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Jobless Thursday – Bernanke Gets 2nd Chance to Give Us Hope

We got nothing useful from Bernanke yesterday.  

That’s not stopping the futures from running the Dow up 100 points off of yesterday’s bottom (8am) though because we’re back to that kind of BS market where you go long at the close (or after the close as was yesterday’s case) and then short after the morning pop because the data (reality) is TERRIBLE but the manipulation is so rampant that it’s reliable.  

Fortunately, we have our 5% rule to guide us and we haven’t had a reason to change these charts in months as the market is obeying our range perfectly.  Heck, these are the same lines we’ve been using since last November as the market is right where we predicted it would be for Q2 earnings.  

Speaking of earnings:  So far, so-so is the verdict with fairly uninspiring reports although JPM came in pretty well this morning, which suits us just fine because it’s one of the few specific financials we’re long on.  Tomorrow morning we hear from C and FHN – that should be a lot more interesting than JPM’s report (5% beat).  

We have a lot of data coming our way today, including the PPI, Retail Sales, Jobless Claims, Business Inventories, the Fed Balance sheet and the money supply along with day 2 of Bernanke’s BS on Capitol Hill – as if it really matters.  

Our trading day is already pretty much done as the old 3am trade worked like a charm and I called a top for Members at 5:33, when oil futures (/CL) hit the $98.50 line (now $98), which is up $500 per contract already so a nice base to get the morning started.  This is just our normal monthly cycle of sticking it the speculators over at the NYMEX so thanks again boys – we couldn’t do it without all your efforts to screw over the American public so – right back atcha!  

Once again yesterday we had a net build in US petroleum inventories of a whopping 4.3 Million barrels, led by a huge build in distillates and STILL not one drop of oil has been removed from the SPR.  Imports picked up by 90,000 barrels a day but we are still being short-shipped over 7 Million barrels a week so over 11M barrels a week of demand destruction in the US with oil averaging $96.20 a barrel, still up 26% from last year despite 8% drop in US demand.  Keep in mind that an 8% drop in US demand offsets a 20% rise in China, as they use just 9Mb per day but Chinese consumption has actually been pretty flat lately and 80% of 9 is 7.2Mbd and that’s where they were back in 2005 so our 1-year drop in consumption has already offset 6 years of Chinese growth – THAT’s the kind of BS CNBC is spouting when they try to sell you the "Chinese Demand" story – it only sounds good to people who can’t do the math – but that’s the audience they count on!  

As Abraham Lincoln once observed, you can fool some of the people all of the time and all of the people some of the time and, as PT Barnum pointed out – we just need the fools with money.  That’s what the oil market is all about because fools and their money are soon parted and the lack of regulation, dark pool trading and blatant manipulation make this the World’s longest running (and most costly to society) con game in history.  Still, if Da Boyz at the NYMEX want to pretend they want to buy 185M barrels of oil at $98.50 or higher for delivery next Thursday – we will be thrilled to sell it to them!  

Click for
Chart
Current Session Prior Day Opt’s
Open High Low Last Time Set Chg Vol Set Op Int
Aug’11
-
-
-
97.43 20:07
Jul 13
98.05
0.62 322211 97.43 185084 Call Put
Sep’11
-
-
-
95.75 20:07
Jul 13
98.49
0.64 130692 97.85 276749 Call Put
Oct’11
-
-
-
96.89 20:07
Jul 13
98.90
0.63 41545 98.27 79694 Call Put
Nov’11
-
-
-
78.01 20:07
Jul 13
99.36
0.62 29108 98.74 71525 Call Put
Dec’11
-
-
-
101.31 20:07
Jul 13
99.87
0.63 50153 99.24 201725 Call 

Already they’ve had to jam 276M barrels worth of contracts into the September delivery schedule and they might get away with this roll as they have 5 sessions left to move about 160,000 contracts (1,000 barrels per contract) from August to September with a rolling cost of just .44 per barrel.  That’s still a $70M hit on 160M barrels and they already spent about 80M rolling the last 200M (because September looked like October a month ago) but what happens when that 300 Million barrel monthly roll hit’s December, which already has 200M barrels backed up in it?  Yep, this is going to be fun!  

"Only" 405,000 Americans lost their jobs last week, with is 22,000 better than last week but Continuing Claims were up 15,000 to 3.73M.  The Producer Price Index dropped 0.4%, which is double what was expected but the Core PPI is UP 0.3%, which is 50% more than expected.  A 3% drop in Crude Goods and a 2.4% drop in Food Prices masked some VERY NASTY inflation everywhere else – keep in mind it’s that Core PPI that the Fed uses to pretend inflation is in check and now that’s growing at a 3.6% annual pace and energy and food are already up 20% in the "non-core".  

June Retail sales were up 0.1% vs. down 0.1% expected by Economorons but was unchanged ex-auto vs. 0.2% (revised down from 0.3%) last month.  So last month’s gain was overstated by 50% and this month Retail Sales are up 0.1% but prices are up 0.3% so – I’m not a "professional" economist but doesn’t that mean that people bought 0.2% LESS stuff and the only reason we had a gain is because they had to pay more money on the things they didn’t cut back on?  

Is this bullish?  I don’t think so…  Auto sales were down 1.6% last month and that’s the only reason there is any kind of positive in this report as they bounced back a bit in graduation season.  Gasoline sales were down 1% and sales at Food Services and Drinking Places were off 2% in June so we may be getting some disappointing results from US restaurants.  Overall spending was down 4.5Bn from May in the "Not Adjusted" column but in the "Adjusted" column we look flat to May and that’s giving the market some hope and should give us another crack at shorting oil at $99 (tight stops, of course)!  What a gift to start our day.  

More nonsense from The Bernank this morning and we’ll be watching the Dollar, which will cause trouble for the markets if they can’t keep it below 75.25 and that would be some trick with the BOJ worrying about a Yen that is now trading at just 78.9 to the Dollar – a very scary level for Japanese exporters.  

 


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  1. exec

    Phil,
     
    I wish I could join you in these future contracts.  How long are holding them?

  2. rainman

    It’s not easy, being a financial advisor
    "If you can’t pick a stock or pick a mutual fund, what makes you think you can pick a financial advisor?"

  3. judy


    Libya

     

    - Debka update – The Libyan war virtually ended Thursday morning, July 14, when UShttp://bit.ly/rrrhA2
    President Barack Obama called Russian President Dmitry Medvedev to hand Moscow the
    lead in peace negotiations for Muammar Qaddafi to step down and make way for a
    transitional administration. He thereby accepted the Russian-Libyan peace formula over
    NATO’s heads.

  4. rainman

    The global debt clock -- Nice debt map

  5. rainman

    Did they tell Cramer to use his "inside voice" today? He isn’t jumping out of the background like he was the last couple days, forcing me to mute the station.

  6. Pharmboy

    PP for today.   I will be out for most of the action today after 7:30ish PST.

  7. cwan120

    CMG pre-market (9:20) is about 327-ish.
    How about another new trade to short them?

  8. jabobeast

    cwan--sounds like you are a glutton for punishment like me ;-)

  9. Pharmboy

    FXE – starting to accumulate the Sept 140/135 put spread for 1.40 or better. 

  10. Pharmboy

    IMGN – someone asked about them yesterday, as we have the July 12s (C/P STO combo).  I am going to let it go as that was the intention when we did it from the June 12 Ps we sold.  So, we will reenter when we get a pullback.  Looks like there is an exhaustion bar for now, but SGEN will set the ways.  Today is the day where SGEN gets their day in the sun.

  11. rainman

    Moody’s warning — Nothing to see here… move along.

  12. jabobeast

    Rain--Moody’s was warning us … you better buy CMG or PCLN or else!!!

  13. rpme

    Pharm, any thoughts on AZN?

  14. nicha

    Pharm/IMGN – I have the Jan $11/$16 bcs plus stock bought at $11.88. Good profits. Get out now or keep one? Thanks.

  15. yodi

    Pharm/IMGN same than nicha thks

  16. matt1966

    Not that any of it is the truth but CNBC has comical explanations for why Europe is down (because Moody’s threatens to downgrade the US) and the US is up (positive economic news).  So according to CNBC, Europe is more worried about our potential downgrade then we are!

  17. Phil

    Good morning!  

    Data looked good enough to give us a bounce – we’ll have to see what sticks.  We’re pretty much going to open at pre-market highs, up about half a point on a Dollar that is down half a point at 75.20.  Don’t forget we have Google earnings this evening so lots of excitement tomorrow!  

    Europe is down half a point and we are up half a point so something is bound to give.  We’re not quite getting to $99 in oil so we have to be patient and wait for a break below $98.50 to re-short the futures (/CL).  On USO puts, roll up or DD on Aug and I’ll be liking the TOMORROW $39 puts at .50 on the assumption we get a bit of a sell-off after the nat gas inventories at 10:30 (as they tend to hold up hope until then).  

    QQQ tomorrow $57 puts at .11 are fun speculative puts on a GOOG miss as $110 can become $1,000 on a big Nasdaq drop so that’s our speculative play of the day and let’s grab 40 for $440 in the $25KP and our plan is to get 1/2 out a .22 so we have a free play if we’re lucky enough to get a dip.  

    Watch those lines!  If the RUT blows that 2.5% line it’s BIG TROUBLE for the technical crowd and, of course, there’s nothing to be bullish about until 2 more of our indexes prove they can hold those lines for at least a full day.  

    Thursday’s economic calendar:
    8:30 Producer Price Index
    8:30 Retail Sales
    8:30 Initial Jobless Claims
    9:30 Hearing: Consumer Financial Protection (Warren)
    10:00 Senate Hearing: Monetary Policy (Bernanke)
    10:00 Business Inventories
    10:30 EIA Natural Gas Inventory
    1:00 PM Results of $13B, 30-Year Note Auction
    2:00 PM Hearing: Financial Stability Oversight
    4:30 PM Money Supply
    4:30 PM Fed Balance Sheet

    Notable earnings after Thursday’s close: CBSTGOOG,

    At the open: Dow +0.14% to 12509. S&P +0.28% to 1321. Nasdaq +0.29% to 2805.
    Treasurys: 30-year -0.35%. 10-yr -0.2%. 5-yr -0.14%.
    Commodities: Crude +0.65% to $98.69. Gold +0.22% to $1589.00.
    Currencies: Euro +0.39% vs. dollar. Yen -0.03%. Pound +0.24%.

    Market preview: S&P futures +0.4% after jobless claims fall more than expected, retail sales unexpectedly rise, and PPI shows little inflation threat. Gold continues to hit record highs. ConocoPhillips (+9.1%) is gushing after it says it will split into two companies, while JPMorgan +3.1% following Q2 earnings that beat forecasts. Later:Bernanke at the Senate, Google Q2.

    Republicans gear up for another debate on the CFPB - and its unconfirmed leader Elizabeth Warren – at a Congressional hearing today, less than a week before the agency’s official launch. The GOP is pushing for reforms to the agency’s powers, and seeks to fund the financial watchdog by Congressional approval – not via the Fed. 

    DANGER Will Robinson, DANGER, DANGER:  Slowdowns in Europe and the U.S. are starting to be felt in Asia, as Singapore reports Q2 GDP fell an annualized 7.8% from the previous quarter. Economists had expected growth to be flat. GDP was up 0.5% from the same period last year, vs. consensus of +1%. - Not a friggin’ word about this on CNBC!  

    The Italian Senate has passed a €48B austerity package. The bill moves to the lower house tomorrow where it is also expected to receive approval. The spending cuts will take place over 3 years with the goal of eliminating the budget deficit by 2014.

    "Italy may not be Greece, but it’s important to rememberGreece wasn’t Greece just 15 months ago," writes Peter Tchir of today’s Italian bond sale. Greece had a very successful bond auction in March of 2010 – less than 2 months later, the paper had lost 30% of its value.

     Italy auctions nearly €5B of 5 and 15 year paper, paying the highest rate (4.93%) in 2 years on the 5 year notes, and the the highest rate ever (5.9%) on the 10 years. It was thought ECB purchases would be necessary for a successful auction, but it’s not yet clear if that happened. 

    While the ECB believes it to be a technical matter, some analysts are concerned steep drops in M1 money supply - mainly in the periphery, but now spreading to the core – could point to an economic slump in the near future. Typically, such drops are met with central bank easing, but the ECB is doing just the opposite.

