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Monday Markets – Japan Moves 8 Feet Over and 633 Points Down

Japan’s quake on Friday was powerful enough to shift the whole island by 8 feet!

Despite the land movement, most of the damage was done by the 20-foot tsunami that hit the nation afterwards, much like the 2004 tsunami that killed over 200,000 people in Indonesia.  The media is still banging the nuclear fear drum over and over again to keep people watching but the reality is that the chance of a catastrophe, at this point is very slim as the chain reaction was halted and enough time has passed for about 1/3 of the heat to dissipate and the containment units are holding (they outside shells blew out from venting blasts that did not damaged the main concrete containers.  

That being said – you never really know what’s going to happen but, if anything, people should be impressed with how EVEN a massive earthquake like this did not cause a major nuclear accident and that is based on a 40-year old design (by GE) so it’s really no reason not to build new plants – preferably not so close to fault lines, though…  

As I said to Members this morning in our special 1:41am Alert – there’s going to be some real bargain-shopping opportunities here as Japan is probably looking at $50Bn in damages, which is already knocking down insurance companies like Swiss Re, Munich Re and Hanover Re – all down around the 5% rule, as we expected last week.  Berkshire Hathaway got hit as well as is AFL, who are one of my favorite insurance companies – especially if we can get them in the mid-$40s again!

By the way, I don’t want to come off goulish – we spent the weekend discussing the terrible tragedy and I’m heading to NYC tomorrow to help coordinate some relief efforts for the victims but this is our job – to figure out what the opportunities are – even in the face of a terrible tragedy like this.  In no way do we want to belittle this tragedy but the damage toll will be much smaller than the Kobe quake of 1995, which caused $132Bn worth of damage (and that was in 1995 dollars!) as it struck one of Japan’s major ports and industrial areas.  Much like 9/11, what it really did was accelerate an already downtrending market and the Nikkei fell 25% in 6 months.  Memories of that move is why we got such a violent reaction today in the Nikkei – despite the much smaller damage (especially in respect to the much larger GDP) done by the current quake: 

And what did the US markets do while Japan took a plunge in 1995?  Well, that was a very different story:

It was a very different World back then, of course so it’s prudent for us to think about what the Japanese economy is like today and what major sectors are likely to be affected.  For instance,  Japan produces more than 40% of the world’s NAND flash memory chips — and 15% of its DRAM — the earthquake could seriously affect worldwide semiconductor supplies, according to analysts such as Jim Handy of research firm Objective Analysis.

Even a two-week shutdown of fabrication plants would remove from production a sizable share of wafer production, causing major price swings and short-term shortages. Not everyone agrees with the Objective Analysis view, however. Market research firm iSuppli does not believe that DRAM and NAND production will be affected by the quake. Micron (MU), Toshiba (ADR: TOSBF.PK) and Elpida Memory production facilities in the region were far enough away from the tsunamis to avoid damage. That said, many electronic manufacturer factories in region won’t be buying or shipping product until earthquake damage is repaired. This includes Sony (SNE), Murata (ADR: MRAAY.PK), Renaissance Electronics and Shin-Etsu Chemical ( ADR: SHECY.PK) factories.

Oil is down but not for a great reason.  Based on the U.S. EIA data, Japan imported 4.7 million barrels a day (bpd) in 2009, with total oil refining capacity of 4.6 million bpd at 29 facilities as of January 2010. According to Reuters, the six refineries that are shut down have a total capacity of 1.40 million barrels per day (bpd). That’s about 1.6% of the 89.3 million bbl/d global 2011 product demand forecast by the International Energy Agency (IEA).   While Japan is the second-largest net importer of oil in the world after the United States in 2009, the estimated import disruptions due to the earthquake does not appear significant enough to sway world’s crude oil market
 
On the other hand, since about 25% of Japan’s electricity is coming from nuclear, the resulted power shortage due to closures of a dozen nuclear reactors after the quake suggests Japan will likely need to increase its imports of petroleum products and other energy sources.
 
The country’s power generation relies mostly on coal and natural gas, which means there will be an increase in imports of diesel (to power generators), and other petroleum products (since part of its domestic production is offline), along with natural gas/LNG, and coal, just to keep the the entire nation going in the aftermath.
Future investments in nuclear power could be even harder to come by, and companies like NRG Energy (NRG) and Southern Company (SO) may need to scrap or write off their planned nuclear power projects, which could impact their forward earnings, and stock valuation.

China is scheduled to build 28 new reactors over the next decade, about 1/2 the World’s total planned.  I doubt they will change their minds.  Hopefully it will cause them to focus more effort on perfecting pebble bed reactors – which promise to be safer than current designs if they work out the bugs.  

Toyota Motor Corp., the world’s top automaker, as well as Nissan Motor Co. and Honda suspended production at all their auto plants in Japan, starting Monday.  When production will resume is uncertain. The area hit by the quake is a major center for car production, complete with a myriad of parts supliers and a network of roads and ports for efficient shipments.  "There is no way to get our products out, even if we make them, with the roads and distribution system damaged," said Honda Motor Co. spokeswoman Natsuno Asanuma.  

"For Japan, a nation that lives by the sea, food comes in by the sea, energy comes in by the sea, exports go out by the sea. Everything stops if a quarter of the coastline has been wiped out," said Weinberg who teaches at New York University. 

We decided all this would be good for Ford, and there are 2 different ways to play option strategies on the $14.36 stock in the Morning Alert.  I was liking them anyway as they pulled back down to the 200 dma and there’s no reason not to take advantage of the situation by buying ourselves some of America’s last remaining auto company.

The BOJ has already dropped the stimulus bomb, giving $184Bn to the Banksters (because they suffer most when tragedy strikes 150 miles from Tokyo).  No word yet on any aid for the actual people who were effected but, as Larry Kudllow said on CNBC: "The human toll here looks to be much worse than the economic toll and we can be grateful for that."  

Of course, that’s to be expected of Larry, who began his career as a Staff Economist at the NY Fed and was an Associate Director of Reagan’s OMB and was even an adviser to Freddie Mac and was "Mr. Goldilocks" on CNBC – telling investors not to worry in 2007 and 2008 as the market began to tank, which can best be summed up in  his December, 2007 quote where he said "The recession debate is over. It’s not gonna happen. Time to move on. At a bare minimum, we are looking at Goldilocks 2.0. (And that’s a minimum). The Bush boom is alive and well. It’s finishing up its sixth splendid year with many more years to come." as well as his May, 2008 statement that everything was going great and: "President George W. Bush may turn out to be the top economic forecaster in the country" in his "R" is for "Right!"    

Hey, I didn’t plan on getting mad at Republicans over an earthquake in Japan – blame Larry!  We can save our real outrage towards the Republicans when their short-sighted de-funding of things like the Pacific Tsunami Warning Center in Hawaii leads to future tragedies.  The Center did issue a series of warnings prior to the quake as the  National Weather Service and the National Oceanic and Atmospheric Administration (NOAA) get steadily better at modeling the planet we live on.  Of course, the $1.2Bn defunding is based on the things the NOAA sees that SOME PEOPLE (who shall remain nameless Billionaire brothers) don’t want you to see, like climate change studies and ocean pollution findings.  As the Frankenstein Monster liked to say: "Science bad!

"People could die. … It could be serious," said Barry Hirshorn, Pacific region chairman of the National Weather Service Employees Organization (oh no, a UNION – don’t listen to him!), noting that Weather Service employees and employees of the Pacific Tsunami Warning Center could be hit with furloughs and closures.  "It would impact our ability to issue warnings," he added.  Democratic Rep. Colleen Hanabusa of Hawaii called the proposed cuts "Reckless - Drastically reducing the … ability to forecast weather and alert our communities about imminent, dangerous events is irresponsible," she said.

Sorry Colleen – we voted for irresponsible in November – no sense in whining about it now!  

Fortunately, we were not impressed by Friday’s stick-save close and kept ourselves well covered (slightly short) into the close, despite the enthusiastic gains the US markets were putting up.  We will be getting bullish if we hold Friday’s lows and buying the F’ing dip so be on the lookout for over-reactions on stocks like HMC and HIT (another one I really like on sale) and we’ll see if we can grab some sale items in Member Chat today.  We get a big snap down in the indexes because there are plenty of things people think they should be selling on the basis of the catastrophe (insurance companies, nuclear power companies, commodities, anyone who supplies Japan this quarter (very bad last two weeks)) but, in the grand scheme of things – as long as things don’t get worse – they are bound to get better sooner or later (how profound!).  

Speaking of things that get better – Qaddafi seems to have pushed back the rebels as his soldiers march on Brega where the rebel strongholds have been softened up by air-strikes as the UN twiddled their thumbs for another weekend.   Other rebels who aren’t doing so well this morning are the gang from Wiki-Leaks – who got a big "so what" from BAC this morning as they release their "smoking gun" EMails.  

BAC should be good for some relief buying off the $14.25 line today.

We’re certainly not going to be bullish until we see the Nas, NYSE and RUT retake their major breakout levels but we do expect the Breakout 2 levels to hold, other than the Russell, of course, which is already below 800 and, as we expected when we hedged, the fastest falling index.  We will, of course be selling into the excitement – as soon as we get an indication that Friday’s lows will hold.  

The rest we’ll have to play by ear and it’s going to be a very exciting week.  

 


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  1. exec

    Phil,
     
    I’ve been watching F for a while.  I think I’m going to jump in on your recommendation.  Looks like IWM is poised to make a triple bottom.  If it holds we may see a nice rally.

  2. Pharmboy

    Good morning!  Anyone else having time out issues or reformat issues with the PSW site in IE or Firefox? 

     

    In other news, Berkshire Hathaway to Buy Lubrizol for $9 Billion Warren Buffett’s Berkshire Hathaway agreed to acquire specialty chemical company Lubrizol for $9 billion in cash, marking one of the largest acquisitions in the conglomerate’s history.
  3. pentaxon

    Dear Phil,
    I appreciate your thoughts very much. But – being a physicist – this time I totally disagree on two points:
    1.)    the nuclear danger in Japan is far from being over. This is not a coal plant or something. "1/3 of the heat dissipated" doesn’t mean anything. This is a diabolic material that needs cooling for weeks and it needs to be surrounded by water! Water is the moderator the slows down the neutrons to keep the chain reaction under control. Once there is a drainage the whole thing really ignites a “never” stops burning again  – for thousands of years !!! Go to Chernobyl: this stuff is still burning there – it burned into the ground and has been covered with tons of concrete that won’t withstand the radiation and heat for a long time (it already has cracks). They are already planning for the next shell – which of course has to be a lot bigger than the old one since no one is going to remove the old one…. (and so on…)
    2.)    I’m not impressed of nuclear power plants. They should all be switched off tomorrow. Even the most modern power plants are dangerous. In any event (technical failure, terrorist attach, airplane crash, earth quake or whatever) you need an enormous amount of infrastructure (electricity, water, trained stuff, working wires, working pipes, working valves … ) for several weeks to shut that thing down. If one link fails you have a melt down and toxic material for thousands of year (I’m not exaggerating) and of course thousands of peoples dying of cancer and other diseases.
    Is mentioned I graduated in physics but on a technical university. I know some engineers that think nuclear power plants are a good idea, but I hardly know one physicist who is not totally against it… this material is by far to dangerous to play around with it. Once you fail it probably becomes a problem for hundreds of following generations. It’s not worth it.
     

  4. dclark41

    Phil
    On the F trade you suggested are you expecting to roll the puts and calls up if the stock appreciates significantly? F does not pay a dividend so I am just curious why you would suggest holding the stock rather than a BCS like the 2012 12.5/17.5 selling April $15 puts for net $1.14. I still struggle with the decision to buy stock or do a spread. I get it when there is a significant dividend involved, but what if there is not? Why risk more money? I look forward to your response.

  5. exec

    Pharm,
     
    No issues on firefox.

  6. stjeanluc

    Good article:
    http://www.rollingstone.com/politics/news/why-isnt-wall-street-in-jail-20110216
    I think that this sums it up:

    The mental stumbling block, for most Americans, is that financial crimes don’t feel real; you don’t see the culprits waving guns in liquor stores or dragging coeds into bushes. But these frauds are worse than common robberies. They’re crimes of intellectual choice, made by people who are already rich and who have every conceivable social advantage, acting on a simple, cynical calculation: Let’s steal whatever we can, then dare the victims to find the juice to reclaim their money through a captive bureaucracy.

