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Fall Down Friday – A Little Reality into the Weekend?

"The sluggish Global recovery"

That’s the reason PKX gave for a 59% decline in 4th Quarter profits.  That’s 59% LOWER than last year, which also sucked!  Posco is the World’s 3rd largest steelmaker and they had issues with rising raw materials costs (duh!) that offset a 26% increase in sales because those sales are coming in at last year’s prices as the CEO says the company is unable to pass on higher costs to it’s customers (primarily car makers, train/rail and shipbuilders).  

This is the REAL economy folks – it’s still very rough out there.  Posco, like many others, does believe 2011 will be better but PKX is already trading back at  $1111, down just a bit from $140, where they traded most of 2007, when the company earned $4Bn on $34Bn in sales.  Last year, PKX earned $21M on $31Bn in sales and I don’t have the full year but analysts were looking for 634Bn Won of income in Q4 and got 525Bn (divide by about 1,100 for $$$) so a big 20% miss with 14 analysts covering one of the World’s biggest industrial firms.  Do you see why I worry about expectations being a bit too rosy?  

Over on that side of the World, the Shanghai Composite fell 1.3%, the BSE fell 1.7%, the Nikkei fell 0.8% but the Hang Seng, which is manipulated by the same Gang of 12 as the US markets, held flat at the week’s high of 24,283.  Thank goodness for Hong Kong or we’d be worried about the 12.5% drop in the Shanghai since mid November but, thanks the the Hang Seng, we can ignore the mainland China Market and just talk up Hong Kong – as if that’s China and not just a trading vehicle used by the IBanks to paint the International tape.  

Interesting little divergence between the Hang Seng (which most Americans think is the entire Chinese market) and the Shanghai Composite.  Where is the China that is is driving the Global bull premise?  Surely it is the golden line of the Hang Seng (Hong Kong population 7M vs. Mainland population 1.3Bn) – Pay no attention to that index behind the curtain!!!  

Reality is such an elusive thing these days, isn’t it?  We live in a society in which we don’t expect the TRUTH from the media so we get none of it.  We get versions and we get spin and we are told that they can report and we can decide.  Isn’t that a ridiculous concept?  Imagine your math teacher telling you that: "I’ll just lay out some problems for you and whatever you decide the answer is will determine how we design the next bridge."  NO!  There is a CORRECT answer and we need to learn, as a society, not only how to find it but we need to re-learn the NEED to find THE TRUTH.  You cannot make either social or economic progress by pretending everything is just a matter of opinion!  

I mention this because, aside from the idiocy that passes for news on CNBC and other Corporate Media outlets, I was struck by a statement from the TARP report yesterday which pointed out: "While there was consensus that Citigroup was too systemically significant to be allowed to fail, that consensus appeared to be based as much on gut instinct and fear of the unknown as on objective criteria.  The conclusion of the various government actors that Citigroup had to be saved was strikingly ad hoc."  REALLY?  We gave Citigroup $25Bn, then another $20Bn a month later and then the Government backed $300Bn of their assets simply out of fear?  

Treasury Secretary Timothy F. Geithner told Barofsky that creating measurements for systemic risk was impossible because firms would “migrate around” the criteria, according to report. Geithner said that “we may have to do exceptional things again” if the shock to the financial system is large enough, according to the report. Barofsky said that Geithner’s remark “underscores a TARP legacy, the moral hazard associated with the continued existence of institutions that remain ‘too big to fail.’”  What are we doing to make sure this never happens again?  Don’t worry – the new web site is almost ready:  

 

Speaking of total Government BS – Remember when The Bernank was testifying before the Senate and Senator Enzi said the US is experiencing inflation and the Fed is doing nothing about it (this was last week).  What did The Bernank say?  “The facts are that inflation is 1% including food and fuel.” is what he said.  Bazinga Senator Enzi – you have been OWNED!  Uncle Rupert’s Journal (see link) is quite happy to cut the paragraph off right there because, after all – the truth belongs to the last guy who holds the microphone, right?  

Well those pesky facts do tend to rear their ugly heads once in a while and today’s annoying fact is the December Consumer Price Index, which shows prices rose 0.5% IN ONE MONTH.  Why that’s half of Ben’s 1% right there!  For the past 12 months, including "seasonal adjustments" the CPI is up 1.5% – that’s 50% more than the Chairman of the Federal Reserve thought they were up so was he ignorant or lying to congress last Friday?  Tough choice, right?  

Of course the weighting of the CPI is completely insane with fuel up 16.5% for the year, Food up 1.5% (and we’d like to know where those people are shopping!), Medical Care up 3.4%, Transportation up 2.8% but that is all offset by a 1.1% drop in Apparel, a 2.8% decline in Natural Gas, and a 0.2% decline in new car prices.  So, other than natural gas, the things you MUST buy every day carry very little weight while the things you MIGHT buy once in a while are given more weighting.  According to the CPI report:  "A deceleration in the gasoline index accounted for much of the slowdown, as it increased 13.8 percent in 2010 after rising 53.5 percent in 2009."  Gosh I know I feel better about that, don’t you?  

Don’t worry investors, there’s no reason to be concerned over rising prices because America’s massive unemployment allows us to make it up by cutting wages!  That’s right, December real earnings were down 0.4%, allowing our corporate profits to keep pace with rising input costs as we simply force the proles to make due with less.  Unfortunately, this caused December Retail Sales to miss expectations by 33%, rising only 0.6% instead of 0.9% expected but, like the MSM, we will pretend that didn’t happen as it doesn’t fit the bullish narrative they’ve been touting since Thanksgiving weekend.  

We get the U of Michigan Consumer Sentiment Report at 9:55, followed by Business Inventories at 10:00 and ECRI Indicators at 10:30 and I’m expecting that to be it for the drop so we’re going to take the money and run on our short plays as the Fed’s Lacker is scheduled to give his Economic Outlook at 12:00 but we already have a video of the dry run of the speech and it looks pretty bullish:

Yep, pretty typical Fed Speak these days…   At least we finally got our oil sell-off!  

Have a nice weekend,

- Phil

 


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  1. reza99

    Good Morning Phil and all:
    Guess what: gasoline prices are
    expected to go up
    this year.

    Perhaps this price increase would hasten the slow down’s return? Or the slow down would change the gasoline’s price direction?

  2. stjeanluc

    The little spark to a larger fire?
    http://ftalphaville.ft.com/blog/2011/01/14/459566/china-japan-analogy-du-jour/ 

  3. mike5885

    S&P futures overnight:  H = 1284.25, L = 1274.25
    current = 1277.75
     
    NET $ = (.04)%,  dx/y = +.14%
    oil (.97), gold (26.40)

  4. stjeanluc

    Commodity inflation much!
    http://ftalphaville.ft.com/blog/2011/01/14/459511/oil-shock-ed/ 

  5. stjeanluc

    Let’s be careful before we jump in to the ARMH bandwagon. It seems that Intel is moving in the tablet and phone market.
    http://ftalphaville.ft.com/blog/2011/01/14/459396/intel-builds-a-9bn-deathstar-to-kill-the-rebels/
     
    By the way, the big winner of the last CES was NVDA. I would not touch them now as they have had a huge run, but they made a nice transition from graphics to tablet. Unexpected! 

  6. stjeanluc

    From Atrios trying to paraphrase Jamie Dimon:
    Chief JP Morgan bankster warns cities will go bankrupt. "Because after all, they don’t have access to all the free money in the world from the Feds, like we do." 

  7. mike5885

    biggest thing I noted on the JPM release is how confusing it is, it always is
    But this one is extremely opaque to me.  It seems like they went out of their way to not  provide any per share amounts for all of the net loss provisions brought back on.  They give the totals and break them out, just not on a per share basis.  So they are making it very hard.
    Then they have all the BS about how management uses a managed basis for what is on the balance sheet.  Here is what is not included this time in the loan loss calculations
    "b. The ratio for the allowance for loan losses to end-of-period loans excludes the following: loans accounted for at fair value and loans held-for-sale; purchased credit-impaired loans; the allowance for loan losses related to purchased credit-impaired loans; and, loans from the Washington Mutual Master Trust, which were consolidated on the Firm’s balance sheet at fair value during the second quarter of 2009. Additionally, Real Estate Portfolios net charge-off rates exclude the impact of purchased credit-impaired loans. The allowance for loan losses related to the purchased credit-impaired portfolio totaled $4.9 billion, $2.8 billion and $1.6 billion at December 31, 2010, September 30, 2010, and December 31, 2009, respectively."
    That’s enough for now, I have seen enough to know it is all gimmicks again, jmho

  8. mike5885

    so they excluded most of the Washington Mutual, what a joke

  9. samz3700

    It seems like some of us may have been to early in the short call.

    This is probably the peak of margins – how much better can they get? Now higher input prices are hitting the cyclicals as Phil pointed out.

  10. jomptien

    Nice video Phil

  11. Cap

     $FCX traders … another pump monkey upgrade hitting the tape w/ a $160 price target.
    These guys are desperate to prevent stocks from breaking down.
    Careful trading.

  12. matt1966

    I’m feeling very poppish today!
     
    Btw Phil, yesterday I said the term bullish should be replaced with bubblish.  Not buddish!

  13. Cap

     Coal news … these stocks have been getting momo pumped on Australian floods (which are now abating).
    Australia says coal exports are resuming.
    Broker actually downgrades PCX this morning, and a large insider has been selling every day for the past 2-3 weeks.
    fwiw.

  14. dclark41

    Phil
    Two questions. How do you handle copyrighted material on your site? Do you have to pay to use the links, quotes, or pictures on your site? I am not the copyright police so no worries there-I have a business that has to seek permission for products that we print and am just curious how you deal with the copyright issue in the digital realm.
    The second question pertains to my TZA hedge. Details: July $15 calls ($3.45 now $3) / April $21 Calls sold ($2.33 now $.91) / Did have April $17 Puts ($2.95 bought back at $4.05). I would like to keep this trade on the table, but having trouble adjusting it. I did not like holding the April 17 Puts sold and got chicken**** and bought them back and left the rest. What should I look to do with the trade if for some strange reason the RUT corrects? I really want to make this a nice hedge for me that I don’t worry about because it’s paid for--just not at $17!(sold puts). I have been working this since November (rolling once already)  and have nothing to show for it! Thank you.

  15. mike5885

    remember this is a long weekend with Monday close

  16. mike5885

    C = 1281.67, F =1278.50
    10yr = (.79)%,  30yr = (.47)%
    VIX +1.83%
    oil (.97),  gold = (23.20)
     
    NET $ = (.02)%,  dx/y = +.04%

  17. Phil

     Good morning!  

    It’s take the money and run time on the USO puts.  We should at least get our net $1.53 back on the Jan $40 puts on the $10KP and we are done with this annoying trade that was taking up too much cash.  It’s just not worth the risk into the weekend.  

    We’re still watching the QID Jan $10s but those are not looking good and we will probably take the loss today (net $1.30 on 20) although with USO gone, we can afford the hold or roll so let’s see what happens.  

    Our 40 DIA Feb $119 puts are very frustrating at $3.40 as we doubled down at $3.10 to net $4.20.  Of course we would love to dump these even and be done with them but that requires a 100-point drop in the Dow to 116 and I don’t think we’ll be that lucky today unless Consumer Confidence is really awful.  Still, I don’t want to take a $3,200 loss so let’s sell the Jan $117 puts for . 95 to hold us over the weekend and we’ll just have to deal with the roll down if the Dow breaks lower.  

    Not even the oil pullback is bothering the market – I’m not sure anything will.  

  18. amatta

     WTF, 
    INTC beats by a wide margin estimates higher and they are down, but WYNN with the news from china is up?

  19. amatta

    Phil, 
    Are we taking half off the USO puts here? 

  20. tuscadog

    Phil / Posco   My post from few days ago "Also think shorting iron ore and steel cos may be interesting? Main consumers, shipping and construction, have huge overcapacity globally and autos will not recover to 2007 levels with high unemployment and austerity. Posco (China slowdown), Cliffs, Wuhan Steel, Vale, Mittal, BHP, etc?"  If you agree, can you suggest some aggressive short plays for a big collapse in iron ore, steel, aluminum and copper (your FCX of course) over the next 12 months?

  21. matt1966

    Backing up the truck with FAZ-

  22. yodi

    SINA is on fire yesterday 4$ today already 1.35 up

  23. nicha

    Phil/CSTR – April $40 puts for $3 for a net entry of $37 sound good to you? Thank you.

  24. Maya1

    Phil/AAPL
    Good morning! ( we hope)
    Unfortunately, I am still sitting with AAPL, and have been a sttuborn student
    Given that admission, and without selling it, are you able to suggest some combination of puts/calls to keep the stock AND not lose on a drop AND not lose on the upside when they report earnings on Tues?

  25. pstas

     CSTR- Phil, need some suggestions on this . Talk about bad timing,I had Jan puts as a swing trade but sold them yesterday as it crossed my line. Would have been a huge winner. Unfortunately, I had some short Jan 52.5 puts which now are deep under water. Obviously I need to roll down/out.  What do you suggest? Thx.

  26. dclark41

    Phil
    Are you trying to be too perfect in your timing if you are long term bullish? If you don’t expect a significant drop what is the point of being so heavily in cash? If you are buying great companies with great fundamentals are you really that worried about a moderate pull-back? Even if we do get one won’t our hedges buffer the downside risk? I am just trying to get a clear picture on what you are waiting for. It seems the event you fear will be bigger than a moderate pull back in which case you should define yourself as bearish until it happens. Personally, I am with you and your thinking. I am scared as hell with all of this BS glossing over some very nasty problems both here and abroad.