    The credibility of the EU stress tests is dealt another blow as state-owned German bank Helaba pulls out of the exams over a dispute about its capital base. 

    Indian inflation in June comes in slower than expected at 9.4%, but is accompanied by a large revision – from 8.7% to 9.7% – in the April figure. This likely means another rate hike later this month. Indian shares take the news in stride, but have already fallen 10% this year on inflation fears. 

    Processing problems at the major mortgage servicers are pushing up to 1M foreclosure actions that should have occurred in 2011into 2012 and beyond, according to RealtyTrac. Foreclosures in June were down 29% Y/Y, the ninth straight month of Y/Y declines, but not because of a strengthening housing market, RealtyTrac CEO James Saccacio says. 

    Banks are offering loans to cities, states and schools, and scooping up their existing bonds, as a low-risk way to exploit the piles of cash the lenders have amassed. However, existing bondholders are concerned about not being aware of all the terms the deals made.

    Due to concerns that a potential federal shutdown will lock the state of the muni bond market, California’s government is looking for another bridge loan. The goal is to use the money to pay the state’s bills until $5B worth of "revenue-anticipation notes" can be sold in late August.

    Apple a day: Q2 data from Gartner and IDC shows Apple (AAPL) now has thethird-highest U.S. PC market share, with each firm putting its share at 10.7%. However, in terms of revenues and gross profits, Apple’s share is doubtlessly much higher – according to Deutsche Bank, Apple was already the PC industry’s most profitable company in 2009.

  18. gucci

    Hi Phil GOOG – i have 2 July 530 short call sold for 19.58 and 2 Jan 2013 520 short put sold for 61.20 — should I rolled July up and out today or wait till after earning today. thx

  19. Pharmboy

    I think UTHR has found it’s bottom.  I am liking the $50/55 Jan12 BCS (100% ITM), selling the $45 Ps for a 0 net cost (not including margin).  More aggressive is selling the $50 Ps for a net credit of $2.20……

  20. matt1966

    The ‘ol 10am pump.  Like clockwork.

  21. Pharmboy

    AZN – I think I noted to wait on them until after the Crestor/Lipitor data comes out.  Not interested in them now.  If the data is negative, that will hit them hard, as Lipitor goes off patent this year.

    IMGN – If you can sell the BCS for $4, why not take it off the table for now.  I would cover the stock with an aggressive stance for now due to SGEN’s review.  How about the Sept $14 strangle.  If SGEN is denied, I expect IMGN to fall some.  If not, then you get another $2 or so out of the above mentioned spread. Then we can get more aggressive on the P side.  IMGN had great data and was denied fast track, so I am leaning bearish on SGEN for the final count in Sept on them.  Today is a formality.

  22. matt1966

    Wow, TNA drops a whole buck in 3 minutes.  Do they have any doubt why trading volumes are down with those kind of moves?

  23. dday97

    USO 38p for .09 for fun.

  24. JRW III

    Good morning, 

     

    IWM    81.82,  82.81,  83.07,  83.34,  83.59,  83.88,  84.14,  84.49,  84.87,  and  85.58

    84.50 is the key today; a breakout confirms the bottom is in !!

  25. David Ristau

    Phil -

    Got an options way to play TBT?

  26. rustle123

    So do we get a sell off today again before the stick at the end of the day?

  27. Phil

    Futures/Exec – You hold futures as briefly as possible.  A .25 move is good, a .50 move is great and a $1 move is fantastic in oil.  Generally you want to play off the .50 lines and get the hell out when you get to the next one (or set very tight stops).  The key is to be PATIENT and wait to get in when critical supports are broken in the direction you want to play.  

    Dollar smacked down to 75.14, Europe still down but not bothering our traders much.  20M shares on the Dow at 9:55 is busier than usual so must be a QE3 rumor or something…

    Good point Rain!  

    Libya/Judy – Another reason oil should head south.  

    Debt/Rain – Notice the US is the global leader by adding 22% in one year!  We’re #1!

    Cramer/Rain – He seems to get louder when things aren’t going his way.  This morning we’re up so we get Professor Cramer but when it’s down, he yells until you buy something.  

    Those QQQQ $57 puts came in cheaper than I thought, just 0.08 of the Nas spike. 

    Business Inventories up another 1% this month.  That wasn’t good last month but it does boost GDP as there is an assumption that things that are made will get sold for a profit and it takes a long time to figure out if that assumption is faulty.

    CMG/Cwan – I like buying 4 Dec $360s for $16 ($6,400) and selling 5 Aug $330s for $13.70 ($6,850) for a net $450 credit and, if CMG finishes below $330 in Aug, you keep $450 plus whatever value is left on the Dec calls.  If they head up, you can add a long (say at $20 for $2,000 more) and you have 4 months to roll and even spread.  We never thought CMG would go down prior to earnings but they are an ALL US company, YUM earnings would have sucked if not for Asia.. 

    Speaking of earnings – I’m sure Sam will talk about this but GMCR has a big shareholder lawsuit that says they have been misreporting earnings.  A fun way to play this is the Sept $85 puts for $5 as these guys could be at $60 if things go badly so, in the $25KP, let’s speculate on 2 of these for $1K.  

    Europe/Matt – They are down because they are rational and we are up because the Dollar is being trashed.  Same cycle as yesterday, BOJ buying Euros while they are open and will likely switch back to Dollars later.  

    GOOG/Gucci – If you planned on gambling on GOOG (and it’s not going to kill you to lose) then gamble.  Tomorrow is the day you get the huge pay-off on the July calls if they flatline or go down so why move them now.  If the reason you want to move them is because losing $6,000 would bother you – then you are crazy to have this play at all as it’s probably the single most dangerous trade you can possibly make as GOOG can go up or down 10% ($50) very easily and has gone up $100 in a single day – what’s you plan for that?  

    A GOOG earnings play I do like is selling the AUG $520 puts for $13 and the Aug $560 calls for $12.30 for net $25.30 credit on the spread so your break even is $498.70 to $585.30 with GOOG at $537 so anything less than a 10% move is a winner and, of course, you can roll the losing side.  Must have lots of margin, of course! 

  28. yodi

    Pharm IMGN There are no Sep option only OCT strangle short or long 14/13 or what thanks

  29. kurtww

     How are you guys playing the 3AM trade on the futures, specifically the RUT? One thing I’m not happy about with ToS is that you can’t trade options on futures like /si, /gc and /tf. I don’t know about /es or /ym, but their support said they hope to have those available in September sometime. 

  30. angelcur

     Loudi, home to 4 million people in Chairman Mao Zedong’s home province of Hunan, is paying for the project with 1.2 billion yuan ($185 million) in bonds, guaranteed by land valued at $1.5 million an acre. That’s about the same as prices in Winnetka, a Chicago suburb that is one of the richest U.S. towns, where the average household earns more than $250,000 a year. In Loudi, people take home $2,323 annually and there are no Olympics here on any calendar. “The debt isn’t a problem as Loudi is not a developed place,” Yang Haibo, an official at the city’s financing vehicle, says as he sits with colleagues in a smoke-filled meeting room under a No Smoking sign. “It’s an emerging city.”

     global debt ponzi!!

  31. angelcur

    singepore is a massive tech barometer..cnbc is a joke

  32. angelcur

      moody’s and the pols were hoping for a big negative market reaction…hahaha…they dont realize that anything that hurts the dollar wall street cheers.

  33. matt1966

    TNA starting to show it’s true color.  RED!

  34. randers1

    How do you feel about a put spread for a GOOG miss?
    July 530- 510 for about 6.50
    July 530- 515 for around  5.30

  35. randers1

    Sorry I did not see your recent post..

  36. matt1966

    Phil / Broker Call From Yesterday:  Looks like they weren’t able to borrow shares to accommodate my existing short position.  What a suprise-  what is a suprise is that it is still tentative that I will have to cover 100 of my shares.. they say I’ll have to do it by 2:30pm or they will do it for me.  Do you have any idea if the 2:30 deadline is due to some kind of settlement requirement.. or, tinfoil hat on now, could it possibly have to do with engineering a turnaround this afternoon once the 30 yr bond auction is behind us?
     
    My, my what a precipitous drop!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 

  37. Phil

    Interesting CNBC not covering Bernanke live today.  That’s because the Senate asks intelligent questions and isn’t controlled by friendly Republicans so he’s already stuttering and stammering as he faces a much tougher crowd than yesterday but your MSM is hiding it from you – nice, right?   Instead they are spinning things positive to give you the impression that everything is great – what a total scam!  

    TBT/David – We just like selling $32 puts whenever they are at $32 as that’s our defendable bottom.  If you want to go longer, you can pick up the Jan $30/34 bull call spread at $2 and sell the Jan $30 puts for $1.65 for net .35 on the $4 spread that’s already $2.38 in the money so anything up from here for the year is a huge winner.  

    Sell-off/Rustle – I think so.  Should be like yesterday with more pops on Bernanke mentioning QE3 and then the funds dumping into all the retail suckers who trade off rumors.  

    10:00 AM On the hour: Dow +0.62%. 10-yr -0.21%. Euro +0.48% vs. dollar. Crude +0.65% to $98.69. Gold +0.26% to $1589.70.

    May Business Inventories: +1% to $1,514B vs. +0.8% expected and +0.8% last month. Sales -0.1% to $1,184.2B. Inventory/sales ratio rises to 1.28 from 1.26 prior, and vs. 1.28 a year ago

    EIA Natural Gas Inventory: +84 bcf vs. consensus of +76 bcf. Futures sink further -2.5% to $4.29. - That should mark the end of the oil rally.

    Fed chief Bernanke begins day 2 of his Humphrey-Hawkins testimony, this time in front of the Senate. His prepared remarks, in which he hinted QE3 stands at the ready, are identical to yesterday. Questioning to follow shortly. Watch live here.

    GE CEO Jeff Immelt says uncertainty about the debt ceiling is keeping small business from hiring. If you’re a small business owner, "why would you invest into that [situation]?" he asks. Having $1T in cash overseas discourages U.S. job growth, he adds, while hinting that things may change soon.

    JPMorgan (JPM +1.1%) CEO Jaime Dimon weighs in on the debt limit debate by saying a default would be catastrophic for the U.S., and politicians should not take that chance. Dimon unplugged: "No debt resolution will cause severe market reaction." 

    Higher cotton prices in 1Q and 2Q pressured clothing makers to raise prices or take losses as margins were squeezed, but relief could be coming as the National Cotton Council reports prices are trending downward.  Firms in line to benefit: Liz Claiborne (LIZ +0.8%, Lululemon (LULU +1.5%), Levi Strauss. 

    Investopedia’s five signs we’re already in a double-dip recession: (1) home prices keep falling – homeowners now have even less equity in their homes than at the height of the housing crisis; (2) small businesses can’t get credit; (3) unemployment has worsened; (4) consumers are losing faith: (5) more people are on food stamps.

    Given weak Q2 data, research firm Future Horizons is cutting its 2011 semiconductor growth forecast to 4% – that’s down from a prior 6%, and below the Semiconductor Industry Association’s 5.4% forecast.

  38. shadowfax

    matt
    They can do it whenever they want, when it is worse for you of course!

  39. dday97

    Bernanke’s beard isn’t trimmed as symmetrical today. He must be nervous, plus he needs a tissue. It looks like he’s tearing up.

  40. dday97

    You sure you’re on the right channel?

  41. Phil

    Someone get me a seat behind Bernanke next time they do this – I could practice my shocked and appalled faces!  

    3am/Kurt – Well, first of all, don’t take 3am TOO literally.  The idea is that between 9am and 3am the BOJ tries to get the Yen lower (higher number to the Dollar) in order to cheer up the exporters, which is pretty much everyone in Japan.  That causes the Dollar and Euro to drop and pushes up commodities and futures.  Once the Nikkei closes at 3am (or around there) there tends to be a rise back in the Dollar that knocks futures and commodities down.  Keep in mind that the futures, especially the RUT, are VERY thinly traded after hours.   You need to qualify to trade futures – you should call your rep about that.  

    Speaking of the Dollar – back to 75.40 now and the Dow has a long way to fall so DIA tomorrow $126 puts at $1.07 are a fun ride with a stop at 12,551.  