  7. stjeanluc

    And Krugman takes on the banks:
    http://www.nytimes.com/2011/03/14/opinion/14krugman.html?smid=tw-NytimesKrugman&seid=auto 

  8. peedlew99

     Morning, 
    Question for you Phil… I noticed last night it only took 15 minutes after the explosion for the media to report that everything was fine.  To me this is much more consistent with a PR campaign to contain public fear than any real assessment of damage.
    How did you arrive at your conclusion that "the reality is that the chance of a catastrophe, at this point is very slim as the chain reaction was halted"?
    I have not seen this conclusion anywhere else.
     
    Paul

  9. pentaxon

    Great article, Cap. That says it all.

  10. exec

    Cap,
     
    That is a good article.  This is not over by a long shot.

  11. drumkeerin

    Pharm,
    Would you please post a link to the 25000K spreadsheet on this site. Somehow I have lost it, and when I copy the address, it  takes me to google, which is not up to date. Thanks alot

  12. ultyguy

    uranium stocks being hit hard.  DNN down 28%.  CCJ down 23%.  Too soon to jump in?

  13. stjeanluc

    This looks like a big "Buy and Sell" into the excitement day! 

  14. Phil

    Good morning!  

    EDZ is a huge disappointment in $25KP (Apr $21 calls) and there doesn’t seem much point to the Dow puts either so we’ll keep the EDZs and cover the 16 Dow May $114 puts by selling 16 March $120 puts again for $1.25.

  15. Manimal

    Good Morning All – Does anyone know what time AAPL plans to release iPad 2 sales figures? WSJ didn’t have the numbers yet.  If I had to guess I’d say 10am pst.

  16. dclark41

    Phil
    Time for another cover on Fas Apr. $32′s? Down 2.4%

  17. exec

    You didn’t think a little 9.0 earthquake was going to scare this market………buy buy buy!!!

  18. mjjwo9b

     Phil,
    Did not get the morining member alert…  where do I look for it on the web site??
    Thanks
    MJ

  19. rustle123

     Phil, do your recommend selling the Apr 14 puts on F and buying the 15 calls for same month?

  20. matt1966

    May God bless Japan! 
     
    Sold my FAZ position held over the weekend at the open.  Now long FAS.  I can’t elaborate because I’ve stopped thinking for the day-

  21. rainman

    NRG — intersetingly, up 3.4%

  22. Pharmboy

    Drum – Here.

    For those who do not get my updates.  BMY and OPK are done.

  23. stjeanluc

    GE 2013 17.5 P can be sold for around $2.25. Around $4K of margin gets you 10 of them with a chance to make $2250 if GE stay above 17.50 over the next 2 years. If not, GE is put to you at around 15.25 which is close to a 25% discount.

  24. Pharmboy

    mjj – click on your account name in the upper right corner.  Then select the boxes you want to subscribe to in the lower left as you scroll down.

  25. Pharmboy

    USU getting crushed as well.

  26. judy

    pharmboy
    Do you know what is up with pfe? Its rocketing this am.

  27. Phil

    TM bouncing back fast.   HMC too.  CCJ finding brave buyers…

    Let’s keep our eyes on those major breakout levels as we’re below them all now and that does mean we could drop back to Breakout2 again – and FINALLY, as we needed a good test of those from this side of the line.  

    It’s not complicated – 3 of 5 over is good, 3 of 5 under is bad.  

    I am trying to get more ahead of the curve on $25KP plays because people say they don’t have time to fill so I’m trying to get them in early but, if you are a good market timer – you should be able to get better fills than the ones I have to call now.  A better way to get into 16 DIA $120 puts at $1.25, for example is to sell 8 DIA $121.75 puts for $2.40 and then to roll those to 2x the DIA $120 puts if the Dow heads south and the roll goes to even but, if the Dow heads higher – you can still sell another 8 puts and make much more money – I can’t possibly explain that every time we do an entry so you either get that concept or you don’t…

    Refiners are loving the action so that’s nice.  

    XLF not loving things at all – down at $16.41 – seems very low to me but let’s see where they settle.  I’m inclined to DD on FAS Apr $32 calls in the $25KP at $1.40 but it makes it a very big, very scary commitment and I really can’t take all the complaints but it is what I would do if it was my portfolio so let’s call it a DD here but a very risky one (buying 20 more FAS Apr $32 calls for $1.40 in the $25KP)

    The oil futures play over the $100 line is still on, of course but be very careful on pullbacks as Qadaffi regaining power is just as stabilizing as him stepping down.  Libya is old news now – it’s all about Bahrain this week.  

    Here’s a few things to watch from SA – let me know what you think:

    Possible winners from the hit to nuclear stocks:
    -Natgas ETFs: GAZ, UNG, UNL, NAGS
    -Natgas equties: FCG, FCGL, FCGS
    -Coal: PKOL, KOL
    -Alt. Energy: TAN, KWT, FAN, ICLN, PBW, PBD, PUW, PWND, GEX

    Likely losers from the Japan fallout:
    -Uranium stocks like CCJ, DNN, URRE
    -Reactor manufacturers like GE, TOSBF.PK, ARVCF.PK
    -Nuclear power plant construction companies like SHAW, FLR
    -Nuclear utilities like EXC, NRG, TKECF.PK
    -Nuclear and uranium ETFs: NLR, PKN, NUCL, URA

    Piper Jaffray reports the iPad 2 (AAPL) has sold out completely, with its team unable to locate a single available device when calling retailers over the weekend. Analyst Gene Munster is sticking with his estimate that 400K-500K iPad 2′s were sold, vs. 300K of sales in the iPad 1′s debut weekend. 

    Jean-Claude Trichet is rebuffed by this weekend’s EU deal that leaves the ECB as the buyer of last resort for PIIGS debt, a role the bank wants little to do with. It "goes in the right direction," Trichet curtly says. Look for this to make rate hikes even more likely as Trichet wields his largest lever. Euro +0.4% at $1.3956. 

    The earthquake renews old worries of massive overseas holders of U.S. Treasuries dumping their paper – this time it’s insurers who will need to raise cash to pay claims. As usual, the reality will likely be different. The 10 year is well-bid, down 2 basis points to 3.37%. 

    Regarding the Saudi intervention into Bahrain, Stratfor notes the situation must be becoming "increasingly untenable for the regime." The leader of the hardline al-Haq party says Saudi interference opens to door for Iran to do the same, though such action seems unlikely at present. 

    Putting a bid back into oil, Reuters cites an Al Jazeera TV report that the U.S., U.K., and France have promised Libyan rebels a no-fly zone. Crude gains more than $1 in minutes, the April contract now at $100.21. OIL -0.6%. BNO +0.5%.

    Japan’s earthquake disrupted production at silicon wafer supplier Shin-Etsu Handotai. Taiwan Semi (TSM -0.9%) and United Micro (UMC) say they can activate alternatives if necessary, and SMC reportedly sources silicon wafers from non-Japan-based suppliers including MEMC (WFR +6.8%)

  28. exec

    Our dollar is pathetic

  29. yodi

    CJJ sell some Apr 34p for 4.10 good buy if you like the stock

  30. Pharmboy

    20 more FAS….holy balls Batman…..

  31. Pharmboy

    PFE may be breaking up into different units…..generics, consumer and prescriptions…..that’s the excitement.

  32. gucci

    Hi Phil Goog near 200ma, would it be good entry at this point or wait till next week, thx

  33. b1ll

    TNK under 9.50

  34. willsons

     PHIL    Do you like or dislike SD here?  Thanks

  35. stjeanluc

    EWJ was at 11.50 5 days ago… Today barely making $10. This should make a nice rebound play. Too early though…. 

  36. kinkistyle

    NMR, MTU/Phil:  If the BOJ is funneling that enormous stimulus through the banks, think there is a chance that some of that mojo rubs off?

  37. morxlntway

    Phil – i have UUp Mar 23 short puts, roll to Apr same strike?
    thanks

  38. exec

    Can anyone explain why the dollar is down today?  Japan is burning….wouldn’t you think that would boost our dollar. 

  39. willsons

     exec      Japanese pomo?

  40. bps2002

    exec,
     
    selling dollars to fix stuff in Japan?

  41. Phil

    Go Ford!  Hope you got in Exec.  

    On FAS – We are in 40 for an average of $2.31 and we damn well want to get the hell out of at least half even so NO GREED if they take off.  Thank you…

    Format/Pharm – We had a brief issue yesterday with the new Facebook "liking" button but I thought that is fixed.  

    Lubrizol is very interesting for Berkshire and man, what timing as they, like refiners, should get a nice boost off this quake.  

    Nukes/Cap – Well I have to defer to Pentax, who knows more than I do about reactors but I do feel it’s all a bit sensationalistic at the moment (could be famous last words).

    Nukes/Pentax – You don’t even like Pebble reactors?  I don’t love nukes but I do feel that they must provide a stop-gap between where we are now and advances in renewables.  Like everything else, they suffer from lack of funding because what’s been the point of researching better ways to make nuclear power when so few plants get built?  Energy research and conservation should be a top global priority for many reasons – some of which are very obvious this morning. 

    F/DC – Not really.  I expect that a 50% profit is nice, even if it does take 22 months.  You can do the BCS – it’s just a more aggressive way to play and if I see a cheap way to make 25% a year that works for almost anyone, I’ll lean towards the more conservative play.   My F play breaks even at $10.53 -that’s 33% below yours and it makes a full $3.44 at $12.50 while you need about $14 to break even. Those are huge differences and, as I try to get the point across – I would rather go 8 for 10 on 25% trades, than 6 for 10 on 50% trades because it’s the 4 you lose that kill you.  

    Wall Street/StJ – Yep, pretty hopeless and getting worse, if anything.  Krugman is just getting downright angry lately. 

    Chain Reaction/Peedle – That’s a combination of news I was watching, blogs I was reading, papers on reactors I was looking over and the "flow" of the news, which seemed to be trending towards – "not a catastrophe".  Consider that the explosion, while looking nasty – was a release of burning hydrogen through VENTS in the reactor that blew up the steel-framed building around the reactor.  That is not the same as a reactor blowing up.  It’s natural for people to see the explosion and freak out and for the rumors to fly around the World in seconds on the Web and then it’s also natural for RESPONSIBLE journalists (and there still are some) to get out there and tell you that "everything is fine" – that’s not a cover-up, it’s just reporting.  

    I may be misunderstanding how it all works but I believe that the boron rods were inserted properly into the fuel assembly and that halted the nuclear reaction but does not halt the decay heat, which is tremendous.  As I mentioned earlier, the first quarter of the heat falls off in the first hour (long gone) but the rest lasts a long, long time but the longer they go without a melt-down (heat burns through the container floor), the less dangerous it becomes.  At this point, they are pumping in seawater and that means they intend to scrap the reactor anyway.  Pouring in water where there is intensely hot metal releases hydrogen gas and that explodes very easily so the explosions are the result of the steps to cool the reactor – of course they try NOT to have an explosion but so did the crew of the Hindenburg. 

    At this point (and Pentax can correct me if I’m wrong) it’s really a question of whether or not the core melts – a la 3-mile island – at which point they have to entomb the reactor but this is no Chernobyl – where the control rods failed to stop the main fission reaction and the resulting blast blew the entire reactor apart – very much like dropping an atomic bomb.

    Oh damn, market turning very weak now.  That sucks – I was hoping for a mindless dip buy.

    If we do not hold Friday’s lows, things can turn ugly.   

  42. jromeha

    Phil, oil over the 100$ line was a great call… I’m curious why you don’t think it should be down as much today? Oil is purely speculative and we have a natural disaster threatening to shave at least a couple % points offbthe country w/the 3rd largest GDP in the world. Further, a nuclear situation which poses even more danger to japan.

  43. cnarbais

    PHIL
    FAS /25kp. Should we sell the 20 fas that we just bought if it brakes down?

  44. jromeha

    Exec- was wondering the same thing… Nearly sh!t myself last night at open with the yen futures I was short! Thank god I didn’t have a stop and held out until after BOJ’s announcement(which just erased the yens gains but didn’t cause it to depreciate much further). I’m beginning to think nothing short of the bernanke’s demise will strengthen our $!

  45. amatta

    Good morning Phil, 
    I have last weeks hedge 20 April DXD 18 C’s (net 1.30) with -20  Mar DIA 118.75 puts to finance (net 0.50)… Since we have failed the levels I am anxious about those 20 short DIA’s… I know its all premium now, but not sure if I should do anything now or sit tight?

  46. amatta

    Phil, 
    Also from last week the TSO play: 24 puts (net 1.70) financed with the sale of the 22 puts (0.81)… now with the refiners flying it’s getting killed. What to do here? 
    Thanks

  47. exec

    Jrom,
     
    Nothing makes any sense anymore.  It’s about time for the BOT’s to take over and run it up isn’t it?