  27. rdn4evr

    OMG – I made money on a put!  I thought that wasn’t allowed.  I didn’t buy the USO puts until two days ago, so I made 40%!!  It’s that occasional Intermittent Reinforcement (say one out of 25 tries) that keeps me part of the 13%.

  28. Phil

     Slow down/Reza – We’re already getting it!  Check out this Retail Sales Report – Most of our retail gains come from a 14% pop in Auto sales – General merchandise is up just 2.5% and was negative in December and that includes gas, which was up 16.2% and accounted for $70Bn of the $290Bn total rise in retail sales (fropom 2009, which was a crappy year).  That’s out of 4.4Tn in total sales – these are not impressive numbers at all.  

    ARMH/StJ – Good point, it’s going to be a crowded space and INTC is not going to ignore it for long.  Probably they are waiting to come out with a killer chip that will be a must have for next year.  

    INTC 2013 $22.50 calls at $2.23 not a bad way to play them.  You can also sell the $17.50 puts for $2 to make it an almost free look at the upside and your worst case is you own INTC for net $17.73.  

    Cities/StJ – I was looking up the Bombay and accidentally put BSE into stockcharts without the $, check out this scary result!

    JPM/Mike – You are right, it takes forever to figure out what these IBanks are actually doing.  Of course, it promotes the attitude of the culture – nothing matters but whether or not you make money.  

    FCX/Cap – Yes, all should be VERY careful with them.  Copper testing $4.40 again but rejected so far.  That’s a good take the money and run drop on them.  

  29. pstas

     CSTR- sorry- position is 10 Jan 52.5 puts sold @ $.50.

  30. Maya1

    And any play on
    CREE?
    CSTR?

  31. mike5885

    C = 1284.42, F =1280.75
    10yr = (.67)%
    VIX (.61)%
     
    NET $ +.01%,  dx/y = +.01%

  32. samz3700

    Is the tape seeming more volatile today than it has for a while or is this just my imagination? Vix is still going down but seems like we are jumping all over the p,ace within a narrow range if that makes any sense.

  33. lflantheman

     dclark41…….Here is an idea for you.  Redefine "cash" as "the best stock I can find in the universe".  Then when you "go to cash"   you really, say,  "go to   AAPL" .   You put all your "cash" in   " AAPL" and  go get some of your cash (by selling some AAPL) whenever you find somewhere better to put your money.  What do you think?  
     

  34. matt1966

    Impressive squeeze in the banks.  Calling all bagholders!  Bove et al need you to report for duty!

  35. Pharmboy

    Good morning, and have a great weekend all….here is the latest write up for your weekend reading.  Science…I love it!!!

  36. Phil

     Pot getting High, High, High!  

    Bubblish/Matt – Shows where my head is at!  

    PCX/Cap – I think they are a bit too high with a forward p/e of 150!  

    XLF going parabolic!  Good call on FAS by someone yesterday!  

    Business inventories up 0.2%, which is a miss but that’s November.   Michigan came in at 72.7, which is a big miss off 75.5 expected and heading the opposite way from expected off November’s 74.5 but the Bots don’t care, do they?  

  37. amatta

    Phil, 
    Are you going to put up some plays on earnings? (you mentioned a couple weeks ago there were going to be good opportunities with earnings coming into play).
    Thanks

  38. JRW III

    Good morning,

     

    IWM 81.53, 80.35, 79.96, 79.76, 79.56, 79.28, 78.94, 78.69, and $ 7 Bil of POMO !!

     

    I’m in TNA at $76.86 average !!

  39. mike5885

    Just a note on semi’s,  historically record margins was a time to sell
    if anything matters anymore

  40. dclark41

    Inflantheman
    Are you endorsing AAPL as good as cash or better? I can find little to say against that statement! Would you buy stock or calls here or Phil’s recommendation from earlier in the week?

  41. stjeanluc

    Intel / Phil – The problem with Intel as I see it (and the same with Cisco – I am short CSCO puts) is that they fly too much below the radar. They are loaded with cash, they have good fundamentals and good products but they trade like a utility! I would not be as aggressive as you are on a trade. At the end of today the way it’s going, you might be able to sell a Jan 2012 20 P for $2.00 which would make a nice $18.00 entry point!

  42. lflantheman

     I would say that right now, and for the next 12 months at least, AAPL stock is better than cash.  I would buy stock, not calls, for "storing" money.  Phil may disagree, but I will stand by this for the next 12 months.  

  43. Pharmboy

    IPXL – June 20/25 bull call spread for 2.10 or better, selling the 20 Ps for $1.40 or better.  Let’s start small with a few to see where/if they get filled.  1/4 entry.

  44. JRW III

    Pharm,

    How’s this for your Japan scenario ?

    Click to View

     

  45. matt1966

    If anyone is is long FAS or XLF get out now!  If I’m wrong… just get back in once we breach the day’s high again.

  46. stjeanluc

    Intel / Phil – To follow up, I was checking some numbers and Intel is now trading at a forward P/E of around 10. Earning growth estimates are for 10% a year for the next 5 years. Compared to many MoMo stocks, this is of course very cheap… And they carry a dividend of over 3%. In fact, you could say that relative to Apple, they are cheap. Apple projected earning growth for the next years is around 15% and they have a forward P/E of around 15. Makes sense so far, but they have no dividend… There has to be a formula somewhere to adjust P/E, growth and dividend rate to get a better idea.

  47. amatta

    Why is copper up, with China tightening? 

  48. Pharmboy

    JRW – If I take my morning POT… then looks about right, although the lines are a bit squiggly. 

    I like this one better….it is just HIGH.

  49. matt1966

    LOL!  Proprietary food with integrity!!  Who is this guy still bambooziling????
     
    Lastly, Cramer said he expects the price of corn could soon double from current levels. Rising food costs shouldn’t hurt companies that sell "proprietary food with integrity." People will want healthy foods from companies like Whole Foods
    cnbc_comboQuoteMove(‘popup_WFMI_ID1EDRAE15839609′);
    [WFMI  52.78    0.47  (+0.9%)   ]

    cnbc_quoteComponent_init_getData(“WFMI”,”WSODQ_COMPONENT_WFMI_ID1EDRAE15839609″,”WSODQ”,”true”,”ID1EDRAE15839609″,”off”,”false”,”inLineQuote”);

    and Chipotle
    cnbc_comboQuoteMove(‘popup_CMG_ID1EEWAE15839609′);
    [CMG  231.04    1.40  (+0.61%)   ]

    cnbc_quoteComponent_init_getData(“CMG”,”WSODQ_COMPONENT_CMG_ID1EEWAE15839609″,”WSODQ”,”true”,”ID1EEWAE15839609″,”off”,”false”,”inLineQuote”);

    regardess of which way food costs go.

  50. JRW III

    And furthermore…………

    Screen shot 2011-01-09 at 3.14.24 PM

  51. nicha

    Phil – thanks for the BSE chart.

    FAS – in one of my accounts realized I had sold a naked July $27 call. Taking your short term bearish stance I am thinkng of rolling it to 2x April $32 calls. Thank you.

  52. Jbur

    pstas: CSTR. Sorry to hear that, and ouch! I think we’ve all had some unexpected $*it like that happen. Hope you and Phil can pull it out of the fire.

  53. mike5885

    C = 1284.50, F =1280.50
     
    everything in the releases today was bad economically (retail sales, sentiment, costs/prices, etd)
    so of course the markets are flat to up :)

  54. morxlntway

    matt – something i heard out of the corner of my ear on NPR’s money program was that the poor of the world are now wealthy enough to afford more meat which is requiring more of the grains to go for feeding cows, etc. Therefore those of us who might choose to eat less meat have to pay more for our whole foods. FWIW.

  55. mike5885

    $$$/Yuan on the move here, had been flat all day, now (.22)%
     
    NET $ (.16)%,  dx/y = (.05)%
     
    C = 1283.40, F =1279.75
    10yr = (1.21)%
    VIX (1.40)%

  56. judy

    In recent days, the dxy has had less influence on the s&p (maybe due to $ going down against non-euro currencies). Today the spy is trading very close to just inverse to the dxy. 

  57. Pharmboy

    JRW – LOL!  Still too squiggly.

  58. bps2002

    I hink this is the sell the news that was expected in November and never materialized.

  59. JRW III

    Out of TNA at $76.74; GOOD CALL matt !!

  60. amatta

    Phil, 
    SLW from 15 days ago was a great pick I bought some puts and sold for a nice 20% profit . They have continued tumbling with the price of silver coming down almost 10%, the shares are down 25%… perhaps worth a play on a rebound here?
    Thanks

  61. mike5885

    Phil any thoughts on some type of a BG-POT pairs trade
    Long the BG and short the POT
    maybe using stock, or construct something for options, like a 5×2 calls to puts
    Not an exact match industry wise
    Fundamentally, I do not really like either company.  I just think that BG will hold up better during a fall off.
     
    I have much more work to do on the idea, just throwing it out there for people thoughts, to see initial reactions

  62. shadowfax

    Phil Intel Advanced micro devices
    Fancy new chip. For the last few years processor speeds have gone up very little or in some ways just went down. Their just released unlocked chip runs @ 3.4G vs 2.95G but the old one could be overclocked to 4.2G vs 3.8G new and the actual size is bigger to disapate heat. The new chip has a Sandy Bridge vs something Bridge ie no change. The wall is heat, the temp @ 95 watts with fan cooling is maxed out. Adding liquid cooling is both expensive and large, desktop only. Overclocking requires it and voids warrenty, record speed requires liquid nitrogen. The bottom line, no chance for breakthrough chip. The solution for me was liquid cooled quad core to 3 single core with lots of high speed RAM. The quad core is running very cool but the other 3 are overheating. Heat is the BRICK wall to advancement.
     
    Great chart of military spending, that is why I say we have to cut in half to start and spend more of that on our injured.

  63. yshenhar

     Phil – the USD seems to be holding 79.20 so far – what do you think of UUP?

  64. matt1966

    thanks JRW.. but now I"m not so sure!  Big prop job going on now..

  65. matt1966

    Wow, a show of strength!

  66. Phil

     Copyrights/DC – There’s a certain amount of text (attributed) you can use without permission and then Ilene and Elliott are in charge of getting permission and we have a pretty large bank of people we’ve gotten blanket permissions from over the years.  Since I’m good about sending links back and our sight generates a lot of hits for people, most people WANT us to link to their stuff.  If anyone gives us a hassle, we just don’t use them anymore – why bother when there are thousands of people who are happy to work with you?  Most of the images I use I use as links from public sites – I don’t download other people’s stuff as that is a copyright issue – even though most people don’t mind, it’s not worth the hassle when they do.  Elliott has accounts to pay for use of images in SWW and we have a budget for that but it’s not so bad as it’s a subscription letter so we control how many people get the images, which makes them cheaper for us to use.  Ilene is a lawyer and you need one to deal with all the copyright BS on a subscription site!  

    TZA/DC – I’d buy back the Apr $21s and spend $1.50 to roll down to the July $13s, after you get that (might take a while), then you can pick up $1.50 by selling April whatevers are $1.50 at the time (currently the $17s).  If TBT heads lower, THEN you can sell some more April puts (maybe the $13s for $2+, now $1.35) and if it doesn’t go lower, then you will be in good shape with your naked July $13s!  

    Dollar getting brutalized again.  Smacked down from 79.6 at the open now 79.23 and was as low as 79 overnight so probably going to test there, which should give oil a nice boost but if gold doesn’t head up, you know it’s just BS…

    Long weekend/Mike – Oh thanks, I forgot actually.  All the more reason to cover those DIAs and make that, hopefuly, our only remaining open play in the 1050P.  

    USO/Amatta – I hope you took them all off at $1.60.  Way too risky over the weekend with just 4 days left to trade.  We might be crying over the missed opportunity but at least we’ll have cash to trade another day. 

    PCX/Tusca – I’d short PCX and FCX, those are the ones I feel most comfortable with.  It’s so hard to tell what’s going on in steel and we could get more stimulus and more bailout any moment.  Also, PKX says it’s a passing issue – that remains to be seen but MT doesn’t look very worried nor does CLF and we haven’t even begun to recover building in the US yet.  Just a little good construction news and you can be screwed on shorts there.  

    For PCX, I would just go for the June $28/24 bear put spread at $2.35 – that’s a nice return if you are right and the net delta is just .21 so costs you net .50 if the trade moves 10% against you.  You can pair it with the sale of 1/2 the $29 calls at $2.55 as those can be rolled up to 2x the $35s ($1.25) and if you are worried that PCX is going to gain 40% by June – then why are you shorting them in January?  FCX I want to watch and wait over the weekend as we just got a nice $5 pullback.  

    FAZ/Matt – Nice call on the turn but I do expect us to head up today. 