  42. jcaesar

    Phil – Can you write a couple words on the logic of the BXP trade (so I can better understand it)?  It seems to be working out so far. :-)

  43. rpme

    Phil, trying to understand the price movements on the 50 VIX July $25 calls I sold. The price keeps going up without the VIX moving and little chance of going up 25% by tomorrow.

  44. asaenz

    @ Phil, whats up with silver? SLV has break up its trading range of the last couple of months, never really followed silver or gold, but do you think there is a good chance this might be the start of a move up to its april´s highs? Thanks.

  45. dday97

    Ha. Those USO 38 puts already doubled to .20. That was a tough 45 min.

  46. jcaesar

    Kurt / Phil / Futures – Doesn’t TOS let you trade futures by default?  I’ve almost placed an order (just before hitting send) and it didn’t stop me until that point.  The reason I didn’t place the order is due to Phil’s statement about the possibility of losing $5k (out of 25k) while going to the bathroom.  I wouldn’t like that to happen! ;-)

  47. jr_mints

    dday97 , great call on the uso puts
     

  48. kustomz

    Great question presented to Bernanke…Bernanke talking down QE3!!

  49. kurtww

    Phil/3AM trade – yeah, I wasn’t going to jump in and go gung-ho on the futures trading right away, I was just curious how you do it. My account is active for futures and futures options, but when I actually tried to trade on /gc it says "not tradable". Apparently they just don’t support trading options right now on /si, /gc or /tf, which really surprised me. Just curious how you guys do it, I guess you just buy the underlying contract (/tf) if you want to trade the Russell overnight? When I was trading gold and silver a while back I always tried to trade the options on /gc and /si because I could sell them overnight if things  went wild. You just can’t do that if you have options on GLD or SLV, or RUT.
    By the way, do you know yet if you are doing the futures trading session in Vegas? I would love to see that and can justify that better than I can to go to Vegas to meet the guys and play poker. 

  50. pentaxon

    jcaesar: futures: I just have to sign the futures customer agreement and signature card and you need enough margin.
    bathroom: stops work good on most futures, since they are extremely liquid.

  51. z401

    what timing on msm to break in on  bernanke’s answer

  52. JRW III

    Bulls really have to hold here (IWM 83.38); if we retest 82.81 under these circumstances, it may fail and signal that wave 4 down is NOT over !!

    Although, it’s great for me, as I am short AND still have a bunch of Aug puts !!  Smiley

  53. yodi

    jcaesar
    It seems like you have to qualify I have one acc aproved the others of mine are rejected if I try to trade fututres

  54. rpme

    Phil, VIX, nevermind.

  55. willsons

     PHIL     I shorted oil at 98.75 and set a trail stop and was stopped out at 98.32.  Question is how wide do you set the stops?  I only did a 10 cent trail.  Not enough? Thanks for all your help.  

  56. yodi

    Phil Any comments on money FAS today ??

  57. dday97

    Thanks jr. Just sold 1/2 at .26. I’ll trail the rest by a dime.

  58. Phil

    China/Angel – That is truly frightening!  

    And wheeeeeeeeeeeeeeeeeee!  

    GOOG/Randers – I’d go for the cheaper one as it’s a gamble, I don’t think they miss but the possibility that they miss makes the QQQ puts a fun gamble as techland will drop like a rock if they do.  MOST of the time, GOOG just flatlines and burns everyone.  That’s why I like the short strangle.  

    Broker/Matt – I have no clue but I imagine the rules are a little tighter now and they do have to watch the naked shorting but it’s interesting that you have to suffer for it with a forced cover.  Anyway, this is why I prefer puts or selling calls – none of that BS.  

    Watch that 75.50 line on the Dollar – that can really knock us down.  

    Channel/DDay – Well now they picked it up but a bit late as the tone was clearly negative from the outset.  

    BXP/JC – I think CRE is overpriced and I think rates will tick up (squeezing their margins) and I think the whole market is going down anyway.  How’s that for a few words?  

    VIX/Rpme – The VIX betting is nothing but a horse race.  When it looks attractive, people start throwing money at a position and your pricing is set by buyer sentiment, not by any actual value of the VIX itself.   Also, are you aware they don’t expire until next week?   Not as safe as you thought.  

    Silver/Asaenz – If gold makes it over $1,600 then I’ll be liking silver for an upside play but, of course, I think the gold move is BS too.  

    Nice Dday!  

    Futures/JC – Open up a paper trading account (you can run it simultaneously on a laptop) and play around all you want.  

    75.53 – Oil at $97.21 and FALLING!!! Wheeeeeeeeeeeeeee!  

  59. dclark41

    Way to go Phil!

  60. tuscadog

    Phil / Oil short   I’ve continued to hold my large DTO short from $99-    Per your detailed rollover analysis,you seem to think there’s a lot more room on the downside.  Continue to hold this short?

  61. JRW III

    matt,

    Did you ask about covering with TZA ?

  62. rainman

    MT Aug $32 puts can be sold for 1.45 or about 4.5%. Note: they report in Aug

  63. jcaesar

    Futures Thoughts  – thanks guys.  I think I will try it on my paper account.

  64. angelcur

     THAT JUST SHOWS HOW CLUELESS THEY(the fed) ARE…HE (ben) IS FREAKING OUT THAT OIL AND FOOD STARTED SOARING ON QE3 TALK…LIKE THAT DIDN’T HAPPEN LAST TIME.

  65. Troy

    Phil/CNBC - Indeed, a HORRRIBLE job covering the bernank speak today…anyone have a better feed online that doesn’t interupt during critical conversation???  Thxs

  66. shadowfax

    Troy
    CSPAN

  67. asaenz

    Wow Phil, those QQQ Puts are now 0.14!

  68. kustomz

    Troy the feed
    http://cspan.org/Live-Video/C-SPAN3/

  69. matt1966

    JRW, I didn’t.  But, I think it’s about being naked on the short.  That is verboten.  If they don’t have the shares for me to borrow, then we both are naked.  What I can’t believe is that they don’t have enough shares for me to borrow.  I’ve had this position since the big run up at the end of June.  I was miserably underwater.  Now that I’m getting close to getting back above.. they want to make me cover.  But, it’s simple enough for me to replace the cover with TZA.  I just don’t like the decay on the inverse etfs.

  70. angelcur

     MORE BS!….notice how poorly the ag equipment plays trade with food prices breaking out..hmm.

  71. Troy

    Shadow/CSPAN3 – THanks!!!

  72. Troy

    Kustomz – thanks…I didn’t even know CSPAN was online, goodbye CNBC monkeyspanks…

  73. angelcur

    gold has made new highs… rising as the European sovereign debt crisis has reached out and tested Italy, implying an inevitable liquidity-creation response from the ECB. euro shitty prospects

  74. exec

    Phil/Futures,
     
    What I’m curious about is you play these futures in the middle of the night.  TOS allows futures trading at night?  If so,that’s right up my alley…..I have a hard time staying busy at 3am. 
    Schwab doesn’t offer futures as far as I know.

  75. angelcur

    hey cnbc!!  brazil pounded again….funny how brazil, which was every hedgies fav a year ago…never gets mentioned….its down -13% ytd!

  76. etradingsignals

    Phil:  Shd we get out of USO 39 put (20 of them in 25kp)? Basis=0.60, currently 1.11

  77. asaenz

    @Phil, whats our target with our USO Aug Puts? i´m looking at USO $37, do you agree? or should we take at least half off the table now (currently 20% up on the play) Thanks! Great pic, btw….

  78. scottmi

    USO Puts – wow!!  i jumped off with 60% gain after less than an hour. Boy is it neat to see the drop continue though! Fun!

  79. Troy

    Bob Corker was fun to watch…ended with telling the Bernank "I’m extremly turned off with your activism"…wow, no wonder CNBC doesnt’ cover the second day, too much honesty, not enough happy talk!

  80. scottmi

    USO Puts – i simply must improve my "stay with the winners on a move" discipline.

  81. asaenz

    @JR would you go long off the 82.81 line IWM ? Thanks

  82. Lincoln

     Phil:OPEN
    This is a general question on calendar spreads
    I have  6 Jan 75 puts and July 82.50′s is it better to roll more or less even to to the AUG 75′s (sell a call or two to finance) to get closer to vertical or roll to the Aug 80′s to collect more cash to in effect lower my basis on the long puts?  I have several spreads like this on the MOMO’s.  TIA

  83. Phil

     Futures/Kurt – Under futures trader in TOS you can just buy or sell whatever you want unless you are somehow restricted.  The straight futures are great to trade if you are nimble as the commissions are small and it doesn’t impact your day-trading buying power so you can get in and out 5 times until you get the break you were looking for.  Yes, I will do a futures session in Vegas.  Actually Tim Sykes (penny stocks) is doing a seminar the next week and he’s trying to get me to stay and talk to his people since I’m there the week before – so I may do a whole week from Vegas at this point.  

    Timing/Z4 – Told you so.  CNBC is only coming in to show you their pet Senators because they know who’s going to ask the market-friendly questions so, by selectively showing only certain answers to certain questions – they are able to fool the maximum amount of people.  What a great service to their viewers, right?  

    Oil/Wilsons – The trick is to scale in and scale out if you are doing more than a couple of contracts.  Also, you want to expand your trail as things move more but a .10 stop on a .40 drop is sensible but you’ll do better if you use each .25 line cross as your next stop level so below $98.50, you could set the stop at $98.55 and then below $98.25, you move it to $98.30, etc.  Also – where’s your re-entry?  You stopped out with a .43 profit so when they cross below $98, you can re-enter with a stop at $98.05 two or three times, looking for that next break.  Also, it depends on your target.  Today was the big day we were looking for so I wasn’t going to be satisfied with anything less than $97.50 but we’re well past that now.  

    $75.54 and $96.72 – didn’t take much to panic the NYMEX boyz!  Congrats to all who played and don’t be greedy at the $97 line (that should be a stop for all oil shorts today (with a .25 trailing stop), including $25KP plays) but below $96.50 and who knows how far we can go…

    Notice the BS that CNBC considers "more important" than Bernanke talking to the Senate!  

    FAS/Yodi – I did say we flatline at $15, right?  That’s about $24.25 on FAS and I have nothing to add to it at the moment.  

    Thanks DC!  

    DTO/Tusca – If we pop $97, I’d get 1/2 out and set stops on the rest.  This was a nice sell-off and if you can’t be satisfied with a move like this, you probably have a gambling problem.  We could get back to $95, that’s my hopeful target for this week but that’s a big move for one day and the Dollar isn’t over 75.60, which would make me feel better about the short position.  

    MT/Rain – Be careful.  Those Singapore numbers are scary.  

    Futures/Exec – Yep, it’s a 24-hour casino except for a halt between 5:15 and 6pm and Friday 5pm – Sunday at 6pm although I think some things do trade, I’m just not that much of an addict to care.  Get a TOS paper trading account and check it out – I love that platform for trading futures.  

    USO/Etrad – Good instincts but see above.  .25 trailing stop on USO (NOW $96.29!) for today.  

    That’s it for the EU panic selling – we should be recovering (at least bouncing) off this so watch those short plays.  

  84. kustomz

    Hard to read this market, not sure I should trust the Dow…thinking of going long QQQ off GOOG earnings…we usually get a push higher after 12pm

  85. dflam

    Hi Phil : Bought 200 shares of COP at $71.89 (now $77.86) and sold Jan. $70 C at $12.12 (now $ $9.85) for net $ $59.77. Also bought another 100 shares at $73.12 and sold Jan. $75 C at $4.15 (now $ $6.55) for net $68.97. Thinking of rolling all to 2013 $70 C at $12.50. What do u think? Thanks.

  86. tuscadog

    JRW / TNA  You entering 1/3 now?

  87. JRW III

    asaenz / long 82.81

    Only if it turns there  8-)

    Currently I have mixed signals; tick went positive, order flow went green, but RSI is negative and the dollar is not coming down. That said, this is where they have to hold (maybe a flush and then a Buy program) we’ll see !!

  88. cwan120

    I got into QQQ 57 puts at $0.07.  Already 1/2 out at $0.16.  So, it’s a free ride for the other 1/2.
    But I can’t babysit all day.  I can only log in a few times a day.  If I put a limit order to sell the remaining 1/2, what would be a good target?
     
    Thanks, Phil!  Very exciting!

  89. JRW III

    tusca / TNA

    I’m still 100% TZA; no 8 EMA cross !!

