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Monday Market Madness – Are We There Yet?

Another day another $453M!

That’s right, there are still 335,695 open 1,000-barrel July contracts on the NYMEX with just 2 weeks left to dump them and the pump crew was foolish enough to run oil back to our $100.60 target, where we were able to jump back in and short it in last night’s Member Chat (as the Gekko said: "Money never sleeps!").  This morning we took a stop at $99.25 and now we are patiently waiting for them to pretend they want to pay over $100 for oil again so we can short it again – isn’t this fun?  

We don’t get a lot of trades where the manipulation is so blatant that I can (and have for the last 2 weeks) publicly call trade ideas that thousands of people can participate in but, in this case, each single oil contract made $1,350 on that move – in just 12 hours – there’s plenty of money to be made for all on these and, of course, we’re doing it to PUNISH the speculators so we need as many participants as possible to maximize their pain (and keep in mind we use very tight stops to minimize ours!).   

Regular options players will also do well with our last trade of Friday, which was the USO June $40 puts (yet again) at $1.15, which should do well this morning with USO down about .70 with oil on the $99 line.  Heck, even as a stock trade that’s 2% shorting USO in 90 trading minutes – not a bad ROI even for boring old stocks…  

As we expected $98.50 has been hanging pretty tough as support for West Texas Crude but I don’t think it will stand up to a rising Dollar so we’ll watch that for clues of a proper breakdown and a ride down to our next set of oil marks. 

Speaking of lines – look how beautifully our levels are lining up with only the S&P still above (but right on) our long-predicted "must hold" level.   I went over our expectations for the next two weeks in this morning’s Member Alert so I won’t get into it again here but if we follow the script into expirations as well as we’ve followed it during May – we’ll be getting this summer off to a great start!

Also in our morning Alert, we took a short position on PCLN (now $507) as we got news that the IATA slashed their profit outlook for airlines in half for 2011.  The organization blames the sharp revision on natural disasters in Japan, unrest in the Middle East, and especially on oil price volatility.  This is, unfortunately, also bad for the airline stocks and that will hit the Transports and that will hit the Dow and if the Dow fails 12,100 – things are going to get ugly!  

So we’re off to a busy and bearish start this morning but we were already worried on Friday and added a longer-term TZA Disaster Hedge that pays 2,666% paired with some short BA puts or 300% on its own if the Russell falls back to 650ish.  That would be quite a disaster of course, which is why we prefer the pair trade over the straight bull call spread.  When you get a 26x return on a 25% market drop, you only need to commit 1% of your cash to cover it – that’s why we love our disaster hedges!  

So we’re certainly not "worried" about what’s going to happen today.  Like John Lennon "we’re just sitting here watching the wheels go round and round, we really love to watch them roll."  We already prepared for a "watch and wait" day today as we HOPE to get a bounce off those Must Hold levels but it’s all about the Dollar and whether they can keep it below that 74 mark as I don’t see the markets making much of a bounce under their own steam.  

This morning, in Member Chat, we were looking at the very scary CMI Report, which shows 1.6% DROP in May in the combined Manufacturing and Service Sectors.  April (the first month of Q2) was up 0.1% and now May is down 1.6% so we are now negative 1.5% for Q2 – that indicates that our GDP numbers may still be over-estimating reality!  

The manufacturing index fell to 45.8, the lowest in over 18 months. This category is now as bad as it was in the middle of the recession, meaning a great many manufacturers are in a cash flow crisis that could crush them in the near future. It is the squeeze many had referenced when the commodity price hikes began. The cost of everything manufacturers buy has gone up—oil, metals and other raw materials. Transportation costs are hiking as well. At the same time they are seeing no opportunities to hike their own prices, as consumers are still fragile. If this squeeze continues for much longer, there will be a radical increase in the factors that signal distress—the number of disputes, accounts out for collection and bankruptcies.   

Not too much data this week but lots of Fed speak and the Beige book on Wednesday should be the turning point – one way or the other.  Steve Jobs does a presentation for AAPL and it might boost the Nasdaq (AAPL is still over 10% of the index, even after the rebalance) but, if the new product is a yawner like the MacBook Air or if Steve sneezes during the presentation – we could go right back off a cliff so be careful with that one!  

As you can see from the chart on the left (thanks Barry) we had a terrible week last week but held our 2.5% line (mostly) and now we need to see if the rest of the World is going to be catching up or ignoring us.  China was closed today and India traded flat but Japan dipped 1.2% and Europe has gotten weaker in Germany and France but the UK has gone the other way into our open (8:30) and is back to even while DAX and CAC are down about 0.5%.  Way too early to jump to conclusions and, as I said – it’s a watch and wait kind of day.  

As we can see from this next set of charts, the Dow is struggling at the 12,150 line to hold on to a 5% gain for the year.  You KNOW the fund boyz and Banksters want to have that headline 5% gain for the first half of the year so they can get their hands on more of that fabled "sideline money" as they convince investors to put it back in their market casino.   We noted the relentless dumping of 401K and IRA money into the fake rally at the end of May and we don’t expect June to end any differently but we’ll need ACTUAL QE3, not just rumors of QE3, to get the other indexes back over that 5% hump, which is now about our 2.5% lines.  

We expect the usual pre-market pump into this morning’s open and it’s really all about what they can get to stick – hopefully we’ll get another crack at shorting oil at $100 or higher (with $100.60 being our new key resistance).  The UN has now jumped on our bandwagon, calling for intervention to put a stop to Commodity Speculators.  As I said last week – just give us $3Bn and access to the SPR and we’ll have them all bankrupt by July 4th!  

Undeterred, funds have pushed their bullish commodity betting by 7.3% last week, back to the highest levels since May 3rd so there is a lot of betting that the Dollar can go lower and there will be a lot of squeezing if it doesn’t.  If the Dollar does dive and the speculators win – then it’s record oil, gold and food prices followed by starvation, unrest, riots and revolution so forgive me if I’m with the UN on this one and continue to say we are better off banding together and bankrupting these Global criminals before they cause more needless suffering.  Unfortunately, some damned fools gave Glencore Billions of Dollars and that’s not helping matters much…

Greek ProtestEven as they tell you today that Greece is "fixed", there are thousands of protesters in Athens’ Syntagma Square this morning.  There are reports of 50,000 to 500,000 (likely closer to the former) protesting in Syntagma Square this evening, against the government program of austerity measures, and the current political situation. Protesters have been camped out here all week, similar to the situation in Spain in the run up to their regional elections. Whether or not they’ll have any impact on the implementation of the country’s latest austerity plan remains to be seen.

It’s one thing for the EU to vote on a rescue plan for Greece that bounds the population into lives of servitude to pay off Central Bank loans but quite another to get the people to accept it.  So far, Icelanders have told the banks to drop dead and nothing bad happened to them while the Irish bent over and accepted the Draconian lending terms that were imposed on them by the EU and they are miserable.  Which lesson will the Greeks learn?  

Even on the off chance that Greece’s primary debt is completely wiped out, in 2012 it will have to pay some 52 Billion Euros (35 Billion in mature bonds and 17 Billion in interest), while it is expected to receive 12 Billion Euros from the troika. In 2013, Greece is not expecting to receive anything from the troika, but it will still need to pay approximately 44 Billion Euros (27 Billion in mature bonds and 17 Billion in interest). Basically, it needs to have more than 84 Billion Euros for the 2012-13 period alone, so even if it receives a loan of 60-65 Billion Euros, it will still have a shortfall of 20-25 Billion. Ostensibly, this amount is supposed to be covered by privatizations and the sell-off of state assets.

Life, however, does not end in 2013. Where will Greece find the tens of billions of euros it need annually to service its massive debt? And what will happen after 2014, when the amount to cover interest rises?

How long will the World be able to extend AND pretend?  

 


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  1. David Ristau

    Oil prices appear to be headed lower, and we have some trading ideas for you.

    Check out our article about why oil prices appear to be headed lower, and how you can profit from the move.

    Check it out at: http://www.philstockworld.com/2011/06/05/why-oil-prices-appear-to-be-headed-lower-and-how-you-can-profit/

    Good Investing!

  2. pentaxon

    Phil,
    An could you structure a bet on the HAL short suggested by Oxen?
    Thank you.

  3. Pharmboy

    Good morning and PP for today.

  4. zeroxzero

    Good morning!  Too many USO contracts to sleep in.  Shorting a MOMO / PCLN?  I thought you’d never ask, Phil! 

  5. williex

    uso target or take morning move?

  6. goober

    Phil anyhting on TZOO as well or too small a mcap ?

  7. Pharmboy

    UTHR meets primary endpoint.  Stock is off 3%. Let’s see where they move it, but I still really like their chances for a takeout.

  8. Pharmboy

    FXE – watching the charts for an entry on the 144 Julys.

  9. rustle123

    Market didn’t stay high enough for me to get all the bearish positions I wanted for the day.  Need a little stick for another 5 minutes.  This market is so weak right now, they can’t show a gain for more than seconds.

  10. Phil

    Good morning!

    They let the Dollar rise to 73.95 but kept the indexes from falling in the futures and NOW they are dumping the Dollar (73.83 at the moment) to help goose the market in early trading.  A very neat trick and we’ll see how long it lasts.  

    Oil ran back to $100 so watch that line, which we can short off but very carefully in the futures (very tight stops over the line).  

    Overall, there is no reason we should be up from Friday’s close so we’ll just have to wait and see what sticks but, especially, we’ll be watching to see if our indexes can take back and hang onto their Must Hold levels:  

    Keep in mind that anything less than a bounce over those 1.25% lines is just a weak bounce and likely to be consolidation for a move further down.  I’m expecting that a combination of the natural bounce and manipulation might get us back to 2.5% by expirations but things ARE pretty bad from a global data perspective and it won’t take much to push us all the way over the edge.  

    On the weekend, we noted that the Dow is our most oversold index (if ANY of them are oversold at all) and that means we can hedge an upside move with DDM July $59/63 bull call spread at $2, offset with an SPY Aug $134/130 bear put spread at $2.05 and the logic there is that, if the market falls, then the SPY will pay off (and you can pull DDM without a total loss) while a very small rise in the market will put DDM in the money and you should make $2 there faster than you lose it on the bearish SPY play so it’s a fun way to take a small bullish position, just in case and, if we fail our levels, you simply kill the DDMs and you are left with an in-the-money 100% SPY bearish bet.  

    Quick trade of the morning is QQQ weekly $56 puts for .33 with a stop at .25 or if the Nas gets over 2,750 (2,300 in the futures).  I don’t think this move up is real so why not play it? 

    Monday’s economic calendar:
    3:30 Fed’s Plosser: ‘Central Bank Policy After the Crises’ 
    10:00 Employment Trends Index
    5:30 PM Fed’s Fisher: ‘Monetary Policy and Financial Stability’

    At the open: Dow -0.12% to 12137. S&P -0.19% to 1298. Nasdaq -0.17% to 2728.
    Treasurys: 30-year -0.5%. 10-yr -0.19%. 5-yr -0.08%.
    Commodities: Crude -0.39% to $99.83. Gold +0.35% to $1547.80.
    Currencies: Euro -0.1% vs. dollar. Yen +0.06%. Pound -0.23%.

    Eurozone producer prices rise 0.9% in April, bringing the Y/Y pace to 6.7%, a hair under March’s 6.8% pace. The figures matched market expectations.

    ECB member Bini Smaghi attempts to make the case for avoidingeven a hint of Greek debt restructuring, pointing to previous instances where workouts left a country in limbo for years. He mentions no examples of when piling on vast amounts of additional debt was of actual service to a "rescued" nation.

     In what will surely be news to many of its citizens, Europe, says Jim McCaughan, has not yet had its financial crisis. McCaughan expects the U.S. to outperform, saying any selloffs due to EU issues will create a buying opportunity.

     "Anyone who drives the nation towards elections now will be effectively giving it the last push over the cliff," says Greek Interior minister Yannis Ragousis, warning legislators not to squawk about the new bailout plan. He worries a public debate could provoke early elections, likely to result in stalemate, with the winner unable to muster approval of the measures necessary for the "rescue."

    Dollar busting attempt #1:  An article in China Daily suggests another rate hike could come as early as this week, ahead of the release of the latest inflation figures. "It would be reasonable to (raise rates) by at least 75 basis points this year," says Li Daokui, a PBOC adviser.

    Dollar boosting counterpoint:  The likelihood that Japan will again change prime minister isnegative for its rating, Moody’s says. With Japan’s past four prime ministers lasting an average of under a year, more change could delay the fiscal programs needed to recover from the earthquake. 

    Philly Fed chief Plosser calls for "articulating a systemic plan" to "normalize" policy, saying it will reduce marketplace uncertainty. Since when has hiking rates become such a dramatic event? Central banks do it all the time and we’re still here. 

    Peter Schiff, head of Euro Pacific Capital, tells NY Post that FINRA’s attempts to implement new Congressional orders are hitting small brokerages harder than the big ones: “Unfortunately they are dropping like flies."

    An ANZ survey of Australian job advertisements falls 6.5% in May, the largest drop in 2 years. An ANZ economist warns the data was affected by seasonal factors and expects employment and the recently slowing economy to soon pick up. Sydney -0.3%. Aussie +0.2% at $1.0739. 

