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Wild Wednesday – Nothing Could be Drier Than a Jolly Caucus Race

Forward, backward, inward, outward

Come and join the chase
Nothing could be drier
Than a jolly caucus race

Backward, forward, outward, inward
Bottom to the top
Never a beginning,
There can never be a stop

To skipping, hopping, tripping fancy free and gay
Started it tomorrow
But will finish yesterday

‘Round and ’round and ’round we go
Until forevermore
For once we were behind
But now we find we are be-

Foreward, backward, inward, outward…

Wheeee – this is FUN!  

Down we go again, giving up 50 points pre-market of yesterday’s gains already – once again punishing anyone who was foolish enough to buy yesterday’s rally.  Like the Wall Street Pelican in the cartoon says: "You HAVE to run with the others if you want to get dry."  Of course it’s impossible for the participants (the bottom 90%) to get dry as they are not on the rock with a warm fire and simply keep getting soaked – over and over again.  But the Wall Street Pelican keeps playing his tune, giving himself a ready supply of dancing fish to snap up whenever he gets hungry.  

Of course, for those who miss the subtlety of the caucus race, Disney also puts in the story of the Walrus and the carpenter.   "The time has come" the Walrus said, "to speak of many things.  Of ships and shoes and ceiling wax and cabbages and kings."  

The carpenter reminds me of the Tea Party, enabling their fat-cat (or fat-walrus) allies, only to get screwed over in the end.  Walt Disney, don’t forget, had gone bankrupt early in his career and had also got screwed by big business when Universal Studios took control of "Oswald the Lucky Rabbit" – the original Bugs Bunny from Disney.  "Alice Comedies" were and earlier work of Disney’s that culminated in the eventual release of Alice In Wonderland, with much of his early sarcasm and frustrations with the system still intact. 

Yesterday, the part of the Walrus was played by Doctor Ben Bernanke, whose Fed Minutes (see my commentary to Members) uses all sorts of fancy language to dance around the fact that this economy is still in the toilet. Callooh!  Callay!  The Fed may as well be saying as they come up with brand-new ways to avoid saying "RECESSION" and "INFLATION" as that may have been inconvenient, what with the Chairman testifying that such a thing does not exist.  "The time has come," Bernanke said, "to talk of many things.  Of shoes and ships and sealing wax – of cabbages and kings.  And why the sea is boiling hot and whether pigs have wings." 

Pigs will apparently have wings long before the real estate market turns around in this country as the most consistent thing about 2011 may have been the Fed’s dreary outlook on both residential and commercial real estate.  No one seems to think it’s likely to improve until well into next year and the Fed seems poised to further extend their guarantees of easy money through 2013 at least.  The good news is – that puts QE3 squarely on the table and, in my Alert to Members parsing the Fed minutes, I noted:

So one dove was so pissed that he dissented.  The question is – how many are "a number of Members" that want more action and how many are "a few others" who feel more action is inappropriate and which ones still have the vote this year?  On the whole, my premise of QE3 is intact per these minutes – the data is worse than they thought and it is probably only the price of oil that is keeping them from acting at the moment but another problem in Europe or poor Q4 earnings and they will have no choice.   Meanwhile, things need to get worst before the Fed acts is the bottom line.  

THAT is the environment we are trading in in 2012 – although the end of the World does seem near, we also see the signs that Deus Ex Machina – in the form of MORE FREE MONEY from the Fed – still may come down from the heavens to save us.  Deus Ex Machina is, appropriately: "God out of a machine" and refers to a plot device whereby a seemingly inextricable problem is suddenly and abruptly solved with the contrived and unexpected intervention of some new event, character, ability, or object – pretty much exactly what QE3 is all about – especially for those who already worship money as their God!  

Greek poets Horace and Euripides both warned their writing students against the use of the Machine God to solve their plot problems as it was lazy and unsatisfying to the audience but, when push comes to shove in Euripides’ "Alcestis" and Alcestis must give up her life to save here husband – Heracles suddenly shows up and saves her from Death and again, in "Medea," she is spirited away from Jason by the Gods (to cover her double murder).  Moral of this story – when it all hits the fan – even the masters will cop out and take the easy crowd-pleaser (likely they had a deadline due and they were out of ideas).  

Clearly the Fed is out of ideas as Operation Twist is a rehash of their (failed) 1961 program but they had to do SOMETHING before going back to the QE well for the third time in 3 years (would have been two years if they hadn’t put it off until now).

While we (brilliantly) sold into the initial excitement yesterday and are very pleased with the downturn this morning – we will also not get carried away on the bear side as the Machine God may be nothing more than an artificial contrivance but we are not in the audience of this particular Global Economic Theater – we are ourselves trapped in the play and I am but a humble member of the chorus and woe unto all of us who do not respect the whims of the Fed!   

 


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  1. stjeanluc

    Oil Lines

    R3 – 106.52
    R2 – 104.85
    R1 – 103.75
    PP – 102.08
    S1 – 100.98
    S2 – 99.31
    S3 – 98.21

    Yesterday’s high and low – 103.18 / 100.41

    Breakout lines – 107.66 / 93.15 

  2. lflantheman

    Good Morning AAPL lovers!   Looks like we had sense enough to "get out" yesterday after that big runup in the portfolio.   Things pulling back a bit today, which is exactly what we want for AAPL.  There is upward pressure on the stock into earnings announcement (which, by the way, is January 24th at 5p.m.) but we would rather repurchase some call options at a lower price than where they are now if we can get the stock to pull back a bit over the next few days.  By the way, that earnings date is perfect!   It’s after January expiration, so we can play the pre-earnings runup, get out, then find another post-earnings play of value.  So today, let’s sit on the cash in the account for awhile and see what the market does. 

  3. escohen5

     lflan — I just wanted to say thanks for the AAPL trades, and the work that you do.  I don’t post much, but I follow it all.  I’ve been an AAPL-aholic for a long time.  I took some good profits yesterday, at your suggestion.

  4. jmm1951

    Caucus notes
    Voters were interviewed and asked what were the most important issues for the election. Some said abortion, or candidates who had too many wives and girlfriends, while others mentioned the economy. I think for the voters of Iowa it is a real dilemma as to whether punishing those who have enjoyed sex trumps concerns about the economy.
     
    Santorum clearly benefited with voters from his reproductive prowess in having sired 7 children with the same mother.  It should also be noted that Huntsman (7) , Romney (5) and Ron Paul (5) both have demonstrated the superior reproductive success considered useful in governing the country, possibly a throwback to the days of hereditary rule. Michelle Bachmann (5) has also showed herself to be a leader in the mould of Queen Victoria (9), contrasting to Margaret Thatcher (2) whose legendary efficiency was such that she delivered both her children at the same birthing.
     

    http://www.guardian.co.uk/world/video/2012/jan/03/iowa-caucus-voters-decision-video

  5. Pharmboy

    PP for today:

  6. Pharmboy

    ARNA/deano – I did not. Nothing new on them….we know that it is a craps roll just like we knew VVUS caused birth defects.  It is up to the FDA.

  7. stjeanluc

    Good day for AA yesterday…

     

  8. BruceE

    Holy cow Phil, I feel like I’m back in college getting a lecture when you write like that.  An unexpected bonus of membership to be sure.  I hope you had a happy holiday, I sure did thanks to your WCP and I look forward to following the new 25KP this year as well.  

    DMND earnings are delayed, I think.  I don’t know if that changes your plan with them.  

  9. stjeanluc

     

  10. stjeanluc

     

  11. stjeanluc

     

  12. mampcsA

     DMND trade in 25KP filled this morning. 37/45 Call spread at 2.1 and 20 puts sold at 1.95.

  13. jmm1951

    I love these mixed openings, because the stocks that buck the trend and go up when SPY is down may be in demand. Today in my universe of stocks AA, GLW, F, MSFT are all positive. BP is up while CVX and XOM are down (suing Halliburton, or rumors of upping the divi), CLF is up sharply while other coal stocks are down (takeover rumors?), AEP is up again and on a tear (flight to safety).

  14. shadowfax

    The first sign that interest rates will rise. 2.9% variable rate morgages, no SSN required. History is repeating itself and the 2nd great land grab goes on!

  15. lflantheman

    AAPL port:   BTO"   Jan weekly 415     10   @   1.14

  16. stjeanluc

    Dana Summers  

  17. lflantheman

    AAPL port:   My toe is in the water.

  18. mampcsA

     Phil, can you suggest a bullish play on TNA for Jan? I seem to be a little too bearish for my liking.

  19. stjeanluc

     

  20. exec

    Ford moving again.

  21. roro

    Sold the FTSE at 5695. Sold OIL again at 103. Sold the Dow at 12,380 and the NAS100 at 2220

  22. acobra65

    Shadow/SSN
    No SSN ?? How’s that… Explain…Thx

  23. dclark41

    Boy, this is really getting stupid. Next the Iranians can double dare us to do what we will do regardless of their nonsense. But the oil barons love it.
       
    Army chief Ataollah Salehi said the United States had moved an aircraft carrier out of the Gulf because of Iran’s naval exercises, and Iran would take action if the ship returned.
    "Iran will not repeat its warning. . . . The enemy’s carrier has been moved to the Sea of Oman because of our drill. I recommend and emphasize to the American carrier not to return to the Persian Gulf," he said.
    "I advise, recommend and warn them over the return of this carrier to the Persian Gulf because we are not in the habit of warning more than once."

    Read more: http://www.calgaryherald.com/business/Iran+threatens+navy+sanctions+take+effect/5943593/story.html#ixzz1iVD3AuGj
    http://www.calgaryherald.com/business/Iran+threatens+navy+sanctions+take+effect/5943593/story.html

  24. jerconn

    StJ – I think those latest AAPL calls in Iflan’s port are Jan 6, the weeklies, def not Jan 1   Thanks for the ongoing updates!

  25. Phil

    SPY 5 MINUTEGood morning!  

    Dollar flew back up to 80.40 and that’s all she wrote for the rally and we’re bearish now until the Euro ($1.295) gets back over $1.30 but not too bearish until the Pound ($1.5616) fails $1.55.

    The Yen is up to 76.70 but the BOJ needs 78 so another 1.5% there means they want to see 82 on the Dollar or maybe 81 would do it if there’s a 2:1 ratio (max, I think).  

    Copper under $3.50 means what the hell are people rallying about anyway and Nat gas ($3.02) needs to hold $3 to show us they are serious but gasoline is flying at $2.76 so maybe not the right day to short oil ($103.50) as they jam it to the moon while Iran runs their military exercises and rumors run wild.  

    Obviously, with the market falling and oil rising it’s a recipe for disaster and, unfortunately, the same nonsense is sending gold back over $1,600 ($1,609) but I’m not looking to fold oil and gold shorts just yet.  I mentioned DIA being a good short and new Members should certainly check out "Once Upon a Mattress Play" for the long version of why we like a good DIA spread hedge.  At the moment, I would set up a DIA cover with the March $122 puts at $4.10 with DIA at $123.50, if DIA crosses $124, we have to cover and roll the longs higher but, for now, I’m expecting 12,400 to put up a good fight (now 12,379). 

    SPY DAILYWatch that 123.50 line on SPY – it’s kind of freaky that SPY and DIA are at the same price but, if you manipulate a market long enough – anything can happen.  We are still mostly watching and waiting and looking for opportunities on both sides of the range but I’ll be a lot more comfortable if we head lower and back for a re-test of that 118 line, which is -5% on the big chart.  

    Our first trades yesterday for the $25KP were the 5 DIA Jan $121 puts at $1.05 and they are still $1.05 as our timing was not great so we’ll keep an eye on those.  We also had 5 GLL Jan $18 calls at $1.10 and those last sold for .90 so anyone complaining they couldn’t get a fill yesterday learned the value of patience!  Since the fills are tough – we WANT to DD to 10 at .80 if possible so let’s see if gold spikes up and we get that.  

    2 other trades in the $25KP were earnings plays on MON and DMND and with spreads we don’t look for quick exits unless something really strange happens so we’ll be looking for more short-term opportunities today – maybe even a short-term bullish commodity bet to balance us out a bit.  

    One thing we did not discuss yesterday is next week’s treasury auctions.  Monday is 3-month and 6-month, Tuesday is 4-week, 52-week (sometimes known as one year!) and 3-year, Wednesday is 10-year (and the Beige Book) and Thursday is the 30-year.  THAT’S A LOT OF AUCTIONS!  

    We also have Fed speak starting this Friday from Dudley, Rosengren, Duke and Raskin (a lot for one day) and next week is Lockhart (Mon), Williams and George (replaced Hoenig – also a hawk) (Tues), Evans Lockhart and Plosser (Wed) and Lacker and Evans on Friday.  Spinning and spinning and spinning is why we’re staying on the sidelines at the moment as the market goes round and round in this insane dance.  Dave Fry had a great chart for you to keep score of your favorite Fed Governors so we know where the dangerous ones are:

    It’s been a pretty reliable bet that they tank the markets into the longer-term note auctions because it scares people into T-Bills and keeps the rates low.  From this line-up, it seems to me they intend to jack us up on Friday and then zap us on Tuesday as Esther George releases something hawkish ahead of the 3-year and it’s no coincidence that Plosser, by far the biggest Hawk, is given the floor at 12:30 on Wednesday – just 30 minutes before the critical 10-year auction.  Coincidence?  Surely you cannot be that naive!

    Wednesday’s economic calendar:

    Auto sales

    7:00 MBA Mortgage Applications

    7:30 Challenger Job-Cut Report

    7:45 ICSC Retail Store Sales

    8:55 Redbook Chain Store Sales

    10:00 Factory Orders

  26. Pharmboy

    Amazing how the PP are followed. AAPL bounced right off the PP, SPY bounced on S2, yadda yadda.

  27. ccsincsd

     AAPL Weekly/jerconn
    Jan1 is the option ID for this Fridays weekly option.  Next week will be Jan2

  28. lotter

    Phil,
    What Dollar index are you using?  I have been comparing your numbers to DXY (Dollar Index Spot) on Bloomberg, and it seems like DXY is about 0.25 – 0.30 cents below the numbers you quote.