  90. hextra8

    Phil,
    I have FAS July 27 calls @ 1.42 (down $1,385) which are expiring tomorrow. What can I do to salvage this trade? Thanks.

  91. matt1966

    I just don’t see how we go lower at this point.  Volume spikes point towards capitulation.  BUT, if we do.  It’s pretty clear their intentions.  Instill fear-

  92. Troy

    JRW - dangerous day to trade, indeed.  Also noticing the Vix isn’t pulling back, TBT is in an acending channel, oil in decending channel, we can’t get off the lower bollinger band, and some very large entities have been bailing today as noted by flow orders.  Last hour today will be interesting as we might see much more volume than usual EOD.

  93. JRW III

    I can’t believe "they" are going to let this happen !!

  94. Phil

    USO/Asaenz – We’re done on those now, stopped out $39 puts at $1.20 is a nice 140% gain for the day.  Do you really need more?  It really worries me that people have to ask if they should take money off the table after such a nice run.  I am not able to call every exit.  When we bounce off a significant line like $96.25 and break over $96.50 then OF COURSE you take the money and run.  If you want to be aggressive, get back in on a cross back below $96.50 with tight stops but why on earth would you let even a 20% gain slip away for you in a short-term trade.  Making 20% in a week is 1,000% a year, let alone a day or two!  There’s really no point in being in the stock market if 1,000% annualized gains aren’t enough for you.  

    Meanwhile, I do think this is more of a pause on the way lower than a rebound but, when in doubt, sell half!    

    OPEN/Lincoln – I’d do an even roll to wherever you can.  If they go lower, just don’t let the Sept roll get away from you but if you can improve $2.50 a month between now and Jan, you end up with a $75/67.50 bear put spread (if they drop every month), otherwise, you keep the short puts high enough to protect you without kicking in more cash.   Putting in more money is for emergencies – you are there to collect premium, not spend it.  

    Higher/Kustomz – Did you see Singapore’s GDP?  We are on the same planet and they are a very good indicator of emerging markets.  

    In fact, EDZ did not make much of a move and if we melt down, they will fly again so I like the EDZ Aug $16/18 bull call spread at $1.10, selling the $17 puts for .90 for .20 on the $2 spread.  

    Oh no:  Dollar down to 75.44 and we’re STILL falling.  That’s NOT GOOD and Wheeeeeeeeeeeeeeeeeeeeee!!! 

  95. doro165

    Bxp just took a dive, time to run?

  96. Troy

    JRW/SP500 - Got a sticky note below my screen with SP500 1370-->1318-->1268….just to remind me of where we are, were we came from, and were we can be if markets meet reality over the debt ceiling

  97. JRW III

    Troy / SPX

    Don’t forget 1300 and 1290 !!

  98. angelcur

    eurozone financial sector cds +7%, portugal, greece, ireland, spain cds all up about 2%…but really its solved.

  99. JRW III

    IWM 82.81; here or maybe a flush then up. I’m still short, remember, trade what you see, not what you believe !!  Smiley
     

  100. matt1966

    This is so engineered it’s ridiculous.   They are just flirting with taking out Tuesday’s low without any intention of actually doing it.  I think..

  101. matt1966

    Thanks for the reminder JRW!

  102. Phil

    I can’t believe that CNBC is blowing off this 1,000% more intelligent discussion on the economy being held in the Senate!  It’s despicable…  

    75.50 – $95.82 oil!  

    Dow stubbornly green.  JPM a big help, up 2.5%.  MCD a flight to quality up 1.25%, MRK too, up half a point.  XOM and CVX are both UP, and that makes no sense with oil at $96 so there’s a whole other leg to go down in the Dow if they turn on us.  

    Senate finished with Bernanke now so we’ll see what happens…

  103. JRW III

    IWM 81.82 then !!

  104. JRW III

    Support at IWM 82.49, 82.26 and 81.82 !!

  105. kustomz

    Phil Im very aware but, this market has slapped me silly when I used logic trying to determine direction…
     

  106. ssdirk

    What’s up gang?  Been a long time since I posted, but always lurking.  This sure is a big bucket of cold water for the market.  Phil, good day trading calls.  About all you can do in this range.  Matt, I know you gotta be loving today.  JRW, I see my old 3m8p is still working mighty fine.  These long trending days are the absolute best for it.  Been working on a system to handle the back and forth over the line.  Not ready for mass consumption.

  107. enni_82

     Phil,
     
    Based on your long term WFR play I’m sensing you like solar long term. I was wondering if you had any thoughts on the inverter company PWER?  I’m currently long around 8.50 and have sold the Jan 2012 7.5 call/put for net 2.1 for a 6.40/6.95 buy write. I’m comfortable with the company long term, but wondering if it has your blessing?
     
    PS…Great call on the USO puts. Thanks!

  108. eyezz

    Very nice in and out on those USO puts again, easy way to get the subscription covered in just a couple of hours.
    Thanks again Phil and everyone here contributing to such intelligent and informative discussion! I have wasted countless hours reading "professional newsletters" and message board blather over the years. Have learned a great deal here in a very short time. I have sent out a number of invites to friends and family for stockworld!
    Out again on those puts with my 20% ;)

  109. jerconn

    Pharm, I can’t quite fathom where you are with IMGN…I have the Jan 12  $11/16 BCS – the long calls 70% up – would you advise to hold on or sell?

  110. JRW III

    Welcome back SS !!  Smiley

  111. JRW III

    Sold 1/3 TZA on the break back up through 82.49 for $1.85 !! No EMA confirmation of direction change though !!

  112. dclark41

    Phil:
    Does EDZ react more to a down day in the US markets on the day of, or when the overseas markets react the next day?

  113. nicha

    jerconn – see Pharm’s post above. He advised selling it.

  114. JRW III

    1/3 more at $1.77 on a piercing of the EMA !!

  115. JRW III

    Several signals; all in cash now !!  Smiley

  116. Phil

    COP/Dflam – I’d stick out the protection for now.  Short-term we should head lower and that will hurt the Jan callers and pump up the VIX to give you a better roll.  You can just treat the roll like any trade and follow it with a trailing stop to execute. 

    QQQ/Cwan – We’re playing for a GOOG miss causing a massive sell-off for a 10-bagger tomorrow so why not sell another half at .20, lock in the profits and then you don’t give a damn what happens tomorrow.  

    FAS/Hex – Well you KNOW that is not the way to play, right?  What you can do to salvage this trade is watch them expire worthless (now .02) and NEVER DO THAT AGAIN.  I don’t know when you bought them but there were .25 at the end of June and went back to over $1 before going to zero.  If you didn’t like them enough to double down at .25 (which would have gotten you out better than even) they why on earth would you watch it go up 300% from there and do nothing and then, when it fell back to .55 on Friday – to still risk the weekend going into the last week when you were already miles out of the money?  The best thing you can do right now is obsess on what signals you miss, how you misplayed this and then, after you are wiped out tomorrow – you need to go to your favorite store with no money and look at all the things you could have bought for $1,420 or $1,000 or $500 and then look at the ZERO you are allowed to spend and HOPEFULLY that $1,420 lesson will stay with you and you will never do this again.  THAT is how you "salvage" this trade!  

    Volume/Matt – Dow volume at 12:30 just 61M – not much after an active first 1/2 hour.  They got their pump and now they are dumping.  30-year note auction coming up should either put in a floor or send us over the cliff.  

    BXP/Doro – I was playing them for earnings.  If not theirs then other REITs.  I think we can do better but nothing wrong with taking 1/2 and stopping the rest out even for a guaranteed gain.  

    Hey SS!  

    WFR/Enni – Holding up nicely today, by the way.   I do NOT like "solar plays" – I like WFR and SPWRA when they are super-cheap because they are both class operations who can adapt and survive in changing conditions over the next decade.  Solar is the future but that future is not tomorrow and many of the companies in this space will not survive.  So no blessing but I don’t hate them, I’d have to learn more about their mix to have a real feeling one way or another but, as far as I know, it’s mostly their inverter business that’s growing – I’m not sure that kind of business has much of a moat around it as it’s pretty basic tech and they are just a supplier, essentially, relying on their partners to make sales that include their products – that’s never a strong position, especially in a low-margin business.  

    Thanks Eyezz but I think I might be insulted by the insinuation that I’m not a "professional newsletter"!  Congrats on picking up the concepts so quickly too…  

    EDZ/DC – Well, like us, EDZ traders are gaming the move so, if the US is down 1%, we expect Asia to do about the same in their session.  I’m thinking EMs were up about a point though and this move by us and Europe (down 1%) will make them think the up move was a mistake PLUS you have a weekend in which Italy, Spain AND the US are NOT FIXED so I think we may close the week on a very sour note out of Asia this evening – especially if GOOG misses.  We may not be paying attention to Singapore’s GDP but they sure are!  

  117. JRW III

    Too early, no EMA confirmation to the upside, but strong confirmation down; other signals still mixed !!

    2/3 TZA again at IWM 82.48 !!

  118. thechaser

    Phil, you are the man!  I went short on oil futures this morning and I will be flying you first class to Vegas to show you how much I appreciate today.  I know when you put up those charts in the morning post it’s time to commit.  This is three months in a row you have nailed it for me.  Thank you is just not enough for what you’ve done for me!  

  119. ssdirk

    JR – trendline of yesterday’s lows still in play. 

  120. eyezz

    hehe, ahhh yes Phil, stockworld is light-years ahead of the "professional newsletters", a new and elevated category is in order!

  121. kustomz

    spike in treasuries

  122. JRW III

    SS / Trendline

    It would appear so !!  All in TZA now with the break of 82.26; 81.82 it is !!

  123. Phil

    The 30-year auction was good – I think this may be a flush at the bottom prior to a move back up so be careful! 

  124. bobhu

    Took profit on QQQ 57 Puts, bot 40 at $0.07, sold 20 for $0.15 and 20 for $0.32.   Thank, Phil

  125. flipspiceland

    @Felipe
    Once again, many muchos for the SODA trade of last week. Finally out of all three legs.  I didn’t want to wait for expiration tomorrow and the possible peg at  $70.00, following your dictum to not get greedy. 
    One of these days I’m going to go with 100 of them instead of 10 and take the rest of the year………naw, that’s not happening.
    Thx.

  126. ssdirk

    JR – I actually have it on it right now.  2 bucks exactly on iwm daily range is getting extended.

  127. tuscadog

    Phil / 30 yr   If they are willing to buy 30 yr at 4.9% they must expect a Ddip and multi-year recession with inflation declining?  Bearish signal for equities?

  128. jabobeast

    JR and Phil disagreeing???

  129. vortexrc

    My subscriptions expires on Monday, July 17 and of course I would like to renew.  Since this is the end of my first year, I am not sure how to renew.  I looked at my account info but did not see a way to indicate renewal.  Please advise.  Thanks!

  130. matt1966

    Sugar.  Started covering waaay to early.  Should have let it run right up until the auction.  I just gotsa get my program finished so I can let the ‘ol puter sweat out the dance with the 8ema.

  131. JRW III

    FYI, Phil may be right about the flush; so if you see a massive spike through the EMA, act accordingly as I will be busy changing positions for 3 or 4 minutes !!

  132. tuscadog

    Phil / Oil   Would you play for a bounce now today, before shorting again tomorrow.  $3.25 fall in one day is pretty dramatic?

  133. kustomz

    Flush in the $ in preparation for a move higher..Bernanke says not ready for QE3…going long the $ 75.85 would be the right thing to do

  134. JRW III

    SS

    Standard deviation works best in a controlled market, today seems less controlled than usual, but good point well taken !!

  135. JRW III

    SPX 1307ish is support, then 1300.

  136. Troy

    JR/SS - IWM in decending channel since 10:36…didn’t notice it matched yesterday, interesting.  Noticing that TBT is not a very good indicator, as it jumps up and down like crazy.  Replaced TBT with Oil.   Parabolic SAR has been very good at shaking out false reversals…zero slope during the pump up attempts, negative slope elsewise.

  137. ssdirk

    JR – a break of that trendline (still riding it down) can get out of hand for the bulls.

  138. jromeha

    Anyone trade oj futures? I know the trees are having disease problems but was thinking of shorting…

  139. kustomz

    Jr, Florida OJ crop up 4% from last year

  140. Phil

    $95 oil!  75.46 on the Dollar so don’t blame that.  

