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Inflationary Thursday – Benny Drops the Big One!

Mutually Assured Destruction (MAD).

That was the actual military policy of the United States of America and the rest of the World for about 30 years.  We had Presidents and Kings and thousands of bureaucrats – the top minds of 2 generations – all getting together on a regular basis and coming up with or buying into insanity like the system on the right.  We look back at it now and say "Gee, what were we thinking" but the whole World went down this path for a  while.  

There is a scene from Doctor Strangelove where Major Kong, the bomb commander, is so focused on completing his mission that he loses sight of the bigger picture but he doesn’t regret his actions – he goes down in a blaze of glory that ultimately dooms the World but his sense of personal triumph at achieving his wrong-headed goal is the punctuation for the film.  Watch this scene and think of Bernanke, tinkering with this or that but so focused on "fixing" the economy with the one tool at his disposal that he ends up destroying it instead. 

After putting over $2Tn into our Dead Parrot Economy since the crash and getting no response, Bernanke is upping the ante with another $600Bn round of Quantitative Easing ON TOP OF the ongoing $250-$300Bn round of POMO commitments for a total of about $110Bn per month dumped into the economy between now and the end of Q2.  This represents a 10% increase in the money supply over 8 months and, therefore, a planned 10% decrease in the purchasing power of your dollar-denominated assets or, to put it bluntly – a 10% tax on everything you own.

That is the joke of this country.  People sit there arguing about whether or not to extend a tax cut that will cost 3% of a year’s salary while the Fed, with no electoral oversight, is simply taking 10% of your LIFETIME savings – AGAIN!  They did it last year, they did it this year and now they promise to do it next year too.  That’s 30% folks!  

You don’t have to worry about the commodity pushers missing a signal – Oil, gold and copper jumped 2% yesterday and wheat, cotton and corn are on a similar path in the futures.  Of course the speculators think this is just great and I told you on Monday that today was a POMO day and I even gave you a play yesterday that makes 1,300% off this inflationary BS so don’t come crying to me that you can’t keep up with inflation because we are the investor class and we LOVE this stuff. 

I just feel a little bit bad for the bottom 95%, the suckers who have to pay for all this whenever they need to drive to work or buy a shirt or, dare we dream – eat!  It sucks for them when the price of the things they HAVE to buy, the things that already eat up 60% of their disposable income, go up 2% in a day, doesn’t it?

Those poor suckers can’t choose what not to buy to survive but WE can choose what to invest in as we rip the money out of their wallets on an ever-accelerating basis through commodity inflation.  

As I said, I feel a little bad but not so much now that the elections are over and the people now have exactly what they voted for:  Back to a bank and commodity-driven, survival of the fittest, Big Business economy where their jobs will be shipped overseas to the lowest bidder as the rich people sit around trying to figure out how to begin charging them for water and air as well.  Just another form of Mutually Assured Destruction?  Hell no, we’re (the investing class) going to make a fortune and the only people destroyed will be everyone else – it’s a fine plan!

The Bernanke plan to rebuild banking by destroying the American Worker is in full force this week with Jobless Claims up 457,000 this morning while Big Business squeezes another 1.9% more productivity out of terrified workers who even took a 0.1% pay cut (Unit Labor Costs) for their troubles.  That has sent the futures to even higher highs as nothing is better for the markets than cheap labor.

Small cap investors should be a bit concerned about mounting misses in October Same-Store Sales with BONT down 4.2%, AEO down 2%, ARO down 2%, HOTT down 8.5%, DDS down 1%, KSS down 2.5%, SSI down 3.5% along with disappointments (so far) from ANF (up 2% vs 4.5% expected)  and M (2.5% vs 2.8%) as well.  That’s the worst performance we’ve seen all year but CNBC is accentuating the positive and eliminating the negative as GE’s Jack Welch was the special guest, doing the happy dance as a good portion of that QE2 money ends up in his company.  

The dollar is falling through support at 76 and touching 75.80 just ahead of the bell so that 0.1% pay cut taken by American workers is a 4% pay cut for the month of October if they are paid in dollars, which began the month at 79 and down 8% from Sept. 1st (83) and 12% from July 1st (86).  Think of how fantastic this is for our Multi-Nationals – who collect international currencies as payments and get to pay their US labor force in (ROFL) American money!  To foreign corporations, this is like paying their American workers in beads and trinkets…   

In addition to our financial plays, we have our list of multi-national dividend payers to work to the upside but we’re not going to be chasing this rally up – we’ll more likely be shorting into the open as we test the breakout levels I set out for Members yesterday morning at Dow 11,500, S&P 1,200, Nasdaq 2,600, NYSE 7,750 and Russell 750.  Since the Dow has the farthest to climb, they are the focus of our upside short-term plays but to play for the QE2 rally, our 3 leveraged financial plays give the most bang for the deflating buck.  

Downside play of the day will be the QQQQ WEEKLY $53 puts for .10 – a gamble but a huge payoff if we turn down on tomorrow’s Non-Farm Payroll and they were as high as .80 yesterday so hoping for .40 is not unrealistic but, keep in mind, they do expire tomorrow so just a craps-roll type of bet.  

 


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  1. jromeha

    With all the projections of 2 Trillion etc, shouldnt this STUPID move by the Fed already have been priced in? This is a joke.

  2. exec

    Bernanke would need a big plan to carry the bombs he’s dropping.
     
    BTW…..received an email to day from Schwab.  The are getting ready to launch a new platform that will include weekly and monthly options. 

  3. jromeha

    Phil – forgot to ask, earlier this week you may have mentioned Japan intervened but  I couldnt find anything on the internet…. Have they intervened on the Yen this week? If so, how long do you think it will be until they intervene again since the $ is near it’s lows vs the Yen again today?

  4. samz3700

    I thought this was already priced in as well – wrong again.

    Phil – need some quick upside plays. I am really tempted to sell more naked calls but premium sucks and is not enough to compensate for shorts.

  5. jromeha

    Gell are you still in the short  EUR/CHK trade? The stop was hit, just curious if you moved the stop.

  6. rwvjx5

    so with everyone looking for sell the news, of course we didn’t get that and now with the fed backing asset prices, how can you go against the fed?
    everyone will be buying the dip and chasing performance through year eend can anything derail this market?
    or is the ship about rready to tip over with all the bulls?
    very frustrating market if your not long right now
    whats the move from here?

  7. ben1be

    Charts today:
    all long
    GE….if financials catch fire, it has room to move
    BYD….strong
    NE...still looking good
    VZ….poised to resume its upward march
    VLO
    CIEN…a dog that might reverse
    DDS…still in a flag
    CENX…aluminum commodity play, hard to ignore it looks so strong
    http://ben1be.tumblr.com/

  8. yshenhar

     Phil / Cover
    What can I use to cover short positions in TZA, QID, FAZ?

  9. Cap

    I think you need to be short this morning, as silly as it may seem ….

  10. drumkeerin

    dear phil
    re dickens-re dickens. not anymore. course taken about 50 years ago

  11. rainman

    diamond / Jekyll — Let’s crash that party! Thanks for the link.

  12. Pharmboy

    Phil – based upon this article by Dr. Ben, in my mind, he is trying to get the pension funds back to a level where they can service their obligations, knowing he has a brief moment in time to make that happen.  It would be one less thing the Feds/govt would need to worry about, and then things get ready and go BOOM.  I guess I would look at it as a last ‘hope‘.

  13. kinkistyle

    TZA is getting all-time high volume on all-time lows.

  14. Pharmboy

    Holy _____……. diamond…..currency war is on.  I still like the one from the Chinese on Zero hedge.

  15. judy

    Phil/Anybody : I don’t quite understand why the world markets are happy about devaluation of the $?  Why are they all up big? 

  16. matt1966

    And we were having a hard time discerning what was real before.. this is some sour fuggin koolaid to drink.

  17. doubled

    Phil,
    IBM B/C Spread Jan 13 155/165    Would you still hold out for a fill at 3.00 net on this or go higher?

  18. exec

    Matt,
     
    You got that right.

  19. exec

    Pharm,
     
    They’re happy because they are relishing in our demise.

  20. Phil

    Good morning!  

    Retail sales were not that great so keep in mind that that is reality and the market going up on a devaluing dollar is the illusion that is being presented to distract you from what’s going on behind the curtain.  Still, it doesn’t pay to outsmart the market in the same way it doesn’t pay to outsmart an elephant by getting it to sit on you instead of a chair.  

    I like the QQQQ Weekly $53 puts at .10 but it’s a big gamble on tomorrow and those Qs have been killing us on their relentless move up.  Cash rich tech companies LOVE inflation as they don’t have to borrow and they are full of capital equipment costs that wash away through inflation and a machine that cost $1M that produces 1,000 $5 widgets a day suddenly produces 1,000 $6 widgets a day but the lease on the machine is the same and the R&D is done so it’s all gravy on the inflation cycle.  That’s what drives tech in inflation and also good for auto makers etc (except for steel cost) so we will focus next week on the kind of companies that increase margins when prices rise but feel free to begin making suggestions – preferably under the Dividend List as we can build off that and keep things centralized.  