  29. angelcur

    greece threatening to leave euro zone over stalled talks..LEAVE ALREADY…whats that eagles song already gone?

  30. lflantheman

    AAPL port:   Bought to open 20 more weekly Jan 6 415 calls @ .94

  31. Pharmboy

    LLY falling like a rock. 

  32. dclark41

    lotter
    FYI/dollar 
    I use ForexPros.com to follow the dollar. They have a nice real time streaming futures chart.
    http://www.forexpros.com/charts/real-time-futures-charts

  33. yodi

    stjeanluc
    Hi FAS what is your play of the day or did I miss it? thks

  34. Highlander

    Flan
    FYI: Earnings Whispers site shows unconfirmed AAPL Earnings Release date of 1/17/2012 with consensus @ $9.87 and whisper @ $12.18. This unconfirmed date would have AAPL announcing prior to expiry!

  35. Highlander

    Flan,
    Belay that! They now show 1/24/2012

  36. JRW III

    Good morning, nothing new:

     

    IWM  71.87,  72.15,  72.56,  72.98,  73.24,  73.51,  73.92,  74.28,  74.61,  75.06  and  75.57

    I also have an ascending support trend line now at IWM 74.22

    I am short; good hunting !!

  37. Highlander

    Flan, the 24th is a surprise and probably explains the crazy drop across the board for AAPL Jan 21 calls this morning.

  38. stjeanluc

    FAS / Yodi – You didn’t miss anything, I got call away from my PC… I am going with a 63/71 strangle now for around $0.75. 5% on each side should have us covered for now. And we roll otherwise! 

  39. shadowfax

    acrobar65
    It was on the Yahoo home page for Idaho. How did they get it on? Wasn’t that the cause of the financial crisis? I posted it because I was shocked. Idaho makes it’s own rules, has the most removed and convicted lawmakers of all the states, facts are online somewhere. No Social Security # required! That will fix real estate.

  40. stjeanluc

    As pointed out by cc, the Jan1 is the option code for this week’s option, being the first weeklies of January. They do expire on 1/6 though.

     

  41. craigzooka

    For the IRA Portfolio I am going to manage a virtual 100,000 so it should be easy to figure out allocation size for your own portfolio.  I want to try to put 25,000 to work today spread over 5 positions.
    Below (if the comment works) are positions I was able to put on today.
    <iframe width=’500′ height=’300′ frameborder=’0′ src=’https://docs.google.com/spreadsheet/pub?hl=en_US&hl=en_US&key=0AuzaH6l890lKdER0ZTdMbHdRZnMwM3B0WkdfeEJPaEE&single=true&gid=0&output=html&widget=true’></iframe> 

  42. samz3700

     Looking at a EUR/JPY chart – it is hard to believe that the EUR has lost 40% against the Yen since ’08
    Gone from 170 Yen to 100 Yen  - 
    Kind of mind boggling 

  43. Phil

    I neglected to mention above that it is very easy for the Fed to tank the market at will but not as easy to jack it up other than making a policy statement or a strong hint of one.  Certainly, when people are in a panic – there’s not much they can do short of an actual policy announcement and that’s probably why they are trotting out almost everyone between this Friday and next – they want to hedge their hedges so they can fine-tune the message with the last word given to super-dove and super-experienced Evans, who used to teach at U of M – so he’s good in public.  

    At the open: Dow -0.22% to 12370. S&P -0.31% to 1273. Nasdaq -0.13% to 2319.

    Treasurys: 30-year -0.1%. 10-yr +0.02%. 5-yr +0.05%.

    Commodities: Crude -0.32% to $102.64. Gold +0.08% to $1601.75.

    Currencies: Euro -0.79% vs. dollar. Yen +0.01%. Pound +0.25%.

    10:00 AM On the hour: Dow -0.06%. 10-yr -0.05%. Euro -0.71% vs. dollar. Crude +0.28% to $103.25. Gold +0.86% to $1614.25.

    Market preview: S&P futures -0.4% and EU bourses are mostly in the red on eurozone concerns, including bank liquidity after UniCredit said it will sell new shares in a $9.8B offer to strengthen its capital position. TiVo surges 12.8% on a patent settlement, but Acme Packet -18.2% following its profit warningLater: factory orders, U.S. auto sales.

    Crude surges higher on a Reuters report that EU governments have agreed to ban Iranian oil imports. Down $1 a couple of hours ago, WTI crude +0.4% to $103.39.

    Reuters reports Tehran as saying it has alternative outlets for its crude if the EU bans imports. Scott Barber helpfully providessome figures showing the EU accounts for 18% of Iran’s crude exports. WTI crude is red again, off 0.4% to $102.56 while Brent crude (the world benchmark) is +0.5% to $112.56. 

    Boosting the Buck today:  Iran’s central bank attempts to brake the plummeting currency, setting a ceiling of 14K on the number of rials needed to buy a dollar, and halving to $1K the amount of greenbacks Iranians flying abroad can purchase. Several currency traders in Tehran have shuttered their business, refusing to trade at that price. Before the move, one dollar bought 17.8K rials.

    Discover’s December U.S. Spending Monitor finds consumer confidence declined 1.3 points from November to 85. The gauge reflects consumers viewing their finances as improving, but still with conservative spending intentions into the new year.

    ICSC Retail Store Sales: +1.2% W/W, vs. +0.9% last week. +5.3% Y/Y, vs. +4.5% last week. "Mild weather and increasing use of gift cards helped give the latest week its boost". 

    Redbook Chain Store Sales: +4.9% Y/Y vs. +4.3% last week. The report attributes strength in the latest week to deep markdowns especially at department stores.

    Nov. Factory Orders: +1.8% ($459.2B) vs. consensus of +1.9%. Factory orders had decreased 0.2% (revised) in October. Ex-transport, +0.3%. Shipments flat vs. +0.5% prior. Inventories +0.5%.

    In case you need something new to worry about:  The average funded status of U.S. corporate pensions slumped to 72.4% at the end of 2011 from 84.3% a year earlier, reports BNY Mellon. While assets increased 2.7% for the year, liabilities jumped 20%, sending funding levels down.

    Seriously???  How can it go any lower?  MBA Mortgage Applications: -3.7% vs. -2.6% last week.

    Good read:  The "New Normal" is morphing into the paranormal, writes Bill Gross of the global financial system, with QE the polite word for what looks more like a Ponzi if viewing recent action by the Italians. "The outcome of left-tailed delevering or right-tailed inflation is not certain. Both tails are very fat."

    Bad read:  "The welfare state has run up against a brick wall of economic reality and fiscal book-keeping," writes Alan Greenspan in the FT. "The only viable long-term solution appears to be a shift in federal entitlements programmes to defined contribution status." Clickhere for CNBC’s non-paywalled summary..

    My top concern gets toppier!  Banks deposit a record €453.18B ($591B) at the ECB’s overnight deposit facility, up from €446.26B on Monday. Banks borrowed just over €15B from the overnight lending facility, a marginal increase from Monday’s €14.825B.

     roundup of opinions about Germany’s Bund auction today finds the sale looks good only in comparison to November’s failed exercise, Hoping to sell €5B in paper, Germany received bids for just €5.14 (accepting €4.1B). At the end of the day, yields are below 2% while inflation percolates near 3% – not a great environment for drawing in buyers

    A scandal brews in Switzerland where the wife (a former hedge fund punter herself) of SNB chief Hildebrand bought lots of dollars 3 weeks before Hildebrand opened a trap door underneath the franc by announcing a de facto peg to the euro. Kashya Hildebrand argues the purchase was business-related and the dollar was "ridiculously cheap."

    If year-end polls are to be believed, spring elections will sweep Socialist Francois Hollande into the French Presidency, the first time in more than 50 years a man with no prior cabinet experience assumes the role. What (very) little Hollande has said about the debt crisis implies he has little patience for the austere approach favored by the Germans. 

    Angela Merkel will follow up her talks on Monday with Nicolas Sarkozy with a meeting with Italian PM Mario Monti in Berlin on Wednesday. Unsurprisingly, the discussions with Monti will focus on the eurozone crisis and economic developments in Europe. 

    Madrid (-1.8%) is leading declines in Europe as Spanish newspaper Expansion cites unnamed sources saying the governmentis considering applying for rescue loans from the IMF and EU. "Unidentified officials were quoted … but there is no smoke without the fire when it comes to the EU sovereign debt crisis," says Kathleen Brooks of Forex.com. Premarket: Santander (STD-4%.

    The forint falls to an all-time low vs. the euro as a EU/IMF rescue package for Hungary looks unlikely before the second half of the year. Talks recently broke off as the government moved forward with a new law stifling central bank independence. Adding to the woes, Linda Yueh reports the government rejected all bids at its bond auction today.

    U.S. prosecutors accused three Swiss bankers yesterday of conspiring with wealthy U.S. taxpayers to hide over $1.2B from tax authorities. According to the indictment, the bankers, from a firm that wasn’t identified, tried to capture business lost by UBS.

    Swiss private bank Wegelin confirms that it’s the firm whose three employees face charges in the U.S. for helping American citizens hide $1.2B in assets from tax authorities. "Although U.S. law has some scope for interpretation in this case, Wegelin & Co is certain that Swiss law was not broken," the bank says.

    In praise of boring banks: To prevent the next financial panic, the government should guarantee all bank deposits and require banks to ditch risky activities such as derivatives trading, Amar Bhide writes in a NYT column, adding, “If the average examiner can’t understand it, it shouldn’t be allowed.”

  44. craigzooka

    OK, lets try that again!
     
    Symbol             Shares     cost
    ACI                     300             14.75
    FEB 15 CALL     -1             1.06

    MT                     200             19.24
    FEB 20 CALL    -1             1.14

    STX                     300             16.35
    FEB 17 CALL    -1             0.74

    FITB             400             12.99
    FEB 13 CALL    -1             0.63

  45. jmm1951

    IRA trades
     
    Here is an example of a kind of trade that often works well for me.
     
    I hold 800 shares of ANR and also some long call options, so I can sell calls. Yesterday I started out short 10 January $22 short calls, which were going into negative territory as the stock surged over $22. I rolled them to the March $24s for a slight credit and sold them for $1.93. Today was able to buy back for $1.56 for a nice return of about $350 after commissions. I can now sell the January $22 covered calls over again.
    This round trip trade repeated 3 times a month would theoretically return $12,000 per year on capital of $22,000 or less capital if LEAPS used in place of stock. Obviously it is by no means a sure thing, but seems to me like the KIND of trading strategy that CAN work in an IRA as there is no margin requirement for covered calls. Also options are cleared daily, so no three day wait, and you have unlimited day trades in an IRA if you have the cash available.

  46. Phil

    Defying Senate Republicans, the President will use a recess appointment to name Richard Cordray director of the new Consumer Financial Protection Bureau, according to sources. Maybe of more import than the D vs. R fight, Obama’s move could be an indication of the banking industry’s diminished influence in D.C

    Shares of payday lenders are slammed on reports that Pres. Obama likely will make a recess appointment of Richard Cordray as head of the Consumer Financial Protection Bureau: CSH-4.1%EZPW -4%FCFS -3.4%AEA -7.3%DLLR -3.8%WRLD-3.6%.

    China is building a payment system to make it more efficient for banks to clear yuan across its borders. Officials want to bring down the cost of yuan transactions as part of the country’s push for stronger global use of its currency.

    The value of Chinese companies delisting from U.S. exchanges in 2011 exceeded the amount Chinese companies raised through IPOs in the U.S., a stark sign of how high-profile fraud allegations and slowing growth have made many foreign investors bearish on Chinese groups. The companies raised only $2.2B through IPOs in 2011, about half the 2010 total. 

    Why we are avoiding Defense stocks:  Lockheed Martin (LMT) is downgraded to Underperform at RBC, ahead of a possible cut to its troubled F-35 Joint Strike Fighter program. RBC sees 2012 as a challenging year for the defense sector, with a reduced Defense Department budget plus "persistent uncertainty as to what exactly the cuts will be, and when they will occur." LMT -1.2% premarket. 

    According to reports, U.S. Defense Secretary Leon Panetta will unleash the department’s eight-month review of possible spending cuts on Thursday. Defense industry-related ETFs ITA andPPA have both gained over the last month, but could be tested if the report comes down harsher than expected. 

    Acme Packet’s (APKT -18.4%Q4 bombshell is leading to broad-based weakness in networking equipment names, as the company’s soft guidance and comments about soft demand from North American telcos lead to fears of a weak 2012 capex environment.  JNPR -4%FFIV -3.5%RVBD -2.6%ALU -5.9%ERIC-3.6%.  CSCO -1.1%ARUN -3.8%.

    The alternative energy industry continues to struggle as Danish wind-turbine giant Vestas (VWDRY.PK) dives 18% aftercutting its 2011 guidance and  announcing plans for significant corporate restructuring. The company, along with rival GE, is suffering from slower demand growth, Asian competition, and subsidy cuts in Europe

    Ford (F) will invest $142M to manufacture a new global compact SUV at its Chennai, India plant. The company sold 100K cars in India in 2011, and hopes Asia will contribute 1/3 of its global sales by 2020.

    Maybe it is time to short:  Goldman Sachs adds Chipotle (CMG) to its Conviction Buy list with a lofty price target of $410. Analysts see the restaurant chain operator hitting EPS growth of 35%-40% in 2012 and give a nod to the historical precedent set by other "hyper-growth" restaurant stocks. Shares +0.3% premarket.

    It just gets better and better for these guys:  Collins Stewart is reiterating a Buy and $475 PT on Intuitive Surgical (ISRG) following the FDA’s recent approval of a vessel sealer product for its EndoWrist instrument line. The firm expects the product to boost the average revenue Intuitive generates from procedures featuring its Da Vinci surgical robots. 

    Chesapeake Energy (CHK +0.9%) says it slashed long-term debt by just over $2B over the past year, adding it fully expects to meet its two-year debt-reduction goals by the end of the year, regardless of natural gas prices.

    Hedge fund manager Robert Raymond continues to sounda dire warning bell on the natural gas sector, as he sees an abundance of new capacity coming online in 2012. "Every producer will have to try and survive in a world of low prices, and the high cost producers’ equity values will ultimately collapse." 