  48. exec

    What a joke……use the dollar to steer the market

  49. yodi

    Made a nice catch with the CJJ 34 put sale this morning

  50. matt1966

    Phil / mindless dip buying:  me, too.  But in retrospect, how would it look if our markets closed green while Japan was burning?  Not going to happen.

  51. smala766

     Phil,
    on friday i couldn’t enter in the EDZ APR 21C .. do you think it’s goog to enter now ?

  52. jromeha

    Exec-Since I’m short that isn’t my preffered outcome… I was hoping to make money off some event like the Irish telling bondholders to piss off rather than a naturalndisaster that kills 10s of thousands. I feel guilty about the profit Im making today and I’ll probably end up donating the profit to Kiva.org to reduce those feelings…I’d like to think that’s what separates me from the Goldman sachs of the world….

  53. Phil

    AAPL/Manimal – Piper says SOLD OUT and I believe them but how much will the quake affect their supply?  I think this is very much a "sell on the news" event for AAPL because they may have lost a major supplier and, just in case, you may want to protect yourself on AAPL!  

    FAS/DC – I was thinking about it earlier but not now – blew the chance.  If anything, we’ll be selling April and rolling out unless, for some reason, we get a nice move up but not enough to let us out of our position – then maybe.  

    Alert/Mjj – It was sent at 1:40 or something and then the new one went out at 10.  The Alert is just a comment that I send by Email – you won’t miss anything if you just check here and, sometimes, the end of the prior day’s post if I do an early one.  If you are not getting Alerts at all – then go to the Member Management link, which is where it says "Mjjwo9b’s Account" at the top right corner of this page.  

    And what Pharm said! 

    F/Rustle – No, we don’t know how much the economy will slow down (probably not much) and you don’t want to be too gung-ho bullish on a short-term trade.  

    No thinking/Matt – Excellent strategy.

    GE/StJ – Very good trade idea, thanks.  

    Dollar/Exec – Amazing.  Japan just dumps $184Bn and we can’t make up ground against the Yen?  

    CCJ/Yodi – Be careful with them because Europe can go anti-nuke very quickly. 

    Gold starting to pull back. 

    Balls/Pharm – Well it’s expiration week and they were at $32.91 at April expiration so I figure $29.50 is a pretty good sale and $16.30 on XLF has held since 2/1 so I’m playing this as a quick dip below the 50 dma that was mainly brought on by rumors of WikiLeaks and the usual hand-wringing that may be dispelled very quickly.  We do have the $29 calls to sell (now $1.27) with .75 in premium so even a half sell would be nice there if $16.30 breaks.  We can also roll to the July $32s for $2 and then we can sell weeklies until the cows come home so I just can’t bring myself to hate the FAS.  

    GOOG/Gucci – Like AAPL, I don’t think much of buying GOOG stock.  You can sell 2013 $500 puts for $49 and buy the Jan $550/650 bull call spread for $43 for a net $6 credit on the $100 spread that’s $22 in the money.  Worst case is you own GOOG at net $494 in 2013 and best case is you get this $100, buy back the puts for $25 or less (net $81 profit at $650) and then take 1/2 the profits and buy another $100 spread for 2013 with no margin requirement.  

    TNK/B1 – I think a slowdown in shipping is a given now.  

    SD/Wilsons – I don’t see a lot of growth there.  If they came down maybe to $9 but not here.  

    EWJ/StJ – Yep, patience is key.  

  54. pentaxon

    You are right Phil, it’s all about a melt-down. To prevent this they have to keep the rods under water at all costs. The reactor is boiling away the water so they have to refill. Since they don’t have enough water they are using seawater. Actually not a good thing to do, but I doesn’t matter anymore they just have to prevent a drainage, because once this thing is dry for some time (probably few hours) the melt-down will start and then it is very unlikely that this toxic burning nuclear something will stay in it’s steel vessell for a long time… The important point that many missunderstand is that the water has a much more important function than cooling. It’s catching the neutrons to prevent a chain reaction (atomic bomb).

  55. zeroxzero

     For what it’s worth, anecdotally, I worked with TEPCO for years in Europe, where they inherited some power plants from a Japanese trading company they bought out.  I have never been associated with a more opaque,  immobile bureaucracy in my entire career.  The company receives checks from Japanese consumers every month and scarcely makes decisions of any kind.  Their approach to any new problem was to ignore it; taking a decision involves risks, taking no decision was never criticized internally.  In fact, they would often reach critical points in project development and simply not return phone calls or emails when they didn’t know what to do — which was pretty much always.  While it’s no laughing matter, when I realized that TEPCO was in charge of saving Japan from a nuclear disaster, I didn’t know whether to laugh hysterically or make plans to travel to another planet.  Events may prove me wrong, but if Japan depends on cool, calculated responses from TEPCO, it will be very disappointed.  Or worse.

  56. alik

    Thanks for the advise to buy PWER. They are having an excellent day so far (a short squeeze?) FNSR is also up.

  57. Maya1

    Phil,
    Good morning!
    Sell into the excitement, I did!
    But what supplier may have APPL lost in Japan? D you know e name of the supplier and what they make and also if another supplier can be substituted, in a different part of country/world?
    Of course, the loss of life is terrible!

  58. dclark41

    getting ugly fast!

  59. dclark41

    …or should that be fas!

  60. exec

    Ford gone negative….might get that trade in after all.

  61. rustle123

     with uranium stocks taking a major hit today, should we cautiously buy a partial position in some?  Looking at URG which is down over the last few weeks from 3.30 to 1.88 and Blackrock owns more than 50% of the shares outstanding.

  62. cslanson2

     Phil,
    Didn’t catch the details of the two (2) Ford plays, could you (or someone else provide a repeat?)
    Thanks

  63. yodi

    Phil, Nuke Europe saw yesterday still a discussion on DW (Deutsche Welle) All want to do away with atomic power but no one likes to be without electric and they can not switch to another energy source so quickly. Solar is unstable.

  64. tuscadog

    Phil / $8B pomo day.     Should be good for a stick this pm?   Less Japanese manufacturing likely means less exports and more manufactured here in the US (and Korea/Taiwan), so shouldn’t a neg factor for US mkts?

  65. rehat

     PHIL’s F Post

    I would think F is a good buy in the morning as Japan’s car production is hit but they sure broke a lot of cars in that quake.  They were at $14.36, which is down nicely from where I stopped liking them at $16.50 (they topped out just under $19) so I really like the short Apr $15 puts at $1 or buying the stock and selling the 2013 $12.50 puts and calls for $5.80 for a net $8.56/10.53 entry.  
    GE will make a nice buy if they have a knee-jerk sell-off (they built the plant 40 years ago) 

  66. kinkistyle

    "The important point that many missunderstand is that the water has a much more important function than cooling. It’s catching the neutrons to prevent a chain reaction (atomic bomb)."
     
    Pentaxon, I so didn’t want to read that…

  67. mjjwo9b

     Phil and Pharm:  Thanks..  I had all the correct boxes checked, but that is just chance.  Your message was routed to spam.  Why only that one?  I will set it to never spam a Phil_Mail.
    Appreciate your response.
    MJ

  68. exec

    Shadow/JR
     
    What level are you using for next strong support on IWM?

  69. williex

    Phil
     
    /I have BCS on COP 75/80 For net 2.35 I am down a little bit.  do you have thoughts on take the loss or hang on for a while.

  70. zeroxzero

     Why is DAG down?  I would think that agriculture would be rising; if China’s crops start to glow green, I would think Canada would be looking pretty good.  Paranoia regarding food contamination doesn’t seem unlikely.

  71. yodi

    Hard to judge the market today. Looks like all run in sympathy with Japan. Do not see any other reason. just like a flock of sheep. Look what happens in the Lybia, hardly any one is talking about it. Germany suspend the life extention on nukes .

  72. dclark41

    Just reported that they believe the fuel rods are melting. Sounds like they are not letting on how bad things really are.

  73. exec

    Fuel Rods Melting……BUY BUY BUY……..!!!

  74. williex

    Phil
     
    I also have sold MARCH DIA put 118.75  Worth rolling now or wait.

  75. Lincoln

     Phil: FAS
    Any way for an email alert with the recommended adjustment to FAS now that it’s getting to be a serious position?  For those of us not in day trade mode.  TIA

  76. dclark41

    Phil
    What is the worse thing that can happen in a nuclear melt down? I’m a little nervous and just feel like we are waiting for something bad to happen.

  77. Manimal

     Phil – AAPL. I agree it’s a ‘sell the news’ type of day. I spent last week scaling in for an average of $7 on the April 360s, and sold ½ this morning at $8.60 for a nice 23% gain.  I plan to hold the remainder through the announcement. 
    I did a little due diligence this weekend and walked over to the Apple Store on 14th and 10th. One could barely get to the table to hold the iPad 2 sample, let alone purchase one. I wasn’t going anywhere near the flagship store on 5th avenue for fear of a tourist mob…
     
    I appreciate your thoughts on a cover. Initially, I planned to cover ½ my position this morning but sold ½ instead. I don’t plan to cover the remainder, but for future benefit, how would you cover if needed? It’s always helpful to me to have these trades on the table to model after today’s close (if you have time). I have 15 of the calls I mentioned above remaining.
     
    PS – It made my morning Sunday to see ‘Manimal’ in the weekend post!

  78. amatta

    Phil, 
    Damn, AAPL’s reaction has now focused it seems to the issues in Japan for suppliers. 
    Again at the risk of getting an earful about never being in uncovered close expiration positions…
    I have 10 Mar 350 C’s net $7.  What do you see as the best roll and cover now that we are falling hard with the Japan news? 
    Thanks

  79. Manimal

    Not sure what happened above – I typed 1/2 into the comment thingy but "&frac12" posted.

  80. jvest

    amatta, you really are a broken record with the AAPL calls. Even at $352.80 it’s only 3% off its 52-week high, what could possibly have changed in your bullish premise?

  81. pentaxon

    kinkistyle,
    sorry for the message. anyway I meant a chain reaction like in an atomic bomb but not as fast and exposive as in an atomic bomb. However the outcome would be the similar.

  82. jromeha

    It’s amazing, I bought VIX june 20$ calls for 5$ and sold the 25$ calls for 3$ in late Jan when the VIX was at 16ish. It’s now at almost 23(up over40% from the day I bought the spread) and today is the FIRST day that I have been in the green! The spread is now at a whopping 2.07. Just some words of warning.. I know Phil has had some profitable plays selling naked puts when on thr VIX when it was low. For those of you playing I’d recommend sticking tonhis plays and not doing any callspreads….

  83. jvest

    Does anyone know how to get thinkorswim to display 50dma or 200dma in the Watch List? That would be a nice way to scan a watch list for undervalued stocks without having to bring up the chart of each one.

  84. amatta

    Jvest, 
    I apologize if it bothers you. Just trying to learn how to manage short-term plays like these…
    Well how about the situation in Japan otherwise, they would have really surged today as was what I was hoping for. So I am just trying to get Phil’s opinion on what is a good roll on the naked calls to turn into a vertical or something that is all…

  85. jvest

    Phil, not sure if you remember that list of stocks you put up to consider buying any time they pull back to their 200 DMA, but there are a few touching or below the 200dma now: FDX, GOOG, GS, HPQ, UNG, WFR.

  86. alik

    Hello Phil, would you recommend getting out of F now with small losses, or it is better to hold?

  87. Phil

    NMR, MTU/Kinki – I think they are great ideas but let them find a bottom first.  NMR is a good one around $5 for a long-term hold.  

    UUP/Morx – We went for the Apr $21 calls, still the $1 they were when we rolled.  

    Dollar/Exec – Because the BOJ just dumped (now) $285Bn of freshly printed money and I think that only made people realize that it’s not even 1/4 of what Bernanke is printing without a disaster.  

    Oil/Jrom – Because of the Saudis in Bahrain and, of course, LIbya not finished either.  By Wednesday, I will be gung-ho short as it’s time to roll the contracts but I think they will keep pushing until then so better chances to pick up .50 here and there over the line than under.  

    FAS/Cnar – Well, we have to hope this is a blow off bottom – just the bots trying to shake out the longs prior to ramping us up into expiration day.  I can only go with my gut here which says the earthquake is temporary but $285Bn dumped on Japanese banks lasts forever as does Ben’s POMO and the EU just upped the bailout ante as well so I’m still on the inflation bandwagon and under the impression that today is a great day to scare the retailers out of their positions so they can sell puts into a 22 VIX on expiration week and buy back all the callers before jamming the markets higher.  I’d love to be able to time the exact bottom but, when I do – people yell at me because I don’t give enough warning so I went early today to make sure no on would tell me they couldn’t get a fill.   I did say in the morning I expected to test Friday’s lows, right?  