    CSTR/Nicha – Yes, I do like shorting the $April $40 puts for $3

    AAPL/Maya – No, what you ask for is ridiculous.  You can’t have it all – do you want to protect your already huge gains or risk them hoping to make more?  I don’t know why anyone would want to tie up $346 in a stock that doesn’t pay a dividend.  If you want to hold them long-term, then you can ditch the stock, put $346 in your pocket and sell the 2013 $280 puts for $30 – which means you now have $66 (almost 20%) of free downside protection in addition to your $346 off the table plus another $30 in your pocket.  If that isn’t good enough for you, you can risk the $30 by buying the 2012 $345 calls for $45 and selling the $435 calls for $15 so you don’t miss one penny of the next $100 run in AAPL and your only risk is buying them back for $280 and NOT losing $66 by holding them naked like an idiot.   If you think that $100 of upside is not enough – then by all means stay naked and risk $346 and let me know how that works out for you…

    CSST/Pstas – Oh that sucks!  I’d go 2x the July $42.50 puts at $5.50 as long as you really want them and just cap them below the $42.50 line by buying some puts with a higher delta as momentum trades.  

    Why cash/DC – Because if we get the drop we expect then our cash will buy a lot more stock.  Why should I buy CAT for $93 when I can hopefully buy it for $85 on a dip?  Also, since we plan on entering buy/writes, we also expect a better VIX to give us better selling prices on our short puts and calls.  Meanwhile, you act like we do nothing all day but we find plenty of things to trade and we’re just 2 weeks into the year so not feeling too much pressure just yet.  If you can’t think of any possible way that you can wake up tomorrow and have the markets on their way to a drop that will blow out our 20% downside protection on Buy/Writes – then go right ahead and spend that cash.  Otherwise, I’d rather stay flexible while things are uncertain and the 5% I would make between now and April if all goes well in buy/writes by committing another 50% of portfolio cash would make about 2.5% of the whole portfolio or about as much as JRW does in a day.   Cash is good – cash is opportunity.

    ABX $45 calls at $2 with a stop at $1.75, looking for .25-.50. 

  67. mike5885

    C = 1287.24, F =1283.00
    10yr = (.85)%
    VIX (2.75)%
     
    NET $ = +.08%,  dx/y = (.18)%

  68. bobhu

    Good morning Phil, I have a short put position on FAS Apr. $18 is deep ITM.  Does it make sense to roll to higher strike price?  Look to me it’s not pay for the risk, just want to know your take on this.  Thanks.

  69. Cap

     POMO prop job again 
     

     
    stealing your images Pharm …
     
     

  70. matt1966

    Ok, that’s it for FAZ.  It’s bottomed.  Boy, if I’d only waited till backing up the truck.. oh well, I’ll be ok.  But please, if you haven’t gotten some yet.. do!  If I’m wrong, it’s a free money day (as long as your bubblish)!

  71. JRW III

    In TZA at $14.52; they really need a reverse split !!

  72. Phil

     Intermittant Reinforcement/Rdn – "Yeah when they call your name, you salivate like a Pavlov dog…."

    $1050P – Rolling 20 QID Jan $10s at .70 to 20 Feb $10s at .85 for .15, which makes avg $1.45 so we DD at .85 and have 40 at avg $1.15.  

  73. biodieselchris

    I noticed the BDI continues it’s sharp tanking into the uber-toilet range. I really thought, you know given the "recovery" and all, that a bottom at 1750 and a cheddar-sharp reversal was in order. At 1438 the BDI is exactly where it was on Oct 17, 2008. Remember the good times we were having back then, when the DOW would drop 9% PER WEEK.  One week before it crossed under 1438, DIA went from 103.20 to 83.75.
     
    Don’t the folks over at the good-ol’ BDI watch CNBC? 
     
    Nothing to see here!! No sir, TRY THE WINE

  74. ban2

    Hi  Phil
    I’m sitting on 2 PCLN Jan 440 short C @ 6.6 now 4.6
    Would you take the chance to let them expire? Could pick up another $900. by next Fri.
    Thnx

  75. rwvjx5

    Jrw
    glad to see you on same side of trade as me, been tough on the short side lately
    we need a "flash dip" lol
    whats your strongest line of support on the iwm?
    thanks

  76. matt1966

    They’re squeezing the bajeebies outta  me! 

  77. JRW III

    Well, I’m down $3K, out of TZA; rhythm is off, so I think I’ll go make breakfast    8-)

  78. stjeanluc

    Look at VXX taking another 2% hit today. It’s a joke…  But at least it’s moving in sync with the VIX which is down close to 3% today. 

  79. JRW III

    rwvjx5 / lines

    IWM 79.28 is a 19 support and 80.35 is 6 resistance

  80. nicha

    Ha ha…BAC settles with NYS pension system For $4.25 million for causing a $133 billion loss.
    At this rate i will never collect anything from the state in retirement. Come to think of it, that is why I am here.

  81. jomama

    Phil, a nice play has been selling calls against TBT leaps.  I kind of landed on this the hard way – i had a vertical that didn’t work out, bought back caller etc – then doubled on the leaps and now i’m selling 40′s or 41′s front month against the Jan 2013 35′s.  Basis on 35′s is around 7, so if tbt jumps past 41, should be a wash.  With POMO and bond sales, there is some good volatility in tbt.

  82. jomama

    nicha, that is why i am very bullish on BAC – they are cleaning their balance sheet on pennies on the dollar. 

  83. flipspiceland

    I continue to be in awe of the many completely sensible, well researched, thought out and deeply considered quantitative analysis on this board.
    And equally astounded that the market couldn’t give one good poop about any of it.

  84. lflantheman

     Maya1/AAPL……..I’ve been riding the Jan and Feb calls upward, and have a lot of them.  Tuesday I will close them all out except perhaps a 3 to 5% of portfolio wager (and that’s what it is)   on earnings, betting to the upside.   I’ve not decided yet how to design that play.  Safer yet is to go to cash (go to AAPL stock if you prefer) today or Tuesday , and ride out the earnings.  

  85. mike5885

    ATT pensions

  86. matt1966

    Nicha, that is amazing.  What I want to see is an audit of the buyback settlement they had with FNM.  That seemed like outright fraud. 
     
    Hey Jomama, long time!

  87. mike5885

    not sure on the ATT, first thing that popped into my head, let the games beging
    the Funny Money and accounting gimmickry instead of winding down is just revving up

  88. stjeanluc

    Flip – The casino, remember, the casino…. 

  89. mike5885

    I can all ready see it now, ATT and other will use this like the banks
    some years they will take the loss, then some years they will reduce the previous pensions loss reserves back on the balance sheet, ala JPM
     
    the everyone will follow and play, states, govt pensions, etc

  90. dclark41

    Phil
    "He that have patience can have what he will"  Ben Franklin
    "Patience is not inertia. … Patience has the steady movement of growth and is always accompanied by peace. This peace can never be mistaken for inertia which is always accompanied by restlessness." – Sri Chinmoy
    "All human wisdom is summed up in two words – wait and hope"  Alexandre Dumas Pere

    "Patience is the companion of wisdom" Saint Augustine

    ” Patience is the ability to idle your motor when you fell like stripping your gears" Barbara Johnson

     
    I will write these quotes thirty times on the blackboard for my weak question! :)
    I just was, respectfully challenging your premise to make sure I understood where you are going.

  91. mike5885

    C = 1289.97, F =1283.25
    10yr = (.85)%,  30yr = (.27)%
    VIX (2.87)%
    oil (.42), Gold (30.00)
     
    NET $ = (.08)%,  dx/y = (.04)%

  92. matt1966

    They picked a fine time for a free money day. 

  93. terrapin22

    Phil / HMY & Gold - dropping like a rock.  Aug 2011 $10 calls bought at $2.20 last week to adjust for prior spread.   so down 15% now.  Jan 2012 $10 puts sold at $1.  Wait for calls to be down ~50% (if it gets to that) and then adjust I presume.  What would the next move be?  Thanks.

  94. Pharmboy

    USU is a uranium supplier.  Jan12 7.5/5 C (buy)/P (sell) for 10c credit.

  95. tuscadog

    Phil / XLF   Do you still prefer the index to individual plays like BAC, C, JPM?  The mkt highs and rising rates have to help BK a lot, so do you like them at $32 or is cash still preferable at this price.

  96. oburlacu

    Hi Phil,
    I initiated about 2 month ago a poistion in FAZ at $10.5 and along the time I hedged with calls that I rolled down so no my net entry is $8.75. I have Jan 10 puts and Jan $9 calls.
    Is it worth rolling the options to February to different strikes? This is in a IRA account where I cannot do spreads but I can sell CC and cash covered puts.

  97. Cap

     Loving the AIG dumpathon  (it is such crapola !)
     
     
    Street_InsiderRumors Berkowitz, Others Are Unloading Their $AIGStock http://bit.ly/hkK5uP

  98. Pharmboy

    Once high flier MCP…just has a second round of heading to the cr@PPer.

  99. nicha

    Pharm/IRWD – I followed u in on this but with buyng the stick and a may $10 straddle. The call was sold for $1.60 but the put has not executed. I had put in an order for $1.30, now at .93. What is your suggestion? Thank you.

  100. shadowfax

    matt
    Everyday free money to banks but the stocks are so pumped up the the BOTS are selling on a 9 out of 10 moves since last Friday.

  101. ravalos

    Such a boring day.. (not to mention CMG shooting up "as usual" making its way BACK to the ‘ol price of $262 dlls..)

  102. drumkeerin

    dear phil
    QID question—unless an upsurge before next friday will get .49 for Jan 11 calls. but have Feb 10 calls at 1.67 and Feb 12 puts at .95. Don’t know where to take this next

  103. Pharmboy

    Nicha – mine did not fill as well.  IF you are up or even, then move to the Aug11 10/15 BCS (1.75 or so), selling the Aug10s for 1.40.  I will move that to the spreadsheet as a new entry.

  104. ravalos

    I wanted to describe a move I made which turned my bearish bet into a bullish one.. I had short Jan $29 puts, so back when it was around $23.5 (and incurring quite a loss) I replaced it with CSCO Jan 2012 $20 short puts.. CSCO was a recommendation from this site and I was able to sell the puts for $2.40 and I intend to hold on these guys until I make at least 75% gain or until expiration (I wouldn’t mind owning CSCO @ $17.6 net)..

  105. ravalos

    I had short SDS Jan $29 puts!

  106. mike5885

    any one have a link to that GS story, where opps we actually were off by 5 B in disclosing our losses

  107. mike5885

    special global designation of which banks are systemically important
     
    a get out of jail free card, here go do whatever you want, the world is here to bail

  108. nicha

    Pharm – spreadsheet is a great idea. It is going to be easy to track ur trades. Thanks.

  109. mike5885

    Fed QE2 Traders

  110. nicha

    Here is the link to the BAC settlement with NYS pension system.
    http://www.timesunion.com/local/article/Pension-fund-gets-4-25M-in-deal-955977.php

  111. mike5885

    Finally found the GS story, funny how they survived and now found the losses, bet this may be a re-occurring theme
    http://www.thestreet.com/story/10973691/goldman-lost-an-extra-5b-in-prop-trading-report.html?

     

  112. Phil

     CREE/Maya – Too dangerous at the moment.  CSTR see above.

    VIX down/Samz – Yeah, what a freakin’ joke.  

    Good point on cash Iflan.  

    IPXL/Pharm – Nice write-up.  I like them because they actually make money but I’d like to see a pullback off $22 and maybe sell the March $20 puts for $1+ as a first entry (now .60).  

    Earnings/Amatta – Yes but not next week, we haven’t seen enough yet.  I was wrong on INTC (although they sold off anyway) as I didn’t count on corporate server sales offsetting a drop in notebooks.   That’s just age, I don’t think in terms of server farms when I think of corporate sales but it’s now a huge factor as are dual processor and quad processors so PC sales can go down while processor sales go up.  (I was also wrong about Jeopardy as IBMs computer kicked human ass).   So now I learned something and I’ll be able to use that to better guage the next report in that sector.  That’s what I like to do the first week or two of earnings – concentrate on reading the reports and getting a feeling for where the money has been going.  

    Great 10:04 call JRW!  

    Dollar creeping back up – 79.37 now.  

    INTC/StJ – That would be nice but why not just go out a year and sell the 2013 $17.50 puts for $2 instead? That’s just $1.70 in net margin to make $2 over 24 months.  I can think of worse fates and you have built in 20% downside protection so a pretty relaxing trade.  

    AAPL/Iflan – As I said to Maya, I like my above AAPL trade better than cash but I do not like AAPL stock better than cash because you can only sell 10% worth of protection and that caps your gains at 10% (and we can do better with cash) and it also doesn’t cover the risk of Steve Jobs catching a cold or just coughing on stage, which could cost you 20% very quickly.  

    CPI/JRW – Gee if people are rioting over a 1.5% CPI increase, imagine what they’ll do if we hit that 2% "target" range! 

    Formula/StJ – Sure there are lots of valuation calculators that take all those things into account.  The one I used to use is on Investools but I’m sure there are nice free ones. 

    Copper/Amatta – Just painting the tape.  They can’t retake $4.40 so far and gold is staying down so not too impressive.  FCX can’t hold $117.50.  Actually, speaking of China – Japan is developing new set of car batteries that don’t use rare earths so HA HA China!  Shockingly, CNBC seemed to miss this news:  

     

    In 2012, Toyota will sell a battery-powered RAV4 compact sport-utility vehicle with an inductive motor supplied by Tesla Motors Inc. that uses no rare-earth minerals. Tesla’s all- electric Roadster sports car and future Model S sedan use a similar motor, also without rare-earth materials.
     