    AutoNation (AN -4.4%) dips lower after automobile companies start reporting December sales figures. The firm was seen as possibly benefiting from a jump in consumer spending in the sector over the last month.

    Some tech giants are so opposed to the Stop Online Piracy Act [SOPA] that there’s been talk of a "nuclear option" where firms including Google (GOOG), Amazon (AMZN), Yahoo (YHOO) and eBay (EBAY) would simultaneously go dark to protest the legislation. With the Senate scheduled to debate SOPA on Jan. 24, the blackout would most likely happen on Jan. 23.  

    Apple (AAPLannounces that the iPhone 4S will be available in China beginning on Jan. 13. CEO Tim Cook says customer response in the nation of 1.3B people has been "off the charts."

    It’s worse than you thought. The S&P 500, off 13.6% from the decade’s start to 2011′s end, is turned slightly positive when dividends are included, but Eddy Elfenbein notes inflation was 34.7% over the same time frame – adding up to a real return of -20.7%. The poor performance has been enough to lower the average real return of equities since 1925 from 8% in 1999 to just 6.6% in 2011. 

  47. craigzooka

     jmm1951, you are right, those kind of trades can work in an IRA, however, I am looking to do something that doesn’t require active management.  Think , Phil’s income portfolio, except in an IRA account which has no margin.

  48. Phil

    Wow, lots of news today – and I haven’t even started going over the auto sales (generally disappointing).  

    Very sharp bounce off the lows as the Dollar is rejected at 80.60, which was the Euro holding $1.29 but after a drop from $1.305 – it’s not too impressive.  Copper $3.43 tells the tail and XLF still laying about so no reason to follow the knife-catchers just yet.  

  49. craigzooka

     St. Jean Luc, how do you get that awesome formatting for your your portfolios, I am using google docs to track everything and want to  steal it :)

  50. roro

    Gone again and back to cash……love the hit and run plays. Now I just need to keep working at getting it into my thick skull that I can actually mix ‘hit and run’  with riding nice waves on larger position sizes……….when appropriate of course….
     
    Love it here! Thanks for having me,……

  51. lflantheman

    AAPL port  :   Sell the Jan 415 weeklies for 1.20   =     +20%..

  52. lflantheman

    If you like, you can put a trailing stop on those Jan 415s, but I just sold them at 1.20

  53. Tarpoon88

     Phil, are you still advocating the SONC play into earnings? Is there reason suspect a beat or is it just that you think it is so cheap compared to unchanging fundamentals a few months ago that even if the market turns from here it needs to catch up? Thanks!

  54. Burrben

    lflantheman / THANKS!
    1 more month here in Nicaragua paid for with a little extra to spare for the electric bill.  

  55. jmm1951

    craigzooka/IRA portfolio
     
    I am very excited to see what you will come up with, but is today a good day to open positions? Surely if we are to sell puts to open, then we want a high VIX, or if we want to sell covered calls we want a strong up day when the calls are overpriced. My first move would be to put $100,000 in BND to secure a position in case our broker goes bankrupt and steals the cash from the account. (Just joking.) Having been running an IRA portfolio for less than a year, my feeling is that one would probably do best to pick just a few days a year that offer exceptional trading opportunities and to make very few trades. I also think that if I was to start again, I would compile a list of a universe of stocks and ETFs that I would use for the portfolio that would be industry best-of-breed stocks like CHK, BTU, VLO, MSFT, VOD, AAPL, CAT, GLXW. BRK.B , XLE, XLF, EWZ, etc, and then look for exceptional opportunities to enter them.

  56. lflantheman

    Dontcha just love those weeklies?  Best thing in the world for day trading, just to bring in some extra cash when the market is dormant.

  57. stjeanluc

    Portfolio / Craig – Send me an email at stjeanluc at gmail dot com and I’ll give you editing privileges to the spreadsheet we keep. You can then create your own page by copying one of the sheets we use and modify it as you need. 

  58. Phil

    Good job taking money and running Iflan!  

    Issues/JMM – "While others mentioned the economy" – what planet are these people on?  Santorum is a loon – as a Democrat, I would be thrilled if he were the nominee.  I actually like Romney and wouldn’t be devastated if he won and Ron Paul would be fun but any of the others will force me to seriously consider moving.  I like the breeding angle – it’s very Third-World and a great indication of where this country will be heading if these people get in power.  

    1% rise in the Dollar has not knocked the markets down 1% so either the markets are going to snap later or they are stronger than we gave them credit for. 

    Watch out for EU close in 20 minutes.  

  59. jerconn

    Iflan, just sold those AAPL’s at 1.55, thanks bro, up 56% in less than an hour!  Up til now I’ve been a long term AAPL man but I’m thinking of converting…

  60. ccsincsd

     flan, highlander
    It looks real.  AAPL earnings on 1/24/12.
    Not good news for me.
    I spent a month putting a 50 contract 400/410  BCS together.  Cost basis is ZERO !!
    Used the charts and bought & sold the legs at different times on the highs and lows.  Was pretty cool.  Thought the earnings pop would propel stock above 410 for a $50k win.  Without earnings, not sure it will pass 410.  Was a fun project though.

  61. stjeanluc

    25KP Portfolio / Phil – I started tracking the trades as well, but won’t do in real time. I’ll update the prices and trades at night and post the current position as I do for the other portfolio. I’ll use your prices for the trade prices as they might vary from one person to the other. No trouble at all with the existing spreadsheet. 

  62. pat_swap

    TLT is still weak. another indication that markets will move up?

  63. craigzooka

     @jmm1951,  I agree with you that today is not the best day in the world to initiate a portfolio.  But,  If we don’t put any money to work then it will be a very boring portfolio to follow!  That is why I only put 5k to work in each position.  I HOPE we crash some time soon so I can sell some of that really sweet 40 VIX instead of 25.  But in the mean time if we accidently make some money so be it.  
     
    Also,  everyone has their own criteria for choosing stocks.  The criteria I am using are 
    1.  Implied Vol of at least 40%
    2.  Dividend of at least 2%
    3.  Penny increment options (liquid options market)
     
    That is what it takes to get me to even look a potential stock for the IRA portfolio.

  64. yodi

    craigzooka
    Hi How come you only sell 1 call on you stocks?

  65. Beaufleurs

    Lflan. Great fun stuff on the aapl port. What would you suggest for those of us who want to buy ,after your post, when the price has already changed, in terms of price we should be attempting to get in at ? I’m attempting to trade in my virtual account while I Continue to learn from you and the others. Thanks

  66. Phil

    DMND/Bruce – Thanks.  It’s normal for companies with accounting issues to delay earnings and our trade is for June so no worries. 

    Thanks for update Mampcs.  

    AA Money/StJ – $9.24!  

    FAS Money/StJ – With the Dollar so high and the markets not worse, I think we can assume $13 is still solid and sell 2 Friday $65 puts for .78.  

    IWM Money/StJ – Well we can’t call it any better than that, right?  I guess we can sell one Jan $43 puts for $2 now.  

    In the $25KP, let’s sell 4 FAS Friday $65 puts for .78 ($312).  

  67. craigzooka

     @yodi, woopsy, that was typo, I sold 1 call for every 100 shares of stock.

  68. lflantheman

    Beaufleurs  /  answer post 11:30 am/    Taking my trading style into consideration, if the price is going in your favor, get in.  If against you, don’t get in.   Example:   If I want to buy calls at 1.00, then you see the post when they are .90, then I would get in.  If you see it and they are 1.20, for instance, then you may want to think about it, because if it’s a day trade i’m likey to be taking profits already at 1.20.  If it’s a long term trade, then a late entry is not a problem.   But I’m talking above about a day trade. 

  69. craigzooka

     @ stjean, I hit you up by email.

  70. qcmike

    lflantheman
     
     
    thank you

  71. jmm1951

    Phil/issues
     
    Yes, I was a little tongue-in-cheek about the breeding capacity of potential leaders, but I think there is a very serious point underlying this aspect of our politics. Human beings are actually animals (see Darwin, C.) and may unconsciously select tribal leaders based on perceived biological traits just like pack animals do. Didn’t bin Laden have 50 children, and how about Ghadaffi?
     
    Americans, seen from an anthropological perspective, do value reproductive skills very highly. When my hospital had a new CEO the Hospital Executive Committee was assembled and each member was asked to introduce themselves and say what they thought their greatest achievement was. The majority cited creating their children and/or grandchildren as their greatest achievement. Our head psychiatrist trumped them all by explaining that he did not have a conventional family, but that he had been living with his male partner for 24 years and that they had 3 dogs. He was applauded for this act of daring. No doubt if he had said he was a promiscuous homosexual, it would have been a different matter. (Of course you can say that the references to children is just a modest social convention by which people don’t want to boast about their real achievements in case they appear overly competitive.)

  72. stjeanluc

    FAS Money – Selling the Jan1 65 Put (0.77)

     

  73. lflantheman

    AAPL port:   AAPL wants to ROCK……February calls 410,   10 of them at  19.60.  

  74. Burrben

    Lflantheman / trailing stop
    Yeah, that would have been the t.i.c.k.e.t.  They are now 2×2.02.  Didn’t think of that until AFTER I entered the order, got into FAS Strangle,  then saw your post.  No worries though, a win is a win is a win

  75. craigzooka

     Until I get some of that hot formatting action from StJeanluc, here is a LINK to the current IRA Portfolio.

  76. stjeanluc

    IWM Money – Sold 1 TNA Jan 12 43 put (1.95)

  77. lflantheman

    Burrben….Now THAT’s the attitude!    A win is a win.   Never think " I coulda made more"   That comes from the greed gland.   Always think  "I made money.  I’m happy.  Now where’s the next opportunity?"

  78. stjeanluc

    Portfolio / Craig – You should have gotten an email from Google for the spreadsheet. I have created a page called IRA Portfolio by copying the 25KP portfolio sheet. You should be able to use that as a basis for what you want to do. Let me know if you need any help. 

  79. stjeanluc

    Portfolio formatting / Craig – Also, so you know, I post screenshots, not from the Google Docs files as it’s a mess. I use the Screen Capture extension in Chrome and that works great…  

  80. Beaufleurs

    Thanks lflan. Makes perfect sense.

  81. jerconn

    Iflan – is the idea on the Feb AAPL calls to cover earnings date, since it’s after Jan expiry?  Could possibly play that with the Jan4 weeklies as well…

  82. stjeanluc

    lflan, the portfolio is up to date but I’ll post the trades and position tonight AH. 

  83. Burrben

    Futures
    Does anyone of a recording of the Live Futures demo Phil did from Vegas? I’ve been having some issues with IB trying to scale in and set stops quick enough for the movements of /CL.
    I’d like to see how the "master" is doing it.  If I could wake up every day around 5am, make a few bucks trading futures, make a few bucks managing short term positions, and then have a long term low touch portfolio for most of my holdings, I think that’s a winning proposition.  
     
    If there isn’t a video, I wonder if we could convince PD for a early Xmas 2012 present and he could do a "live" show that we could keep in the wiki? 

  84. lflantheman

    jerconn….you could certainly do stuff with the weeklies.  I chose the Feb calls for flexibility and lower theta.   For example, I may want next week or the week after to convert the calls to a spread and hold through earnings.  Not possible with Januarys, and not likely I’ll do it, but just more flexible and lower theta.  I don’t like to buy straight up calls too close to expiration EXCEPT for daytrading the weeklies.

  85. Phil

    CVX/JMM – They have an $18Bn judgement against them from Ecuador over a spill (chemical, not oil) and that’s probably depressing the whole sector as it’s occurring to these little countries that they can fine the crap out of oil companies and miners to raise cash.  Good observation on counter-trending stocks.  

    Variables/Shadow – Wow, that’s amazing.  We, as a society, are dumber than lab rats – we never learn!  

    That cartoon sums it up nicely StJ!  

    TNA/Mampcs – Well, we sold the Jan $43 puts above for $2 so I like that and you can combine that with the Feb $43/49 bull call spread at $3 for a $1 (if $43 holds) shot at making $6.  

    Goldman/Angel – Not surprising, is it.  Goldman’s former CEO, Corzine, weasels into position at one of GS’s top competitors, wrecks the company and sells the assets to GS.  Sounds like a win/win for Goldman and, of course, Corzine will walk away from it all scott free and you can bet that, once the heat dies down, he will be richly rewarded by some "coincidental" opportunity GS throws his way.  

    80.43, oil $102.50, gold $1,613 ($18s bottoming out at .90 so far).  

    Iran/DC – If they double dare us we will put them on double secret probation!  

  86. lflantheman

    Off line till 3:30 pm.   Good Trading!

  87. jerconn

    Iflan – thanks, for the explanation as well as the trade!  But I’m having trouble swallowing my regret as I watch those weeklies go up today…movin’ on…

  88. yodi

    craigzooka
    A more relaxing way of selling you CC example STX bought 100 stk for 16.67 sold the MAR 15c for 2.24 This gives me a great downside protection as well as a return of 1.9% per month 2.24-1.67 = .57 / 3 month = 1.9% per month

  89. lotter

    Thanks dclark, much appreciated.

  90. Phil

    Dollar/Lotter – I use the (/DX) futures in TOS. 

    Already gone/Angel – It’s all talk.  Imagine how long it would take them to reboot a currency from scratch – total chaos.  Lots of posturing and empty threats all around the Euro Zone.  

    80.40 holding and making a nasty bullish stair-step sort of pattern if they head back to 80.60.  France finished down 1.6%, near the day’s low, Germany down 0.9% and FTSE down 0.5% so I think we can look for a sell-off from here and those DIA puts are still cheap and less risky than shorting oil ($102.50) with all that nonsense but now the Qs are making an interesting short as they run back to $57 so let’s go for 10 QQQ $58 puts for $1.10 in the $25KP with a stop at .95 so risking $150 on the trade.  

