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Thursday Foolishness – More of the Same with One Trade

Our day is done, how’s yours?  

That’s right, we already did our 3am trade where we caught the dead top of oil (and the dead bottom of the Dollar), where my 2:59 am comment to Members in Chat was:  

 

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 .

For the next hour, I did a blow by blow on the oil trade in Member Chat on the way down to $102.70 – a nice $1,000 per contract worm gotten by the early birds, where we took the money and ran ahead of likely morning manipulation back up to $103.50, where we can short it again on inventories (11am).  The Dow slipped to 12,300 and paid a solid $250 per contract as well, paying for over 100 Egg Mcmuffins this morning by itself.  If you want to see how we make decisions along the way down – it’s well worth going over this morning’s comments – there was also some good discussion of other topics this morning, including my pick for the best wide-screen TV.  

We’re still just messing around with hit and run plays, waiting to see how the week pans out and next week we’ll be waiting to see how earnings pan out as well as what we expect will be a pretty major market pullback leading into the 10-year auctions next Wednesday at 1pm.  Clearly the Fed freaked out and jumped in yesterday when TLT hit $118 so we are fairly comfortable with our prediction of a slide into the 1pm 3-year note auction on Tuesday that culminates in panicking people into 10-year notes the next day.  AFTER that, we can start looking at earnings to drive the market. 

Driving the gloom this morning is a story we picked up yesterday but it seems to be surprising people today that Unicredit’s failure to raise capital yesterday is causing their stock to drop today.  Italy’s second largest bank is now trading well below it’s 2009 crisis lows and is back at levels not seen since the early 90s and the whole Italian market is down 3.3% this morning – led down by Financials.  Italian 2-year notes are already back up to 4.72% while Spain is creeping up to 3.63%.

The Euro is down to $1.283 and the Pound is testing that $1.55 line that would spell catastrophic failure if they don’t hold it.  The good news for Japan is that the Yen is almost back to 77 (76.82) – so they have that to hang their hat on. 

So Europe is still a mess – not a surprise really.  We’re patiently waiting for next week’s earnings data so we can get a feel for what’s real in the market and what is not.   Some early reports are mixed with HELE, MON (got ‘em) and MSM beating this morning but RPM, WOR and STZ missed and PLCE slashed guidance by 30% with "margins hit by discounts and record high apparel costs."

THAT doesn’t sound good, does it?  And STZ is a pretty diversified company with revenues down 27% year over year and they STILL missed those lousy expectations.  Even LLY cut guidance this morning as Zyprexa goes off-patent.  What is this World coming to if we can’t make insane profits on anti-psychotic drugs?     

BKS is down about 30% pre-market after announcing plans to spin off its digital business – which is the only part people like!  Still, I don’t think investors understand what spin-off means so I’m going to be liking a play on them under $10 this morning, perhaps selling puts into the initial drop.  

XRT WEEKLYWe "only" lost 372,000 jobs last week and the ADP report came in hugely strong at +325,000 vs expectations of 150,000.  This is the largest monthly increase for ADP since the same December report last year and the market rallied all the way up to 1,344 on the S&P by the end of the month before dropping back to 1,250 so anything less than a big pop off this news and we know there is other stuff that’s much worse than it was last year without even checking.  

As you can see from David Fry’s XRT chart, we’re pretty high in the range on high expectations that are simply not likely to be met.  I was hoping for a test of $55 to go short again (we hit them last summer for a good ride down) but this morning’s data doesn’t make that likely and woe unto the markets if they can’t hold 50 through earnings.  

Of course, what really matters is, as usual, the financials.  Dave has a nice chart from MS showing that the top 6 financials: BAC, GS, GE, WFC, ALL and JPM are EXPECTED to contribute 26.3% of the S&P 500′s TOTAL earnings growth for 2012 – that’s a heck of a lot of responsibility heaped on what have recently been very narrow shoulders.  We’re in BAC, JPM, GE and ALL and are generally bullish on the Financials but I’ll bet many people are going to be surprised that it’s BAC who are expected to lead the S&P’s earnings thrust in 2012 with a 12.25Bn turn around in profits.  

That’s right, when you see all the clever analysts on TV telling you that they are targeting 1,350 on the S&P – keep in mind that, if you don’t believe in BAC – then that whole premise is right out the window.  So, I guess we should put BAC in our One Stock Portfolio – the portfolio for lazy people who can’t be bothered to play the market every day (or maybe just have a life) and just want to pick just one stock that they can put everything in on a make or break trade.  

BAC is still $5.75 and you can buy the stock and sell the Jan 2013 $5 puts and calls for $2.55 for a net entry of $3.20/4.10.   So putting $32,000 into 10,000 shares of BAC and selling 100 puts and calls can make a profit of $18,000 (56%) in 12 months if BAC holds $5 (13% down from here) through next January’s expiration.  It’s very likely that this trade would outperform the S&P if successful and it can be hedged with 5 FAZ Jan 2013 $40/60 bull call spreads at $3.10, selling the $20 puts for $3 for net .10 on the $20 spread so 5 contracts pay $10,000 if FAZ shoots up, which is what we expect to happen if BAC fails to hold $5.  On the downside, BAC should be well in the money long before you are forced to buy 500 shares of FAZ for $20.10 net ($10,050) and even if FAZ is zero, if you make $18,000 on the BAC spread – you still net $8,000 (25%) for the year.  

So that’s it then – have a lovely 2012 – I’ll check back with you next January and we’ll see how this goes.  

 


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  1. jerconn

    Phil, I get the impression you’d like us all to be futures traders, is that the case?  Then we can eat Mcmuffins for breakfast and relax the rest of the day!  But if so, it sounds like a rather limited future for PSW… (tongue in cheek, you understand…)

  2. stjeanluc

    Data Project / Wappler – Let’s talk next week when I am back in the US. I have limited hardware/software resources here in France and also less time. I’ll do an analysis of what I already have and we can discuss what’s needed.