    01:00 PM On the hour: Dow -0.27%. 10-yr -0.14%. Euro -0.07% vs. dollar. Crude -2.5% to $95.60. Gold +0.26% to $1589.70.

    01:03 PM The Treasury sells $13B in reopened 30-year bonds at 4.198%(.pdf), wrapping up a this week’s $66B in post-QE auctions. Bid-to-cover ratio of 2.8; indirect bidders take 37.8%. Direct bidders take 21.9%.

    Treasurys move a couple of basis points but are still mostly flat after a long bond auction came in largely as expected, but with a sizable direct bid. The 30-year yield -0.01 to 4.19%; 10-year -0.01 to 2.895%.

    Jeff Reeves pays homage to Jonathan Swift with a satirical piece calling for the U.S. to strategically default, indicating that a benefit would be a slash in Medicare spending. "Without healthcare, surely few of our seniors will survive into old age," Reeves writes

    Former Fed Chairman Paul Volcker sees a long period of sluggish activity for the U.S. economy, and uses the dreaded Japan analogy in describing the future for the economy. Volcker’s gloomy prognosis: "all the evidence reflects the fact that the excesses in leverage are still with us and the de-leveraging process takes a long time." 

    This is like getting a phone call from your banker!  The head of China’s Dagong credit rating agency lobs another shell at the U.S., saying "we will definitely downgrade" if there is no "major event" to improve the fiscal situation in coming months. Guan Jianzhong also promises a downgrade should QE3 come to pass, saying the U.S. could end up with a credit profile in Spain’s league.

    Ron Paul on whether the U.S. AAA credit rating is worth saving: "Probably not. I think if you had a market evaluation on this issue, it should have marked down a long time ago… Long term, I think raising the debt limit is a negative because it delays the inevitable. It will give us much bigger problems down the road." 

    Nice try Mr. President but…: President Obama may summon congressional leaders to Camp David for a weekend summit over the debt ceiling, a source says, perhaps hoping the fresh mountain air will help bring the sides together.

    …You are dealing with complete assholes:  As House Speaker John Boehner turns down Pres. Obama’s request to move debt deal talks to Camp David, former Speaker Nancy Pelosi says Republicans "may need to see markets drop 500 points" in response to a failure to reach a deal before coming around to an agreement. 

    Tim Geithner dislikes proposals like Sen. Toomey’s to prioritize debt payments, but the Pennsylvania Republican remains convincedTreasury is still working on a contingency plan to do just that. S&P warned Democratic leaders last week it might downgrade the U.S. credit rating on a priority payment plan like Toomey’s. 

    Fitch downgrades Greece’s banks to B- from B+ in the wake of the yesterday’s downgrade of the country to CCC. The agency notes the banks’ funding is supported by "extraordinary liquidity provided by the ECB," leaving little room for maneuver against further deposit outflows or sovereign shock. NBG -2.4%.

    Like a chicken that’s had its head chopped off and continues to run around before keeling over is how John Taylor sees the euro. In fact, the euro is only holding up against the greenback and the pound – 2 currencies that have their own issues. Measured against the franc, yen, aussie, loonie, gold … the euro shows every sign of weakness.

    Though expecting a Chinese hard landing and a 2012 recession, Gary Shilling remains positive on U.S. Treasuries, due to his view of the American economy as "the best of a bad lot." Shilling expects 30-year yields, currently at 4.2%, to eventually drop to 3%. Meanwhile, Shilling is bearish on equities and "agnostic" on gold. 

    Some Republicans say bank examiners are clamping down on otherwise healthy banks and unnecessarily forcing them to classify some loans as "non-accrual," crimping lending. Simon Johnson counters that bringing more players into the banking industry, rather than weakening regulation, would be a boon to small business and employment.

    "I am willing to agree to something that I don’t agree with," says Minnesota Gov. Dayton, apparently accepting a legislative proposal that could end the 2 week state government shutdown. The plan increases school funding by $700M by borrowing against future tobacco revenues. 

    Mortgage rates moved lower this week on weak economic news, according to data from Freddie Mac. Borrowers now have another bite at the low-rate apple with average rates on 15-year fixed mortgages falling to 3.65% from 3.75%, and the 30-year fixed moving to 4.51% from 4.6%.

    Ten years of high household credit growth in Canada could be coming to an end, according to a report form CIBC. "The past decade (8.2% avg. growth) was the exception, not the norm," says one of the authors. He sees growth going negative in H2, before returning to normal levels of 4-5% in coming years. 

    More analysts offer positive commentary on Apple (AAPL) going into its 7/19 earnings release. J.P. Morgan is boosting its gross margin forecast due to better component pricing; Piper Jaffray expects the "news flow" surrounding the firm to become increasingly positive; and Caris & Co. sees Apple "miles ahead of competitive tablet wannabes."

    Three lunchtime reads:
    1) QE3? Not so fast. Let’s debate the merits of QE2 first
    2) Bill Gross: Don’t mess with the debt ceiling
    3) Why Netflix is likely to keep punishing shorts 

  141. ssdirk

    In tna off of the bottom of the trendline.  IWM just too extended.

  142. kustomz

    Equities and the safe haven of the Euro (wtf) win over the $

     

  143. JRW III

    As I said, changing positions,; out of TZA with 41 cents, in TNA !! (off SPX 1307)

  144. Phil

    You are welcome Chaser and congrats!  

    Thanks Eyezz too!  

    Hey, big move up at 1:30 on the dot – I knew that was a flush.  Let’s see how far they can take us back but Dow just retraced over 50% of it’s drop in 5 minutes!  

  145. matt1966

    Does anyone still believe this market isn’t manipulated by the Fed with occasional help by the Treasury?

  146. jomptien

    Phil, You were on the $ today with your calls almost exactly on the turns – Krap kuhn krup (Thai for thank you very much).

  147. ssdirk

    matt – not me.

  148. JRW III

    IWM 82.81 is now resistance, but "they" are in control !!  I’m fully long !!

  149. ssdirk

    matt – meaning I do believe.

  150. lol730

    Phil,
    thanks for "Flash" hint.
     
    Out of /TF with 5 points in 4 minutes :)

  151. kustomz

    Ahhh rumor that a deal has been reached for 1.5T that explains the move

  152. ksone88

     USO, QQQ- Phil, thanks for these plays. Out of USO for about 65% gain today and just keeping 1/4 QQQ.
     

  153. Lincoln

     Phil: TBT vs FAS
     
    I’m more comfortable with TBT than FAS, would it make a suitable alternative to do a weekly income play?  TIA

  154. gmarts

    This is the most disjointed totally BS action …. How can anyone keep a straight face on while referring to free and open markets. I’m beginning to believe, that my government is as much the enemy as the Gang of 12.  Somebody remind me exactly who it is that Bernanke supposedly works for. At least my "bunker plays" (gold, silver, xanax and ammo) are still working…

  155. jabobeast

    WTF???

  156. biodieselchris

    TBT – interesting that it’s up on a down day, maybe inflation is starting to gain traction as Phil posted?
     
    One of these days all of that money pumped into the system is going to show up, really more a matter of time.

  157. biodieselchris

    CMG bounced off 320 and that is annoying. I hope the MM’s aren’t trying to hold 320 through Friday considering that is my put strike. 
     
    310 is fine though….    :)

  158. cwan120

    Hi, SSDirk,
    Welcome back!  Where’s your friend judahbenhur?

  159. Phil

    Nice job Bob – see how good scaling out is.  QQQ snapped back hard already.  I still like letting that last bit ride for tomorrow – just in case.. 

    SODA/Flips – Congrats on that one, nice job handling that crazy MoFo Momo!  

    30-year/Tusca – This was what we exepected to happen all week, right?  They panic the markets so they can sell their $66Bn worth of debt without the Fed having to step in and now they can go back to happy talk and pump up the markets until the next time they need some panic cash.  All according to plan so far.  Maybe GOOG earnings are an upside lock and tomorrow we pop back up 2% in the markets…

    Actually, now that w’re so low, the QQQ Aug $57/58 bull call spread at .50 is a nice upside play on GOOG.  Great day for the usual covers like RIMM tomorrow $27.50 puts at .46 or VLO tomorrow $25 puts at .30.  

    USO Aug $37/38 bull call spread at .50 is also a nice, upside play.  Same offsets or you can sell the tomorrow $37 puts for .21 as $95 should hold and, if not, the next week $36 puts are .30 for the roll.  

  160. flipspiceland

    @BDC
    I know where some of that money is showing up:  In Real Estate Prices in big money city, Toronto, Canada. 
    An Average—and I mean average house— is nearly $400,000. 

  161. tuscadog

    Phil JRW / You both seem to be anticipating a stick today after the flush?

  162. ssdirk

    cwan – juda and I have been trading together now for a year.  He is doing great.

  163. Troy

    ssdirk – still have the ocean property?  BP situation seemed to go away quickly, at least in the MSM

  164. flipspiceland

    @BDC
    How can you have a burrito without a Tortilla?
    Be like having a "menage a trois",  all by yourself:
     
     
    From the company’s description by an "analyst":
     
    (The Company’s restaurants serve a menu of tacos, burritos, salads and burrito bowls (a burrito without the tortilla).

  165. ssdirk

    Hey Troy – Yep, still have it.  We have no known residual effects from the spill.  Summer bookings and traffic have been really strong.  Last year sucked!!

  166. exec

    I can’t believe you guys are so cynical with all this manipulation talk. 
     
    These 200 point swings instigated by random press release, leaks, rumors, and lies are simply the typical day to day gyrations that occur in any normal market/business.
     
    You keep up all this crazy conspiracy talk and you’re going to get tagged as hysterical.

  167. kustomz

    ES volume is very low, doesnt look like there is much interest..that usually means down but…I think the next few days its about the earnings and forecasts..

  168. Troy

    Kustomz/$1.5T rumor - where did you get that info, it explains the spike up well.

  169. Troy

    ssdirk- yeah, I remember it wasn’t a very good time for you on the forums, as we discussed BP daily for two months as you sat in front of the mess.  Good to hear it worked out!  I changed my tag from "Goldman" recently…

  170. Troy

    SSdirk - still working on a modification of your original TNA/TZA system…thanks for starting the method, JRW has mastered it…I’m attempting to follow (Stealing JRWs lines daily, of course!)…

  171. kustomz

    ZH Troy

     

  172. jabobeast

    Blockbuster: Netflix Customers Offered Blockbuster Total Access With New Everyday Pricing And Free 30-Day Trial With Proof Of Netflix Account
     

  173. ssdirk

    Troy – still tinkering as always, but it is and always will be JR’s system. 
    JR – what are you thinking.  I took 1.5% on the tna play and happy.  The counter trend moves always make me nervous.  I am thinking that s3-81.82 may still be a possibility.  It was just too soon to get there and stay in the channel.  It can’t get there until 2:30 without getting out of the channel.  In cash and would be happy to take tza at s1 or 83ish with confirmation.  I think /es is trying to stay above the 100dma for the close.

  174. deano

     poor LULU!!!

  175. JRW III

    2/3 out of TNA; a break of 82.81 should NOT have happened. I will sell the rest if we lose 81.46

  176. JRW III

    SS,

    Looking like a retest of the lows coming if we lose 81.46 !!

  177. JRW III

    And out; 2% on 2/3, 1% on 1/3 !! (and 1/3 in TZA)

  178. Phil

    Disagreeing/Jabob – Well I’m not purely technical – I watch all the wheels spinning and try to suss out what’s behind sudden moves so what looks like a clear break down is what I sometimes see as a buying opportunity.  

    Renew/Vortex – You don’t have to do anything, the system will roll you over as long as your CC is up to date.  There’s a Member Management link at the top right of our web pages – it should say "Vortexrc’s Account" – that’s where you can manage all your info, subscriptions, etc…  

    Oil/Tusca – Totally done at $95 – that was our best likely case target.  Almost worth playing bullish off that line.  Until we get more info (a new count from the NYMEX), we don’t have a reasonable case to expect it to go lower into the weekend.  

    TBT flying!  $32.70.  

    OJ/Jrom – I don’t trade anything that I’m not fairly sure I will see or hear news about if something major happens.  To play specialty futures, you need to become an expert in the field otherwise you are just gambling.  

    Good call SS!  And JRW right behind you.  

    You’re welcome Jomp, Lol, Ksone!  