  91. angelcur

    i hope your are right about qe3 phil..but you were thinking it would happen last summer.. tell me what has changed i keep thinking they are going to do somehting too..i think they are very committed to europe right now through the swap bs..of course they might note that the spainish cds is up 12% in three days and mb applications are down 9.6% testing recor lows from august..typically fed actions are too late or too early

  92. jrod0725

    Phil, question about the FAS puts in the $25KP as I may be missing something, wouldn’t that require $26K to execute? It appears TOS uses my option BP (no margin) as opposed to my Stock BP (with margin) and will not let me make that trade. Any suggestions? 

  93. dclark41

    Phil
    I forgot about the vaunted “double secret probation”!

  94. craigzooka

     @Yodi, you are correct that your way provides more downside protection.  However, my way returns 8.9% in one month instead of 1.32% per month (you made a mistake in your calculation).  
     
    Here is how you calculate the monthly return in your example, where
    15 = price called away at
    16.67 = purchase price
    2.24= option price 
    (15-(16.67-2.24))/(16.67-2.24)*100/3

  95. Phil

    Good to have you Roro – it takes a village, you know. 

    SONC/Tarpoon – I think expectations for SONC are very low and, long-term, I like them so the retreat to long-term ownership makes it a good all-round play.  SONC has a high p/e (22.5) as they invested in growth but compare that to Cain’s PZZA (28.7), BWLD (25.6), YUM (23) and it’s not so high.  JACK (13.6) is actually my favorite in this space and we just missed a nice dip down below $19 on them, which is what got me to looking around and finding SONC, who are back near their 2009 lows but on track for a 100% increase in profits next year but not in revenues because they changed their franchise model so less total revenues and more profits going forward but allows them to grow faster.  They have 3,500 stores vs. 32,000 MCD’s.  

    AAPL powering the Nas higher – not good for the Qs if AAPL goes over $415.  LULU also going nuts.  NFLX up 4% – big effort to push the Nas higher so if the Dow crosses 12,350, I’d say bear bets are in trouble but Dollar holding 80.40 so far.  

    NKE making new highs too.

  96. craigzooka

     @burrben, sorry there is no recording.

  97. exec

    JR,
     
    I was curious about something when trading IWM.  I notice a lot of big orders go through on TZA in rapid succession.  Do you have a working theory that this would indicate that TZA will be going up or down?

  98. terrapin22

    Phil / HMY – time for a new bull call spread on this one?  Appears to be at low end of its range.  And if QE3 is acoming, this should rocket higher along with gold.  ABX has rallied more on a relative technical basis to almost middle of its range. 

  99. Phil

    Sorry, that was Dow futures in above comment – 13,400 on regular Dow.  

    Patience is a very good strategy for long-term investing JMM.   Good list.  

    Free spread/CCS – OK but what is stopping you from taking the money and running now, rather than waiting to see if earnings beats you?  

    $25KP/StJ – $9?  Not bad for a day, I guess…  8)  

    TLT/Pat – Yep, low TLT means risk on for the markets at the moment but I think the Fed is on patrol at $118 so expect that to hold, which is another reason I’m market bearish at this spot.  

    Good criteria Craig and good point – if you don’t play, you can’t win.  

    Animal instincts/JMM – Well Keynes believed that about the whole economy, right?  Does that mean Octo-Mom should be President?  While I think people like to see "family values" of some sort in their leaders, I don’t think you can look at our Presidential selections and say that they were driven by the number of children they had although, if you want to give an award for breeding capacity – I’d say Slick Willie is the obvious choice, just ahead of Kennedy but, as an Irish-Catholic, Kennedy certainly had nothing to prove in that department.  

  100. yshenhar

    Cutting zeros to better understand the debt situation:

    * U.S. Tax revenue: $2,170,000,000,000
    * Fed budget: $3,820,000,000,000
    * New debt: $ 1,650,000,000,000
    * National debt: $14,271,000,000,000
    * Recent budget cuts: $ 38,500,000,000
    Let’s now remove 8 zeros and pretend it’s a household budget:
    * Annual family income: $21,700
    * Money the family spent: $38,200
    * New debt on the credit card: $16,500
    * Outstanding balance on the credit card: $142,710
    * Total budget cuts: $385

  101. stjeanluc

    You wonder why the GOP keeps on insisting on no taxes on capital gains and dividends…

    Makes sense for everybody except the bottom 80%…

  102. stjeanluc

    25KP Portfolio / Phil – Your picks… but many are long term (I mean more than 1 day) so not surprising! 

  103. ccsincsd

     FreeSpread/Phil
    Hi Phil.  Like you said, getting out now.  Have a ask in at 7.40  I"m just a hair away.  Did not get my full objective, but worked out great.  I’m going to try and create a new one for the Feb cycle as I still believe in a big aapl pop after earnings.

  104. rustle123

    The Rustle Solution to the Debt Crisis:
     
    The country just needs to get a few of those no interest credit cards to put the debt on so we can pay it back interest free and save trillions.  Problem solved.

  105. JRW III

    exec / orders

    Well, I place fairly large orders in 3′s; in general a volume surge can indicate a trend change !!

  106. stjeanluc

    Earning estimates might not be as good as first thought:

    http://www.bespokeinvest.com/thinkbig/2012/1/4/q4-earnings-estimates-trickle-lower.html

  107. yodi

    craigzooka
    The 8.9% on STX In your case you are counting on many birds on the roof as you are looking to be called I do have my bird .57 in my pocket with goog downside protection!!

  108. terrapin22

    Phil / NAK - do u like this one at these levels?  low volume and options don’t look that liquid though. 

  109. craigzooka

     Here is the current PSW IRA portfolio,  Hopefully we go into crash mode some time soon so that we can deploy some more of our capital.
     

  110. craigzooka

    Damnit, it didn’t insert the picture, sorry.

  111. exec

    JR/Trend Change


    Well that’s certainly what happened in this case.

  112. craigzooka

     

  113. Phil

    Hot formatting action/Craig – Please, no pictures!  

    Futures/Burr – I have mentioned before that if people are motivated and one of those people is technical enough to make it mindlessly simple for me, I would be very happy to take time after hours one day to do an on-line futures seminar.  We used some sort of screen webcast thing in Vegas but had problems with the audio or something – that needs to be solved so I can somehow just sit at my desk and have TOS up and running and talk to 100 people while trading.  

    Meanwhile, we’re certainly going to do Vegas again so someone needs to set up a planning committee for that one.  Labor Day the markets are closer (9/3) so that’s a good one this year or Columbus Day (10/8) or Veteran’s Day (11/12), when the markets are open but it’s the kind of weekend people can usually get away for.  I liked last year’s format – Dinner and Poker Tournament on Saturday and classes Sunday with live trading Monday.  

    QE3/Angel – Well the make-up of the voting Fed has changed.  Hoenig did his best to undermine anything on the easing side and he’s gone and George is too new to make that kind of trouble.  Plosser and Fisher never made the kind of trouble Hoenig did and Kocherlakota never says anything and NONE OF THEM are voting this year anyway.  Then there’s the situation, which is deteriorating somewhat (we’ll see on earnings anyway).  As you say, the Fed is too late already but once the Fukushima reverse backlash washes out and the lower numbers begin coming in and the Fed gives up on Congress or the President accomplishing anything – they will be forced to act.  

    FAS/Jrod – According to TOS, it’s about $23K net in a non-PM account but you can cover with $60 puts at $.05 or Jan $40 puts at .10, which would take it down to a $6,000 margin but these trades are not for people who ONLY have $25,000 to their name – this is an aggressive carve-out of a more sensible long-term portfolio.  If you are margin-challenged, I would suggest simply not making the trade – there will be many others.   For small portfolios, margin should not be something you try to get around – it is, to some extent, there to protect you and keep you from risking more than you can afford to lose.  We could wake up tomorrow and the markets could be down 10% on some bank collapse that no one saw coming and FAS could be down 30% at $50 and you could be on the hook for $20,000 from the puts and that’s game over on $25,000 because you don’t have the margin left to cover and roll.  This is why, if you are new to options, it is VERY IMPORTANT to take a few months to paper trade – so you can see what happens to positions over time and you can get a feel for what is appropriate and not for your own trading size and temperament.  

    TLT dead stop at $118.  

    HMY/Terra – We love them at $8, we sold them at $12-15 and, with gold toppy (I think), it’s not a good time to enter them.  On a QE3 announcement, it will be like shooting fish in a barrel picking inflation winners so no need to front-run the trade.  As I said, I think things have to get worse before they get better. NAK is a better speculative gold/copper/moly play at $6.50 and you can buy the stock (as owning a few thousand in 2020 is a good plan) and sell the Aug $6 puts and calls for $2.70 for a net $3.80/4.90 entry.  

    Zeros/Yshen – I like that illustration. 

    GOP/StJ – Yes but that doesn’t even begin to take into account that the top 0.1% earn as much money as the bottom 80% combined.  If you taxed cap gains and dividends the same as wages, the bottom 80% could pay 1/2 as much tax (or we could pay off the debt).  

    AAPL/CCS – Very nicely done.  You could spend $5.20 to roll the caller to the weekly $410 calls ($4.90) and those expire on Friday so even if AAPL is higher, you net at least $10 off the Jan $400s plus whatever premium remains less the $4.90 you’ll spend on the roll.  If AAPL goes lower, those short calls expire worthless and, since the Jan $415s are $7.30, you should be no worse off as long as AAPL hold $400 for the next 48 hours.  

    Earnings/StJ – That’s what I’m smelling.  

    NAK/Terra – Great call (see above).  GMTA!  

    Picture/Craig – Do you have a little image box in on top of your comment box?   If not, then let Greg know to let Matt know that you need an upgrade to be able to insert pictures.  

  114. craigzooka

     @Phil, sorry to bug you, but it appears my ability to post a picture has been revoked.  I tried twice using the "Insert / Edit Image" button on the editor.  Could you poke Greg into seeing what happened?

  115. craigzooka

    How do I let Greg know?  I don’t think I have an email for him.

  116. stjeanluc

    Earnings / Phil – The projections for the Telecom sector are surprising – -15% YoY. Do they take into account the hit that T will take from the T-Mobile fiasco? It’s not like people are not going to use their phones and cable TV anymore.

  117. stjeanluc

    Here  you go Craig…

  118. ccsincsd

     AAPL/Phil
    Thanks.  Man, I wonder when my head will think like that?  I’m getting better, but still don’t see all the alternatives fast enough.

  119. stjeanluc

    Historically speaking, we are not that cheap…

    Especially if earnings are not as good as planned!

  120. angelcur

     as long as the S&P 500 can hold above 1265 bias is to the upside…i may buy into any decline today…  upside target for this move is between 1300-1325….XOM my fav belleweather market…. holding up well today and the broad market should be ok.. \.. maybe it pushes higher one more time – to a new 52 week high…and the market runs higher toward that 1300 target. .. then we get a pullback…just using a compass coz there ain’t no roadmaps 
     
     

  121. stjeanluc

    I think that you have made that point before Phil…

    http://www.nytimes.com/2012/01/04/opinion/bring-back-boring-banks.html?_r=1

    Banks must therefore be restricted to those activities, like making traditional loans and simple hedging operations, that a regulator of average education and intelligence can monitor. If the average examiner can’t understand it, it shouldn’t be allowed. Giant banks that are mega-receptacles for hot deposits would have to cease opaque activities that regulators cannot realistically examine and that top executives cannot control. Tighter regulation would drastically reduce the assets in money-market mutual funds and even put many out of business. Other, more mysterious denizens of the shadow banking world, from tender option bonds to asset-backed commercial paper, would also shrivel.

  122. angelcur

    http://www.ft.com/intl/cms/s/0/cbb499f0-36b8-11e1-9ca3-00144feabdc0.html#axzz1iQSho3hj
    uhoh GS infiltrating Chinese govie?

  123. wappler

    Stjeanluc (et al),
    I’ve been following the FAS Money play that you and Phil have set up and so far it’s been a very nice journey, thank you!
    Based upon the encouraging results I have decided that I’d like to explore this direction a bit further and wanted to see if there is interest from you and/or PSW members to join in on an Options Database development project:
    The objective is to build a database that would identify good candidates for expiration plays or day trading, such as the plays found in Jeff Augen’s books.  I have drafted the initial design of the options data warehouse and have a developer on standby to do more work, but before I proceed I’d like to open it up to the experienced option traders at PSW for initial feedback – after all, this should not be a theoretical exercise, but should give us a great starting point for more weekly/montlhy option plays with stocks other than FAS or AA.
    I seem to remember that a while ago you wished you had analytics on par with Jeff Augen’s at your disposal – how about we give it a try?
    Regards,
    Wappler

  124. jabobeast

    Phil--since it is a slow day.. Could you help me answer my anti-OWS friend who sent this to me to "read"…this should be a lay-up for you ;-)
     
    http://online.wsj.com/article/SB10001424052970204632204577128230588463516.html?mod=WSJ_hp_mostpop_emailed

  125. NF**X

    NFLX – Tempting to short them into earnings now – but I don’t have the stomach. My guess is the “billions of hours of streaming” announcement that caused today’s pop will precede stagnant sub numbers or a modest decline. Have they reported this hours metric before? If so, oh well. If not, it’s weird.

  126. exec

    JR,
     
    Target?

  127. jerconn

    PHil, regarding your early comments this morning, "if DIA crosses $124, we have to cover and roll the longs higher but, for now, I’m expecting 12,400 to put up a good fight (now 12,379),"  – any adjustments to be made at this point?

  128. morxlntway

    Hi Phil – in regard to Jrod’s question about FAS, i seem to recall that there was talk of something in the new year for those with smaller portfolios. Wazzat my imagination?

  129. stjeanluc

    Option Database / Wappler – I think that it would be a great idea, but sounds like a lot of work. I would of course be interested, but I am limited until next week as I am still in Europe with more limited time and resources. 

    Based on my current experience though, I would say, start with stocks that have weeklies. After all, they have one expiration day a week… It worked well with FAS on Friday for example. This should limit the scope of work.

    Let me know what information you would like to get! 

  130. Phil

    Pictures/Craig – Just send him a note at philstockworld dot com and hel’ll get it working.  

