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Which Way Wednesday – EFSF’d Up Edition

QEC (China)?

That’s the word out of Asia this morning as the Hang Seng flipped 360 points higher after Premier Wen Jiabao said economic policy needs to be fine-tuned and asked local governments to check for signs of lending distress. The markets took that thin sauce as sign that monetary easing is on the way.  You would think people in China would be happy as minimum wages rose at an annualized 21.7% pace in September and when Wen Jiabao promises a chicken in every pot to his people – they are literally excited about the prospect of actually getting a chicken in their pots!  

Shenzhen in China is now matching Hong Kong, paying their workers a lucrative $207 per month (don’t spend it all in one place boys).  Beijing is the place to be if you are an hourly worker though, with the minimum hourly rate now a screaming $2 – putting the average Beijing worker just 50 hours a way from buying a square foot of living space in the city.  

The rise in minimum wages is in line with China’s efforts to boost spending power and domestic consumption.  KPMG says that minimum wage levels in China are four times greater than other places in South and South East Asia.  However, it believes China can defend its position because of its productivity and infrastructure – something the US used to be able to do as well, one upon a time, before we allowed our infrastructure to slip into 3rd World status (see "America’s Infrastructure Crisis").  

As I mentioned in yesterday’s post, Congress is now in year 3 of ignoring the 2009 report (commissioned by the previous administration) that concluded that this country was on the verge of spiraling into a state of permanent decay if we did not IMMEDIATELY put $400Bn a year into fixing things from the above list.  In those 3 years, every single one of those infrastructure bills (which create millions of good jobs that can be filled by our millions of unemployed construction workers) has been filibustered out of the Senate with not one reaching the President’s desk since his initial, inadequate stimulus package.  

Even if Europe fixes their mess and China does whatever it is China does to paint their numbers for another few years – it will only serve to swing the spotlight back on this dinosaur of a Nation that is little more than a shell of its former self.  The myriad of problems facing the US economy did not go away, they were merely overshadowed by the more immediate-seeming disaster in Europe, with it’s endless stream of artificial deadlines (now in year 3) that would spell the end of the European Union if this or that vote did not go through by Monday (almost every Monday).  

Anyway, I’m bored talking about Europe.  Que sera, sera on that one at this point.  We cashed out at the top (as I just mentioned on TV) with perfect timing and now we just sit bemusedly at the sidelines, waiting for some proper resolution – one way or the other.  We HOPE that things are resolved and the markets move higher because that would be better for the Global Economy and better for the millions of people who need jobs and are in danger of losing their homes but HOPE is not a valid investing strategy and our main investing job is to make sure that we are not so unfortunate as to be knocked down the ladder into the bottom 99% or (God forbid!) the bottom 90%, where we’d really have to make sacrifices like waiting for one-day sales and ordering off the Dollar Menus at McDonalds.   

Charlie Rose had a great discussion last night about the reality behind the Occupy Wall Street movement (who now have their first Corporate backer: Ben and Jerry’s!) that’s a must-view but even more so is this fantastic clip of Stephen Colbert consulting with noted Conservative spin doctor Frank Luntz.  If you’ve ever wondered why all politicians sound like they have the same pull-strings in their backs when they talk, this is a great quick-view of the process that politicians go through before deciding what they think:

There’s 3 parts to this so you have to click forward to part 2 and part 3.  Although it is done in Colbert’s light-hearted manner – you get more truth out of this 15 minutes than you get from 15 hours of Republican debate watching.  Colbert sums it up in his first question to Luntz: "What are the most effective ways to lie to people?"  What’s interesting in the focus group is how they are, at first, universally disgusted by the phrase "Corporation are People" but then, about an hour later, Luntz has them all working together on a campaign to "humanize" Corporations.  

As Luntz explains with impeccable Republican logic: "A + B equals C but B + A does not necessarily equal C.  C + A may equal B but C – B does not necessarily equal A."  If you can understand this, then the Republican debates will make a lot more sense to you.

Maybe embracing the A + B might = C if that’s what the suckers want to hear attitude can be applied to the markets as well.  We sure did yesterday as we ignored the silly, low-volume sell-off (we already had our hedges from testing the top of our range) and took advantage of the dip to pick up a couple of bullish trades for our White Christmas Portfolio.  10 SSO Weekly $45/46 bull call spreads were .40 ($400) and we hope to make $600 if the S&P can pop back to 1,250 by Friday’s close.  

Another bullish trade idea for our new WCP was 20 FAS weekly $13/14 bull call spread at .60 ($1,200), selling the Nov $11 puts for .65 ($1,300) for a net $100 credit on the $2,000 spread.  Our goal is to make just $10,000 by Christmas in our virtual portfolio and it would be off to a great start if we can nail our first couple of trades.  We also have a longer GNW trade working for January but that’s it so far in our new set. 

Our logic is that, if the EFSF passes today, the markets should grind steadily higher and, if the EFSF fails today, we’re going to have a whole lot of great shoring opportunities on the way back to 1,100.  As you will see from this morning’s RE-relief rally open – you have to grab those long plays while we’re down because they tend to gap right back up in pre-market trading, making it much tougher to catch a good entry.  

AGQ $70 calls were another bullish play from Member Chat and we added 5 of those to the WCP at $2.10 ($1,050) and they are at goal this morning at $4.40 ($2,200) for a nice 100% gain in a day – now we just have to put a stop at $4.25 and see what happens but it looks like we’re well on our way to that 80-inch flat-screen this Christmas!  

Our goal remains to hit and run in our short-term, aggressive portfolio.  It’s still a wild rumor-driven market and, even if the EFSF passes – then they will begin to argue about whether it’s enough, etc. so, as the great Yogi says: "It aint over ’till it’s over" – be very careful out there.  

 


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  1. NF**X

    AMZN – Nice take. The supply management chain (distribution centers) is an amazing thing for them. I’ll give you the union take re same later. On the earnings followed by CCs, I just find the psychology of that kind of thing interesting – especially among media types, er, I mean, Analysts – as they get spun or, in some cases, “contexted” – few reporters on any beat really know their stuff without helpful guidance from PR pros. Thanks also for the 50 PE rule – a day late. Lol.

  2. NF**X

    SSO 45/46 w BCS – Should see some pop today, me thinks.

  3. Lincoln

      AMZN: Kindle
    As a late and reluctant convert to the kindle I have to agree with their  "lifetime value" premise.  I read and buy way more books since I got it.  Just about very book I like leads me to immediately check out the recommendations and more times than not buy another book.  The "Fire" looks to me to be an excellent basis for the "razor/razor blade" model.  But the stock price has already priced in perfect execution so maybe selling a Jan ’14 150 put will pay for my content while waiting for better price on the stock.

  4. stjeanluc

    Oil Lines

    R3 – 98
    R2 – 96.32
    R1 – 94.85
    PP – 93.18
    S1 – 91.71
    S2 – 90.04
    S3 – 88.57

    Yesterday’s high and low – 94.65 / 91.51

    Breakout lines – 99.73 / 83.28 

  5. NF**X

    P – The only thing I hate about Pandora cuz I love it so, is that I ignore the 5000 songs on my IPod most of the time. We’re at the tail end of a major remodel – out of house for 9 months. The AV guy is installing Control4 to drive and control all audio, video, lights, security, etc. Naturally, you have to splurge for a pro to install Control4 – can’t buy it off the shelf (tho Best Buy installs it now too.) Anyway, I told him it’s important that I’m able to control Pandora from the remotes.

    Pro: “Um. C4 has 4500 internet-based stations built in but no Pandora interface.”

    Me: (silence)

    Pro: “I’ll come up with a workaround.”

    Me: (Silence with $20,000 worth of AV steam leaking out my ears)

    So the workaround is to have a Bluray player that has Pandora built-in. Gotta have my P! From The Cult to Abbey Lincoln to Justin Bieber stations, everybody feeds on it here.

  6. stjeanluc

    AMZN – I do wonder though why the need to sell the Kindle or Fire at a loss. It seems to me that the most important investment was in the software as you can already install the Kindle software on just about every system there is (iOS, Android, PC or Mac). Of course, on these platforms, the user is free to use your competitors application as well (Nook or iBook) and I am guessing Nook won’t be an option on the Fire but Amazon has got to have a big market share on the other devices anyway.

  7. stjeanluc

    Pandora / NF – Use to listen to it, but they seem to lack behind in selection. There are some better alternatives on the market now:

    http://www.tested.com/news/spotify-vs-the-world-10-streaming-music-services-compared/2575/ 

  8. NF**X

    AMZN – Kindle as loss leader. I think Phil covered this, but a major difference between the “reader” Kindle and the Kindle Fire is that the Fire is only a reader as a secondary matter. It’s intended to be a “buying” device that you can take with you anywhere. You need a touch screen and color to do that easily. It’s where they slay all the brick-and-mortars over time: you have the store in your purse, jacket or backpack at all times.

  9. NF**X

    stjean/P – That is the Achilles heal: I do find songs repeated too often – must be indicative of smaller library. Also, I’m pretty sure I pay for the premium service – so I hear no commercials. But I still have a skip limit. BTW, a useful Pandora app is called Pandora Jam – I got it to feed Pandora to my Airport Express. But it’s otherwise a useful PC-based interface in a number of ways.

  10. jmm1951

    Lincoln/Kindle
     
    Yes, since I bought an iPod recently I have been devouring books at an unprecedented pace using mostly the Kindle (for paid) and Google books (for free) applications. However the real key may be that the Kindle application is available on any platform.
     
    The economy is picking up here in Florida. Yesterday I was in a huge brand new Goodwill Store donating a couple of sacks of my wife’s clothing. The store is located in a former Walmart building in the city where I live, and it was FULL of big-spending customers mostly buying clothing fashions and shoes. I swear, it was busier than Super Walmart, which is usually pretty busy at all hours. I was stunned. How can I go long Goodwill?

  11. Pharmboy

    PP

  12. stjeanluc

    AMZN / Phil – Really like the little rant about investing in R&D. This is really an underestimated factor in investment calculations. I have done some research on the largest companies and here are some results (revenues / R&D investment in 2010 in $billions):

    AAPL – $65 billions / $1.7 billions
    MSFT – $62 billions / $8.7 billions
    INTC – $43 billions / $6.5 billions
    IBM – $99 billions / $6 billions
    ORCL – $26 billions / $3.2 billions
    AMZN – $34 billions / $1.7 billions

    It’s clear that these companies are investing a large percentage of their revenues in R&D and might not be rewarded by investors for the efforts that will only pay in the long term. Interestingly enough, AAPL seems to be lagging behind all these guys (even AMZN) percentage wise! 

    I mentioned INTC yesterday and your rightly pointed that they are expensive now, but still they sink 15% of their revenues into R&D and also pay a 3.4% dividend. I have to believe that it will pay off in the market eventually.

  13. NF**X

    Kindle – One last thing then I need to go pretend to be running a business: the latest iteration of the Kindle app on the IPad (which I use when not on my Kindle and instead of the Apple bookstore) has the “shop store” button/link removed. “Take that Mr. Bezos,” says Mr. Jobs’s ghost.

    You have to leave the app now to make the buy. That’s a major Apple-driven tweak and admission that the Kindle Store was pounding their store on their own device.

  14. morxlntway

    Lincoln – you did go long Goodwill. "Give and it shall be given unto you…" :)

  15. jtncsanford

    Hi, newbie here! how/where do I follow Phil’s new 15k portfolio? Thanks

  16. rustle123

    @Pharmboy
     
    Are you familiar with SQNM.  Heard they just came to market with a product that tests pregnant woman to see if they have a high chance of having a fetus with down’s syndrome without having to do an amnio.  It’s done with just a blood test.  Stock is near their low of the year at 4.63.  Worth taking a shot on or still bs company?

  17. Kwan

    On the mobile handset front, NOK posted its 6th straight loss in its mobile division while its rival Samsung is expected to post good numbers on Friday and perhaps even surpass the APPL juggernaut as the leading seller of mobile units.

  18. Burrben

    Jtncsanford / 15K
    Welcome.  There isn’t a consolidated post yet for the 15K White Xmas Port.   But all trades can be found in two places
     
    GNW here : 
    http://www.philstockworld.com/2011/10/24/monday-market-movement-living-on-the-edge/
    The rest here:
    http://www.philstockworld.com/2011/10/25/technical-tuesday-must-hold-levels-must-hold/#comment-1424141

  19. oscarz

    Phil/ SQQQ – Are we staying with  the spread as it is, given Netflix and Amazon’s substantial price drops?

  20. angelcur

    yesterdays decline help ease  overbought condition of the market…. i think theres still some more downside left….stocks bouncing this morning… keep an eye on the banking sector….  weakness there will flag more down action
    any news out of europe is going to move the markets…. theres plenty of headline risk for longs and shorts
     
    GOODWILL//speaking of that we should all try and give as much $$ or food to our local soup kitchens over the next stretch of holiday and cold season as we can muster.

  21. Pharmboy

    SQNM/rustle – that ‘test’ is what drove them down to $1 several years back.  I don’t like the company, but that is a bias in due to the company’s platform and its past history.  They are a traders stock, so buying in here is fine b’c it appears to be a floor, but, not one that I could recommend.  It might be fine, and the test appears to work, I just don’t know enough about it.

  22. stjeanluc

    AA Money Recap

    Long strangle:

    Jan 13 12.5 calls – $1.27 now $1.25
    Jan 13  7.5 puts – $1.04 now $0.91

    Short weeklies:

    Weekly 10 calls – $0.41 now $0.45
    Weekly 10 puts – $0.23 now $0.06

     

  23. oscarz

    Anyone/ V -  Oct / Nov straddle and closing in mid afternoon, worth doing?

  24. exec

    Good Grief!!! 
     
    How can you take these people serious.

  25. jomptien

    Phil,
    Oil play today?

  26. Burrben

    VXX vs VIX study
     
    If anyone is interested in a good write up of a possible direction of the VXX using VIX term structure as research, here is a good article.  He makes the case that "The VXX is set up to get SMOKED between November 16th and December 21st. "
    http://www.optionpit.com/blog/christmas-vix-and-vxx
     

  27. stjeanluc

    AMZN / Iflan (or anyone who played it) – I would be curious to know how the AMZN trade your outlined yesterday worked out today to see if it could be used for other earning plays. Thanks.

  28. vic55

    Briliant exec,
    One of the posts below her speach – "That’s the most coherent? OWS protester I’ve heard yet."

  29. Pharmboy

    USO – shooting star pattern…..now I would short in here.

  30. jabobeast

    that was hilarious exec…

  31. biodieselchris

    bot HOV-1.50 calls for 0.10.
     
    If I’m going to gamble, I might as well only risk $100
     
    :)

  32. Pharmboy

    FXE at OH resistance.  If you think things will be fixed, buy, if not short.  I am shorting.