    The RAV4 EV motor is separate from Toyota’s next-generation electric motor project, Hanson said.
    Toyota is developing efficient, cheaper, lighter motors, along with advanced batteries and power electronics, as electric propulsion is essential for next-generation autos, Takeshi Uchiyamada, Toyota’s executive vice president for research and product development, said in an interview this week in Detroit. The company is making progress in all three areas, he said, without elaborating.
     
    The carmaker revealed this week it’s also working on a magnesium-sulfur battery capable of holding twice the energy of lithium-ion cells. Under ideal conditions, such a battery can store 4,000 watt hours/liter of electricity, Jeffrey Makarewicz, a Toyota battery engineer, said in an interview Jan. 10.

     

    ROFL Pharm!  Is that Monetary Chart right?  Holy crap!  

    Food integrity/Matt – That’s fine for the top 1% and maybe even the top 5% but it’s a stretch to get the top 10% on board with doubling food prices, isn’t it?  I know when we take my kids’ friends to CAKE for lunch, most of them never eat there while my kids have the menu memorized.  WFMI is the same, we have it at the pool all summer and people often say "Oh that’s delicious, where did you get that" and we tell them Whole Foods and they usually roll their eyes and say "Oh…" as in – well no wonder, I’m not shopping there anyway.  

    I used to be in Cramer’s World, which is the World many of us are in where we work with people who earn about the same as us, meet with clients who earn about the same as us and live in neighborhoods where people all earn about the same and your whole social life tends to be with the same economic group.  You go to Smith an Wollensky’s to grab a $50 lunch and you run into 5 guys you know and they are heading off to the Keys to do some fishing this weekend and one guy bought a new BMW and 2 of them got 3D TVs and everyone is employed and happy and you go home and your kids want new Uggs because theirs are old and the other girls are making fun of them…  When I sold my company and we had kids, I purposely moved to a more "normal" neighborhood as I wanted my kids to grow up like I did – only a little spoiled.   People tend to think the whole world is like their own little bubble – that’s how analysts and fund managers etc. can be so damned wrong about macro events – they don’t live in that world.  

    Velocity/JRW – That’s my whole runaway inflation premise.  Velocity is down 20% and money supply is up 100% to make up for the overall slowdown and THIS is all we have so far.  So 800 x 2 was 1,600 and now it’s 1,700 x 1.7 = 2,890 so we SHOULD have an 80% increase in GDP but we have a 3% increase because there was a multi-trillion dollar hole that was covered up and that’s where all the money is going but once that Velocity begins to pick up, there is no way the Fed can jam that genie back in the bottle.  Of course, that will be great for the markets but the inflation is going to be sick.  

    FAS/Nicha – Very dangerous with the ultras but it does work.  Just make sure you have a cover play if XLF breaks $17.  

    Grains/Morx – That’s been a long-term trend.  We push beef on Japan and China and eating cows is very inefficient.   Not only does 70% of the grain we produce globally go to feeding the worlds 1.2Bn cows but each pound of beef (the cow) consumes 1,000 gallons of water and 10 pounds of grain so, very simply, if we didn’t eat the cows, there would be 12Bn people’s worth of spare food and enough fresh water for about 3Bn more people.  

    SLW/Amatta – I like the above ABX play better as an attempt to play a bounce.  Gold had a better pullback than silver so far.

    BG, POT/Mike – I’m not big on pairs trades like that.  I think a straight short on POT will be good but not while the market is this frenzied. 

  113. craigzooka

    Does anyone know of an inverse VIX etf with options?

  114. ajaytoo

     Phil, I recently adjusted into 2x AAPL Feb 330 short calls which I bought at 15, now 22.50 and 1x Apr 370 long calls. Plan was to add to the long calls and roll into a vertical if AAPL kept rising, which it has. Would this still be the best move? Which strikes would you recommend…I’m having trouble finding an attractive adjustment. Thanks!

  115. biodieselchris

     Phil is it still 13% that haven’t capitualted.
     
    Throwing in the towel, I;m done. This latest move market melt-up and CMG crossing their 50 day makes it official (and now this account has lost $28,000 aggregate). It will be low rates and Melting-Up Markets forever and ever and ever. No such thing as a down market any more, not evena  5% correction. Every stockhigh flier will be over over 1,000 by Christmas. AAPL, PCLN, CMG. Every last f****** one.

  116. lvmoda

    Another calm end to the weekly NFLX roller coaster, closing a 200C/180P strangle position.   Next week should introduce a little more volatility with earnings coming on 1/26.  Appears that the market attiributes the collapse of CSTR to the rise of NFLX, but curiously enough NFLX is having a down day after CSTR results.  I think today’s price movement has much more to do with the unwinding of weeklies, with today’s weekly option volume between the 185 and 195 strikes at 15,000 contracts, which interestingly is roughly equal to today’s underlying stock volume! 

  117. Pharmboy

    Someone was asking about municipal bond funds.  MUB.  Now that is a chart….

  118. oburlacu

    Hey Phil,
    I have a March GDX bull put spread 56/51 for a net credit of 1.24. Now that spread is 2.15.  Should I wait or roll down?
    Thanks,
    Ovidiu

  119. lithuanian

    AAPL frenzy
    I wass about to go long AAPL and  did a small research ( asked about 20 people aged about 30-35 years) NO ONE has AAPL product and has no intention to purcase any time soon. Just one girl admitted she has an iPod,  old one. And those people are not farmers ( mostly educated office workers), they live in capital city of Lithuania (average salary in city 1000 USD /month (take home)). Most people consider AAPL products as toys not tools, and the biggest concern is how to pay every day bills, not to buy toys. 
    Gasoline price 6.6 USD / gallon( the same is in all the EUROPE )      BE PREPEARED  !:)                                                        House heating 200-250USD                                                                                                                                                                To feed family 400-500/ month and so on.   I think at least 10 percent up in  in a year.
    You may consider Lithuanians are poor , but what about Belorussia ,Latvia, Poland, Estonia, Ukraine , Russia( except maybe only Moscow and a few other cities), Balkan countries (all post soviet countries/  GDP per cap 16000 USD) plus now PIGS. That is a lot of people not buying toys. At least here and I dare to name those contries as Europe. I think maybe 15 percent out of 140mln in Russia are OK , others are quite screwed.  And I dare to suggest that those peoples are going to spend their money on sidelines to pay for gas and food not in stock market.

  120. mike5885

    C = 1288.52, F =1285.25
    10yr = (.51)%
    VIX (4.15)%
     
    NET $ = (.51),  dx/y = +.10%

  121. nicha

    Phil/Cows – good to be a vegetarian! I read somewhere that the amount of grain a chicken eats during the day can feed a family of four…people, that is.

  122. humvee4me

    Nicha: that is a crazy "fact" of what chickens eat; double check your information before posting.

  123. reza99

    Phil:
    Is there any SAFE (capital return) investment that could return 20% (max) return by option exp. next week? Oh Yeah!
    Personal bubble: How does the working avg. Joe and family’s diminishing living standards find its way to asset markets and their outlook? Over 80% of the stocks are owned by top 10% income level.
    " People tend to think the whole world is like their own little bubble – that’s how analysts and fund managers etc. can be so damned wrong about macro events – they don’t live in that world.  "

  124. jabobeast

    I don’t know why I have such a hard time understanding the buy the f’n dip strategy. The 13% may be lowered as I am being forced to capitulate ;-(

  125. jomama

    PHARM, which is your one speculative biotech that you like the best risk/reward price etc.  Appreciate your writeup and work.  thanks

  126. lvmoda

    Would anyone on the planet be short AAPL at 347?  How about anyone waiting to see if they have good earnings, before committing to the stock?   Maybe they’re thinking Ipad sales were soft this Christmas…and want to wait and see.   In other words, where is the juice for the next leg up going to come from?    Portfolios rebalancing/reallocating to tech from other sectors maybe, since the commodity rush for the moment has subsided.   I don’t know… to me the expectations for an earnings pop from AAPL seem to be at a peak.   (Not that I’m trading on it…lol!)

  127. Pharmboy

    IPXL is up a dollar already.  Come on…

  128. jomptien

    Bought  TNA @ 78.16, sold  Jan 75 call for 4.20.

  129. Peter D

    AAPL/Phil,
    That comment at 12:11 on Steve Jobs catching a cold is one of my favorite scenarios for getting VIX up.  A 20% drop in AAPL is roughly 4% drop in the QQQQ, then RUT and SPX would follow down.  With a higher VIX, short stranglers would have a ball for a couple of months!

  130. Phil

    Power/Shadow – What the hell are you doing with your computer?  I have whatever Dell and Apple included in the box and I leave it at that.  I think INTC sacrificed raw speed for better parallel processing ability as that seems to be where the real gains are coming from now.  Until the cost of 10 linked chips exceeds the price performance of a single super-conducting chip that runs 10x faster, Moore’s law will have to take a break.  

    UUP/Yshen – I think there’s just too much effort going into breaking the buck right now and ahead of a 3-day weekend doesn’t seem like the best time to play it.  I like the Feb QID $10s better because if the dollar goes up the Nas goes down and if we get some headline misses, they go down too.  

    FAS/Bob – Wow, that is deep!   Obviously I’m not going to say stick with FAS as I just picked my XLF spread as a guaranteed 100% return two weeks ago.   Shorting an ultra with unlimited upside is never a good idea and if they start stringing together 2% gains on XLF, that triple action on FAS can add up very fast.   You have pretty much nothing to lose by selling the Apr $30 puts for $3.10 and rolling your short caller up to the $27 calls at $6.15 so you sell $9 there and you gain $3 or more anywhere between $24 and $36 and your b/es are $21 and $39, which is a nice, wide range to start catching up.  

    BDI/BDC – Catastrophic looking isn’t it?  They must be teleporting those commodities everyone is snapping up on the other side of the world.  

    PCLN/Ban – I would but that’s because I wouldn’t mind rolling them to Feb if they break up.  Up 30% and back to cash with no risk is kind of nice too.  

    I’m starting to think the VIX is right – perhaps there simply is no risk in playing the market up.   On the other hand, I can’t believe you can buy a SPY $129 weekly put for .24 so that seems like a fun gamble on a sell-off into the close.  

  131. morxlntway

    I managed to stay a vegetarian for a couple years after reading Diet For A Small Planet, back in the 60′s, but now i am just part time. :)

  132. Phil

     Lots of bank earnings next week and RKH Feb $85 puts are $1.15 and were $2.50 yesterday so I like those a lot.  

  133. craigzooka

    Phil, I think you missed my question.  Do you know of an Inverse VIX etf that has options?  After a google search I found XXV but it has no options :(

  134. shadowfax

    Induction motors batteries
    Induction motors are not new, they are larger produce less touque and use was restricted by recharging efficiencies, full electric is the key reason to use now. Magnesuim sulfur batteries are not new either and have very high watt to size ratios, but have some serious problems. 1 sulfation of magnesium plates. 2 Complete discharge and mostly discharged for to long destroys them. Litium if totally discharged only causes a surge that puts stress on the charger and voltage reulator. Avoid allowing your portable devices to go all the way to dead off, the regulator is in the battery pack and that is what fails not the cells!

  135. Phil

     LOL Nicha!  Hopefully we can do a little better for you over 20 years!  

    TBT/Jo – As long as you are below the caller and watching it, it’s an excellent spread.  They’ve been rigid in that channel lately. 

    XOM making a move today.  

    BAC/Jo – Good point. They really are clearing out the risk factor.  

    AET looks ready to rock.  I like selling the 2013 $25s for $2.20 and buying 2012 $30s at $6 for net $4 with the stock at $33.60 and, ideally, you want to sell Feb $34s for $1.50 (no .90) but fallback would be selling Apr $34s for no less than $1.25 (now $1.60) if the stock goes the wrong way.  

    LOL Flips – Yep, this is not a thinking man’s market.  

  136. oakd

     Hi All
    I have some call options that I sold that are very far out of the money. I could let them expire worthless in a week, but they’re tying up alot of margin, so I’d love to dump them now. They show a last trade of 0.01, but I (or my broker) can’t enter a sell price of under 0.05. Annoying… Anybody know how to deal with this?
    thanks

  137. jomama

    Phil, regarding BAC – the more interesting point is that the govt and all the various private lenders are letting them off the hook at pennies…I know Maxine Walters screamed a little but she has lost a lot of credibility from both parties.

  138. biodieselchris

     all this talk about inflation and gold finally taking a beating and TBT manages 1 cent.
     
    So much for 65 contracts. Going into the toilet next friday. Oh well.

  139. tchayipov

     Lithuanian / AAPL
    I don’t know about Vilnus, but in Moscow people are creasy about apple products, I just visited apple store there and it was complitely out of stock, have to wait 3 mo to get iphone ($1000), 2 mo to get mac air, they even don’t have last version of macbook. Couple of years ago people here were introduced to store loans and they got creasy, I know lots of people who make 500 -700 $ and buy iphone for $1000 and got loan
    ?????
     

  140. Pharmboy

    Could Sanofi-Aventis get Genzyme for $76 per share? That’s apparently what the French drugmaker’s trying to do, at least according to a story from Le Figaro. As Reuters reports, sources on the Sanofi side of the deal identified $76 per share as the target price, or about $20 billion. That $76 would include a $70 to $71 cash payment, plus a contingent value right to make up the difference.  Selling a few $70 Jan11 Ps. 