    WOW – CNBC says Middle Class is undertaxed.  I guess that’s the new talking point for conservatives?  

    Just a rumor Kustomz.  

    TBT/Lincoln – That’s interesting because it’s short-term volatile but long-term stable.  Remind me on weekend and we’ll take a look at setting something up.  

    Bernanke/Gmarts:  Bernanke is APPOINTED by the President but he WORKS for the PRIVATE member banks:

    Each of the twelve Federal Reserve Banks is organized into a corporation whose shares are sold to the commercial banks and thrifts operating within the Bank’s district. Shareholders elect six of the nine the board of directors for their regional Federal Reserve Bank as well as its president. Mullins reported that the top eight stockholders of the New York Fed were, in order from largest to smallest as of 1983, Citibank, Chase Manhatten, Morgan Guaranty Trust, Chemical Bank, Manufacturers Hanover Trust, Bankers Trust Company, National Bank of North America, and the Bank of New York (Mullins, p. 179). Together, these banks owned about 63 percent of the New York Fed’s outstanding stock. Mullins then showed that many of these banks are owned by about a dozen European banking organizations, mostly British, and most notably the Rothschild banking dynasty. Through their American agents they are able to select the board of directors for the New York Fed and to direct U.S. monetary policy. Mullins explained,

    ‘… The most powerful men in the United States were themselves answerable to another power, a foreign power, and a power which had been steadfastly seeking to extend its control over the young republic since its very inception. The power was the financial power of England, centered in the London Branch of the House of Rothschild. The fact was that in 1910, the United States was for all practical purposes being ruled from England, and so it is today’ (Mullins, p. 47-48).

    He further commented that the day the Federal Reserve Act was passed, "the Constitution ceased to be the governing covenant of the American people, and our liberties were handed over to a small group of international bankers" (Ibid, p. 29).

    Also see/read: "The Creature from Jekyll Island."

    Stick/Tusca – We got a huge push up and I doubt that was it for the day or they wouldn’t have pulled the trigger so early.  I think they were just testing the reaction to a smallish debt solution and now they have a benchmark to push the next rumor through.  

    Conspiracy/Exec – What conspiracy?  I don’t see any conspiracy.  There’s no plan to jam the markets higher at 2:30…

    Dow volume 90M at 2:27.   Dollar 75.47, oil $95.68, gold $1,588, silver $38.69. 

    Just in case there is a conspiracy – IWM next week $83 calls at .87 were double that this morning and a stop at .75 makes this a good poke. 

  179. samz3700

     Phil -
    I need a few longs to protect against the remote possibility of a budget deal over the weekend -
    any suggestions – thanks

  180. shadowfax

    samz3700
    Pick an index, the limit will be lifted, both parties loose if not.

  181. ssdirk

    Ruh Roh

  182. kustomz

    I’ve seen more orders AH in ES than right at this moment…got a bad feeling

    GO BUCKY!! PLEASE!!

  183. strether

    Phil
    Why are QQQs down 1% but DOW only down a bit??

  184. shadowfax

    JRW
    They are pushing the band!

  185. JRW III

    Just for the record, I’m not comfortable being short here, (1/3), but the system does work !! 7 1/2% so far today !! 8-)

  186. shadowfax

    HEY! How about a long sqweeze?

  187. Phil

    LULU/Deano – They had me a little worried this morning. 

    Oops, Dollar killed that little rally by going back over 75.50 faster than the stocks could go up.  This is tricky because an actual debt agreement is kind of good for the Dollar if it reduces spending and insures we don’t default.  Still, I expect them to try again into the close as very little firepower was wasted on this attempt – Dow volume 92M at 2:37.  

    Oil finished at 95.70.

    Longs/Samz – See above. 

    And what Shadow said.  

    Dow/Streth – Earnings on the multinationals have been good.  JPM was kick-ass and up 2.5% despite the market.  IBM is green, XOM and CVX are green, MCD is green – when the big boys are green, it doesn’t matter much what the kids do in a Dollar-weighted index.  

  188. JRW III

    All in TZA now !!  (and more comfortable)  8-)

    Watch out at IWM 81.82-88 !!

  189. JRW III

    I guess this is just going to be one of those up/down days !!  Emoticon

  190. Phil

    Deal seems official at $1.5Tn and that’s shooting the Dollar up and killing the markets but, ultimately, should lead to a relief rally once the Dollar calms down.  Dollar now 75.63 – Yen much happier at 79.15

    White House says both sides agree on $1.5T in spending cuts (DJ). WH Press Sec. Carney is holding a briefing now. Stocks spike briefly back into the green.

    02:00 PM On the hour: Dow -0.02%. 10-yr -0.28%. Euro +0.02% vs. dollar. Crude -2.57% to $95.53. Gold +0.28% to $1590.00. 

    Convoluted logic:  Today’s stellar Treasury auction, the week’s third big auction to go off without a hitch, adds credence to those who believe a debt deal failure ironically would heighten demand for Treasury bonds. The most likely outcome of a failure is that instant austerity would slow the economy, causing a rush out of stocks and into Treasurys, and a lack of issuance after Aug. 2 would raise their scarcity value. 

    JPMorgan becomes the first big investment house to cut its Q3 GDP forecast, lowering it from 3% to 2.5%. Michael Feroli says much of Q2 growth was inventory build which is likely to weigh on output this quarter

    Dennis Gartman issues a cautionary warning to commodities investors, noting that the rate at which gold (GLD +0.4%) and silver (SLV +1.4%) are rising “borders upon the absurd.” His firm has “quietly” cut its gold position in half, he says, because "panic is in the air, and panic almost always ends in tears." 

    I am so enjoying this!  The FBI has opened an investigation into whether employees of News Corp. (NWS) hacked or attempted to hack into the private calls and phone records of 9/11 victims and their families, AP reports. Shares, which were up a bit before the news broke, now -2.5%.

    Marriott International’s (MAR -2.6%disappointing forecast for FY11 EPS is dragging down the sector. Sympathy slides: Starwood (HOT-2.1%), Hyatt Hotels (H -2.0%), Host Hotels & Resorts (HST -3.1%).

    Netflix (NFLX -3%) says it realized "some people would be concerned" about its new pricing plan, but a "silent majority" of subscribers will realize the $15.98 price for combination DVD-and-streaming video plan still represents a good value. Investors may be starting to notice the customer anger, as shares have given back all of their gains since the price hike announcement. 

    The TSA takes the first step to create faster lines at airport security checkpoints with a pilot program for frequent fliers on American (AMR -2.1%) and Delta (DAL -1.4%) at select airports. If the TSA accelerates the program, it will good news for airline stocks (XAL -0.5%) facing profit pressures. 

    Flurry Analytics believes the Verizon (VZVOD) iPhone and the iPad’s popularity have halted Android’s momentum with app developers: only 28% of "new project starts" for iOS and Android involved the latter in Q2, compared with 36% in Q1. However, this drop could also be due to developers finding it harder to profit from Android.

    Gleacher & Co.’s Stephen Patel is cutting EPS estimates for Nokia (NOK) and Motorola Mobility (MMI). Patel sees Nokia suffering from an inventory buildup, and is skeptical of the prospects for Microsoft’s (MSFT) Windows Phone 7; and he sees Motorola being unable to profit from Android due to "a lack of scale and proprietary user experience."

  191. kustomz

    Come on JRW you can do better than that anime tease

  192. shadowfax

    JRW
    Bouncing boobies? Really? Market must be going up, get out of TZA!!!!!!!

  193. deano

     SPWRA on a nice run today – anyone know anything?

  194. zeroxzero

     CNBC thinks the Middle Class undertaxed?  Gee, Phil, with Cramer on my side, I guess you’ll concede the point :)

  195. shadowfax

    zeroxzero
    Who said it?

  196. samz3700

     anyone use IB and trade JRW system – IB only offers stochastic oscillator – I am not sure what to use to replicate JRWs mom stoch – thanks – guess answer might be to subscribe to a charting service

  197. JRW III

    shadow / bouncing boobies

    Everything falls in time !!  8-)

  198. shadowfax

    JRW
    Your right again!

  199. ssdirk

    Phil – every time I see that GEICO pig commercial with his head out the window saying "Wa Wa Wa Wheeeee!" I think of you.
     
    JR – Channels all clear to the bottom.  Let it rip!!

  200. shadowfax

    Maria’s lisp has lapsed!

  201. zeroxzero

     Sorry, Shadow, just a figure of Cramer-speech; I haven’t watched CNBC since 2007.

  202. Phil

    Here’s why I’m bearish on BXP in a nutshell:

    Dollar finally stopped going up – Dow volume 99M at 3:15 so, hopefully, rally time (or at least bounce time).  

  203. matt1966

    Why do I think we’ll drift up from here into the close?
     
    Jabobeast / Netflix:  Good deal!  I’m gone from NFLX.  If you’re gonna bump rates 60% you damn well better add some extra service to the mix.
     
    JRW:  CAn you make that bigger?

  204. deano

     August RUT 740 puts are 4.78!

  205. jabobeast

    stick time again?

  206. shadowfax

    matt
    I expect an 82.81 close and JRW is usually right, he is short.

  207. shadowfax

    matt
    I have been wrong all day!

  208. JRW III

    matt / Bigger:

    Bigger Picture

  209. shadowfax

    JRW
    You are about to be held in ?????

  210. yodi

    JRW III
    you are distracting the guys from waching the stick!!!! bad

  211. Troy

    WTH…no ^bounce^…uh, I mean in the markets!

  212. shadowfax

    JRW
    Kute but too big!

  213. yodi

    JRW III
    but she is waring a 1585 $ gold chain

  214. zeroxzero

     Does that mean we should be buying ABX down 1.3%+?

  215. shadowfax

    yodi
    You are looking way too close!

  216. kustomz

    Phil, are bank stocks already pricing in a possible recession?

  217. Phil

    All in all, it’s been a very bad week but the Dow is hanging tough and the NYSE and S&P are right on those 2.5% lines so a good place for a turn (RUT and NAS always over-react in either direction):

    RUT puts/Deano – I like them for shorts.  

    03:00 PM On the hour: Dow -0.32%. 10-yr -0.26%. Euro -0.29% vs. dollar. Crude -2.38% to $95.72. Gold +0.05% to $1586.30.

    Container traffic coming in and out of the Port of Los Angeles dropped 12.3% Y/Y in June, while traffic at the nearby Port of Long Beach rose 6.6% Y/Y. LA imports fell 10.2% Y/Y, while Long Beach imports added 3.5%. The two big West Coast ports account for ~40% of U.S. inbound container traffic. - I’m pretty sure LA is much bigger than Long Beach. 

    Bond insurer MBIA (MBI) trips the breakers up 8.4% on rumors of a mortgage-suit settlement with Bank of America (BAC). (CNBC)

    Speaking to Greek parliament, finmin Venizelos clearly describeshow the eurozone debt crisis has taken a troubling new turn as it focuses on Italy. "We have 3% of the public debt in the eurozone, Italy alone has 25% … the whole of Greek public debt is the borrowing of Italyfor a year, €355B."

    Gold futures have hit another high on what one strategist calls "a witch’s brew of debt crisis, further stimulus, a weaker dollar and a loss of confidence in paper currencies and government." Euro Pacific Capital’s Michael Pento believes gold could reach $2000/oz if the Fed initiates QE3. 

    Brazil’s oil reserves, including recent discoveries in deep waters of the Atlantic Ocean, are similar in size to those found in the North Sea, a Petrobras (PBR) official says, adding that production in the area will reach production of 6M bpd by 2020. The U.K. and Norway held about 62B barrels of reserves in the North Sea before the deposits were developed.

    Shares of SunPower (SPWRA +5.7%soar to a new 52-week high as solar industry blogs light up with rumors of increasing commercial uses for its solar products.

    DRAM prices fell over 7% during the first half of July, approaching historic lows, says DRAMeXchange. The market research firm attributes the dip to an expected slump in PC demand over H2, and the need for PC manufacturers to decrease inventories after ramping up purchases earlier in the year.

    iSuppli estimates China’s domestic smartphone shipments will grow from 35.3M units in 2010 to 111.6M units in 2015, driven by declining prices for both phones and 3G services. This presents a major opportunity for Apple (AAPL) and Qualcomm (QCOM), and also for Chinese wireless chipmaker Spreadtrum (SPRD).