    With the powering aussie (falling greenback) limiting visits from American tourists, Australia begins a campaign to double the number of Chinese visits by the end of this decade. In Q1, Chinese tourists outnumbered American visitors for the 1st time.

    A massive data dump this morning and over the weekend from biotech firms reporting results from various drug trials and regulatory updates. Stocks on the move as a result: Cell Therapeutics (CTICD,press release+2.8%, Exelixis (EXELPR-2.2%, Incyte (INCYPR+3%, Corcept Therapeutics (CORTPR-4.8%, United Therapeutics (UTHRPR)-6.1%, RXi Pharmaceuticals (RXIIPR+17.7%, Impax Labs (IPXLPR-3.3%.

  11. rpme

    Phil, why do you have the dollar at 73.?? and I have the dollar at 74.24 on Forexpro?

  12. angelcur

    btw/ consrsnsus est for sp (gaap ) earnings per share  jumped 23.7% in 2011 to 95.66..for 3 years the gaap rises at least 20%..that has NEVER happend before..big gap between economic sales and earnings expectations and they have widened the last two months..i dont think earinngs are in for any sort of hard landing i just think the risks to earnings expectations are to the downside…another red flag

  13. daveo

    FAS: I F#%king quit.  I just sold all of my FAS holdings.  I know I will regret it but I just can’t stand losing another $1-1.2K again today.  It’s my fault I know.  I was stupid and have been playing the $2KP in my IRA (ie. no margin).  I was playing with half of the contracts as Phil so I figured I would be alright.  I never thought that the position would go so far against us.  Every time we sell short FAS shoots up.  Everytime we go naked long FAS tanks.  Recently I’ve had to sell some of my longer term holdings so I could afford to roll or cover.  As I’m in an IRA selling short eats real cash for the full value.  This was stupid of me and I should have killed my FAS positions when I was down $2K or $5K.  As of this morning I am out $13K for the year.  I simply cannot afford to hold these positions any longer.  I have decimated my IRA and I need to stop.  The last week has been particularly bad.  I have lost over $1K a day.  At some point you have to say enough.  When we rolled the July 27s down to the July 26s I could only afford to roll 1/2 of them.  My plan on Friday was to sell the July 27s when we got a rally on Monday morning.  Well, obviously, that rally hasn’t come (at least not for FAS, PCLN is going up though). 
      Conceptually, I understand the rolling and I do believe it will pay off in the end.  But it just seems like we are in Vegas losing at Blackjack using a Martingale system (DD after every loss) to get back to even.  At some point we hit the house limit (or our own in my case) and can no longer DD and must take the loss.  Which I have done this moring.  And of course I seemed to have sold at the low of the day as FAS is already rising (or not).  I would buy back in but, as I’m in an IRA, I can’t use the funds until tomorrow.
      Why I am I writing this.  Well, mostly so I can get it out and this has been very frustrating.  It feels like the market is against us.  I think that PSW has gotten too big and the banks are trying to f#@k us.  They obviously have members here and they are going against our positions.  I’ve been watching the interchange between Amatta and Phil somehow thinking that I was different.  I’m not.  I should have gotten out long ago.  I’m not suited to this type of trading.  At least not at this point.  I should have been smarter up front and opened a new margin account to trade the $25KP in.  So, when Phil says the $25KP should be money you really can lose, he means it.  If you can’t stand to see your account lose $1K or $2K a day, DO NOT PLAY.
      Well, at least I learned something.  Only 9500 more hours to go

  14. dclark41

    Phil
    Is there anything to do but wait on FAS? Seems to be no end to the drop.

  15. daveo

    Income Trades: Now that I have some cash again I need to get back into some long-term positions.  Phil, if you get a chance later today, could you let me know which positions from the Income Trades are still viable?  Or is this really not a good time to be bottom fishing?

  16. Phil

    Nice article David!

    HAL/Pentax – Sure:  How about selling 5 June $49 calls for $1.75 ($875) and buying 3 Oct $55s for $2.35 ($705) for a $170 credit on the ratio backspread with tons of time to adjust (you just buy another long over $50 and another at $52.50 and then many months to roll) if it goes the wrong way – otherwise, you cash out up $170 plus whatever value remains on the longs.  

    PCLN is ignoring the bad news and we love that!  These tools are willing to pay you $10.50 to sell them 5 June $510 calls ($5,250) and you can cover with 3 Oct $550 calls at $25.40 ($7,620) for net 2,370 on the spread.  Same as any backspread, just buy another long if they break $510 and another at $525 and then you have a more bullish calendar spread with lots of time to roll.  If it were not for the margin ($25K), I would like this for the $25KP. 

    USO/Willie – No, morning moves are BS – I wish it went higher and we got our DD. 

    TZOO/Goob – They already pulled back drastically off their high ($103 to $65), PCLN only fell from $561 to $510 (10%) in the same time period so I like my odds better shorting PCLN.  

    Weak/Rustle – Good call, this was a very lame open considering how hard they worked to make it look good.  Nas is still looking shortable but not for very much longer I think.  

    Dollar/Rpme – Did I say 73?  That would be a mistake.  It’s at 73.90 on /DX.  

  17. topher7

    …and of course..  NFLX is up…

  18. tuscadog

    Phil / Oil    The Saudi prince and Exon CEO has told us the mkt price is really $70.  Wouldn’t the best leveraged play on a major oil correction be to buy FAA, since the earnings impact on airlines will be huge?

  19. rpme

    Phil, No my question is why the spread. On Forexpro the dollar has not been below 74 since midnight. Did not know if I was using the wrong numbers.

  20. Phil

    Will XLF hold $15?  This is tragic…Don’t forget our plan was to sell those July $15 puts at .50 – so we finally hit that for the $25KP (10) and the Income Portfolio (20).  

    Consensus/Angel – Yes, because they’ve been so right about everything else in the economy?  

    FAZ/Dave – Well someone has to capitulate before they can go up.  Those $25KP plays are meant to be a small, aggressive carve-out of a much larger portfolio ($250K minimum) not something to play with in an IRA!  Still, I do still like the July $26 calls, now $1 but we stopped doubling down ages ago and have simply been using our front-week short sales to fund rolls to better positions.  From a time perspective, we have 40 days to expiration, that’s 5 weekly sales to make enough money to roll back to the Aug $25s (which are not out yet but probably .50 so .10 per week) or $1 to roll to the Oct $27s, now $2.05.  If you think XLF will never recover and the market is doomed, then of course cash out or at least take an offsetting short in the financials like FAZ to cover but getting out with a max loss at the exact bottom of our expected range kind of defeats the whole purpose of sticking with the trade in the first place – THIS is the bottom (hopefully) that we stuck it out for. 

    Of course, if the trading isn’t suited to your personality, then do stop and avoid it in future.  These are high-pressure greed trades, not portfolio builders!  I would suggest paper trading this one through though so you can track the moves with less emotion and see how it evolves over time.  

    By the way, in the $25KP, the July $27s are now .77 and the July $26s are $1.07 which is a .30 spread so DO NOT tell me there was no way to make that roll for .35 or less…  PATIENCE!!!  

    FAS/DC – PATIENCE!!!

    Income Trades/Dave – Well we had a bunch of short put ideas last week, they should all still be good.  Otherwise, whatever trades still net out the same are still viable if they are long-term.  Otherwise – PATIENCE!!!!  We’ll find more as the market settles….

    Dow holding 12,100 like a champ!  

    FAA/Tusca – Sure but let them finish selling off first.  After earnings forecast were just cut by 50%, I doubt they’ll be reversing very soon. 

  21. Phil

    USO June $40 puts back to $1.40 – that’s a quarter and all we were playing for – the rest is GREED!!!  

  22. jmm12

     Phil, What do you think about where to roll these June 40 puts in RIMM?

  23. lolkha

    What do you think about POL?

  24. dclark41

    Phil
    You haven’t lost me brother! Just commiserating and trying to find a few takers.

  25. leonf675

    Phil, do you have any good hedges for a 401k portfolio where i am only allowed to hold buy-writes or protective puts.
    I am focusing this portfolio on protecting myself from dollar-debasement long-term,  so I hold things like: GLD, UNG, FCX, FXA, FXC, NOV, RSX (mostly covered with front-month ATM calls) in this portfolio.     However, I  think given the dynamics of the market, this portfolio has a chance of suffering significant paper-losses depending in the near term (yet I don’t want to sell out of it in case QE3 materializes).     Would recommend something like a b/w on SDS or DXD make sense for about 5% of the portfolio? Or something else?

  26. button

    Phil,
    HOV getting hammered this morning with earnings after the close tomorrow.  Earnings should be horrible but isn’t that priced in by now?  Do you think it is worth a play at this point or would you wait until after earnings?

  27. dclark41

    Phil
    I have Jan XLF 14/17 BCS (3.04/1.29) now (1.63/.31). Should I buy back the caller and sell July 15 puts. Or would it be better to roll down and out. Thanks.

  28. topher7

    Pharm..  I still have FXE July 140 Put..  (30 @ 1.30 avg)..   DD here or roll to higher strike.??  thnx

  29. Phil

    Dollar tested 74 again and another rejection should goose the markets a bit.  Gold at $1,550 is disturbing but too scary to short.  

    Dollar/RPMe – Oh, I have that on 2 different TOS systems on the /DX futures.  73.88 at 10:33.  No idea why you would see something different but it’s actively trading at that price.  

    RIMM/JMM – Well, I wouldn’t do anything for now as they still have 35% premium and maybe RIMM bounces.  When the premium is gone, THEN you might want to roll to the July $37.50 puts, now $2.30 and, even if you do a 1.3x roll – isn’t that a nice net entry?

    POL/Lol – It’s a nice specialty company and the industry went through a rough patch on the Japan thing as well as the riots in the Middle East causing demand disruptions as well.  I’d let them test that 200 dma at $13.25 but but then they get interesting again.  

    Commiseration/DC – I guess venting helps but those are the emotions you have to take out of the mix if you are going to trade aggressively.  You can’t trade out of fear or anger….

    Oil fails $99 – Greed is good!  Tight stops in the $25KP at that $99 line now for the USO puts (now $1.45) so still $1.40 for the stop and a .10 trailing if we get past $1.50.  

    401K/Leon – You can’t buy a bull call spread?  If that’s the case, get another broker!  The TZA spread we discussed Friday is very nice as it’s January and $3 pays $12 so 300% upside if the RUT has a serious breakdown and, most likely, you can kill the trade at $2 on a recovery so you risk $1 to make $9 as a cover on that, even if you don’t offset it with another hedge (like the DXD bull call spread above, which pays $2 if the Dow goes back up).   Your holdings are terrifying to me as they are mainly commodity-related so you can get totally screwed if something happens in Europe or Asia that causes a panic flight to the Dollar.  You say buy/write but that would be selling naked puts, right?  If you can sell naked puts then I LOVE the TZA spread with a short put to offset the cost.  

    HOV/Button – We’re sitting on it in the $25KP but yes, I do think bad earnings are priced in so it’s worth a pop to sell the 2013 $2.50 puts for .90.  You can pair that with the 2013 $5 calls at .20 so it’s a net .70 credit and a huge winner if HOV really takes off and a nice winner if they just hold $2.50 and a net $1.80 entry otherwise. 

    XLF/DC – I’d roll the Jan $14 calls to the 2013 $14 calls for .50 (.30 of which you stand to collect if XLF fails to re-take $17) and then wait until January before you worry again.  

    FUN TIME – Gotta play IWM to hold $80, right?  The June $79 calls are $2.07 and our goal would be to sell the June $80 calls for the same to make a free $1 spread and a tight stop at $1.95 means we risk .13 to make $1 so let’s go 10 in the $25KP.  

  30. brooklyn

     Phil/AGQ; I still have June $255 calls. What do you think of Jan $25 SLV puts at $1 to hedge/offset the loss?

  31. goober

    Not nearly as much DX action this AM. Trying to push it up but pretty obvious markets would collapse. Just like Laurel and Hardy "this is a fine mess you’ve gotten me into "……… so much for the smart guys eh ?
     
    Just watching , took a small profit early on ES short and waiting for a direction ?

  32. goober

    Also notice the RUT is leading the down side

  33. morxlntway

    In defense of Davio (& others), there is an over abundance of extreme language in an attempt to define where we are headed.  It causes tension and even panic when we are not sure what the real definition of "doomed", etc.
    I was amused at these entries in the same post on Friday:
    "You’d better learn to think that way if you are going to make it in America for the next 20 years.  We’ll build our walls and take tunnels from one gated community to the next and we will cluck our tongues at the rabble who riot outside the gates.  That’s where things are heading because we have NO PLAN AT ALL for what we’re going to do with 100M people who are retiring in the next 20 years who have an average of $40,000 saved up to live on for their retirement because they made the terrible, terrible mistake of allowing the Government to take 10% of their wages for 40 years and thinking that was going to be coming back to them when they retired along with another 2.5% for their health care.  Now it’s all gone and the costs are rising quickly and there’s barely a person in the top 10% who would give up even 3% (the Bush tax cuts) to help them.  
    Screwed does not begin to cover this situation….  "
    then,
    "CSCO/StJ – It’s not a broken stock.  It’s an infrastructure stock and we’re in a recession so no one is buying what they are selling because they can make due without.  That’s all.  Over time, the cycle will roll and they will be hot again"
    If we are screwed then i wouldn’t be expecting anything but, as someone said recently, bullets to be hot again. Some of us do wonder why hold something like FAS if we will be soon moving to our bomb shelters.
    I’m not angry or trying to start something it’s just that emotional or groovy phrases (and we are all somewhat to blame i’m sure) can have more of an effect than we intend it to.