  141. tchayipov

     Oakd / margin
    go to TOS and get PM (portfolio margin) and you forget about this problem

  142. amatta

    Phil, 
    I am at a loss as to how you get the $1.45 cost for the 20 QID’s. I am at net cost of $2.45. This is considering all the DD’s and rolls (from original position of 5)…

  143. tchayipov

      / income trader
    it is friday, one week till exp. 
    anybody knows when we gonna open condor for feb. cycle????

  144. Pharmboy

    Scratch that, moving to the Feb 67.5s.

  145. biodieselchris

     I lik ehow HOV is breaking higher. If the BULL(s***) MARKET continues to continue next week this could move much higher. Remember that ridiculous pump to 8 mid year?

  146. shadowfax

    Phil
    Please understand that I am an electronics junky. I built this computer to outdo anything sold in a box at about the price of a top of line Dell or HP. I also built a giant OTL tube amp 6 years ago 15 tubes and 400watts per chanel output, never measured power in but 2 for stereo would flip a 20 amp breaker when turned on! Been selling or reuseing the parts since. This is fun stuff for me! I had a highest speed line installed at my parents house unavailable hear, when I get their I will turn up the refresh rates and multi-feed the front end. I am trying to catch the BOT moves and closer to NYC will also help. YOU and MEMBERS first to know!!!!!!!!!!!!!!

  147. shadowfax

    oald
    Market order should fill, make sure bid covers cost first.

  148. Phil

     Coming into the NYMEX close we still a lot of barrels to roll, I like the oil futures short off the $91.50 line with very tight stops above.  

    Patience/DC – Well said.  I like to put a few post-its around my monitors until they sink in.  

    Cap with a great call putting his foot down on MCP the other day, by the way!  

    HMY/Terra – You bought to cover callers, right?  We expected a downturn in gold, that was the point, so you ride it out now and hopefully the callers are gone and then we come back.  

    XLF/Tusca – Sure because you never know what skeletons are in the closet. JPM and C were the only two financial I liked solo but they both had a huge run since then so XLF is still safer but also due for a pullback.   BK has earnings next week, if you want to play them long, how about buying 5 June $31 calls at $2.85 ($1,425) and selling 3 Feb $32s for $1.10 ($330), which puts you in at net $2.19 per long with an easy roll to a vertical (the June $35s are $1) or, if they flatline, you can then sell March, April and May for income.  If they go down harshly, the callers go worthless and you can sell longer puts for $1K, like maybe 5 2012 $25 puts (now $1.30) and then you have the free calls and all you are doing is agreeing to buy BK for $25.  

    FAZ/Obur – Sounds like you played it well.  It’s not really good protection now but it turns out you didn’t need to protect upside financial plays in this rally so getting out even(ish) is great.  You only owe the $10 putter $1.70 and you can roll that to 2x the July $7 puts at .85 so that takes care of that side.  If you want you can also sell the $8 calls for $1.75 and drop your net to $8/7.50 but why bother?  

    AIG/Cap – Another good call.   See, they are making me gun shy on puts.

    QIDDrum – Well since we were saved from doom on USO I got brave and went for a DD on the QID Feb $10s (now .82) and I think that’s worth the risk into expiration and the following weekend.   Same goes for waiting on the puts as $12 isn’t all that far away if AAPL falls.  

    CSCO/Rav – Nice adjustment. 

    Super Market continues to fly.  

    Gross/Mike – Nice!  I read the QE2 thing in the times last weekend, I forgot to mention it but it was a good article.  

    TBT rising from the ashes once again.  

    Anti-VIX/Craig – I don’t think there is one.  Just sell VXX calls!  

  149. amatta

    Phil, 
    I never got a fill on the DIA 117 puts to cover. Damn, the this damn rigged system, the bid got to .95 where I set the order but went straight down from there. Now I am taking a massive loss on the 119 DIA’s, what do you recommend I do now? Risk it or sell some higher puts for the .95? Thanks 

  150. shadowfax

    matt
    FAS and FAZ + 4% moves! What, Why, and WOW!

  151. biodieselchris

     shadowfax -  you seem to know about the portable power space, what kind of work do you do?
     
    I’m working on a renewable fuel cell. The energy part of the energy/power equation. In fact, we are marrying a fuel cell to a battery in a hybrid configuration.

  152. biodieselchris

     Why didn’t I just play the free money long term. It’s so easy too. Just short both of these.
     
    Leveraged funds =  garbage. This was free money and I pointed it out here and to myself a year ago and now here I am wishing I would follow my own advice.

  153. zeroxzero

     I need to build a house with part of the electricity supplied by photovoltaics.  I have ample sun, and very expensive electricity from the grid.  I would install grid backup, and probably use grid 220v, have solar thermal water heating specced, but am at square one with photovoltaic electricity, although I have designed in appropriate flat roof area for installation.  Any ideas on appropriate technology appreciated.

  154. jomama

    Phil, any thoughts on MCD?  Seems like a rotation away from winners or are their serious concerns about 1) rising input costs thus lower margins 2) strong(er) dollar 3)law of large numbers and tough(er) comps.  Thanks as always.  I was thinking about selling puts below 70.
    Regarding BAC, i really like their risk/reward.

  155. qcmike

     Phil
    JPM

    I have the 35/38 March call spread
    Close or what would be a good roll ?
    Thanks

  156. mike5885

    C = 1290.10, F =1286.00
    10yr = +.36%,  30yr = +.27% these have turned positive slightly, so some selling
    VIX (4.82)%
    oil  +.21,  gold (27.50)
    NET $ = (.35)%,  dx/y = +.05%

  157. shadowfax

    biodieselchris
    Don’t know much about fuel cells, they sound like a winner except the freezing issue which to me is solved with mass transit by leaving on continuously, trucks next, and maybe trains that already use electric motors with diesel generators. I am disabled and can’t work except my ideas like catching the BOTS. My first job was power supplies, second auto pilots (military) and computers for 12 years before a couple of very small businesses that made a living until the world changed. You mentioned rare earths before, post more after hours.

  158. Jbur

    CAP: good info on Berkowitz/AIG!

  159. Phil

     Wow, what a scam.  This guy on CNBC has a rare earth company in Iceland and they pay him to hang out up there and talk about how, maybe in 2016 they might produce something if all goes well.  

    AAPL/Ajay – Good time to adjust.  I’d sell 2 March $305 puts for $3 and roll the callers up to the March $345 callers for +$6 and buy a July $370 for $19.25.  That gives you a .78 delta plus the puts to the callers’ $1.10 but a good time advantage and you can wait them out.  If they STILL go up, then you have to roll the April callers back and roll them up again.  Down is fine as long as AAPL holds $300, which they sure should.  

    Everything goes to $1,000/BDC – Well it sure will be fun if it does..   As with JRW’s inflation charts earlier, once inflation takes hold we can really count on those $1,000 targets and picking calls will be like shooting fish in a barrel.  

    GDX/Obur – That’s why I don’t like those, you can get trapped and your risk/reward is negative.  I’d take the $1.40 and run on the $51 puts as that plus the $1.24 credit is $2.64 and the $56 puts are only $3.50 so you are down $1.10 and you either get a bounce or roll to something like the short $50 puts (now $1.15) just to get your money back.  

    Well so much for shorting SPY!  $129 puts are down to .08 but only .18 out of the money so a DD here brings net to .15, and now we’ll just be happy with even.  

  160. achou

    Bot moves/Shadowfax, if you want to lower your trading latency, set up a shack next to the nyse server farm, it’s some where in-the-middle-of-no-where jersey.
    http://www.cbsnews.com/8301-504803_162-20019067-10391709.html

  161. matt1966

    A truly impressive squeeze in the banks.  Would like to think this is the last hoorah but instead I think I will just shut up now!  I may cover, but I won’t capitulate.  However if we ever get a pullback next week, I’ll look to get out with a small gain.  This kind of a move is pure show. All the news yesterday about banks was just cover for what they planned on doing today.  Ok, bye-bye!

  162. shadowfax

    JRW
    What happened at 1:48 and 1:51?

  163. biodieselchris

     i just a pucnched a hole through the wall. This market is infuriating.
    I got so pissed I just bought 30 DIA 118 calls. F*** it!! (and it’s already up a penny)
     
    I’ll come back next Friday and see. I can’t check this market everyday. It’s too painful. i’m so pissed.

  164. reza99

    Hi Phil:
    Reposting from 12:35 --
    Is there any SAFE (capital return) investment that could return 20% (max) return by option exp. next week? Oh Yeah!
    Personal bubble: How does the working avg. Joe and family’s diminishing living standards find its way to asset markets and their outlook? Over 80% of the stocks are owned by top 10% income level.
    " People tend to think the whole world is like their own little bubble – that’s how analysts and fund managers etc. can be so damned wrong about macro events – they don’t live in that world.  "
     
    Thanks!

  165. bobhu

    pharmboy/GENZ, nobody else got that news? GENZ drop $0.36 today??  Reliable news? Thanks.

  166. morxlntway

    Pharmboy/Nicha – did that IRWD august trade work for you?

  167. matt1966

    Today’s move in FAS is already larger then the one on Dec. 4th at the beginning of the so called Santa rally.  Squeeeeeeel!

  168. mike5885

    if max pain points mattered anymore, I would think we would have a chance of a sell off into next Friday.  The S&P 500 open interest is hugely weighted to the call side
    1272.50 is a rough estimate of a first stop, just my eyeballing it
    then 1252.50 area
    that is just a guesstimate, do not use my thoughts in your decision making
     
    again, with all of the Free Money, max pain points have not mattered much the last year on the S&P seems like

  169. craigzooka

    Phil,  I already sell VXX calls.  Doing quite nicely on them.  I was hoping there was an equally crappy leveraged etf that was inverse VIX.  So I could make bank on the other side of the trade as well.

  170. mike5885

    C = 1291.62, F =1288.00
    10yr = +.27
    VIX (5.67)%

  171. amatta

     PHIL, 
    On your comment "AET looks ready to rock.  I like selling the 2013 $25s for $2.20 and buying 2012 $30s at $6 for net $4 with the stock at $33.60 and, ideally, you want to sell Feb $34s for $1.50 (no .90) but fallback would be selling Apr $34s for no less than $1.25 (now $1.60) if the stock goes the wrong way"
    Are we attempting to sell the Feb Calls for $1.50 hoping it does not break $34? If it does then we roll?
     

  172. rdn4evr

    Seriously? the VIX is lower than where it closed last April 12th, on this friday before a 3 day weekend going into the short week before the first opex of the year? After a solid 3 month "Diagonal" move in the markets, and when metals are breaking down?  And we’re all capitulating?

  173. shadowfax

    achou
    Thanks for the link, missed that show probably watching Sunday night football. I want to move NJ was not even on my list, if I could get a subsidy for cost of living beyond my means and 2 2GIG cable lines 65 microseconds is very slow for my system which can eat 15 GIG at 64BIT rate.
    Phil
    Where is Mawa NJ?

  174. Pharmboy

    GENZ news.  Received it on my biotech service earlier as well.

    IRWD – not filling.  :(

    IPXL is not either, and that move is VERY bullish as volume is up and it is breaking highs.

  175. bobhu

    Phil/FAS, my short on FAS was puts deep ITM. on 10:45am. Your answer on 12:46pm seens to on calls. Thanks.

  176. biodieselchris

    Matt – I gave up, I’m loaded to the teeth with Kool-aid and I’m drinking it hard, gas-on style. After awhile you just gotta write DOW 100,000 on the wall and figure that’s what these guys want. CAPITULATE CAPITULATE CAPITULATE.
     
    I mean they’re not even ATTEMPTING to tell the truth anymore (e.g. that inflation target of 1% this year is reasonable, when it was up 0.5% LAST MONTH, or 6% annualized, I’d say that’s running "a bit" ahead of the  magical "2% target").
     
    GRRR. 

  177. biodieselchris

    for clarification, CAPITULATING is the ratio of long (calls) versus short (puts) I take out at any given moment. By no means have I capitulated on the VIX.
     
    I’m all in on options right now. Literally.

  178. Phil

    Reality/Lith – I couldn’t agree more.  It’s what I was saying before about living in the real world.  You just rattled off a population the size of America that in now way can afford to buy the toys we are projecting a "global marketplace" for.  Add in Europe ex-Germany and you have another 400M people in the "developed World" that aren’t going to be customers and, truth be known, about 200M Amercians can’t afford it either and we know where China and India are.   I just don’t see this ending all too well.  

    Chickens/Nicha – Really?  That’s a lot – I can’t see that being right but, on the other hand, they probably eat dozens of times what they feed someone in the end.

    Safe 20% in a week/Reza – Sure dozens!    That’s what I’m saying about bubbles.   These people on TV get their hair cut and nails manicured and makeup put on and suits cleaned and they are fed while they work and their "peers" are the fund managers who drive over with their limos and they ask them how they think the economy is doing.  Then when an NYU professor like Nouriel Roubini, who lives in the Village with semi-real people (as they are still in NYC so the top 1% of the World) in a cheap suit and tells them the economy is actually in trouble – they  make fun of him and call him a crackpot.  Now that he was proven right in ’08 – they no longer like to have him on unless they want the markets to go down because he’s no longer just an amusing little man.   It’s like that show Undercover Boss – where CEOs go and work for their own companies – most of them haven’t got a clue what is going on on the production sides of their own companies – how would you expect them to understand how their own speculation in wheat futures is starving 2M people in Sudan?  

    Let us know when Jabob – I think we need to get to 99% bullish before it’s safe to short but then the catch-22 is, who will be left to short?

