are working on water treatment plants. I think India is in the same boat as China. Most of the diseases there are water borne as well. My 1 year old daughter keeps me very busy hence I have been unable to research them.

  210. dclark41

    rev
    So every week you are buying an amount of shares of the VXX and selling an equal amount of weekly ATM calls? If the VXX goes up you just let the shares be called away and repeat the process the next week? What about commissions? Is 3.8 enough to cover those? Interesting idea-just trying to understand it fully. I have read Augens’ book The Volatility Edge, I will take a look at his new book. Thanks
    dclark41

  211. gel1

    HHFIV / Nevada
    My house there is in Incline Village, on the north shore of Lake Tahoe. There is not a water shortage at all, because of the adjoining lake, however there are very strict regulations in place to protect the lake from water run-off from your property. In place is a regulatory body that monitors each property within a mile of the lake, to make sure the permeable surface meets a certain ratio of footage relative to the total area of your property. I attempted to add 50 square feet to a patio on my property and was denied the permit ( all ratio related. ) My property is two blocks from the beach, and I am constantly watched  by the "tree huggers " as they are in control – maybe it is for the best!

  212. HHFIV

    gel1: You are speaking my language! If you still want the patio, then I will pass along information about a simple system that would address the concerns of the regulatory body.
    Lake Tahoe is beautiful. Do you have the "Keep Tahoe Blue" sticker on any of your cars?

  213. gel1

    drcraig
    Yup…. $2000 for the month of August, and it normally is about $85. Water in California is very expensice as you can see. This additional billing is for a small leak in the pool, that has yet to be found. We get no rain from April through November, so I’ll deal with the pool level this winter, if we get some rain. Water is truly becoming a "precious commodity, particularily if it is potable. In order to get a permit to build a pool, you now have to have a pool cover to guard against evaporation. Much of California was a desert before population growth, and water is now rationed through economic penalties for usage. Let me tell you…. that $2,000 bill was "painfull" and no analgesic will help!

  214. gel1

    HHFIV… I gave up on the patio – I guess I could get creative and cantilever the thing. Those license plates are still available as "personalized plates", and the extra fees go toward the preservation of Lake Tahoe…. me, I just go "in cognito" with regular plates, and try to blend in without being noticed..

  215. Maya1

    gel
    Are you famous?
    If so, flaunt it, man!
    If not, you are already incognito!
    Personally, where and how I grew up, I was taught to be spiritual and NOT flaunt it if I had it( but, alas, I don’t have ‘it’)
    Since moving t9 California, I think, you HAVE to flaunt it if you have it…so go and be seriously cognito!
    And keep upmthe posts

  216. Maya1

    drcraig,
    Please stop selling AAPL calls, at least for now!
    I am a novice in options trading, but for the past 6 weeks, AAPL has been not the stock to sell calls for.
    The aapl guru (lflan) has already offered to buy anyone’s calls…
    Personally, I have lost $11,000 on selling calls the past month( ouch)
    Now, if you want to be contrarian and hope for an egg from aapl earnings next week, yeah, possible, but lonely road, I think, unless I join you in the strategy

  217. kinkistyle

    The Fed released its POMO schedule. Looks like non-stop pumping for the next two months.
     
    After the reaction GOOG got after earnings, I think I might start buying lotto tickets to the upside as well, as this market is officially one giant messed up casino.

  218. revtodd64

     VXX – dclark 41  Yes, I’m selling ATM calls every week as long as the VIX stays under 25.  You can set the figure lower if you want to be more cautious.  Over that, there is too much downside.  I have IB and my commissions are very low.  I bought 700 shares plus the calls for about $8.50 and the profit would be $420.  You can click on my user id to get the full write-up.

  219. kinkistyle

    GE had increased earnings but had a 5% decline in revenues.    I think GOOG might be the GE for the 21st Century.  Wish I owned less of the latter and more of the former actually.

  220. kinkistyle

    GE announcement here: http://finance.yahoo.com/news/GE-Delivers-Consecutive-bw-3558538583.html?x=0&.v=1

  221. Phil

    Good morning!

    Will be interesting to see what sticks with GOOG giving such a huge boost.   

    The EU did not hold an early pop with the FTSE giving up about 0.7% from the open with the DAX and CAC so far down about 0.3%.  EU car sales were off 9.2% from last year.  Greece is on strike over rising unemployment (12% reported, 20% actual) and further Government cutbacks – essentially the Conservative game plan….