    DXD/Amatta – Those DXDs are just $1.45, that’s disappointing.  The Dow, on the other hand, is 60 points over 11,875 and you collected .50 for it so if you cash the DXDs for $1.45 you have net .65 credit and you are good to break-even at about Dow 11,800 and, of course, those can roll down to even lower April or May puts.  Doesn’t seem so bad to me yet.  

    TSO/Amatta – They don’t suck any less because they caught a break but this was bad luck and may or may not reverse in time.  The bear put spread was .94 and is now about .60.  I think I’d roll the Apr $22 puts to the March $25 puts (even) as those wear out Friday and then see where that leaves you.  If it costs more than .25 to roll them back – you can do that and you are back in the original spread at $1.19 when it’s trending your way again.  Or, if that’s too much bother – just kill it – it didn’t work – you can move on.  

    LOL – Kudlow says he made a "misstatement" – he must be getting a lot of crap for it.  

    Dips/Matt – That’s just what they want you to think!  China closed up, India closed up.  We’re down because Europe fell off a cliff into the close (not sure why).  Well, not the close because of daylight savings – they have another hour with the FTSE down 1%, DAX down 1.7% and CAC down 1.3% – all at their day’s lows.   This could be because Euro and Pound are strong as Yen weakened and the Dollar is still the Dollar.  

    EDZ/Smala – Yes, I still like them.  If we don’t recover I think the Emerging markets may think twice about their positions.  

    Preferred outcome/Jrom – Well said.  You don’t have to give it all away but if you even give a little, you are a far better man than Lloyd Blankfien can ever hope to be.  We took precautions because there wasn’t enough risk priced into the market – natural disasters, terrorism, revolution, economic collapse – all were being ignored in the pricing of equities.  Nothing to feel bad about  - it was going to be SOMETHING.  

    Thanks Pentax – very good to know this stuff.  

    TEPCO/ZZ – Also good to know and very scary.  

    PWER/Alik – Hey, even a blind squirrel… 

    AAPL/Maya – Oh I don’t know but lots of chip production got hit.  I would assume AAPL is buying from the majors and there’s simply a better than average possibility of a negative impact to their shipments so prudent to get more cautious.  

    LOL DC!  

    F – Quite a ride and back to our buy point ($14.25 now) and that’s a very nice entry with the sale of the 2013 $12.50 puts and calls at $5.65 for a net $8.60/10.55 entry.  You collect that almost 50% gain even if F drops 12% over the next 22 months – that’s nice! 

    F June $14 puts can be sold short for $1 for a net $13 entry – that’s nice too! 

    Uranium/Rustle – If you want to go with a very slow scale in but I think wait for them to stop falling and, as I said above, I think the EU will probably start pressing for another ban and THAT’s when they bottom out. 

    Europe/Yodi – So what do they expect to do? 

    POMO stick/Tusca – It’s all out the window with the greater global situation but, as I said earlier – if you are a long only fund manager, what are you really going to be buying based on Japan?  Nothing right now.  What are you going to be selling? Tons of things that may not recover in time to make your Q or your year for that matter.   So we get selling first and buying second – that’s natural.  I’m for buying down here – if we fail our breakout levels – we’ll know we were wrong.  

  88. kevinb63v

    Phil,
      Thorium based reactors should be in the conversation, as well as pebble bed. Thoruim is mildly radioactive, plentiful (miners consider it a garbage material byproduct) and does not have the reprocessing/dangerous byproducts problems of uranium based reactors. In fact, thorium was originally considered as the basis for nuclear power, but the military desire for the plutonium byproduct for weapons carried the day. Thorium based reactors share the same characteristic as pebble bed, in that they are not capable of the kinds of high megawatt outputs as U based, but it also doesn’t need the huge containment construction either, so is suitable for smaller local installations.

  89. jvest

    AAPL/amatta – doesn’t really bother me, I just feel sorry for you getting stuck in the same jam over and over again.  : )

  90. yodi

    Looks like every one is drinking coffee this morning as GMCR is holding still good after last weeks crazy run up. Any comments? still holding the long Apr puts

  91. exec

    Look how they dumped the dollar into close of the European markets.   How the hell do they do that…..is there a guy sitting with a dump button.  Unbelievable.

  92. lvmoda

     UK newspaper  reporting "All THREE damaged nuclear reactors now in ‘meltdown’ at tsunami-hit power station"  Good article;  the pictures of unit 3 exploding show a mushroom cloud similar to a-bomb.

    Read more: http://www.dailymail.co.uk/news/article-1365781/Japan-earthquake-tsunami-Second-explosion-rips-nuclear-plant.html#ixzz1GagaHgBW

  93. Pharmboy

    QCOR – anyone still in them?  I would move out.  AW had a big bearish print in his article this weekend, and it is probably wise to follow the exits on them (for now).

  94. gucci

    Hi Phil — question on all major breakout level from chart this morning, all are red now, how do you monitor this,  into the closed if still all 5 red then add more disaster hedge?  or start now. or other scenario as you mention before they want to shake out the weak hand to buy back the caller and then drive up the market on expiration day, thx — POMO today is light as you mention last week too

  95. Phil

    Down goes the dollar (76.63) – the universal cure-all! 

    Spam/Mjj – Sometimes Keywords set it off.  That’s why so many Americans are unaware we are having a chicken breast shortage…  8-)

    RUT FUTURES took a nice bounce off the same 786 line they hit on Friday’s pre-market.  IWM $79 calls have pretty much no premium at $1.20 and make a fun upside play with a stop at .95.  

    Berkshire looking attractive if they hold support at $83.  March $85 calls are .50 even though stock was $85.30 this morning – that seems like a fun play to me.  

    Europe not getting worse into their close – we are just catching up.  

  96. tuscadog

    Phil / Nat Gas      This nuclear crisis seems to put the Pickens plan and the concept of more natgas power plants on the front burner?  CHK etc should now have some better years ahead?  Buy now?

  97. kustomz

    Japan’s world-renowned centre for earthquake prediction said there was a seven-in-ten chance of a tremor with a magnitude of seven or more hitting "within the next three days".

    I’m sure money is listening to this warning and would expect any dip buying to be sold into the next few days.

  98. hanna5

    Phil / All – GOOG is down to the 200 DMA at 568 or so, and is now trading at about 11x 2012 EPS ex cash. And, android is doing well. Any buyers here on weakness?

  99. jvest

     Phil, I’m curious why you quote the dollar from /DX front month rather than $DXY. (TOS has both, but you do have to put the $ in front to get $DXY). $DXY is at 76.375 with /DX at 76.665, which would seem to indicate the dollar index is actually lower than you quote but futures price in a slight recovery.

  100. mampcsA

     Phil, followed your idea and sold 16 DIA 119 puts for 1.25 (and bought back the 8 DIA 121.75 puts for a .5 loss). Is that too bearish?

  101. exec

    Kustomz/Tremor,
     
    I’m wondering if there is any scientific data that goes into these predictions or if it’s just a CYA thing.   It’s funny how they all of the sudden can predict this stuff but didn’t have a clue before the earthquake.
     
    In any case, any strong aftershocks would not be good. 

  102. jvest

     btw, go WFR!  +14%

  103. exec

    TZA April 15′s just jumped for no reason.  Might indicate that someone is getting ready to dump.

  104. stockbern

    LUV/Phil   Jan13 buy-write put entry close to  2009 Crashiversary?

  105. Maya1

    Pharmboy,
    Do you have any knowledge about ZGNX?
    They have a new product in the immediate pipeline that I do not know details of, but thought you might.
    Thanks!

  106. terrapin22

    any news on SKX?  big drop today. 

  107. Pharmboy

    ZGNX/Maya – they have an approved device to deliver a ‘tryptan’ for migranes SubQ (injection).  Supposed to be faster acting than pill, but at what price will insurance pay for it vs the generic pills?  I would like to see a few rounds of revenue first.  Their flagship is a hydrocodone for cronic pain.  Using an Elan techology, it is supposed to give better round the clock pain managment at a lower dose (decrease dose and or abuse potential).  There are a ton of players in this ‘decrease’ abuse potential area, and a patch is also out there for those who have trouble swallowing.  I am inclined to stay away for now.  See if they break through here (4.95 woudl be a support area), otherwise, buy a small allotment here and be ready to DD at ~4.  Trend is down though.  At $4, they would be a nice first rounder.

  108. jossietx

    Phil, I had sold 5 contracts of VZ 2013 Jan $30P @2.79 to fund buying 10 contracts of APR 34/38 BCS for $2.59. What’s your opinion on rolling the position? thanks

  109. rustle123

     When Goldman starts shorting the market heavily and then try to scare people out of it, do you think they will have CNBC start raising fears of Godzilla?  He was created from nuclear detonations.  I can see Cramer talking about it as he’s telling you to still buy Chipotle, Godzilla’s favorite food.

  110. pentaxon

    One thing that I did’n mention is that it is that they have to add boric acid to the water that they are pumping in to slow down the nuclear reaction. I hope they have enough of this stuff. But unfortunately I’m just reading that the fuel rods in reactor 2 are completely dry. not good. No it’s a matter of heat, of how far the reaction is slowed down and of what stuff is melting together at what time…  that’s the part of physics that shouldn’t be done only theoretically not experimentally…

  111. matt1966

    Phil / OE Week Premise:  While I have no doubt they could race us back up to trash the puts.. I just don’t think it will start today.  I will be looking for it from tomorrow forward.  However, they’ve got plenty of territory to cover so I think it should be pretty obvious once and if it starts.  We shall see!

  112. Pharmboy

    Phil – Vatcha’ tink about steel here?  Need to rebuild with something!

  113. stockbern

    Boeing   Who in the hell knew that 1/3 of the Dreamliner comes from Japan

  114. stockbern

    PKX/Pharm    Posco

  115. Phil

    COP/Willie – I an not high on the oils right now as they’ve had a big run and I expect crude to head back to the mid $80s at some point. You need a $2 gain just to get even at expiration so I’d ditch. 

    DAG/ZZ – It’s not that bad.  I really don’t like the idea of investing against a worst-case premise. 

    Melting/DC – Oh I give up – everyone just believe what they want I guess….

    FAS/Lincoln – What?  You mean send out the trade that I already posted?  That would be confusing I think.  I put it up as soon as I thought about it and, realistically, I’m never going to remember to make an Alert for every move and then that will cause major problems if I miss one so it’s not a habit I want to encourage (that people playing a hyper-aggressive portfolio do so passively, waiting for Emails).  

    Worst thing/DC – Chernobyl is pretty much the worst-case

    AAPL/Manimal – Yes, Paramus was a zoo.  I peeked over someone’s shoulder, took a look and walked out.  Wasn’t going to wait to touch one.  You don’t cover Aprils – you get out.  Covers are for when you have expectations of short-term pullbacks and longer-term recoveries but your time-frame is what, 5 weeks?  Not a lot of leeway.  Also, AAPL might fly up and then your caller burns you and then you can’t take it and buy back the caller but then they fly back down and screw you – what fun is that?  

    AAPL/Amatta – So the game is do the opposite of what I say and then make me figure out how to save it anyway?  You can’t "save" a call that expires on Friday.  This is why I said last week that if you own a call or put that you are unwilling to roll to April – you must cash it the week BEFORE expiration week.  Worst of all, you didn’t listen and you totally lucked out and AAPL opened at $8.45 this morning but that 20% didn’t do it for you and you didn’t get out even and now you are down 20% and you wonder what to do?  Do you see why I find this frustrating?  At this point, you may as well hope to get your $7 back on a reaction to the sales numbers or at least a stick on the Nas but I super doubt you will get out even if given the chance so this kind of seems like a waste of time…

    VIX spreads/Jrom – The problem is they are not real spreads, you are simple betting on or against possible target outcomes with other people – the underlying is fairly meaningless.  

    List/Jvest – Thanks, worth keeping an eye on but first we want to know that they’re stopping there (along with everything else).  Sorry on TOS – it’s all default settings for me!  

    F/Alik – LOL, you guys crack me up!  Do you really buy stocks with no intention to stick with them if things don’t go perfectly?  Doesn’t that mean you end up dumping about 50% of your entries with an immediate loss and then, even if you are 60/40 on the 50% you stick with – you still probably can’t get ahead.  Don’t buy any position, EVER that you are not willing to buy more of if it’s 30% cheaper.  That’s a good way to start.  Make every entry as if you expect to buy more at 30% off – that’s a good habit too.  