  33. rossmanmd

    Any suggestions for a good hedge this morning for Europe not being fixed today.

  34. roberthjrfl

    Exec, WOW………

  35. Burrben

    I have a gut urge to start selling short puts on AMZN to build a much larger position now that they got spanked.  Seems like a very good long term hold.  Thoughts?

  36. oscarz

    pharmboy / uso- Directional or bear put spread?

  37. Pharmboy

    Directional.  Phil noted Nov 34 Ps yesterday for 90c.

  38. oscarz

    Thanks Pharmboy.

  39. rainman

    NF**X / Control4 — Look at Logitech’s Squeezebox.  I have 3 of them (great room, whole house and shop). It can drive pandora as well as other internet audio. There are several different versions of them as well asan audiophile version called the transporter but the DAC’s in my standard squeezebox are decent enough that I don’t feel the need to run it through a better DAC. They also natively play FLAC files.

  40. angelcur

    oh btw i don’t think my president has done a very good job..his team is dreadful..but i think we can give him another four years to save the world..unlike others i do hope he dumps biden..for hill..BUT have you seen cains latest ad..with mark bloch playing his minister of information  (Goebbels) takin a drag on a fag in the spot..looking like crap and very very grey and sinister..makes yo think:
    http://www.youtube.com/watch?v=73ks2TPPyho

  41. biodieselchris

     AMZN puts — hopefully this guy is full of crap, but that’s the risk, I would think.

  42. jabobeast

    PCLN getting hit again

  43. rustle123

    @Pharmboy
     
    Thanks for the advice, staying away from it.

  44. NF**X

    burrben/AMZN – For what it’s worth, I’m going to ride my 1:3 195/210 Oct w BPS thru tomorrow’s weekly options pricing – before deciding to "hope" for $210 on Friday (doubtful) – or rolling out an down.  At 230, I never saw 210 coming – tho I was warned here.  But at 195-ish last night, I wasn’t sure I’d see 205 today either.  I love to sell their puts – but someone else here (esp Phil) probably has a better take on accumulating a position re same.

  45. NF**X

     rainman/Control 4 – Thanks.

  46. vic55

    Anybody shorting DIA? It looks too happy

  47. Kwan

    exec – oh. my. god.

  48. Pharmboy

    Why are we going down?  I thought everything was peachy due to the pre-market ramp job.

  49. Pharmboy

    Shorting DIA, vic….. ;)   I am short almost everything.

  50. Phil

    Good morning! 

    Well, the pre-market pump isn’t holding up so well already as the Dollar rockets back off a test of the 76 line.  More to the point, it was a very harsh rejection of the Euro at $1.40 and the Pound at $1.60 and let’s not forget that Yentervention is still out there with the Yen bouncing off the (too strong) 75.70 line this morning.  Below 76 really freaks the Japanese out and they will take drastic steps to strengthen the Dollar if that keeps up.  

    Unfortunately, that stopped us out of AGQ in the WCP with a clean double so now it’s just the SSO and FAS plays working for the week (and GNW is for Jan).  If you want to get back into silver, let’s keep our eye on the $1,725 line in gold and, of course, the $34 mark in silver, which is where we expected to get rejected when we took the trade so now we hope for another entry at $32.  

    Oil pulled back to $92 already and those Nov $34 puts (from 10:52 yesterday) are still at .93 so barely moving and still a good entry to play oil down but, as I said yesterday – scaling in VERY CAREFULLY.  They bottomed out at .80 when USO was testing $94 so they are not going to be very exciting until/unless we get a big move.  

    SPY DAILY David Fry sums up yesterday’s action and both of our sentiments nicely with this chart:  

    What we’re looking to hold from the Big Chart are our Must Hold levels on the Dow (11,590), S&P (1,235) and the Nasdaq (2,603) – all green so far, along with the -5% level on the NYSE (7,473) and the -10% line on the RUT at 697.  Keep in mind though, that the NYSE and the RUT are already disappointing down there so just losing any two of these should flip us more bearish.  

    DXD makes a very nice cover with the Nov $16/17 bull call spread at .50 and we can buy 12 of those and sell 2 NFLX Nov $67.50 puts for $3 in the WCP as I’m not expecting them to go another 10% down this month but we still need to set a stop at $4.50 on the short puts and we’ll roll the loss ($300) if we have to.  If all goes well, that buys us $1,200 of downside protection, which is always nice to have.  

    If you like AMZN (and I discussed why I do at the end of yesterday’s post), the 2014 $150 puts can be sold for $27.50 and that’s a nice net $122.50 entry or you can pair that with the 2013 $150/200 bull call spread at $30 for a net $2.50 entry on the $50 spread that’s 100% in the money.  It’s a bit early to get bullish on AMZN but if you are scaling in and take a small initial entry here, your worst case is owning them at net $152.50, which is still another 25% off the current price. 

    Damn, the Dollar is flying back to 76.50 so I’m going to cut this short and push the hedges.  Who knows what the latest rumor is but, by tonight, we’ll finally have some facts.  

  51. angelcur

    pharm europe is reversing

  52. jerconn

    Pharm – dollar up?

  53. rainman

    Pharm / down — gap fill.

  54. stjeanluc

    Short / Pharm – Well, not everything… TLT!  ;-) 

  55. terrapin22

    Phil / VXX – play from yesterday afternoon.  looking okay for now. 

  56. 1020

    Angel – That was, by far, the most bizzare political ad I have ever seen….

  57. rainman

    GLW had good earnings today.

  58. revtodd64

     "Uproared" Video – Mass movements are filled with angry, frustrated people who are not articulate about their cause and not educated about how the world works.  Both the Tea Party and OWS movements have their share of silliness.  Its easy to use media to discredit a movement as filled with hippies and incoherent, ignorant people.  I’m sure government media in Egypt tried to do the same with Tahrir Square, and the crowd was not filled with saints, intellectuals and business leaders, as some women reporters found out.  But even inarticulate people know when things are wrong and out of whack.  I have learned a lot the last year teaching financial management classes to homeless people.  They understand  economics better than most people think.  Crowds are toppling governments around the world.  We can laugh at those who seem ridiculous, and we can tear gas them, as Oakland police decided to do this week, but I don’t think this group is going away.  The bottom line is that we as a country failed to take the financial crisis seriously in 2008 and have allowed inequality, hopelessness and poverty to grow.  It should be no shock that people are in the streets.  Interesting how videos of interviews of inarticulate people go viral and the 700 airline pilots that occupied Wall Street got zero press.  I have a number of friends who are clergy, social workers, IBM consultants and teachers who are hitting the crowds on the weekend.  I also have fewer people in the shelter I run since some are camping out at Occupy Poughkeepsie.  (Frankly I’m glad for a little relief, so I hope they keep going.)  I’d say don’t ignore this movement because of some U-Tube video.  Check out Alternet .org for some free lance reporting on what is happening in places where the NY Times and Fox News fear to tread.  

  59. Phil

    Let’s watch those tests of yesterday’s lows – if they hold up, it will be worth daytrading a bit off that for a bounce.  

    Dow volume 24M at 10:15 – medium.  

    Analysts/NF – It is shocking how little they understand the stocks they follow.  I get asked all the time if I would do a write-up on this or that stock and they don’t even ask if I have a background in the sectors – just stick a warm body on it and fill some pages you can stick ads on is the entire model.  Even the proper research analysts at the big firms aren’t what they used to be – if they’re not simply spouting whatever BS the trading desk is feeding them, they are mostly just guys who couldn’t hack it as traders but stuck around to "analyze" companies but having to do those things on a schedule means sometimes you get around to doing your homework and sometimes you just wing it and, once they get away with winging it a few times – well, those of you with kids know how that turns out….

    Wow, is IWM really going to 69 by Friday (down 3.5%)?  Someone thinks so and is willing to pay you .44 to cover the short put for them.  I say take the money as those can be rolled to Nov $63s (now .75) and that’s 10% down so we super-doubt that.  I’d combo that with TZA weekly $35/37 bull call spread at .61 which puts you in the $2 bearish spread for net .17 so you make about $1.83 before you even trigger the roll on the short puts – pretty good wishy-washy protection.  

    On the whole, though, I’d rather sell the TNA Nov $40 puts for $3.60 as they were $2.50 on Monday so a very good chance at a quick 20% if we turn back up and TNA has to drop 10% before you have to give the putter his money back.  Of course if the RUT fails to hold 700, you can just take the quick loss and be done with it.  

    Control 4/NF – Guys like you are the reason I wanted to open a high-end stereo shop.  It’s amazing how much people pay to string a few wires around a house!  

  60. Pharmboy

    FXE….in Opts words….

  61. Pharmboy

    SLAB filled the gap…..wish I had more…..but i will take it.

  62. rustle123

    Summarization of Dr. John Faessel for what it’s worth:
     
    The McClellan Oscillator backed off Mondays yearly highs post of hyper overbought (sell signal) plus 279 and is now in NUTRAL at a plus 136.
     
    Yesterday the stock market reversed on more Euro worries; will they or won’t they fix it? Volume was low and below average. (I.e. not a distribution day.) Today the S& P 500 futures are up 10 points at the high of the session. Euro markets are up marginally.
     
    The technical structure of the stock market overall on a medium term basis is superb. And while it may take some back-and-fill to burn off the recent overboughtness I’m a believer that the historic seasonal set up looks good for higher prices. Given a Euro punt of the can deeper down the field the overall backdrop of horrid sentiment should have cleaned out the last seller. If the market moves higher today (shortly) as the futures suggest we could develop the handle of the "cup and handle" pattern. Any break above Monday’s high will bring buyers in en masse.
     
    Short term declining tops resistance is at S&P 500 (SPX) 1237ish.
    Continue to expect (SPX) Price resistance / “overhead supply at the former support now resistance at1250 to1260.
    Monday’s top tick resistance was 1256.
    The 200-day moving average resistance is at 1274.
     
    The 50- moving average "now" support and former resistance is at (SPX) 1180.
    Short term price support in the S&P 500 (SPX) is at 1226 then at 1216. Last Thursday’s low tick of the cycle was at 1197and 1192.
    The August 8th lows were 1101.
    The “clean-out” lows were put in on October 4th were at (SPX) 1074.
    The (SPX) closed yesterday at 1229.

  63. rainman

    rev / OWS — I agree, they aren’t likely to go away anytime soon. Cold weather is the only thing I see at this point that will disperse (some) OWS. Any other means to disperse them will likely result in anger and more conflict.

  64. jcaesar

    Pharm – Congrats on shorting FXE.  You’re be a winner today!

  65. Kwan

    GLW – they also made a Lotus Glass announcement today targeted towards better quality LCD/OLED television images. (It’s all in the substrate.)

  66. NF**X

     Control4/Phil – True that!  In the end, it’s a marginal cost on a major rebuild – and down the stretch, with the exception of the "experts-only" C4 equipment, I’ve elected to buy speakers and related on AMZN – let my guy do the install (one of the GC subs did the pre-wiring) – I’m hoping C4 can eventually tie my shoes, brew my coffee, shower me and carry me to my car as I pass thru 51 and up into the twilights.  lol.

  67. 1020

    Exec – Your video just shows me a confused woman not ready for prime time…
     
    Remember this gal?  http://www.youtube.com/watch?v=lj3iNxZ8Dww
     
     
    nuff said….

  68. NF**X

     IWM – What did that 73/74 PS cost us yesterday?  $.50?  I outted at $.66 – why not?  That’s 20%+ in a day.

  69. Pharmboy

    MNTA holding up pretty well, as are most of the biotechs.  Gotta like ‘em.

  70. roberthjrfl

    Is there anyway to push a refresh to my web browser when a comment on the blog gets posted?  I am using IE but i don’t mind switching.

  71. roberthjrfl

    Wow, what a run on the Dollar……  anyone know what is driving it?

  72. Phil

    Dollar 76.57!  76.65 was yesterday’s top out.  

    Why loss/StJ – They have an inferior product and AAPL was threatening their book, music and movie market share.  It’s just math – they determine how much media the average KIndle user consumes and they amortize their up-front loss on the Kindle over the life-cycle of the consumer’s purchases and then they see (assuming the model works) – how many of the gadgets they can push out to consumers.  It’s just the razor and blade model.  Even today they still do that – give you a $5 razor for free because, down the road, you’ll buy $50 worth of blades.  

    Good point NF – The Kindle is superior to the IPad in that it’s cheaper, lighter and the batteries last longer.  Tina now has both after pretending she was satisfied with her Kindle all summer but my IPad2 finally broke her down.  If I read more books, I’d get a Kindle as it’s certainly better for that purpose and I’m not too keen about taking my $800 IPad to the beach or floating in my pool with it but even the $200 Kindle pays for itself after reading 50 books at a discount but the black and white touch is just $99 and perfect for just reading.   

    Oh and speaking of the Kindle Fire and why NFLX is a dead model – one of the Fire features is:  "Amazon Prime members enjoy unlimited, instant streaming of over 10,000 popular movies and TV shows "  

    Going long on Goodwill/JMM – I heard an analyst recommending that a while back.  His name was Jesus or something…

    R&D/StJ – I love companies that spend for their future.  AAPL is amazingly efficient at R&D and, of course, takes full advantage of their 800-lb gorilla status with suppliers because they just tell them "I need a micro-camera that does this and that and, if you can invent it for me by May, I’ll order 20M for XMass" – that’s why they don’t need to spend too much internally.  Also, they don’t do focus groups, whatever Steve decided the new thing would be was what it was.  Not sure who will drive that going forward but that was a valuable talent!  

    Woops – Dollar broke higher – bullish bets not worth hanging onto if the Dollar pops 76.80.  Indexes other than the Dow have all failed yesterday’s lows now with an hour left to EU close.  

    DIA Nov $114 puts at $1.80, 10 in WCP with stop at $1.65 (Dow 11,750)

     

  73. vic55

    revtod
    There is only one thing that is more dangerous then uncontrolled crowd -> controlled crowd
    Pharm
    do you have a target for fxe? Mine is 136 and 88 for USO

  74. ban2

    good morning Phil
    I sold 50 naked BAC May 12 $4. puts @ $1.00 (now .39)
    Better to cover here (eg your rule #1) or what about selling the May 12 $6. calls for $1.5?
    I have plenty of margin.
    tia

  75. jcaesar

    Tyler Durden and Pharmboy are certainly dancing a jig right now.  ;-)

    It looks like they’ll even be happier as the doom seems to be accelerating.

  76. rpme

    Phil, Jesus was long Goodwill, that is a great comment, and I did not know he was a trader.

  77. Pharmboy

    SPY phantom bar to 119.  Now that is interesting. 

    vic – close enough.

    Jig/jc – I am still licking my wounds from this massive run up.  No jigs yet.