    This is the big one.  Screw the 12.5% lines – we have serious breakouts to watch now and those are:

    • Breakout Levels: Dow 11,500, S&P 1,220, Nasdaq 2,600, NYSE 7,750 and Russell 725
    • Up 10% (must hold)Dow 11,220,S&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%: Dow 10,710, S&P 1,123, Nas 2,310, NYSE 7,140 and Russell 666 

    So far, we have not held our 10% levels for more than one day, that’s going to be key but it was the Dow holding us back and now they are well over the 10% line and halfway to goal.  Copper is $3.90 so let’s see if they hold that and gold touched $1,380.

    I still like oil short up here ($86.50).  We were hoping to see $87.50 but it’s too weak so shorting off the $86 line is the way to go if they break under with razor-tight stops. 

    It’s a travel day for me, I should be around in the afternoon – BE CAREFUL!!!

     

  21. ravalos

     Well, one thing is for sure.. I’m getting destroyed on my shorts.. and this was supposed to be a happy time for any investor when the markets are indiscriminately going up, up and away. And to think that I keep reading lots of financial columns where they argue the market is STILL undervalued! NOW I’m quite sad about this whole mess.. I don’t want to roll my short calls out A YEAR or so just to be again out of the money on those.. pathetic. :(

  22. boobearsdad

    ravalos,
    Yep, I’m with you.  Getting killed on the short side.

  23. doubled

    ravalos
    I ‘m with you.  this is indeed pathetic.  We are truly in an Asylum now.

  24. morxlntway

    me too. missed some great opportunities. Maybe tomorrow…

  25. lvmoda

     VXX down over 5% and FAS up 3.8%.    Nobody seems too happy about it!

  26. ravalos

     This is beating my brain: "The market can remain irrational longer than one can remain solvent"…

  27. doubled

    NFLX is having Bi-Polar Seizure disorder in the Asylum.  Its UP it’s DOWN it’s UP  Wow.

  28. boobearsdad

    ravalos,
    The thing that I find profoundly scary is that the market may not be irrational at this point.  If the US dollar is going to devalue 10%, shouldn’t the market go up 10% (absent other factors)?  So my eyes are most definitely open here, and now I’m wondering what kinds of plans I should be making to hedge against what might otherwise be a disaster.

  29. yodi

    ravalos,
    Just do not look at the market for one day specially not today, The crazy’s are buying today pushing every thing up see what happens tomorrow. They all running for the door again. So don’t dispair

  30. ravalos

     Boo, I’m with you on that one. Precisely that same thought crossed my mind earlier this morning.. we are not REALLY yet at irrational levels, so getting to that point would really give me the coup de grace..I didn’t want to enter a hedge yesterday (similar to what we did with SDS back when the SP was about to break below 1044) because that hedge turned out to be a disaster.. so now I’m unsure whether to enter another one just to find the markets tanking a few days later! It’s Murphy’s Law! But, some stocks REALLY ARE at irrational levels, so I’m not sure what to make out of this..

  31. yodi

    All week I am looking to role my DIA Jan 112 to 114 as told by Phil Now today is the day I am roling paying .85 and even waiting for .80

  32. ravalos

     Yodi LOL, isn’t there a movie named like that: "The Crazies"?

  33. dclark41

    Yodi
    Well said!

  34. boobearsdad

    ravalos,
    Exactly.  I figure the moment I capitulate and take on some additional long positions to hedge my short exposure, down we go.  Ain’t trading fun?

  35. morxlntway

    Yodi – have you been selling puts to pay for the rolls? (DIA rolls, not Rolls Royce)

  36. Pharmboy

    SWHC ain’t getting any love in this environment……one would think with all the gold being bought, someone would want to protect their stash….

  37. Phil

    Jekyll/ Daimond – That first book is a must read for understanding the Fed!

    Priced in/Jrom – This is to be expected as global investors pile in.  Clearly the last couple of days were aimed at painting a pretty picture for the Global markets and, of course, they want to put a positive spin on the elections and the Feds because they don’t want to bust the myth that Republicans are good for the markets.

    Weeklies/Exec – If Schwab is finally doing weeklies then TOS must be working on dailies…

    Japan/Jrom – It wasn’t an official thing, just what I was watching with Yen behavior.  Make sure you read this currency note from Absolute Return!

    Upside/Samz – Don’t chase.  You can do a momentum play like yesterday’s DIA $113s (now $1.69) using perhaps the 11,350 line on the Dow but you don’t want to buy premium into a pop, those calls are close to a double off yesterday’s lows.  Watching and waiting is still the best strategy for today. 

    Move/RWW – Move is not to move yet.  If your premise is this is a crazy bull rally that isn’t going to stop then waiting a week isn’t going to matter.  More directional trading mistakes are made on blow-off tops and bottoms than at any other point in the market cycle.  Look at the VIX, down to 18.31 on a day the market is gapping up 1% in the morning – that is craziness!

    GE, VLO, VZ/Ben – Those I like.   

    Covers/Yshen – See previous post, a DIA upside momentum play is best but now’s the time to roll your calls if you intend to stick with them.

    Thanks Drum, sounded very interesting.

    Japan/Diamond – I wait and wait but Japan is like a prom date that doesn’t show up.

    Funds/Pharm – But that is just short-term BS.  There is nothing sustainable to the move unless he plans to create a permanent long-term inflation cycle and then that makes the money the funds have inadequate to service the actual retirement needs of the pensioners  - MADNESS!

    TZA/Kinki – Could be a squeeze.  A lot of capitulation in today’s move.  

    How’s the Dow volume?

    World markets/Judy – Damn, so much going on I could give a full-day lecture!  Global markets are up because "THEY" are flooding the global media with statements alluding to the idea that QE2 will spill over into the emerging markets both through money literally overflowing out of the US as well as the emerging markets fighting fire with fire and pulling out their own printing presses to fight their own deflation caused by the relative weakness in the dollar – MADNESS!

    IBM/DD – $3.30, even $3.50 not bad for a first fill and then offer to DD at whatever gets you to $3.15 and then you can offer to DD again at $2.85 or less.  

    Shorts/Rav – At the moment, just think of them as protection for new bullish plays. 

    10%/Boobears – Try 20% if we inflate the currency 10%.  As I said above, inflation has huge benefits for some companies but keep in mind we can make 1,300% on our upside plays so, hopefully, that will offset some of those downside losses.  

  38. kustomz

    Dow 42m

  39. matt1966

    …and now for another issue of Bear Droppings!
     
    To my dear bears.  I feel your pain.  Actually, I do in my IRA accounts but not in my daytrade account.  You see, I was once like you.  Trying to hold out for sanity to enter our markets.  Always looking for that pullback.  And when we got a small one, I was convinced we’d topped.  From March 10th, 2009 to April 26th of 2010 I could not understand what was happening.  I fought it hard and lost a lot of $.  Meanwhile, the chearleaders were making money hand over fist.  My government tried to tell me but I wouldn’t listen.  They were saying, c’mon, hop on board, it’ll make you rich.  But I didn’t believe them.  I saw it as smoke and mirrors.  Well, guess what?  It is.  But the money is real.  Now our government is trying to say the same as before.  They are trying to give the investor class more money.  Will you take it?  Will I?  I can’t answer for you but for me, I do want some this go around.  In the very least, I will not FIGHT it.  Once a pattern is reestablished I will day trade.  But for now, the big money is getting in further.  Volume is way up since the announcement.  Someone is buying.  Will it be you?  I’m concerned about the gap up getting closed but I see an absolute floor at yesterday’s levels at the time of the announcement.  If we go below there.. something is wrong.  Ben said he was going to put his $ to work immediately.  And he pretty much broadcast that they will be buying equities.  You are insane and broke if you fight it.  Ignore anyone who talks about value in the market.  It means nothing and they are just trying to con you.  It’s all about cash inflow, nothing to do with technicals or fundamentals.  All analysts should be fired until QE2 is long over and we’re back below the level on September 1, 2010.  It’s day one and I’m living long.

  40. Phil

    At the open: Dow +0.62% to 11284. S&P +0.77% to 1207. Nasdaq +1.23% to 2571.
    Treasurys: 30-year +0.89%. 10-yr +0.86%. 5-yr +0.26%.
    Commodities: Crude +1.85% to $86.26. Gold +3.09% to $1378.90.

    Currencies: Euro +0.77% vs. dollar. Yen +0.65%. Pound +1.11%. 

    On the hour: Dow +1.24%. 10-yr +0.94%. Euro +0.98% vs. dollar. Crude +1.82% to $86.23. Gold +2.9% to $1376.40. 

    Stocks are up sharply over the past 19 months, but mutual fund investors continue to take money out of stock funds. Investment Company Institute data indicates that from the end of March 2009 through Oct. 27, investors pulled a net $89.4B out of such funds, while pouring money into bond funds. One-word explanation: Fear.