    Thorium/Kevin – I’m in favor of that.  It would be nice if we had some official Government agency that helps develop and evaluate these things but I guess it is best left in the hands of the private sector – look what a bang-up job they’ve been doing for us!  

    GMCR/Yodi – Yes but their coffee supply is just north of the nuclear site and may become irradiated!  8-)

    Dollar/Exec – I used to think you couldn’t manipulate FOREX but it seems to be happening these days.  

    Meltdown/LV – Not only that, but I heard they were storing half the Worlds gold in reactor number 4 (under the code name "Operation Grand Slam") and now it will be irradiated for a million years and the price of what’s left will skyrocket.  A leading expert explains

    Breakouts/Gucci – Well, if you are too bullish, then of course hedge.  If you are fairly balanced, we want to wait a day to confirm a move. 

    CHK/Tusca – Not cheap but always a good buy as they are an excellent company.  You can sell the 2013 $30 puts for $4.70 and buy the 2013 $25/40 bull call spread for $7.50 for net $2.80 on the $15 spread with a break-even at $28.90 and 1x assigned to you at net $32.80 worst case.  

    3 days/Kustomz – I think they always predict that after a major quake.  They’ll impress me when they actually do predict the first one!  

    And what Exec said!  

    GOOG/Hanna – Did them above. 

    DX/Jvest – Because that’s what’s on my screen on TOS.  DX moves faster and it’s been a reliable indicator so why switch?  

    DIA/Mampcs – No, that’s about where we are in the $25KP – Don’t forget, it’s all premium and it’s rollable. 

    WFR/Jvest – Gotta love those guys.  

    TZA/Exec – Good eye.  

    LUV/Stock – I have not been paying attention to them.  It’s all about fuel hedging and gate fees for the airlines and LUV used to be the best negotiator for both.  I’d go light with an artificial and sell the 2013 $10 puts for $1.20 and buy the $10/15 bull call spread at $2.40 for net $1.20 on the $5 spread and your worst case is you are in for net $11.20, just 10% off but you can work it if they fall and, if they go up, then it’s $3.80 at $15 against about $2.50 in cash and margin.  

    SKX/Terra – just going with the flow I think.  I like selling the Oct $17 puts for $1.80 for a net $15.20 entry.  Net margin looks like about $1.70 to make $1.80.  

    VZ/Jossie – It’s not April yet and they are holding $35 so how about just take out the caller for .09 and, if you have to, keep an eye on the roll to the June $34s for .50, where you can sell something else to pay for it.  

    Godzilla/Rustle – You must have missed Friday, we had the film.

    LOL – here’s another point of view from an Indian magazine:

    Top officials of Department of Atomic Energy today said the Indian civil nuclear programme will continue, without any compromise on safety parameters, and also claimed that what has happened in Japan’s Fukushima plant was not a "nuclear accident".

    "There is no nuclear accident or incident in the Japan’s Fukushima plants. It is a well planned emergency preparedness programme which the nuclear operators of the Tokyo Electric Power company are carrying out to contain the residual heat after the plants had an automatic shutdown following a major earthquake," said S K Jain, the Chairman and Managing Director of Nuclear Power Corporation.

    "Once the plant shuts down after an emergency situation automatically, the fission reaction stops and it is only the residual heat that has to be quenched and that is what the Japanese were doing," Chairman, Atomic Energy Commission, Dr Srikumar Banerjee said.

    "Because of the unprecedented tsunami, the external power was unavailable for the emergency diesel generators to take over… During the process the pressure was building up in the reactor which had to be released in a phased manner. Which resulted in the exothermic reaction due to hydrogen generation," he said.

    "It was purely a chemical reaction and not a nuclear emergency as described by some section of media," Banerjee said. (MORE)

    See – do enough reading and you can "prove" anything….

  116. mrmocha

    QCOR - Thanks Pharm, even though I’m out (at 16, luckily), your ongoing updates are always appreciated.

  117. hanna5

    GOOG – whoops! thanks phil! just found that! nice trade idea! sorry was gone this morning and scanned the comments but should’ve looked harder. 

  118. Phil

    Steel/Pharm – Had they not shot up on Friday, I would like them.  I think MT is best at the moment at $34.64.  Artificial so you don’t get burned and you can sell the Jan $30 puts for $3 and buy the $30/40 bull call spread for $4.75 so in for $1.75 and worst case is you own 1x at $31.75 and you are starting out $4.65 in the money.  

    BA/Stock – That’s all they need.  

    Only 80M shares traded in this mess at 1:40 on the Dow – very stickable and good for EDZ if we don’t.  

  119. mrmocha

    Covester - any of you guys use it?  Opinion?  It would be great if Phil would just put the 25KP there for those of us that miss half of his trades due to workload.  I see the Phil’s friend Tim Sykes has a portfolio…

  120. pentaxon

    it’s only that this "residual heat that has to be quenched" can melt together your fuel rods – or your control rods out – or it can melt your fuel rods to drop on the floor of the reactor. whatever melting it will be – once the critical mass of fuel is melted together somewhere the chain reaction starts again… and this time in a sligthly less controlable way, as the chairman would probably call this then.  I don’t say that this has to happen. As I said earlier it’s a matter of heat, geometry and so on. But unfortunately the reactor seems to be quite hot still.

  121. Phil

    11:10 AM A mild boost for already strong Treasurys in the wake of a Fed purchase of $7.56B worth of notes maturing 2018-2021, of $24.583B offered by dealers. The 10-year yield -0.07 to 3.34%; 5-year -0.105 to 1.95%; 2-year -0.06 to 0.58%. 

    12:00 PM On the hour: Dow -1%. 10-yr +0.14%. Euro +0.51% vs. dollar. Crude -0.84% to $100.30. Gold +0.3% to $1,426.20.

    1:00 PM On the hour: Dow -1.1%. 10-yr +0.48%. Euro +0.63% vs. dollar. Crude -0.89% to $100.25. Gold +0.2% to $1,424.

    The Fed Open Market Committee meets tomorrow and probably won’t change a thing, but with the pendulum swinging in Europe, for how long can that stay the case? Maybe a while longer, Ryan Avent says, with the arrival of a sudden gust of headwinds

    The Dow crosses 100 points down and the S&P 500 legs down to -1.2% as volatility rises and Japanese ADRs are among those leading consumer cyclicals lower: Sony (SNE) -7.8%, Makita (MKTAY) -6.6%, Toyota (TM) -5.5%. Mild gains for precious metals are fading (gold +0.2% to $1,424; silver +0.3%), but: platinum -1.1%. Crude -1.5% to $99.65. 

    Calling U.K. efforts at lowering its budget deficit a "strong and credible fiscal consolidation program," Fitch reaffirms Britain’s AAA rating. The largest risk at this point would be an economic slowdown that undermines the budget cuts and puts the banks again at risk.

    Gaddafi’s army continues to overwhelm the opposition, retaking the oil port town of Brega. While rebel General Abdel Fatah Yunis calls the retreat a "tactical withdrawal," loyalist forces appear to have their sights set on Benghazi. U.N., NATO, and the G8 continue to discuss a response.

    Angela Merkel puts a three-month moratorium on Germany’s extension plan for 17 nuclear plants, to enable an extensive safety review with "nothing taboo."

    More on the latest fuel rod exposure: Chief Cabinet Secretary Yukio Edano says it’s "highly likely" nuclear fuel rods are melting inside all three of Fukushima’s reactors.

    With speculation high that Japan will spark natural-gas buying, the fuel is spiking around the world, as much as 7.4% in the U.K. Natgas up 3.5% in the U.S., to $4.028, but support there should be "short-lived as the U.S. market is not a competitive bidder for spot cargoes," Barclays says. 

    Calling the Japan quake "a terrible tragedy," Jim Rogers says the panic represents a buying opportunity in, what else … commodities. With nuclear plants shut down, Japan will have to import more oil and gas, and the rebuilding effort will lead the next great surge in copper demand. JJC -1.3%, COPX -0.9%

    Speaking after Japan formally asks for "expert missions" to help stabilize nuclear reactors, IAEA chief Yukiya Amano says there is little chance this crisis could turn into another Chernobyl, noting differences in the design and structure of the Fukushima plant. 

    The iPad 2 (AAPL +1%) has a Qualcomm (QCOM -0.9%) chip, as does the Motorola (MMI -2.3%) Xoom and the coming iPhone 5. Michael Dawson thinks that means QCOM revenues and the stock are set to spike

    Apple (AAPL) may have sold closer to 1M iPads over the weekend, says Wedbush’s Scott Sutherland, one-upping Piper Jaffray’s estimate of 400K-500K units. Meanwhile, J.P. Morgan warns of a tablet bubble where supply outpaces demand by 36%. AAPL +0.3% today, running against a tech sector and Nasdaq that are both down about 1%. (earlier

    After its giant mergers have tended to disappoint investors, Pfizer (PFE +3.1%) starts looking the other direction – with plans to spin off big businesses like its consumer health and generic-drug units, Sanford Bernstein says after talking to the CEO. The deals could contract the revenue base 40%, but focus the company by shedding underperformers. 

    Three lunchtime reads:
    1) Contrarian’s trouble with new bubble
    2) Contemplating Japanese investment during these devastating times
    3) Krugman: Another inside job

  122. pentaxon

    pumping sea water into a reactor "is a well planned emergency preparedness programme"? really? then those "nuclear power plant manuals" are another source of scare… (come on)

  123. Lincoln

     Phil: 25 KP clarification
    OK, I knew my request re: email was dumb as soon as I submitted it.  It’s just that several of these trades have required very fast adjusting which I wasn’t expecting to be the case in this portfolio.  
    " So, prepare to be bored!  In this way, my small, aggressive portfolios can be a trick as we end up using a lot of those boring, low-risk, highly hedged strategies I preach about constantly – even as we are trying to make 300% in a year."
    I’ll wait for more of those "boring" strategies as we go forward :)

  124. cwan120

    Can someone re-post Phil’s trade on F?
    At 10:35, Phil responded dclark41′s question at 9:09 by comparing two trading strategies.  I found it very educational.  But I missed Phil’s original trade on F.
    Apology…  I am way behind in reading…

  125. hanna5

     CSCO – Wow you can sell some 2012 puts on CSCO for great entry prices, and not so much margin. Great looking trades for anyone who wants to own CSCO between 14.3 and 16 or so…depending on whether you sell the 15 puts or the 17.5 puts. Or, you could get more aggressive and use the proceeds to buy a call spread.

  126. rustle123

     Here comes the stick.

  127. amatta

    Phil,  AAPL
    LOL, no I am not doing the opposite you recommend.
    To clarify I did get out of the 7 350 C’s this morning on the spike at $7.80 as was the plan (well I was hoping to get out at $9 or above but with the Japan thing the shares did not rocket up as they would have if the market would have been green this morning). So all in all I ended that play I had been working on for 3 weeks for a net gain of $450.
    Then greed kicked in when I saw it went up to 8.50 in 2 minutes after I sold and then down to 6.50, so I scaled in with two rounds of 5 calls each for net $7.I immediately realized it was a foolish and greedy play. 
    Anyways I’ll quit bugging you with it, and try to get out even on my own.. ;-0

  128. rossmanmd

     any suggestions for earnings play for LULU on thursday?

  129. scottmi

    F/Solar – Ford solar project.

  130. stjeanluc

    CSCO/ Hanna5 – Honestly, I am not getting into CSCO until the next earnings! Great company, broken stock IMHO. I want to see some positive momentum before I put money into them. The last 4 quarters have been good for a 20% whack! 

  131. jvest

    Phil, Fedex (FDX) has earnings this Thursday 3/17. They’ve pulled back sharply from a high of $98.52 at February opex to sit on their 200dma at $88.31 today. You’ve said recently to bug you for ratio backspread plays around earnings. Just wondering if you have any ideas for this one.
     

    From thinkorswim — 11:54 AM Eastern Daylight Time, 03/14/2011 (MidnightTrader) — FedEx Corp. (FDX) tumbled out of the gate and is trading at a session low of $87.55, down 3.48%, despite an upbeat note from Deutsche Bank, reiterating a "buy" rating on the stock on the prospect of strong earnings growth this year.
    Analyst Justin Yagerman discounted FedEx’s sharp cut in its quarterly profit forecast on higher-than-expected fuel costs and severe winter weather. While the quarter was hurt by fuel prices, he said full-year earnings for the fiscal year ending in May should not be hit as much, because of the company’s fuel surcharges.
    The company is guiding for Q3 adjusted profit of 70 cents to 90 cents per share compared with an earlier forecast for 95 cents to $1.15 per share in earnings.