  78. doro165

    Wow, in seven minutes those DIA puts jump 40 cents!

  79. One_T

    What did I miss?  I never saw the Nov. $114p’s near $1.80. The 113s were $1.85…

  80. Phil

    And what Morx said!  

    Welcome Jtncsanford!  Right now, we’re referring to the White Christmas Portfolio as the WCP and, as you can see from the trades above, this is where you go to follow it.  I tend to do a wrap-up every other weekend or so but the live trading is in Member Chat every day (sometimes on the Main Post).  It would be a good idea to go back on our Portfolio Tab (above) and read through the $25KP from the beginning as we discuss a lot of the strategies and trading styles there and, of course, you should read our strategy section and the PSW Wiki as we don’t baby-sit every trade – it is expected you know how to take a profit (or a loss) without being ordered to do so.  

    For example, those DIA $114 puts for the WCP hit $2.25 in about 10 minutes.  That’s up 19% so of course we’re going to set a stop at $2.15 (.15 trailing above $2.30) and then we’re done with the trade for a quick $250+ profit and back to cash for the next opportunity. 

    The USO Nov $94 puts are already $1.10, also doing well but not in the WCP so you are on your own as to how greedy you want to be but USO puts are excellent downside hedges so worth letting them ride a bit.  

    SQQQ/Oscarz – You need to be more specific.  I must have made 5 or 6 SQQQ plays in the last couple of weeks.  

    Good point on Goodwill, Angel – it’s a tough year for charities and a good time for all to clean out their closets and kitchens and contribute what you can.  Just a few hours with a big box and a realistic attitude about what clothes you actually need more than a guy who’s living on the streets can make a world of difference for so many people!  

  81. Phil

    Dollar rejected at 76.80 – still hope for the bulls!  

  82. Pharmboy

    GS is holding up pretty well right now, so to get this party started, they need to go negative.

  83. oscarz

    Phil / SQQQ- The Dec 21-28 spread.

  84. vic55

    $DXY hit Trendline resistance @ $76.65 if it breaks out, next stop $77.4

  85. 1020

    Pharm – Some help for your evil laugh….. :)
     
    http://www.youtube.com/watch?v=kRhByi8tTtQ

  86. 1020

    ….then there’s the evil pose…  :)
     
    http://www.youtube.com/watch?v=8hmz6DVpz0s&feature=related

  87. 1020

    ….just remember:  We do not gnaw the kitty…
     
    http://www.youtube.com/watch?v=bV4vJa2Ys3w&feature=related

  88. vic55

    Pharm,
    Did you see Pbar on 5 min SPY @ $119?

  89. ban2

    JR
    looks like we bounced @ $70.59
    good lord, where do I get one of those crystal balls??
     
     

    JRW III
    October 24th, 2011 at 3:47 pm | PermalinkIgnore this user
    asaenz / Target  I hold no longs; I expect we go North after a small pull-back. The pull-back could go to 70.50 ish, I dought we’ll see 69 again before 2012, but if Europe messes up………………………………….!!

  90. jmm1951

    Phil/Kindle Fire loss leader?
     
    How does everyone KNOW the Kindle Fire is a loss leader at $199. There are plenty of Android tablets selling for a lot less money on Amazon itself, for example the one linked to below for $99. No doubt the Kindle Fire is superior to this one, but $100 worth of components? How do people KNOW this, since I understand the the components of an iPhone come to about $30.
     
    I bought an AAPL iPod 8gb a few weeks ago for $165 at Office Depot, which is arguably a superior device to the Kindle, except that the screen is smaller. With Wi-Fi and Skype it can also double as a phone, as well as being used for an e-reader, music player, stock trading device, calculator, browser, hard drive for document storage, and God knows what else. How much is AAPL losing on these? (Although some might say the i-Pod touch is too small to use as an e-Reader, I find it excellent and have read several books to completion even though I wear progressive bifocals. You can display a playing card size page in 10-point type, read it easily and have enough words on a page that constantly having to flick forward every few seconds is not too much inconvenience.) AAPL must be losing a fortune on these.
     
    http://www.amazon.com/android-Keyboard-External-supports-Flash10-1/dp/B005FYOPH0/ref=sr_1_19?ie=UTF8&qid=1319642360&sr=8-19

  91. rustle123

    @jmm
     
    Because Amazon told analysts it was.

  92. stjeanluc

    Looks like they are timing the meetings in Europe to match the close of the US markets as usual… My guess right now is that they will not come to a final agreement today and will push back a final decision for another meeting. But they will make some conciliating speeches on how things are moving forward and so on! The problem when you have to reach agreements between 27 people in the EU and most of these people have varying agendas and needs, you can usually only reach the weakest of compromises. Sometimes it’s a good thing as you avoid large pendulum swings, but when crucial decisions are needed, it’s a weakness! IMHO.

  93. stjeanluc

    Fire / Jmm – They say they lose $10 on each one of them! Of course, as components get cheaper, they might eventually make money! 

  94. Phil

    AA Money/StJ – The short puts were supposed to come of at .05 but I guess no fills yet?

    V/Oscarz – They could go 10% either way on earnings.  I’m not sure you’re getting paid enough to take the risk.  

    Wow Exec, thousands of people at a protest and you discard the whole movement on one person’s comments?  It’s good to get this kind of insight into your decision-making process.    Now I’m going to make you watch this

    Oil/Jomp – Same play as yesterday.  

    VXX/Burr – We did them yesterday, didn’t we?  

    HOV/BDC – That’s a pretty good deal.

    Europe/Ross – Sure, it’s the above hedges.  You can bet FXE down too or TLT up.  

    AMZN/Burr – As I said above, there are good entries but be very careful – the downgrades will come.  

    Ad/Angel – All I saw was a music video.  

    Good update Rev, thanks.  The funny think about it is that the MSM, doing the work for the top 10% – is giving the top 10% a totally false picture of what’s really happening and that causes them to make foolish, misguided decisions regarding their money and their future.  I guess this is why you always wonder how the upper classes can be so stupid as to let a revolution grow and get out of hand – the pampered classes don’t want the truth – they are too comfortable with the fantasy that sustains their lives to let it go – even to their own detriment.  

    Yet another nice turn-around on the EU close – now you can see why I have such an itchy trigger finger on those day trades!  

  95. lflantheman

    Followup on that AMZN spread I  posted yesterday.    You may recall:   Bought 2 Nov 230 calls and 2 Nov 230 puts and sold 1 Oct 230 call and 1 Oct 230 put.   Total cost:   $3480       The spread was interesting because analysis revealed almost no chance of loss if held until Oct 28, and infinite possible upside.    Presently stands at  -217.    I’ll keep you posted.   On another note:  I have an uneasy feeling about this Europe thing.  JRW mentioned yesterday that our markets may drop no matter WHAT they do.  I tend to think that as well.   ?Sell on the news?.   Finally, another observation on the interview Phil had 2 days ago.  It occurred to me watching it that these people doing the interviewing are on a totally different bandwidth than Phil, or us.  They are conducting a SHOW, whereas Phil is seeking the truth, in financial and other matters.  I got the feeling that they weren’t really listening to anything he said, much less understanding his answers.  They have their own agenda and were using Phil to move that agenda forward as best they could.  Still, I enjoyed seeing him at the event.  

  96. stjeanluc

    AA Money / Phil – The short puts are now at $0.10. They never went under $0.06 the entire week. On TOS, that $0.05 line is important as there is no commission on the trade (no small savings in the long run!) 

  97. 8800

    Phil,
    Strategy question: Given the pent up energy attending the EFSF outcome tonight (hopefully) is there merit to putting on both bull and bear weekly spreads  (2-4 pt  range; now about .50 ) in anticipation of a reasonably strong move in either direction before week’s end?
    thanks

  98. stjeanluc

    V / Oscarz – The weekly straddle is pricing in a 5% move on either side, but as Phil mentioned, it could be violent! 

  99. rossmanmd

    Phil,
    PNRA – Earnings were better and quicker than I expected. I own Jan 12 125C and sold Nov 115C for net $1.65. Any suggestions to recover? Thanks.

  100. 8800

    8800
    October 26th, 2011 at 11:46 am | PermalinkIgnore this user
    Phil,
    Strategy question: Given the pent up energy attending the EFSF outcome tonight (hopefully) is there merit to putting on both bull and bear weekly spreads  *(iwm 1 pt atm range; now about .50 )* in anticipation of a reasonably strong move in either direction before week’s end?
    thanks

    *Correction to above, sorry

  101. jmm1951

    stjeanluc/Fire
     
    Maybe they lose $10 on an order of 10,000, but make $30 on an order of 500,000. This reminds me of when I lived in Bermuda and I met a London businessman on the plane who was staying at the Hamilton Princess Hotel for $150 per night.   He was there to prepare an estimate for repairing stonework damaged by acid rain at the Cathedral. (This was in the early 80′s, so it was considered very expensive). He asked me how much profit the hotel would make on that. I said that would depend entirely on what percentage of the rooms were occupied.
     
     
    Anyway, I wouldn’t believe anything they tell analysts unless there is proof, because there are way too many ways you could calculate profit and loss. If they had said "we need to sell a million to break even, I would be more credulous."
     
    And that still doesn’t answer how much AAPL "loses" on the iPod touch.

  102. oscarz

    stjeanluc / V – So far it’s a wash. I will be happy with 5% – 10 would be great.

  103. charliesurf

    Hi Folks,
    I am a new member and enjoying the discussions around here. One question though: what is a phantombar ?
    Saw a comment for the IWM 2 days ago (I believe a million share block showed up AH at 71.16, although that price was never hit during market hours on that day).  But then the following day it printed 71.16. Is this how it usually goes ?
    Thanks for any information.

  104. stjeanluc

    V / Oscarz – I meant that by buying a weekly straddle you would need the stock to move at least 5% to make money (or you lose money selling the straddle). Past the 5%, profits are unlimited! I use the straddle price as a guideline of what the market expects as a move. But as Netflix showed this week, sometimes they are wrong, very wrong!

  105. stjeanluc

    Europe / Angel – Exactly what I said earlier, no final decision will be taken today. Just noise in the hope of appeasing the markets! 

  106. sparky123

    Phil/Exec Ford
    Exec I didn’t understand Phil’s suggestion on Ford last week either, but Monday, with a larger gain to protect it started to make sense.  I sold the $10 2013 calls against 1/3 of my position in F. I was able to get a bit higher premium, so I could buy them back for a profit, but it now makes sense to leave them alone and have 1/3 of my position insured down to $10 a share. That will take my more expensive shares out at a profit (fifo)and leave me holding the cheaper ones. If I want more Ford I can sell the 2013 $10 puts. Buying F down to $9 a share in the face of massive paper losses was a struggle, but that’s no excuse for hanging on to those more expensive shares. Thanks Phil.

  107. vic55

    Hi charli
    You are correct and if you look @spy today 5 min chart you’ll see pbar again. Usually (not always :) ) pbar becomes a target

  108. Burrben

    Phil / DIA Put price?
     
    Okay, I have to call bulls on this one.  I just went though all the time and sales for those DIA NOV 114put from 10:48am – 11:00am on IB.  The lowest those puts traded once you posted was about 1.99 and then they blew up to 2.15+.  I don’t know if anyone was able to get into them, or if my TnS data is wrong, but what time did you execute that trade?  Did anyone else get in for 1.80?
     
    I am trying to follow this as best as I can, but I don’t think that a trade should be counted as a profit if no one could get executed at the price listed (within a dime a so)….

  109. angelcur

    st jean..and zero (the note form yuor associate) you know its amazing that all the eurozone’s collaborative efforts are directed toward impression management..rather than codifying a rationale coherent long range plan to direct a solution that sticks and is painful for all the players while affording the rest of the financial world with an indication of hope actualized…i said it in july i can’t see this happening..priniting is hardly a solution..long range

  110. jtncsanford

    Is there a way to view the "comments" without continually hitting F5? Thanks for your help!

  111. rustle123

    Now Tilson loves Netflix.  My guess is he’s averaging down and trying to goose it as much as he can right now.

  112. Phil

    C4/NF – What you really need is one of those Japanese robots.  That’s what I’m saving up for.  

    Confused girl/1020 – At least we don’t run our confused women for President and Vice President!  

    IWM/NF – Good exit.  

    Refresh/Robert – I just hit the F5 button.

    76.65

    BAC/Ban – Good sale!  It depends on if you have a better way to make $2,000 between now and May than riding out the remaining premium on the short puts.  They certainly seem safe with BAC at $6.55 so it’s really just an opportunity cost (if any) on the margin. 

    GMCR having another rough day.  

    SQQQ/Oscarz – That’s just long-term disaster protection, not a day trade at all.  We make those high-leverage plays to cover the possibility of a major collapse like a Black Monday or 9/11 and we offset with something bullish to make it free or very low-cost insurance because that’s all it is.   

    Kindle/JMM – I’d be surprised if it’s much over break-even.  I’m not saying they are subsiding it like an IPhone, just that by the time it’s shipped and distributed, there’s no money in it but that’s fine as the goal is not to make money on the device.  AAPL tends to net 35% on their products (they won’t make something they can’t make 30% on) so figure a cheap IPad is is about $250 and they wholesale it for maybe 30% less so $175 and then they make 1/3 so about $110 to make it and ship it to distributor.  AMZN is the distributor so if they are coming in at a similar cost – they may squeeze out some profit off the Kindle Fire but, this early in the cycle, I doubt it.  

    AMZN/lflan – I’d take the money and run on the 2 longer puts and roll the short put down to 2x whatever and play it along for a recovery.  You can take out the caller and hope for a move back up or sell other calls and roll lower with that cash.   As to the interview – that’s why I like BNN – they don’t pre-interview.  When you go on Bloomie or CNBC, the interview is essentially scripted before you begin – you’re just a little trained monkey they trot out to say your lines on que and the people who do best in that format are the biggest phonies.  

    .05/StJ – No harm in waiting then. 

    Mixed spreads/8800 – Or cash.  Cash is nice.  We have taken spreads on both sides this week but we take bullish plays when we’re down (like earlier) and bearish spreads when we’re up (like Monday) – taking both sides at the same level is a very tricky business and, if you have absolutely no directional or rangeish conviction – why are you gambling in the first place?  If you just want to gamble, I’d go for the FAS weekly $13 puts at .33 and the $14 calls at .33 because we know FAS can pop $1+ very easily and if you can pull $1 off the table on either side, it’s a 50% gain overall. 