    Telcom/StJ – A very large amount of people cancelling services and also huge problems with collections make it a tough sector.  Other than T and VZ, who are both too big to fail, the only one in the sector I like is FTR but even they have had a lot of issues.  With the big guys, the cash flow is enormous, all they have to do is stop building/upgrading for a year and they’re up Billions.  

    AAPL/CCS – 10,000 hours of practice is all it takes!  

    History/StJ – That’s why I like stocks with p/es in the low teens. 

    QQQ/$25KP – Although close to .95, I an not inclined to stop out as I think we’re near the top enough to DD or roll if we have to.  Hopefully not famous last words!  

    GS/Angel – I’m only surprised if they are not.  

    Analytics/Wappler – Interesting but my time is limited.  

    Article/Jabob – First of all, Andy Kessler is a Billionaire fund manager/propagandist, not a "journalist" although he does write books like "Eat People and Other Unapologetic Rules for Entrepreneurs" so as charming a guy as you can imagine.  Why do you make me read whiny claptrap that starts off with "It used to be so cool to be wealthy" – what an ass!  He’s so out of touch with reality that this whole article compares the Super-Rich to the merely well-off.  This is the same idiocy the Fed uses to "prove" there is no inflation – as if the fact that a phone got 90% cheaper offsets the fact that a bag of groceries got 100% more expensive.  Only people who haven’t got a clue what it’s like to live on less than 6-figures a year make statements like this.  

    Essentially, Kessler wants to be able to crush poor people beneath the wheels of his Hummer – like the chariots of old.   It bothers him that he may have to park with the same valet a poor person has access to – what an elitist f*ck this guy is!  I mean really, come on – "Medical care?  Thanks to the market, you can afford a hip replacement.." What about the 50M who don’t have insurance and can’t afford that – are they beneath his notice.  These are the ramblings of a sick, depraved individual who has no concept of what real life is like for the "middle class" and your "friend" who sent you this thinking it proves something only proves that he too is a moron who probably wouldn’t last a month trying to live with a minimum wage job and what it provides – like half people do in this country.  

  131. diamond

    WapplerAvailable Weeklys – CBOE

  132. jabobeast

    Phil--sorry to make you read it but your response… priceless ;-) 

  133. peedlew99

     What is that video from?  

  134. Burrben

    Phil / Future Trading Video
    Phil, I don’t mind taking this task on.  Let me ask you though, is there a real need for a "Live" stream with chat, audio, etc?  I think most of us are interested in "how YOU do it".  Therefore the presentation method might not need to be live with interaction.  It could be recorded, posted in a new topic, and then discussed.  Once we get a small "set" of videos, then we might want to do a interactive session where people could ask you direct questions.
     
    What do you think?

  135. wappler

    @stjeanluc,
    Stocks with weekly options sounds like a good idea.  To get us started several questions come to mind:
    a) What were the selection criteria that made you come up with FAS Money?  We could build a query to scan for similar candidates.
    b) Same for the daily FAS strangle – what are the characteristics that would help us identify more/better candidates?
    c) An idea from Augen’s book: Scan for stocks with a ‘forced’ pin and buy a straddle before Friday’s close – take profit if stocks come back to its ‘natural’ valuation on Monday.
    These are just some ideas to get us going.  The key is to build a foundation that would allow us to run all sorts of analytics, build volatility surfaces, etc.

  136. JRW III

    exec / Target

    I would have thought gap fill (75.05 ish), but it looks as if they will be lucky to keep it above the trend line (now 74.36) !!

  137. lflantheman

    AAPL port:   Sold to close Feb 410s  (10)  for +$400.   Analysis:   I think I can buy them back cheaper another day.   I have no problem with holding, but I’m out for now.

  138. Burrben

    wappler / Option Data
    I think your project sounds interesting, and I’m not sure how much experience you have with Raw option data, either EOD or RT, but the data is dirty dirty dirty.  The HF I worked for traded VolArb only on the US market.  We used the following data providers:
    IVolitility , ORATS, Optionmetrics IVY for RT and EOD data to start.  Each data import had to be worked on by a quant for a few weeks where he would write SAS import scripts to smooth inconsistencies in the data.  Once that was done you had the problem of matching vol surfaces, div data, interest rate data, borrow costs, earnings dates, and vol’s all out of wack due to bad marks, etc.
    We then moved to Activ and Reuters datafeed and thought they would be better…….nope.  Just as bad.  Faster, but not much better.  Then we used Hanweck on top of Activ data to provide time-weighted vol info which allowed us to input custom variables into vol calcs, and account for the non-linear passing of time with respect to decay.  This was the best (and most expensive) solution.
    What I learned over that 8years was what we all know.  Garbage in, Garbagae out.  No matter how good your ideas are of what you are looking for, if what you are looking at is the wrong picture…the result is flawed.  
    I recommend to really put some time into data quality first.  Just my 2C from pulling my hair out with option databases….

  139. Phil

    NFLX/NF – Well, technically, Billions of hours of streaming is an expense if they don’t have the subscriber growth but they are low enough still that I wouldn’t short them.  Hopefully they run back to $180, where they are back to the zone where they would have to have 2Bn subscribers to justify the valuation.  

    DIA/Jerconn- Well we crossed but, as with the Qs, I want to wait and see what sticks for the day.  Yesterday we began selling off at 3pm and, so far, we’re not even back to that 3pm level of yesterday (12,450 on Dow) and AAPL hasn’t popped $415 and the Dollar is still at 80.41 so I need more proof.  

    Smaller portfolios/Morx – I would say if a trade gives you a margin issue – just ask.  It’s easy enough for me to come up with an idea like the one for FAS but mostly it’s best to avoid tying up too much margin and stick with directional bets and covered spreads – just make sure you are balanced overall.  

    No problem Jabob – As I say, you have to go out of your way to read at least 25% things that totally disagree with your viewpoint but sometimes – yuch!  

    Video/Peedle – It was a documentary from years ago.  I remembered the song so I searched it on YouTube but the documentary itself is totally obscure.

    Chat/Burr – Well I have to be able to talk in the very least.  I guess people can type in questions on Member Chat and that would work.  Suddenly it’s "sessions"?  

    FAS/Wappler – I think the problem is (as it is with most "systems") that you are attempting to apply what is a unique situation with FAS.  The underlying XLF is steadier than the premiums paid by the ultra-ETF would indicate and also, the movements of XLF are fairly predictable based on widely (and quickly!) reported news.  Just because some other stock or ETF has weeklies to trade doesn’t mean it will work anywhere near as well as FAS (see IWM Money).  When I originally picked FAS last year, it was after playing with most of the others and deciding FAS was worth doing as a trade we could all follow.  Even then, at some points, this trade was way underwater and we had to fight hard to get it back on track.  So be very careful is the bottom line! 

  140. angelcur

    mccain endorses huntman’s cousin elder romney

  141. lflantheman

    stj….selling price on those Feb 410s was 20.00 .  Thx. 

  142. stjeanluc

    lflan, let me know the sell price for the feb options when you get a chance. I’ll post all the trades tonight. 

  143. stjeanluc

    Jinx…. 

  144. cwan120

    IRA Portfolio / Craig & JMM:
    I was tied up most of the day; just got back and finished reading the comments.
     
    Craig: It’s great!  I’ll begin to look into your trades.
     
    JMM: If you’d like, you can start a more aggressive IRA portfolio.  However, let’s NOT make this into a competition.  Different people want to do different things.  Most likely, I’ll pick some ideas from Craig, and some ideas from you.  If you don’t want to be bothered with tracking your trades, you don’t have to start a "portfolio" per se.  You can just share your trades.

  145. lflantheman

    AAPL:   Many hoping, some predicting, that a dividend will be forthcoming next year. 
    http://business.financialpost.com/2012/01/04/apple-dividend-coming-in-2012-analysts/

  146. diamond

    Phil – CBOE is launching something new to play with:
     
    Emerging Markets ETF Volatility Index (VXEEM)
     

  147. JRW III

    Looking a lot like an island top reversal (if they don’t gap over resistance tomorrow at SPX 1281) !!

  148. Phil

    Dow volume 84M at 3:15 – Are we still on vacation?  If it’s like yesterday, we’ll do at least 42M into the close all down as the clowns who pumped it up off the lows take their money back so they can do it all again tomorrow.  

    Euro still weak at $1.2935 and copper $3.42 and the energy sector will totally implode if Iran doesn’t start nuking the Straight so lots of excitement ahead but – as I said, I’m pretty sure the Fed wants us to end the week high so, when they take us down next week, it all sort of evens out – just like last month, and last year..

    Dow transports rejected at 5,100 is what stopped this rally.  VIX down 3% at 22.29 shows no one particularly worried but also not complacent enough to get us back to 20 – where we were on the 22nd, when the Dow was 250 points (2%) lower.  

    Tomorrow we get Chain Store Sales, that’s a biggie.  ADP also at 8:15 and Consumer Comfort at 9:45 and ISM at 10 (expectations now high) and then Nat gas at 10:30 and oil at 11 – also set up to disappoint the bulls.  Friday, as I mentioned, is a Fed-A-Palooza, which will likely take us higher as the doves weigh in so, if there’s going to be some selling – it should occur between now and tomorrow morning.  

  149. cwan120

    Phil: The DIA $121 Jan puts in 25KP, continue to hold?

  150. Phil

    VXEEM/Diamond – No thanks!  Holy cow that’s a crazy idea.  

    DIA/$25KP, Cwan – Yes, nothing to change my mind on those today.  Don’t forget a lot is hanging on Merkozy meeting and it’s doubtful anything will come of it tomorrow so could be big disappointment and then we have sales data where expectations have been pumped up and are not likely to be met.  

  151. rpme

    Phil, I was reviewing and looked at your Santa Inflation Hedges, xhb, xle, dba, xlf, are all on track. This is amazing considering the Fed says no inflation.

  152. jerconn

    PHil, sounds like lots of negatives coming up, maybe DD on those DIA 121 puts?  They were only 5 in the 25K…

  153. Burrben

    Stjeanluc / FAS Strangle
    Would you recommend that we close the puts and let the call ride?  Looks like the puts are up 55% with the calls being down -120%

  154. stjeanluc

    FAS / Burrben – You stole my post… I will close the put today and let the call side ride. I like Phil think we’ll be lucky with the calls tomorrow. And in any case, tomorrow we will get new strikes to roll to if we need to.

  155. yodi

    FAS same applies in the Phil play put is down to .30

  156. stjeanluc

    FAS Strangle – Buying back the FAS 63 put for a 74% win. We will ride the 71 calls overnight. I think that they should be OK, and they should roll to something like 75/76 next week and 80 in January so no big deal!

  157. stjeanluc

    From Barry’s site – what is predictable in 2012…

    http://www.ritholtz.com/blog/2012/01/2012-the-predictable/

    Some good ones:

    The usual suspects will goose stocks and commodities near month end to game performance.
    The usual suspects will manipulate stocks, gold, oil and silver near derivative expirations.
    The usual suspects will try to manipulate S&P futures and stocks during the last hour of trading.
    The usual suspects will manipulate S&P futures after Asian trading closes.
    The usual suspects will buy S&P futures on Sunday night to front-run the expected Monday rally. 
    When stocks rally most fin media outlets will attribute the gain to optimism on Europe.

    When stocks decline most fin media outlets will attribute the drop to pessimism over Europe.

    Late afternoon bullish rumors and stories to boost the NYSE close will appear.

  158. angelcur

    my favorite play is breaking out today..take a look at it they just made an acquisition that is worth about 12 dollars a share (conservatively ) and no one has caught on YET..i know this company very very well..MIL

  159. Phil

    12:41 PM European shares give back a portion of early 2012 gains as Unicredit completes a major capital raise, but at great cost to existing shareholders. Stoxx 50 -1.4%, Germany -0.6%, France -1.3%, Italy -2.1%, Spain -1.7%, U.K. -0.4%. The euro tethers itself to "risk" again, jiggling about with each move in equities, -0.9% to $1.2936.

    3:00 PM On the hour: Dow +0.12%. 10-yr -0.15%. Euro -0.87% vs. dollar. Crude +0.3% to $103.27. Gold +0.86% to $1614.25.

    "The principal of an (Iranian) oil embargo is agreed. It is not being debated anymore," says an EU diplomat. Traders expect Iran will find buyers for the roughly 18% of its crude that now goes to the EU – most likely in Asia – but will need to offer substantial discounts. Expectations of such a move have already hit the rial, which is off 40% vs. the dollar over the past month.

    "We are on the verge of a disastrous recession," ChartProphet predicts. The reason for the doom: unsustainable emerging market growth; the eurozone; Middle East upheaval; commodity prices that signal contraction; and overvalued tech plays. Still, a "fully directional bet at this point is almost foolish," ChartProphet writes. 

    Janney downgrades MasterCard (MA -3.7%) and Visa (V-2.2%) to Neutral, predicting consumers will continue to reduce their debt this year and create a "sluggish" environment for growth in credit card companies

    Expectations are fairly low heading into earnings season: Bespoke claims the consensus Q4 earnings growth forecast for S&P 500 companies now stands at just 6.2% Y/Y, down considerably from September levels. Energy companies, bolstered by high oil prices, are expected to post the strongest growth of any sector (21%), while telecom companies are expected to deliver the weakest performance (-15.4%). 

    The Fed gives us more transparency, for the 1st time releasing the results of its monthly survey of primary dealers. The answers are a month old and show 60% of the group believes it will be 2014 before the first bump in the Fed Funds rate, with an intrepid 3% predicting a rate hike as soon as H2 of 2012. (pdf)

    The EFSF is set to test the markets again this week with a€3B bond offering. The sale is going ahead even with concerns the fund could lose its AAA rating should the S&P move ahead with the oft-rumored downgrade of France. The last €3B was something less than a resounding success. Remember, the EU would like the EFSF to eventually reach €1T in firepower. 

    Action on the short end of EU sovereign debt curves – Italian 6-month yields diving 100 bps to 1.7% in 2 weeks – provides evidence the ECB’s LTRO is having great effect, with banks happily taking 1% central bank money and playing the carry trade. It’s an indirect form of QE says SocGen and perhaps explains euro weakness in the face of renewed "risk" appetite.