  3. stjeanluc

    FAS Strangle / Dpas – You could read the weekend recap I did last weekend as I posted a small description of all the trades in our virtual portfolios…

    http://www.philstockworld.com/2012/01/02/weekend_portfolio_recap01022012/ 

  4. kramer36350

    MON
     

     
    Investing

    Investing > 
    In Play ®

    FEATURES
    Market Coverage Market Overview Market Update In Play® Story Stocks Short Stories Tech Stocks Market Events Earnings Calendar Economic Calendar Splits Calendar Conference Call Calendar IPO Calendar Upgrades/Downgrades Market Statistics Market Digest U.S. Market Indices World Market Indices Currency Exchange Rates
     

     

    InPlay

     

     
    8:56AM On The Wires (WIRES) :

    The Clorox (CLX) announced that it has acquired Aplicare and HealthLink. These acquisitions are important steps in the company’s effort to increase exposure to faster-growing categories as part of an ongoing portfolio transformation. The acquisitions complement and expand the breadth and depth of the health care portfolio of the company’s Away From Home business.
    Senesco Technologies (SNT) announced that it has re-structured its research and development agreement with Rahan Meristem (1998) Ltd ("Rahan") to reflect the priorities of both Companies.
    Baxter International (BAX) announced the dosing of the first patients in a Phase I clinical trial of its lead investigational candidate, BAX 855, a longer-acting form of a full-length recombinant factor protein.
    NetQin Mobile (NQ) announced the appointment of Omar Khan to the position of company Co-Chief Executive Officer. Khan was formerly the Chief Product and Technology Officer of Samsung Mobile and most recently served as the Managing Director and Global Head of the Mobile Center of Excellence for Citigroup.
    Neoprobe announced that it has completed its corporate name change to Navidea Biopharmaceuticals (NAVB). Co will begin trading under the ticker symbol, NAVB, on the NYSE Amex at market open.

     
    8:42AM Horizon Technology Finance provides investment portfolio update for fourth quarter 2011 (HRZN) 16.23 : Gross new loan investments during the fourth quarter of 2011 totaled $19.5 million. There were no refinanced balances in the fourth quarter. "Our new loan investments of approximately $20 million in the fourth quarter can be attributed to a combination of our improved liquidity resulting from our new credit facility, our continued focus on new originations, and year-end market demand for our loan products. Our investment activity in the fourth quarter showed, once again, how quickly we can deploy our available capital into high quality earning assets."
    8:33AM PowerSecure announces $20 mln of new utility infrastructure awards (POWR) 5.17 : Co announced it has been awarded a new contract to serve two separate divisions of a major investor-owned utility. The award includes transmission and distribution construction and maintenance services, and is expected to generate $20 million of revenue over the two-year contract period. The Company expects to realize approximately one third of the revenue from this contract in 2012, and two-thirds of the revenue in 2013, although these estimates could fluctuate depending on specific work assignments.
    8:32AM Barnes & Noble NOOK unit sales increased 70% YoY During the 9 week holiday period; announces decision to explore separation of NOOK Digital Business; Co expects fiscal 2012 digital content sales to be ~$450 mln; Lowers FY12 EPS and Rev guidance below consensus (BKS) 13.58 : Co announced digital content sales also grew during the same nine-week period, increasing 113% on a comparable basis. Content sales are defined to include digital books, digital newsstand, and the rapidly growing apps business. Co expects fiscal 2012 digital content sales to be ~$450 mln. By fiscal 2012 year-end, based upon forecasted device sales, the co expects annualized U.S. digital content sales will achieve a run-rate of ~$700-$750 mln.  Due to the increased significance of the NOOK business platform, the Company is evaluating its reporting segments. The evaluation is expected to be complete by the end of this fiscal year, which may result in reporting NOOK as a separate operating segment. In order to capitalize on the rapid growth of the NOOK digital business, and its favorable leadership position in the expanding market for digital content, the Company has decided to pursue strategic exploratory work to separate the NOOK business.  Co also said that it is in discussions with strategic partners including publishers, retailers, and technology companies in international markets that may lead to expansion of the NOOK business abroad. During the nine-week holiday period, Barnes & Noble store sales increased 2.5% over the prior year period to $1.2 billion. Comparable store sales increased 3.4%, on top of a 9.7% increase last year. Barnes & Noble continues to benefit from a consolidating physical book market. The Company benefited from the closure of Borders stores during the holiday season and now expects the sales lift to be in a range of $200 million to $230 million in fiscal 2012. The Company reinvested the Borders upside in its digital business. Co lowers guidance for FY12 (Apr), sees EPS loss of ($1.40)-(1.10) from ($0.50-$0.10) previous guidance, excluding non-recurring items, vs. ($0.55) Capital IQ Consensus Estimate; sees FY12 (Apr) revs of $7.0 bln – $7.2 bln from $7.4 bln previous guidance vs. $7.32 bln Capital IQ Consensus Estimate
    8:32AM Worthington misses by $0.05, misses on revs (WOR) 17.66 : Reports Q2 (Nov) earnings of $0.27 per share, $0.05 worse than the Capital IQ Consensus Estimate of $0.32; revenues fell 1.8% year/year to $570.4 mln vs the $589.38 mln consensus.
    8:30AM Market View- eMini index futures continue to see improvement following weekly Initial Claims & Continuing Claims: ESh2 -1.75, NQh2 +0.75, YMh2 -9 (TECHX) :  
    8:24AM DDR announced earlier that it increased its dividend to $0.12/share from $0.08/share (DDR) 12.40 :  
    8:21AM American Eagle lowers Q4 EPS guidance; holiday sales +15%; comps +12% (AEO) 15.16 : Co lowers Q4 EPS guidance to $0.33-0.35, ex-items, from $0.40-0.44 vs $0.43 Capital IQ Consensus Estimate; holiday sales +15% YoY to $887 mln; comps +12%. The holiday season started strong with a nearly 20% increase in comparable store sales in November and record sales over Thanksgiving weekend, fueled by strong unit sales, with customers responding positively to the assortments and promotional events. During the important final two weeks of December, in a significantly more competitive environment, the co made a strategic decision to take a more aggressive promotional stance. While impacting margins, the decision enabled the co to generate strong unit sales, increase market share and achieve targeted inventory levels.
    8:18AM On The Wires (WIRES) :