    On the whole, S&P up 1% from last week’s high – seems worse after the pullback.  

    AAPL/LV – I heard someone predicting AAPL $1,000 so that’s 200% upside from $347!  8-)

    IPXL/Pharm – They are all over your trades lately.  

    Jobs/Peter – Reminds me of the episode of Seinfeld where Elaine sneezes in an NBC guy’s pasta and that sets off a series of events that kills their TV show.   The entire US economy can be destroyed by a rhinovirus.  

    Vegetarian/Morx – I put in one summer when I was dating on back in college but I like meat too much.  Now I feel I owe it to my grandchildren to be able to tell them how we used to eat meat any time we wanted…

    VIX/Craig – I did’t know there is an inverse VIX but shorting VXX is a better way to go as it decays anyway.  

    Batteries/Shadow – Thanks, I’m glad someone here knows this stuff.  

    LOL- Cramer says "The papers have been so wrong for so long it’s scary" – advises viewers not to pay attention to (spit when saying this):  "Facts"! 

  179. nicha

    Pharm – I got NUVA assigned to me and your suggestion was to turn it into a buy write by selling the Jan 12 $30 call for $3 and $22.50 put for $3. The put never got executed and now is at $2.30…any advice. Was thnking of selling the Jan 12 $25 put for $3.50.

  180. biodieselchris

     you know, with Obama basically the biggest p*ssy I’ve ever seen in my life, and not raising taxes, with the states going into default, (and Obama is supposedly the liberal side of this equation?????), the 1% have figured out they completely and totally won The Game. Who loses when the debt-into-currency games comes crashing down?? Not them! It’ll be social security, pensions, public schools, tuition subsidies, all the things the little guy gets to make their pathetic little lives a little bit less so. The Bottom-90% will be told to "buck up!" and "Drill down get to work!" and accept extreme austerity measures (to their "Entitlement Programs," like Soc. Sec. that they PAID INTO THEIR WHOLE LIVES — HOW IS THIS ENTITLEMENT?????) while the rich pull all the strings. Everything I’ve read, and I mean everything comes back to the same central theme that this scam began with nixon and the gold standard and the systemic transfer of everything plus the kitchen sink back to our 1% overlords who give nothing in return, except the outsourcing of everything we made for them in the first place, so they could rich. Thanks.

  181. samz3700

    The beard told us he wanted to inflate asset prices

    Why in the world would I think it a good idea to fight him. Feel like a total moron.

    Yes, it might end badly but sure wish I had drinking the f* cool aid.

    It only goes in one direction – until it doesn’t

  182. Phil

     Good read from Rcro on Seeking Alpha:

    I am not suggesting our government-or other governments-are on the right course. What I am saying is that they are frantically attempting to slow down the inevitable last gasp of an nearly dead economy.

    For the last 50 years or so, our government has been adopting economic measures that were unsustainable. To understand why, it is necessary to know what really drives legislators. I was active in politics for about 30 years and got to know them pretty well. Before my boss, William Scott, Attorney General of Illinois, was indicted and imprisoned for converting campaign funds to personal use I was employed as an Assistant Attorney General. In the 50’s legislators made at least some effort to do their job. At that time we were often referred to as “public servants.”

    Sometimes, we were asked to things that were questionable but legal. Sometimes we complied with the request since we were directed to “throw them a bone” on certain occasions. By the time the 60’s and 70’s rolled around the policy had changed from “throw ‘em a bone” to “F-ck them with a smile” By 1991, The political landscape had changed so much for the worse and politicians had become so corrupt, I had to get out of politics for fear of imprisonment, bodily harm or worse. Since the 90’s things have only gotten worse. Much, much, much worse.. The only thing politicians have in common these days is then all have pretty teeth and a winning smile, but if there is such a place as hell,. It will be full of politicians..

    Most of the politicians I see on TV or am familiar with are very dangerous people; For the most part. they are highly intelligent, but opportunistic, unethical megalomaniacs that have an insatiable need for power and money. They seldom look beyond the next election and if they do, it is to look for the election beyond that. To accomplish their goal of gaining or retaining office they need money from the wealthy to conduct their campaigns and also for their personal needs. Many of you do not know that it is legal for a politician to convert campaign funds into funds for their personal needs, but they must report it as income and pay income tax on that portion they keep for personal use. Money is a powerful magnet for some.

    Through the years, state and federal legislators could have steered this county into an economy that was vibrant and prosperous.; however, it was not politically expedient to do so; Furthermore, where was the money ? That is why we find ourselves in our present condition. The politicians and lobbyists are primarily to blame. It is absurd to believe that legislators could not have kept taxation and spending to acceptable levels. They are highly intelligent and competent people--they just don’t have the guts and honesty to do what they were elected for.

  183. biodieselchris

     TheBernank.com is sounding like a better and better idea everyday.
     
    I’m really thinking about vetting some frustration. I’ve got something to say maybe someone else out there does to.
     

  184. dflam

    Hi Phil:
    Need your advice on another successful trade. In IRA account, bought PNC at $56.80 & sold May $60 C at $ $3.35 for net $53.45 expecting ,if called 11.9 % ROI , 25.7% annual.
    PNC now at $63.97 ,calls at $6.45 for net of $57.52 with delta of .67  Should I roll now to Aug. $62..50 C at $6.10 with delta of .59  or just be patient and hold existing position? 
    Also,do you have any general guidelines as to when to roll such as % 50% profit level,etc.? I knnow there are lots of factors to consider,but at what point would you recommend I might consider a roll ? thank you. 

  185. reza99

    Safe 20% in a week/Phil – Thanks for explaining your view point. It is refreshing to see someone who shares the concerns of avg. Joe and family. 
    About the trades care to share?
    Cheers!

  186. nicha

    morx/IRWD – was a scratch for me. Out of it now.

  187. biodieselchris

     funny, coinstar guides a mere 8% lower and crashes 25% and no one is talking about it. What if CMG or NFLX pre-release a statement that pink ponies don’t fly after all? A 25% move on PCLN is 108 points.

  188. shadowfax

    biodiesel
    When the crunch comes, military spending will stop, and they with all that firepower will ture it on the ones that caused this transfer. There aren’t many targets and they have no idea how to live in a cave. The last HA HA HA!

  189. Pharmboy

    Nicha – I would stay the course for now.  Wait until after next earnings and then make a decision.

     

    BDC – I lost my a$$ last year being short. I am now doing a few swing trades using Opts methods and only playing biotechs and a few recommendations here (WFR for example).  Being short is way too painful.  I have a few disaster plays and mainly staying in cash. 

  190. biodieselchris

     This article came out on Monday (the 10th). 
     
    Yes we are still waiting, for that proverbial ‘first domino.’

  191. mike5885

    Hour of Power
    C = 1291.03, F =1287.50
    10yr = +.91%
    VIX = (6.61)%
     
    NET $ = +.03%,  dx/y = (.09)%

  192. biodieselchris

     thanks Pahrm and also some of your plays like IMGN and a few of my own like ARMH and NAK have kept me out of the insane asylum. 
     
    Most of my losses were in TBT calls and high-fliers like NFLX PCLN CMG puts. So not much in the ‘general market’ short, where I was actually pretty bullish. Just technical — like 800% gain in 18 months for a movie rental company is a little. …overdone maybe. 
     
    Couldn’t have been more wrong though. My problem has and continues to be position sizing. I still have an account that peaked at $41.5k in july and just lost another 1,000 to 12.5k this morning. I have a headache. It is physically painful.

  193. Pharmboy

    At 11:50 eastern time, I write this…..and IRWD moves .20c.  OK, now I am annoyed BioDC.  I need an email alert to go out instead as my fills are not happening any more!  One thing is for sure, put in the trade and let it sit.  We cannot chase these as they will make us eat our lunch if we are not careful.

  194. matt1966

    Breathing a little better now.  Actually, all the pain I hear on the board today, Biodiesel!, gives me hope we are at a near term top.  I scaled in today almost the whole way down in FAZ.  I also have half my powder still dry.  I will see this through oe.  We nearly always have a pullback just before oe after crazy runs like this.  I’m hanging my hat on that.

  195. barfinger

    Well, I had been worried…  I mean two days without a 52-week high? But it’s all better now.
     
    What "Fall Down Friday"?

  196. biodieselchris

     What I should’ve done:
     
    on July 1 a PCLN 200 Jan11 call was trading at 18.30.
     
    Now 239.

  197. Pharmboy

    Sorry, link.

     

    Matt, I am gung ho bullish…..LOL as I write this.  Giddy up. 

  198. biodieselchris

     Pharm – if people scour this board, they’re sure laughing at me. Maybe even Lloyd eeked out a muffled "ha"

  199. Pharmboy

    Oil stocks are just rocking.  HES, DO, PBR, BHI, BP…unreal runs.  Now if HK would go….that would be nice huh, Cap and mrm?

  200. nicha

    Phil/chicken feed – I am tryng to find the link where I read it. It’s been a few years. Here is another link I found.

    http://www.vegan-nutritionista.com/vegan-facts.html

  201. Phil

     Calls/Oak – Get another broker!  That’s BS, your broker is screwing you.  If someone is trading at .01, then you can trade at .01 too!  Anyway, if you don’t need the margin, it’s a non-issue.  Not only does TOS let you close those out in the final week but they waive the fees!  

    BAC/Jo – Well they really are too big to fail.  That’s why we loved them when they were down around $7 all the way up to $12.50 but at $15 we bailed and never went back in because of these issues.  Now I am softening as they begin to fall by the wayside but I’d like to see the totals as to what’s gone and what’s left as it only takes one creditor who won’t budge to screw them up.  

    I think TBT heard you at 1:13 BDC.  

    GENZ/Pharm – That’s a fun rumor but the way to go is to sell the 2013 $70 puts for $4.30 because, if it’s true, then the premium gets wiped.  You can even ofset it going the other way with the April $70 puts for $2, which makes it a net $2.30 spread that really is very unlikely to hurt you while the rumor resolves but I like GENZ at net $65.70 so I think the naked put sale is nice.  

    QID/Amatta – They were net .90 and we rolled them for .55 I think.  Have to go back and look, which I will do over the weekend.  

    HOV/BDC – Always a favorite.  

    Thanks Shadow – thank goodness you are on our side!  8-)

    DIA/Amatta – With a cover, you need to just get the best price – it’s not like an entry where you have no penalty if it gets away from you.  Well, you can always sell the Feb $117 puts for $1.70 and use that to roll the $119 puts out to the March $120 puts and, since that’s the trade – you may as well go ahead and sell the Jan $117.75 puts for .80 as they are rollable and have .80 in premium to grab first.  

    Solar/ZZ – Depends on weather and patterns where you are as well as (if any) what kind of rebates you can get.  Most states have local specialists who can give you quotes and know their ways around the regs and rebates.   The good ones are usually attached to roofing companies.  

    MCD/Jo – Too high to buy but I wouldn’t short them as they are the best.  Of 1.2Bn cows in the world, about 300M are theirs already!  

    On BAC, I like the 2013 $15/20 bull call spread for $1.75, selling the 2012 $12.50 puts for $1.12 and that’s net .63 on the $5 spread.  Very nice if you don’t mind owning BAC at net $13.13.  Figure if they go below $15 you can sell the $12.50 calls for cover ($3.80) below that line and if they head back up, and you buy by $15.50, even if you miss dumping the caller, you’re in for net $10.58/11.54 – which is still pretty good!  

    JPM/QC – Looks like $3 to me – what are you waiting for – 110% of max possible profits?  

  202. lvmoda

    Matt -   Using PSW as a pain indicator….OMG what have we become?!   ;)

  203. ajaytoo

     Phil / AAPL – Thanks, so I end up with 2x Mar 345 callers, with 1x Apr 370 long calls, 1x Jul 370 calls, and 2x Mar 305 naked putters. I’m not sure exactly how you got the .78 delta. I see that my long calls have a .39 blended delta and the callers have a 0.55 delta. Also, I worry to the downside that my long calls will lose a significant amount of their value if AAPL drops to even 320-330 by March. I suppose getting back to even is all i should be hoping for at this point.

  204. Pharmboy

    Phil – on the GENZ trade you note, won’t they just revalue those options in 2013 under SNY?  When MRK bought SGP, the options were revalued as a 50/100 or whatever (non-standard options), and thus were not wiped out. I am just playing the arb play and letting them go month by month.  My reasoning at least.

  205. deano

     Phil
    My SDS hedge is getting away a bit and I’m looking to adjust – I have the Mar 24 calls with the 33′s callers sold, and short the 29 puts – looking for a good adjustment to move to, thanks,

  206. Pharmboy

    ZMH Mar11 65C are 25-35c and OI is 35K.  P/C ratio is 13:1.  Gambling, but buying a few of those as well as front month Feb $55 Cs for 2.45 or better. Smelly.

  207. matt1966

    Ivmoda, it’s called searching for a silver lining!
     
    Pharm, can you put a bear on there chasing the horse?

  208. qcmike

    Phil
    JPM
    Thanks any new spreads  ?  maybe Jan 45 /50  ?

  209. Pharmboy

    matt – ROFLMAO!

  210. morxlntway

    I shoulda stayed in ABX from this morning. Got out even sure that they would be heading back down. oh well.