    Ireland’s 2011 budget deficit comes in at €24.9B vs. €18.7B in 2010. Tax receipts rose to €34B from €31.7B. The pop in the deficit comes from "non-voted capital expenditures," which rose from €2B to €11.9B – this is taxpayer money used to keep the banking system afloat. (pdf

    "Greece, in March faces the immediate risk of a disorderly default," without additional rescue money, says PM Papademos, speaking to a group of business and union leaders. He also tells those assembled that Greeks must accept a fall in income to stay in the euro.

    Reuters reports, former Greek PM Papandreou indicates he will step down as PASOK party leader and not run for re-election.

    Switzerland’s Federal Council, which elects the SNB’s governing board, expresses its "full confidence" in bank Chairman Philipp Hildebrand following disclosures about his wife’s currency trading. An examination found no evidence of "problematic" transactions revealing the use of insider information. - What was that, like a 5-hour investigation?  

    Er, hello?!?  Italy’s Unicredit (UNCFF.PK) continues to slide, off 13.5%in Milan, as word emerges just 24% of shareholders took part in today’s €7.5B share offering, despite it being priced 69% below Tuesday’s closing price.

    Though the market just shrugged its shoulders at the hefty$18B judgement leveled on Chevron (CVX -0.1%) by an Ecuadorian court for a long-ago chemical spill, Oppenheimer analyst Fadel Gheit speculates the company may have to pay out a settlement of $2B-$3B to avoid protracted collection efforts all over Latin America and Europe. "When the dog keeps on barking and barking, eventually you have to throw it a bone."

    The effects of constraints in U.S. military spending could soon be felt in Wichita, Kansas, where Boeing (BAplans to close its defense operations. Around 2,000 workers could lose their jobs as Boeing moves work on its aerial-refueling tankers to Washington state.

    China’s government orders satellite broadcasters in the nation to curb "excessive entertainment" under a new order that became effective on Jan. 1 to attempt to thwart the influence of Western culture. A report from a media watchdog tallies the drop in entertainment-related shows following the directive to 126 from 38.

    File under interesting legal defense but bad PR: Attorneys for PepsiCo (PEP +0.4%) fighting a legal battle against a man who claims to have found a dead mouse in a can of Mountain Dew, puts forth the disturbing theory that the case is without merit because the firm’s drink would’ve dissolved the dead mouse before it could be found.

    In the same therme:  Farmers and the food industry ask the Obama administration to ease coming federal guidance that will advise consumers to minimize their intake of dioxins, chemicals that may be harmful at certain levels. "Nearly every American – particularly young children – could easily exceed the daily [dioxin limit proposed by the EPA] after consuming a single meal or heavy snack," the food groups say in a letter. 

    More environmental abuse – don’t worry, if you vote Republican all these problems will go away (or at least be ignored):  A rise in small earthquakes in areas where fracking occurs is causing increasing concern, with a 4.0 New Year’s Eve quake in Ohio prompting officials to close five wells. A thorough seismic survey could detect quake-prone areas, but it costs $10M and the apparent link between fracking and earthquakes is not yet conclusive.

    Gaming firms are caught in a quandary over their initial support over the online piracy bill – called SOPA – up for debate in Congress later this month. Though industry players such as Nintendo (NTDOY.PK), Sony (SNE -0.8%), Electronic Arts (ERTS -3.3%), and Entertainment America are publicly siding with the "free Internet" crowd to avoid a customer backlash, privately the firms support the bill through lobbying groups aiming at preventing rogue firms from stealing IP and customers away.

  160. jmm1951

    SONC
     
    Has anyone seen their restaurants, or eaten at one? I did, once. They are the pits of the pits of the pits. So they are bound to make a lot of money.

  161. Phil

    Fueled by strong iPad (AAPL) and Kindle Fire (AMZN) demand, tablet shipments totaled 72.7M in 2011, estimates DisplaySearch - up 256% Y/Y, and well above some prior forecasts. Notebook shipments, which were dinged by the tablet market’s growth, are believed to have nonetheless increased 12% Y/Y, to 187.5M units.

    More grist for the Apple (AAPL) TV rumor mill: A "source who worked at Apple" tells USA Today Apple is thinking of building a "42-inch or larger" TV set, and that design chief Jony Ive has a "slick 50-inch TV" at his studio inside company headquarters. But unsurprisingly, multiple sources claim Apple has thus far failed in its attempts to secure deals to offer top TV shows on an a la carte basis.

    In a stroke of good-timing, the iPhone 4S goes on sale in China a mere 10 days before the widely-celebrated Chinese New Year. Still unanswered about the launch: Will China Unicom (CHU-1.1%) hold on to its exclusive status as the only AAPL carrier or will rivals China Mobile (CHL -0.6%) and China Telecom (CHA -1.5%) gain access? Right now, CHL is the market share leader with 70%, compared to 20% for CHU and 10% for CHA.

    Chrysler (FIATY.PK) Dec. U.S. sales: +37% Y/Y to 138,019 vehicles. Jeep +41%, Dodge +28%, Ram Trucks +10%. For the year, sales +26% to 1.37M, the largest gain of any U.S. automaker. (PR)

    Ford (F) Dec. U.S. sales: +10% to 210,140 vehicles, vs. +7.7% consensus. Cars -14.9% to 55,215: Fusion -4.5% to 21,622, Focus +12.1% to 14,281. Utilities +16.2% to 62,252: Escape +36.8% to 25,574, Explorer +37.4% to 13,872. Trucks +27.8% to 92,673: F-Series pickup +24.4% to 68,278. (PR

    GM (GM) Dec. U.S. sales: +4.7% Y/Y to 234,351 vehicles, vs. +4.4% consensus. Chevrolet +8.9% to 161,158; GMC -0.5% to 41,960; Buick -12.4% to 14,974; Cadillac -2.7% to 16,259. (PR)

    Honda (HMC) Dec. U.S. sales: -18.8% to 105,230 vehicles. Honda division -19.3% to 92,101: CRV -6.7% to 21,586, Civic -27.3% to 20,545, Accord -40% to 17,667. Acura division -15.2% to 13,129. Total car sales -29.4% to 51,485; trucks -5.2% to 53,745. (PR)

    Hyundai (HYMLF.PK) Dec. U.S. sales: +13.3% to 50,765 vehicles. Sonata +8.6% to 17,340, Elantra -0.5% to 13,025, Accent +90.9% to 5,316. (PR)

    Kia (KIMTF.PK) Dec. U.S. sales: +42.5% to 43,390 vehicles. U.S.-built vehicles: Sorento +8.8% Y/Y to 10,663, Optima +244.6% to 10,704. (PR)

    Nissan (NSANY.PK) Dec. U.S. sales: +7.7% to 100,927 vehicles. Nissan division +10.7% to 89,937: Altima +12.9% to 25,976, Rogue +18.6% to 12,286. Infiniti division -12.1% to 10,990. Cars +2% to 54,565; trucks +27.5% to 35,372. (PR

    Toyota (TM) Dec. U.S. sales: +0.4% to 178,131 vehicles. Toyota division +1.9% to 152,776: Camry +7.3% to 33,506, Corolla -4.8% to 21,009, Prius +8.7% to 17,004. Lexus division -8% to 25,355. Total cars +4.4% to 95,726, total light trucks -4% to 82,405. (PR)

    Volkswagen (VLKAY.PK) Dec. U.S. sales: +36.2% to 32,502 vehicles. Jetta sedan +18% to 12,422, Passat sedan +3,745% to 6,884. (PR)

    Three lunchtime reads:
    1) 10 themes for 2012: interest rates, the election, Europe and more
    2) The 5% yield solution
    3) The 2012 recovery: Handle with care

  162. Phil

    Inflation/Rpme – And this isn’t anything compared to what will happen once the economy bottoms out.  They have pushed to much cash into the system that, once it starts moving, it will create monstrous inflation. 

    DIA/$25K, Jercon – I will DD if we get a good price tomorrow but you never know what will happen overnight so not worth upping the risk.  You’ll notice I’m more conservative until we’re ahead and then I’m willing to take more risks over time.  

    LOL StJ – Very good Barry post.  

    MIL/Angel – Wow, that is a big move.  Last 3 days too.  

    SONC/JMM – When they first opened by me, they had huge lines of cars so it took me a long time to even try them.  In the end, nothing special but not worse then McD’s and, as you say, low quality plus a hook = profits.  To some extent, their serve in your car thing makes them less profitable as they require more real estate per store but then I look at them as sort of a REIT where they are breaking even or better and paying off thousands of acres of commercial real estate and that makes me like them more (as a LONG-TERM investment).  

    Nice flat finish to the day – could have stayed in bed overall!  

  163. jmm1951

    cwan120?IRAs
     
    I have no interest at all in competing with anyone on IRAs. I am delighted to be able to steal ideas from Craigzooka. I don’t think I want to start another portfolio as I already have a real one, but I am always interested in discussing ideas on how to make margin account trades work effectively under IRA rules, or any tricks that people have for enhancing IRA trades.

  164. zeroxzero

     Editorializing on Bestbuy:  I don’t know what kind of numbers they’ve been putting up, but 1/ I went to one twice in Salt Lake City a few months ago, and it was about the worst-managed store I have had the misfortune to visit.  It had lots of young workers standing around doing very little, no engagement at all with customers.  I asked two or three a few simple questions, they all went off somewhere to get answers — and none came back.  At the checkout — I found stuff on my own — it was a comedy of incompetence, simple to accept money – could find the "codes" for the products, etc.
     
    About the worst, but not the worst.  That would be the Bestbuy in Miami yesterday.  Even more workers, all young, all dumber than a mud fence, and all standing in groups talking and utterly ignoring all customers.  Believe me, I am the least demanding client imaginable, but seeing six youths standing around texting and bull-ing with their backs turned quite purposefully to anyone that walked by – not a manager of any kind in sight — was enough to convince me that their stock price’s one-year trip from $36 to $23 hasn’t dropped nearly far enough.  Zero sounds about right.  There is no pique in my comments, but purely a wish to find the most vulnerable possible company to short, in what looks to be a more-than-anemic U.S. equity market.  If anything can offer up a reason why this is a bad idea, I’d be happy to hear it.

  165. wappler

    @Burrben/Option Data,
    Thanks so much, that’s exactly the kind of feedback that I am looking for.  I was aware that there were some issues with data quality, but did not know it was such a pain in the neck.
    For the proof of concept I am planning to use data from TradeStation, which I hope is good enough to get us started. In case the Options DB has legs, in his book ‘Trading Options at Expiration’ Jeff augen recommends Tick Data of Great Falls, Virginia.  Ever heard of them?

  166. angelcur

    MIL..yes those reserves have a npv of about 2 billion dollars or 30 bucks a share..company hates carrying goodwill… 6 months til cash flow postivie on this acquisition..obscene

  167. stjeanluc

    Flat Finish / Phil – The option seller’s best friend…. 

  168. wappler

    @Phil/FAS,
    LOL, I should not have said that I wanted to find a substitute for our FAS Money play – this was just meant to be an example.  U would not want to get rid of it, I love it way too much!
    The idea is to build something that is not readily available to us retailers (at least not that I’m aware of).  Something that allows you to analyze the universe of stock options to give you an edge in the market – over/underpricing of options that lead to a potential low risk trade. 
    As an example, I am not sure how you manage to find the time to come up with our recommendations every day.  I assume that you look at TOS, going through your list of favorites, until you find a strike/expiry date that seems overpriced and that you would sell puts on.  Wouldn’t it be nice if such a query could be at least partially automated – maybe a prepare a list of potential candidates for your review to save you some time with the initial search?  Now, to codify the search rules that are currently ‘in your brain’ would require some effort, but if it saved time, wouldn’t it be worth it? 

  169. stjeanluc

    Database / Wappler – Phil already answered for FAS as he is the one who picked it originally. I extended the experiment with the strangle porfolio. I would say that most 3x ETF should work well, the only difference being the instrument price. FAS is currently around 65 so you a nice selection of strikes for a 10% strangle and the options prices make it interesting as you don’t have to trade 100 contracts to make money!

    FAZ, the opposite of FAS should work as well, but doesn’t seem to be traded as much. I tried a couple of TZA strangles and that was OK. But TZA is already at 25. And no weeklies on TNA for some reasons. And monthlies don’t work as well as they seem to price the lower overall monthly volatility. I am sure we could make some plays on that as well, but time is the problem.

    What I did also was a volatility analysis of a large basket of stocks to give me a list of stocks and the corresponding weekly volatility. You could go with stocks like NFLX, WYNN, FFIV and some others. They have some nice premium and their prices give you some nice strikes to play with. The problem with individual stocks though is the risk as compared to indices. Yes, you have lower margin requirements than the 3x ETF, but you have to deal with news, earnings and many other factors, not counting the possibility of a takeover or BK!

    If you have a programmer that can deal with large amount of data and is somewhat familiar with statistical studies, you could run a walk-forward analysis on all the weeklies that should give you a price projection 5 days ahead based on historical data and sell a strangle based on that. That was going to be my next idea, but I don’t have the resources where I am now! I have some analysis tools at home that I plan on leveraging later this year. 

    These are some quick thoughts!

  170. jmm1951

    Zerox/BBY
     
    It often seems to me that supermarkets have nice displays of fruit and vegetables for show, but really they make the money off cigarettes, and lottery tickets. Best Buy looks like an electronics store, but really they are in the business of selling extended warranties, service contracts, and cell phone contracts, plus computer repairs or virus removal via their Geek squad.
     
    I agree that most of the sales associates in the stores are useless. I find it annoying that the best deal on computers is never actually in stock, just on display, or that they don’t open in the morning until the slacker generation has had ten hours sleep.
     
    On the other hand, I did get my excellent Toshiba laptop there for a very reasonable price and was able to find a Cradlepoint router that will take input from a wireless Internet USB stick and convert it into a WiFi signal so that you can run multiple devices off it. Of course I had to torture the sales guy to get them to admit that they had it in stock, but that is normal these days, as they don’t want to sell you anything if you don’t look like an extended warranty kind of guy.
     