  132. Phil

    Covester/Mr. M – No options. 

    Boring/Lincoln – Well when the market gets crazy, we have to shift strategies.  You can opt not to go with the unhedged positions or with shorter-term positions.   I would love for the market to get boring again but, so far, no luck. 

    Speaking of boring – can you believe how long they made us wait for the stick? 

    F/Cwan – See above. 

    CSCO/Hanna – Yes, a great time for put selling.  I may have said this before but selling the 2013 $15 puts for $1.70 is net $1.50 in margin so over 100% upside at $15, which is 15% lower than we are now with a b/e way down at $13.30 and that’s the kind of slow, boring trades Lincoln should be looking for! 

    AAPL/Amatta – I’m happy to help (usually) but it does drive me nuts to see you doing this stuff over and over.  Fortunately, we now have the late pop we expected and we’re back to $6.50 on the calls so I am fully confident you have a .25 trailing stop in and are thrilled to have gotten a little back already. 

    LULU/Ross – That stuff is like crack for rich women so be careful.  I don’t see any good plays on them because it’s not obvious what they’ll do and there’s no particularly clever spread with a high probability of success.  

    TIF, on the other hand, has a nice spread between the Aug $65s, now $3.20, selling the Apr $60s at $2.70 for net .50 on the $5 spread.  It’s a bearish play looking for them to have trouble holding $60 on earnings (tonight) and figuring we can roll out of trouble if they head up.  

    CCL has got to be hit by fuel and food costs so I like selling the 5 Apr $40 calls at $1.60 ($800) and buying 4 July $42 calls for 2.15 ($860) for net $60 and that one is good for the $25KP.  

    ADBE also has a fun spread for the $25KP, buying 5 July $35 calls for $2.30 ($1,150) and selling 5 Apr $33 calls for $2.05 ($1,025) for net $125.  

  133. Phil

     IWMs were a bit of a disappointment at $1.50 but I do hope people take money and run!  

    FDX/Jvest – Well I guess we’re worried about fuel costs for them too.  I would not play the earnings on them – could go either way – but the Jan $75 puts can be sold for $5.10 and the Jan $80/90 bull call spread is $5.70 so net .60 on the $10 spread that’s $8.50 in the money with a break-even at $75.60 is not a bad way to play this one if you can be a little patient.  

    Oil $101 so Yay!, I guess….

  134. cnarbais

    PHIL:
    ADBE 25kp … Did you mean buying  5 35 calls  ( not 435)

  135. pentaxon

    Phil, all major breakout leves failed, and it looks like they don’t recapture them back today. When should we turn really bearish?

  136. Phil

    AAPL/Amatta – That’s about buyers, not suppliers.   Still, I would almost trust Piper to say something if it were a concern.  Almost.  

    2:00 PM On the hour: Dow -0.91% to 11934. 10-yr +0.42%. Euro +0.2% vs. dollar. Crude -0.82% to $100.33. Gold +0.24% to $1425.20. 

    Down sharply at $98.50 earlier this morning, crude reverses and is green on the day, the April contract at $101.08/barrel. The move could be little more than buyers stepping in after oil fell 8% in the previous 5 sessions, or possibly due to escalating tensions in the Middle East.

    Shaw Group (SHAW -15.6%) tops the NYSE’s biggest decliners on concerns that its nuclear power plant projects could be in jeopardy. A D.A. Davidson analyst warns that although nuclear power does not account for a huge portion of Shaw’s current earnings and revenue (less than 10%), it’s a large part of future growth possibilities (almost 50% of its backlog).

    Woo hoo for my favorite!  And the NYSE’s top gainer is MEMC Electronic Materials (WFR +11.4%) on speculation that demand for the company’s silicon wafers could increase. Japan accounts for ~50% of the world’s production of semiconductor wafers, and analysts expect supply disruptions. MEMC has manufacturing facilities in the U.S. and other parts of Asia aside from Japan.

    Even as many await the traditional surge of home buyers and sellers in the warmer months, analysts say it will be at least another year before there’s any solid improvement. Even NAR’s Lawrence Yun says "there are too many vacant homes and excess inventory in the system now to create a stronger housing market."  

    Not wanting to buy commodities outright because its participation would drive up prices, China’s foreign currency reserve manager has quietly built stakes in FTSE 100 firms worth 0.74% of the index’s capitalization, the bulk of the money going into energy and materials stocks

  137. gucci

    ADBE — is it buy July 35 call for 2.30 and buy 4- or 5  thx

  138. ultyguy

    Cnarbais……..it’s just a typo.  the 4 is supposed to be $.

  139. tuscadog

    Phil / no pomo tomorrow.   Given weak bounce today with $8B pomo, maybe prudent to be fully hedged going into tomorrow as levels threatened?

  140. Phil

    ADBE/Cnar – Thanks – yes it is $35 calls – fixed now.  

    Bearish/Pentax – Yes, very sad.   If they can’t get back over tomorrow, we have to really think about a major downside move.  I will be very surprised if we aren’t back to Dow 12,200 and S&P 1,300 on Friday.  

    Transportation stocks are among the day’s worst performers as worries about a slowdown in global growth intensify. All 20 stocks in the Dow Transports are lower, especially railroads and shippers: KSU -2.1%, UNP -1.3%, CSX -1%, NSC -0.8%. Also in the red: FDX -2.6%, EXPD -2.2%, R -1.8%, UPS -1.6%, JBHT -1.2%.

  141. craigzooka

     This would we a lot of extra work for someone, but you could set up a TOS playmoney account and keep track of the 25k portfolio that way. 

  142. kustomz

    I used to do a lot of shipping with UPS back from 2000 till 2004 and used to pay 6.60 for a 3lb package to LA, same package shipped today is 16 dollars.. amazing how companies can offer free shipping…like zappos (AMZN) for instance

  143. Phil

    Good opportunity to get SHAW as a long-term play.  Jan $35 puts can be sold for $6 to pay for the Jan $30/40 bull call spread at $4 which is a $2 credit on the $10 spread that’s $3 in the money and worst case is you own 1x at net $33 – the current price.  

  144. Lincoln

     Phil: ZZZZZZZZZZZZZZZZZZZZZZZZZ
    Booooooring, CSCO puts, CCL and ADBE spreads.   Actually that’s more my speed.  Maybe I’ll just sell 666 CSCO put contracts to make my 100K  :)
    cheers

  145. cwan120

    CCL in $25KP / Phil: I never understood those diag spreads.  I’d appreciate it if you can educate me.  Is it a bearish trade?  How does it work?  Is it due to the delta on the April short calls higher than the July long calls?  And why not trade a bear call vertical?
    Sorry about so many questions.  Frankly, I take $25KP more as a learning and educational thing, and use the opportunity to learn how such trades work.
    Thanks!

  146. Phil

    Tomorrow/Cnar – Would be prudent but would not feel right.  Still seems like a shakeout day to me.  

    TOS/Craig – Great by me if someone wants to. 

    Shipping/Kustomz – I don’t get them at all.  They ship anything 2nd day all year and we pay $77/year.  How the hell do they make money on that?  With AMZN the big issue is sales tax now – the states are really not going to let this go anymore.  

    Boredom/Lincoln – Many chances to be bored and make 20% a year.   20% a month – not so much…

    3:00 PM On the hour: Dow -0.82% to 11,945. 10-yr +0.35%. Euro +0.23% vs. dollar. Crude -0.01% to $101.15. Gold +0.29% to $1,425.90.

    The proposed settlement between state attorneys general and the mortgage servicing industry would help, not hurt, the economy, Paul Krugman asserts. Pro-banker politicians will denounce it, but Krugman says they’re defending "a system in which only the little people have to obey the law, while the rich, and bankers especially, can cheat and defraud without consequences."

     

     

  147. stjeanluc

    Craig, any updates in Craigbot today? 

  148. cnarbais

    PHIL
    On the CCL 25kp  Ratio Spread 4/5   When I enter the order It shows a bid of 30 and ask  of1.20 .. I always get lost there with ratio spreads…. should I enter a limit credit of $ 0.60?

  149. stjeanluc

    You would think that they would have worked this out by now:
    http://www.engadget.com/2011/03/14/ios-daylight-saving-time-woes-continue/ 

  150. yodi

    Phil For my math it would be 125.00 not 25.00 or am I wrong?
    ADBE also has a fun spread for the $25KP, buying 5 July $35 calls for $2.30 ($1,150) and selling 5 Apr $33 calls for $2.05 ($1,025) for net $25.  

  151. Pharmboy

    ADBE/yodi – net $25/option, so yes $125. 

    CCL/cnar – yes, $60.

  152. Phil

     CCL/Cwan – That one we’re selling more than we’re buying so it’s more bearish than ADBE, where we’re more playing for the simple Theta advantage PLUS the fact that I don’t think they’ll pop $35.  With CCL, the stock is under $40 and I think (as I said) that they will have input cost issues and an inability to pass on higher prices so we’re playing for a disappointment but you never know (maybe huge profits from booking ships in Euros) so a ratio backspread is most flexible.  It’s my opinion that the only reason the April $40s are $1.60 is because of earnings and, if CCL isn’t over $40 after earnings, I expect them to fall below $1 but the calls we are buying, the July $42s have a whole other earnings to hide behind, which should somewhat support their value, even if we drop.  

    Since we are paying net $60, anything down is likely to be a winner and even if the stock jumps 10% to $44, that would only put the $40 calls at $4 while the July calls (with a delta of .42) should gain $1.60 so .40 x 4 loss on 4 ($160) and a full $200 loss on the uncovered short call is a risk of $360 if CCL pops 10% but, even then, there are many ways we can shift the position and roll out of trouble between now an July.  So, we win on a flatline, we win on a move up of less than $2 (5%) – because all we have to do is give the callers back the $1.60 they gave us – and we win if it goes down.  The only way we can lose is on a 10% pop and we can see ways out of that.  Now do you see why I don’t explain this every time I make a trade?  

    CCL/Cnar – I do not find it very effective to order the spread.  I generally just try to get a good price on each leg.  With an uneven spread it’s fairly impossible to get  a fill from the broker on the whole trade.  

    Time/StJ – Mine looks fine. 

    ADBE/$25KP, Yodi – You are right, I missed the $100.  The spread is $125, not $25.  

  153. matt1966

    Well.. looks like they want to finish the FAS flat for the day.  Which is really unbelievable.  But, I’ve seen even more unbelievable things!  Another really low volume day.  Not that they care.  Anyone selling is quickly being absorbed.  They managed to contain the Japanese damage to our market better then the Europeans.  Of course, they’ve  got more fun money to throw at the ‘problem’.  What a racket.

  154. lvmoda

    I wonder what the half-life of this reactor fear will be in the market.   Another day or two…all discounted by the end of the week, I suspect.

  155. exec

    Matt,
     
    Only 3 things to say……Buy…Buy….Buy…..the F’ing dips.

  156. matt1966

    Looks like they’ve got us pointed to the moon for the rest of the week.  Yipee.

  157. exec

    Close here makes it quadruple bottoms…….my spidey senses are warning of strong bounce.

  158. jromeha

    Copper up 6 cents since 11 am, what a CROCK!!! Thought I would make some cash shorting at 4.20 but obviously they have other plans… I guess it must be expected demand from new houses being built in Japan?!!!?

  159. hoss18

    RE:  BTFD    As I watch today, my feeling is the famous line, "Hold your fire till you see the white’s of their eyes!"  We aren’t seeing that in Japanese crisis yet.  The world’s third largest economy just stopped for a week….and we’re only down 50?
     
    Staying slightly bearish and waiting for Phil’s from there…..

  160. Phil

    LOL LV!  That would be an interesting thing to plot.

    Dips/Exec – When people can say BTFD and everyone knows what it means – then the markets are well and truly fixed!  

    Yipee is right Matt – this was not the week I wanted dip buying to fail. 

    Well that was an interesting day.  Transports down 1.43%   SOX were a star, down just 0.18% – everyone else down about half a point so now it’s up to Asia to carry the ball but, if they do – then an EU bounce can give us a nice gap-up open.  

  161. matt1966

    .38%, .48% & .54%.  That’s all ‘they’ are willing to tip their hat to the Japanese today.  ‘They’ have no time for reality.  Not when their is money to be made! 
     
    This market is so far removed from reality that it’s like Fantasy Investing.

  162. Ultraman

    You wonder what Montgomery Burns and Homer Simpson would do with this nuclear plants issue?