  34. pentaxon

    Thanks Phil. HAL going down like a charm.

  35. angelcur

    Swiss franc is on a three sigma move…and looks very shortable..ditto with bp

  36. goober

    Phil / Angel – are you seeing DX move up as a trend here even if short lived , say above 74 for  ?

  37. rustle123

    Dow/Phil
    Dow holding 12,100 like a champ! 
     
    Would be surprised if we break it today especially since the Dow is getting to oversold levels.  Now just waiting to reshort oil again.  Where would you enter for DIA puts?  Would you start scaling in if we turned positive or wait to see if we can test 12200?

  38. angelcur

    goober i am neutral dollar right now i had seen technical signs of a major bottom forming but that was quickly undone..i am short swiss ad and bp…

  39. exec

    Phil/Oil,
     
    You have a good feel for the oil.  I wish I could take advantage of your MoJo but can’t buy the futures and USO has already moved at the open.

  40. rustle123

    If FAS can get back down to 24, can be a real nice play to write puts at.  Very oversold at that level.

  41. Pharmboy

    topher – I would hold the line here and watch it for a move down to sell the June 142s for 40c or so (1/2 sale).   OTherwise, U need to move up in the chain, so sell the Jun 143s, and roll to the July 142s.  use 10 c stops on those that are closer in (june) to make sure if FXE starts to dive, taht you can protect your gains. FXE moves very fast down, a bit slower up.  It is all about the dollar now, and the box.

  42. Pharmboy

  43. BertII

    RIMM bouncing back back over 39 don’t forget they have earnings on June 16th

  44. willsons

     TBT making a nice move up today.

  45. Phil

    LOL NFLX – Total joke of a mover at this point!  

    AGQ/Brook – Well, those are not looking too likely now, are they?  As long as you REALLY want to be long on SLV at net $24, then sure, it’s a good offset.  Keep in mind that the only way it’s likely that they can get the market going is to really trash the Dollar so there’s still hope we get a nice pop in AGQ this week but it is getting thin..

    Language/Morx – Well it’s also a timing issue.  We were short-term bearish (60 days) but now, at the bottom of this 5% channel, we’re a little more bullish in the very short-term (2 weeks) but still short-term bearish (60 days).  After we get a proper correction – we’re longer-term (18 months) bullish due to inflation that’s backed up in the pipeline.   Of course, there are things that can go wrong and DOOM us along the way but this is a site for nimble trend traders AND long-term INVESTORS and they do have conflicting signals because they don’t work in the same time-frame.  It’s like that Germany thing was a great opportunity to buy CCJ, even though we knew it was going to crash – there’s a World of difference between what even the word "DOOMED" means to you when you are an investor or a day trader – to one it means short them now and to another it means, begin scaling in.  All part of learning how to trade – there are no absolutes that are going to apply to everyone.

    HAL/Pentax – Thanks to David too for a nice catch! 

    DIA puts/Rustle – Not sure what you mean by enter for DIA puts.  I would have no interest in buying puts until we test the 2.5% mark but, as to selling puts, we already sold $123 puts for $1.77 so I already figured 12,100 would hold and really expect at least 12,200 to hold by expiration.  

    10:00 AM On the hour: Dow -0.26%. 10-yr -0.15%. Euro -0.1% vs. dollar. Crude -0.39% to $99.83. Gold +0.73% to $1553.70.

    11:00 AM On the hour: Dow -0.27%. 10-yr -0.1%. Euro -0.2% vs. dollar. Crude -1.1% to $99.11. Gold +0.66% to $1,552.80.

    Banks (XLF -1.7%) are in focus in early trading, as WSJ andNYT each publish big stories saying their troubles aren’t over. The KBW Bank Index fell 4.1% last week vs. the Dow’s 2.3% drop, and this week also could be rocky because of worries that the Fed might force big banks to sharply increase capital cushions. But to some, that sounds like a bell ringing at the bottom.

    A Few Charts That Show Why Quantitative Easing Was A Miserable Failure.

    A survey performed by Goldman Sachs shows EU banks will have to raise €29B as a result of current stress tests, and that 9 of the 91 examined lenders could fail. Just 22% of the respondents will find the tests’ outcome to be credible, compared to 35% who believed so last year

    The ECB’s liberal definition of securities eligible as collateral for loans, risks turning the institution into a bad bank as lenders dump assets of questionable value in return for cash. The ECB has €480B in ABS and another €360B of "non-marketable financial instruments" on its books.  That’s $1.2Tn!!!! 

    Eurozone Woes Are US WoesA different perspective on the risks the world faces from the financial woes of Greece, Ireland and Portugal is provided by a new class of statistics published today by the Bank for International Settlements, the central bankers’ central bank. What it shows is that US banks are collectively second or third most exposed to the woes of Greece, Portugal and Ireland, through what the BIS calls their "potential exposure" to these countriesThis new visibility for the big bets US banks have made on the eurozone’s most overstretched economies could prove controversial in Washington – coming so soon after these banks were bailed out by US taxpayers.

    Horst Seehofer, head of German Chancellor Angela Merkel’s coalition partner SCU, said it’s not certain yet that the lower house of parliament will support more aid for Greece, citing an interview. "We won’t issue a black check," Seehofer, who leads the sister party to Merkel’s Christian Democrats and is also prime minister of Bavaria’s state government, was quoted as saying. The parliament will only agree on loans under strict conditions such as a "maximum" effort by Greece to consolidate its budget, Seehofer said.

    Irish Independent:   We Will Default, So Let’s Get On With ItIreland will default, when it does happen we should not do it alone but with Greece and Portugal; we should consider leaving Europe given how badly they treat us; we need to take a scalpel to our public sector and Ireland will take five to seven years from now to recover. Those are the views of Larry McDonald, former Lehman Brothers vice president turned international best-selling author, who was in Dublin last week speaking at the Irish Funds Industry Association. McDonald was, until September 2008, vice president of distressed debt and convertible securities trading at Lehman Brothers. He was heralded by many colleagues at Lehman for both his early 2006 call on the subprime crisis and the $46m in trading profits realised from it.

    Analysts expect another solid quarter of earnings and revenue growth in Q2, FactSet says, but as a 4% GDP growth rate for 2011 now looks like a pipe dream, assumptions about corporate earnings may be high. Kelly Evans thinks many firms will cut forecasts in the weeks ahead, which would suggest the stock market isn’t as cheap as it appears.

    "In 32 years, I’ve never seen so many problems in so many places," says Dan Basse, as droughts wilt wheat fields in China, the U.S., the U.K., and France. Though analysts call for prices to push far higher, one has to wonder if the drought hasn’t been priced in, with wheat off 8% over the past 3 weeks.

    Big Money Moves Into the Midwest Grain TradeFor rural farm co-ops, it’s definitely a new era when East Coast hedge funds, Asian corporations and investors for billionaire George Soros come a-courting. Across the Midwest, well-heeled outside investors are on the prowl to acquire the hard assets of U.S. agribusiness.

    China Car Sales Tumble For Second Month In A Row, As Goldman(GS) Sees Spike In China Inflation To Multi-Year Highs.

    Fukushima Radiation Jumps to Record Levels, As Tepco Warns That Heavy Rain Will Cause Toxic Pools to Overflow. Things seem to be getting worse at the Fukushima Nuclear Plant. Today Tepco announced radiation readings of up to 4,000 millisieverts per hour at reactor No. 1 — the highest air radiation yet at that reactor, according to Japan Times. This follows video of steam rising from the reactor floor. Tepco also warned that pools of radioactive water will overflow by June 20 or sooner if there is heavy rain.

    The Peru ETF (EPU -9.5%) is diving following Ollanta Humala’svictory in that country’s presidential campaign. Credicorp (BAP -10.3%), the nation’s largest banking institution, is following suit, as is Southern Copper (SCCO -8.5%), which has its major interests in Peru.

    I predicted this over a year ago:  Video Game Consoles’ Dominance is CrumblingConsoles are losing ground in video gaming as players turn to tablets and smartphones.

  46. rustle123

    I’d be scared going into RIMM holdings if I had it.  I am/was a huge blackberry supporter and I’m throwing in the towel and getting the new IPhone when it comes to Verizon in July.  They are really starting to remind me of Palm.

  47. angelcur

     peru stocks halted down -9% after leftist victory

  48. amatta

     Phil, 
    The market holding its own without Dollar weakness, you think they’ll push down the dollar and up we go?

  49. Phil

    Oil/Exec – Well you can play USO weeklies, like the $39 calls, or puts which are around .50 with around .50 deltas – they pay very well.  The trick is to PATIENTLY wait for a move to the top or bottom of the channel and start scaling in there.  We called $99 as a bottom and $100 was the last top so the channel is getting narrower and unpredictable but that just means waiting more patiently for a good entry when the Dollar pops or drops and forces an unusually big move one way or the other.  The most important thing is following a strike that you intend to enter on each side and getting comfortable with what kind of movements you get on those so you will KNOW whether or not you are getting a "good deal" when it’s time to take action.  As with everything else – 10,000 hours of practice and you’ll be trading like a pro!  

    Nas taking another whack at 2,750 (2,300 in Futures) – will make a nice short spot if they fail again.  Dollar 73.86 did not like attempt to shove it down to 73.80 so far and that will put the brakes on the rally.  Maybe this is why:

    The debt exchange currently being floated for Greek paper can still be considered a default even if it is voluntary, says Fitch. The key will be if the new terms are deemed worse than the original terms. If so, Fitch would have no choice but to move the rating of Greece and the securities into default

  50. escohen5

     NFLX looking like a rout…..time to close the weekly 275s?

  51. jabobeast

    why is NFLX down?

  52. Pharmboy

    Um,  um, ooooooo!

  53. ethan2010

    phil,
    i have short 4 AAPL Jun17 345 Call at 2.69, now 5.85, also long 4 Jun17 355 call at 1.02 now 1.95. do you think i should roll or add more longs? Thanks,

  54. kevinb63v

    Phil,
      I hate to belabor the point on RIMM (holding Jun $50 sold puts), but I tried the (b) option of the last advice you gave me, which was to see if RIMM broke over $45 and buy the stock or options to cover, rather than roll to JUL $47.50 puts which would be a waiting game. RIMM quickly fell to the present sub $40 level, at which point I wouldn’t mind accepting the puts, but not at $50 (net $48.55 were I to do so). Can you offer any help?

  55. exec

    Phil/Practice,
     
    Thanks for the pointers. 
     
    Unfortunately I’ve been very busy recently and haven’t been able to watch USO close enough to get a feel for the moves.
     
    So I’m back to sitting 100% cash and it’s burning a hole in my pocket.  This market is so irrational that I can’t make up my mind how to play it other than the JR’s in and out approach.

  56. Pharmboy

    OPTR – all out.

  57. Phil

    Dollar/Amatta – I’m not sure.  That’s why this is a watch and wait day.  We need to observe to see what they can and can’t accomplish but, so far, it looks like they can’t even get the Dollar back to Friday’s 73.75 level and certainly not for lack of trying.   Without QE3, it’s ridiculous for the Dollar to be this weak. 

    NFLX/Esco – At least put stops on the short $275 weekly calls at $2.50 because we have 4.5 days and clearly they can move that in one day!  

    NFLX/Jabob – No, the question is – why was it up?

    AAPL/Ethan – You want me to tell you to keep being short on AAPL?  No thanks.  You are lucky you only lost 120% and tomorrow it may be closer to 500% if they roll out a product everyone likes.  I cannot, for the life of me, understand people’s fascination with these idiotic spreads.  You collected $1.67 to risk losing $8.33 and you are surprised to lose $2.30?  You have to assume EVERY trade you take has a 50/50 chance of success so if you consistently take trades that have 5:1 odds against you, then you’d better be right 5 out of 6 times or you WILL lose money.  I’m not right 5 out of 6 times so I avoid those like the plague but, apparently, many of you are much better at picking sure things than I am so you are willing to take tremendously poor odds to even up the playing field…

    RIMM/Kevin – It’s a good story but knowing what you sold them for would have added so much to my understanding of the narrative.  Also, I’m not clear how buying the stock would cover short puts so something is strange from the last time.  Anyway, so you have the short RIMM $50 puts at $10.30 and you would like to own them so why not roll them down to 2x the Jan $37.50 puts at $4.30 and also sell 1x the $40 calls for $5.40 and that’s about a $7.50 net credit, assuming you sold the original puts for $2.  Now the question becomes, what’s your comfort zone?   If RIMM heads over $40, you can cover with the stock and you end up in a buy/write at net $32.50/35 with an extra set of $37.50 puts which, of course, can be rolled to 2013 and you would just set up with a lower buy/write.  That’s nothing to cry about, right?  Alternatively, you can add the 2013 $37.50 calls now for $9.70 and that’s net $2.20 on the spread with a year to roll the callers that are $2.50 higher in the first place.  Worst case is you end up owning 2x or RIMM for just under $40 but you can still roll the Jan puts to the 2013 $35 puts so the real risk is owning 2x RIMM at net $35ish, which isn’t much worse than owning 1x at net $50, is it?  The 2nd trade is "safer" into earnings because if RIMM pops on you, you won’t be screwed and, if it dives on you, you can roll to the 2013 $30 calls (now $13.70) for $3ish and play for the bounce and you’d then be in the 2013 $30/Jan $4 spread for net $5.50 with the 2 short (assuming you roll) Jan 2013 $35 puts and figure you sell the 2013 $45 calls for + $4 and then you drop the net back to $3.50 and you still have a very cheap 2x entry to RIMM or you walk away with $10 over $40, which is still almost a double after all the drama.  