    Nothing spectacular, but Apple (AAPLcontinues to gain market share in the U.S. laptop market, growing its shipments 8.5% over the last year to grab 10.7% of the market. HPQ and DELL continue to be the giants, combining to account for nearly 50% of sales.

    Based on the MBI news – I think it is prudent to buy back the FAS calls in the FAS Money Trade (or anywhere else).  

  218. Pharmboy

    SGEN gets ok from panel. On my iPod…..!!! Trading AH should be interesting.

    Imgn- go out to October. 14 calls and puts for 3.35.

    Later.

  219. JRW III

    2/3 out of TZA !! Watch IWM 82.48

  220. JRW III

    And out !!

  221. shadowfax

    PHIL!
    Based on your evaluation I am holding some longs, SPY and TNA.

  222. jabobeast

    FU CMG!!!

  223. shadowfax

    If IWM catches TBT tomorrow is gap up.

  224. shadowfax

    XLF has changed it’s trend.

  225. yodi

    shadowfax
    I am short sighted

  226. tuscadog

    Phil / EDZ   Would you hold into the close, per your am comment?

  227. exec

    JR/System
     
    What is the concept of you scaling in and out of positions.  I don’t recall you ever discussing this.  Do you always use the same tactic…..1/3 increments or do you sometimes just pile in 100%.

  228. Phil

    Bank stocks/Kustomz – I don’t think anyone is really pricing in a recession or we’d be down around 11,500 max.  

    Longs/Shadow – I just think it has a higher percentage profile at the moment.  

    Very weak looking bounce so far.  No volume (Dow 107M) coming into 3:45.  

    Looks like it’s going to be up to GOOG to save the markets!  

    GOOG Next week $550s for $7.20, selling this week $545s for $6.90 is net .30 on the spread – 10 in the $25KP.  

  229. shadowfax

    yodi
    I don’t need correction to drive but the print is TOO SMALL!!!

  230. shadowfax

    Thanks Phil!

  231. drumkeerin

    Phil,
    SHAW taking quite a tumble lately. Anything serious going on?

  232. kustomz

    Not if the markets are propped up and they juice tech, industrial and commodity related stocks. I think the banks are sending a signal and its being misread as rotation.

  233. JRW III

    Only 18 cents on that one; roockie move, spooked by EOD profit taking !!  Smiley

     

  234. JRW III

    exec / scaling

    I started doing that last year on a comment from shadow; I don’t need to attract BOT attention !!

  235. shadowfax

    JRW
    Rookie move?

  236. kustomz

    Buy/sell orders just doubled in ES in the last minute

    Bet the dollar spike after the close

  237. shadowfax

    JRW
    Don’t ever forget you my hero!

  238. Phil

    EDZ/Tusca – Oh yes, with this crappy close it’s worth holding the EDZs through the weekend unless we fly up tomorrow.  

    You are welcome Shadow! 

    SHAW/Drum – Going to be hard to get a plant approved this year and probably next.  Long-term, we’re going to have nukes but, like CCJ – it’s going to be a long-term slow period. 

    Rotation/Kustomz – Maybe but I think it’s simply too many possible default issues can crash the system so of course people aren’t willing to commit but tomorrow morning all the EU banks will pass their BS stress tests and there will be much rejoicing – as long as GOOG doesn’t screw up.  

    What a disappointing close! 

    Is Facebook undervalued at a $100B market cap? A host of VCs and analysts have run the numbers, and say yes. The biggest driver for their sky-high optimism is the explosive growth in the online advertising market with Facebook getting a healthy slice of that pie. Calls for Facebook’s market cap by 2015 range as high $140B-$234B.

    Research in Motion (RIMM) is reportedly working on a media hubfor TV sets. If true, this is a questionable move for RIM, given the head start possessed by the likes of Apple TV (AAPL) and Roku, and that home entertainment is far removed from the company’s historical strengths.

  239. JRW III

    Well, 8+% on the day; SS probably did better just holding longer, good to trade with you again SS !!

    Hmmmmmmmm, IWM 82.26 !!

    See you all tomorrow !

  240. bobhu

    Anyone got the 3:46pm GOOG trade?  the avg. ask was $0.70 when I entered the trade.  Thx.

  241. kustomz

    Wow on GOOG

  242. strether

    GOOG up 7.7% AH

  243. Phil

    Son of a bitch!  GOOG is totally flying.  $8.74 is a huge beat, above the highest estimate on the street ($8.24).  Foreign revenues were huge on the exchange rates.  $585 is going to be a bitch on that $25KP play but we’ll sell the next weeks into the excitement and let the others pull back (hopefully).  

    GOOG trade/Bob – You are better off if it didn’t fill!  

  244. exec

    JR/Scaling
     
    Ok…..so you scale because of order size or to double and triple down?  How do you go about your buys/sells?

  245. kustomz

    GOOG back to 620 is pretty much in the bag

  246. Phil

    GOOG’s massive move is not doing anything for the futures, unfortunately.  

    At the close: Dow -0.44% to 12436. S&P -0.68% to 1309. Nasdaq -1.22% to 2763.
    Treasurys: 30-year -0.81%. 10-yr -0.35%. 5-yr -0.2%.
    Commodities: Crude -2.32% to $95.78. Gold -0.15% to $1586.90.
    Currencies: Euro -0.26% vs. dollar. Yen -0.21%. Pound +0.18%.

    Market recap: Stocks again faded down the stretch in a session marked by sharp swings exacerbated by thin trading. An early rally was snuffed out after Bernanke told lawmakers the Fed isn’t doing QE3 for now. Techs, transports and cyclicals took it on the chin. But strong Treasury auctions continue to defy doomsayers. NYSE decliners led advancers three to one.

    Google (GOOG): Q2 EPS of $8.74 beats by $0.88. Revenue of $6.92B (+36% Y/Y). Shares +6.8% AH. (PR)

    Google (GOOG): Jumps 10.1% AH on a killer earnings beat. Revenue, ex-traffic acquisition, of $6.92B beat consensus of $6.55B. Sites revenues of $6.23B; networks revenues of $2.48B. Paid clicks up 18% and cost per click up 12%.

    Cubist Pharmaceuticals (CBST): Q2 EPS of $0.34 misses by $0.09. Revenue of $168.5M (+5% Y/Y). (PR)

    Murdoch speaks: News Corp. (NWS -2.4%) has made "minor mistakes," its chief tells WSJ, and the damage to the company is "nothing that will not be recovered." They’ve handled the hacking fiasco "extremely well in every way possible." Full interview soon. (earlier: FBI probe

  247. cwan120

    So GOOG beats big time.  Moon here we come!  Who said we don’t have a Space project after Space Shuttle!

  248. matt1966

    Shucks on Goog.  Was going to buy my usual 100 shares just before close.  Would have been good for about $700.  Damn meetings! 

  249. ilene

    Today’s levels.

  250. tradinv1

     Here’s a shout out to Hannah!!  Attagirl!

  251. drcraig

    Anyone else win the GOOG lotto? Bought two calls at EOD. Hedged with Phil’s QQQ play.

  252. Warp10

     drcraig, I also did at a delta of 0.80

  253. Warp10

     Bobhu, I also was in at 0.80, it will be interesting getting out of that tomorrow.  I will not cry too much as I am long 570 calls and short 460 puts that will erase the loss by a nice margin. ;-)

  254. bobhu

    Warp10, I didn’t get filled(entered order for $0.30), interesting to see how that trade do tomorrow.  You had a nice teade for $570 call and $460 put, good for you.  I sold $510 put while ago, should be save.  Good night.

  255. drcraig

    570 calls for me as well. Best time to sell will likely be at the open with maximum premium remaining. Typically the stock drops at the open a bit, and then recovers somewhat throughout the day. Open to close it is down a bit more than half the time after a beat.

  256. zeroxzero

     drcraig:  Just got back from dinner, wow, another happy GOOG lottery winner!!  I loaded up on straight equity because my broker was suggesting that it would be nice for me to hold a few marginable stocks overnight, so I saw Phil’s note, bought a pile of ‘em, and how sweet it is!
     
    Thanks Phil, your note at the close was responsible for making those silly GOOG sellers pay for my NYC sojourn, nice!!

  257. dclark41

    Pharmboy:
    Are you rolling your DCTH options out to 2013 now that financing is out. Looks like they did it early because of the current economic environment. Can’t think of any other reason why it would come now? Your take?

    http://phx.corporate-ir.net/phoenix.zhtml?c=123840&p=irol-newsArticle&ID=1585491&highlight=

  258. dclark41

    Pharmboy:
    FWIW. DCTH
    A poster from IV (not me)
    spoke to McD. I like to call every few months now and see where my investment is heading.
    1) The price of the offering will be announced tomorrow morning. That was one of the first things I asked. One more point…I asked why not wait until the fall or winter when the pps might be significantly higher, he stated that the markets are a bit unsteady right now with the debt ceiling and they didn’t want to be backed up against a wall just like last august.
    2) New studies with melphalen in 2012 in ASIA. "Melphalen is the drug to treat liver cancers not necessarily doxirubicin". Mentioned celsion and obviously that is a different therapy with dox that is regional not isolated.
    3) Spoke about why the pps was depressed. Told him that alot of investors see fda/us market as more immediate since much of the wealth is here and that Europe and other markets would take more time to develop. He disagreed. He thinks investors are not understanding this for what the ce mark really provides and allows and its potential market capability and penetration.
    4) New filter will be used in q2 in EU. FDA application will be with old filter and then once approved they will submit new application which may only take a few months to get fda approval to use new filter or new trial and just use old filter in the US.
    5) "Lots of news in the near future" as I have told him that things have been dead for to long.
    6) Interim reimbursement will be substantial and reimbursement through programs like NICE are not a factor.
    7) Sanofi rumor is total BS
    8) Update of P3 tail to be released
    9) Convertible bond was to much money for delcath…ie they didnt need 75 million dollars right now.
    10) test market is not limited in patients but rather centers of excellence. Meaning, for instance, only 10-15 center but that is just my example.

  259. lol730

    S&P warns about downgrading US. futures flat.
    Nobody cares

  260. Cap

     MOCHA
     
    HK bought out for $38  - 65% premium !

  261. Jackhound

    zeroxzero, awesome on GOOG call for your overnight straight equity positions, but I wasnt sure why you bought GOOG equities at close when the note you mentioned seemed bearish to me (sorry if I missing something, I am new and not that experienced as a trader)

  262. hanna5

    Yay! Yay! Goog!

    Stock and options gonna be great tomorrow! Hope others kept up the faith and bought some leaps when it was down near 480 to 500. Should be good for more then 100% tomorrow. Finally. As you know ive been adding these since march… Will cover some and keep the rest hope it runs from here!!! Still good value I think till 700.

    Hell if CMG is 300, GOOG to 900 maybe? Lol

  263. eyezz

    I feel ur pain Matt. I became distracted around 3:30 and neglected to catch Phil’s GOOG play.  Even just a long gamble for about 8 bucks on the calls, might open around $580 say for a quick 5x or more on those calls, o well …

  264. Pharmboy

    Damn on HK.  Got out too early!

     

    DCTH/dc – well, I believe some of the hype.  I was at a conference all day with doc’s, some of them in the liver/cancer space.  DCTH is one of the treatments they like and they want to get their hands on it, but it takes time and it is not approved.  I need to follow up with a few others to get their take.  I am in the 2013 puts, and have the 2012 calls.  I will wait until Sept/October to roll my calls out.  IF you are currently in the Septs, then I would definitely do the roll the the 2013s, selling the front month calls and puts to make money. 

    DCTH and CLSN….not a good comparison… CLSN is more like BSDM FWIW.  I will see what we have and make some decisions next week about our rolls to 2013 when the stock prices settles down.  Also need to see the offer price.

    Looks like they are blowing $6M/q, which is fine for the offering.  Gives them another year of headwinds, but we will need to see some sales in the EU in the coming quarters to make sure things are moving in the right direction.  The 5M shares (actually 5.75M when you read it) is a ~12% dilution, which is a 250M company at $5/share.  Let’s just say that the sales could be $500M peak for the liver part alone, so in the end, I am not too worried about it (for now)…..

  265. dday97

    Shorted CL at 95.50

  266. dday97

    Well stopped out +15. Guess I’ll play with this line tonight. 95.50 up & down.

  267. dday97

    Phil, since you sleep about as much as I do you may as well start a futures board so I have someone to talk to at night :)

  268. Phil

    Good morning!