  163. gucci

    Hi Income trader could you give the strike for April iron condor, your comment cannot be read thank

  164. Phil

    Loyalist forces in appear to have retaken Zuwarah, one of the last remaining rebel-held towns in Western Libya, amid reports of residents fleeing their homes under heavy shelling attack. "By the time world powers agree on a response … Gadhafi’s forces may have already secured victory," says an analyst.

    The passage of each hour reduces the risk of a meltdown that could cause a serious radiation release. "The longer it goes on, the better the situation," says a nuclear expert as the natural decaying process means the amount of heat the fuel produces drops dramatically with time.

    Japanese automakers have virtually stopped production, but the disaster also is bad news for U.S. carmakers that soon may be coping with parts shortages. Some affected component plants supply unique parts for U.S.- as well as Japanese-built cars, and the process of rebuilding the supply capability "is not [just] a matter of days or a couple of weeks." F -0.3%, GM -0.5%

    GE (GE -2.6%) shares drop more than 2%, although analysts begin to speak out that the decline is "excessive," given GE’s limited exposure to financial losses due to problems with Japan’s nuclear reactors and that its nuclear power business represents just 3% of GE sales. Barclays believes “GE’s liability for the issues in Japan as a supplier are contractually zero.” 

    Some analysts see Berkshire Hathaway’s (BRK.A -1.2%) $9B acquisition of Lubrizol (LZ) as inciting similar deals, but only one stock has surged: NewMarket (NEU +11.7%), seen as one of Lubrizol’s closest competitors. Analysts also point to Omnova (OMN +0.1%), Penford (PENX +0.5%), Huntsman (HUN -0.3%) and Solutia (SOA -0.4%) as possible buyout candidates.

     

  165. Pharmboy

    gucci –

    Income Trader is initiating the following Iron Condor trade for the March cycle in the virtual portfolio –

    Small Portfolio

    -15  RUT  APRIL11  880C

    +15  RUT  APRIL11  890C

    -15   RUT  APRIL11  680P

    +15  RUT  APRIL11  670P

    Net Premiums $1.15 to $1.25

    Large Portfolio

    -50  RUT  APRIL11  880C

    +50  RUT  APRIL11  890C

    -50   RUT  APRIL11  680P

    +50  RUT  APRIL11  670P

    Net Premiums $1.15 to $1.25

  166. exec

    Matt/Moon,
     
    Yep……I’ve seen this script before.  We just shrugged off two days of horrible news like it was meaningless…….as always…..nothing else matters except the dollar….which our markets once again tracked beautifully.
     
    Let’s face it….. the wizard behind the curtain that has his finger on the dollar lever……and his stage hands the BOT’s…..had a masterful performance……they flawlessly orchestrated the anti-crash script despite the weighing news.
     
    Mathew….you will listen and  will buy the dips or else you’ll get the hose again!!!

  167. scottmi

    Nuclear – lvmoda, yes let’s hope so. heck, this might even become a triumph for nuclear safety – been hit with the worst, and no radioactive disaster. I am disappointed in merkel’s 3 month moratorium – just more FBP ("Fear Based Pandering").

  168. zeroxzero

     The only positions that make money for me are the ones I don’t have when I wake up, and which I get rid of before the market closes.  I’ve suffered a complete loss of prescience since A/ Gaddaffi started winning, B/ the Euro got perky again, C/ Japan took a bath — take your pick!  It’s  OK to make a little scratch as "Joe the day trader" but Im accustomed to having a false sense of certainty and I miss it.

  169. exec

    What a crock of shit…..was going to buy some TNA in after ours and they ran it up a half percent.

  170. cwan120

    Thanks Phil for your detailed explanation on the CCL back ratio.  I’ll copy & paste that comment into my PSW-must-read-again file.
     
    As I said earlier, I watch $25KP as an educational tool.  I appreciate very much your thinking process, especially when a trade moves against you.  That’s what PSW is about: EDUCATION!  Thanks again a lot.

  171. matt1966

    exec, LOL!  Pretty scary..  If you missed out on TNA, there is still time for FAS.  It dropped AH!  But I’m waiting until tomorrow..

  172. yodi

    I Pad-2 I asked the question yesterday way would I stand for hours in line to buy it just wait a bit longer it possible even gets cheaper. Are these people crazy???

  173. exec

    Matt,
     
    I’m waiting also.  They’ll probably run it down in premarket to screw everyone that bought in afterhours.

  174. leonf675

    Pharmboy/Income Trader:   Does it mean they are going to close the current March-cycle trades or keep them in around in hopes of them expiring worthless?   Will Income Trader maintain this trader and any future adjustments on their tab?

  175. exec

    Here’s something to ponder that you won’t see widely reported.
     
    Has anyone wondered why our government encouraged the Libyan rebels to rise up against Qadhafi only to sit back and do nothing substantial while the protesters get slaughtered in a one sided massacre?
     
    Think about it.  We all know that our politicians are the biggest hypocrites on the face of the planet. (both parties).  So when you hear all there bullshit about why we’re not taking on an active role in preventing the slaughter you can’t take them at face value.  This all leads back to one thing……Oil!  They may be hypocrites but they’re not stupid. 
     
    Suppose we went in and helped the opposition and suppose they prevailed.  That would send a pretty clear message to the populous of Saudi Arabia who are chomping at the bit to over throw that regime.   There is no way in hell that the USA or any other oil loving country is going to assist in over throwing King Tut and the boys when they start slaying their people.  He may be a rotten greedy money loving Dictator……..but he’s our Dictator!!!
     
      No blood for oil baby.

  176. Pharmboy

    Leon – I think the prudent thing is to get rid of the March P side at 5-10c.  Why risk the implosion of the market.  Did not happen today, but who knows.  I will try again tomorrow.  Otherwise, maybe use a few $ and buy some downside protection.  There is so much downside risk right now……I am legging into their new one at the high price, but only a 1/3 entry. 

  177. amatta

    Phil, 
    On the CCL play if at April expiration we are at $44, wouldn’t the 40 Callers be at $4 (gained $2.40) while our profit in the $42 calls of $1.60 would offset to leave us with a $.80 loss on 4 plus the $2.40 on the naked caller result in a a max loss of $560?

  178. craigzooka

     I wanted to wait until the market was closed to post this,  Here is the Craigbot3000 report for last week.

  179. craigzooka

     hmm, thats weird.  If it is a post that I created then I can put pictures in the comments.  If it is a post that Phil created I can’t.  I am going to email Ilene and see whats up.

  180. craigzooka

     Phil, would it be ok If I put a summary once a week of the trades the Craigbot3000 made.  It would be availabe to premium members only.

  181. craigzooka

    The Idea would be to put a post up on the main page over the weekend or on Monday after the market closes of the previous weeks performance.

  182. Phil

    Portfolio/Craig – You’ll have to call me to talk about that but I’m sure we can work it out.  

  183. stjeanluc

    Good editorial:
    http://www.washingtonpost.com/opinions/what-if-were-not-broke/2011/03/11/ABhFE6T_story.html
    Summary:

    We have an 8.9 percent unemployment rate, yet further measures to spur job creation are off the table. We’re broke, you see. We have a $15 trillion economy, yet we pretend to be an impoverished nation with no room for public investments in our future or efforts to ease the pain of a deep recession on those Americans who didn’t profit from it or cause it in the first place.
    As Sen. Al Franken (D-Minn.) pointed out in a little-noticed but powerful speech on the economy in December, "during the past 20 years, 56 percent of all income growth went to the top 1 percent of households. Even more unbelievably, a third of all income growth went to just the top one-tenth of 1 percent." Some people are definitely not broke, yet we can’t even think about raising their taxes.
    By contrast, Franken noted that "when you adjust for inflation, the median household income actually declined over the last decade." Many of those folks are going broke, yet because "we’re broke," we’re told we can’t possibly help them.

    Give Boehner, Walker and their allies full credit for diverting our attention with an arresting metaphor. The rest of us are dupes if we fall for it. 

  184. Maya1

    Pharmboy,
    Sorry if I posted this already…
    Do you have any knowledge/ interest in ZGNX?
    They are waiting approval on a new formulation of some drug?
    Buy here?
    Very volatile though! Maybe it was the day for volatility and nor the stock.

  185. scottmi

    Fukushima info - Good source for running info at Greenpeace

  186. Kwan

    Microsoft is killing its Zune player due to "tepid demand".
    ‘Bout time.

  187. Kwan

    Here’s a link to Craig’s post. I just dug it up because I’ve been waiting for you to write something up :)

  188. Kwan

    On second thought, that may not have been the post you were referencing – apologies if so.

  189. vic55

    Any news from Japan? Futures are dropping like a rock

  190. judy

    blast at the nuclear power plant – people within 20 miles to stay in doors

  191. judy

    nekkei stopped

  192. z401

    NIKKEI down another 6%

  193. mampcsA

     Hang Sheng is in free fall too (down 800 points already). Might be ugly on Wall Street tomorrow.

  194. judy

    radiation in kanagawa near tokyo at 9 times normal levels

  195. judy

    that is the far side of tokyo, if yahoo is right.
    however, in a ct scan you get about 100 times that amount.

  196. vic55

    There are two factors involved radiation levels and time spent in radioactive area.

  197. scottmi

    Fukushima – best writeup i’ve seen so far: Dr. Josef Oehmen article.

  198. kinkistyle

    Pharm: A morbid time to ask but any thoughts on Cleveland Labs (CLBI)?  They are supposedly the go to biotech for radiation sickness treatment.

  199. lvmoda

     Nikkei Futures down 1000 to below 8000.   Listening to an expert on CNN, there is a belief among experts that reactor 2 is in uncontrolled meltdown, with fuel pellets released from the rods to the floor where they are heating up in uncontrolled fission.  The risk of another hydrogen explosion compromising the reactor chamber is great, so the seawater solution is not only not working but increasing the risk of a major release of radioactivity.   My personal interpretation of the experts commentary is that its too late to prevent the reactor 2 core meltdown – its already happening – and that the chamber is reheating not cooling, with hydrogen continuing to be created under pressure posing an extreme contamination threat.  Actually, 1000 points down in the futures is modest if indeed this is the situation at hand.

  200. Pharmboy

    Kinky – they are 1 of 5

  201. 1020

    Fukushima - A 12 mile Radius?  http://www.youtube.com/watch?v=zDAmPIq29ro   Bastards……

  202. Pharmboy

    maya – post is here from earlier today.

  203. 1020

    Dr. Oehmen - No Thanks…..Trust an "expert" and you just might die….

  204. edro00

    Anyone selling futures?

  205. yshenhar

    NIKKEI down 13%!!

  206. escohen5

    I sold a couple of /TFH1 a few hours ago….

  207. Phil

    Holy Crap!  

    Check this out – ZZ called it earlier as did Pentaxon this afternoon!  

    A 3rd explosion hits the Fukushima nuclear station, this time damaging the #2 reactor. While TEPCO is publicly circumspect about the damage, an industry insider relates, "they’re basically in a full-scale panic … they’re in total disarray, they don’t know what to do." Nikkei -6.9%. S&P futures -0.7%.

    The likelihood of a nuclear catastrophe rises as the explosion at the #2 reactor damaged its steel containment structure. Workers may need to be evacuated from the plant, meaning the nuclear fuel in all 3 reactors could melt down, leading to an unfettered release of radioactive material.

    Concern rippled around the world, fueled by a seemingly slow initial response by Japanese authorities. Executives from Tepco, which operates the complex, looked visibly shaken as they acknowledged in a press conference that they still weren’t sure how severe the damage was, or how much radiation could leak out. Japan’s government only established a task force to oversee the problem shortly before 6 a.m. Tuesday morning.

    Sorry guys, of all things I feel for BS and trusted the Government, who it seems were lying to us!  

    A one-year-old boy is checked for radiation exposure near the Fukushima plant

    Our futures are down about 2% now and we are going to be coming right across our Breakout 2 levels of Dow 11,600, S&P 1,260, Nas 2,675, NYSE 7,935 and the RUT will be well below 780.  I wish I could say this is a good time to cash in our disaster hedges but who knows now – this is kind of unprecedented other than Chernobyl.  

     

    "If you can continue to cool the reactor, and if the containment vessel is not broken, we will be able to eventually put this under control," said Masashi Goto, a former plant engineer for Toshiba Corp., part of a team that designed the containment structure for the Fukushima Daiichi reactors. "But the current situation is still very unstable," he added.
     
    In a worst-case scenario, fuel pellets from the damaged fuel rods settle to the bottom of a reactor pressure vessel, fuse into a molten, radioactive mass and begin to burn their way through the essential steel encasement.
     