    100% cash/Exec – CSCO, WFR, BA, HOV, WMT, XLF, GE, DIS, INTC, TASR – nothing to buy???  

  58. Pharmboy

    Someone is buying DCTH.  Big hammer forming.

  59. exec

    Phil/Cliffhanger,
     
    I’ve been thinking about selling some puts on company’s that I want to own.  Like Microsoft for example.  Problem is, when I view the charts of most of the company’s that I like, it looks like they are hanging on a cliff and about ready to go over the edge. 
     
    I was also checking out that VXX chart.  Is there any fear left in this market?  They say buy when people are fearful and it doesn’t appear that there is any level of fear out there. 
     
    I’d be interested in hearing your view of this market.  Do you see another bounce in the channel or over the cliff?

  60. palotay

     So, we are below all of our must hold levels, is now the time to get more short?  I’m already well hedged, but am thinking about taking a more aggressive stance.  Thoughts?

  61. tchayipov

     Pharmboy / OPTR
    did you close position with loss?
    I have June 12.5 / 15 call spread and short half Dec 12.5 puts
    what is your recomendation?

  62. mrmocha

    Pharm - ARIA – I’ve kept them uncovered fearing a buyout or other big run would nail me while I was covered, but the weakness of late has me troubled. Are you covering them until something big happens or leaving yours naked and ignoring?

  63. leonf675

    Phil, thanks for the response on the 401k question.  
    Unfortunately, I can’t switch to another broker based on my employment situation (work in IT for a brokerage, but I am still required to maintain all my accounts with them).   I am limited to just b/w  (covered calls only and no bcs or short puts are allowed).   
    I am a little terrified with my commodity-focused portfolio myself (didn’t look as terrifying just a month ago when everyone was screaming hyperinflation).    You may recall based my questions from about a month 1/2 ago  when i was describing my overall allocation, this 401k is roughly 10 – 15% of my assets and i was looking at it as a hedge against inflation or since I am locked out of  the money in the account for another 25 years, i was mostly looking it, as a way to protect against the falling value of the dollar.   I am certainly more balanced in my non-retirement accounts where I am allowed to have spreads, etc.
    Having said that,  let’s suppose I am ready to start from a clean slate and lock in the gains in commodity-focused positions.  Currently, I have around 100k in the stocks I mentioned and 90k in cash.   How would recommend I allocate around the resulting 190k if I sold everything now and went to cash?    How would you hedge against the possibility of QE3 and continuing dollar-debasement?
    If you could please reply with a sample list positions you would have in place for an account like this, I’d appreciate it.

  64. terrapin22

     Phil / HCBK – i own the stock at around 11 and sold Jan ’12 12.5 puts for $2 (now at $4) back in January so down about 35% on the position.  how would you adjust this?   Thx.

  65. terrapin22

    Pharm / DCTH – wow!  finally.  hammer-time indeed. 

  66. amatta

     Phil, 
    RIMM / Income Portfolio. 
    Well I have almost exactly the same situation with RIMM as you just dealt with for Kevin, and your response to him was close to what I had asked over the weekend on the Income Portfolio chat if I should do but I guess you didn’t have time or didn’t make it to that chat over the weekend. 
    I have 12 Sept 47.50′s sold for $3.90 (now 9.40). So was thinking of rolling them to the Jan 40′s (5.70) and selling the Jan 42.50′s for 4.10.  If they cross 42.50 I would buy the stock. Is this a good plan?
    I also posted there on the Income Portfolio the questions on my positions I have been trying to get your input on it for 2 weeks to be able to position myself entirely on the Income Portfolio (you asked me to post it over the weekend). Just hoping now to get out of those damned FAS to be out of the 25K. 
    Thanks

  67. lori13

    Exec I nthink there is a lot of fear in this MKT.  I bought Phil’s puts and a couple of hundred $ worth of QQQ’s on Friday. After all the news and comentary this weekend was getting very worried. 
    Thanks Phil for not panicking this morning.  I lightened up a little but am holding on.   Still the general consences does seem to be pretty bearish..  ?

  68. mrmocha

    Pharm, I don’t usually go against your calls but last month you said "For a small position in NSPH, fine, but RXII can be just watched for now. " I did some reading and decided to buy bit of both; check out what RXII has been doing since then.  Hopefully will have a transitory effect on NSPH.

  69. mrmocha

    JRW must have just read Ristau’s article on oil, look at that buy on SCO just now!

  70. terrapin22

    Pharm / ARRY – your thoughts on this one?  double down if it goes lower?

  71. Pharmboy

    OPTR – should be a net credit for the spread, tcha.  Not much, but 20-30% is nothing to sneeze at.  They are in critical territory now and could go either way, and I did not want to risk any more profits.

    ARIA – covered with the July 9s, mrm. I also sold some July 8 Ps with lots of support in here. I just follow Opts rules once we reach congestion.  If I get called away at 9, then so be it. That one has been a HUGE winner.  ASCO ends today or tomorrow, so much of the cancer hoopla will be over. 

    PLX is green….

    DEPO is holding ground.

  72. rustle123

    Just bought back NFLX 275 calls at 1.66.  Thanks for the call Phil.  Don’t know if you missed it but asked before where you would buy DIA puts again?  Scale in if mkt turns positive, tests 12200 or now?

  73. palotay

     It is unbelievable that the VIX is down for the day.  WTF?

  74. Pharmboy

    ARRY – my average is 3.01, so I am down 55c (~ 20%).  With this one, I am going to wait a bit more and see if they give up the 2.50 area for a while, or if this is consolidation.  Just have to wait and see.  I don’t see any data coming out in the next two months….although I need to dig deeper.

  75. stjeanluc

    RIMM – Based on ComScore, in the last quarter they have lost close to 5% market share in the US. 
    http://www.engadget.com/2011/06/06/comscore-android-grows-larger-than-ever-among-us-subscribers-a/
    Of course, this could still be positive in sales as the smartphone market is growing so even a smaller slice of a bigger pie could be bigger. But it should still be worrisome for them. That’s another stock in need of a good earning number next time!

  76. David Ristau

    Just bought back 1/2 of our JOYG puts at 1.15 for our clients for a nice 8% gain. Still some upside there with JOYG showing massive strength!

  77. goober

    Angel and all – just found this  on currencies ? this guy runs lots of money. Thx for earlier heads up
     
    http://www.zerohedge.com/article/john-taylor-says-he-now-long-usd-week-ago

  78. Phil

    Cliff/Exec – It depends what you call a cliff.  I just listed 10 stocks I think are buyable right now.  So let’s say, for example, you take a poke at CSCO ($16) by selling the Jan $15 puts for $1 for a net $14 entry.  Let’s say you have a $100K long-term portfolio so you are allocating $2,500 for the first round so you sell 2 puts for $200 and that would put you in 200 at net $14 for $2,800.   Now, what if the market drops 20%?  Assuming CSCO follows the market, it will drop $3.20 to $12.80 and you will (assuming the timing) will have 200 shares of CSCO at $12.80 that you bought for $14 with a $240 loss.  So what is this trade doing?  It’s risking $240 (under foreseeable circumstances) to make $200.  

    So what do I give a damn if the market falls 20% to Dow 10,000?  I only end up getting CSCO at the price I wanted it for anyway.  If the Dow drops 40% to 7,320, then CSCO is down to $9.60 and I have 200 shares at net $14 and I buy another 200 for $9.60 for 400 at $11.80 and I’m down 18.6% with the market down 40% so I sell the 2015 $12.50 puts for $1 and maybe the $12.50 calls for $1 and now I have a buy/write at $9.80/11.15 on 400 shares that have used up $3,920 of my $10,000 allocation so far and my worst case is I have 800 shares of CSCO at net $11.15 ($8,920) for a full position on CSCO at that price.  

    If you don’t REALLY want to own 800 shares of CSCO for $11.15 in 2015 and hold it for 20 years, then DON’T sell 2 puts now for $1 but if you find VALUE in CSCO and REALLY want to make it a long-term holding as a 10% allocation of your portfolio if you can buy it for a 36% discount from today’s price – then take the $200 and you don’t give a damn whether the market goes up or down 20% because you either get your cheap CSCO (that you REALLY wanted) or you get a free $200 for NOT buying it and, of course, once CSCO is moving up $1 (and the puts drop to .65), you no longer count it as an allocation since you can easily stop out even and you move your $10K allocation on to the next stock you may buy at a discount and just let the short put ride with it’s net $400 margin to make $200 in 6 months.  

    If you are 100% in cash and you allocate 10 short put positions like that, that’s $2,000 to pick up on idle cash over 6 months – still better than $100K would do for you sitting in a bank or in a bond and, as you can see from the Income Portfolio, we can be a lot more aggressive than that without getting too risky.  

    This is how we plant our trees but, if you don’t plant ANY, none are likely to grow into good long-term investments, are they? 

    More short/Palotay – I’m not convinced yet  Europe closed flat on the FTSE, down 0.3% on the DAX and down 0.7% on the CAC but they were all playing catch-up with our awful Friday.  I’d have to consider it significant that the FTSE bounced off it’s 200 dma at 5,800 and held it for 2 days now.  The DAX bounced off 7,000 with the 200 dma 100 points below that so they don’t look too worried and the CAC is the worst performer having failed their 200 dma at 3,900 so I’m going to want to see how they do tomorrow as well as see how China does when they reopen.  Our volume is a lame 65M on the Dow at 1pm so not really capitulation selling but no panic either.  If you want to get more aggressively bearish, I’d consider the Jan TZA spread from Friday as it won’t hurt you too much if the market bounces back but it will grind it’s way to victory if we turn down.  

    IRA/Leon – But isn’t a bull call spread "covered"?  Well, the commodity focus is not so bad on that basis (15% of assets as a hedge against inflation) but then you just need to recognize that there will be many ups and downs along the way and you can "hedge" by simply buying puts or ultra-short ETF longs like EDZ, when we cross certain thresholds that make you feel your current covered calls are inadequate.  That’s not complicated – we took naked EDZs to cover a couple of weeks ago in the $25KP and we go on and off with DIA puts all the time so those are signals you can follow to use your own index covers.  You’ll have to ask me on the weekend, or try nights if I have time this week as theres a lot to consider.  I’m currently very bearish on commodities so if you are willing to cash out, I support that entirely.  Once things come down more, THEN there will be plenty of things to buy…

    HCBK/Terra – So you are in for net $9(ish) and will end up with 2x at $10.75 if it’s put to you in Jan and what I said earlier about this being a terrible time to bail on the Financials had no effect on you whatsoever, right?  Imagine if you had also sold the $12.50 calls for $1, that would have dropped your net to $8/10.25 and it would hardly be an issue, right?  Too bad you didn’t sell calls all the way from $11 to $8.50 and instead rode a massively aggressive entry all the way down, only to panic right when it bottoms out.  It’s a sad tale, but one that is told over and over and over again.  As HCBK only has Jan calls (no 2013s yet) I would do nothing and see what happens.  You could roll the caller to 2x the $10 puts (now $1.85) for about net .50 and sell the $9 calls for .55 and that leaves you in at net $8/9 with the stock at $8.55 if you really insist on losing faith here.  

    RIMM/Amatta – Sure, that’s fine.  You want to put them in as much premium as possible and covering the other side gives you more leeway.  Frankly, I didn’t even look in the chat on the Income Portfolio this weekend – I generally only chat in the last post I write and tend to check comments in Portfolios when I do updates.  I’ll try to take a look there tonight or tomorrow.

    Bearish/Lori – It all depends on the Dollar and that depends on Europe and Japan, neither of which are in the kind of shape you want to be risking your assets on.  Cash is the way to be at the moment as we need to be ready to buy, in case there is a QE3 event but also ready to buy, in case the market does crash and we get our bottom fishing conditions.  Obviously, I’ll be a lot happier to see a nice crash so we can go bargain hunting – it’s much more relaxing than chasing another bloated, inflationary market pump.  

    SCO/MrM – That guy had good timing.  

    DIA/Rustle – I thought I answered that?  Yes, I did…

    VIX/Palotay – It was up early, then down.  This means down is the new up and the VIX is reacting to unusual upside moves in the market while EXPECTING downside moves.  

    RIMM/StJ – 5% share loss is bad but not so bad considering IPhone penetration.  Others (NOK) have suffered far worse!  

    Jobs must not be wowing them so far – AAPL making lows.  

  79. sparky123

    Phil,
    Re exec. Even for a long term investor, why would you go long these stocks until we finish testing the bottom of this  channel? With what’s going on in Europe the dollar could pop either way. Why not wait until the direction is more clear?

  80. grenowoods

     They are saving Jobs for the big stuff.

  81. rustle123

    DIA/Rustle – I thought I answered that?  Yes, I did…
     
    My bad, passed over it.