    ECB’s Trichet says global recovery is expected to continue, providing a boost for euro-zone exports, but economic risk remains on the downside. Inflation should be moderate in 2011, with risk slightly tilted to the upside due to energy prices. Current key interest rates are "appropriate" with "price development to remain moderate."

    Another day, another record yield on Irish 10-year debt - now at 7.6%. Ireland is fully funded until April, but Ambrose Evans-Pritchard says that is less reassuring than it looks, as spreads over German bunds are mimicking the action seen earlier in Greece. "Once a confidence crisis takes root in this fashion, it starts to contaminate everything."

    QE2 is "an inevitably blunt instrument," writes Pimco’s Mohamed El-Erian in the FT, and its "potential benefits come with the certainty of collateral damage." Absent structural reforms, part of the capital injection will "leak right out of the U.S.", potentially hurting emerging nations while failing to achieve domestic goals.

    24/7′s list of 10 companies that will "never recover" from their mistakes: Motorola (MOT), GM, MGM, Gannett (GCI), Moody’s (MCO), Blockbuster (BLOKA.PK), Level 3 (LVLT), Boston Scientific (BSX), Abercrombie & Fitch (ANF), Office Depot (ODP).

  41. yodi

    morxlntway
    DIA no never sell puts in an up market I am naked and waiting for the big shoe to drop Once the hangover sets in it will be time to sell puts

  42. Maya1

    Phil,
    Good afternoon (when you come back)
    What do you think of AAPL at these level for the next couple of/ 3 months?
    Still worth buying the $330/360 bull call spread or too risky at these levels?
    Ant thoughts on the growth high flyers like FFIV, CRM?

  43. yodi

    morxlntway
    DIA matter of fact I just see I do have still some NOV 110 puts short sold for 2.25 going to buy them back for .36

  44. goldman

    Phil/DOW - 42M @ 10:25.   1% on TZA…now looking at screens scratching my head.  I have no real levels calculated at this range, this is beyond crazy.  My last three levels are  IWM 72.97,  73.83 and then 74.17.  I’m thinking about a new hobby, this one is too illogical and depressing as those of us who understand reality! 

  45. yodi

    I think some guys are smiling today look at NFLX 168.50 interesting

  46. yodi

    Good day to sell some puts with POT not the Californian one !!!!!!

  47. dclark41

    Yodi:
    What would you suggest selling on POT. Thank you.

  48. Cap

    Matt’s bullish ?!?!?   That’s it …. I am going all in short !!
    :wink:

  49. alik

    Phil, what do you think about long-term investing in BID (art prices are very sensitive even to a threat of inflation), WMT, FDO (there will be a lot of poorer people)?

  50. yodi

    dclark41
    Selling naked puts or even calls on a stk like this I always look for a delta of 20 or even below Jan 120p sells for 2.09 with a PM margin of 650.00 giving you a 30% return on the margin if POT stays over 120 by JAN 11

  51. 1020

    Good Morning.  Will 1215 be all for the S&P today?

  52. 1020

    Nope

  53. dclark41

    Phil:
    I am horrible at adjusting short trades gone bad….I am also bad at knitting   :)     What do I do with TZA (April $23/c/b/$6.05, April $32/c/s/$3.98, April $20/p/s/$3.90? I thought about moving the spread down to the $19/$29 for $1.85 more. Does that make sense or should I just leave it since it is so far out? Also is the FAS trade (Jan$17/c/b, Jan $21.67/c/s, Jan $19/p/s)  longer term or are you getting out with a reasonable gain? Thank you!

  54. 1020

    Obama is open to an extension of tax cuts for all. Let the deficit debate begin!

  55. redlog

     Reading this site at least makes me feel like I’m not the only idiot looking for value.  Maybe Matt is right, but I remember there was a very outspoken member, can’t remember name, who went on a rant going to all cash on July 6th and several of you took that as the sign for the turn up.  In any case if you you want to wait for a sure signal the market will turn I’ll let you know when I go long.

  56. Cap

    Of course Doug Kass claimed to have gone all in short a few days ago …so he is either broke now or a liar.
    I am just kidding about me going all in short but it is tempting.
    I am long IWM Nov 71 puts; short the IWM 70 weeklie puts

  57. exec

    Matt,
     
    Well stated.   Ummmmmmmm…..shouldn’t you have posted this on the 10th….:)

  58. z401

    redlog
    going long. i was thinking the same thing. should i take one for the team so everyone else could profit. ROFL

  59. Cap

    Julian Robertson to his traders a few days ago … "buy buy buy AAPL calls, I’m going on CNBC thursday to pump the hell out of it"

  60. 1020

    Extending tax cuts for all. All borrowed money. No worries for those without a job……

  61. goldman

    Obama "open" to tax cuts for rich… http://www.cnbc.com/id/40006031

  62. 1020

    I know I know!  The voters have spoken! Give me a break…..

  63. kinkistyle

    Matt:  Bubbly bubbly!  Whats are the most bubblicious stocks around now?  Chinese companies with White CEOs?  Subprime lending?  We can party like its 1999/2006!

  64. hanna5

    Well, thats all she wrote folks. We (investors) now have everything we ever wanted. DOW to 12k before December 1! I will begin selling some of my longs here. We seem to have gone a little over the top….

  65. hanna5

    Also, since NFLX is not participating, i will start a small short position….

  66. goldman

    I’m politically agnostic, but will have to say that as a person, Obama to me is a spineless puppet of those in power.  He is no FDR…on any level…

  67. z401

    we got a bounce in the $ i’m sure it will be short lived

  68. matt1966

    The way I see it.. the only fly in our ointment are all those pesky other countries that want to protect their own currency by buying dollars.  That’s the only place our volatility will come from.  Pesky protectionists!  ;-)

  69. goldman

    Perhaps Bernanke figured out a way to inflate the dollar value too…

  70. Pharmboy

    Go CRIS, go CRIS, go go go

  71. ravalos

     I’m seriously tempted to close my longs.. plays that are supposed to be "set & forget" until Jan 2012 are way ahead of themselves now.. 

  72. 1020

    Goldman/Obama  Sad, but true…. :(

  73. doubled

    Glad I held on to the 200 Jan NFLX calls that I sold.  Paying off now.  At least this one is dying.for today anyway.  I guess the Lithium injection didn’t work out. 

  74. z401

    wonder if we can reclaim 76 on the $ today?

  75. jomptien

    Rav, Morex, Bober, etc
    sorry I’m late in this post as I just got on. I was in the same position as you guys with short calls in NFLX, MOS, and FCX. After it started going against me I rolled up and out 1 month along with selling some OTM puts. It is working out real nice as I’m up on NFLX, up on FCX, and down small on MOS. I should probably close then out but I don’t see anything else to do with the $ now with alot of cash on sidline.

  76. Savi

    Pharm--I bought some CRIS on your positive bias--what are you doing now--sell and wait to buy back?
    Tx

  77. kinkistyle

    Can you believe that we are only about 2.5% away from hitting the 2007 highs on the QQQQ?  Wow!

  78. Cap

    hey ravalos … hang in there … nothing goes up forever, including the markets, no matter what Ben writes in the Wash Post.

  79. Cap

    New topic ….
     
    who here is in NYC … ravalos, drcraig … others ?
    thinking of having a little Friday afternoon cocktail gathering if you are interested.

  80. shadowfax

    Phil
    I also was wondering abut the FAS play yesterday, it is up almost 100% overnight but 1300% and the hedge for a short which I expect to do on a short term pullback?

  81. z401

    wow $ takes back 76 but for how long?

  82. kinkistyle

    selling puts/jomptien:  Not a bad idea.  Lots of cash, might as well use it as margin for put sales into the rally.  Although the low vix kind of "puts" me off a bit, ha ha. ;)

  83. Maya1

    Yodi/ POT
    HOW DO YOU GET A DELTA OF 20?
    please explain if you have time…?
    would appreciate it!

  84. Pharmboy

    CRIS/Savi – just watching, and waiting.  Nothing to do now.

  85. shadowfax

    What is needed now is to let all tax cuts expire so everyone suffers equally by per cent. I feel sorry for all the little guys including myself but we have to do something to ballance QE2.

  86. ravalos

     Cap, a cocktail gathering is a very good idea!

  87. yodi

    Maya1
    Delta on POT is 0.20 !!!!!!

  88. gel1

    jromeha – EUR/CHK
     
    Was sleeping when I was stopped out. I have aletrs sent to my iPhone…. but last night I turned it off
     
    I did a new play this AM selling the USD/TRY. Stop at 1.43, with a target at 1.35. The Lira follows the Euro directionally, so the fundamental reasoning is there.

  89. gel1

    yodi / POT
    Nice call on that one….. I’m following you on your strike.

  90. gel1

    Nice day to be a "bug" eh !