    PNRA/Ross – You have Dec to roll to and there are 3 weeks left in November so a bit early to panic.  I’d cash the Jan $125s for $15.25 and roll out to 2x the May $125/140 bull call spreads at $8 for about .75 out of pocket and then I’d roll the caller ($19.40)  to 2x the $130s at $7.50 ($4.40 out of pocket) as your longs would be $15 in the money before you would have to pay the $130 callers back $10 and they are 2/3 premium and you can roll them along to the Dec $135s (now $7) and the Jan $140s (now $7) so you’ll be $15 ahead of your callers before you get in any real trouble and you can always add some more longs if they pop $140.  

  113. jcaesar

    Exec / OWS – Were you kidding about that comment?  It was just one person.  I live in DC and went to the 2010 Tea Party Tax Day Rally.  I asked about a dozen people a variety of questions.  No cameras were present, just me and them.  One of the questions I asked was whether they had enjoyed their Obama tax cut.  These were all middle class folks (as far as I could tell), and to a person, they told me I was lying about any tax cut coming from Obama.  They said "oh no, our taxes have gone up."  Really, they said that.  They also went on and on about him overriding the constitution.  But when pressed, no specifics (at least that made sense). 

  114. ban2

    Burrben
    Maybe I’m wrong but I believe most all of Phil’s call’s and calc’s are on "last trade" data

  115. snow

    OWS/exec – here’s someone more articulate for you:
    http://www.observer.com/2011/10/exclusive-occupy-wall-street-activist-slams-fox-news-anchor-in-un-aired-interview-video/

  116. Pharmboy

    hate to do it, but bought GS calls.  They are moving and IF they go up, they could move violently.

  117. exec

    Phil/Moore
     
    Whoooow……that was difficult…..never the less….I watched the entire piece and can’t say that I’m any more impressed with them now than I was before.
     
    It wasn’t my intent to try to discredit or justify the movement with that clip.  I just thought it was an interesting illustration of the type of people that attend these protests. 
     
    You have to admit, that woman didn’t make a bit of sense or appear to have the slightest clue as to why they were protesting.  I for one would never attend a protest unless I knew what I was attending.  It just makes you question the credibility of the entire movement.
     
    Speaking of movements….I was in downtown Cleveland last week and noticed a couple of camera towers set up near the square.  I walked right past them and wondered what the hell was going on.  I later found out that the camera crews where there to film the "Occupy Cleveland" movement.  I was stunned, there were more TV reporters on scene than occupiers?  There was like a dozen people held up in tents and the media was treating it like some major event.  What a joke.
     
    Now that you’ve tortured us with Moore ……you have to watch this…. humble…meek….mild mannered…..centrist :-)

  118. Pharmboy

    Pretty Funny:

  119. NF**X

    EPD – I trade these guys in my wife’s lower-risk SEP IRA account.  They’ve been rock-steady – 40% gain over 24 months and a nice div yield of 5%.  I like ‘em – a bunch.  I don’t see trading shares out for pure options any time soon, but any thoughts on squeezing some extra yield out of a stock-based position?   Just simple calls? (Premiums are never great) Maybe structure a 15-20% discount play to increase my position?  Thanks in advance.
     
    Oh – also love SO for a bunch of the same reasons in the same account.

  120. NF**X

     Pharm/GS – Sorry if I missed it – what GS calls did u like?

  121. Pharmboy

    110s….although I accidently bought the 105s.

  122. lflantheman

    AMZN spread:  Thanks Phil.    I’ve sold the long puts and bought back the short Oct put.   I’ll keep you all posted on the progress of this interesting trade. 

  123. exec

    Caesar/comment
     
    I wasn’t kidding or making any kind of a statement. 
     
    Frankly….when I saw the video my initial thought was….WTF…..I couldn’t help but think that if these are the type of people that our society and education system are producing then we are doomed. 
     
    As an employer, I thought to myself, how the hell could you hire someone like that?  What are they capable of doing?  I mean seriously…is our society that dumbed down?
     
    Ok enough…..I’m sorry I posted the damn video during trading hours and got everyone’s panties in a bunch. 
     
    On a final note…..it is interesting how the different ideologies reacted to the video.  While one ideology defended or accepted her performance……the other was flabbergasted or appalled.

  124. GBorGH

    Pharm – what expiration on the GS calls?

  125. jabobeast

    Man Exec, I thought the woman in that video was Michelle Obama…
    FU laser eye surgery!!!

  126. terrapin22

    GNW coming back up…and HOLI making a nice move.

  127. oscarz

    Phil /  SQQQ – Thanks for the explanation.

  128. 1020

    Exec – One last view of our fellow Americans exercising their right to free speech….
     
    http://www.youtube.com/watch?v=ylVWhbklqbM   
     
    ….and producing a society that is "dumbed down" is part of "their" plan…. :(

  129. Pharmboy

    More doom and gloom.  Just b’c I can.  Go greenbacks….go.

  130. kongen

     caesar – I think we were all apalled.  But, n=1, and "you can’t underestimate the intelligence of the American public".  Another point – I wonder if there is some pathology there.

  131. angelcur

    exec  this is my point exactly..so long as both sides are unbridgeable..the crooks in charge may continue to pilfer at will..the joke is on all of lefties and righties..its the’new ferment of old wine’…btw anyone notice how wealthy clinton and bush are since they left office..and guess hwo is going to be th efirst billionaire ex president in our lifetime..scandalous

  132. jcaesar

    exec / OWS – I think your sample size is the issue.  You don’t see any problem there??? You keep making general statements based on this one person.  I went to the Tea Party protest and purposefully went out and asked more than ten people a series of questions, so I could get a decent sample size.   Do we not teach statistics in our schools anymore either?

  133. Pharmboy

    GS/GBor – Nov.  I would wait now though.  They are in between R1 and R2.  Could fail here and I was already short them.

  134. rustle123

    For the bears of the day out there, Fast Money traders on CNBC said we drift lower.  So you might want to cover some short positions as we will probably have a huge stick.

  135. jcaesar

    And I know I would have done better with more than ten people, but I’m just one guy with a limited amount of time.

  136. vic55

    Pharm,
    I’m not sure I understand why you bought GS, I would wait at least until triangle breakout on 60 min. 

  137. Pharmboy

    from 99er – look at that butterfly on the /NQ….

  138. Phil

    EU blog/Angel – Thanks. 

    Welcome Charliesurf (good name)!  I’m not the TA guy, I just make up terms when I need them generally…

    You’re welcome Sparky!  Hopefully they bump the dividend this month.  

    DIA/Burr – Well if you picked them up for $1.99 then selling them for $2.25 would have accomplished the same goal.  I can only call the last sale at the moment I look at it, if something is a momentum play of course it’s going to change – just hopefully not that rapidly but the principle is the same – get in and get out when it stops going your way.  If it makes you feel better, we will "not count it" but also make sure you don’t count losses when the entries don’t match!  I post whatever the last sale is when it’s a liquid trade like DIA but it’s up to you to understand that if I’m calling $1.80 with a $1.65 stop and you get in at $2, then you set a stop at $1.85 and HOPEFULLY you understand the concept well enough to know that you are not likely to get a 20% gain since you already missed the first 10% so you should take the 10% (which, as you say, was still doable after you read the post) and be happy.  

    Now I could sit there and lay out that whole chain of logic every time I want to call out a momentum trade but then it would be 5 minutes later before I could post it.  If you miss a trade – that’s fine – the point is to learn how and why we enter certain types of trades so you can identify them yourself – not so you can sit around all day waiting for someone to tell you what to do.  JRW said 70.50 would be the bottom in IWM so we had a goal and everything all lined up.  There are going to be 100 trades in the WCP – I very much doubt you’ll catch them all but you will miss the whole point if your focus is on the accounting rather than learning how to make these small trades in the first place.  

    Comments/Jtn – I think some browsers do an auto refresh if you like that better but be careful because it can trigger while you are writing a comment and then you lose it.  

    NFLX/Rustle – Hey, even I like at $76 (earlier short puts).  It’s an overreaction to their current situation.  Long-term, they could go lower but short-term, they should bounce back to $90.  

    "The type of people"/Exec – Wow man, you need to quit while you’re ahead!  Obviously, you suffer from having a Conservative brain and you are not comfortable with participating in things unless you are told what to do.  That’s why this movement is not for you.  This is what a real revolution looks like at early stages – a general sense that the World is not right and SOMETHING needs to be done.  By the time the movement finds a cohesive voice and states their intentions clearly, they will already be outside your door with a bucket of hot tar and a bag of feathers so be careful what you wish for!  

    That’s a good clip Snow!  

    EPD/NF – Well they had a nice run off the crash but so have many people.  The question is where do they go from here?  To a large extent they move with oil and they do pay a nice 5.5% dividend so a nice, long-term hold if nothing else.  The problem with big dividend payers is you don’t get a lot of money for selling calls (just $3 for the 2013 $45s) but you could combine that with the purchase of the 2013 $45/35 bear put spread at $3.50 if you want to lock in the gains to continue taking the dividend but it’s kind of a boring play that way.  You made the easy money on this one, now you need to decide if you are satisfied just selling the $45 calls and collecting your dividends or not but, if you are nervous enough about the stock to feel the need to protect it – then take your double off the table and find a fresh horse to ride.  

    Statistics/JC – If your pre-concieved notions are confirmed by the first person you encounter, why waste more time?  That’s GOP polling 101.  

  139. Pharmboy

    Thanks for playing Ebay.   Good bye!

  140. rdn4evr

     Pharmboy – Ebay, wow, way to plunge through every moving average at once!  Did I ever mention I hate PayPal?  Savi probably does too by now.

  141. Pharmboy

    CRM  goes Boom.  (Opt spotted it).

  142. l4real

     Hey Exec,
    Do you have anything more recent than a 2009 Limbaugh video to make your point?
    As fellow traders, we use more than one data point to determine a trend. Doing so insures a higher probability of being correct when identifying a trend and entering a position.
    I suspect many of us do the same when formulating an opinion about an issue.
    FWIW, I’m okay with you showing the video. I ‘m also okay with differences of opinion. 
    But i’m not cool with a stubborn ideology that insists on portraying the truth about a particular issue, using a single event, despite overwhelming evidence showing otherwise!
    Just my thoughts, with no disrespect or ill feelings towards you.

  143. jasu1

    Phil,
    TNA Nov 40Put back to $3.60; still a viable trade going forward?
    Thank you.

  144. alik

    Hello Phil, I have 30 Nov 11 P and 30 Dec 11 C on ITRI. The before market  earning announcement was as bad as they get but stock is 8% up. I do not understand the price action and do not know what to do with my positions. Can you give me some advice? Thanks.

  145. stjeanluc

    CRM / Pharm – I had a post yesterday about them as Oracle is moving aggressively against them with acquisitions. And we know, no one messes with Larry Ellison, no one! 

  146. David Ristau

    Hey Phil,

    I have some historical data showing that corn and wheat rise historically during November and they look like they could make another leg higher after some consolidation into the end of the month.

    Trying to find a way to play this…any ideas?

    I like DE…other ETFs aren’t really liquid enough…maybe DBA.

  147. 1020

    Limbaugh is laughing all the way to the bank – Thanks to his legion of Ditto Heads.
     
    Frankly, I find amusement in those who subscribe to the "Rush" ideology. They tend to "parrot" many of the things this "fine american" has to say.
     
    Find Your Own Voice…..

  148. gmarts

    Dollar below 76.60…

  149. rustle123

    OMG, I couldn’t try to be as wrong as CNBC is.  SERIOUSLY!  My post at 1:01 was when the dow was up a little over 20 and they said we were going to fade from here the rest of the day.

  150. exec

    4real
     
    Oh yes….I have entire database full of Limbaugh video’s that I use exclusively for picking stocks.  :-)
     
    Actually…..that was the first one I pulled off the internet and couldn’t bear to watch more the the first few bars of his idiotic introduction song, so I’m not even sure what it was about.  Never the less…..that "low blow" Michael Moore" clip that Phil posted required retaliation, and you gotta admit…Limbaugh is equally outrageous and irritating as Moore.
     
    As far as them being outside my door with the tar and feathers…..no way….they’ll never get past my moat…..and there’s always this.

  151. qcmike

    Pharmboy
    Good call on HGSI Puts
    Thanks

  152. Pharmboy

    YMI – buying round 2.  They are forming a base in the 1.50-1.80 range.  One can sell the Jan12 2 Cs for 20c as well.  Will do that as a 1/2 cover.

  153. Pharmboy

    Out of GS 105s.  Whew.

  154. Pharmboy

    HGSI/qc – the sumpin’ was up with the way they were acting, and making a quick 15% or so is fine.  I like them in here, but don’t want to catch the knife just yet.  We will put on metal gloves here in a few days!

  155. Phil

    1:05 PM The Treasury sells $35B in five-year notes at 1.055% (.pdf). Bid-to-cover ratio of 2.90, vs. a recent average of 2.74; indirect bidders take 49.3%, vs. a recent 40.6%. Direct bidders take 10.4%, vs. a recent 13.1%.

    1:00 PM On the hour: Dow +0.24%. 10-yr +2.36%. Euro -0.55% vs. dollar. Crude -1.99% to $91.32. Gold +1.51% to $1726.00

    1:17 PM Treasurys pare losses after a steady auction of five-year notes; the 30-year yield +0.01 to 3.14%; 10-year +0.025 to 2.14%; five-year +0.04 to 1.03%; two-year +0.02 to 0.28%.

    European shares close marginally lower after a volatile session as the 2nd EU summit of the week gets underway. Stoxx 50-0.5%, Germany -0.6%, France -0.3%, Italy flat, Spain -0.7%. The U.K. +0.5% as resource stocks get a lift from China. The euro -0.5%at $1.3832.

    The CEO of the EFSF is flying to China on Friday to meet potential investors (beg for money) for the rescue fund’s bonds. Chinese buying of EFSF paper has less to do with altruism and more to do with propping up the value of the euro, which China does not want to see in a steep fall vs. the yuan any more than it does the greenback. 

    Sept. New Home Sales: +5.7% to 313K vs. 300K expected, 296K (revised) prior. Months’ supply 6.2 vs. 6.6 prior. Median price -3.1% to $204,400. 

    Sept. Durable Goods: -0.8% vs. -1.0% expected, -0.1% prior. Ex-transport +1.7% vs. +0.4% expected, -0.1% prior

    EIA Petroleum Inventories: Crude +4.7M barrels vs. consensus of +200K. Gasoline -1.4M vs. consensus of -1.25M. Distillates -4.3M vs. consensus of -1.5M. Crude futures lower, -1.43%to $91.84. 

    The "MoMo Massacre" resembles a classic slasher pic, writes Kid Dynamite, where the characters get killed off one by one. Starting with OPEN and RIMM, continuing through to GMCRFSLR, and NFLX, and now AMZN. We know how the sequels go, so those remaining - AAPLCMGPCLN - don’t go outside to check on that odd noise.