  82. Phil

    Apple thing looks like it’s about the new OS and the cloud – not very exciting but not terrible.   

    AAPL July $340 puts a nice sale at $10 because of this data from conference:  

    10:06 am 3/4 of Macs shipped today are laptops.
    10:05 am Citing MacBook Air as example of great Mac.
    10:05 am Mac has outgrown the industry every for the past 5 years.
    10:05 am 28% Mac growth, -1% PC growth.
    10:05 am Showing quotes from AllThingsD about how kick-ass the Mac is.
    10:04 am 54m active Mac users and growing.

    There seems to be a worry that the Cloud will dent ITunes revenue but so would competitors and the way the APPL stuff interacts, it seems like a great reason to buy an AAPL car stereo in addition to the IPod, IMac, IPad, IPhone…

    Why/Sparky – Why sit in all cash when you can take a poke at a few nice stocks.  What if this isn’t the beginning of a huge sell-off?  Then what do you do with your cash – just jump in at some point out of fear you’ll miss something going the other way?  Those are just 10 companies I like that I think have reached a fair value.  There are about 8,500 companies I wouldn’t buy yet, but those 10 are not on that list.  If you know the perfect, exact time when the market will absolutely reveal it’s direction to us then, by all means – please let us know when it comes but, meanwhile, I like to while away the time making a little money. 

  83. lvmoda

    IWM hugging S2 @ 80.

  84. Phil

    12:00 PM On the hour: Dow -0.13%. 10-yr -0.15%. Euro -0.12% vs. dollar. Crude -0.7% to $99.50. Gold +0.77% to $1,554.40. 

    01:00 PM On the hour: Dow -0.14%. 10-yr -0.18%. Euro -0.22% vs. dollar. Crude -0.7% to $99.57. Gold +0.66% to $1,552.70. 

    Did I say that? Goldman jettisons its bullish stance on the economy, citing a lack of a "sustainable" recovery due in large part to Japanese supply disruptions, oil price shock, and a difficult hurdle for QE3. Just flip the quarter again, guys.

    A Wells Fargo survey of investor attitudes showing a steep decline in optimism since February may be less than meets the eye. Two items of major concern – MENA and the Japan quake – registered zero in the February reading. All of the other categories have registered little change. 

    Run awayyyy!  China’s well-to-do citizens are moving money and/or themselves out of the country at a startling rate. A new study puts at 60% the number who are either considering or completing the emigration process, mostly in violation of Chinese law. This coincides with Treasury picking up a surge in hidden cash transfers since summer 2010. 

    While no one expects a rate hike when the ECB meets on Thursday, strategists expect the bank to signal a move to come in July. Look for a raised inflation forecast to be presented at the post-meeting press conference as justification for the move.

    Meanwhile, with Apple (AAPL -0.6%) soaking up tech-media oxygen, Microsoft (MSFT +1.1%) at E3 unveils a new Xbox dashboard, featuring YouTube (GOOG) and Bing voice search.

    Gimme Credit moves Cisco (CSCO) to its bottom-ten investment grade list. The company won’t be disappearing, but the move is a reflection of the firm’s increased competition and move into less-profitable products, a double-whammy slowing revenue growth.

    Circumstances including a rapidly building natural gas supply aresetting up a "golden age of gas," the IEA says, projecting global consumption could rise 50% over 25 years and account for more than a quarter of energy demand. That’ll mean less take-up for renewables and nuclear. ETF: UNG +3%.

    Investors cashing out of Groupon at an unusually high rate when the firm needs the dough to compete with well funded competitors could be reason for concern. If actions speak louder than words, perhaps the sellers know something the prospectus doesn’t tell us.

    The New Yorker‘s James Surowiecki laments the political "demonization" of Elizabeth Warren and the Consumer Financial Protection Bureau: "It’s profoundly misguided, because Warren is far from the anti-capitalist radical that her critics (and some of her supporters) suppose. Indeed, an empowered CFPB could actually be a boon to business."

    Three lunchtime reads:
    1) Wolf with Davies and O’Neill: The world economy survives crisis after crisis
    2) Economy circling the drain?
    3) Life without QE2 

  85. sparky123

    Why Phil. It’s perfectly obvious. As soon as I make a bet in the opposite direction. CSCO may be too big to succeed. I’ll look at your other suggestions. Thanks

  86. dflam

    Phil /KFT:
    Hi Phil : In non IRA, I bought KFT  at $28.10 and sold Jan $30 P&C for $5.87 for net $22.23. Puts sold at $3.10 ,now $ $.81 which I will keep open to expiration. Calls sold at $ 2.77,now $4.35. The 2013 $30 C are $4.90 so a roll gets me $.55 which is doesn’t seem worth rolling for 18 months. Considering closing it out and buying something else. Comments.please. Thanks.

  87. Phil

    Oh no!  AAPL failure bringing down the whole market now.  Dollar ramping up to 74 at the same time – not good at all!  

    I see nothing in the AAPL presentation to cause this – this is just a planned move.  Possibly a spike down to shake out the weak hands but it could also be selling into the AAPL excitement or a reflection of a plan to wait to sell until the AAPL excitement but now just giving up and selling…

    I would have to go with shaking out weak hands at the moment.  Dollar has to pop 74 but, if it fails, then all markets can bounce, leaving all the capitulators behind.  So I still like the RUT at the moment, over the 800 line in the futures as well as the Dow over 12,100 

  88. judy

    AAPL – last week there was a news article about VZ sales of iphone being dramatically less than expected.
    I was surprised aapl did not pull back more on that news. I think it was being held up in expectation of something great for this event. 

  89. lvmoda

    Phil,  stickable conditions setting up today?

  90. zeroxzero

     PBR Jan 2010 $30 puts sold for $4.45, own Petrobras in 18 months for $25.55   Or keep the change, as it were.
     
    Arch Coal looking goo

  91. zeroxzero

     d,

  92. zeroxzero

     d… sorry, EM internet problems.

  93. angelcur

     dam feels like its about to break…normally msb steps it up right about now…oil and spx at key levels too…if we close near lows that will be pretty bad signal i think.

  94. angelcur

    bap is a peru bank check it out

  95. angelcur

    trichet saying "greece must dratically improve policies"..msb buying oil?

  96. JRW III

    Good morning,

    Support at IWM 79.90, SPX 1290; I expect a bounce there but, as I said "the wheels should come off this week"; if not, it’s Wave 5 UP !! 

    Just watch the chart and play what’s in front of you, good hunting !!

  97. Phil

     Poor BIDU – taking a real beating since Friday. 

    KFT/Dflam – Well a 3.5% dividend is nice.  With a stock like KFT, you are in for net $22.23/26.12 with the stock at $34.  Your Jan $30 putter and caller are still $5.20 so they have $1.20 in premium, which is, in case you didn’t do the math, 5.3% of your basis over 6 months left to collect.  Once that premium is gone, figure you roll them to a 2013 combo that’s $6 and you pick up $2 more to lower your basis to about $20.  So, about 10 years from now, you will own KFT for free and collect a $1.16 annual dividend (which will likely keep up with inflation) and if you do that with your whole portfolio every 10 years for 30 years, you’ll end up with 3x your current portfolio size of zero-basis stocks that pay you 10% of your current portfolio amount in dividends annually.  That sounds nice to me – why are you throwing it away?  If you want to be more aggressive, the Jan $30 puts and calls can be rolled up to the Jan 433 puts and calls at $3.80 for $1.40 so it’s a new risk of $1.40 to make $3 in 6 months.  Then you can do the roll to the 2013 $35s if KFT keeps going higher (still $6.80) which would give you your $1.40 back with more than a 50% profit in 6 months and you will have raised your call-away by $5, which is another 22% of your basis.  I lost track – why is this a bad thing?  

    VZ/Judy – Yes but that’s because they didn’t steal all of Ts share like unrealistic expectations thought.

    OH NO – AAPL has a Blackberry mode for thumb typing!  

    Stickable/LV – Very stickable but Dollar won’t go down. Volume is certainly light enough.  

    PBR/ZZ – I like them but not with oil so high and likely to fall.  

    BAP/Angel – Interesting but I think the dump Peru story has legs.  Don’t forget how screwed people investing in Venezuela were when Chavez took over.  

    2:00 PM On the hour: Dow -0.23%. 10-yr -0.08%. Euro -0.22% vs. dollar. Crude -0.77% to $99.45. Gold +0.24% to $1546.10.

    Starbucks (SBUX +3.7%) moves to the top of the day’s leader board after BMO upgrades its shares and predicts a potential 25% gain in the next 12 months, arguing that a “number of potentially short-lived or one-time cost pressures are masking Starbucks’ true earnings power.” BMO joins several analysts that have hiked price targets in the past 10 days.

    Orexigen (OREX -12%) adds to Friday’s 30% drubbing after announcing its obesity-drug program is being put on hold indefinitely. The stock is now trading at lows not seen since April 2009. 

  98. rehat

    Apple just came up with the Blackberry Messenger Killer – Apple messaging accross all iOS devices. I know a lot of people mostly in emerging countries who but the blaskberry primarily for the BBM functionality.. oh boy there goes RIMM… 

  99. amatta

     rehat, 
    I assume iOS is the Apple operating system right? So I am not sure I follow, you couldn’t message between RIMM phones (which obviously don’t have iOS) would you?

  100. Phil

    Oh no – here comes the Dollar with a big move up!  

    Nice, Jobs is back and showing off cloud stuff.  No more Mobile Me – all free in the cloud,  Access to all files on all devices wherever you are – kind of the way things should be…  

    Wow, documents shared in the cloud.  This will be great for editing SWW as we can all work on it without all the Emailing revisions back and forth so that’s a huge productivity increase for Eileen, Elliot and I and I imagine so for millions of others too….

    Dow still holding 12,100 – might be significant.  Oil selling off into NYMEX close, failing the $99 line.  Dollar at 73.985.  RUT failing to hold 800 is bad but they are fighting to get it back.   XLF right on $15 too – very exciting!  

    NFLX $260 – even more exciting.  Now if only GMCR would follow them to Hell, I’d be happy…

    DIA June $123 calls at .45 are worth a toss as a fun way to play the upside.  

  101. asaenz

    @ Pharm…. worth buying SVNT on this dip? i sold 1/2 my position in the recent rally, now i stand even on the ones i have left….thanks!

  102. Phil

    Now they are set up for a half-point stick if they can jam the Dollar back off the 74 line to 73.75 into the close…

    2:00 PM On the hour: Dow -0.23%. 10-yr -0.08%. Euro -0.22% vs. dollar. Crude -0.77% to $99.45. Gold +0.24% to $1546.10.

    Geithner calls for a global standard on derivative margin requirements to prevent a “race to the bottom” that could prove to be “the recipe for another crisis.” Without pinpointing specific requirements, he says “regulators are now in the process of laying the groundwork to set an international effort in motion” with the U.S. taking “a leading role."

    The U.S. economy and stock market are in a "soft patch," not a sinkhole, BofA’s David Bianco argues, citing a weak dollar that will boost export activity and an acceleration of business investment likely from higher oil costs. Perhaps the most compelling reason to stick with stocks: The S&P EPS yield of 7.5% is near a record high compared to the 10-year TIPS yield of 0.7%

    25 Million Americans Are Unemployed Or Can’t Find Full-Time Work (NPR)

    DESCRIPTION

     Could Fast Food Automation Replace Low Wage Workers? (Econ Future)

     

  103. lori13

    Phil I have the 37 June TBT put at 3.70.  I think we were going to look at a roll this week.  Wait, Ideas?  Thanks.

  104. Pharmboy

    Hello PCLN.  Thar she blows!

  105. Pharmboy

    SVNT – do nothing for now.  Sell some calls OTM in Sept and let’s watch. I am thinking of the Sept $8 Ps for 1.25 if we can get them.

  106. snow

    Hmm, editing in the cloud? Isn’t  that called a wiki? Especially if you have the discussion page with the article?

  107. rehat

    Ammatta/ iOS,
    It is the Apple operating system for all it’s mobile products – iPhone, iPad and iPod Touch. So the BBM functionality of instant messaging will not work as long as these devices are connected to Wifi or 3G – I think this is going to be big plus as a lot of families and work groups use blackberry for it’s email and bbm functionality and now Apple give you a more flexible alternative as it works on all iOS devices and on wifi and 3G, whereas bbm does not work if I cahnge my SIM card if I go to another country and do not activate the Blackberry plan in that country.. This is great for me as I travel a lot and now can always have a bbm type application…. the more I think about this I feel this is going to be a big killer app for people in India – who are big users of bbm

  108. jabobeast

    FU Momos!!!!

  109. lvmoda

    IWM at LOD.

  110. rehat

    BTW, I am posting about the new Apple stuff because I think this has a big impact on Apple but I think a much bigger negative impact on RIMM. So I feel this could be important for those who are selling RIMM puts (which I covered last week FWIW).

  111. asaenz

    @ Phil, too dangerous to play for a stick here with iwm?

  112. jabobeast

    DXY ???  it just doesn’t matter??

  113. angelcur

    phil i only meant for  people to look at how gaffed that bank was not buy it! por dios..viva cesar!! (kidding)

  114. kustomz

     11999 here we come

  115. Phil

    Oh nuts, AAPL going down again and the Dollar just popped over 74 – hopefully it’s just a quick spike over that won’t hold otherwise it’s going to blow the technicals and this downtrend is going to look nasty to Asia this evening.  