  91. gel1

    Cap
     
    I like your manefesto as presented last evening !

  92. Savi

    Tx Pharm--really appreciate your splendid write-ups

  93. yodi

    shadowfax
    FAS Sure shows profit but there is still quite a lot of beef in the putter which I sold for 2.75 now 2.18. The long caller is up by 1.45. I feel we have seen the hight of DOW up 200 for the day. I do not expect a stick on the end of the day. Tomorrow the buyers all wake up and sell sell sell. Just my small prediction. Sure there is some money in FAS as Phil says if you in dought sell half. Saludos 

  94. Cap

    11400 Dow … yeesh

  95. kinkistyle

    We should AT LEAST break the April highs with QE2.0.  The problem is how much farther do we have after that?  S&P 1300 maybe?

  96. jthoma

    Phil- the only redeeming grace is " the fatter the berry, the more juice" when the chickens come home to roost! Will we never remember 1999 and what happened only because we are currently not fearful- greed has once again taken over and Joe Blow will lose his life’s savings and then wonder what happened!

  97. Cap

    Gel – lol – thanks.  Not a manifesto, but jrohema is insistent on clarifying where I stand on various "issues", so why not ?

  98. humvee4me

    Phil; in two hedges goes backwards--I’m thinking wait until tomorrow to see about adjusting them.
    2011Apri QID    long 10call  short 14 call   short 12 put   QID currently  12.13
     
    2011March UUP    call 23 long     short  22 put    uup currently  21.97
     
    thoughts appreciated

  99. Pharmboy

    Goldman said 1250 by year end, right?

     

    MEE has an injunction in court for shutting down a mine by the Dept of Labor, and they are up today.

  100. Pharmboy

    This also happened in the 80s (when I was a wee young lad in Kansas.  The Feds did the same, and then what?

  101. rdn4evr

    USDJPY -  Can someone do me a huge favor and please help me understand how Andy Xie’s Yen-Dollar currency trap would work, speaking very slowly and using small words?  I’d appreciate it.  My logic synapses appear to be fried by this market.  Thanks.

  102. biodieselchris

    Short guys:
     
    Me too is all I can say. Look, if we’re having this same conversation with the DOW at 22,000, shame on us, but remember Phil’s Microwave Oven theory — always use new information and evaluate accordingly. 
     
    Now CMG calls, where were we ….

  103. shadowfax

    yodi
    I also am expecting a pullback, why do you think tomorrow? I am considering IWM puts maybe overnight or weekend or maybe wait till next week. No chance of stick today!

  104. goldman

    No Year-End Tax Selling—Bush Cuts Likely to Stay: Trader http://www.cnbc.com/id/40009010
    In other breaking news "Dollar to become worthless…hyper-inflation and social unrest ahead: Taxpayer"

  105. lvmoda

    We have Bernanke for three more years, but I think he just committed hari-kari on the Fed’s reputation.   The WSJ is reporting the $600B Treasury bond buy is intended to stimulate the economy, borrowing, investing and spending.  Yeah, we’ll see where interest rates and unemployment are in 12 months, right when the 2012 election cycle begins.  I think the real reason for this move is to continue to inject liquidity into the moribund banks, who continue to face real losses as the foreclosure phase ramps up.  The Fed must have its back up against the wall by the banksters, who expect to extract even more wealth from the taxpayers in order to keep up the facade of solvency.   Who really thinks interest rates will be lower when the Fed decides to return these securities back into the market?   Do they intend on holding them to maturity(hello Japan)?   As the lone dissenting governor stated, it’s a "bargain with the devil".   Another rape of the commonwealth to prop up the banksters.   Who will respect the Fed in a years time when $600B doesn’t create employment nor GDP growth?

  106. jromeha

    Gel – I got lucky and I wasnt stopped out on that currency play – I think I put the stop as an "ask" instead of bid so I barely missed the stop and now the trades up a good amount :) ! Good call by you/your people! Turned the $110 profit off the $280 purchase!
    Cap – See, my point was to find out which issues you were ‘ independent’ on. You wanted me to tell you where I stand (which I did), the difference is I am not claiming to be an independent, I am a democrat. Not caring about social issues doesnt make you an ‘independent’. On all the issues you care about ie your ‘voting issues’  you stand with republicans. That makes you one of them. As our last leader liked to say, you’re either with them, or you’re against them….And you, my friend are WITH them.
    Matt – Nice post. I have been wondering where your rants have been lately, now I know why – you aren’t fighting this ridiculous market any longer!

  107. mike5885

    I have not been around for most of the day, just saw that RICO story on JPM and HSBC
     
    http://www.zerohedge.com/article/rico-suit-filed-against-hsbc-and-jpmorgan-silver-market-manipulation

    I am surprised not major news, but I guess I should not be surprised by anything anymore.

  108. gel1

    Pharm
     
    Are you still in NWBO ?   Is it worth waiting on this one ?

  109. yodi

    shadowfax
    Pull back. Besides the general data of tomorrow Friday we will have the Friday effect but simply the market has gone up just on a blind feeding frenzy. I am happy with most of my positions. IWM will possible go down tomorrow but look it that way they gone up 1.57 today so how much will they go down tomorrow beside you will pay a fat margin on the naked play. At the moment I sit back and watch. CMG is still in my hair and I am waiting that the people will get a heartburn of all the chili. 

  110. samz3700

     Sorry seems like a Cluster F* for many of us – mostly watching as market zooms up -
    could stay elevated for months – ugh

  111. jvest

    Ben must be buying SKX.

  112. jomama

    Interesting rotation out of pharm & biotechs today. reloaded on some uso puts – probably a little insane but can only inflate the price of oil so much before it becomes unaffordable to the masses?
    selling a lot of retirement portfolio into this silliness.

  113. mike5885

    NET $ +1.41% here, with the dx/y = (.82)%
    High was +2.55% at 8:30, the opening bell
    Lowest  was (.14)% last night at .73% last night 3:00 am est
    have been between NET $ +1.40 – +2.00 all day, very weird

  114. Cap

    jrohema – stop being ridiculous.
    As an independent, I stand with no party, I vote for who I feel like, nobody tells me how to vote or who to vote for, or what issues are important to me.
    That is what being an independent is, your protestations to the contrary notwithstanding.
    Give it up already !  LOL.

  115. shadowfax

    jomama
    You are dead right on where do you stand! If you consider my prior post please consider that struggleing businesses and broke unemployed get nothing from tax breaks, neither do the poor. The lucky maybe even the struggleing lucky will only pay a small amount more and if that gets 1.4 billion over 10 years it is a start.

  116. yodi

    shadowfax
    /ZW wheat prices are at a very high today have been selling the April 1000 c for 27.37 still trying to close the Jan 11 700 c on corn for 20.75 but no takers so far.

  117. acobra65

    lvmoda/banks
    AGREED: Bernacke knows the real balance sheet of the banks.  With the mortgage foreclosure issues over the last several weeks, Bernacke needed to act BECAUSE HE KNOWS the banks are greatly exposed to 1) Increased shadow inventory; 2) only 5% of all 2nd mortgages have been written off, even though 100% of them are worthless and the derivative exposure is huge and JPM is the one mostly exposed…. Frosting on the cake is they will take the dollar to 70.00, with pay off debt with cheaper dollars and the multi-nationals are minting money along the way, so they can continue to show profits for the next 2 reporting cycles based upon currency not real profits from top line growth….

  118. goldman

    My 3 year SP500 chart shows 1227 for fib 61.8%…should get there by Friday on inflated employment data (say 105k).  Today analysts predicting 1350-1550 for 2011 SP500…1565 being fib 100%.  Question becomes is today a Day of Infamy or Day of Revival for the United States economy…guess we will know in 6-12months…

  119. boobearsdad

    Headline on MarketWatch says "Take the money and run."  Phil, are you writing for them now?  :)

  120. gel1

    yodi / POT
    I am in the belief the POT buyout is not over yet…. I believe there will be some posturing within the Canadian government, and concessions will be made. In addition to the January puts, I slso sold some January 140′s, as I believe BHP will "stretch" further.

  121. mike5885

    NET $ +2.26% spiking up here as traders get ready to come back from lunch, dx/y =(.76)%
     
    C = 1217.23, F =1214.25
    oil +1.63

  122. JRW III

    Good afternoon,

    IWM 70.40, 70.96, 71.28, 71.65, 72.13 and 73.14

    matt, i’m happy to see you are finally taking the Kool-Aid 8-)

  123. JRW III

    P.S.

    I’m in meetings today, good hunting !!

  124. mSquare

    Wow on the 40% rise of Coal India from teh IPO price. Makes it in the top 5 by market cap in India. Will help most Indian funds that got allocated the stocks.
    http://in.reuters.com/article/idINIndia-52662420101104?pageNumber=1
    EPI – In spite of making another 52-week high, I bought OTM calls expecting more upside. Also Obama in India next week which will add to the news flow…
     http://finviz.com/publish/110410/EPIc0dl1336.png

  125. acobra65

    It will be interesting…. with the Republican gains, the QE2 now in and good possibility of the extension of tax cuts….. what does the employment report really mean to the markets ????  In order for the "boys" to make real money before end of year…. there needs to be a fairly good pull back…… then up we go….. COMMENTS ?!?!?!