    Stupid Google trick:  Offer to sell July $580 puts (or similar) for $20 at the open.  They closed at $51 this evening and, if you are lucky, you might catch an offer to buy cheap.  You can do this with any put, just put in offers that you can live with like collecting $5 for the July $535 puts, which closed at $15.  If you are really daring – I bet the July $600 calls will open at some very silly number – as will the Augs.   Or, maybe, there will be a cheap today put for a pullback?   We’ll see…

    Looking at the big chart, it was NOT a good technical day at all as we were rejected at every potential support line.  It’s going to take a lot of luck today for us not to be more bearish into the weekend.  In fact, as it’s expiration day, it’s likely we’ll have to ignore whatever BS happens anyway.  

    Big EU stress tests coming up at some point, I think about 7am EST.

    Meanwhile, it’s 3am and the Dollar is back at yesterday’s high of 75.64 – hopefully that’s it as our indexes are flat to yesterday’s close so holding up well under the pressure.  

    Oil is not holding up so well at $95.55, gold fell back to $1,580, silver $38 on the dot and copper still super-high at $4.37 and nat gas still following copper at $4.40 (/HG is a great short below that line) with gasoline $3.115 because, of course, it’s the weekend but this makes little sense with oil at $95.50 so (/RB) is a good short if oil fails to hold $95.

    Asia is pretty flat overall with Hang Seng down 0.5%, Shanghai up 0.3%, Nikkei up 0.4% and Bombay down 0.3%.  Unfortunately, Europe is opening down 1% with banks in panic over the stress tests but it doesn’t make sense that they are planning to release stress tests at 4pm London time on a Friday if they are bad because you don’t want to crash the markets into the weekend – that’s just nuts but, then again, if they were good, why wait until 4pm?  Maybe it’s SO BAD, they feel the need to do damage control over the weekend?  I think that’s what EU traders are thinking at the moment as they opened straight down but it will be an opportunity if the Pound can hold $1.61 and the Euro can hold $1.41.  The Yen is already at 79.20 so they will give us room to run the dollar back down hopefully.  

    We have the Empire State Manufacturing Survey at 8:30 and that sucked last month with sucked not being a strong enough word!  Franky, if this one heads lower, we are in DEEP TROUBLE.  On the bright side, last month was so terrible (-7.8) that a flat performance will spark a relief rally.  We also have CPI at 8:30 and our core PPI was up yesterday, sending gold to all-time highs AND we have Industrial Production and wages, which will highlight the plight of the American worker as they work more hours for less money – which is GOOD for Corporate America (and what else in life matters?).  Michigan Sentiment is at 9:55 and that may be an upside surprise depending on what oil was doing when they took the survey (we had that nice dip last month).  On the whole, Michigan Sentiment has been pretty bad though:  

    Ignoring those nervous Europeans, we have to focus on GOOG and be a little bullish today as the data expectations are very low.  I think 75.75 should be the top in the Dollar so we can play the S&P Futures (/ES) UP over the 1,305 line or the Dow Futures (/YM) over 12,400 (now 12,390).  

    Oh yes, Obama has an 11am chat with the nation scheduled! 

    Friday’s economic calendar:
    8:30 Consumer Price Index
    8:30 Empire State Mfg Survey
    8:30 Real Earnings
    9:15 Industrial Production
    9:55 Reuters/UofM Consumer Sentiment
    10:30 ECRI Leading Index

    Notable earnings before Friday’s open: CFHNMAT

    S&P warns (pdf) of "at least a 1-in-2 likelihood" it could lower the AAA debt rating of the U.S. within the next 90 days, "owing to the dynamics of the political debate on the debt ceiling." This follows theMoody’s warning yesterday. Stock futures and the greenback sell off for a couple of minutes before bouncing back. The damage in the bond market lasts for about half an hour.

    Geithner says "we’re running out of time" to raise the debt ceiling. Bernanke says failure would be "calamitous." Pres. Obama says seniors might not get Social Security checks without a deal. But, Kurt Brouwer asks, isn’t this the same gang who said TARP, the stimulus, Obamacare, QE1 and QE2 would fix things? Is it any wonder that Americans "just do not trust our leadership anymore?" 

    Recent polls suggest that Americans are willing to accept some increase in taxes to reduce the deficit, Bruce Bartlett writes. Republicans, take heed

    Five reasons to be bullish (!) on stocks, according to Brendan Coffey: (1) the S&P has bounced off its 200-day moving average; (2) the market looks to be following its 2003-05 pattern; (3) S&P 500 firms are trading at just 15x trailing-year earnings, cheapest since 1994; (4) oil and gas prices are falling; (5) consumer demand is growing.

    After all, where are you going to put your money otherwise – CHINA???  The Financial Times‘ Izabella Kaminska paints an unsettling picture of how financing for commercial Chinese projects is often "funded with bonds backed by grossly misvalued land assets." Meanwhile, Chinese urban fixed investment, which includes construction and real estate development, has taken a sharp dive as of late.

    Barney Frank blows his lid at S&P for its report saying Dodd-Frank be damned, when push comes to shove, the government will step in to support the SiFis. "There is absolutely no support for more bank bailouts," says Frank. At Dow 12K, he’s right. All S&P is saying is that at Dow 8K and falling, it’ll be a different story.

    "It’s been an unmitigated disaster," says Jamie Dimon of the flaws in mortgages. "Everybody is going to sue everybody else, and it’s going to go on for a long time." Dimon believes the litigation reservetaken so far should be enough to cover additional expenses, settlements, and probes by the DOJ and the state AGs.

    As it tries to settle some mortgage-related disputes andcontinues to battle other charges, JPMorgan Chase (JPM) has decided to wind down its $154B mortgage portfolio at a 10-15% annual clip, until it’s "close to zero." JPMorgan added $1.27B to its litigation reserves in Q2, and took a $1B charge related to "outstanding foreclosure matters."

    "Interest rates can change like the weather. Debt levels … can’t be brought down quickly," write Reinhart and Rogofff, dismissing arguments that low servicing costs mean debt isn’t an issue (as Italy is finding out). Despite "prominent intellectuals" arguing otherwise, the empirical evidence shows strong correlation between large government debt and low growth.

    Finally acknowledging the inevitable, the Cabinet of Greek PM Papandreou for the 1st time begins to discuss how it will manage a default … make that selective default. A stalwart to the end, Papandreou stresses this will not be "a credit event, nor default … but a temporary rating of Greek bonds."

    Google’s (GOOGearnings call includes some encouraging mobile division data: daily Android activations are now above 550K; traffic for its AdMob mobile ad network has grown 3.5x in the last year; and 6B Android apps have been downloaded – this holds up well against Apple’s (AAPL15B App Store downloads, given Apple’s head start. Shares+12.1% AH.

    Google (GOOG) confirms in an upbeat earnings call that Google+ has 10M members since its invite-only launch, and that the "+1" button for recommending sites has been served 2.3B times a day. The company is trying to simplify even as its revenues spread beyond core search to YouTube and mobiles. GOOG +11.5% AH. (earnings beat

    IMAX says Regal Entertainment (RGCwill install nine additional IMAX theatres to the company’s chain, bringing its total to 25 from 16. IMAX shares +0.3% AH.

    I like IMAX long-term and they got cheap at $28 and we have the Harry Potter movie this weekend which should be the biggest IMAX film ever.  The Aug $27/28 bull call spread is .55 and pays 81% if the stock just holds $28 for the month.  4 of these calls can be offset with the sale of one Jan $25 puts at $2.40, which has about a $5 margin requirement (after using the cash for the spread).  Let’s put 10 of these into the income portfolio, which will be:

    • Selling 10 IMAX Jan $25 puts for $2.40 ($2,400)
    • Buying 40 IMAX Aug $27/28 bull call spreads at .55 ($2,200)

    So that’s a net credit of $200 being the worst case scenario if IMAX holds $25 through Jan expirations and, since we’re happy to enter 1,000 at net $24.80 (with more hedges, of course!), this is a nice play for that portfolio!  

     
  269. Phil

    Good morning guys.  If I knew you were up, I would have said hi before posting.  I’m often up but reading and watching to see if anything exciting is happening and, if it is, like today, I’ll write up an Alert but once I start writing, I’m kind of on a roll until I get it posted.  

    Good discipline on that short DDay but the 3am rule is the dollar goes down after 3am – you’re just lucky the EU is in such a panic as we would have expected an up move off that line (but we wouldn’t play it today because we know how screwed the NYMEX boyz are!).  If I started a futures board I’d have to move to the UK (which I may do one day) as I’d rather go 3am to 4pm if it were 9am to 10pm so at least I’d be on a decent sleep schedule for going out on weekends.  

    Anyway, I think the EU has to have panic fatigue by now so we can look for a bit of a bounce and that should lift the Euro and Pound and knock the Dollar back below 72.60 and then we can get a little lift in the futures into our 8:30 data and then we shall see what’s what.  

  270. dday97

    I know. I usually like buying first thing but it looked so weak I gave it a shot. .15 for round 1 and another .22 for round 2 that i just got out of. Nothing exiting but nice. Now for a break to make some eggs.

  271. Phil

    On the GOOG spread (next week $550s, this week $545s) the play would be to take the money and run on the $550s while they still have premium and wait for the premium to crush out of the $545s (and hopefully a pullback).  Timing will be tricky, especially if they go over $600.  If GOOG keeps going up, we can move to a longer term spread (as we have $60 from our calls to shop with!) so I’m not too worried, the premium on long calls should be through the roof and we can use that to our advantage rolling the current caller.  

    Congrats ZZ and all the GOOG players!  

    Nice rundown on DCTH, DC – thanks!  And, of course, nice follow-up analysis by Pharm.  I learn a lot from these discussions!  

    HK/Cap – You still in that?  Congrats and fantastic call!  

    Congrats Hannah.  I remember just last month the Sept $600 calls were just $1 and we played that 2013 $500/600 bull call spread at $35!  I wonder what they’ll open at this morning?  By the way, great call by you on June 8th:  

    Meanwhile, i find it very encouraging that in the midst of this market drop, GOOG is still holding on to near $520, which is near its post earnings low….so it seems to be building a base here, and when the market finally moves higher, think it will join in. So, i continue to accumulate here, stock and LEAPs. great value

    Also good call by me as they got taken down on the 18th:  

    GOOG/DrC – Same as AAPL bashing prior to earnings.  Works every time and then people are "surprised" by how strong they react after earnings but all they are doing is getting back on the pre-bashed path.  

    Eggs/DD – Most important meal of the day!  At $95 I’d play for the upside bounce but not after 8:30 as the NYMEX opens at 9 and oil was only saved by the NYMEX bell yesterday – those guys were screaming to get out (I think we really screw them up when we sell them those futures as a group because they are so used to flipping them between themselves they get caught with their pants down when outsiders short and hold).  

    Well, not much to do now but:  

  272. flipspiceland

    "Barney Frank blows ……."
    That woke me up…..

  273. judy

    This might effect goog today.

    Phone makers await Apple vs. HTC ruling. The future of Android (GOOG) devices will be in focus today, when the International Trade Commission is due to make a preliminary ruling over accusations by Apple (AAPL) that HTC violated iPhone-related patents. The ruling will be the first in a dispute between Apple and a phone maker that uses Android, and may provide hints as to the outcomes of disputes Apple has with Samsung (SSNLF.PK) and Motorola (MMI). The results of the wrangling could be worth hundreds of millions of dollars a year in royalty payments.

  274. rj_jarboe

    Phil,
    For the Income Portfolio, how about HRB @ $15.44 with a conservative sale of the Jan13 $12.50′s for $6.20. This makes the dividend 6.5%, the potential return @ $12.50 is another 35%, and a nearly 30% discount if assigned.

  275. Phil

    Barney Frank "waking you up"/Flips – That’s an image I’ll have to work hard to get rid of!  

    HRB/RJ – I do like those guys, we were big on them last year at $10 so not as sexy for us at $15.50 but remind me if they hold the line at $15 next week and we could put something together.  Generally they are safe to play in Q4 as they have their busy season into April of the next year.  

  276. rustle123

    Looking at the market, it’s great to see every problem in the world is fixed today.  Up till yesterday, everyone said Greece would default eventually, guess they were all wrong.  It’s fixed and this is the first I heard of it.

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