    AAPL is so cool – Cloud is free, cloud is enabled unless you disable it, cloud works as soon as you sign in and automatically backs up everything you do, even photos.  And you guys think CSCO won’t be getting a lot of business?  All this stuff works now, apparently you can go home and try it with iOS 4.3.  

    Here’s "one more thing"!  

    ITunes Match – Apparently, they are now going to treat songs you purchased on a CD just like songs you bought from ITunes so you get the Album covers and info etc. and it copies to all your other devices – that’s REALLY nice as I have a terra-byte of songs.  

    Ah, they’re charging $24.99 a year for that and there’s no way 50M people don’t want that! 

    Now you can go to a hotel without your IPad and they can have an I-device there and you have instant access to your whole music and video collection.   

    Meanwhile, look how devastating a rising Dollar is for the markets, 74.01 and the markets are heading straight down.  The Dollar was 76.16 on May 23rd…

  116. asaenz

    @ Phil, if we do have a big correction (20%) how cheap do you think FTR can get? Any puts worth selling today?

  117. lvmoda

    Ouch…breaking IWM support from May 4th….here we go…

  118. angelcur

    1373 was intraday high so 137 points is 10%….

  119. angelcur

    iow dont get doctrinaire after nearly 100 points of down

  120. dflam

    Phil/KFT:
    Excellent suggestions.My weakness is not  looking at the combined spread and determining the next"roll". I looked at both options individually and simply determined it was safe to keep the put ( I don’t have a problem buying KFT at $30 )and looked only at (A) the premium remaining on the $30 call, and (B) the premium to a roll up to the $32 or $33 call, and determined the small additional premium was not  worth the much higher risk.Might  be a subject you can wrote about in the future. 

  121. Phil

    TBT/Lori – It’s just going to pop "one of these days" so you just want to roll it straight out.  The Sept $36 puts are $3.55 so for .15 you make $1 progress.  Do that every 3 months and in a year you’ll be selling the $32 puts…

    Oh, Dollar rejected right on schedule at 3pm!  Now we can have a stick…

    Stick/Asaenz – No, I was holding out hope, as you could hopefully tell from the running narrative – the push down was all about the Dollar so easily reversible but now we’ll have to see if they can take the Dollar back down or if this is a real breakdown.  

    BAP/Angel – Ah, that makes more sense then. 

    Well, I guess they should have charged more for that Match service – AAPL off $10 now and the Nas is none too happy about it.  I still like selling the AAPL July $340 puts, now $10.50.  

    FTR/Asaenz – A bit of a safety stock but could go back to $6.50 and also just broke below the 200 dma so I’d wait and see how they do, not try to catch a falling knife.  

    KFT/Dflam – If you remind me! 

    Hardly anyone likes it, but most think it’s inevitable: QE3 will happen. Ed Yardeni on a weekend meeting of fellow pessimists: "Everyone seemed to agree that the Fed would most likely leave the federal funds rate at zero for a long time and that a third round of quantitative easing is likely later this year… Most agreed that it would probably boost stock and commodity prices again, though not as much as QE2."

    Japan says Fukushima reactors #1, #2, and #3 experienced full meltdowns, #1 within hours after the earthquake and the others within days. TEPCO (TKECF.PK -25.2%) still avoids using the term ‘meltdown,’ but with no fuel left in the core, what else could it be?

  122. bobhu

    Got filled for XLF July 15 Put for $0.50.

  123. lvmoda

    IWM bounced three times off the LOD Support line since May 4th.  If IWM reverses (which should happen soon – very oversold), I have near term resistance on my chart at 81.15 and top of channel resistance at 84.25ish.   All this is predicated on the market retaining its character demonstrated in May.

  124. JRW III

    Target:

  125. amatta

    CCJ again going down the drains? Wasn’t it already discounting the Germany BS? 

  126. angelcur

    dont be suprised if breitbart has pic of trichhett and legrande playing hide the saucisse..in an effort to walk th edollar up and crash the market..mon ding dong!

  127. Phil

    Dollar 74.04, Yen back on the 80 line, Euro fell back to $1.456, Pound $1.634.  Oil $98.63, gasoline $2.943, Nat gas way up at $4.82.  Gold $1,543, silver $36.50, copper $4.127.  

    This is really brutal – I don’t see how they are going to bounce this as it’s getting too technically ugly but, on the other hand – I don’t see how they can let it go because it’s going to be impossible to recover (and the assumption is they still want the market to go up). 

    74.05!  

    So, on the whole, I still think we somehow get a stick that is such BS that Matt will make at least 3 rants against it…

  128. angelcur

     ntes china net falling apart.

  129. amatta

    Phil, 
    I am not going to be traveling tomorrow, we are getting creamed again on FAS, were you intending on covering it today or tommorrow? 
    Why can’t they get the F$#king dollar under control? 

  130. lvmoda

    LNKD up on a day like today when all the other momo’s and the market are down…go figure. 

  131. pentaxon

    They won’t get it back over 1300, asia will sell off, europe will sell off and tomorrow it will be even harder for them…

  132. Phil

    XLF/Bob – Let’s hope they don’t actually trigger, that would be some ugly market!  

    CCJ/Amatta – It’s still a commodity stock, will fall with the rest.  

    S&P recovering first along with the Dow – we’ll see if they can hold the line here (1,285 and 12,050)

    Wow, this is pretty relentless!  I guess someone was holding out to see if AAPL rallied the Nas but, when they didn’t, they pulled the trigger on a dump program.  AAPL isn’t even going down anymore – just everything else…

    FAS/Amatta – No, I am not intending to cover it – we can only hope it comes back.  Covering it this low would only lock in losses.  

    Well, I have my new IOs for my Iphone already!  

  133. rustle123

    Phil, took your flyer on the DIA calls in time.  One of the few times in this market I am hoping for a stick, or good opening tomorrow.  Then crash and burn.

  134. lapper

    Amatta, you are blaming the dollar?  Look at the chart, hon.  They threw everything but the kitchen sink at it in the past week.  Dollar is super weak.  Markets are simply barfing anyway.  Masked selling and more to come IMO.  The game seems to be changed.  They would have stopped the bleeding long time ago, I think they don’t want to.  I think Phil is wrong on assumption they want the market higher.  I think they are trying to find bids by manipulating the dollar, and just dumping the inventories/shorting.  Next leg would be 600 pip drop in EUR and a bloodbath in stocks.  Then there will be no QE3, and panic/margin call selling.  Then they will cover, reverse, and guess what?  Yep, QE3.

  135. Phil

    Wow, 3:30 on the button with the stick.  Go sticky go!!!  

  136. terrapin22

    Phil / TBT – do u like selling July $33 puts here for almost a buck?

  137. Phil

    TBT/Terra – They fall to $32 so often I’d almost say wait but for scaling in, sure.  

    Oh no – they couldn’t get the Dollar below 74- that’s not good!  If LNKD can’t save us, I don’t know who can…  8-) 

    NFLX down to $461 – ROFL!!!  

    Target/JRW – I think it would be a shame to go to all that trouble and not hit 1,300.

  138. kurtww

     Phil, I have a small Oct 14/18 EDZ spread that is actually showing a loss today because we’re above the range. 
    Obviously I can wait and hope it stays above 18 long enough, or should adjust it in some way to make it more beneficial to me? Rolling to a 14/22 spread would cost $1.50 or so per contract. Thanks. 

  139. Dennis

    Damn Phil, how the heck did you call that turn?  

  140. rdn4evr

     NFLX – Hopefully everyone is closing out the $275 weeklies sold last week for $5.70 now $1.00

  141. pentaxon

    Thesis: looking at ES futures it looks like the bots were too cocky in harvesting the stops at the bottom ignoring that they scared people with the technical picture they were painting. Accident at work.

  142. Phil

    EDZ/Kurt – Well you have to ignore what it says it’s worth, as long as EDZ is over $18, you get $4 in October.  There’s not much you can do with those spreads other than roll to a longer call (for yourself) but hardly worth it as they only go to January.  That’s actually a nice spread to buy from scratch at $2…

    Turn/Dennis – Well if you look at it with the assumption that you are watching various forces at work trying to manipulate the markets, then you can begin to get a handle on who’s winning and who’s losing and where they are willing to put their firepower.  Still, this is, so far, a very lame bounce off a very big dip and nothing to get excited about. 

    NFLX/RDN – You are right, not worth keeping the $275 calls open with all that profit and 4 days ahead when anything can happen.  

    This should be the next crack at a stick but if they fail this, then bad finish and maybe nasty day tomorrow (and I’ll have to make new charts so I’m rooting for the stick!).  

  143. stjeanluc

    Cloud / Phil – All this from Apple is exciting if you have a lot of Apple products, but many of these functionalities have been available for a while from others like Google for example. You can also share pictures and music as well. Not as cute, but I have been sharing documents on the web (spreadsheet, database and others) with my office in Spain for the last 3 years. You can even use your Gmail account as a backup drive! But Google doesn’t have Steve Jobs making the presentations I guess… He is a great salesguy, no doubt!

  144. asaenz

    @ Phil,  should we close any positions we bought to play the stick? i closed 1/2 on this awfull attempt for a stick…. thanks!

  145. lori13

    Any ideas for a lower open tomorrow?

  146. angelcur

    this is so cute! selling over into an OVERSOLD condition..wait for 1270 then phil will read the entrails

  147. rustle123

    holding the calls till tomorrow.  Think there will be some wacky announcement to goose the markets even if for a day and a little squeeze.  Just seems at that oversold level where the big boys work their magic.

  148. kurtww

     That’s weird – IB was showing the EDZ spread losing $150 earlier, now it’s showing that it’s up $400. Makes more sense. 

  149. pentaxon

    Isn’t the Bernank just talking. Maybe he get’s a little post-it that he should say something QEish now?

  150. lolkha

    quite ugly finish

  151. angelcur

      ip buying tin for big premium

  152. kurtww

     Just checking in on my positions today and I’m happy NFLX is finally showing signs of sanity! I hope it lasts. Nice to be on semi-vacation and see the portfolio making up for last week!

  153. Phil

    Very possible Pentax because it started out looking like a flush but then someone big hit the panic button.  Once the Dollar popped over 74, things turned sour quickly…  

    GOOG/StJ – True it’s all available but when AAPL does it, they do tend to make it nice and easy.  Like I just plugged in my phone and it did a 15-minute OS download and now all my music is being shared and there were no instructions or buttons or anything – it just works.  That’s good stuff!  

    Stick/Asaenz – I don’t mind leaving the DIAs on as they are cheap plays looking for a long-shot pop back up but yes, generally it’s not worth much risk.  Better to lose 10% 3 times trying for a bounce and then make 30% on the one you catch than lose 30% 3 times and needing to make 90% with the 10% you have left!  

    Tomorrow/Lori – Oh I think they will try to repair this overnight.  If that fails, then we will open lower and keep falling.  Charts are already ugly and only a big turn will save them but, as I said this morning, it’s hard to get the Dollar lower than it is now.  I still like TZA and, as you can see from the RUT’s action today (down 1.6%), they have a lot to worry about.  All looked pathetic today and that crazy VIX only went back to 18.50 – bad craziness…

    Oversold/Angel – That’s kind of a matter of opinion.  We’re only oversold in this upper channel but, in the broader channel, this is still a minor pullback so far.  

    At the close: Dow -0.5% to 12090. S&P -1.08% to 1286. Nasdaq-1.11% to 2703.
    Treasurys: 30-year -0.17%. 10-yr +0.03%. 5-yr +0.06%.
    Commodities: Crude -1.41% to $98.81. Gold -0.17% to $1544.60.
    Currencies: Euro -0.45% vs. dollar. Yen +0.15%. Pound -0.49%.

    Whuck?  Greek PM Papandreou says he will consider holding a referendum on austerity measures necessary for his country to continue receiving bailout funds from the EU/IMF.

    Whuck?  The Supreme Court made it easier for investors to pursue securities fraud suits today when it ruled against Halliburton (HAL -4.2%) and overturned a lower court’s decision. The ruling eliminates the need for loss causation in achieving class-action status, and allows that accusations alone are enough to obtain class-action status for plaintiffs.

    Whuck?  The U.S. economy continues in a "recovery phase," Larry Summers tells CNBC, and "will be accelerating before too terribly long." He sees the risk of declaring a premature recovery, a la Japan in the 1990s or the U.S. in 1937, outweighing that of 1970s over-stimulation. "Policy does need to be above all vigilant to make sure that recovery is well established."

    Once more unto the breach for Meredith Whitney who, armed with comprehensive data, continues to insist state finances are far worse than commonly thought. Of particular note is unfunded pension liabilities, kept off state balance sheets, but 3X larger than on-balance sheet debt.

    Airlines’ shares sell off on a gloomy profit outlook, but their persistent pain at the gas pump should boost profits for suppliers of aircraft parts, Heard On The Street says. As airlines replace their fleets, the top beneficiaries should be Boeing (BA -0.4%) and EADS (EADSY.PK); investors also should consider their suppliers, such as Goodrich (GR+0.6%).

    International Paper (IP) offers to buy Temple-Inland (TIN) for $30.60/share. TIN shares +46.4% AH. 