  126. yodi

    Gel1 You are much more of a gambler than I am. I have been playing POT for some time Just sold the shares the other day for 145.
    Today is a down day for POT if the market did not go up that much, I think they would have been as low as 135.00. At this stage I would not play with short calls on them.

  127. mike5885

    NET $ +1.23% at 1:40, one of the lowest readings all day

  128. flipspiceland

    Why is there only talk and cartoons about the banks’ additional trillions from the FED and nothing at all about the " bonuses " the fraudsters running the banks are going to take down this year?  That’s the real crime here.
    I couldn’t care less if the FED gives a few digits to the banks, as long as the banksters don’t get one red cent of it.

  129. ajaytoo

     Phil/AAPL – Starting to worry again about my AAPL Apr 320 short calls. My portfolio is basically dominated by this bearish position. How to adjust AAPL position? I figure I should add some QQQQ verticals or something as well?

  130. lori13

    Phil and gang,
    Need some advice.  Made $1000 on xom, lost $350 on sds.  Thought I’d start small.
    Basicly in cash and R/E.  200K in an IRA  30K in TOS in cash.
    Another 200K in cash 401 acct.    About 100K in Stocks.
    Any ideas?  Thinking about ERY at 31.55, how high can oil go?  Thanks for any long term advise.

  131. goldman

    PHIL/DOW - Only 13M DOW shares per hour the last two hours…DOW 104M @ 1:53

  132. Pharmboy

    Gel – NWBO, yes, still holding on to them.  Little position.

  133. Pharmboy

    Out of NNVC for now.  Will reload back at $1.

  134. shadowfax

    acobra65
    The dollar at 70 is not low enough, try under 40. If the tax cuts are extended try under 30!

  135. nicha

    gel- I followed you in on CCJ. Buy 1 Mar $25 call and sell 3 Mar $30 calls. I sold Mar $30 puts sometime back to compensate the loss in the shorts but the short Calls are killing me. Wanted to adjust that position a little bit. What do you suggest? Thanks.

  136. reza99

    Some labor shortage news from Thailand land:
    Labour shortage in Thailand still of concer
    fnWEB – Bangkok – November 3, 2010 – The Labor Ministry has called on representatives of industrial sectors to seriously address labor shortage problems, adding that the effect of the strong baht could shift industrial bases abroad.
    According to Labor Ministry Permanent Secretary Somkiat Chayasriwong, a labor market research conducted in the industrial sector has revealed that demand for laborers has dramatically increased, particularly in the textile, electronic, and machinery industries.
    Mr Somkiat noted that ,within a five-year time frame, Thailand’s industries would need at least 250,000 more workers, a 19 % increase from what the nation needed last year. As it has become increasingly difficult to find Thais willing to work in labor-intensive industries, those industries have resorted to hiring foreign workers to do the jobs. To prevent exploitation of alien workers, the Department has urged employers to treat them fairly in order to prevent them transferring from place to place in search of better employers; which will make it necessary for those companies to look for another batch of workers, slowing down their production at the same time.
    Meanwhile, Thai-Garment Manufactures Association has also admitted that the industry is currently in need of at least 40,000 more skilled workers; therefore, it is necessary for companies to require workers to perform multiple tasks in order to enable the companies to fill their orders.
    If the Thai baht strengthens further, it could force many companies relying on exports into the red beginning in the first quarter of next year, leading them to a decision to move their production bases to other countries such as Vietnam and Indonesia, given those countries’ much lower production costs in general, the Permanent Secretary said

  137. mike5885

    NET $ +1.06% at 2:04

  138. shadowfax

    Phil
    Dow volume at 2PM 105.8 mil

  139. tuscadog

    Phil / trash the dollar    I’m a bit concerned that Ben has decided this is the only way to save the banks and restore the trade balance.  I exited FXI, IDX a few days ago per your advice, but I’m wondering if we shouldn”t be putting our money in offshore stocks as a hedge on our devaluing dollars?  And, maybe ABX is a safe bet now?

  140. Phil

    Hey guys!

    Still in transit but very strange low volume (and thanks for updates) to move the market up more than a point. Kind of like inflating a tire with a straw – might look good but may pop off on the next turn.

    Take money and run is always good advice but cash is better right now. Those 1,000% plays are not going to go away so just make sure you have cash ready to commit to a breakout. If you are 60% invested short and down 20%, that’s 12% of the portfolio but 3% on a play that make 500% to the upside will fix it so don’t panic, just do the math and be ready to make a sensible commitment for an upside play. Balance is very important if you are not in cash!

  141. jromeha

    Cap – Im a democrat but I would vote for Ron Paul (my mom would kill me if I didnt, she was one of his top campaign coordinators in Wash St.). The point is on issues that you care about you side with republicans and you tend to vote republican.

  142. matt1966

    tusca, the US stock market will definately trail the drop in the dollar.  Bigger bangs are outside our pathetic market.  US equities will do the worst job of offsetting the falling dollar.. but they’re better than nothing (CDs, saving account, inverse ETFs).
     
    Btw folks, it’s a free money day.  Make that a free money 7 months.  Unless QE3 is announced beforehand.  What a spineless bunch of leaders we have.  Sickening to think about.  Ok, that’s enough thinking.  Back to sipping the Kool-Aid.  Thanks JRW!

  143. acobra65

    Shadow/Dollar
    70.00 short term.. longer term into next year…. down, down and down…….. But, conversly you must be predicting stocks "off the charts" like back to at least 2007 highs…..

  144. judy

    Phil,
    I’m confused about your low volume comment. $tvol – shows high nyse volume today as compared to yesterday as well as previous days.

  145. mike5885

    On April 23, 2010           
    S&P = 1219        $$$ = 84.80            Gold = 1113.75
     
    today, November 4th      
     S&P = 1219        $$$ = 75.64        Gold = 1376.76
     
     so Markets flat,  Dollar (10.80)%,  Market in gold terms    (23.60)%
     
    So more debt, lower purchasing power and nothing to show for it, except a lower standard of living.

  146. mike5885

    NET $ +.66%, lowest of the day, dx/y (.67)%

  147. goldman

    As Markets Soar, ‘They’re Already Talking About QE3′http://www.cnbc.com/id/40008029
     
    "They’re already talking about QE3," said Dave Rovelli, managing director of US equity trading for Canaccord Adams. "Eventually we’re going to be printing so much money the dollar is going to really go down and everybody’s going to try to deflate their currency against us. I just don’t know how this could end well."

  148. Cap

    jrohema:  you know what they say about the democrats … "i didn’t leave the democratic party, the democratic party left me".

  149. Cap

    I always get a kick out of people talking about Ron Paul as if he is some kind of Repub standard bearer.
    He’s more like a crazy uncle.  There is a lot not to like about Ron Paul.  He’s sorta like the Grayson of the republicans … way out there …
    He’s really a libertarian .. not that there’s anything wrong with that.
    I just don’t like his isolationism and that he attracts all sorts of fringe elements like aryan nation types which he does not disavow.

  150. Cap

    anyone know why BIDU is down $3 ?
    QE2 bad for China ?

  151. jthoma

    matt- toatally right but bernanke is forced to try and save our country even though he knows no number of QE’s will work! he has to do it as it is his job. Sooner or LATER the world ( specifically the Chinese) force us to stop the shenanigans as we are no longer able to answer to noone! We will go down like cheap lard when we get to QE double digit number- as a great composer once said, when it happens " I want to be in that number- when the saints come marching in"!- buy as many shorts as your account can stomach and remember the old saying about running out of pet-r before you get to the goody with the fat lady! 1999 all over- when will we ever learn?

  152. mike5885

    10yr (5.73)%, 30 year (.74)%

    so they piled into the 5 year today
     

  153. jthoma

    cap- because it is OVERPRICED!

  154. ravalos

     Wow, this is a gutsy call from a very good financial blogger.. and no good news for the shorts of us..
    http://seekingalpha.com/article/234812-a-huge-rally-for-equities-coming-in-2011?source=feed

  155. Cap

    that guy needs to stay off the crack ravalos.

  156. Cap

    oh dear, i made it rally $1 (sorry about that).
    jthoma, yes its overpriced; but so is most everything else and the market is up huge today.

  157. jthoma

    cap- I’m not that bad- LOL!

  158. biodieselchris

    GOOG making a comeback in China? I figure it’ll happen eventually. BIDU will be at 75 the next day, if announced.
     
    Matt – go have a burrito! — it goes good with Kool Aid!! …. :)  CMG wow!