    Just past noon, police clad in riot gear fired tear gas to dispel around 150 Culture Ministry workers and forced open a padlocked gate that had kept the Acropolis and the Parthenon inaccessible for the second straight day.

    Strange day in Asia with the Hang Seng down 1% and the Shanghai up 3% (India down 1% and Nikkei down 0.9%).  Apparently they are all-in on the QE2 and they actually consider the relative strengthening of the Renminbi to be a good thing as it’s an effective raise for 1.3Bn mainlanders.  China airline stocks went flying (they can afford to travel?) and the commodity sector went flying based on the ability to buy more as well as a GS doubles their metals forecast, now predicting a 30% gain in 12 months!!!!  This is so like the way they pumped up their oil forecasts over and over again to get us to $140…

     “As the likelihood of QE2 has helped diminish market concerns about sharp macro deterioration, relative commodity performance has been increasingly tied to fundamentals,” Currie said in the report. “In addition to gold and platinum, we are most constructive on copper, zinc, corn and crude oil.”

    Goldman Sachs this week raised three-month and one-year estimates for gold prices to $1,400 an ounce and $1,650 an ounce, respectively. Copper may climb to $11,000 a metric ton by the end of 2011 as stockpiles shrink, the bank said last week. Today Goldman Sachs increased its 12-month estimate for corn to $6.25 a bushel from $5.

    “We expect the recent tightening of corn balances on strong demand growth from ethanol, as well as sharply lower U.S. yields, will lend further support to corn prices despite the recent rally,” Goldman said. Wheat prices will remain elevated and volatile for now and will drop in the “medium term,” the bank said.

    Goldman Sachs forecast a 20 percent return from the S&P GSCI Enhanced Commodity Total Return Index over 12 months, compared with the prior 19 percent. The gauge is up 2.3 percent this year.

    Man you never know what kind of font this thing will paste!  

  222. kinkistyle

    “As the likelihood of QE2 has helped diminish market concerns about sharp macro deterioration, relative commodity performance has been increasingly tied to fundamentals,”
     
    Swans getting ready for some hyperpigmentation.

  223. Phil

    AAPL/DrC – Those weeklies won’t help you as they are through earnings.  Let’s see what happens in the morning and think about it based on the actual prices.  Make sure when you ask again later that you include quantity and basis for each position.  Also, what is your real goal here?  Do you WANT to have 10 naked AAPL Nov $300s into earnings?  

    Congrats on sleeping at the wheel BDC!   

    Speaking of GOOG – Hopefully they test $600 and we can grab some puts!

     STX/Rav – They already did that about 10 years ago I think and then went public again.  Great scam!  

    Rolling/HHF – You certainly get it!  Just keep in mind that if you are rolling your puts further and further down, the only reason you would be doing that is if your longs positions are going up and up and up.  The more "ridiculous" your loss is on the put side, the more "ridiculous" your gains should be on the long side.  The trick is deciding when to cash out the longs and flip short.  Which we chose to do at the 7.5-10% line.  Maybe too early, maybe not but, if we’re wrong – then we can go long again.  That’s what’s always nice about cash – it’s very flexible.  Glad you don’t mind my sarcastic style, I don’t want to be mean or anything, but I tend to feel comfortable here and I joke with you guys the same way I do with any of my friends – sometimes in print it comes across a little harsher than I meant it but that’s me and I’m not some guy who comes in and politely teaches a 45-minute class a few times a week and leaves – that’s just not my style, even if I wasn’t on all day long….

    Dollar still going down, getting close to 81 Yen now.  $1.60 to the Pound and $1.41 to the Euro.  Another day, another 1% drop in the value of our money – ah well…

    Filling up/Matt – I think the real perspective is that is that 62M people die of hunger each year including 15M children and, at 15% ethanol content, the US is using 4M YEARS worth of food each day to fill up our gas tanks.  Meanwhile, if we instead focused on fuel efficiency and conservation, we could knock off 20% of our consumption of 400M gallons of gas per day so 80M gallons is 4M tanks of gas is more than enough corn to feed those 62M people for a year EVERY SINGLE MONTH!  Think about that next time you see a guy in a Hummer.  

    Oops, 7:30 already – I have to go to work!  

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