    Ensemble Therapeutics announced the extension of its strategic alliance with Bristol-Myers Squibb (BMY), building on a collaboration initiated in April 2009.
    Harris Corporation (HRS) was awarded a $6.8 million contract by the U.S. Air Force Materiel Command to deliver integration and maintenance support through December 2012 for AFNet hardware.
    Alnylam Pharmaceuticals (ALNY) and Arrowhead Research (ARWR) announced that they have entered into a collaboration and joint licensing agreement.
    SPX Corporation (SPW) and Shanghai Electric Group announced the formation of a new strategic joint venture to supply industry-leading products to the power sector in China and select global opportunities. The joint venture agreement is between Shanghai Electric Group and an SPX subsidiary in China.
    AMRI (AMRI) announced that it has entered into a preferred provider agreement with BioPontis Alliance.
    ViaSat (VSAT) has entered into a new five-year wholesale distribution agreement with the National Rural Telecommunications Cooperative
    BT (BT) announced that it has signed a contract extension with Bristol-Myers Squibb to manage its global network services through 2017.

    For those the played MON:   
    8:14AM Monsanto beats by $0.06, beats on revs; reaffirms FY12 EPS guidance; affirms free cash flow guidance (MON) 72.67 : Reports Q1 (Nov) earnings of $0.23 per share, $0.06 better than the Capital IQ Consensus Estimate of $0.17; revenues rose 32.8% year/year to $2.44 bln vs the $2.05 bln consensus. Co reaffirms guidance for FY12, sees EPS of at the high end of prior guidance of $3.39-3.44 vs. $3.47 Capital IQ Consensus Estimate. Co affirms its guidance of free cash flow for fiscal year 2012 in the range of $1.3-1.5 bln, reflecting an investment of $600 to $700 million in capital expenditures. The co expects net cash provided by operating activities to be $2.2-2.5 bln, and net cash required by investing activities to be ~$900 mln to $1 bln for fiscal year 2012.

  5. kallenjr

    stjeanluc, wappler,
    I have read Augen’s books several times and wanted to start something similar to what you all are discussing. My checkered past includes extensive spreadsheet analysis with databases (including query development). Data source for what you want to analyze is critical. Augen discusses his methods (at the time of his book printing).Would love to help if it makes sense.

  6. kramer36350

    Apologies for the tome, meant to show just this the MON play:
     
    Monsanto beats by $0.06, beats on revs; reaffirms FY12 EPS guidance; affirms free cash flow guidance (MON) 72.67 : Reports Q1 (Nov) earnings of $0.23 per share, $0.06 better than the Capital IQ Consensus Estimate of $0.17; revenues rose 32.8% year/year to $2.44 bln vs the $2.05 bln consensus. Co reaffirms guidance for FY12, sees EPS of at the high end of prior guidance of $3.39-3.44 vs. $3.47 Capital IQ Consensus Estimate. Co affirms its guidance of free cash flow for fiscal year 2012 in the range of $1.3-1.5 bln, reflecting an investment of $600 to $700 million in capital expenditures. The co expects net cash provided by operating activities to be $2.2-2.5 bln, and net cash required by investing activities to be ~$900 mln to $1 bln for fiscal year 2012.

  7. craigzooka

     VLO falling today.  Looking to add a small position in the IRA portfolio.  I will see where I can get filled once the market opens.  This is a $5,000 ish allocation in a $100,000 portfolio.  I am hoping in continues to go down so we can pick up some more at 17 and load the boat if we ever see 15.

  8. yshenhar

     stjeanluc – thanks for your great work on the various portfolios. One question regarding the FAS strangle experiment – what do you think of making it an iron condor on weeklies to reduce the margin requirements?

  9. stjeanluc

    Kallen, sounds good. Let’s pick that up next week then.

  10. dclark41

    Last time the dollar was this high crude was at $99.68. …………but Iran……….Iran……..blah, blah, blah

  11. stjeanluc

     

  12. Burrben

    Phil / Video   
    I don’t want to cloud the discussions during the trading day about the video, but MeetingBurner is just like JoinMe with a few more features.  The most important being that you can record the screen share and share it where ever you want.  It’s not any harder or more complex, you just push a "record" button and it’s all done for you.  
     
    I think about it like this.  Imagine we had a daily discussion, then tomorrow it’s deleted, gone. We can no longer reference prior days discussions anymore.  That doesn’t make any sense.  The strength of this site is the history of information.  That’s why I want the video recorded.      
    I’ll leave it up to you though.

  13. srinirap

    phil where can i access ur 3 am trade on the oil and dow futures.

  14. yodi

    Good morning Phil What are we doing about this MON play of 1/3 The short 70c and 72.5 call are both under water even that the 3 April longs are now showing a credit. Wait till the exitment settles?

  15. yshenhar

     @ srinirap  look at the comment section of yesterday’s post.

  16. stjeanluc

    FAS / Yshenhar – We kicked that idea around before, but the problem is that condors are a pain to adjust if you need rolling. You lose on commission and you also lose on the spreads.

    The only decent solution would be to make it a calendar by buying longer dated options and sell the weeklies against it. But you still need to come up with the money for the long options.  So not a great solution as I see it. It’s really the ideal trade if you have a PM account!

  17. stjeanluc

    FAS Strangle – Speaking of FAS, I love it when a the plan comes together. I just closed the 71 calls for a 50% profit. I look for another trade after 10:00 AM.

  18. stjeanluc

    Quite a turnaround for the AA Money portfolio…

    Phil, I believe AA reports on Monday AH. Do we want to cash the profits on the short puts before that and sell options again on Tuesday? 

  19. yodi

    stjeanluc
    Talking about the FAS strangle I got a bit late on the train and could close with a 30% profit as FLAN says better not be to greedy

  20. stjeanluc

     

  21. stjeanluc

    FAS / Yodi – In any case, better than late yesterday…  

  22. stjeanluc

     

  23. mampcsA

     Phil, do we get out even on the QQQ Puts in the 25KP?