  159. kustomz

    cap, just come out and say it..you dont like RP because he doesn’t have aspirations to take over the world beside you think GW was a great President which qualifies you as an expert on crazy   ;-)

  160. arbolito

    Phil, with this new debasement of the the US$ what do you think of this play: buy GDX @ 59.83 , sell 2012 calls and puts for 17.90, 41.93/50.50. Is this a good play? I think the strategy would be to buy the shares and sell the calls now and when the adjustment comes sell the puts, am I correct? Thanks for your input.

  161. biodieselchris

     Wasn’t there some kind of Hindenburg talk back in August? The media is so worthless. They only report the right now --
     
    -- [Then] Right now the market is down so it must be a Hindenburg crash shaping up!!!
    -- [Now] Right now the market is up up up so we must be going to DOW 38,000!!!!
     
    Cap an independent? I practically spit coffee out of my nose. Too funny…..

  162. jthoma

    biodieselchris- please don’t send him to CMG- when it exploded due to earnings and " international expansion possibilities" I shorted it because although they have great plans- I have never seen a Chinamen eat a burrito and the french are certainly too haughty unless they hire a sous chef to put a sauce on it!

  163. lvmoda

     Bidu, along with other highfliers like Nflx, Cmg and Pcln are somewhat subdued today because of the commodities rush.  There seems to be a flattening of the high-tech surge (except for aapl) and rotation into lower-risk basic materials, energy and other "real asset" equities.   I’m wondering if that will continue to be the case as "real asset" balance sheets inflate while "intangible asset" balance sheets start to lag…

  164. gel1

    nicha / CCJ
    The short Jan 30′s really got ugly on us…. I believe the anticipation of a weak dollar looking forward, and the expectations of an economy that will grow with the election results, has skewed the stock upward. I believe I will wait for a correction and then roll my shorts up to the 2012 35′s… hopefully even with a correction.  At the same time I will add some more short puts to balance, as I believe CCJ has a ways to run. China has a massive amount of new plants in the construction stage, and the economy in France is picking up… so the demand for Uranium is definitely bullish

  165. yodi

    ravalos
    The article One must ask the guy "what are you smoking man????"

  166. shadowfax

    acrobra 65
    I think we have all the QE2 in the market, a blow off top. The dollar will go lower and lower and so will stocks sooner or later. I am mostly in cash ready to short today, tomorrow, or next week short term. I am holding the FAS play from yesterday and Adobe callers. Don’t trust the bulls or the bears and expect the volitility will increase. I never play the VIX only watch for premium expectations. JRW said, maybe I am unable to commit more than a day. I feel the same and have since last year.

  167. jromeha

    Anyone think we will get even a HINT of a selloff going into tomorrow’s employment #s?

  168. yodi

    gel1 nicha.
    CCJ entered the play with buy/writes and doing well, some sale of putters I will add after a pull back not a good day today for that. Stock got really a bust today. I think revtodd recommended this play for Nov

  169. ravalos

     I am not sure we should expect anything negative out of tomorrow’s economic data.. if the employment report turns out to be bad, I don’t think we will get much of a negative reaction in the markets based on the whole Fed’s intention to do anything possible to boost equity prices.. if it’s a positive number, then also it’s very good news because one less thing to worry, so the markets should go up as well. ONLY a truly depressing and way-below-expectations number could probably do something, but still, when the Fed’s intention is to do anything possible to boost equity prices, I keep losing the battle in my mind as to why I continue to incur significant losses going short on CMG.. the position is oversized and it’s killing my portfolio. I can’t see any other reason why the market will fall off here! Things are just out of the reality at this point because clearly as the Fed as explicitly stated it, THEY WANT THE STOCK PRICES TO GO UP sacrificing the dollar in the process. As simple as that.. so before I capitulate, anybody has a different perspective?

  170. shadowfax

    Phil
    Dow volume 125 mil at 3:14.

  171. Cap

    kustomz; oh you got it, we need a prez who wants to take over the world; yeah, that’s the ticket.

  172. kustomz

    Ben1, not sure if your still in AMD ..

    Advanced Micro Devices Inc. call options should be purchased because the maker of computer microprocessors that’s posted two straight quarterly losses may rally after meeting with analysts next week, Goldman Sachs Group Inc. said.
    Equity derivatives strategists John Marshall and Maria Grant recommended buying “inexpensive” November $8 options on the second-largest chipmaker, which will host its 2010 financial analyst meeting on Nov. 9. The stock, which hasn’t traded above $8 since July 27, rose 1.4 percent to $7.64 yesterday to limit its loss for the year to 21 percent. The Philadelphia Semiconductor Index has gained 5 percent year-to-date.

    http://www.bloomberg.com/news/2010-11-04/amd-calls-should-be-bought-to-hedge-bearish-bets-goldman-says.html

     

  173. nicha

    yodi/CCJ- gel’s play was beautiful on this one. He bought 1 Mar $25 call and sold 3 Mar $30 calls and sold the $26 puts too. The bull call spread was only .20 cents and you got $2 for the $26 putters. I went with the call spread but did not sell the putters. Been regretting that. Last week I sold the Mar $30 puts to balance some but with the stock up more the shorts are killing me.

  174. biodieselchris

    Matt – it’s hard not look at this two chart (PCLN and CMG) and not think a 20% correction is in the cards.
     
    DOn’t fight the uptrend though. once the catalyst is in, the pullback will last three months. No sense chasing it to capture that first 5% when you can capture remaining 15% with more confidence.

  175. yodi

    ravalos
    Just relax and see what tomorrow will bring. You not the only one holding shorts of CMG. I aired my view on tomorrow a little while ago. So just sit back and see.

  176. jomptien

    Kink,
    I agree about the low vix is usually a bad time to sell puts but if you got a lot of cash selling deep ITM puts is better than in the bank or sidlines I think. I did it mainly to balance my short calls that got hammered but now is a little fun.

  177. lori13

    Guess no one’s interested is shorting energy ERY today. 
    Thought the republicans were opposed to Gov’t intervention in the markets and in favor of a strong $. 
    Won’t they rope in the Fed as soon as the next Congress gets in?

  178. Cap

    XLF JPM BAC going nuts

  179. biodieselchris

     PS – a similar pullback for PCLN and CMG now, compared to the one from May-July, would put them at 250-260 and CMG at 190.

  180. biodieselchris

    time to trot out news on the PIIGS. Let’s get this pullback underway!

  181. lvmoda

     The only way I see the market heading down is if the $75B in cash being printed leaks out to the emerging markets.  Those markets don’t want the inflation exported to their markets and likely they will enact capital controls shortly.   KO is issuing $4.5B in debt in which the lowest 3-yr coupon rate in history is being offered.  The ripple effect of QE2 in certain ways is lowering the cost of doing business for the multinationals which will serve to increase margins.    All in all, I don’t see how the market can fight or resist the Fed’s intentions, at least for the next six months.

  182. kinkistyle

    Yay, new highs for the year!  In fact Yahoo Finance has declared it "World Rally Day": http://finance.yahoo.com/

  183. tuscadog

    Matt / overseas  So you advise investing in overseas mkts.  Go back into FXI again, EWT (Taiwan)?  Phil, cash or overseas mkts?  Bit confused as I’ve been liquidating my Asian posistions recently.

  184. lvmoda

     Bio –  Notwithstanding the Fed Jam Up,   I have November short strangles on CMG (180/230) and PCLN(340/450).  They have had a big part of their run already, and today are lagging on a % basis with the market.  There is a huge amount of premium in PCLN…earning report on Monday.

  185. ban2

     gel -- you holding SWKS into earnings? — after this pre annoc run up think I’m going to sell some Dec 25 c as a "sell the news" play
     
    cap — your opinion on any short on FCX ?
     
    thanks guys

  186. lvmoda

     This could be fun: In the new GOP-led Congress, Ron Paul is set to chair the House subcommittee on monetary policy, giving him oversight of the Fed. 

  187. kinkistyle

    exporting inflation/tusca: Here is an article on the exporting of our "free money" into emerging markets:
     
    http://online.wsj.com/article/SB10001424052748703805704575593831687941678.html?mod=googlenews_wsj
     
    Thats why I think China is the new Dot.Com and Subprime bubble rolled into one.

  188. biodieselchris

    Au: 1386
    Ag: 26.11 (!!!!)
    Pt: 1766
    Pd: 677 (+32 ~!!!!)
     
    So much for QE2 being ‘baked in.’ This is insane!
    Rh and Ru could play catch up. They are harder to invest in, but worth mentioning none the less.

  189. Cap

    ban … fcx … its vacillating wildly w/ the dollar and metals prices.  
    I think its a short; you might want to just sell the 110 calls.

  190. biodieselchris

    Rhodium chart — way WAY behind !!

  191. barfinger

    I agree with those who believe there will be no substantial pullback for quite some time, barring some catastrophic trigger event. I have closed down half my shorts at considerable losses, and if we rally again tomorrow, that will be the signal to close the rest.
    All the forces are aligned to support the equity markets. It is quite possible that this will continue until the retail investor capitulates to his fear of missing out.
    I hate to say this, but I feel we have been on the wrong track here.