    Even as Pres. Obama proposes steps for student loan debt relief, real wages for college graduates continue to drop, Mike Mandel observes. In Q3 2011, full-time workers with a bachelor’s degree and no advanced degree earned 3.5% less Y/Y in real wages, continuing a long-term trend. And because real wages are declining, it’s much harder for grads to pay back their loans. 

    As consumer confidence craters to early-2009 levels, confidence in the U.S. government also hits frightening depths, as Congress’ approval rating hits 9%, according to the latest NYT/CBS poll. 89% don’t believe government will do the right thing, two-thirds say income should be more equally distributed, and two-thirds object to tax cuts for corporations.

    For those wondering how a haircut of 21% or 50% or whatever cannot be considered a credit event – thus triggering CDS -Nomura is too. "The CDS trigger in Greece continues to have potential for contagion across the euro area … even if the direct losses from a Greek credit event remain relatively small."

    Not a happy guy (about to get that haircut!):  Bill Gross on the EU confab: "This is no summit. It’s a coffee klatch filled with petit fours and empty promises … EU is a dysfunctional family (with) recession ahead even if agreement is reached. Greek default certain, Portugal/Ireland next."

    While EU leaders hash out details over Greek debt, markets take aim at the next domino. Portuguese 2 year yields spike 90 basis points higher today to 19.06%

    Reuters reports a short suspension in Italian Parliamentafter fist fights break out as the chamber is debating changes to Italy’s generous pension system. Yesterday, Umberto Bossi said "People will kill us," if pensions were touched. Apparently, he was not kidding.

    Incoming ECB president Mari Draghi throws markets a bone, saying the central bank will continue purchasing the sovereign bonds of debt-burdened states. Two German ECB members have resigned in past months, in part over their disagreement with the program. Again testing 6%, Italian bond yields dive back to 5.92%.

    MF Global (MF) will explore strategic options, sources say, following yesterday’s 48% dive, and after its bonds tumbled into distressed territory. Shares began the day higher, but are plunging again, recently -24% to $1.37. Investors are panicked about MF’s $6B in exposure to European sovereign debt.  - I like selling the March $1 puts for .50 and buying the June $1/3 bull call spread for .50.  

    Economic eye candy: A chart breaking out the lackluster Oct. Consumer Price Index report puts an exclamation point on just how broad-based the negative outlook is for consumers heading into the critical holiday shopping season. Every category trended lower M/M.

    The Fed and other "money-printing" central banks will keep prices elevated for risky assets like stocks, Marc Faber says,preferring equities to bonds for the next 10 years. But the new money is undermining the economy and causing bubbles, one of which is Chinese real estate: When "the Chinese bubble bursts one day… it will have devastating consequences for the global economy."

    Corning (GLW) is now up 4.3% premarket after beating Q3 estimates. Though the company is guiding for Q4 EPS to be down ~5% Q/Q, the Street appears to have discounted a larger drop. Investors also seem to like the company’s forecast that retail demand for LCD glass will be up 13% in 2011, in spite of broad concernsabout weak LCD TV demand. 

    Salesforce.com (CRM -4.8%) slides after Whitney Tilson tells CNBC he’s short the stock in size. Valuation is the key reason he says, arguing the stock could drop 75%.

    "We haven’t lost our minds," says Whitney Tilson in aletter to his investors following his knife-catching attempt with Netflix (NFLX). The situation reminds him of BP last year: "The company, its CEO, and the stock are universally hated … we love situations like this." Among the bullish factors: The shrunken market cap makes the firm "a bite size acquisition" for big cap techs.

    Green Mountain Coffee (GMCR) trades 9.5% lower on volume already 2X daily activity in advance of its earnings report tonight. Forbes reports 83% of analysts are still locked in on GMCR as a Buy, even in the face of the Einhorn’s strafing run at the stock.

    Oh no, don’t buy my favorite energy company!!!  Valero (VLO +8.4%) shares surge after the Daily Mailsuggests the petroleum refiner could be in the middle of a takeover war between Royal Dutch Shell (RDS.A +1%) and other bigger rivals. Valero has been buying refining equipment being jettisoned by other companies squeezed by the rising cost of crude and declining demand for gasoline.

    Didn’t I just say this?  Amazon (AMZN -11.5%) would seem to be the latest victim of the Apple (AAPL) machine, with Q3’s 42% EPS miss expected to be followed by Q4 losses on the Kindle Fire alone of as much as $200M, as it subsidizes the Fire anywhere from $10 to $100. But AMZN has no choice: "The traditional media business they have would wilt on the vine without [the] transition to digital." 

  156. Phil
  157. kallenjr

    Phil,
    Are the WCP trades meant to include day trades? I know the WCP goal is to grow $15k to $25k. But what if the account is less than $25k?

  158. hemas03

    Missed the DIA Nov 114P, Now back at 1.80.  How bout another shot around 1.60? Or is it too risky icw EFSF folly?

  159. NF**X

    Momo Massacre and Kid Dynamite – Love it! It’s Paranormal Activity 4 just over the horizon.

  160. revtodd64

     Exec – Switchblade drone
    Does the NRA know about this yet?  Looks like the consumer-sized drone as easy to pilot as a model airplane, perfect for recreational use and just in time for Christmas.  No way to put this genie back in the bottle.  I wonder what happens when the drug cartels start getting these things.

  161. angelcur

    euro zone plans to leverage efsf "several fold", finance ministers to decide details in november….hahaha..draft euro zone statement makes no mention at this stage of italy’s required budget steps

  162. NF**X

    * – I’m going to take every little thing NFLX offers up now in the way of low risk return. So, thanks, Phil – that includes taking the 45% gain 67.5 Nov SPs off the table after just a few hours.

  163. NF**X

    SSO – the BCS is just dying to cash for us. Come on – Come to Poppa Phil.

  164. stjeanluc

    Eurozone / Angel – I have to say, I am really surprised that there is not more details on the plan. Shocked…    :-) 

  165. nicha

    NF – what was your net on the SSO trade? Mine was .55 and I am about break even.

  166. stjeanluc

    China, IMF…. to the rescue!

    http://ftalphaville.ft.com/blog/2011/10/26/712791/eurozone-running-out-of-knights/ 

  167. palotay

     OPEN – I’m getting short these guys before earnings on Tuesday November 1st.  PE of 60, but very little, if any revenue growth, smells like another NFLX waiting to happen.  Google acquired Zagat, and seems like they are getting interested in going after Yelp for restaurant reviews, and reservations will be next.  Livebookings is releasing a new service for free reservations.  Restaurants are feeling the squeeze from the economy, and are looking to cut expenses, and OPEN is expensive.  They also have a lot of the low hanging fruit already, and will have a hard time growing (as can be seen already).  I’m going aggressive, short the 2013 January $50 Calls, and buying the April $50 Puts.

  168. russellb73

    Phil
    Any thoughts about selling some long term puts on SCCO? 

  169. revtodd64

     http://blogs.marketwatch.com/election/2011/10/25/cut-1-trillion-lose-1-million-jobs-defense-industry-warns/
     
    So the defense lobby is warning Congress that this will cost 1 million jobs, and as I do the math, those jobs are costing $1 million a piece!  Do they really want to be making this case?  How many infrastructure jobs could be created with $1 trillion dollars?  

  170. jabobeast

    USO….ouch!

  171. SellPremium

    Phil-  X beat estimates but went down and is staying down.  Any thoughts on them?  Btw, despite some scary moments, my LNKD (had to DD when it went to $94 but still) and CRM shorts (via credit call spreads) both paid off.  I really do think we should take a look at stocks with unjustifiably-high P/E ratios as those will crumble at one point or another.  I plan to short CRM and LNKD again if they hit $130 and $90 respectively.
    Also, I wish I’d asked your opinions about GMCR (asked about shorting it on 09/27 but things were headed up at the time and you said it was dangerous to short a momo stock in an uptrend) and XRTX (asked about going long when XRTX was $8 because of the SNDK links..but you advised against it…with data to back up your opinion) at different times than I did as those were two huge opportunities but I guess others will come and the key is not to do a revenge trade by going "all in" on the next trade that comes after a missed opportunity. 
    Pharm-  What do you expect out of DNDN’s earnings and what do you think of the stock right now?  I’m thinking it can’t go much lower if they miss and let’s not forget this is the same stock that was $40 a couple months ago.  The cost of their treatments being perceived as "too expensive" is not really true….SGEN’s treatments will cost as much or more from what I understand. 

  172. jcaesar

    Rev / Defense Jobs – Come on man.  Get real, we know government CAN’T create jobs. So cutting back on defense spending will have no effect on jobs.  ;-)

    Actually, I’ll be interested to see how the right weaves through this issue.  They’ll have to artfully avoid any admission that Keynesianism is actually valid.

  173. rustle123

    Loving SCO today.  Down oil, down!

  174. gmarts

    Jc, the defense industry unlike almost any other is directly tied to goverment spending, as ONLY governments are allowed to buy F-16s. They are not comparable to any other private sector, and are not useful for broad economic comparisons

  175. rustle123

    Love it that Jon Corzine went from almost bankrupting NJ to bankrupting MF Global.  Thank God for Christie.

  176. jcaesar

    gmarts – My point was that it is a proven GOP fact that the government can’t create jobs.  Haven’t you received the memo?  If it’s not true, then I don’t know why they keep hammering away at that all the time.

  177. jcaesar

    gmarts – Didn’t you hear Rick Perry.? "Zero jobs were created by the stimulus."  I think that’s a direct quote from one of his first debates.  Everyone else agreed with him, if I remember correctly.

  178. angelcur

    euro official saying leverage to be 4x

  179. sagemm1

    Phil or anyone, I am new to this blog:
    This could be a dumb question but on the FAS WCP trade how would you unwind this if or when FAS 14 c are in the money so as not to be excercised tomorrow? Just excecise my 13 c’s?

  180. randers1

    Phil,
    Waaay back when, I sold some 1/12 GMCR 35 puts- I think the feeling then was that they were going down, but not out of business.. Know I am not so sure. Should I buy them back at about a 25% loss or turn it into a Bear Put Spread  ? or do something else..

  181. NF**X

     nicha/SSO – my net was .55

  182. gmarts

    JC, How much of that stimulus money went into defense? what sector of the private sector HAS experienced net job growth as a result? I’m just curious because I can’t find ‘em.

  183. revtodd64

     Jcaesar – Good point.  Gmarts – most things government does should be unique from the private sector.  Government should create jobs in areas the private sector will ignore or cannot do.  The private sector cannot effectively create a large scale military, transportation infrastructure, education system (see private internet colleges and the student loan bubble) and I would had health care for the retired and poor, though many would debate that.  I don’t want government trying to make better computer chips, or picking winners and losers in solar companies, etc.  I do want them providing the necessary basis for a capitalist economy to exist.  

  184. Burrben

    NFLX 67.5 Puts
    As NF**X said the 67.5 puts are 1.65×1.70, for about a 45% gain.  Following normal rules we should close these out correct?  Or are we going for a higher percentage gain in the WCP?  If we do, that would increase the cost basis to get into the DXD trade.

  185. Burrben

    Phil / VXX
    The VXX trade from yesterday seemed like it was betting that the VXX would increase by Nov.  Selling puts, buying a BCS.  This article is pointing out that the VXX will get crushed after Nov 16, which would make the Tue trade lose on the puts and the Bcs.  
     
    I’m not advocating that this will happen, I just liked the study of the skew and term structure to come to a different outcome.  I never did much Vol anaylsis, although this is what my old hedge fund was purely based around.  Please let me know if I’m not understanding the trade properly.

  186. JohnC1

     Phil:  Deck reports tomorrow.  Would you consider selling short out of the money calls against them.  For example, the November 120s?  Any perspective?

  187. jcaesar

    gmarts / jobs – Ah, nice, moving the goal posts.  Now it’s "what area of the private sector has had net job growth?"   Well that answer is easy.  They all have since the stimulus began to be spent.   It was signed in February of 2009, and the spending began the next quarter (if I remember correctly).  And net private sector job growth went up from there.  Not enough of course, but those were net gains.  That was an easy question to answer – more of those please. 

    As to the amount of money in defense…who cares?  The defense stimulus, as you should know, began earlier last decade, right after 9/11.  Our defense budget is about twice what it was pre 9/11. 

    Any more questions?

  188. NF**X

    Burrben/NFLX – I actually forgot we got into NFLX as part of the DXD play.  Still, I bailed on the gain.

  189. lolobear

    BIDU reports tomorrow.  What’s the take on that?  Thinking of buying puts.

  190. gmarts

    Jc as I seem to recall, unemployment was about 7% before the stimulus, and less than 8% before QE2, so how come it’s over 9% right now if we’ve had all of this job growth?

  191. rdn4evr

     I see Pentax has updated his VIY indicator (thanks).  I have to admit to being fascinated by that chart as we get closer and closer to November.  One thing that I would point out is that, in many cases, large declines similar to the one indicated for November didn’t actually begin until after the options expiration period passed for that month, and then it was look-out-below!  The actual commencement of a large move up or down into bearish or bullish territory would seem to be best corroborated by a convincing cross of the 20 day MA by the 5 day MA, with the 20MA then turning up/down as well.

  192. etradingsignals

    Phil/  Iflan / Anyone
    BIDU reporting tomorrow. Is there a good way to play the volatility crush (with a bullish bias)?

  193. NF**X

    FAS 13/14 BCS + Nov SP – The BCS portion cost me .60.   Can probably cash that for .80 this afternoon.  Any sense in taking that not insignificant gain now and letting the Nov 11 short P run?

  194. yshenhar

    rdn4evr  is there a link to the VIY indicator you mention above? 
    TIA

  195. Pharmboy

    VIX is falling, the low is most likely in unless they unleash hell.  GS continues its ascent into la la land (although 10K 95 Oct Weekly Puts have changed hands over an OI of 2K).  TLT is not helping as it is back in the lower portion of its huge green engulfing from yesterday.  Makes sense huh?

     

    SPY (daily) shows negative divergence on MACD and StochRSI, so something has to give.

  196. jcaesar

    gmarts – Well you first said "net job growth" and then you mention the unemployment rate, two totally different things.  Which is it?  In any event, you can see from the BLS table and graph net job growth scenario began to reverse at the beginning of his administration.    I don’t have the private sector numbers, but I think their graph would show about the same.  The government has been hemorrhaging jobs since 2010.

    http://data.bls.gov/timeseries/CES0000000001?output_view=net_1mth

  197. jabobeast

    MR STICK!!!!!!!!!!!!