  24. Phil

    Futures/Jerconn – I think it’s a useful tool for people who can afford to play but certainly not for everyone and not at all for people who aren’t pretty good day traders (not the deluding yourself pretty good either!).  For me, I’m pretty comfortable with my retirement plan as I can just long on whenever from wherever, make a trade, collect $1,000 and then go spend it the rest of the day – isn’t that worth 10,000 hours of practice for you to work towards?  

    Let’s say that you’re retired and I have $1M and it pays you $75,000 a year to live on and you get $25K in SS.  It’s comfortable but not fun.  If you can develop a good discipline trading futures then you can budget $5,000 for a quarter and risk $500 a day max and, if you can manage to have a few $1,000 mornings like this one each month, you can add $20-30,000 in fun money.  I think that’s worth learning and yes, it’s gambling but my point is that, rather than playing cards or riding the bus to the local casino to gamble randomly – LEARN to TRADE the Futures and you have a second career that can last until you go senile (and I bet actively tracking the markets can help keep you from doing so).  

    My other retirement plan is to play poker but I think it’s much harder to make money consistently playing poker than it is playing the futures so yes, I do like for people to PRACTICE Futures trading – maybe it’s for you and maybe it isn’t but, if it is – it can open up a lot of opportunities in life.  

  25. stjeanluc

     

  26. NF**X

    Big Screens – Been looking to bump up from 67, PD. We have a very nice Samsung DLP from a couple years ago. Now, Mitsubishi is the only DLP choice and the only way to get above 67 without paying $20K+ for a plasma. Been looking at the 82 incher too. Here’s our great local dealer on same – they on,y handle a dozen or so TVs and do it well – and check the prices, man: http://www.thebigscreenstore.com/big-screen-store-locations-md-va

    Did you do the Diamond series? Love to know what you think in a month or so.

  27. stjeanluc

     

  28. jerconn

    PHil, thanks for the advice on futures trading, that gives a good picture on why to work on trading them!  I guess I have it in mind for sometime in the future.  Right now I’m working on my 10,000 hours following you and the other geni’i (plural for "genius"?) here on PSW…between JRW, Pharm, Iflan and others there are a lot of good techniques to learn and I’m starting to wonder which one will turn out to be my own unique approach cause in the end that’s the one that works for all of us, doesn’t it…each person developing their individual approach that works for them…anyway it’s an intellectually exciting and stimulating process and sometimes even profitable…btw, is TOS the best platform for paper trading futures, or there are others out there?

  29. roro

    Quick hit the DAX short at 6099 then bought it back at 6076, and Dow ………back in cash again.
     
    You like a selloff for the S&p right, Phil?…………down to around 1180. Are we into a BIG shorting day?

  30. wappler

    Phil/Queries & Computer project,
    Phil, if we could only harvest your brain and turn it into an algo a la Matrix, we could all retire, LOL!  I hear you on the computer project front, after all, with their resources there’s never really a level playing field.  My modest goal is to look into some of the strategies in Jeff Augen’s options books to see if there’s some nugget in there.  If not, at a minimum it will give me a better understanding of the inner mechanics of options that will come in handy as I’d like to broaden my skill set in the income trade area.

  31. 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.

  32. Phil

    Good morning! 

    What a total BS pump-job open that had NOTHING at all to do with the data we were going over in the above post.  I mean – REALLY?!?  

    Anyway, that’s over already and reality is setting in.  Unfortunately, oil did not get back to  $103.50 and is already down to $102 while the Dollar flies up to 81.25 as the Pound gives up $1.55 ($1.5487) and the Europ is just pathetic at $1.278.  The Yen shot up to 77.12 from 76.8 at 8:10 and that disproportionate move seems like a little Yentervention to start our day, which makes sense as the BOJ saw a nice pre-market rally and didn’t realize it was all BS and thought it would be a good time to give the Dollar a nudge without hurting the markets.  FOOLS!   

    That’s why this week is UNPLAYABLE other than hit and run trades.  Speaking of which, I believe our $25KP has the following open: 

    • DIA $121 puts at $1.15 and we’re sick of them so we’ll look to get out with a stop at $1.05 (.15 trailing after $1.20) 
    • GLL Jan $18 calls, now $1.05 – fine.
    • MON spread – we cash the 3 April $70s at $8.45 for a nice profit and let the one short $72.50 call ride (now $3.70) on the assumption the market falls next week.  If not, we roll it to a new spread.  
    • DMND – Fine but earnings won’t be for a while. 
    • FAS short Friday $65 puts – fine
    • QQQ Friday $58 puts – glad to be out at a $1 stop (now $1.05) but I still think we should hit $1.20 if the Nas gets real this morning.  

    That will put us, as planned, back to bullish into tomorrow’s Fed speak (GLL is bullish because if the market goes up, gold should calm down but also if the market collapses, gold should come down).  Let me know if I missed anything there.  We have NFP tomorrow and if it matches ADP, the markets should head up anyway.  

    If we’re going to pull a proper low this morning, it’s likely to be on oil inventories causing a sell-off at 11.  If that doesn’t work – then I think we may be clear to climb back into the close regardless of the data realities.  

    Thursday’s economic calendar:

    Chain Store Sales

    7:30 Challenger Job-Cut Report

    8:15 ADP Jobs Report

    8:30 Initial Jobless Claims

    10:00 ISM Non-Manufacturing Index

    10:30 EIA Natural Gas Inventory

    11:00 EIA Petroleum Inventories

    4:30 PM Money Supply

    4:30 PM Fed Balance Sheet 

    At the open: Dow -0.49% to 12358. S&P -0.51% to 1271. Nasdaq -0.16% to 2326.

    Treasurys: 30-year 0%. 10-yr +0.05%. 5-yr +0.02%.

    Commodities: Crude -0.85% to $102.34. Gold -0.84% to $1599.15.

    Currencies: Euro -1.01% vs. dollar. Yen +0.48%. Pound +0.77%.