  192. 1020

    The Fed may allow banks to pay dividends soon…..

  193. shadowfax

    Buy volume into close, not shorting today.

  194. Jordan

    To all bears, maybe there is some hope, but likely not for a couple of weeks. I am looking at the SPX. Observe the gap-up on 4/14, followed by some churning on 4/15.  Remains to be seen what we get tomorrow, but recall that by 4/30 we were on our way down.

  195. deano

     Made very little on this run today compared to the market – the question is am I over-hedged, or is this it? Opinions welcome!

  196. jomptien

    Another POMO day on Monday coming up.
    Ron Paul head of monetary subcommittee, looking forward to that Ivmoda

  197. matt1966

    All I’ve got to say is if the govt doesn’t sell its stake in C before Jun 2011 they are idiots.  Banks on a tare cuz of the Fed ok-ing larger dividends down the road.  Just another excuse for them not to lend.  Of course, it beats the hell out of larger bonuses to get rid of their largesse.
     
    Bio, take a long look at the chart from 3/9/09.  Tell me how many pullbacks we had between then and 4/25/10?  DO NOT BANK ON IT HAPPENING THIS TIME.

  198. ban2

     cap --  thnx  Short fcx 110 c —  trying a few for $1.27

  199. kururi67

    man they tilted the pinball machine today.

  200. gel1

    ban2
    SWKS had a nice 4% run today… and I am expecting good earnings… so I’m holding on as a typical momentum play.

  201. matt1966

    Now THAT is some ez money!  Hook ers on me tonight fellas!  8-)

  202. biodieselchris

    I want to put together a physical rare earth metal fund (Rh and Ru to start with) if anyone has interest. 

  203. lvmoda

     FAS up 8.8%, VXX down 7%.   Come on in, the water’s fine!  lol

  204. ephmen85

    Hey Cap…don’t know if you’re still there, but I’m here in soggy NYC and just saw your post about a possible Friday cocktail.   Keep me in mind if something happens…Jeff

  205. goldman

    Day Trading – TNA hit $31.50 on August 24th, hits 59.73 today!  There is really no reason to day trade a one way market, as at some point one expects a pullback and never gets comfortable day trading one side of the stick.  I should have simply bought 10,000 TNA when the Fed notes pointed to QE2 in early Aug… and sold on the news today.  What a waste of time…live and learn!  Instead of slaving away to make 1.5% day tradiing today, I could have slept in and made 2% on the euphoria…grrrr 

  206. terrapin22

    Tusca – i was at an EM conf a few weeks ago and the experts there said that EM stocks were a long way from being in a bubble.  We are in the early innings and have long way to run before it pops according to them.  Cash is not an option in my opinion as USD gets devalued by 20% or more over next few years.  unless of course it’s in foreign currencies.  I know I won’t time the exit correctly but i’d rather put up a fight and go overseas with a large % of my portfolio than have my hard earned savings raped by Ben and his printing machine.  
    there are plenty of non-EM plays abroad too.  EZA – south africa is one option.  NZT – new zealand telecom yielding 10% is another one I’m in.   

  207. ravalos

    The only thing I hate about shorting calls is that you end up with nothing if you capitulate.. As opposed to short puts where you at least get assignment of a stock, which has a claim to a real business.. This is the only reason why I’m reluctant to capitulate, but you can’t fight a train that goes at 300 Mph..

  208. Cap

    you got it Jeff.
    So far we have you & ravalos … and me
    Tomorrow good for you guys ?
    I can then pick a place and time …

  209. ephmen85

    I should be able to make it Cap…earlier is better (4:30-5:00 ish?) than later and midtown preferred…let me know

  210. Phil

    Wow, finally got into the hotel.   What a nightmare at the Hard Rock in Orlando!  Room wasn’t ready, hotel full, their club level (according to the manager) is not at all business friendly with loud music and kids all over the place so no quiet place to get connected and get work.  Music and kids don’t really bother me of course but I couldn’t make a connection without a room number and I couldn’t get a room number because my room wasn’t ready – boy am I pissed!  

    Anyway, I see we finished at the highs because, clearly, we weren’t jammed up enough in the morning, right?  Nas very choppy while it waits for the others to catch up but those $53 puts dropped to .05 after topping out at .15 so no fun there.  

    No luck on oil either as it held that $86 line and gold is trying to make $1,400 – Madness!

    Volume/Judy – NYSE volume includes finanicals that are bot traded all day, Dow volume is more realistic indicator now that  C has been given the boot although BAC is still in fluffing volume.  

    GDX/Arbo – Remind me tomorrow, we need a play for gold $1,500 if the dollar is failing 76.

    I’ll be back on later, time to hit the pool…

  211. tuscadog

    Phil / Bahner = Depression 2011  No fiscal stimulus means there will be no fix for the US structural woes ie trade deficit and unemployment.  CEO’s don’t care, (read Republicans), let the peasants rot, my gated community is safe?
    Ben can’t help as the money goes into banks and then overseas.  So, we head to negative GNP next year.  GOP will blame the collapse on Obama and plan to win Presidency in 2012.  Who cares if real unemployment is 25% and real wages declining fast, as long as stock options rising.  I’m past worrying about the politics as ignorant people get what they vote for, and Americans are the least informed politically of any developed nation.
    But my investment thesis is confused.  Negative growth here next year suggests a declining mkt, potential return of financial crisis, the banks will be toast when the foreclosure tsunami resumes.  So, do I get out of US equities, into Asian and Brazilian.  Do I short the US mkt?  Do I buy gold assuming the money printing will keep expanding in desperation.  I find it hard not to see a Depression ahead in the US next year.  Can foreign mkts really rally more if the US slides into a Depression, with declining real demand.  Higher oil and  commodity prices will just make the peasants even more poor and desparate and further cut discretionary spending.  Short retail discretionary x3 ?
    It just seems that US$ cash is a dangerous place to be?  So even if you are negative on mkts, where best to invest?

  212. ravalos

    Oh Cap, I waasn’t expecting the Cocktail friday to be tomorrow! I can’t this week and next week I’m flying to Europe on vacation for a while :( oh I will miss it. If we do it again later on pls let me know!

  213. goldman

    So it would seem that 90% of this QE2.0 equity inflation goes to the top 10%, which will then leverage up accordingly to save our consumption driven economy???
    sociology.ucsc.edu/whorulesamerica/power/wealth.html
    In terms of types of financial wealth, the top one percent of households have 38.3% of all privately held stock, 60.6% of financial securities, and 62.4% of business equity. The top 10% have 80% to 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America.

     

  214. Cap

    ravalos … no problem.
    jeff …. early is fine; let’s connect tomorrow.
    drcraig or anyone else NYC; weigh in soon.

  215. shadowfax

    Biodieselchris
    I believe that rare earths are more important than solar! Wind power, transportation, and solar storage require them, so keep me up on your idea. It’s better than biodiesel,HAHA!, that desolved my fuel guage sensor clogged up the works and cost $900 to fix.

  216. biodieselchris

     here we go again:  a US nickel is worth 6.25 cents (in Cu and Ni melt)

  217. biodieselchris

    shadow — haha I should change my user handle — I was in to that so long ago.
     
    here’s a couple of Rh ideas:
    Some kind of "coin" (and bars)
    Kitco Rh "sponge"
    ruthenium, harder to get for a lone wolf. If we had bulk purchasing power it would be a different story

  218. goldman

    Phil/QE 2 market correlation - If the Wilshire 5000 index is the best measure of the U.S. stock market capitilization…and today that index went up exactly $245B (http://www.wilshire.com/Indexes/Broad/Wilshire5000/)    We also know that the index averages went up about 2% with such inflows today….can we thus assume, in a logical world (yeah, I know…), that if all $600B of QE2 went directly into the markets, we should get a 5% boost in total market valuation?  You had mentioned a 10% market risedue to the dollar falling futher…does this mean you believe QE2 has an amplification factor?

  219. brooklyn

    Cap/ I might be game. Let me know when/where.

  220. diamond

    Phil - I have mentioned before that you should get a MiFi 2200.
     
    It is well worth the money to have a backup plan (especially when you travel) — just in case …

  221. ben1be

     kustomz 
    Thanks for the heads up on AMD.

  222. gel1

    ban2 / SWKS
     
    Good earnings as expected   .43  vs .35… And the beat goes on …..

  223. ban2

     gel1
    so I see — but will the stk price rise after such a run??
    I sold the 25 c  late this pm and hope to get a dip tomorrow to cover — then I hope it goes up for you to unload also. 
    The biggest thing this stock has going against it is Cramer has pushed it from 9 with the CEO on his show at least twice.
    I rode it from 14 to 18 and got off the bus.
    I also see a lot of (all) insiders sold stock in Sept coming into end of qtr.
    good luck.  hope we both make a few bucks

  224. matt1966

    goldman, thanks.  Simply amazing there aren’t more people like Stockman sounding the alarm.  But as JRW says, it’s better to be rich then right.  I’m tired of being a martyr.  So how ’bout a hooker?  I figure that’s along the lines of the kind of trickle down effect Ben is shootin for!