  198. NF**X

    EPD/Phil – Ugh – ur right.  I don’t know that I’m nervous about EPD.  I guess I should have added that my wife’s IRA port is lower-risk AND I don’t deal with it much.  (it’s JNJ, PEP, FTE, SO, WTIBX, RYOHX and the like.)   I write a few calls occasionally – threw in a BBY buy-write recently – but that’s about as active as I get.  I open it once a week at most.  Even tho its always hard to dump a good income stock like EPD, given that its not really the lowest of risks and that we won;t be drawing on this account for another 17-20 years, I’d love some low-maintenance option plays that ramp up the gains.  Think i prob missed a port u did like that while I was away.

  199. Phil

    Dollar 76.42!

    PayPal/Rdn – They do suck.  We used to use them for Member payments and dropped them, mainly because they were such a nightmare to process refunds or adjustments. 

    This is interesting.  Here’s a live stream from Occupy Atlanta and the place they are in (and there are many shots) does not look anything like the clip Exec used to show how dumb the woman at Occupy Atlanta was.  Now I have to question the entire validity of that clip.  If anyone knows Atlanta well, I’d be interested to know if that thing is even real or just more propaganda to make the knuckle-draggers feel superior to the people who actually care about something.  

    TNA/Jasu – Sure, it’s a bullish play on the RUT, that’s all.  We’re wrong if the RUT can’t hold 700. 

    ITRI/Alik – Well they are cutting 10% of the workforce so the "Job Creating" class is very pleased.  The miss was expected and they’ve already been punished since July so a bit of a relief that the actual news is not worse than the rumor.  I would take the money and run on the calls though as you are lucky to have gotten such a break – there’s nothing very exciting about this company and you paid a boatload of premium to bet against yourself – you can’t possibly be a bigger sucker than that!  

    DBA/David – They are generally a good inflation hedge but they’re already up 50% for the year.  The same historical data you are looking at also has a historical low point heading into the summer – we didn’t have that this year, they rand up from $22.85 last June to $35.58 in March and were still $34.21 in August and FINALLY they are back to $30, which is still WAY too much money for people to pay for food.  My problem with these sort of questions is you take absolutely no account of the actual VALUE of the underlying commodities.  If they are currently too high – then the don’t go higher just because it’s November.  Either the commodity sector needs to take a big correction (as risk comes out of equities) or the broader market will.  

    CNBC/Rustle – It is kind of amazing, isn’t it?  

    WCP/Kallen – The trades are not meant for a portfolio that small, the risk level is not appropriate for small traders.  I would suggest simply paper-trading along with the portfolio and then perhaps taking some risk-appropriate trades when we do our new $10,000 portfolio in January.  While it is fairly easy to turn $15,000 into $25,000 in two months utilizing margin from a larger portfolio – attempting to take an entire portfolio and pulling in a 66% gain in two months is ridiculously dangerous.  If you only have $10,000 – then try to make $20,000 in year one and $40,000 in year two and $80,000 in year three and THEN you can get super-aggressive with a portion of your larger portfolio.  Can you make 10% a month with a $10K portfolio?  Sure you can.  

    When you do that you also risk losing 10% a month but you can recover from $9,000 or $8,000 or even $7,000 so it’s OK to use that strategy.  But if you are trying to make $5,000 a month, you risk losing $5,000 too and that means that one bad turn in the market can wipe out half your account and then you need to make 100% just to get even so you do what?  You risk that and then you have one more bad month and your done.  No thanks – that’s never, EVER the right way to play and, as it said in the intro letter you got to log into this site – Read the New Members Guide, read the Strategy Section and STUDY AND PRACTICE before you start tossing money around in the markets.  

    Warren Buffett’s #1 Rule of Investing is "Don’t Lose Money" – If you go into the market treating it like a casino, you can expect the outcome to be about the same as when you visit a casino.  

    DIA/Hemas – Nope, that was just to protect our longs.  Now we’re back on track for our bullish plays.  

    NFLX/NF – Now THAT’s the way to play them!  

    OPEN/Palotay – I agree, nothing of substance to them.  We were spoiled, having shorted them at $100 so it’s hard for me to get motivated to short them again at $50 but they aren’t worth that either.  

    SCCO/Russell – I don’t follow them closely enough to say.  Miners are tricky things and take huge amounts of evaluation.  SCCO is a good one and pretty cheap and they pay a very nice dividend of 8.5% so I’d say they LOOK very good but I have no idea what the state of their operations or growth prospects are.  That being said, I think that selling the 2013 $23 puts for $4.35 is a very reasonable net $18.65 entry (40% off current price) but, with a $2.50 dividend, you may want to consider also buying the stock at $29.65 and selling the 2013 $23 calls for $8.20 for net $17.10/20.05 so it’s + $1.40 if put to you but you collect about $3.10 in dividends to drop the net/net to $14/13.50 and I don’t need to look at them too closely to say THAT is a pretty good entry point!  

    Wow, TBT has been flying.  TLT down to $114 again. 

    Jobs/Rev – Yep, the most expensive jobs in America are in the Military and, sadly, the grunts on the ground get almost none of it.  The average soldier has more money in equipment on him than he makes in a year.  It costs $45,000 to train a soldier for duty (but they balk at paying for college). 

    X/SellP – I like them long-term to recover but it’s a patience trade.  As to high p/e stocks, I look at them all the time but people get very upset and start capitulating when they move against us so I prefer to wait for there to be a catalyst in the next few months that I think we can short into before I make a general call but you can ask me any time and I’m happy to give you an idea for the others.  The best time to short them is when they are ramping up on some silly, overblown story.   That’s when you get top dollar for selling calls and can buy cheap long puts for a bear put spread if you want to get really aggressive.   

    LOL JC – Good point! Ipso facto and all that….  

    SCO/Rustle – That was a very good call.  

    Welcome Sagemm1!  Don’t worry, we love dumb questions – they are so much better to make fun of!  8)   How to unwind?  Well, first of all tomorrow is Thursday, not Friday and second of all we generally wait until the last minute to buy them back if on track but some brokers, like TOS, let you run the contracts through the close and simply credit you the net spread.  We don’t exercise the contracts – if anything, we buy back the calls we sold and sell the calls we bought but we have no desire to own FAS into the weekend.  

    GMCR/Randers – I wouldn’t.  You were right, they suck but they are not BK.  If you are going to sell naked puts, you can’t go reacting to increases in the PRICE of your contracts when the VALUE of the stock has them almost 100% out of the money.  What do you care if they are $2.50 or $3.50 or even $6 (the price of the $45 puts – assuming GMCR drops $10 more), as long as they are on track to expire worthless?  The MOST important lesson from our $25KP is – they are only paper losses until YOU panic and buy them back.  Yes we took some hits but we also rode out plenty of huge swings against us only to turn trades profitable down the road.  The key is PORTION CONTROL.  If you scale into positions and keep your risk size manageable – you can adjust your way out of all but the most horrific moves against you and, if you are well balanced – then the profits and losses balance out and you take your hits, get back to cash and try again.  

    NFLX/Burr – Those puts were offsets to the DXD bull call spread in the WCP – so we’re not looking to change them until/unless we decide we don’t need the DXD’s anymore.  As a stand-along trade – of course take it off the table!  Overall, if the market shoots up and the DXD’s end up at zero but we make it back on the short NFLX puts then it’s just free insurance we never used.  

    VXX/Burr – We’re hedging for disaster on the EU meeting.  If no disaster, we won’t be waiting until Nov 16th to lighten up on our hedges, will we?  

    DECK/John – They were on our Long Put List because I thought they were toppy at $90, now they are $105.  I think they are way overpriced up here and if you want an earnings play I’d sell 5 Nov $105 calls for $6.60 ($3,300) to some other sucker and buy 4 Jan $115 calls for $6.25 ($2,500) for a net $800 credit on the spread.  If they do well, then the premium disappears and you don’t owe the $6.60 back until they hit $111.50 and if they go higher than that, you can add 3 more long calls and do a 1.5x roll on the short calls.  If they go down – easy $800 plus whatever value is retained on the long calls.  Let’s do a set of these in the WCP!  

    BIDU/Lolo, Etrad – Total wildcard.  We shorted them at $150 but I don’t have the conviction at $130 coming into earnings – not with all those Chines people getting massive salary increases.  

    So Gmarts, when you "recall" something and then find out that you are 100% incorrect – does that do anything to change your overall opinion (like maybe Obama stopped and reversed the single greatest job-destroying disaster in our nation’s history and should be given proper credit) or do you just fog over and wait for the next chance to stick in a talking point that’s been hammered into your head without any factual support?  

    I know Conservatives love to make fun of "Saved or Created" jobs but imagine if those jobs were not SAVED and we simply continued to lose 7M jobs PER MONTH like we were at the end of the Bush Administration.  Yes, we should have had a lot more stimulus if we wanted to be serious about putting those Millions of people back to work but serious has nothing to do with the clowns that were unfortunately elected in the last cycle because Obama didn’t manage to magically undo all of Bush’s damage in his first two years (which is ironic because Bush couldn’t even undo the damage done to New York City, Afghanistan, Iraq or New Orleans during his full 8 years but the voters were OK with that).  

    Holy Cow – Dow almost all the way back to yesterday’s open.  What a nutty market!  

    FAS/NF – Its a very good discipline if you want to be an active day trader.  Like JRW, you should look to go back to cash at the end of each day and only leave on things that you REALLY feel you should.   Take 1% of your portfolio, say $1,000 and make 20% ($200) each day for 200 days and what do you have?  A $40,000 gain – 40% of a $100,000 Portfolio just making a series of quick $200 gains and getting back to cash.  Why risk that overnight?  

    Don’t worry, NF, I’m sure there will be many more Buy lists – WHEN APPROPRIATE!  

  200. lflantheman

     etradingsignals     Earnings trade BIDU/bullish bias/ volatility crush advantage:
    Buy 3  Nov 130 calls     Buy 2 Nov 130 puts         Sell 1 each  Oct 130 puts and 130 calls     
    Risk is about 15% of investment, upside infinite.   Break even about 120.        No upside breakeven…just up.

  201. angelcur

      EVERYONE thinks market goes higher into year-end as europe fools us again and hedgies get squeezed and try to make up performance….could be a perfect storm into year end

  202. lflantheman

     etradingsignals:   Note that I’m not making this trade.  I’m just answering your question.    

  203. angelcur

    2008 losing lots of jobs..shock!

  204. angelcur

     think this insane volatility is making everyone complacent…somebody will get burned badly…meaning bears think every big rally will fail…..and bulls think every big swoon is just another buying opp….eventually one side will get put in the ground waiting for the bottom/top.

  205. gmarts

    As I read those charts, neither seems to indicate a net growth in jobs, but rather a decrease in the rate of job loss. I pose the simple question that if net jobs are being created, why is the unemployment rate higher now than Jan 09?
     
    FWIW, I’m a political independent , and accept no party line arguments from either side.

  206. lolobear

    GMCR now reporting financials on November 9th.  Does that mean anything considering people thought they were reporting today?  Good or bad?  I have puts and now I’m not so sure that was the right move. 

  207. rdn4evr

    Yshenhar,
    I’m assuming this is okay with Pentaxon: 
     http://www.pentaxon.com/psw/viyindicator.html

  208. gmarts

    angel, dang no game… I was going to order the "good" pizza too.

  209. rustle123

    That means that they are being very safe on their reporting and were probably missing some items the auditors wanted to see or the auditors asked them for information they previously didn’t think they needed.  I wouldn’t take it as a good or bad sign.

  210. rustle123

    last post was I made was directed at GMCR for lolobear

  211. jtncsanford

    Newbie…. Is this comment section the same as member chat? Is there another section for Optrader portfolio? Thanks for your help!

  212. jmm1951

    jtncsanford/query
     
    Yes, this is member chat. Each day has the day of the week in the title, however early morning chat may continue on the previous day’s article, so check that first for Phil’s start of day comments.

  213. rokjok777

    OK, newbie report. I put on two of Phil’s trades, SSO and FAS. With slippage, crappy executions, and the fact I’m in Australia and can only trade the last 2-3 hours in NYC, my cost was $642.35. Closed the trades after 3 days for net +$140.41. Um that’s alot better than a bank CD (even though CDs here in Australia pay about 6%..). Also good fun!
    Question: does anyone have a spreadsheet they’ve built to manage their trades? I can build one myself but figured somebody might have one they would share. markbpey@hotmail.com
    Thanks!

  214. elliotteldrich

  215. Phil

    Complacency/Angel – That’s why I favor cash at these major inflection points.  

    Well that was a fun day, wasn’t it?  Dollar finished right about where it started at 76.38 so the entire move down at the open to 76 and the move back up to 76.87 that tanked the markets at 11 was all just total BS that washed out by the day’s end as we go back to flatlining right where we were flatlining from yesterday’s close through the US open.  Total, blatant manipulation!  

    Unemployment/Gmarts – Now you know.  

    World Series/Angel – Wow, postponed until prime time on Friday.  What a lucky coincidence for the the powers that be!  I don’t ever recall a pre-emptive postponement, that’s just ridiculous.  

    GMCR/Lolo – I’m sure they know they will be under tremendous scrutiny so, if they caught a last minute issue – I’m sure they felt it was better to postpone than leave themselves open to attack.  

    Damn, why can’t we get Rajat Gupta to give us the inside scoop?  They have a phone call of him, right after a GS board meeting calling his buddy Rajaratnam and telling him GS was going to miss earnings.  Then there’s another call where he tells him Buffett was coming in with an investment – those were 30% swings in GS!  Just those two phone calls and we could have all retired!  Check out this little network Rajaratnam was working to get his info.  

    At the close: Dow +1.34% to 11864. S&P +1.07% to 1242. Nasdaq 0% to 2336.
    Treasurys: 30-year -1%. 10-yr -0.53%. 5-yr -0.014%.
    Commodities: Crude -2.53% to $90.81. Gold +1.26% to $1721.75.
    Currencies: Euro -0.01% vs. dollar. Yen +0.17%. Pound +0.21%.

    Market recap: Stocks surged to finish near session highs as EU leaders reach agreement on a bank recapitalization plan – but those darned details are still a bit hazy - and on reports China mighthelp finance an effort to resolve Europe’s debt crisis. The dollar pared gains vs. the euro and set a fresh low vs. the yen. Crude oil slid on aninventory increase. NYSE gainers led losers three to one.

    Next!  S&P chairman John Chambers reportedly warns that the U.S. would be harmed if the congressional super committee doesn’t come to a satisfactory solution on reducing the U.S. deficit, without specifically mentioning a ratings action. Bank of America earlierforecast a U.S. credit downgrade in the absence of a credible deficit reduction plan. 

    Moody’s expects U.S. retailers to continue struggling in 2012, thanks to both weak consumer spending and rising commodity prices. Following earnings misses from SHLDLOW, and GPS, Moody’s expects just 1% operating growth for the sector this year, and a mere 2%-3% growth next year. (consumer confidence)

    A draft statement to be released tonight says the eurozone plans to leverage the EFSF rescue fund "several fold" but that details will not be agreed upon until November. Using the fund to provide 1st loss insurance to sovereign debt buyers along with the creation of a special purpose investment vehicle (SPIV) are the options being considered. SPIV? Didn’t that sort of thing end with Enron?