    Reports out of Syria say 120 of its security forces have beenkilled by an ambush of "armed gangs" in the northern city of Jisr Al-Shugur. One source says the attackers were members of the outlawed Muslim Brotherhood.

  154. zeroxzero

     If The Bernanke doesn’t move quickly, equity investors might start thinking there’s something wrong with the U.S, economy.
     
     So, Phil, how far can commodities slide if the QE Commodity bubble is really ending?  Secondly, can a "QE 2 Extended" [they will never call anything QE3] really hold up commodities in the face of the demand destruction one could expect from a 20%-30% hike year-on-year?  And is that essentially a mathematical question?   

  155. flipspiceland

    Why does anyone take Larry Summers seriously?
    Why quote someone who quotes him?
    The ninny lost Billions for Harvard’s endowment,  he along with clinton, bush, rubin, and Greespan presided over the biggest fraud to homebuyers and buyers of MBSs in history, and he has a serious case of narcolepsy.
    Please spare us any more prognostications by this utterly failed jackass.

  156. Cap

    Finally, a little excitement.
     
    Energy names slaughtered; a lot to like long there IMO.

  157. lvmoda

    Getting oil back down to $70-80 would do a lot more for the economy than keeping equity prices up at this level, and would provide more stimulation than some kind of asset purchase program from the Fed to extend QE.   That stimulation should carry through to increased demand and thus jobs.

  158. rustle123

    @flipspice
     
    Why does anyone take Greenspan seriously?  The list can go for many more.  In 10 years from now, they’ll have Bernanke talking about what should be done after it will be well documented how he was one of the worst Fed chiefs ever.

  159. zeroxzero

     Is VXX calculated with an algorithim that normal people can reproduce, or is there just a blind oracle in a box spitting out random numbers? I would think it actionable to sell a security that lacks any perceptible relationship to the phenomenon it purports to track.

  160. Pharmboy

    FYI – Sentimentrader Summary: The Nonfarm Payroll report that was the big focus on Friday continued the recent streak of poor economic reports.  
     
    The S&P 500 ended up losing more than -1% on the heels of a report that saw the jobs market create more than 100,000 fewer jobs than had been estimated. 
     
    The last time we saw that combination (a -1% loss and 100k jobs less than estimated) was last June. It lost another -1.3% on Monday then rallied for almost two weeks (rally is about 5% – which is JRWs wave 5 if I am not mistaken).
     
    That seemed to a be a pattern. Overall there were five precedents, and the S&P saw further losses during the next 1-5 days four times. But by two weeks later, the index was positive all five times, averaging a return of +4.9%.
     
    The rallies lasted around a month following those instances, though that previous one in June 2010 only lasted two weeks. During the next month, all of them gained at least +5% at some point.
     
    For those curious, the dates were 4/6/01, 8/6/04, 9/7/07, 7/2/09 and 6/4/10.
     
    With the large loss in the S&P, it’s odd that the VIX indicator (also known as the "fear gauge") actually closed lower on the day. 
     
    In the past 16 years, using S&P 500 SPDR (SPY) prices, there have only 36 times that has happened. The short-term bias was relatively weak, as SPY was positive the next day 42% of the time, and over the next week 50% of the time but with a negative average return of -0.5%.
     
    But one month later, SPY was up 70% of the time, averaging +1.2%, so the weakness was usually restricted to the short-term. 

    Now the indexes have broken resistance levels, but just something to think about IF we get a rally.

  161. goober

    MY 1:22 PM post on currencies today should be read by everyone.  I think it is probably very important and may have been missed by some. It was addresesed to Angel. John Taylor was very evasive as though he knows something and did not really want to say ? I am not into a trade yet on it to short EUR, but likely will be as soon as his information is confirmed.
     
    Had a good day shorting on 2 rounds and gonna short NKD tonite

  162. strether

    And all of those recent turn arounds were accompanied by POMO with promise of more POMO

  163. angelcur

    phil rsi’s are swampped on everything hourlies dailies weeklies 5 day moving average if the cboe put /ca;; is 1.04 the trin is 3.40.. BUT the big mother the monthlies are JUST rolling over..i think that 1270 target is going to get smoked..but you know wtf knows..this is about gaming the gamers.
    .with regard to greece these are my people..we own land in sparta that has been in court for years now becuase some squatters decided they would form a co-op take and action against my family’s interest and try to win the land..and in the greek way (if you know what i mean)it has ripened in the system without ajudication forever.so as far a eurozone goes.the taxpayers there ( like all three of them) arent going to do anything the hated germans want them to..this is a society that killed itself 2000 years ago to avoid becoming a technological society..techne was not for them..so look to ireland to lob the suprise i still believe germany walks..just a swag

  164. jbaker2447

     Hi Goober, can you please re-post , I’m very interested — I have a basic membership and can’t see your original — thanks!

  165. goober

    JOhnTaylor said twice "something is going to happen in just a few days"  ? we shall see .

  166. goober

    J baker – Its on ZH  on tehir main page today,  good luck

  167. angelcur

    I AM CLEANIN OUT MY "JUNK’ MAIL NOW…I DONT WANT ANDY B TO BE GETTIN IT OUT THERE…we are such puritans when the souls of other saints are purloined….burrrrp

  168. goober

    You would think these guys would know better , pretty stupid stuff when under such scrutiny. And he was one of the main Palin bashers. Ha Ha Ha ! Gotcha ……………………..

  169. goober

    I already admitted I am a full on heathen, so no worries !

  170. lapper

    Goober, yeah John Taylor…  long dollar, 400 pips underwater, BOO something baaaaad will happen.  Soon too!  Just talking his book.  I would listen to the chart, not some monkey who obviously can’t.

  171. pstas

    Sixty Seven Years Ago:
    D-DAY  -  JUNE 6, 1944 : Soldiers, Sailors and Airmen of Allied Expeditionary Force! You are about to embark upon the Great crusade, toward which we have striven these many months. The eyes of the word are upon you. The hopes and prayers of liberty-loving people everywhere march with you… I have full confidence in your courage and devotion to duty and skill in battle. We will accept nothing less than full Victory !" Dwight D. Eisenhower

  172. ilene

    Today’s levels. We have updated the levels to now show levels as -5%, -2.5%, Must Hold, 2.5% and 5%. The -2.5% and -5% are not currently coming into view on the charts.

  173. rpme

    According to JRW, is tomorrow the day "the wheels come off"?

  174. goober

    Lapper – you may be right about him talking his book, but maybe not. we shall see. I just thought his demeanor was rather unusual and his comments as well. Doesn’t cost anything to pay attention though does it ? I will certainly be watching as I have been expecting such a move anyway. But as always, when ?
     
    The comments on the Weiner article are absolutely hilarious. I needed a good belly laugh !

  175. goober

    Lapper – Actually I think the charts do suggest such a move is possible as well.

  176. Pharmboy

    Goober – I think the Euro goes through the floor in the next few months.  If it was in the next few days, I would be happy!

  177. goober

    It has been flying high thats for sure.

  178. kurtww

     Pharm – I hope so too, European vacation is no fun with the euro at 1.46! In Austria at the moment and gas is 1.42, which sounds great at first glance, but works out to $7.90 a gallon. Plenty of people still driving around, though there are a lot less big Mercs and BMWs around than I remember from last time.  

  179. kurtww

    I was also struck how many ICE trains there are in Germany now. Those are the fancy white high speed trains, they were a frequent site last time I was here (around 5 years ago) but now they seem to be the norm on long stretches. And I read on the train that Siemens and DB just announced the next, fourth, version, the ICx that gets 30% better fuel economy per passenger mile. It’s amazing the difference some infrastructure spending can do. And of course the trains are all made in Germany, not outsourced to China or anywhere else. They made a point of saying that they use a lot of components from mid-sized German companies too, not just from one big company. Quite a contrast to the situation in the US, at least at first glance.

  180. Phil

    Commodities/ZZ – I think a nice 20% correction would be healthy.  Silver and copper already had it but gold would have none of it.  Oil is technically down from $115 but that was total BS so I’d say 20% off $105 to $85ish would be reasonable.  Gold around $1,250 should be enough to take the froth off commodities.  That would coincide with a Dollar move up to the 78-80 range but, unfortunately, that’s probably a 10% (more) market dump as well.   QE2 didn’t work – demand isn’t there.  That’s why the demand commodities are falling first and the pure speculative plays like gold hold up best – it doesn’t matter if real people want it as long as there are enough delusional rich people buying it.   What QE2 did was make a lot of money available to rich people but that doesn’t help you sell 90M barrels of oil at $100 a barrel to the masses.  

    Summers/Flips – He’s famous and still makes news when he prognosticates, should we cover our ears and pretend he didn’t say it? 

    Energy/Cap – Hopefully oil will drop another 20% and then we can go shopping.  

    Cheap oil/LV – The only trouble is you can’t do it through subsidies, it has to get there through some form of market forces.  Subsidies in China and India is why their demand is unnaturally high at $100 per barrel and that leads speculators to conclude supply is inelastic and makes them braver in their long positions leading to higher prices, etc…

    VXX/ZZ – Sure it’s right here.   

    Hiistory/Pharm – I think this time it may be different.  That was a butt-ugly finish and the Dollar is still super-low.  

    1:22/Goober – You are right, the link should be enshrined and a mandatory pilgrimage should be set each year so that all will remember there was a link to the article from Zero Hedge put up by you at 1:22!  8-)  

    Anyway, so Talyor thinks QE2 is over and there will be no QE3.  He’s just saying what I’ve been saying, the Dollar is too weak and it would take any small event in Japan or Europe to jam it higher and send the markets and commodities diving.   How come no one makes a big deal about it when I say that?  Be carfeful shorting NKD, the Yen is already at 80 and any move up will be NKD positive and I won’t believe they will let 80 fail until it actually does.  

    RSI’s/Angel – Good point on those and also on Greece.  

    DDay/Pstas – Thanks, I forgot.

  181. lapper

    $ and John ‘who’  taylor.  I am not saying it’s bullish here, but will trade the chart not some guy who just got killed on a trade.  that’s all I m saying. 
     
    Pstas:  Yeah if your name is eisenhower you sure do love a good crusade, but a Great Crusade is even better!

  182. ilene

    Today’s levels version 2 – working out some details here.

  183. strether

     Phil
    Should we be looking to buy SPY puts as the end of POMO approaches?That seems to be the implication of John Taylor’s excerpt.
    Strether

  184. goober

    Lapper  – clearly said I was NOT in a trade but observing for future actions.
     
    Phil some of your answers today seeem a bit turse ? unnecessarily. Don’t need a shrine or a badge ?
     
    And today Bwarny Fwank was overhead saying "dis could coss a spesho erection" in regard to Weiner ?

  185. lapper

    Ilene, how about renaming up 5% line into ‘bagholders needed’ and adding ‘reality check’ and ‘gravity is a b1tch’ at -20 and -40% respectively?

  186. Phil

    Here’s a detailed, bigger-picture view of the S&P.  

    So, on the 5% rule, we ignore spikes and pretty much late April through May was a spike over our expected 100% level and nothing more.  Now we are getting real and there is nothing strange at all about a 10-20% pullback after a 100% run.  We already had one 5% pullback but that was caused by the quake so not natural.  Now we’re getting the overdue natural pullback but it happened so quickly in this leg (4 sessions) that we are already looking oversold.

    Note last time we did the same thing into Fukushima but then sprang back VERY quickly on G8 intervention (on a Thursday).  So far, the 1,300 level (2.5% and also our Must Hold) offered no support so now it’s up 1,265 for major support as that’s the 5% line.  Note on the close-up charts it’s 1,268, that’s because we’re basing -2.5% off 1,300, not 5% off 1,333 – you need to use the supports that form in the time-frames you are studying.  

    What we don’t have yet, is a blow-off volume spike to give us a nice turn signal.  Not having that makes me nervous that we still have a major drop ahead of us…  Of course, we have to consider that C did that 1:10 split and probably took 10% of the volume out of the S&P, maybe more.   Notice how it’s not very likely that we’ll go below 1,250 as that’s Fib-level support and the rising 200 dma – that should be a tough level to cross below so if we do have a blow-off move with volume down to there and people are freaking out – it will probably be a great spot to go long! 

    Meanwhile, the Dollar gapped up to 74.36 in the futures when they reopened at 8, probably adjusting to where it should have been during trading hours as ther has been no gap like that in the other currencies.  Pretty much it was just the Dollar being manipulated to stay under 74 to stop the markets from completely falling apart.   Now we are in futures and they can be supported more easily so they let the Dollar find it’s proper level, which also cheers Japan up and gives the Nikkei a pop (50 points so far).  

    See, it’s a nice, predictable scam at least.  

    Not much movement from the index futures yet but I can’t believe they would go to all this effort just to let everything fall apart overnight.  

  187. lapper

    Phil, your feed has gone bad on the dollar (June is probably not the most active contract anymore, and software just takes net change).  There is no spike June is 73.975-98 right now.

  188. sparky123

    Maybe it’s more about the Euro than the dollar. If the bond swaps aren’t voluntary, (and who would swap if they’re insured), then it is a credit event, and I can’t see that anyone really knows who sold protection on Greek banks and bonds.

  189. rpme

    Lapper, I had the same problem today. Phil kept quoting a dollar amount that Forexpro was not matching and in the past they seemed to always be aligned.
    What I figured out later is that Forexpro is using the Sept contract price, for what reason I do not know but quoted at this moment $74.36. My Yahoo quote has the dollar at $73.94….trying to learn!