  225. z401

    WOW ! you’ll never see Stockman om CNBC

  226. gel1

    ban2/ SWKS
    I am very bullish on this stock, and I think we are looking at more nice earnings reports going forward. On stocks, I try to play the stock, and play the market seperately. Tody I played the stock and held firm, as I expected good earnings.
    Cramer.. I know what you are saying…. let me tell you, he is reading our posts, and knows who you and I are…. so not surprised that he is pushing this baby ! This is a momentum stock, and the earnings will drive it… so ignore Cramer. Nothing wrong with taking profits…. but timing is everything, in love and selling stocks – I still love AAPL, and will be long as the overall market is sustainable, and the company keeps its earnings up… just me, and for the purpose of stating a disclaimer… I am not always right!

  227. amatta

     Phil, 
    I am short Nov 23 SKX Puts sold for $1.18 (now 2.45 after the nice bounce courtesy of the Fed Today). Now that the Euphoria is probably over, would you recmommend buying back at a loss and sell lower ones (albeit now with lower premiums due to volatility crush) or continue to hold until closer to expiration?
    Thanks

  228. amatta

     Phil, 
    I closed about 25% of my buy-writes (mainly ones that I was up more than 50%) based on expected pullback as per your commentary. Fortunately I didn’t go short on anything else aside from SDS hedge. What is your expectation now that we are above the lines (although as you say a day does not a trend make? Should I add back other bullish plays? which aside from the FAS, UYG or XLF plays do you recommend now? Do you have a TBT spread that you think might be timely now?
    Thanks 

  229. gel1

    ban2…. Remember CWG…. I said the same, and many who said it can’t go higher because it has had a run, and they shorted the stock….. do not overlook the momentum factor, as the fundamentals will drive the earnings and the earnings will drive the stock price… Just because a stock has risen, is not reason enough to assume it will soon correct, unless the market is correcting… but in this case the market is definitely in celebration mode, and the bias is toward the upside….. take that one Cramer, you parasite.! ( I know you are scalping our plays )

  230. gel1

    oops…. That should have been CMG

  231. praizada

     Anyone know why Japan is up 2.5%?

  232. goldman

    matt/Stockman - such reality checks from those with both intelligence and integrity, such as Stockman, gives me hope for the future of our society.  I have grave concerns when one single individual has God like control over global commodity prices, and also the world’s economy.  There is so much more at stake than just our stock portfolios…hindsight will unfortunatley be 20/20…

  233. goldman

    Fast Money comments tonight…you gotta love Brian Kelly…LOL
    Instant Insights with the Fast Money traders

    I feel like I’m driving in a gasoline truck at a 100 mph and towards an brick wall, says Brian Kelly. And Ben Bernanke just lit a match. I can’t help but worry that this ends badly.

    I also remain skeptical, adds Steve Cortes. The unanimous opinion sees to be the market can not go lower and I find it reminiscent of the rhetoric we heard right before the tech bubble burst.

    I want to know what the Fed sees that’s so dire that it’s required them to take drastic steps, muses Guy Adami. I guess it doesn’t matter because the market just wants to go higher. But the market action has the feeling to me of a blow-off top. I don’t know when it ends, but I suspect it ends extraordinarily badly.

  234. jromeha

    Gel – I said good job with the currency play earlier but somehow the THANK OUT was left out. THanks for posting that play! I owe ya a steak or something if you make it out to Boston this summer or a couple of beverages in Vegas if we get this thing together.

  235. RCT770

    Pharm – any thoughts or insight on SQNM?
    Thanks.

  236. goldman

    End the Fed: Ron Paul - (note the 90% CNBC poll vote to end the fed, 20,000 votes so far)
     
    http://www.cnbc.com/id/32881898

  237. kinkistyle

    goldman: I think we all know its going to end badly.  When --  Thats the $640,000,000,000 question.   
    The next real opportunity might be after Nov 20.  After all the bearish puts expire worthless.

  238. jromeha

    ANybody watching copper? Almost at $4!!! I have an order in to short at 4.01. Copper is 20 cents off is 2008 highs but there is no inflation……….I think I dislike Bernake and the banksters more than I dislike Bin Laden…

  239. gel1

    jromeha… Glad you made out on that one… steak, drinks would be fun… if it doesn’t come together, then I may use it toward a credit for that bet I may lose with you…. Ha!

  240. doubled

    Phil,
    Strategy on IBM C spread 2013 155/165 is interesting and something I have missed as a nuance to the use of the BC spread..  DD repeatedly to reduce entry is good as price fluctuates..  At some point though you’d want to manage the 155s if the stock dropped to say 120. (Perhaps you would just sell to close the calls bought way before this happened) .  So is there a rule of thumb strategy or is it just a set of variables to consider at any given time relative to your overall portfolio composition and overall strategy?  ( Of course that would be true.)  However at some point one would have to deal with the caller.  It appears – just sell to close (at some point) and so it eats some of that nice profit but that is the nature of the BC spread anyway.  Am I correct?
    Also using the same above strategy could it be used for an aggressive index ETF like UPRO?

  241. Phil

     Good morning!  

    Sorry but these vacations are quite the time sink.   Easier to control with just Tina and the kids but my brother and family are here too so I have little free time.  

    Depression/Tusca – We’ll have to get into terms more carefully because our economy can drop off 20% but the dollar can drop 50% and our GDP will go up 60% in dollar terms so is that a depression at S&P 1,600?  Of course it is but keep in mind that we can leverage US assets and, as long as the dollar doesn’t go completely worthless, then inflation can be our (the investing class’s) best friend.  That’s why I want everyone to have cash ready – we can turn a little cash into a very large amount of cash once we get comfortable with steady inflation.  It is truly mindless to bet on something like ABX to go from $50 to $60 to $70 and the 2012 $50/60 spread is $3.30.  Why would I buy gold when ABX can pay me 200% a year?  If inflation goes faster than that (20% a year) then we can make crazier money without having to play futures or direct commodities or even ETFs.  

    Top 10%/Goldman – And 70% of that is the top 1%!

    Amplification/Goldman – Yes, I mentioned above how INTC makes 1,000 widgets with the same machine and inflation drops all to the bottom line.  Look at the shrinking cost (in foreign currency) of US labor.  TM took great pains to not mention this benefit in their earnings report but it’s there – they simply are paying US workers 20% less Yen this Q and doing very well selling their cars in China – we are now the 3rd World labor!

    MiFi/Diamond – I know, I was wishing for one the other day. 

    Stockman/Goldman – Yep, he gets the lead in my post today. 

    SWKS/Gel – They had a great Q and would have been better if not for a tax issue. 

    SKX/Amatta – I’d put a stop at $3 (.50 trailing) and then execute that but, otherwise, we all know it’s worth $22.50, even without inflation so you can just roll it along until people agree with you. 

    SDS/Amatta – Let’s see how next week begins.  We have a little Yentervention this morning and we’ll see how the market holds up to a dollar bounce and then, over the weekend, we’ll see how countries position themselves for the next G20 now that Timmy has totally lied to them at the last one.   I mentioned we should be looking at those Dividend Stocks to start with because, if things go the other way, at least you have a good stock!

    Japan/Praiz – Yentervention rumors. 

    Fast Money/Goldman – That’s an interesting set of comments from that usually up-beat crew. 

    Copper/Jrom – Just keep in mind that a weak dollar trumps all demand logic.  I do agree with the $4 short but keep those stops tight.

  242. Phil

    IBM/DD – It’s a normal strategy for an inflation hedge like the ABX above but keep in mind that we don’t normally assume 20% inflation in a year so this is not a "good" general strategy and it should, of course, be used very sparingly as in "If we are having 20% inflation then I need  10% of my portfolio to make 200% to stay even so maybe I’ll allocate 1% to IBM with 2 planned DDs that will take me to about 3% and I’ll also invest in ABX and maybe something like VLO, which are all stocks that will do well if the economy gets stronger OR we have inflation."  Of course, at the point where your initial 3% is weaker than you thought then maybe we will decide our inflation premise was faulty and take a 20% loss (0.6%) rather than DD.  Better information will hopefully lead to better decisions.

  243. deano

    November 04 2010 6:28 PM GMT
    Brazil ready to retaliate for US move in ‘currency war’
    --
    By John Paul Rathbone in London and Jonathan Wheatley in São Paulo
    --
    Brazilian officials from the president down have slammed the Federal Reserve’s decision to depress US interest rates by buying billions of dollars of government bonds, warning that it could lead to retaliatory measures
    Read the full article at: http://www.ft.com/cms/s/0/326a6d62-e83d-11df-8995-00144feab49a.html?ftcamp=rss

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