    Market preview: S&P futures -0.4% and sliding back toward earlier lows despite a stomping ADP jobs report and decent weekly jobless claims. Barnes & Noble plunges 28.5% on a possible separation of its Nook ops, while retailers J.C. Penney (-6.2%), Target(-4%) and Children’s Place (-12%) are suffering after profit warnings.Later: ISM services index.

    Found in the prospectus for UniCredit’s capital raiseyesterday: "Concerns that the eurozone sovereign debt crisis could worsen may lead to the reintroduction of national currencies in one or more eurozone countries or, in particularly dire circumstances, the abandonment of the euro."

    Reuters reports a source in the Prime Minister’s office saying Mario Monti has unexpectedly jetted off to Brussels, with no details yet on who he is meeting or what his agenda is. Italian shares scrape session lows, -3.8%Unicredit -15.6%Things to do in Brussels besides drinking beer.

    Hello, McFly!  The next Greek bailout tranche of €5B, originally scheduled for last December, will be delayed until March, says the EC’s Olivier Bailly. The €10B tranche set for March will be moved to June, and only if inspectors deem Athens is delivering on fiscal reforms. Yesterday, Greece’s PM warned against any delays in receiving bailout monies.

    Summary – there is nothing here to be complacent about.  Cashy and Cautious is still the way to go!

  33. lflantheman

    AAPL 50k portfolio:   Buy to open 10 Jan (monthly)   410/420 bull call spreads.   I paid 5.25.  

  34. wappler

    @stjeanluc/data project
    Sounds good to me.  I’ll shoot you an email with my contact info.  Talk to you next week!

  35. Phil

    BKS Feb $10 puts can be sold for $1.20, 5 of those short in the $25KP.  TOS says net margin on that is just $800 to collect $600.  I also like the stock at $10.50, selling the 2013 $10 puts for $3 and not even bothering to sell calls yet on this silliness.  

  36. nicha

    Phil – on MON we have short $70 and $72.50 calls. Do we keep both of them open?

  37. Canuck

    QQQ weekly – in at 0.90 out at 1.10 — is that a "wheee?"

  38. jmm1951

    Phil/Poker
     
    Way too much luck involved. I was very into online poker at one time, and having won back-to-back 150 player small stakes tournaments on Full Tilt, I was convinced of my own genius, but it was all downhill from there. Trouble is you play patiently for hours to get into a competitive situation with a large stack and then get blown away with some foul luck on the final table. Not effective use of time.

  39. turtle1755

    Phil:
     
    I am a newbie here and in options.  Can you teach me why you sell the calls  on BAC at $5. I understand buying the shares and selling the put part. don’t get the logic about selling the calls.
    thanks,
    turtle1755

  40. angelcur

    so long as SP 500 holds above the 1265 level… we have to give the bulls a little more room.  Below 1265 bears are in control…keep in employment report is tomrrow AM

     

  41. dclark41

    Phil
    Can you explain what you like about BKS more specifically when you get the chance? Thx.

  42. lflantheman

    Analysis of above trade:   This came to me last night while I was trying to fall asleep.  How to take advantage of earnings being reported after expiration.   Just take advantage of high expectations for AAPL, but no report yet.    AAPL expected to close above 420 at Jan expiration.    If so, this trade yields 85%.  The 10 contracts is a scale-in. 

  43. exec

    Flip/BMY
     
    I didn’t buy it back in October because it had just broke through resistance and I didn’t know the stock that well.  I wanted to keep an eye on it for a while to get a feel for how it moves.  In any case, I’m thinking about pulling the trigger real soon via buy/write.
     
    I remember you telling me that you believed the low thirties was the new support.  You can sell the Jan 13 – 30 puts for about $2.  What do you think about that trade?

  44. Savi

    Good Morning—-
    Phil—they must have seen your trade on BAC —-waiting to get in not getting filled

  45. stjeanluc

    lflan, can you give me the price for each leg? Thanks. 

  46. lflantheman

    10,30 and 5.09.   Sorry stj, I keep forgetting to include that. 

  47. cwan120

    IRA/Craig: What do you use to scan stocks with your criteria outlined yesterday?  Thanks!

  48. stjeanluc

    FAS Strangle – I don’t see a trade I like right now as I am worried we might gap up or down with the job numbers tomorrow morning and I don’t want to risk a position overnight. The best thing should be to take advantage of any gap opening tomorrow and sell a tighter strangle like last Friday to cap the week.

  49. lflantheman

    Probable AAPL pin this week is 415, but could be 420.  410 unlikely.  I’m looking for a proper play on this today.  Last week they pinned within 12 cents of 405.

  50. flipspiceland

    @EXEC

    I’ve gone further out to the second quarter selling the $30 puts.

    This trade, selling puts, has not yet disappointed. I was put to once for 3700 shares and the trade so far in 6 months has netted an additional $23,000.

    The buy/write you want is ok, but I’d pay closer attention to Phil’s idea of selling the puts.

  51. Burrben

    Phil / BAC & FAZ trade
    In the post you mention both FAS and FAZ.  I’m guessing that FAS should be FAZ to hedge….  or am I missing something?
    —--
    It’s very likely that this trade would outperform the S&P if successful and it can be hedged with 5 FAS Jan 2013 $40/60 bull call spreads at $3.10, selling the $20 puts for $3 for net .10 on the $20 spread so 5 contracts pay $10,000 if FAZ shoots up, which is what we expect to happen if BAC fails to hold $5.  

  52. pat_swap

    Iflan/AAPL
    Can you provide more insight on the data that you look at to determine the pinning price? Do you look at the executions?
    thanks.

  53. stjeanluc

     

  54. dclark41

    iflan/scale
    What is your target for position size on the last trade? Will you increase the position only on a drop in AAPL share price?  if yes, what price level would you look to do round two? Thx.

  55. rustle123

    Phil, so after taking some profits, do we go into TNA into tomorrow or DIA calls?

  56. lflantheman

    It’s primarily intuitive.  I look at how the market, and AAPL, are acting the day before, and arrive at a ‘best guess’ as to the pinning price.  I usually guess it correctly, but note that last week I missed it.  It’s more art than science, but even if you can determine the probable pin price most of the time, then you can design profitable trades on the weeklies.