  211. Pharmboy

    For ONXX – Phil’s play was to sell the May $32 puts for $2.15 and then you can buy the $33/38 spread for $2.50 and that’s net .35 on the $5 spread that’s already $2.77 in the money.  Let’s start with that one.  I am also keen on the Jan12 30/40 spread for $5, selling the 30 Ps for 3.5, which is 1.50 for the $10 spread.  EASE into this one as data are coming out sometime and we don’t want to be caught with our pants down.

  212. mike5885

    C = 1291.31, F =1287.25
    10yr = +.91%
    VIX (5.80)%
    imbalances

  213. willsons

     Phil    Help me understand your luv for HOV    I look at the financial statement and it looks to me like a train wreck.  What am i not seeing?  

  214. amatta

    Phil, since I don’t have access to futures on Schwab, I rebought the 40 USO 40 Puts @1.26 now down .09, do I kill the trade at a loss or do you think oil moves down after the weekend? 

  215. mike5885

    Brazil reverse swap taking aims at dollar shorters

  216. deano

     Phil
     
    Also, I have XOM in at 61 with Jan 12 62.5 callers and 60 putters sold, and given the run up, thinking I should roll up or split – any opinion as to the target? Thanks,

  217. leonf675

    Phil, any thought on this idea?   ANR:  Buy 1x Mar 11 45/50 Bull-Call Spread for $4.20  Sell 1x 50P for $1.55

  218. mike5885

    thats a BIG stick

  219. Phil

     VIX 15.44!  Dollar 79.34, gold $1,360, oil $91.55, copper $4.43.  

    SOX up 2.5% on the day, right on 450.  Last time they hit 450 was May of 2008 when they topped out as the rumor of infinite Chinese demand and the idea that everyone in the World would get an IPhone and a 3D TV and solar energy was our future began to seem a little silly.  Thank goodness we’re smarter than that now, right?  

    Hang in there Matt – another 100 points on the Dow and you can outlast me!  

    Friday/BDC – Don’t forget we don’t really expect a big move down until the following week.  

    Safe way to make 20% Reza- Sure there are.  Answered above.  

    Equal crap/Craig – Yeah we used to do that with FAS and FAZ when they were both around $10. 

    AET/Amatta – We are waiting on selling the Feb $34s UNTIL they get to $1.50 and, if we are wrong, then we sell the Apr $34s before they go below $1.25.  Of course my amazing market powers have already driven the Feb $34s to $1.10 but the way this markets going, I wouldn’t settle for less than $1.50.  

    Not all RDN but it is getting hard, isn’t it?  

    Mawah/Shadow – That’s north NJ on the NY border and on the rail lines.   Not a bad place overall but a little far from NYC for me (about 45mins).  Lots of good casual restaurants, no culture to speak of.  That’s the problem with people who are between 20mins to an hour from NYC – they are too close to bother competing as well too far to attract enough people to bother so they mainly opt not to even bother pretending to have culture outside a movie theater and a bowling alley.  

    FAS/Bob – Sorry, was confused.  If you shorted FAS puts you should be fine though so I’m still not getting something.  How about telling me the strike you have and the basis you paid or sold for?   

    Greats summary of the last 40 years BDC!  Now what?  

    PNC/Dflam – Sorry, no guidelines as it all depends on so much.  Ahead of earnings do you really want to risk it?  Right now the VIX is low so you are getting ripped off to make a roll.  If you can do a call spread then why not just wait until earnings and, if it goes well, you can roll the May $60s to 2x the Aug $65s (now $4.85) and buy yourself the Apri 2012 $65s for $7.80 so you have one flat spread and another $5 upside on your calls for net $5ish and still plenty of time to roll them higher if things go well.  

    Safe 20% in a week/Reza – Oh theres so many ways to do it I wouldn’t know where to begin…

    Waiting/BDC – The worm, as they say, will turn.  Of course you can’t ever play all bull or all bear – that, more than anything else, can kill you.  

    Fall down Friday/Barf – Didn’t you catch that spectacular dip in the morning.  We must have been red for almost an hour!  

  220. zeroxzero

     Thanks for the solar tip on U.S. construction guys, Phil, I’ll call some.  I live on an island some hundreds of miles from the U.S. coast, so the Yellow Pages don’t work for me — everything is seek advice/seek suppliers/import talent/negotiate with Customs/shake and stir.

  221. JRW III

    Technically, there should be a good move up on Tuesday !!

    Have a good weekend all !!

  222. matt1966

    willsons, it is a train wreck!  stay away from housing.  if it goes up, we will know for a fact that the TOP IS IN!

  223. matt1966

    JRW, I’ll give you a good move up on Tuesday if you give me a bigger move down!

  224. ravalos

    Hey JR, what was your % win for the day!?? You never leave us without saying it!

  225. willsons

     matt 1966   Thanks for your input.  

  226. jromeha

    Pharm- regarding MCP, I read somewhere (maybe here) last week that the buyers of MCP’s last issue were required to hold onto their shares until Jan 29th so I think his may be a pre-selloff in anticipation of people taking profits come the 29th.Meant to short them Wednesday but didn’t get around to it.

  227. JRW III

    ravalos / %

    - 1/4%; a loss of $3K. I hope you did better !!

  228. Highlander

    Phil,
    AAPL closes north of R2 again! I guess thats ‘ARRRHHH -2′. That was a funny clip!

  229. amatta

    Phil, 
    DIA Cover. Not sure I follow. First sell the 117s and roll to the March now? or you are saying start with the Jan 117.75′s and then if DIA goes down roll to the Feb 117"s… and why would I roll to the 120′s if it has gone down, 
    Thanks for clarification. I can still place the order till 4:30 on index options…. 

  230. zeroxzero

     Sold BIDU Feb 120 11s at the close @ 1.3631. I’ve got both China tightening and U.S. irrationality on my side, I expect.

  231. reza99

    Powerful finish of the SPY, ‘they‘ managed to keep SPY129 weeklies well ITM; impressive!

  232. reza99

    ‘they’

  233. Pharmboy

    MCP/jro – yeah I saw that a few days ago and the chart had turned already, much like AIG and its swap offering.  I went with AIG.  Should have done both…

  234. reza99

    He who knows when he can fight and when he cannot, will be victorious.
    Sun Tzu
    I hope that’s us!
    Have a good weekend, everyone!

  235. reza99

    Safe 20% in a week/Phil – Oh theres so many ways to do it I wouldn’t know where to begin…
    How about starting at here.
    BUT, It’s perfectly fine if you choose to keep your cards close to chest. :)

  236. stjeanluc

    JRW – You are right, technically, this looks a lot like March 2010 and the S&P climbed 80 points then. On the other hand, Monday is not a holiday in the rest of the world and we are one failed bond auction from a selloff in Europe…. 

  237. Phil

     Food facts/Nicha – Don’t show me those things – they piss me off and make me feel guilty and I’m going to Carmine’s tonight where they feed you a whole cow for dinner…  

    Delta/Ajay – I added 2x .39 and 2x .55.  I was looking at some uneven trades so I was adding deltas, not averaging.   Yes, getting even is your goal when behind.  

    GENZ/Pharm – No, if GENZ gets bought for cash the options all get called at net value.  If it’s a stock swap, it’s different.  Either way, the premiums get squashed.  

    SDS/Deano – I’d sell the June $23s for $2 and roll down to the June $20s at $3.40 so it costs about net .70 to roll down $4 and buy some time. On the put side, you’re not so far out so just keep an eye on the roll to the 2012 $20 puts which should be better than even so as long as you can do it for even, you can hang onto the Marches to give them a chance.  

    JPM/QC – Not off this run, remind me next week – hopefully better then.  

    HOV/Willsons – They wrote off their properties and took a huge write-down.   They still have the properties but they are carrying them with no valuation and that helped them restructure and they are carrying forward about $2Bn in tax credits.  I like their location and property base and the owners are sharp cookies who are just playing the game.  Ara’s pulling a $2M salary and he sold about 1/2 of this year’s allocation of options for $1M and kept the rest, which means he pretty much cashed what he needs to pay taxes.  Not much other insider selling in the past 2 years.  

    USO/Amatta – NYMEX boys are still on schedule of 25M per day and 4 days left to sell but March is getting crowded with 362M barrels and Feb still has 129M so 100M to dump next week.  Conditions still ripe for another sell off but weekends are very risky to stay short – which is why I was very glad to kill those puts earlier.  

    XOM/Deano – As I said above – low VIX makes for poor rolling conditions.  You’re going to roll to 2013 and it’s not going anywhere so why not enjoy the protection through the week after expiration at least?  

    ANR/Leon – The play makes sense mathematically but they look overpriced to me.   

    Island/ZZ – Hey that’s cool!  I need to speak to you about that one day. 

    Rrrrrrrrrrrrrrrrrrrr2 again/Highlandarrrrrrrrrrrrrrrrr – LOL!

    DIA/Amatta – It was selling the Jan $117.75 puts – all premium at .80.  When that premium is gone,  THEN you can roll them to Feb whatevers.  It doesn’t matter much if you roll the Feb now or after you see what happens with the Jans but if you don’t roll up $1 now, you can get screwed on a sharp drop off.  

    20% Reza – Perhaps you don’t realize I am just joking.  There is no such thing as a "safe" 20% in a week or we would all be Billionaires but it wouldn’t do us any good because Lloyd would be a Trillionaire and we still couldn’t get a decent 3Br in NYC for less than $5M.  

    Have a great weekend everyone!  

  238. shadowfax

    Everyone who cares
    I have not been trading only watching the sananagins. It is by general charting still in a rising channel but the BOTs are selling on every uptick, most accute in financials which are regarded as leaders, also oil. I have no idea what all this means because going back 6 months or more does not show the program trades like I see now. These trades last miliseconds and I have not been able to separate their volume from the rest for 1 minute. My gut is the big guys are getting out and selling to the suckers. I know I can speed up refreash rates  by half but I need to start a 1 second chart or faster up to 65 milisecond the NYSE limit as linked by acho @1:58. IWM is breaking all the rules with major divergents from normal at 9:42, 10:46, 12:36, 1:48 to1:51, 3:46, 3:54, and 3:59. Anyone have an idea?

  239. JRW III

    stjeanluc

    I agree, and we only have $1 1/2 B of POMO, but I will not be surprized at a gap up, or even open followed by a buy program, Tuesday morning.

    Good Hunting !!

  240. reza99

    20%/Phil – Yes I realize that of course there ISN’T a 100% safe invstmnt; I settle for better than even odds any time.
    Enjoy your weekend Phil!

  241. Phil

    At the close: Dow +0.47% to 11787. S&P +0.74% to 2755. Nasdaq +0.73% to 2140.
    Treasurys: 30-year -0.41%. 10-yr -0.17%. 5-yr -0.07%.
    Commodities: Crude +0.21% to $91.59. Gold -1.91% to $1360.50.
    Currencies: Euro +0.1% vs. dollar. Yen +0.24%. Pound +0.25%.

    Market recap: The Dow and S&P extended their weekly winning streaks to seven, riding momentum from strong earnings reports from JPMorgan and Intel. Broad gains in financial stocks were somewhat offset by declines across materials amid worries about the potential impact to demand from tightening in China. Advancers led decliners nearly two to one on the NYSE.

    Hedge funds have been crowding into more of the same trades, amplifying market swings during crises and helping to diminish the impact of corporate fundamentals on stock movements. With powerful macroeconomic forces such as government stimulus moving markets in the past year, "the hedge fund business model may not make sense," one observer says. 

    News that nobody worried about:  The ECRI’s Weekly Leading Index slips to 128.1 from previous 128.9, but the annualized growth rate (a moving average) is up to +3.7%, a 33-week high. Managing Director Lakshman Achuthan: "With WLI growth rising for 10 straight weeks to a 33-week high, U.S. economic growth will soon begin to revive."

    Here’s a vote of confidence: Pimco cuts U.S. government holdings in its flagship Total Return bond fund to 22%, from November’s 30% – matching up with the 10-year Treasury yield hitting a seven-month peak on Dec. 16. Part of the funds flowed instead into mortgage-backed securities (now 45%, up from July’s 18%) and emerging-market debt (9%).

    New Jersey Gov. Chris Christie’s comments that rising health care costs might “bankrupt” his state, made on the same day of a planned bond sale, draw criticism for their poor timing and may have driven borrowing costs higher. Shortly after Christie’s bankruptcy reference yesterday, a tax-exempt school bond offering was cut by almost half. 

    Cities, hospitals, schools and other public borrowers scramble to refinance tens of billions of dollars of debt this year in the midst of a crumbling municipal bond market. An estimated $109B worth of letters of credit and similar backstops are expiring this year, and for some borrowers, new guarantees may not be available and refinancing too costly.

    Richmond Fed’s Jeffrey Lacker expects "earnest re-evaluation" of QE2 purchase plans to come along with 3.5-4% growth this year – which would result in a "more sizable reduction in the unemployment rate than we’ve seen so far." Consumer spending is starting to wake up. But there’s "potential for broader distress" in the muni market.

    Boston Fed’s Eric Rosengren says stimulus is still necessary to bring down an unemployment rate that’s likely to stay close to 9% this year. “The current level of accommodation from monetary and fiscal policy is appropriate,” he believes. He worries that rising energy prices could impair household income and choke off recovery

    As part of Goldman Sachs’ (GS) recent drive toward internal reform, it revealed the details on additional losses of $5B it suffered in the financial crisis. The bank’s regulatory filings to investors at the time reported a total hit of $8B in 2008. The new figures drive that number up to $13.5B, fanning debate over financial disclosures. 