    French President Sarkozy plans to call his Chinese counterpart tomorrow to ask the country to peel off some its reserves to invest in the expanded EFSF, according to a source. This comes ahead of a visit to China by Klaus Regling, the CEO of the fund.

    Italian PM Berlusconi’s letter to his EU counterparts detailing his country’s fiscal reforms: On the most contentious issue – pension reform – the retirement age will be raised from 65 to 67 by 2026. That hardly seems worth fighting about. There is also a pledge to sell of €5B/year in state assets for the next 3 years.

    A weakening ruble is keeping Russia’s central bank from lowering rates, even with a banking sector starved for liquidity and inflation not being an issue. In fact, capital outflows may force the officials to hike rates soon, according to Capital Economics. RSX -20% YTD.

    Brian Moynihan (BACfires back at critics of his bank telling employees to take the battle over its public image to the state and municipal level where BofA loans drive the wheels of local commerce and charitable gifts help fund causes in the community. Moynihan unplugged: "You ought to think a little about that before you start yelling at us." Yeah – THINK!  

    Yeah baby!  Barrick Gold (ABX +1.5%) hikes its quarterly dividend 25% to $0.15/share. "Strong earnings and operating cash flows, combined with (our) positive outlook on the gold price, enables the Company to continue to make high return investments … and also increase its dividend." Earnings are due tomorrow. (PR)

    The top 5 YouTube channels receive as many daily viewers as the top 5 cable channels, according to a spokesperson. In addition, Sandvine reports YouTube now makes up 20% of downstream North American mobile data traffic. Google (GOOG) hasmade huge strides in monetizing YouTube’s library, though recentcontent purchases are hurting the site’s profitability.

    Visa (V): FQ4 EPS of $1.27 beats by $0.02. Revenue of $2.38B (+12.6% Y/Y) misses by $10M. Adjusted (non-GAAP) full-year EPS of $4.99. Increases buyback plan by $1B. Shares -1.7%AH. (PR

  216. revtodd64

     Gmarts – As I read the charts Phil posted, there has been job growth in the private sector since March 2010 and unemployment has twitched from around 9.5% to 9.0%  I notice that the unemployment chart stop in Jan. 2011, whereas the job change chart keeps going through this summer.  It seems consistent with a slow recovery.  Public sector job loss is missing from the equation.  It is possible to have private sector job growth and higher unemployment if the public sector is cut back.

  217. kongen

     There are some very nasty comments on OWS out there.  Noone seems to consider what our civilization (or govt) is for!  Sigmund Freud was not only a great physician, but also a great intellectual.  In “The Future of an Illusion”, he describes the OWS perfectly: “Human civilization … includes all the regulations necessary in order to adjust the relations of men to one another and especially the distribution of the available wealth." and, "It is understandable that the suppressed people should develop an intense hostility toward a culture whose existence they make possible by their work, but in whose wealth they have too small a share."    

  218. kinkistyle

    HCBK misses by a cent .17 vs .18 expected.  Big 32% drop in profits thanks to ZIRP.

  219. jmm1951

    jtncsanford
     
    As one newbie to another, in my opinion it is impossible to just copy Phil’s trades in lockstep. What is more important is to look at individual trades and understand the rationale for them and how they work, and then start to make some small trades so that you can delve deeper into the mechanics. Getting in and getting out of trades correctly are both equally important.
     
    The information and help available on this board is priceless, but it is not easy at first, or ever. Also your situation may not match exactly. For exactly if you are trading in an IRA, some trades that use margin should perhaps be avoided or adapted to reduce margin requirements. For example calendar spreads don’t require margin, and condors give you 2 spreads for the price of one.
     
    However, in the short months I have been on this board, I don’t think there has ever been a day when I haven’t learned something useful and valuable about trading stocks and options. Phil’s slogan ought to be: "We make money the old fashioned way. We earn it."

  220. nicha

    rokjok/spreadsheet – sent you one I have.

  221. boltdude

     TQNT – ouch.  So much for benefitting from having Apple as a customer.   Maybe Apple’s purchasing department trained at the Wal-Mart school of vendor management.

  222. Lincoln

     GMCR: WTF
    I was so looking forward to some more crazy AH action.  Just more premium decay time i guess on my bear put spreads.

  223. Phil

    Chat/Jtn – My chat is the comment section under my latest post (although sometimes a little mixed up on weekends) and Optrader is under his most recent post (tabs on top of page take you right to author’s section).  

    And what JMM said!  

    Australia/Rok – Good job.  I would suggest doing a lot of NOT trading from Australia.  Just identify the trades you think are still makeable after you wake up and go through the day’s chat and then you can just ask if we think the play is still good.  As I mentioned above – our goal here is more to teach you HOW to trade, not to have you just follow our trade ideas.  That way, after a while, you should be able to wake up whenever you damn well please, take a quick look at the market and set up a nice, profitable little trade whenever you feel like it.  Also, it’s good to paper trade (TOS has a good system) and you can learn what trades work for your schedule and what don’t.  If you play futures, we have something called the 3am trade that would be perfect for you as we’re not usually up to make it. 

    Big Chart looking pretty good – what was everyone worried about?  

    Jobs/Rev – Also population growth.  If we don’t add 110,000 jobs a month, we’re not keeping up with population growth and unemployment goes up anyway.   Then the random factors of people entering and leaving the workforce and the dreaded "seasonal adjustments" and "birth-death" modeling that may as well be a dart board with millions written on it.  

    Freud/Kongen – Hey, that’s Commie talk!  8)  

    HCBK/Kinki – Yep, about what was expected.  Little reaction means we should be safe going forward.  

    Thanks for the nice testimonial JMM!  

    That is something I don’t say often enough about trading – it’s a profession!  To get good at it you have to read and study and practice, Practice, PRACTICE (10,000 hours, according to Gladwell).  Of course, if you are going to spend 5 years getting really good at something – making money trading is a good choice!  

  224. rustle123

    CNBC is spinning the Occupy Wall Street protesters as misguided.  They are saying many of the top people worked their way to the top, some even coming from other countries as a kid and they are not the bad guy.  Basically the message was if you worked hard and earned a ton of money, you shouldn’t have to pay taxes.

  225. jmm1951

    rokjok/Spreadsheet
     
    G’day mate.
     
    I don’t know what broker you are using, but mine (TradeKing) provides a number of spreadsheet formats that keep track of your positions, as well as monthly statements, tax statements, etc. You can also trade directly from the spreadsheets. Another useful calculator tool enables you to calculate the potential returns on option strategies over different time frames and volatilities and to trade direct from the calculator. These spreadsheets can also be downloaded into Excel. The "options view" spreadsheet shows volatility, delta, theta, etc, and the "holdings" spreadsheet shows purchase price, profit + loss, basis price, latest price, etc. I could download them and e-mail to you if you like, but the problem would be that the calculation of the variables would not then be "live" and you would just have column headers.

  226. Savi

    Phil—met Rajaratnam at a fund raiser and thought why can’t I be as splendid on stock picks as this guy--ha! what a laugh--feel sorry for his wife although she did enjoy the Channels and Louis Vuittons and probably will continue to do 
    Btw  would you take shares of Groupon on the IPO—I may get some shares--will flip of course—Thanks

  227. rokjok777

    Phil, thanks, excellent advice on NOT trading from Australia, i had already reached that conclusion, seems to me that makes sense no matter where you are. But in my paper trading I’ve been able to select several recommendations you’ve made during the day that were still active (I check the time and the price of the underlying as well as the options price as a rough guide). Yes I’m understanding the logic, it’s the mechanics that are taking some time. Patience.
    Everybody’s invited for beers next time you’re in Sydney…
    http://www.youtube.com/watch?v=epfzJU5RWM8

  228. ariveraA

    A note for other newbies like myself:  For those of us with smaller portfolios ( $50K or less) , the temptation is always high to day trade.  After months day trading (TNA / TZA, FAS/FAZ, AGQ / ZSL, EPV,etc.) I have made thousands in a day and lost thousands in a day…
    It is not for the faint of heart and frankly it should only be done with money you can afford to lose.  I separated my portfolios in different providers just so that I could not day trade more than my threshhold of pain… be careful.  The difference between investing and gambling is not much!

  229. Burrben

    Ok, when I heard K. Kardashian would earn 60mil this year I was floored.  But then I just read today that V. Beckham will be earning close to 95mil in 2011 due to sales of her clothing line, which increased 70% this year.  Holy crap!
    http://www.vogue.co.uk/news/2011/10/24/victoria-beckham-sales-increase—%C2%A360-million-this-year

  230. Peter D

    rokjok777,
    I love trading from Australia.  When I went for the 3 weeks vacation, it’s great to get up at 11:30PM and trade until 2AM.  It’s so quiet and there was no distraction!  If you are early riser, you can get up at 5AM and trade until the US close.  The US Day Light saving is a pain as you might need to stay up or get up an hour later/earlier.
     
    Options expiration is on Friday night Australia time, so you can spend the whole night and sleep in on Saturday!

  231. jomptien

    DBA/Phil, David,
    Looks like inflation hedge DBA is down about 10% over the last year and below major averages – not up 50%

  232. angelcur

    gmarts i was oigng to say precisely what phile said..a pre emptive postponment..i can assure you that nolan ryan is rip shit right now…does anyone like bud selig?

  233. deano

    Seems like the war has come to the home field:
     
    Oakland Police Critically Injure Iraq War Vet During Occupy March
     
    http://www.huffingtonpost.com/2011/10/26/iraq-vet-oakland-police-tear-gas_n_1033159.html

  234. angelcur

    so what happened  that so many coordinated ousters of ows sites happened on the same day?

  235. dclark41

    jmm1951
    Just switched to TradeKing from Fidelity. Can you give me a quick run-down of the features that you find most useful. Thanks.

  236. jmm1951

    dclark/TradeKing
     
    Golly, you are putting me on the spot! OK.
     
    1. Under the Accounts menu both the Holdings view and the Options view are very useful. The Holdings view gives you your basis in a position, and gain and loss. The Options view gives you all the Greeks on your positions. Both these views are much more useful than the Summary view on the home page.
     
    2. Under the Tools menu, the Profit and Loss calculator is pretty useful as you can set up spreads or condors or complex multioption positions and see exactly what the value of the spread will be if the stock reaches a certain price by a certain date. You can use your mouse to slide the position around. You can also trade from this screen.
     
    3. You can also trade from the Holdings view by right clicking on a position, for example to roll out of an option, or else you can check the position on the left side of the page and then use the trading menu at the top to select from a long list of choices. If you have outstanding orders or stops on positions, these will be flagged in the Holdings view.
     
    4. I don’t care greatly for the technical charts and I always use Freestockcharts.com as you can set the charts up exactly the way you want.
     
    5. I like the order Preview function, because you can use it as a kind of calculator without actually placing an order, and it will tell you how much margin required for a trade, etc.
     
    6. I like the Conditional Order function. For example you could place an order to buy back your AAPL calls if SPY goes below $120, or something like that.
     
    7. The 1-800 number. The folks on the help desk are extremely pleasant and helpful.
     
    8. When looking at your account balances be aware that the total account value may change quite a bit between trading hours and aftermarket hours if you have a lot of options. This is because in the day time it is based on bid and ask prices, but out of hours it is based on last trade. I had a position in BP leaps that had not traded for several days and the difference on that position alone was more than $1500.
     
    Hope this is some help.
     
    4.

  237. Pharmboy

    EU Greek Bond Deal/randers – 50% is voluntary.  Ok, no dice from me on the Greek debt I own.  I want my 21%.  That’s not a deal. 

  238. Pharmboy

    From Dave,

    One thing is clear; investors continue to pull money out of the stock market at least as measured by equity mutual funds. This is evidenced by ICI (Investment Company Institute) data showing we’ve now reached $100 billion in equity fund redemptions in 2011. This matches the entire year of 2009. Also, since 2010, over $200 billion has been withdrawn including 2011. With cash balances at funds around 3.4% there isn’t much firepower from them to push stocks higher. That’s why we can safely assert the action is driven by hedge funds, trading desks and HFTs.

    Remember the ‘plan’.

  239. dclark41

    jmm1951
    Didn’t mean to put you on the spot. And you really out did yourself! Thank you. I am going to review the items you listed over the next two days. Are you pleased with there service? Any problems? Thank you very much again!

  240. dclark41

    jmm1951
    ….I can’t help myself!
    It should read "their" not "there". I reach the pinnacle of stupidity around 12 am! :)

  241. scottmi

    Trading Tax – those damn long haired hippy-type pinko commies at Wharton consider: Is it time for a trading tax?

  242. zeroxzero

    Late check in, Euro deal "done", and the Euro doesn’t seem to be able to crack 1.40 this evening.  If anything, it seems to be selling off.  Voluntary haircuts?  Right.  My European friend’s comment yesterday about the general incoherence of the plan seems to have been on the mark — Merkozy have not exactly mastered the "vision thing" [origin: George "Dubya", in response to criticism of his focus on short-term campaign objectives]. I’m glad I’m short.  Let’s hope I feel the same way tomorrow.
    A 1.40 Euro may hold down inflation, but at the price of long-term structural unemployment and an utter lack of competitiveness among the Peripheral nations. Most Europeans are tremendously overpaid at current levels — those that still have jobs — and the pension/severance packages are so severe that a company is better off letting workers sit around, begging for government help, than go bankrupt trying to fire them.  Not much of a prescription for recovery, and forget about the Germans picking up the tab — even if they did, it wouldn’t touch the basic issue of Europe’s internationally uncompetitive economies, a phenomenon that is not being addressed despite it being the essence of the EU’s problem.
    The U.S., with it’s swooning currency, is at least taking part of the hit — that everyone must become poorer.  Or almost everyone, as Phil will be quick to point out.  But there’s no way around the fact that, when labor costs fall, capital becomes worth relatively more, even if taxes are raised, such that U.S. income disparity must continue to increase notwithstanding even the most draconian imaginable change in the U.S. tax regime.  But it would be a nice gesture to cancel the legal "humanity" of corporations, one of the most corrosive influences on a popular democracy one could conceive. Power to the People!! 

  243. Phil

    Victory in Europe and the Futures are flying – up about 1.5% already!

    The full statement can be read here.  

    European leaders persuaded bondholders to take 50 percent losses on Greek debt and boosted the firepower of the rescue fund to 1 trillion euros ($1.4 trillion), responding to global pressure to step up the fight against the financial crisis.