    If they burn through the reactor pressure vessel—akin to a giant, suspended steel thermos container—they are released into the containment structure, like a thermos inside a steel lunch pail. If the integrity of that structure is violated, radiation can escape to the outside in large amounts.
     
    Thus, the containment structure, which is built of steel and concrete, is the last line of defense in terms of isolating radioactive material.
     
    No nuclear plant of this design has ever reached that worst-case scenario, but the problems at Fukushima Daiichi bring the industry closer to that pass than most engineers thought likely.
     
    "It’s been designed to contain almost anything," said James F. Stubbins, head of the nuclear engineering department at the University of Illinois. He said so far the containment structure appears to be working.
     
    Murray Jennex, a nuclear power expert at San Diego State University, agreed.
     
    "This is not a Chernobyl. The difference is Chernobyl did not have a containment structure, which these plants do," Mr. Jennex said.
     
    But Edwin Lyman, a physicist at the Union for Concerned Scientists, an environmental group that has been critical of nuclear power in the past, said containment vessels such as the one at Daiichi are known to be vulnerable to failure if melted nuclear fuel reaches the bottom of the reactor.
     
    "That would essentially mean a large radiological release to the environment," he said

     

     

     

    This is a terrible tragedy – our prayers go out with all the people of Japan.  

    They still don’t seem to have firm information – BBC says levels of radiation are 4 times legal limit, not hundreds of times as being reported elsewhere.

    One lesson here is, no matter what the government says, if a nuclear plant has an explosion within 100 miles of your home – it’s time to head the other way for a vacation!   

    Even as I write this, our futures are down 2.5% – well past where we need our levels to hold.  We’re into lunch time in Asia and the Nikkei is now down 1,200 points (12%) and the Hang Seng is down 4% with the Shanghai down just 2% and India off 2.5%.  Europe doesn’t open until 4am EST now with daylight savings time – we’ll just have to see what happens later.

     

    Futures trading in Japan  will be suspended if the main contract falls to 7780 points; recently it was down 17% at 7820, having briefly fallen below 8000 for the first time since March 2009. The Osaka Securities Exchange triggered circuit breakers several times to temporarily halt trade. Topix futures trading has been halted.
     

    Australia’s S&P/ASX index was down 3%, the Shanghai Composite was down 2.1%, South Korea’s Kospi was down 2.6%, Singapore’s Straits Times Index was down 2.6%, Taiwan’s Taiex was down 3.7% and India’s Sensex was down 1.8%.

     

    "What the world is watching right now is whether Tepco’s Fukushima nuclear power plant is going to turn into Chernobyl," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. "Foreign investors who had been buy(ers of) Japan stocks are now turning to sell."
     
    All 33 subindexes on the Topix were lower, with Tepco, the operator of the stricken nuclear facility in the country’s northeast, still being quoted limit-down. Tohoku Electric Power, which also operates nuclear power facilities in Japan, was also limit-down.
     
    Sony shares were down 5.5% as it, among other companies, has called a production halt on some operations in the aftermath of Friday’s earthquake and subsequent tsunami.
     
    Even construction stocks—a small bright spot Monday—w ere falling back, with Kajima Corp down 13%. As the nuclear crisis persists there are increased worries about the overall economic hit from the quake.
     
    The Bank of Japan offered to inject five trillion yen ($61.4 billion) in same-day funds into the money market Tuesday, extending emergency efforts to calm markets.

     

     

    I would expect at least a bounce in our futures at the -2.5% lines back to test -2%, which are our "Must Hold" levels at Breakout 2 and what happens after that will be very telling – update later this morning, of course.  

    Again, our hopes and prayers go out to all the people of Japan in this time of terrible tragedy.  

  208. edro00

    Futues – the bots are tough, one crawled up 20 on /ym to take out my stop then proceeded down …..

  209. lvmoda

     These futures move too fast to feel like you are getting in early.   I would play the fade (recovery) normally, however in this case I’m very concerned that there is or will be a major radioactive release and there is a low-pressure nor’easter that will drive the contamination towards Tokyo.   The amount of long-lived radioisotopes may be small (mostly iodine 131, 8 day half-life and not cesium 137, 30 year half-life), but the fear factor will nonetheless drive the panic for another 48-72 hours at least.

  210. 1020

    Phil/ZZ  I paused at his TEPCO comment today and it gave me a chill.  I will always take an honest, experienced view of an insider versus a company man, government official or most "experts" any day…..
     
    Thanks for your observation zeroxzero!
     
    My heart aches for the people of Japan…..  :(

  211. lvmoda

     Not going to miss this lousy commercial:  Aflac (AFL) fires Gilbert Gottfried, the longtime voice of the insurer’s duck mascot, after the comedian attracted attention for his tasteless jokes about the Japan earthquake.

  212. hoss18

    My thoughts and prayers are with the Japanese people tonight…..but my conscience forces me to realize I have a family of my own to protect.
     
     Guys, hate to say this…but the genie is out of the bottle on this one….we can’t be buying with any confidence until there’s some closure on what’s going on to those plants…….and from the sounds of it we’re a VERY LONG way from that….and now it seems we really can’t trust the official reports….I think the world goes on defense now…..
     
    Seriously, probably need to think about where we find more protection, in the world of circuit breakers we may have time to put these on, and where the capital fleeing Japan may go….do you think margin calls will start hitting?  PMs selling off initially because people are liquidating to pay margin calls, but could they then rally?  And what if Japan recalled it’s currency?  Just outright defaulted, like a national force majeure?
     
    Keep playing chess, I know it’s hard because there’s so much emotion going on right now, but we have to stay several moves ahead….
     
    Peace and blessings to you all…….Travis

  213. lvmoda

     Oh Crap!   It’s happening…
     
    HONG KONG (MarketWatch) — Radiation levels in Tokyo surged to 23 times normal on Tuesday, according to reports that cited readings released by the Tokyo metropolitan government. Radiation levels of .809 micro severts were recorded in central Tokyo at 10.00 a.m. local time (9.00 p.m. U.S. Eastern time), reports said. Southerly winds are believed to be pushing a radioactive plume from the Fukushima Daiichi Nuclear Power Plant, which lies about 150 miles north of Tokyo.

  214. BruceE

     Thanks Phil!

    Your call for cash last week has saved my portfolio from disaster and it is bittersweet that it looks like I will do very well with the TZA hedge you picked on Wednesday, the April $36/41 BCS, as well as the DXD disaster hedge.  I am now sorry I did not add the SQQQ trade as well but I thought that would be too "greedy."   I assume you will be telling me to take the money and run, that’s my question into tomorrow’s open.  Thank you so much.  

  215. lvmoda

     Hoss, I agree with you.  This is a time of great uncertainty, where even government information sources are suspect.    There will be a time to buy, but not now because the uncertainty is increasing.   Again, logically I think the fear factor is a much, much greater driver than the fact factor.  That illogical dislocation will create a superb buying opportunity when the uncertainty peaks into a major panic – which is soon to come – but not now.   

  216. scottmi

    Fukushim 3 – scariest article yet, about how #3 uses a plutonium mix, and stores the spent rods on top of the reactor. These spent rods are the real threat says this article.

  217. kinkistyle

    50 Brave Fukushima Workers stay back to pump water while fully exposed. WE LOVE THEM.
    True patriots in every sense of the word.  These same workers most likely lost their homes and family in the tsunami, but they stay for their countrymen — and maybe the world.
     
    God bless them.  God bless Japan.

  218. exec

    Wow…..this is shaping up to be a interesting day. 
     
    No POMO today……not sure how they will keep a lid on a selloff today.

  219. Phil

    Not a good morning so far!  

    We bounced off the 2.5% line, went over the 2% line but then got slapped back down again and probably now bouncing again – where she stops, no one knows.  

    Asia closed with the Nikkei down 10.5%, the Hang Seng finished down 2.86%, the Shanghai down 1.4% and the Bombay down 1.5%.  Europe opened in free fall with the Dax down at the 5% rule, the FTSE down 2.5% and the CAC splitting the difference, down 3.4%.  The uncertainty is going to persist because the Japanese Government has now shown it can’t be trusted to give us an honest assessment of the situation.  Even if they do get the reactor under control – people are already on CNBC saying there will be another earthquake – clearly the sharks are once again circling!  

    Damage estimates are way up, now I’m hearing well over $100Bn in damage in Japan – things sure look worse as camera crews make it into devastated villages.  The situation at the nuclear reactor seems grim to the point where the Dollar is actually getting some action this morning as Global investors are fleeing for the exits.  The Dollar punched up to 77.25 and we’ll be watching that 77 line today.  TBT will be back around $36.50, where we love to enter it.  

    Oil hit $97.77 and the futures are a buy above the $98.50 line, where it is right now.   Gasoline is down to $2.85, natural gas $3.93, gold $1,406 (as I have been saying, gold is not where people go in panics anymore), copper $4.10 and silver $34.65. 

    It’s all about the potential melt-down today and we need to try to separate rumors from facts but the facts don’t look too good!  This seems to be a reasonable summary:  

    TOKYO — Conditions at a crippled nuclear power plant deteriorated further Tuesday, with a Japanese nuclear safety official saying that the water inside the waste fuel storage pool for a damaged reactor may be boiling.

    Hidehiko Nishiyama told reporters that "we cannot deny the possibility of water boiling" in the spent fuel storage pool at the facility.

    If the water boils, it could evaporate, exposing the rods. The fuel rods are encased in safety containers meant to prevent them from resuming nuclear reactions, nuclear officials said, downplaying the risk of that happening.

    But they acknowledged that there could have been damage to the containers. They also confirmed that the walls of the storage pool building were damaged.

    A fire, explosions and other damage to the Fukushima Dai-ichi power plant following a massive earthquake and tsunami on Friday have triggered Japan’s worst nuclear crisis since the atomic bombings of Hiroshima and Nagasaki in 1945.

    Nishiyama, an official in the Economy Ministry, which oversees nuclear safety, avoided commenting on the potential risks from rising temperatures caused by a failure in the systems that keep the spent fuel rods cool. He said the plant’s operator is considering what to do about the problem.

    The Unit 4 reactor at the Fukushima Dai-ichi power plant caught fire earlier Tuesday and is believed to have caused a release of dangerous levels of radioactivity in the immediate area. Elevated radioactivity readings in surrounding regions were not high enough to pose a health threat, the government said.

    Unit 4 was not operating at the time of the tsunami, but its backup power systems failed afterward, preventing cooling systems from working properly. Three reactors already have been wrecked by explosions and nuclear officials confirmed that temperatures in two other reactors that had been shut down for inspections were also rising.

    The temperature of the water in the spent fuel storage pool for Unit 4 was 183 degrees Fahrenheit (84 degrees Celsius) on Monday, when it was last measured. No measurements have been available since then, Nishiyama said.

    "We have no information about whether the spent fuel rods are exposed," he said.

  220. Phil

     Test – I think the video may screw up the next comment so I’ll append another news story that’s not too important:

    "It is likely that the level of radiation increased sharply due to a fire at Unit 4," Edano said. "Now we are talking about levels that can damage human health. These are readings taken near the area where we believe the releases are happening. Far away, the levels should be lower."



    He said another reactor whose containment building exploded Monday had not contributed greatly to the increased radiation. Edano said that reactor, and another, Unit 3, had stabilized but the status of Unit 2 was unclear.



    Temperatures in two other reactors, units 5 and 6, were slightly elevated, Edano said.



    "The power for cooling is not working well and the temperature is gradually rising, so it is necessary to control it," he said.



    Officials said 50 workers, all of them wearing protective radiation gear, were still trying to pump water into the reactors to cool them. They say 800 other staff were evacuated. The fires and explosions at the reactors have injured 15 workers and military personnel and exposed up to 190 people to elevated radiation.



    In Tokyo, slightly higher-than-normal radiation levels were detected Tuesday but officials insisted there are no health dangers.



    "The amount is extremely small, and it does not raise health concerns. It will not affect us," Takayuki Fujiki, a Tokyo government official said.



    Kyodo reported that radiation levels nine times higher than normal were briefly detected in Kanagawa prefecture near Tokyo and that the Tokyo metropolitan government said it had detected a small amount of radioactive materials in the air.



    Edano said the radiation readings had fallen significantly by the evening.



    Japanese government officials are being rightly cautious, said Donald Olander, professor emeritus of nuclear engineering at University of California at Berkeley. He believed even the heavily elevated levels of radiation around Dai-ichi are "not a health hazard." But without knowing specific dose levels, he said it was hard to make judgments.



    "Right now it’s worse than Three Mile Island," Olander said. But it’s nowhere near the levels released during Chernobyl.

  221. Phil

     New post is up (in progress) – let’s move comments there please

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