    BP (BP +3.5%) says it has reached a share-swap agreement with Rosneft, the Russian state-controlled oil company, and a source says it is in talks about a possible deal to jointly explore for oil and gas in Russia and elsewhere. 

    Dividend stocks! The mother of all sortable charts for 2010

  242. Phil

     Barry’s summary of the Week’s events:

    Positives:

    1) Japan joins China in wanting to chip in to help Europe

    2) Portugal, Spain and Italy all successfully sell debt and sets calmer tone for the week

    3) US Treasury yields shrug off higher inflation readings and stay moderate (bond bulls should thank the Fed)

    4) Stocks shrug off all the negatives below and continue to melt higher

    5) Thailand, South Korea and China take prudent steps to cool inflation pressures

    Negatives:

    1) PPI, CPI (record high), Import Prices, inflation expectations in UoM, all point to upward inflation trend and JOC and CRB food indices hit record highs

    2) Thailand, South Korea and China all tighten policy over inflation worries

    3) Indian Sensex index falls to 4 month low after 8.4% wholesale inflation report and ahead of likely rate hike on Jan 25th

    4) US Retail Sales a touch light

    5) UoM confidence light

    6) Initial Claims jump but seasonal issues

    7) Muni’s break down.

  243. Phil

     European bond haircuts are coming, but "it’s a very exciting time to be an investor" as turmoil in the debt markets presents a variety of opportunities, particularly in U.S. municipals, Pimco’s Mohamed El-Erian tells CNBC. When investing in municipals, he says, "it’s not just in the rate risk, it’s interest rate and credit risk… Be highly differentiated. You want to be very high up in the credit curve." 

    The municipal bond market fell sharply for the third straight day amid continued flows out of money market mutual funds. Spreads widened, with retail investors looking to dump bonds, as well as dealers heavy with inventory despite the relatively light new-issue calendar.

  244. stjeanluc

    I wish Christie would just shut up! Enough damage done to NJ when he opens his big mouth. I don’t disagree on every point with him (although mostly) but I disagree on his bully tactics and his bad sense of timing (winter vacations anyone)! 

  245. barfinger

    Let me put forward my (limited) understanding of what seems to be going on in the market, and hopefully, somebody will flesh out or correct my view:
     
    The masters and their tradebots are being handed billions of dollars in exchange for unproductive assets (like Tbills). Whether by collusion or happenstance, the masters feed this money to their tradebots which buy (and sell) stocks in such a way to produce a net gain in the market indexes. The masters, however, must wind up net accumulators of stock, unless they can do what shadowfax may have detected today: flush it out in a way that does not deflect the market on a positive day.
     
    It seems to me that they aren’t so evil as to want to dump it all in one massive armageddon event, but should there be an actual piece of unspinnable bad news, I suspect they would turn off the bots, and allow a collapse. I figured they must have a way to divest the stock they acquired without significantly opposing their main program.
     
    Should they pull money from the sidelines, they would be able to sell into that updraft to keep their net holdings light.’
     
    Anyway, if the day dawns, and there is no awful overnight event, one can go heavily long for the day and the odds will be with you. Close out at the end of the day.
     
    I have no more hedges, but I am not heavily long. Next week, it seems safe to load up on the morning dip (defined as a market that does not rise) and sell into the afternoon stick.
     
    Where am I wrong?

  246. biodieselchris

    Barf - if CSTR is a canary in the coalmine then no one is watching the mine. It would unnerve me as a blind long, or even if I was a hedge-fund running bots (which really have to outrun each other to do any god in the long run, these guys are just playing musical chairs), that an 8% miss clobbers a stock more than 25%. Either CSTR wasn’t participating in the Bot fun or this is really big wake-up call.
     
    I guess we shall see.

  247. Peter D

    biodieselchris,
    Sorry to hear about your account balance, which looks as gloomy as the NW weather today.  Down 70% means it needs to make over 300% to be back to even.  What’s your plan?  May be learning a scheme plus money management that consistently makes money, and restart it with 125k (so that it’s eligible for portfolio margin).  Once you have a good scheme, you may as well bet bigger.  Good luck!

  248. palotay

    Do you guys have any recommendations for a software or spreadsheet solution for calculating how your portfolio is positioned based on delta?  It is clear that I am too bearish, but I have a hard time quantifying by how much.   I already use a spreadsheet to keep track of basis, projections, etc.  Google Docs is great for this because you can easily insert tickers for slightly delayed quotes.  Which would be great if I owned a bunch of stock, but I can’t get delta info on specific options. I haven’t figured out a way to do this in TOS yet either.  

  249. Peter D

    Palotay,
    In TOS, there is a Beta Weighting that normalizes all your positions into a symbol.  Normalizing to SPY or SPX is most useful for me.  In the Position Statement window Pane, click on the little circle next to "Not Weighted" label, click Beta Weighting and put in SPY, SPX or others.  Now the total Delta is based on SPY or SPX.  If Delta based on SPY is -1000, you’d lose $1000 for every $1 move up in SPY.
     
    Delta does change when the market moves.  What TOS doesn’t do is to show aggregated Delta on what-if scenarios when the market has moved X% from where it is.  TOS does show Delta for each symbol for various price range, but not the entire portfolio Delta for a price range.  Hope this helps.

  250. matt1966

    The times we live in-
     
    “The S&P 500 is in line to be up for seven straight weeks,” said Art Cashin, director of NYSE floor operations for UBS Financial Services, in his widely read morning note. “That’s never happened before. Equally unique is the fact that the S&P has not fallen below its 10-day moving average for thirty straight trading days. That, too, has never happened before.”

  251. barfinger

    that is now 32 days, by the way…

  252. Cap

     Phil, thanks for the kudos earlier re:  AIG, MCP.   Sometimes I get these right; but as we know these momo jobs are tough trades.   I still want to see AIG at 50 or lower.
     
    CMG PCLN NFLX DECK OPEN are also some of the names we are trying to outsmart.  FCX also.
     
    Yesterday I posted a sale recommendation of NFLX 195 weekly calls at about 70 cents.   Those went out at 0.
     
    Couple other names to look for short plays on…. JOE (up against Bruce Berkowitz, but on the side of Einhorn and Tilson) and ZAGG (scam company i am told).
     
    Short plays in this tape are very tough, but then we get CSTR days (I’ve been short that name at its highs, but not in it for the drop).
     
    Expect more Gang of 12 shenanigans next week (expration week upgrades, usually Wed & Thurs).

  253. Cap

     Meanwhile, the governments of 2 countries fell today & yesterday.
    Tunisia … corruption and inflation
    Lebanon … basically a coup by Iran and terrorist Hezbollah while Prime Minister was visiting Obama.
     
    Party On ….

  254. deano

     Phil
    Thanks for the help on SDS, but I’m not seeing the following 29 to 20 roll: "On the put side, you’re not so far out so just keep an eye on the roll to the 2012 $20 puts which should be better than even so as long as you can do it for even, you can hang onto the Marches to give them a chance."
    Can you clarify? 

  255. reza99

    Re 20% / Phil – Well, max 20% is    0 <= return <= 20%; i.e, 0 or better weekly returns. Having 0 returns would make a person $0B or a big goose egg. Perhaps you took the most extreme (ideal) case of my question, NBD.
    "Perhaps you don’t realize I am just joking.  There is no such thing as a "safe" 20% in a week or we would all be Billionaires…"
    Hehehehe :D

  256. jomptien

    Pharm/GILD, I was wondering what you think of GILD. I bought May 36 calls for 3.50 just because the chart looks good. Selling puts may be safer but with the low VIX went for the calls and hope for a pop. I remember this one last year sometime. Thanks

  257. 1020

    GO PACK!!!  :)

  258. shadowfax

    1020
    From 1980 to 1995 I would  join the Packers Backers at the York Montana Bar about 30 miles past nowhere MT. Fun times but most of us admit that they are the choke team of all time!

  259. lvmoda

    From this weekends’ Barrons Roundtable….just reaffirms where Wall Street’s mindset is regarding Main Street.   Kudo’s to Bill Gross for nailing the point, shame on Archie MacAllaster for offering a viewpoint based on visiting movie theaters and McDonald’s in Manhattan!  How clueless is he?
    MacAllaster: The economy isn’t falling apart.
    Gross: Of course it’s falling apart! You are taking the corporate side. What about the side of Main Street? Of those who are unemployed and can’t find a job?
    MacAllaster: I’m talking about stocks.
    Gross: Corporations are probably at the peak of their domination. They dominate versus labor in terms of their ability to export jobs and production overseas. They dominate now in terms of Washington, given the Republican electoral victory and the Obama administration’s moving toward the center.
    They even dominate with regard to the Supreme Court, as evidenced by the recent ruling removing limits on corporate donations to election campaigns. This is all good for the market, but not for Main Street in the long run.
    Zulauf: You also have a tremendous social division. In the U.S., the top 20% of the population owns 93% of the financial assets. That tells you the average guy is in bad shape. He spends what he makes, and, at the end of the month, he’s even.

    MacAllaster: You don’t go to movies like I do, and ordinary restaurants like McDonald’s. It seems to me the little guy isn’t doing so badly, and the government is helping him. In the end, the stock market will do just fine. It isn’t so expensive.

  260. Pharmboy

    GILD/jom – I like them and they make mucho $$.  They were targeted by the downgrade police and have been bouncing around $34-38.  Since there is no dividend, and I do not see them as a takeover for now, I would go with a bull call spread, selling a few Ps to reduce the costs. 1/25 is earnings, so I think it is wise to wait until after, as they are volatile into those. 

  261. hanna5

    For whoever is interested : A note on inflation and interest rates, and what we are observing. I think it may be wrong to think that Bernank and others in Gov/banking do not see the inflation that has been creeping into the system. They see the same data that we do, and tho they may say things for political reasons (and to keep the peace), what they do is another matter. We have seen massive increases in money supply and low interest rates. POMO and MoreFreeMoney programs have served to push rates UP. Why? I think that the Goal of these programs was to affirm the belief that the Gov would stop at nothing to prop up capital markets and protect investment; thus, these actions had the INTENDED but slightly counterintuitive effect of causing money to come out of bonds. We will similarly see inflation in the coming months and years. It will be downplayed until it is so rabid that it must be acknowledged. The, all at once, we will see the Fed begin to attack inflation head on. At this point (i think this is the goal) we would have inflated enough, and debased the currency enough that we will have reducing into insignificance the housing, state, and national debts that we have. This is the only possibility to restart on a path to long term prosperity. Yes, in the short term the price inflation in goods will cause pain to the lower classes, but I hope we will see support programs to defray this. And, in the long run, the benefits will out way the risks. Investment options that stem from this thesis : TBT (heavily long), but also stocks that will inflate with the dollar such as AAPL. The upper and upper middle classes will do well. Apple products will become a status symbol in growing nations like China, etc. GS, because of their presence in capital markets, and because i think we will see much M&A in the coming year. I also still like MON (long term, as it has had a great run recently), BAC, and GOOG for various reasons. For those who dont look on Opts side, GLUU is also a nice little stock in the mobile gaming market which is branching into android platform… Lets have a great investing year, all!!

  262. pakdog

     1020 – How delirious are you after that game!?! Oh my goodness!

  263. jomptien

    Pharm/GILD, Thanks for the info, I already have the calls, I will sell higfher calls before earnings and wait until after to sell puts.

  264. Pharmboy

    GILD/jom – the trend is up, so until that changes, leave them naked, and then do a 1/2 or 2/3 sale of the front months ITM or OTM.  After last earnings, they filled to the up side and then fell back to their start….so give them some room.  I use Opts methods on the 1/2 covered calls, using the trend as your friend.

  265. jomptien

    Good advice Pharm

  266. 1020

    pakdog – A  Serious A** Whooping is all I can say….and I enjoyed every minute of it!
     
    I have family in Green Bay, down the street from Lambeau Field, my wife was a student of Mike Holmgren in the eighties and I’m am a Green Bay Packer shareholder  (for real)  so I guess you can say I have some "skin" in the game…. ;)

  267. 1020

    Green Bay and Chicago for the NFC title would be a NFL classic – you don’t get anymore "old school NFL" than that…..
     
    Go Pack!  :)

  268. Pharmboy

    Here is the updated spreadsheet.  Bookmark it!

  269. flipspiceland

    @hanna5
    Other than your stock picks which I don’t know anything about,  agree with your thoughts about what is happening in every respect.
    But with that said, I also said that Justin Bieber is really a girl, a wuss, and pantywaist and will only last ,maybe , 6 weeks.

  270. pakdog

    1020 – Nice peidigree. Any chance they’ll ever run options on those shares? Packers-Bears cage match next Sunday, I can hardly wait. My brother is a Bears fan (he was born in Chicago and we moved up north when he was 2, it’s rather bizarre) so we’re calling it the civil war.

  271. pakdog

     Congrats J-E-T-S Jets Jets Jets! fans, I’m totally impressed with their game today.

  272. 1020

    pakdog – I don’t know, though I would be a buyer of AROD – If it came to market….  ;)

  273. 1020

    Green Bay v. NY Jets.  Most likely, the highest rating ever for a Super Bowl… The Black Eyed Peas at halftime…..
     
    Not bad for FREE!  :)

  274. 1020

    Though, the downside is, you do have to listen to Troy and Joe……or you can listen to play by play from either teams announcers on SIRI/XM…(much better)
     
    Happy MLK All!

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