  57. Phil

    VLO June $18 puts can be sold for $1.75 for a net $16.25 entry and ties up just $2.25 in net margin (TOS ordinary).  This is a great offset to bear hedges – especially oil shorts like SCO. 

    Good catch Craig.  

    Yes, StJ, thanks.  I like that $25KP even though I don’t like to encourage people to watch prices day to day.  

    I may have accidentally started a BBY buyout rumor as I called a guy I know (per our discussion this morning) and told him I thought it would be a good idea to take over the chain and revamp it and the rumor already boomeranged so be careful on the short side.  After our discussion I looked at their numbers and decided they make sense as an LBO as they hav undervalued real estate and more cash than debt, even though they wasted $1Bn buying their own stock last year ($25 avg).  It is a good capitalist’s job to take companies away from stupid managers – on a smaller scale, this is what we plan to do in the Build a Berkshire Workshop. 

    You can be a junior LBO player on BBY and and speculate a $28 take-out with the 2014 $18/27 bull call spread at $4, selling the $18 puts for $3.10 for net .90 on the $9 spread.  If they get bought out, you get paid off early and, if not, you are $5 in the money to start while you wait for a potential 1,000% ROI ($1.80 net margin).  

    Video/Burr – Well it’s not going to be the kind of polished presentation I’d really want to save/make a big deal of but – it’s better than nothing until I get my 10,000 hours of presentation practice.  So remind me on the weekend and we’ll give it a try. 

    3am trades/Srin – If we are doing them (and they are sporadic) then it would be in chat at the end of the previous day’s post.  I often get up at around 3am and a RARELY see a set-up I feel is worth getting out of bed and commenting on so I don’t want people to think it’s a "thing" – You’ll all have to buy me a nice townhouse in London if you want that kind of service (Notting Hill, of course).  

    MON/Yodi – See above and ALWAYS sell into the initial excitement.  If you are nervous about the naked short caller, just leave one of the longs on.  

    Nasdaq bucking like a bronco this morning!  

    AA Money/StJ – Who’d a thunk it?  You know, people are dissing AA but the point was to find a SAFE, non-volatile position that someone could commit serious money to and, when you consider that our net .34 long spread is actually $1 in the money at the moment (up $660 if it expires here) and NOT actually down $160, as you never get a proper picture looking at what you "owe" in premium – this trade is on track to be a huge success – on track for a triple in less than a quarter.   I don’t know what people expect from trades….  As to earnings, I think we can cash those out tomorrow (I still think we go up tomorrow).  

    FAS Money/StJ – Looks good to me.  And I think our new system has smoothed out some of the roller-coaster moves we got last year.  

    IWM Money/StJ – Threading the needle there.  

    QQQ/$25KP, Mampcs – Yep, see above. When you get behind, your goal shifts to getting out even.  

    Nat gas was in-line so we’re waiting for oil inventories with oil (/CL) at $102.77 and climbing into inventories.  I think we have to wait for after to play futures but my expectation is a build and disappointment and we get our market lows for the day.

  58. flipspiceland

    Traveling with laptop, backup diskdrive, and external power supply. No matter. Laptop internal power supply went kaput. Can’t do anything about that. Utterly uesless, now.

    Luckily, brought along an IPAD 2 and auxiliary ZAGG k/board for other reasons like reading, and haven’t lost more than a beat in getting back up.

    I’m going to buy another IPAD in the next upgrade and be happy about it.

    Every household that has one of these things is going to wind up owning more than one.

    Great legacy, Mr. Jobs.

  59. stjeanluc

    As we enter earning season again, here is a list of volatile stocks on earnings:

    http://www.bespokeinvest.com/thinkbig/2012/1/4/most-volatile-stocks-on-earnings-report-days.html

    I plan on testing again my earning Iron condors on earnings.

  60. lflantheman

    dclark/……..Excellent question.  And I’ve predetermined that I will risk no more than 10k of the AAPL 50k port on this trade.  That would be 1/2 of the 20k that the portfolio is up.  The Jan 410/420  bcspread makes 85% at 420, breaks even at 416 and loses all a bit lower.   So for capital preservation and protection, I risk only 1/7th of the portfolio on this trade, and it’s all "house money".   This is how I drive my s AAPL portfolios higher.   These are single stock portfolios.   Your remain cautious and extremely attentive with large trades, but once you have house money you can move more aggressively into what you would consider to be more risky but high payoff trades, but with smaller amounts. 

  61. wappler

    @Kallen,
    What’s your email address?  I’ll send you my contact info, let’s set up a call with stjeanluc next week.

  62. dclark41

    iflan
    Excellent answer. Thank you.

  63. yodi

    Phil On MON Your thinking is correct I am not worried about the short 72.5caller as it will lose on premium in any case once the exitements cools down. As you always teach PATIENCE

  64. Phil

    Oil up 2.2Mb, gas up 2.5Mb, distillates up 3.2Mb – disaster!  Oil at $102.40 and hopefully a head fake goes higher but this is a good spot to go short on (/CL)!  

  65. dclark41

    Phil
    Do you think this can overwhelm the impact of the Iranian navy :) !

  66. rainman

    Speaking of Nat Gas, is there a lower limit on price before the pumps get turned off?

  67. stjeanluc

    It’s going to be challenging in China:

    http://www.bloomberg.com/news/2012-01-04/china-no-country-for-old-men-as-demographic-tsunami-begins.html

    The latest government census shows 178 million Chinese were over 60 in 2009. That figure could reach 437 million — one third of the population — by 2050, the United Nations forecasts. While the elderly were looked after in the past by their children, urbanization and the nation’s one-child policy have eroded the tradition of family care. [...]

    China’s challenge is similar to that faced by Japan in the 1990s, with one essential difference: China will grow old before it gets rich.  

  68. Phil

    Diamond/NF – Not sure what that is, we just bought the TV.  I had a Mitusbishi dual mono amp and pre-amp once upon a time and they were excellent but this is the first non-Sony TV I’ve ever had in my living room.  So far (2 weeks), so good but we’re not using the TV speakers, of course (Bose 5-speaker system).  