     

    Ten hours of brinkmanship at the second crisis summit in four days delivered a plan that the euro area’s stewards said points the way out of the debt quagmire, even if key details are lacking. Last-ditch talks with bank representatives led to the debt-relief accord, in an effort to quarantine Greece and prevent speculation against Italy and France from ravaging the euro zone and wreaking global economic havoc.
     
    Measures include recapitalization of European banks, a potentially bigger role for the International Monetary Fund, a commitment from Italy to do more to reduce its debt and a signal from leaders that the European Central Bank will maintain bond purchases in the secondary market.

    More details can be found here

    Dollar testing the 76 line and, if they fail that, we can be off to the races.  The Euro is right on the line at $1.39929 but the Pound is already over $1.60.  The Yen has fallen (gotten stronger) to 75.95 and that’s still the fly in the ointment because, if I were the BOJ – I would intervene on the Dollar today – while we’re in a huge rally, when it’s least likely to screw up the equity markets.  

    Gold is not moving higher ($1,724) as this is not too inflationary by itself but if combined with US and China stimulus measures, we could be off to the races again.   Silver is $33.57, copper $3.55, oil $92.06, gasoline $2.66 and natural gas $3.58 with inventories later today. 

    6:02 PM The European Banking Authority breaks down by country the amount of capital banks will need to raise by June 30, 2012 to meet the 9% level agreed to at the EU summit. The total amount necessary is €106.5B. Not surprisingly, Greece, Spain, and Italy lead the way.

    9:59 PM White smoke emerges from a government building in Brussels as it appears EU leaders have reached a deal with banks for a 50% haircut on their Greek bond holdings. A pre-dawn press conference is set to begin shortly. 

    10:06 PM Risk assets are on the move higher on word of the deal for a Greek bond haircut. Euro +0.5% at $1.3976. Hong Kong +1.4%. S&P 500 futures +0.9%, German DAX futures +0.7%

    10:10 PM Speaking at the press conference, Sarkozy says the IMF (i.e. U.S., maybe China too) will partner with the EU to provide additional bailout funds. He believes the EFSF can be leveraged to provide €1T in firepower without threatening any EU core credit ratings. Under the plan, Greek debt/GDP would fall to 120% by 2020. None of this is new information, all having been leaked out during past days

    10:19 PM Of interest is that the 50% haircut is only for privately held Greek paper – i.e. it does not apply to ECB and IMF holdings. Anticipating such a scenario 2 weeks ago, UBS went through the numbers and found the net effect to Greece as being a 22% reduction in debt – better than a kick in the teeth, but likely not enough relief for the nation to be able to pay its bills.

    Congrats to the bulls – especially our White Christmas Portfolio players as we’re off to a big start there already!

    ASSUMING we are firming up above our Must Hold levels, we can kill the bearish side of our hedges and turn the trades bullish like selling the lower half of the bearish DXD spread or, if you don’t have the margin, just cashing out the bearish bull call spread but leaving the bullish offsetting short put.  That’s why we use that kind of insurance hedges when we are bullish but cautious – it allows us to flip the insurance into a straight up bullish position very quickly.

  244. Phil

    TQNT/Bolt – The World is littered with bankrupt Apple suppliers!  They are the best at paying the least to their vendors, I never consider an AAPL partnership to be a positive for a company unless it’s a really big one like GLW who, even if they sell AAPL glass at cost, it still improves their overall economies of scale for the rest of their sales.  Also, any time you invest in a known AAPL partner – all you are doing is entering a trade where the "good" news is baked in and the possibility of AAPL terminating the relationship and destroying the company or the company simply not making money supplying AAPL probably make it a better short than a long. 

    Misguided/Rustle – Yep, that’s the latest talking point on the occupy crowd.  The problem is the message itself "we in the top 1% worked hard and earned a lot of money" is an insult to the vast majority of the bottom 99%, who also worked hard but did not make a lot of money at all.  How many of us have had bosses that worked less hard than we did?  If they want to get the other 98.9% of the people off their couches and into the protest lines – I can’t imagine a better message than "Don’t complain – we just work harder than you do and deserve it more."  

    Of course hard work is very important and A LOT of people in our position did get their by busting our asses.  When I was promoted to manager and given the chance to open a new office when I was young, I was there from 6am to midnight every day and usually about 10 hours on the weekend and that office was profitable in it’s second month – but only because I was doing 3 jobs!  I always tell people who are starting small businesses that the reason 9 out of 10 small businesses fail is because 9 out of 10 people have no idea how much work it takes to make a small business successful and they are often unable or simply unwilling to make the kind of sacrifices it takes to get through those critical first years.  

    So yes, a lot of us do work hard and we deserve something for that but to pretend that all hard work is rewarded is ridiculous.  It is also ridiculous to believe that luck has no part in your success.  We all get breaks and the leading characteristics of a winner is how they deal with their failures along the way but that doesn’t make us "better" than someone else.  My neighbors have a child who is severely autistic – that then limits their ability to choose careers unless, of course, they decide to sacrifice their son’s development because money is more important.  We all have to make choices along the way – I sold my last company when my first daughter was born because I would rather be a Dad than be richer.  

    We all make choices in life and we all need to have compassion for people who’s paths in life may not have been as rewarding as our own because it’s not because they worked less or prayed less or whatever – most of the time it’s just the dumb luck of the Universe that puts us in a position to have more than someone else.  We can take whatever the Universe dishes out and make the most of it and again, I understand that most of us here have done that BECAUSE we are smart and hard-working but it’s also because we didn’t have to choose between college and cancer treatments for Mom and that we never got in a debilitating car accident and that we had reasonable primary school educations and we didn’t have to drop out when we were 16 to get jobs and help out with the rent and we had healthy children and our homes weren’t washed away in a flood, etc….  

    The people at the bottom KNOW we are lucky and we just seem dumb to them when we deny it.  When we begin to thump our chests and tell a woman who wakes up at 5am to get her kids ready for school before she races out the door to put in an 8-hour day at a $30,000 job and then races back to catch the kids coming off the bus and gets them home and helps with their homework while cooking dinner and maybe, if the housework is done, at about 8pm she gets to sit down and watch TV before passing out – that we are successful because we work harder than her – well, you can imagine why she wants to kill you….

    Groupon/Savi – I’d take the IPO at the IPO price and get out in early trading (make sure there’s no lock-up).  They should get a good pop first day or first week but they are going to have a nose-bleed valuation that’s not likely to survive.

    Australia/Rok – I don’t mean don’t trade at all, I mean to be VERY selective so not trading the majority of things you see.   Go through our Portfolio section and check out the September’s Dozen and other Buy Lists – those are longer-term set-ups (we also have an Income Portfolio that you never hear about in chat because it’s so dull and low-touch) that you don’t have to mess with every day – you identify an opportunity, get a good entry and wait.  You can do that just as well in Australia as you can in Austin, Texas…    

    Shipping/Vic – Look at the BDI, listen to FedEx and the rail companies – that’s not the story we’re getting.  I don’t know why the discrepancies.  It could just be a reflection of the collapsing commodity market or it could be an echo from the Japan quake disruptions.  The story Mish cites came from, of course, the WSJ so I take it with a cargo container full of salt.   Apparently, NY/NJ ports are flat to last year, Savannah is down 4% and Oakland is only down 0.9% with LA down 5.75% so, by focusing in Long Beach, which is very much affected by Japan and auto imports that were severely disrupted – the article goes out of it’s way to paint the worst possible picture – purposely misleading investors to make the wrong conclusions and make the wrong investing decisions based on the "data".  It also fails to mention the fact that last year was very strong, up 15% from the prior year as retailers finally re-stocked from a 2-year shock so it would be unlikely that we’d match that this year in the first place.     

    Last Thursday, the National Retail Federation said it expected holiday sales to rise 2.8 percent over last year. And late last month, the federation said it expected port volumes to rise by at least 4.5 percent a month for the final four months of the year.

    At the same time, some analysts revised their holiday forecasts upward after the retailers tracked by Thomson Reuters beat estimates and reported an average 5.1 percent increase in same-store sales for September last Thursday.

    “For the holidays,” Craig R. Johnson, president of Customer Growth Partners, wrote in a note to clients last week, “a 5 to 6 percent increase is clearly in reach.”

    Good attitude Arivera – now we need to work to improve your success ratio!

    Kardshian/Burr – Hey, she worked hard and deserves it!   8)  

    DBA/Jomp – Underperforming the indexes doesn’t change the fact that they went from $22 to $32, does it?  

    Occupy/Deano – Wow, what thuggery by the police!  

  245. kongen

     Phil – "Misguided" – bravo!  Your straight thinking alone is worth the membership.  (Has anyone here been on Telechart?  Their chat is filled with racist, extremist rant.  Phil is a great relief.)

  246. Phil

    Coordination/Angel – Oh just one of those Global coincidences, I’m sure.  Certainly not evidence that the top 1% control Government and the media (can I have my puppy back now?). 

    Euro finally at $1.40 – now we see if they can hold it.  

    Dow (/YM) futures can be played bullish off the 11,950 mark but with very tight stops, of course.   Dollar over 76 cancels that trade – I’m still worried about Yentervention so not too bullish yet.  

    As an offset to Dow longs, gold (/YG) can be shorted at $1,720 with a stop at $1,726, which is $33.20 per $1 ($199.20) per contract at risk.  If the Dollar pops and sends the Dow down, gold should fall too.  If the Dow goes up and risk is out of the market – gold should go down too.  

    Trading tax/Scott – I would love a transaction tax that makes HFT unusable.  

    Voluntary/ZZ – I have no pity on people who still hold Greek debt.  This has been going on for years and when you are getting paid 10% for a bond – of course there’s a serious risk of failure – it’s about time bondholders finally get a dose of reality – maybe now they will stop lending to people who can’t balance their budgets – which is how Capitalism is supposed to work in a truly free market.   Good point on capital gaining value, that’s why the Banks and Corporations have been hoarding it.  Little chance of reform when all the money is resting with our Corporate Citizens.  

    Big data day!  

    Thursday’s economic calendar:
    8:30 GDP Q3
    8:30 Initial Jobless Claims
    8:30 Chicago Midwest Mfg. Index
    10:00 Pending Home Sales
    10:30 EIA Natural Gas Inventory
    11:00 KC Fed Manufacturing
    1:00 PM Results of $29B, 7-Year Note Auction
    4:30 PM Money Supply
    4:30 PM Fed Balance Sheet

    Notable earnings before Thursday’s openABBABXAET,AVPAVTAZNBCBENBGBLLBMYCAHCCAMCCE,CELG

    CLCLICLPCMSCNXCTXSCVEDANDLRDOW,ELNENDPEQTGRGTIHOT

    HSYIMAXINCYIPIRMJCI,LAZLMMCOMJNMOMSIMWWNIHDOORIOXY

    PCG,PEGPHMPOTPTENRCLREGNRTNSNHSNVSTDSWI,TKRTWCUAL

    UTHRVLYWBCWECWMXELXOMXRAY,YNDXZMH

    Notable earnings after Thursday’s closeAMDCBG,CERNCINFCLDCLFCROXCSTRDDRDECKDPLEMN,

  247. Phil

    Thanks Kongen – I’m not a Telechart guy but one of the reasons I started my own blog was that I couldn’t stand the people who commented in other ones…  

  248. Phil

    Notable earnings after Thursday’s closeAMDCBG,CERNCINFCLDCLFCROXCSTRDDRDECKDPLEMN,

    ERTSEXPEFIIGILDHIWHLSIMITMNKEGKLACLEG,LVSMETMMINCR

    NETLNLYPFGPMCSQLGCQLIK,RGCRSGSWNUHSVARVRSNVRTXVSEA

  249. Phil

    Royal Dutch Shell (RDS.A): Q3 net income +102% to $7B vs. forecast of $6.6B. Revenue +36% to $126B. Annouces interim dividend of $0.42 a share. Earnings benefited from a 33% gain in U.K. gas futures and a 46% increase in Brent oil prices, and a ramping up of projects. (PR

    AstraZeneca (AZN): Q3 core EPS of $1.71 beats by $0.01. Revenue of $8.21B (+4% Y/Y) beats by $50M. Net profit +124% to $3.48B, in line. Raises FY core EPS forecast to $7.20-$7.40 from $7.05-$7.35. Earnings benefited from favorable currency movements, sale of dental unit, and strong performances in emerging markets. (PR

    Operation Apple Smash begins!  Sony (SNEagrees to buy Ericsson’s (ERIC) 50% share of Sony Ericsson for €1.05B ($1.47B). The transaction also provides Sony with a broad IP cross-licensing agreement and ownership of five essential patent families. (PR .pdf

    More on Sony (SNE) / Ericsson (ERICdeal: "The transaction gives Sony an opportunity to rapidly integrate smartphones into its broad array of network-connected consumer-electronics devices," including tablet computers, TVs and PCs, the companies say. (PR .pdf)

  250. jmm1951

    dclark/their/there
     
    I make that error all the time. Somehow my fingers go ahead of my mind and "there" is very easy to type. Yes, I have no complaints about the TK service. They are working all the time to improve it, and live quotes are supposed to be on the way. As you may know, they are developing a new interface called TradeKing Live which everyone will have eventually. Compared to Scottrade, which I had before they are 120% better, but then that is because TK is geared to options trading and ST is not.  by the way, I should have mentioned The Options Playbook, which is also worth referring to via the link on the TK site. The forums and discussion groups on TK are useless. For this stick to PSW.

  251. jmm1951

    zeroxzero/vision thing
     
    Actually it was George Herbert Walker (Pappy) Bush, not George W.

  252. lvmoda

     Well, it looks like Europe finally politically committed to stimulus and maintaining the union.   Maybe $1.4T is not enough, but once they’ve taken that move on the EFSF along with getting the IMF in on the Greek bailout, it’s hard to see how they might change course.   So the euro shorts cover and we have 1.40 for today.   With futures up 26 on the S&P at the HOD right now, its hard to get long here so I’m just gonna watch.  With expectations of 3% growth from those incredibly inaccurate economic experts polled, a miss in an hour could let the air out of the market bubble this morning.   I guess it’s time to be in a bull mindset until the US panel starts to play their games on getting agreement on the deficit reduction plan.

  253. NF**X

    OWS – Hate to go all tactical and stuff, but if the cops are going to be super aggressive, people resist and Labor and Dems don’t bail, we’ll be at a turning point. But here is where you need “meetable” demands – or at least something Authority can capitulate on.

  254. NF**X

    WCP – Nice!

  255. NF**X

    Matthew Sweet – I’m not sure I can post a pic here, Phil. If not, I will send via email. Great show by a now fat dude! Fatter than me. Lol.

  256. dclark41

    jmm1951
    Thank you again.

  257. lvmoda

     Fear money coming out of treasuries….TBT on the move.

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