    I’ll tell you what BBY reminds me of. In the early to mid 1980′s the economy was very depressed in Britain. I was working overseas and making lots of money. When I visited Britain I would go shopping with hundreds of pounds in my pocket and find it almost impossible to get anyone to sell me stuff because they assumed that no one had any money. You would ask to look at something expensive, and they would try to show you something cheaper. BBY is like that. You can go in with a pocket full of hundred dollar bills, wander around for half an hour and leave with your stash intact.
     
    Here in the Dominican Republic you will get the attention, and the sales guy will arrange for a friend of his to deliver your new fridge for free, and then he will ask you for a tip for good service. No extended warranties, though. Not sure which system I prefer.

  171. stjeanluc

    After all these "stories" being told about Obama’s big government in Iowa, some perspective!

    Not what we have heard…

    24editorial_graph2-popup

    Sources: Congressional Budget Office; Center on Budget and Policy Priorities 

  172. elliotteldrich

  173. stjeanluc

    Here is the latest AAPL 50k portfolio status with today’s trades:

     

  174. stjeanluc

    All the portfolios are now up to date on the spreadsheet – we are now tracking 6 different portfolios as the 25KP and Craig’s IRA portfolio are now in their own pages. 

  175. barfinger

    BBY: I have bought three laptops from them in different cities, Rochester NY and Ft. Myers FL. I know what you mean about the extended warranty BS, but after I growl at their offer, they are smart enough to STFU. I have explored the TV department and the Home Theater area, and found the staff to be reasonably alert. Do you actually expect more?
    CompUSA store in Ft. Myers does not have those problems because the staff is 100% commission. Lack of attentiveness is not a problem at all.
    Dare I suggest that the weekly SPX strangle is a good choice? Been doing weeklies for five months, and I vastly prefer that to the monthlies I did for many years.
    Strangling anything allows you to sell premium on both sides, and I have never seen any strangle strategy fail over an entire year. I must say that AA is a bad choice, but I did mention this before.
     
    I believe it was chaps that suggested the legal dodge that enabled IRAs to own normal accounts, and therefore, do strangles. There’s where the money is :)

  176. Burrben

    Wappler / Data
    I have heard of them, and they do clean the data and apply many of the processes you need.  Such as corporate action processing.  But they don’t supply Vol’s, which my firm always needed.  
    Here are the fields that they provide.
    http://www.tickdata.com/support/options-data-support/options-data-faq/
     
    Maybe take a look at Orats Scanner tool.  It’s web based and is pretty useful.  We used to have a corporate subscription, but I don’t have access to it now.  I sent them a email, but I haven’t heard back yet.
    http://www.orats.com/tools/?tool=scanner

  177. csaw2

    "Hackers plan space satellites to combat censorship"
    http://www.bbc.co.uk/news/technology-16367042

  178. cwan120

    Hey, barfinger,
    I am having fun with strangling the SPX weeklies, as well!
    What’s that "legal dodge of IRA to own a normal account?  Did you work it out so you can trade strangles in IRAs?  I’d appreciate it if you can elaborate.  Thanks!

  179. wappler

    @stjeanluc,
    "If you have a programmer that can deal with large amount of data and is somewhat familiar with statistical studies, you could run a walk-forward analysis on all the weeklies that should give you a price projection 5 days ahead based on historical data and sell a strangle based on that. That was going to be my next idea…"
    Stjeanluc, how about joining forces to develop the above walk-forward analysis?  It’s your idea and I can bring the resources to bear to get it implemented.  Let me know, if you’re game and we can sit down and do a requirements analysis!
    Bonne soiree, laissez-nous continuer demain!

  180. zeroxzero

     Jmm/Barfinger — Thanks for your comments.  I, too, bought an excellent Toshiba laptop last month — at the Manhattan U.West side BBY.  The sales people were more alert, by an order of magnitude, but .01 squared still ain’t much.  I wondered why there was so much extended warranty discussion in SLC — now I know.  I actually did get a Geeksquad setup + virus package in NY, no Xtended warranty, on the Toshiba, since I needed it to work asap and didn’t have time to load the software.  It did seem to make them happy.  Yesterday’s Miami session was ridiculously bad, inspiring my short idea, and I do wonder how much of a future BBY has pushing that stuff, but it’s a reason to be cautious.  Maybe a long/short paired with Amazon could work.

  181. sparky123

    exec, bar,
      I have purchased Laptops at BBY, but the last one I wanted, I ended up buying at Staples, cause BBY didn’t have it, and other items, a camera, and smaller stuff I ended up buying on Amazon, cause BBY didn’t have them either-- so I sold BBY and sold puts on Amazon, and earlier had sold puts on Staples. So I’m out of everything at a profit, but really at the moment I’m foggier than ever about what will happen next.

  182. sparky123

    sorry zero,
    i guess i’m foggy about who i’m talking to as well.

  183. barfinger

    http://www.youtube.com/watch?v=n4s4hW-oGZ0&feature=related
    What we all face.

  184. jmm1951

    Interesting article here about extended warranties, service contracts, etc.:
    http://www.popsci.com/gear-amp-gadgets/article/2009-01/ugly-business-extended-warranties
     
    "Back in the day when I was a commissioned sales associate at a large chain electronics store. (I won’t say who, but let’s suppose their initials were "C.C.") The commission paid to us for a $50 cordless phone would have been about $3-$4. Add on $25 for a 3 year "Extended Service Agreement" and my commission would be an additional $7-$8. $4 on a $50 sale, or $12 if I could convince the customer to pay $75 for the same product. Now you tell me where the store makes it’s money!"

  185. barfinger

    http://www.youtube.com/watch?v=_rYgsTVtbb0&feature=related
     
    and my rowing machine inspiration.

  186. diamond

    stjeanluc – IWM Spreadsheet correction:
     
    TNA Jan 12 43 Put $1.95 (sold today) is correctly listed under "Current Position Recap" … however, it is missing from (above that section) where you list the total "Short Option" history. 
     
    I realize that it is no big deal, but I thought you might want to know.

  187. ceegee

    Someone posted a link to an article during last week, that included a list of 100 high div stocks with PE’s low compared to historcal PE’s – I can’t find that link though and I lost the bookmark to the article. Can anyone help…….?

  188. revtodd64

     Craigzooka – Thanks for posting your IRA trades.  This is my favorite IRA strategy and I tend to do monthly trades as well, but on stocks with lower volatility and return.  You have great ideas and I may mix some into my IRA.  Right now I’m playing more conservative and looking at Feb covered calls on the following.
    NUE  $41 calls – 4.6% if called
    EMR $48 calls  -  3.9%
    MDT $38 calls -3.3%
    ITW $47.50 calls -3.2%
    I’m sacrificing return for safety on these, but they are great dividend stocks that are all trading at decent values right now.  As I feel more bullish, I think I will mix in some of your higher return positions.  Thanks for posting.  I will follow with great  interest.

  189. BertII

    Phil
    This isn’t from fracking they were caused by the waste injection wells which is in part fluid from oil and nat gas drill sites
     
    More environmental abuse – don’t worry, if you vote Republican all these problems will go away (or at least be ignored):  A rise in small earthquakes in areas where fracking occurs is causing increasing concern, with a 4.0 New Year’s Eve quake in Ohio prompting officials to close five wells. A thorough seismic survey could detect quake-prone areas, but it costs $10M and the apparent link between fracking and earthquakes is not yet conclusive

  190. sparky123

    Bar,
    One pill makes you smaller and the other makes you tall, and the ones your mother gives you don’t do anything at all, but i’m up, and i’m down and i’m in, and i’m out, and I had a pretty good year, but now I’m filled with doubt. Cause the stakes keep getting higher, and i really don’t want to play, but the red queen keeps printing dollars, so here I’m forced to stay. I asked Alice, but she wouldn’t say…..     

  191. barfinger

    Sparky, I get it. Sometimes the Thorazine seems like the better choice. And Alice doesn’t know squat.

  192. zeroxzero

     Nice poetry, sparky — Playing these markets is definitely like chasing the White Rabbit — the only safety lies in feeding your head on a constant basis, and even that is cold comfort in a bewildered world.
     
    From the WSJ, Dec.29:  "The Federal Reserve last week announced its new "Enhanced Prudential Standards and Early
    Remediation Requirements" for big banks, as required by the Dodd-Frank law. You have to pity the poor
    Fed because it faces an impossible task.  The Fed’s proposal opens with an eloquent ode to the evils of too-big-to-fail and moral hazard. And then it spends 168 pages describing exactly how it’s going to stop any large financial institution from ever
    failing again….
     
    How does the Fed address [the problems cited]? Read the 22 pages of overview with 39 separate explicit
    questions. Translation: Help! We have no idea how to measure and regulate "credit exposure" for
    modern banks.  http://faculty.chicagobooth.edu/john.cochrane/research/papers/Fed_Mission_Impossible_WSJ.pdf

  193. sparky123

    plus the money multiplier in europe is apparently dead so all of that "QE"  is going nowhere. my head is stuffed, i can’t feed it anymore. 

  194. zeroxzero

     Sparky: On multiplying money:  " The European Central Bank has been buying Greek, Italian, Portuguese and Spanish debt. It has been lending money to banks that, in turn, buy the debt. There is strong pressure for the ECB to buy or guarantee more. When the debt finally defaults, either the rest of Europe will have to raise trillions of euros in fresh taxes to replenish the central bank, or the euro will inflate away…Defenders think that devaluing would fool workers into a bout of “competitiveness,” as if people wouldn’t realize they were being paid in Monopoly money. If devaluing the currency made countries competitive, Zimbabwe would be the richest country on Earth."

  195. Burrben

     Phil / Futures Video
    I think I found a good solution for us.  There is a new company in the space called MeetingBurner who hosts their software in the cloud.  There is no fee and no ads.  They will allow up to 50 participants at one time, and up to 500 if we make a special request.  The software will run on both Mac’s and PC’s, and it’s Java based.  Instead of dealing with computer webcam audio, they give us a landline conf # and passcode.  The video can be recorded and shared with non-participants, and also uploaded to our website, youtube, etc.  People who attend the meeting DO NOT have to register, all they need to do is click on a URL to enter the meeting.
    I setup a account and hosted a "meeting" myself this afternoon.  The process was very simple using Chrome, and they have step by step, on screen instructions for even the most challenged.
    http://www.meetingburner.com/
    I would suggest that you setup a free account, get TOS ready, login and launch a meeting, start the java based desktop sharing application, click record, have someone join the meeting and the stop a few minutes later.  They will encode your recorded meeting and have it ready for viewing in about a hour from the end time.  If that works to your satisfaction, then we could set a time a place for a larger test audience, or just "go for it".  
    Let me know what you think.  Everything else charged at least $50/mo+ for 50 people, and some required a longer contract.  I really think this is a good start.  

  196. lvmoda

     Burrben,  the solution we used in las vegas was http://www.join.me and seemed to offer similar features as the solution you have found(also free).  The problem that day with the audio was that somebody dialed into the landline conference call and did not mute their phone which caused a lot of noise on the line.  After scrambling to upgrade to their ‘pro’ service which allowed auto-muting of participants, everything went smoothly.   I think international call-ins or possibly speakerphones caused the line noise issue…just something to be aware of.

  197. wappler

    Burrben,
    Thanks for the info ORATS – you mentioned you had a corporate subscription:  How was your experience with the option scanner tool?  Regarding Tickdata, you mentioned it didn’t supply Vol’s – are you referring to volatility?  I don’t think you mean volume, which they supply, at least according to their website.

  198. Phil

    Good morning!

    Hang Seng up 0.3%, Shanghai down 1% and Nikkei broke the tie by falling 0.8% but BSE up 0.4% so mixed over there.  

    Dollar at session low of 80.40 at 3am and oil back at yesterday’s high at $103.70 so oil (/CL) makes a nice short below $103.75 here but DANGEROUS pre-market trading as Iran could spout off at any moment and the trading is VERY THIN.  

    So that brings us back to the good old Dow (/YM) futures at 12,350 and they are just over that line at 12,351 but that’s the short of the moment as long as the Dollar is over 80.40 .

  199. Phil

    Wheee – fun ride in oil down to $103.29 already so .10 trailing stop and the Egg Mcmuffins are paid for!  That’s how fast we like to take the money and run.

    Oops, $103.24 so I guess I should mention that, at this point, with each additional .15 drop, you can expand your trailing stop by .05 so you capture at least 2/3 of all additional drop while reasonably widening your stop to reflect the .50 drop (where a .10 retrace would not be bullish).  Usually, once the stop hits .30, I’m going to cap it because it is a big deal if oil makes it through one .25 level and then the next.

    Now we had a sharp bounce at $103.20, which is expected on a .50 fall, and we’re at $103.30 (.10) and, so far, not over that line so I put a hard (mental) stop at $103.31 and – oops, there it is!  

  200. Phil

    80.445

    Now we are rooting for $103.50 so we can go short again but won’t happen with the Dollar running up so now willing to play the cross below $103.25 as well as watching to see if $103.40 is making a top (40% retrace failing is sigh of weakness as that’s a 38% Fibonacci retracement).   Of course, it’s kind of silly to assume Fib numbers hold up in such thin trading but, if we are playing against algos – then that’s exactly how they are programmed!

    80.435,  $103.35

  201. Phil

    80.435, $103.35

    So while oil drifts around inside my range, we look out longer and we see that, at 10:30, the Dollar was at 80.46 and oil was at $102.85 so we do feel good about shorting it here and I don’t see any new Iran news.  The problem with 3am as opposed to 4am is Bloomberg isn’t obsessed with Iran like CNBC is so something could happen in Iran and we won’t know it until the price of oil jumps on us.  

    And there goes $103.25 so game on again! 

    $103.15 and 80.48 so confidence in this move so far.  

  202. Phil

    So our goal here is $103.85 but, of course, it would be strange not to get a bounce at $103 and $103.10 is a 20% overshoot of the .50 drop so that should hold if we are decelerating normally.  Since we have a very nice profit on first one, no need to be nervous here and we’re not playing to win a nickel so we see how the $103.10 line holds and plan to stop out even if we have to (on the way to a better/higher re-entry later).  