    Markets not too shocked so far but oil hanging at $102.30 so far as well.  Oops, $102.11 now – LOL!  

  69. angelcur

     aaii % bulls 48.9, % bears 17.2…% bears only lower one other week in the last 6 years.

  70. craigzooka

     In the IRA portfolio, Buying 200 shares of VLO at 19.50 and selling two FEB 20 CALL at 0.95

  71. roro

    in short OIL at 102.40……..out at 102.15. thank you.,

  72. kallenjr

     wappler,
    It is: w k _ a l l e n at b e l l s o u t h dot n e t

  73. craigzooka

     @cwan120,  I just use the TOS scan tool, I scan in penny increment options and add 2 criteria, make sure the last trade is above $5.00 and the yield is at least 2%.  Once the scan comes up I just sort by volatility.  The idea being that the stock price is how much our house costs and the volatility is how much we get to charge for rent.  Don’t go telling everyone my incredibly complicated secret [end sarcasm ;)

  74. stjeanluc

    Oops, forgot to post my oil lines:

    R3 – 105.80
    R2 – 104.76
    R1 – 103.93
    PP – 102.90
    S1 – 102.07
    S2 – 101.04
    S3 – 100.21

    We seem to be bouncing between S1 and PP now… 

  75. Canuck

    Phil/TZA weekly,
    got in the 25/27 bcs with a 26p offset for net entry of $0.16 on Friday,
    sure didn’t like tuesdays action on the trade, but took your comments yesterday about expecting today down and tomorrow up, so I closed the trade today net $1.02 not wanting to risk tomorrow – Thanks!!
    If tomorrow is up strongly, may look at redoing the trade for next week.

  76. sagemm1

    Flip/ipad
     
    what I can’t understand is why is the ipad soooo much better than a laptop…lighter. longer battery, can do more?? just a question but cannot understand having to hold something up for a screen whilst typing? friend had me try to watch a show hand got sweaty and not free to enjoy a beverage

  77. jerconn

    Phil – do you have a USO short for us?

  78. exec

    Flip/BMY,
     
    I’m talking about the Jan 2013 puts.  Not this January.

  79. roro

    the Dowmshort was from yesterday’s close near the high and dumped it this morning for profit.
     
    the DAX short was placed at 09:23 and closed at 09:49 for 30 points. the OIL short came off of Phil’s call, post inventory and shorted at 102.40 with a close at 102.15……….3 minute trade.
     
    the DAX and OIL took 29 minutes of risk………..back in cash

  80. jerconn

    Iflan – AAPL has a habit of peaking the morning after earnings are announced, in fact it’s often a classic sell into the excitement case.  If so, we might want to be in Jan4 weeklies as well…do they come out the previous week?

  81. pat_swap

    what with the big move up in the markets?

  82. crussell14

    Phil
    Not sure how (must have been running to a meeting) but I messed up the MON trade. Ended up buying 2 April $70 calls MON and selling 2 Jan $70 calls. Any ideas to fix this? Thanks

  83. jrod0725

     Phil, you mentioned let the short MON $72.50 call ride. How about the short $70 call? Thanks

  84. angelcur

     BAC is leading us higher today….hahahaha

  85. sagemm1

    frustrating…one of those days where I am a day late and a dollar short….should be in the green yet screen is redddd!

  86. angelcur

    euro bank index down over 3% today….if things keep worsening in europe….we will look back at the "divergence" as comical.

  87. angelcur

     germany cds spiking 7%..near all-time high

  88. Phil

    Futures/Jercon – See, there was a super-quick $300, oops, make that $400 per contract and the stop would have been $102.50 so $100 per contract risked and making at least $300 per contract (.10 trailing) now and isn’t that plenty for a day?  Even skiing with the kids, I think we managed to keep it under $300 a day.  I don’t even know another platform for paper trading futures other than TOS but it seems to have all the functionality of the live one and I love the live one for trading futures.  

    DAX/Roro – Where are you trading that?   No, I do not like big shorting here.  I’m almost tempted to go long off 12,300 on the Dow (12,250 in futures) but that Italy thing is messed up.  Still, I’m pretty sure the Fed is going to say many nice things tomorrow and even if we have a poor jobs report – they’ll still spin that to QE3 so I would not make a big short bet overnight, nor do I feel great about being long so – CASH! 

    Harvest my brain/Wappler – Sounds like what the mice said to Arthur

    MON/Nicha – I was looking to take all 3 longs off the table and leave the 1 short naked but you can take 2 off the table and leave a 1/1 spread if you want.  

    QQQ/Canuck – When it’s a wheee, you’ll know it.  

    Luck/JMM – I don’t agree.  You see the same people at the top tables all the time for a reason.  My cost of entering a tournament at this point is zero because it’s extremely unlikely I don’t make it to the money tables but I’m still not good enough to win big money regularly and, because, like you,  I look at it as a relative use of my time – I don’t play poker often enough to get much better but I plan to when I retire.  It is ALL about patience and cash management – the minute you start thinking you are "good" then you are done.  As I hate to lose more than I love to win, I generally play very conservatively until I get my money back and then I have fun because, whether you are 1st or 10th is very much a matter of luck in the end.

    Welcome Turtle!  Read "How to Buy a Stock for a 15-20% Discount," which I’m pretty sure is reference in the New Member’s Guide.    

    BKS/DC – They do $7Bn in sales and are valued at $500M.  Yes, they make no money but they might accidentally make 10% one day and then their p/e is negative – their competition is wiped out and they have successfully marketed electronic books and, of course, they have all the distribution rights locked up and deals with all the publishers who need them to survive.  They haven’t cut costs and still have gorgeous, well-staffed stores that draw a constant crowd.  I expect that, as the recession eases, they will raise prices slightly and, while there is a recession on, they will squeeze the publishers for a better deal so, long-term, I expect them to get "discovered" by analysts.  Meanwhile, my main interest came because they fell 25% today for bad reasons and that was enough to push me from slightly interested to very interested.  

    BAC/Savi – Anything I mention on the main page these days takes off.  I have to be careful what I say but it was more to make a point than anything else.  