  190. Phil

    SPY/Streth – I think I picked that last week but sure, that would work.  You just have to stop out if we cross over a line and just be ready to admit to yourself that it was a bad call.  We’re not dead yet as this is a pretty minor pullback in the grand scheme of things.  The entire move between 1,333 and 1,200 (20% of the 100% run pullback) is just consolidation for a move back over the 1,333 line.   Actually, come to think of it, you can pretty much double all those pullback lines to 5, 10 and 20% – which might make them seem more clear.   I just thought that would be confusing because people would go "5% of what" but the 2.5% line, for example is 2.5% off 1,333 but a 5% pullback of the 666 run – get it?

    Terse/Goober – "My 1:22 PM post on currencies today should be read by everyone."  Now, I’ll admit that even I fell for that one and went back to see what I missed.  Imagine my disappointment when your post turned out to be a link and that your characterization of it was incorrect as he said he did not know what but that he expected "something" to happen soon to boost the Dollar.  Most likely, he thinks that this week’e end of the POMO schedule will be a catalyst but this is not the last one.  And then you have to use this comment to make fun of the way Frank talks –  does this elevate the political discourse or somehow prove a point?  How am I supposed to think of you other than a mean-spirited, nasty, intolerant person?  You do things like this and then wonder why you are not taken seriously?  

    Feed/Lapper, Rpme – That may be it.  There may have been some rollover issue and that’s why the charts disagreed earlier.  On TOS the /DX line is now 74.375.

  191. goober

    I have 73.985 as well

  192. flipspiceland

    @Felipe
    re: Summers
    Yes  to yer question.   But you don’t have to pretend.
     Ignoring him is no pretense. The only thing that makes his assinine statements newsworthy is paying attention to him.
    The wise man knows first, who and what to ignore. (as the recent addition to this blog so perfectly points out).
    He has earned every cent of his irrelevance.

  193. goober

    Phil I know there are millions of people saying things far worse without a doubt. I thought it was quite funny and I guarantee some here do as well. I did not interpret what Taylor said wrong, although he may well be talking his own book. I say when you respond like this you make yourself look petty and mean spirited. It was funny ! Can’t dems laugh at themselves. Why is it not mean spirirted when you say things against others not even in the spirit of todays joking Weiner events but as a normal course of events ? More double standards, Phil you gotta get a grip on that. You keep proving my points . Your reaction to me about Taylor is simply out of line, I am not surprised ? But oh well ! Mean spirited I am, NOT , you seem to fill that bill better than anybody especially with your double standards. Everybody is watching and it is quite obvious when you make comments for no reason unlike todays Weiner events.\
     
    You are like a bully, you can dish it pout but you can’t take it , something to ponder and that is quite obvious.

  194. sparky123

    Goober,
    Take a chill pill. Taylor has been wrong on most all of his calls. If he’s right this time it’s dumb luck.

  195. BruceE

    Grow up Goober.  As a parent of a child who is in speech therapy I found your comment on Barney Frank very offensive and I’m generally thick-skinned.  I’ve seen many people go over the line from time to time in chat but you do it daily.   I also watched the video you linked to and I also wondered how you interpreted what he said that way.  Phil is correct, you mischaracterized the statement and no one would have cared except you made a big deal about it.  I don’t know what today’s joking Weiner events were.  Other than your four comments on the subject, no one else on the board mentioned him at all and no one had the poor taste to respond to your repeated attempts to bring it up including Phil yet you still throw it in in your response to him.  Give us a break, please.  

  196. peedlew99

     Phil,
     
    Any thoughts on a good level to watch to short the euro?
     
    paul

  197. vic55

    My gess is that there no reason to try to teach goober manners. Ignore button should do the trick.

  198. kustomz

    Man goober, I have kept my mouth shut but, your starting to get too confrontational with Phil. I have been around Phil since 05 and calling him mean spirited couldn’t be farther from the truth. He doesn’t need your crap, think about it. He does this all day then he has a family he needs to spend time with. Why are trying to get under his skin? Its like you go out of your way to get your shots in. I’m not trying to escalate things but you need to show some respect, I would just ask that you back off…please. A word of advise, I have read some of the things poster post on ZH and that kind of stuff wont fly here.

    Sorry Phil but, I cant sit idly by while someone attacks your character.

  199. zeroxzero

    Vix / Phil:  I am truly curious about vix now, but do not ask of you a personal seminar.  But, if you’re really bored some weekend, feel free to write what you think we option newbies need to know or consider about implied volatility in setting up option positions.  Still a black box to me, although I have a handy Black-Scholes calculator that spits out numbers which bear only an accidental relationship to my trades.

  200. zeroxzero

     Goob:  I hate to wade in here, but these guys are right, you need to chill.  Right or wrong, you must see that you are causing unwanted oscillations of the electromagnetic field which we are collectively trying to tune to a profitable frequency.  This attack /defend thing is for the social blogs; this is a working blog.  My two cents.

  201. pyern

    Phil,
    I’m short the AKAM Jun 35 puts at $2.40 (now $3.25), with pretty much no premium left.
     
    Would it be better to roll now or closer towards expiration, especially if we have more downside in the short term? I’m thinking to roll either to 2x Jul 32′s or 1.5x Aug 32′s or maybe simply to the 1x Jan 30′s, all requiring a minor debit. Other better choices?

  202. angelcur

    i have to admit this is like a sandbox at times..ill ignore all the mewling ..ill even sit idly by while phil’s character is attacked..coz i know his sense of humor is rich enough and his sensibilities not so delicate as to dilute his commitment to us…i just realized the ZH is zero hedge so thanks for that but back now to the planet earth…the technicals are indicating an imminent multi session bounce…   we need a couple of days without bad news….the cboe put call… the trin… many relative strength readings and the march of negative news and  pessimism  supports at least a short term rally…i am not going to cover my shorts and hedges until after after tomorrow’s open..the nikkei is higher right..go figyah..stay loose!

  203. jomama

    Well, so long guys! Its been a fun ride but i’m outta here. The bickering and the partisan bullshit is becoming too much for me (from the top down). Thanks Phil for making a better trader and investor. I learned a lot.

  204. Pharmboy

    Jomama – U will be missed.  Stay in touch!

  205. 1020

    goober – Kinfolk?
     
    http://www.youtube.com/watch?v=blQrIySidOA
     
     
    :)

  206. jomptien

    Zeroxzero/Goob,
    "unwanted occilations of the electromatic field." Best explanation yet!

  207. jromeha

    So sick of them killing the Dollar! ANd WHY is it down .3%!!!!? B/c they can…

  208. jromeha

    Goob – I tried NOT to ignore you but Im going to have to click the ignore button after tonight… You just cant help yourself…

  209. Phil

    Good morning!

    Well, I didn’t know I had a limit but Goober found mine and he’s gone now.  Sorry Jo felt it necessary to go, next time I won’t wait so long to "review" a Membership.  Bottom line is I have a strong conflict with believing in freedom of speech and expression but, when push comes to shove – when it gets to the point where someone is actually disrupting other Members, I have to put my foot down.  After making my decision and having slept on it, I feel better about it.  This is the first time it’s happened but, I suppose part of my job in trying to build a strong community of people who are market savvy and help each other and share ideas is to prune the occasional weed and I apologize to those who felt I let things go for too long – it won’t happen again.  

    Now, blissfully, back to the markets:

    I was wrong about why the Dollar was kept down because it turns out it was a contract rollover issue but, interestingly, the net effect is the same because now the new /DX contract has been knocked down from 74.36 to 74.09 (0.37%) and that’s got the pre-markets up 0.4% but NOT oil, which is flattish at $98.83.  

    Dow futures shot up to 12,150, which is higher than yesterday’s open and they make a good short below that line on the assumption that the move is a bit extreme and that the Dollar isn’t going to get below the 74 line.  

    Also, those DIA June $123 calls should get a nice pop if we open this high so that’s an "ALWAYS sell into the initial excitement" moment, if ever there was one.  

    Asia closed mostly up with only the Hang Seng off 0.17% (was closed yesterday).  The Shanghai was up 0.6%, the Nikkei was up 0.67% as the Yen was jammed back to 80.30 for the 3am trade (back up to 80.20 now) and the BSE was up 0.3%.  Europe is up across the board on the weak Dollar with the Euro back at $1.465 and the Pound back at $1.642, which is kind of where we started yesterday too.  

    No major news, just the same BS overnight manipulation we had yesterday but the gall of the Dow move is pretty amazing, up about 100 from yesterday’s low.  

  210. Phil

    Euro/Peedle – I would think $1.465 is getting a bit much but they topped out at $1.494 at the beginning of May and if they are going to try to knock down the Dollar, that’s what it’s going to take so maybe a light short off this line but hopefully they get a pop close to $1.50 and then you can get serious about a short position.  

    Thanks Kustomz, you are right, part of the reason we have a Members Chat is so we can be selective and not turn into the mess that the public chat rooms get to be.  

    VIX/ZZ – Remind me on a weekend and hopefully I’ll be in the mood!

    AKAM/Pyern – I don’t like rolling to July+ early because you are rolling possibly past earnings and then you won’t get a good gain off a move, even if it’s in your direction because the earnings volatility will protect the putter.  If you are going to do a 2x roll anyway, why not roll them to 2x the JUNE $32s, now .93 first and THEN you can roll to July whatevers after that premium (almost all premium) is burned off.  

    Bounce/Angel – At least after Japan’s quake we had a reason to bounce.  Now we’re getting it for no reason at all (oops, this is Matt’s job to complain about the BS bounce – I don’t want to steal his thunder!).  As I noted in the S&P chart, we do look very oversold and that is the bigger picture and we did expect to bounce off the Must Hold lines back to the 2.5% lines by next Friday (expiration day) so it doesn’t matter WHY we are bouncing as it was pretty much pre-ordained anyway.

    Sorry you feel that way Jo.    Take care, it’s always been good chatting with you. 

    Dollar/Jrom – Same crap every night, may as well bet on it.

    click for ginormous graphic

  211. lapper

    wow Phil, long AAPL or something?  5 screens of AAPL advertisement :)
    Notice how the dollar manipulation has changed in the past couple of weeks.  It’s like a new operator is doing the jamming.
    Before: Asia open weakness, 3 am ramp, small weakness into NY open, second ramp to ensure somebody does not push a sell button on equities.  It was very effective.  Now just one long jam which starts too early, pops the futures, fails to continue to rally the markets, and, often, gives it all back by afternoon.  Wasting ammo… unless the goal is different.  Like create bids to sell into.  Who took my tinfoil hat? oh..there it is.

  212. Phil

    AAPL/Lapper – Yes, full disclosure – we sold those $340 puts yesterday and I was hoping this shameless advertising would turn the corner for them.  Or possibly, it was a nicely done collection of data on AAPL and hopefully, those who don’t know why we went long on the drop will see that the projected 15Bn app sales alone in 2011 should be good for $21Bn in revenues and AAPL "only" had $65Bn in revenues all of last year so the people who sold them yesterday were probably idiots and the cheaper they get, the more we want them.

    Dollar fixed on that 74 line, right where it left off yesterday except this is a different contract now but I guess getting flipped to the front-month put it at the mercy of the same Bots that were driving the other contract down yesterday – how’s that for a conspiracy theory? 

    Oil testing $98.50 line, big deal if they fail that.  RUT has been unable to crack 800 again so we’ll watch that line.

  213. jromeha

    Phil- let’s not forget the infamous yipcarl…. it’s happened once before…I only remember bc I couldn’t stand him and his mancrush either!lol. Anyways….

  214. jomptien

    Phil/Qid
    I think you missed my post yesterday am. but I have July 48/51 BCS nicely itm but need adjustment as I actually lost money yesterday even though QID was up 1.61% What would suggest with these? Thanks

  215. morxlntway

    most popular of all time!?? Kinda sad but i guess not surprising. Course my most pop is probably "words with friends"

  216. Phil

    Yip/Jrom – That guy was nuts but I thought he quit?  I know we put him in moderation for offensive comments and there was some whole scandal about him being a professional investment adviser to some California pension people but, I pretty much forgot about him after he left.  

    QID/Jomp – LOL – QID is at $52.89, you can’t pay attention to silly fluctuations in the PRICE of your spread.  When you do a vertical like that, you only should worry about whether you are on or off track.  As your call goes more in the money it loses premium while the caller keeps more premium so you will show very bad nets until the caller’s premium begins to decay.  At the moment, the spread is about net $1.80 out of $3 so there’s really no benefit to cashing in early unless you think the Nas is going up enough to put QID back below $51.  You could be adventurous and cash your calls at $5.25, which is way more than you would otherwise collect and then you can sit tight on your $3.45 caller, knowing that you can roll him out to the Oct $59 calls about even.  That being the case, you can buy the Oct $60 calls for $3 to cover and turn it into a bearish calendar spread with lots of time to roll (if you don’t want to risk the naked puts) and that leaves $2.25 in your pocket and the most you can lose of that is $1 assuming you end up having to roll the $51 caller all the way to the Oct $60s.  Other than that – I’d just sit tight and stop freaking out about changes in price. 

    Popular/Morx – What?  

    OK, back to work on the new post.  

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