    Woops, there goes $103.10 without a stop so now $103 is the next test and, below that line, we can add another round and that drops the average entry to $103.125 and we’d get out even there but, that also means that $103.12 should be the new stop to capture another .13 and THEN, if we reenter – we’re .53 ahead to start.  

    80.56/102.94 – That was fast!  

    So 2x now with a stop at $102.12 but screw that as we’re below so stop on 1x at $103.05 for a .25 gain and now we’re up .65 with a 1x entry at $103 and a stop at $103.12.

  203. Phil

    Dolllar topped out at 80.56 and now 80.545 with oil at $103.07 so taking money and running as this was the high for the Dollar at 1:45 (see, keep looking for confirmations and, as soon as something worries you – get out!).  

  204. Phil

    While it’s tempting to go long on oil – the fact that it took 4.5 hours to get from $102.85 to $103.70 and only 30 minutes to fall from $103.70 to $102.95 indicates that going long on oil is stupid.

  205. Phil

    Dollar new high and oil breaks below $103 again so game on again as long as Dollar stays over 80.55 and oil stays under the $103 line.  

  206. Phil

    Now we’re back to playing for nickels and dimes as we expect to be stuck between $103 and $102.85 so out already and back in already at $103 (stop at $103.05).

  207. Phil

    80.60!!!  That smacked oil down to $102.85 but now reason it shouldn’t head lower now.  

  208. Phil

    Guy on Bloomberg says oil $110 at year’s end.  Commerzbank.  

    80.63!  $102.85 holding so far but it’s going down!!!

  209. Phil

    $102.84!  

  210. Phil

    Oh yes, didn’t even mention Dow 12,300 now being tested so nice gain there as well and time to take all money and run since that should be a bouncy zone and it’s $1.29 on the Euro, which I’m sure the Swiss will defend as I don’t see any news to justify this drop.  

    So we’re officially done at 80.70, $102.85 and 12,300.

    Time to walk for me (treadmill, too cold outside). 

  211. roro

    Late this morning. Very long day yesterday so missed the the 2:30 AM wake up call. Got the DOW short as I entered it near the top at the close from yesterday.

  212. jerconn

    PHil, what is your take on V (Visa)?  They have good prospects but wonder if their valuation isn’t a little rich right now, plus the dividend is not really significant…would like to get in now but thinking might be better to wait for a dip, what is your opinion?  TIA…

  213. roro

    SNB’s Hildebrand is supposed to hold a press conference today to address the currency trades by his wife.
     
    Bruce Krasting wrote about it yesterday at Zero Hedge speculating that there may be broad consequences………wonder if that is playing on the Euro……….down to 1.2845 and now up to 1.2870.

  214. stjeanluc

    Portfolio / Diamond – Thanks! Corrected…. 

  215. dpastramas

     Spreadsheet / stjeanluc  Hi, where can i see this spreadsheet?

  216. kramer36350

    Unicredit is halted down 7.9% (seems to be the culprit for the initial risk-off turn in Europe), but Deutsche Bank is down over 5% on liquidity problem rumors, EURUSD traded under 1.2850 at its lowest level since September 2010, 10Y Italian bonds have pushed well above 7% yields and 510bps spread to Bunds as Unemployment rises to 8.6%, Belgian 10Y yields are over 4.5% – highest in 3 weeks, and the rest of European Sovereigns are all leaking wider (near wides of the year).
    http://www.zerohedge.com/news/euro-slumps-15-month-lows-btps-crack-7-yield
    Looks like France survived their bond auctions . . .

  217. stjeanluc

    Spreadsheet / Dpas – Copy this link in your browser:

    https://docs.google.com/spreadsheet/ccc?key=0Anwf9je9MizqdGQzN2NZUjNfdjhrbjFwWlc1eDYtWnc

    Clicking on it doesn’t always work. Let me know if you have any problem.

  218. Phil

    So, did I miss anything?  

    Dollar kicked up to 80.95 and oil down to $102.40!  Nice!  Dow 12,274 so all according to plan, it seems but, as I said yesterday – we expect a turn down this morning but then we worry about the Fed pumping us back up on Friday with dove talk so we’ll likely be taking money and running on short-term bear plays.  

    Late/Roro – I never wake up on purpose for the futures.  If I’m up, I’m up and, unless I see a good set-up, I’d rather stay in bed and read on my IPad.  There’s ALWAYS something to trade so I’d rather be awake and in the mood than knocking myself out – if I’m going to do that, I may as well get a real job…

    V/Jerconn – I like them but not 40% more than last year!  MA was 20% above V and pulled back sharply (5%) so I’d watch their direction but neither is a bargain to me with fairly high p/es (20) for companies that are Coke (p/e 13) and Pepsi (p/e 16) in market share.  If the global economy collapses, would you rather be stuck with KO or MA?  

    SNB/Roro – Europeans are not like us, they believe in people’s integrity and I doubt she would have made a trade like that unless she knew it was clean.  I kind of doubt Hildebrand told his wife to make a trade on Tuesday and then influenced the entire board of the SNB to make a drastic policy change the next day – as they said, the Dollar was way too low – we were playing it up too!  Also, it’s actually old news – just a new sensation:

    Hildebrand’s central bank only agreed to publish rules on personal financial ethics yesterday following days of speculation and local media alleging the former hedge fund manager of using insider knowledge to his advantage. While all three currency transactions that were investigated more closely were cleared, a dollar purchase over $504,000 carried out by Kashya Hildebrand without her husband’s knowledge was considered "sensitive," according to an investigation carried out by PricewaterhouseCoopers LLP last year.

    Documents released by the SNB yesterday show that Kashya Hildebrand spent 400,000 francs ($517,000) to buy dollars on Aug. 15 without informing her husband first, two days before the SNB stepped up liquidity provisions to the money market and three weeks before the currency cap was introduced.

    Kashya Hildebrand, a former hedge fund employee, said in a statement published on Swiss Television’s 10 vor 10 program on Jan. 3 that she purchased dollars because "it was at a record low and almost ridiculously cheap" at the time. She also said that up to 80 percent of transactions at her art gallery in the center of Zurich are in dollars.

    Unicredit/Kramer – Note my comment in news at 3:57!  Too funny how long it takes the investing public to wake up to obvious news.  

  219. kramer36350

    Wall Street 1, Worker 0 
     NEW YORK (TheStreet) — PepsiCo is considering laying off roughly 4,000 workers and ending the company’s 401(k) match to boost earnings, according to The New York Post.
    http://finance.yahoo.com/news/Stocks-Watch-Pepsi-Costco-tsmf-3030570959.html?x=0
    Would not surprise me at all to see more 401k match eliminations as margins come under more pressure . . . .

  220. Phil

    BBY/ZZ – I used to manage a stereo store when I was in High School in the late 70s and we were all geeks.  I wouldn’t hire a guy who didn’t know the components cold.  After college, I worked in computers for a while and same thing – it was a profession and we were paid like professionals – now the sales end of electronics is nothing but glorified warehouse people and they wonder why they can only get people to buy low-margin crap.  We had low-margin crap in our stereo store but we took the time to explain to people why it was worth paying twice as much for better quality equipment and we got a good reputation, good word of mouth and made more money than any other store in the chain.  My attitude was there were cheap TVs and stereos at Sears and Macy’s and Steve’s and Crazy Eddie so why compete on price?  It works but it takes an effort that companies just aren’t willing to make these days. 

    BBY’s mistake, to me, is that they have literally 100 TVs and they are all virtually identical.  They are practically saying to the customers when they walk in – hey, there is nothing at all special about a 50" flat-screen.  Same with laptops etc.  I recently did look at TVs and, like you, I had to wait for the sales guy to get a manager to tell me if you needed a special DVD player to watch 3D movies.  By the time they came back (a few minutes) I had already Googled the answer for myself.  If you want to know why a 65" Sharp is better than a 65" Sony or vs. vs. – not even the manager can tell you the difference (other than reading you the card, as if you can’t do that yourself).  Now I’m going to research it but of course the average person will just see the sharp is $500 less and buy it. 

    And that is how all of our manufacturing ends up overseas.  Quality is meaningless these days and quality is what America used to stand for (and Germany still does).  When you raise your kids in a culture where the cheapest crap is good enough – you raise a nation of poor consumers and poor workers.  

    product imageMeanwhile, after much consideration – this is the TV we settled on:  

    http://www.buy.com/prod/mitsubishi-cinema-wd-82740-82-3d-dlp-projection-hdtv-1080p-120hz/223042550.html

    With picture performance that outpaces today’s smaller flat panels, Mitsubishi 3D DLP Home Cinema TVs offer a larger than life, intensely vivid 2D and fully immersive 3D viewing experience. In huge 73" and 82" screen sizes, Mitsubishi 3D DLP Home Cinema TVs deliver incredible picture performance at an exceptional value, and completely define the large screen 3D entertainment category.

    The 82" was $2,200 (not LCD but only weighs 80 pounds) and it’s totally kick-ass in our living room – like being at the movies – actually better, my kids have lost their desire to go and would rather rent DVDs for $1 at RedBox so this thing will pay for itself in 20 weeks!  

    It doesn’t have any of that stutter that LCD’s get on sports and you don’t need the room to be dark to watch it as it’s rear projection (all done with mirrors).  They also make a 92" version but that seemed excessive (and $1,400 more) so I went for the best deal per inch….

    Had they had this in BBY, even if it was $2,499 – I would have bought it locally.  Of course, once you get the TV, you buy a stand and 3D glasses and the 3D DVD…. so WHY is this not featured dead center in their store with one of those CC deals that makes it $49 a month?  People pay more than that for the cable that feeds into the thing!  

  221. dpastramas

      Spreadsheet / StJ  Thanks!!! Works like a charm! Can see under google docs.  Very good capability ;-)
    Damn, i miss the FAS trade yesterday, was out… maybe i get a second chance today.
    StJ just one last thing, is there a post where you explain the FAS Strangle expirement. I see it is quite successful

  222. Burrben

    lvmoda / join.me
    Join.me is great, but they don’t support recording of the meeting for future use.  From a selfish point of view, I really want recording since I tend to need to view things 4 times before they sink in.  I must have watched all the TOS videos 10 times each on boring days at work.
    I’ll check if this allows the host to automute the line.  Good point.

  223. Phil

    Queries/Wappler – Well, for me, I look at NEWS first and let’s say I see that Unicredit had a poor result in their share offering yesterday afternoon.  That makes me think the Euro will go down and the Dollar will go up and makes it a good idea to short European Banks or US indexes so then I want to know who in that group is running ahead of the rest and then I’ll look to see if, out of those, they actually deserve to be leaders or not.  So yesterday, my decision was to short the Dow as it was running ahead of the other indexes and, as I went through each component, they were looking toppy and oil over $102.50 would probably impact the consumer stocks negatively more than it impacted XOM and CVX positively (plus CVX has the overhang of the Ecuador fine that no one is taking seriously yet) and then I look to see if there’s a DIA contract I consider reasonably priced that I am willing to ride out to a test of 12,400 in case it doesn’t go the way I think into the close.  If you can that – I’ll be able to retire! 

    Warranty/JMM – I tell the guy right off that if they give me the component for X then I’ll buy the warranty and the accessory – cuts the negotiating time down nicely.  My opening line is "Hey, you want to make a really easy sale?"  There is a total lack of sales training these days and, in part, it’s killing the retail sector.  If I ran a BBY today I would say nobody leaves my store empty handed.  There are so many cool things you can buy for under $20 that no one is so poor that they were motivated to come to our store and we can’t find SOMETHING they will walk out the door with.  Every sales guy should be walking around with an Ipad that’s a database for everything in the store (and how they connect, what they work with, features, etc) that lets them know prices and stock levels – I mean, isn’t this 2012?  What’s wrong with this country that our technology stores don’t use technology?  

    Policy/StJ – Take away the stimulus that Obama was forced to spend to clean up Bush’s mess and you get the real picture.  

    Big Chart – good illustration of why we shorted the Dow and Nas. 

    Computer project/Wappler et al – Years ago I consulted for several companies who tries to codify options strategies and all were disaster.  I’m talking major projects with IBanks where I was one of dozens of people consulted and millions were spent.  I’m sure they are all still trying today and a lot of the work we did at the time is what drives modern Trade-Bots but no one has found a way to pick stocks yet – certainly not for lack of trying.  So beware of creating a time-sink is what I’m saying.  

    Causes/Bert – Well that’s the point of paying for surveys, right?  Maybe pay for a "useless" Government study to come up with safer ways to drill but the oil and gas boys don’t like studies – in case they reach a conclusion that is not profitable.  Whatever is causing it, if something IS causing it – then something needs to change.  

    Rambling/Sparky – Reminds me of this:

  224. Burrben

    wappler / data
    Vols to me is Option Volatility data.  Since our funds whole premise was that vol’s revert back to a mean, along with correlation, we would buy or sell based on the richness or cheapness of the vols, and hedge out our deltas 2/3 allow for a slight lean and trader discretion.  
    The traders didn’t like the scanner tool since we couldn’t add our inputs to their vol calculations, our inputs being hard to borrow rates, standard borrow rates, predicted divs we used, our value of time, etc…  But I liked it from a retail trader perspective since it allowed me to find the best buys or sales within a stock I liked for fundamental reasons, like BTU.  We are playing BTU not for a voltrade, but since it’s a good company.  
    Sample of downloadable vol data here:
    http://www.ivolatility.com/data/data_download_intro.html

  225. Phil

    Video/Burr – We don’t need that kind of video, just the ability to show what’s going on on my computer screen and my ability to talk while doing it.  The video cam idea could be good for our next Las Vegas show though.  

    Joinme/LV – Remind me to try that over the weekend.  

  226. Burrben

    Funny video " All I wanna do is retire – tough to be a broker "
    http://www.youtube.com/watch?v=AVWB9SnQlP0&noredirect=1

  227. wappler

    @Burrben,
    Thanks for the clarification re Vols, I get it now.  The ORATS scanner looks interesting and I may sign up for the 14-day trial.  Do you have an idea what the mostly cost might be?  I don’t see any pricing on their web site.

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