    BAC/Burr – Yes, I meant FAZ both times, thanks. 

  89. l4real

     Phil
    Need a little help with hedging a TZA position. I would like to sell 10 Feb TZA calls @ 1.72 to establish a buy/write. Also considering a put sale. your thoughts?

  90. Canuck

    QQQ – ok, so it was a "wh" – you made me laugh though!!

  91. roro

    jerconn,
     
    i read your question/answer with Phil re the futures trading. for what this is worth i started in 2005 and did the steep learning curve Phil pointed out as the 10,000 hrs.
     
    i always played safe all through the meltups and meltdowns and went from learning OIL/NG to currency futures to equity indexes.
     
    since then i also got into spot forex…….more flexibility with position sizing and some nice US companies to deal with too.
     
    2 that have gone to London are FXCM and GFT. both of which I know and are offering CFDs which are a very nice alternative to futures since the sizing is so much more flexible, ie., $10,000 lot sizes for OIL(100 barrels per vs the miniNYMEX Crude at 500 barrels or standard CL at 1000), equity indexes from the Dow to Spain’s IBEX.
     
    the kicker is CFDs are restricted in the US, but I am pretty certain if Americans have an offshore address then getting an account set up is a possibility.
     
    one disadvantage is the spreads are higher but if you are already trading with Phil then you are are already miles ahead on having cross referencing for your trades.
     
    personally, i have had very positive experience with both companies and also trading CFDs as an alternative to futures when I want more flexibility to size positions.
     
    hope that is useful to you in some way.
     
    you are in Kabul, right?……….good luck and take care. if you have questions please ask.

  92. jerconn

    Okay, Phil, I’m convinced.  Starting paper trading with futures next week.  Esp since in my part of the woods the "3 AM" trade is normal mid-morning hours, so could be good…but I haven’t quite started yet so maybe you have a USO short for us?  Thanks muchly! 

  93. roro

    Phil,
     
    I trade it off of FXCM’s London platform…….it is offered as a CFD (wrote to jerconn about CFDs as an alternative to possibly explore)
     
    i can access all the European and Asian equity indexes from that platform………information is at FXCM.co.uk
     
    nice chart package too! excellent service……..my experience.

  94. jerconn

    Roro – thanks for you advice and recommendation.  It sounds like you’re a little ahead of me, I’ve gotta do some paper trading for several months I would think.  But I’ll make a copy of your recos and thanks again!  Not in Kabul, not quite that far east…that’s Romeha…

  95. roro

    jerconn……….FXCM.co.uk has a paper trading platform for the CFD’s……….excellent tool, imho

  96. neverworkagain

     Angelcur / MIL:  I saw your comments yesterday. Intriguing deal and history. Do you know them from the KHD days? From what I can see, even without yesterday’s deal, they have 70% of market cap in cash and a chairman with a strong track record (and tradable options).

  97. roro

    Thx for answering the Big Short question, Phil………it is like a psycology thing with me. i knew it wasn’t the smart play but when i get a twist in my gut usually i take the right choice which is cash (there are exceptions when i do forget like last friday getting short into the close – yes, i can spell stupid, and yes i still keep a sense of humor on losses – made a fair bit back already this week following your reads and playing ins and out/hit and run……….softened the blow already.
     
    amazing!

  98. roro

    btw, Phil……….i trade my own account. fyi. i am totally an independent learning individual

  99. angelcur

    euro looks dreadful…greece is oging to go i think just a question of when that g paps is a pretty smart man..he must have seen the ethors

  100. mampcsA

     Phil, i presume plan is to still DD on the GLL 18 calls at .8 in the 25KP?

  101. yodi

    stjeanluc
    In Phil’s FAS play should we not take out the 65p Jan1 for .10 ???

  102. roro

    if there is a short squeeze on that Euro, lookout.

  103. Highlander

    Flan,
    Closed my 60 AAPL Jan 21 $410 position with 19.27% gain in two days and set up a bull call spread with Mar 17 $415′s long (showing same actual delta as the Feb’s and captures new product announcement dates) and  based on your analysis shorted Jan 21 $420′s at a net debit of $17.50. Looking to close the short leg on a dip or possible ride it to expiry. In worst case can also roll it forward.

  104. Highlander

    jerconn
    fyi weeklies come out the previous thurs when they come out. does not happen every week though!

  105. Phil

    Oil flew back to $102.80 but Dollar still 81.235.  Nas went crazy too so the push is on and we don’t fight the Fed, which is why the $25KP is all bullish now.  

    Flipping/Rustle – I am not big on flipping.  I’m pretty bearish right now and I see the moves up as fake so why play them – we’re not desperate to trade every second of the day, are we?  When we get a good, silly move up, then I’m happy to grab some short positions with conviction and ride those down.  Longer-term, of course, I’m a QE3 Believer so I’m bullish until there’s evidence that we have such severe problems that even another Trillion won’t help – we’re not there yet but if they wait another few months, we might be!  

    NFLX finally gets real. 

    IPad/Flips – Yep, the kids already have my old one and Tina (Ms. no Apple for me) couldn’t wait and got here own 2 also so now we have two 2s and an original and the kids can’t wait for the 3 so they get my 2 and this will never end.  If they come down to $99, then it makes sense to have dedicated ones in the kitchen (recipes, cooking videos, warranties, grocery lists, messages) and one in the bedroom and one in my office and one by the couch and one in the bathroom…  If they can make it waterproof, I’d like one at the front door so we can see who’s there (a waterproof IPod touch would do the job too) and I’d want one at the pool so I can check on the kids – in short, I’m not expecting sales to trail off for a long, long time.  

    MON/Yodi – Don’t forget on an earnings like this, a lot of people getting squeezed!  

    Iran/DC – Yawn.  Wake me up when they accomplish something other than threats.  In fact:  

    Iran says ready for nuclear talks with G5+1: FM


    Shanghai Daily (subscription) - 6 minutes ago
    5 (Xinhua) -- Iran’s Foreign Minister Ali-Akbar Salehi said here on Thursday that the Islamic republic ofIran is ready to resume nuclear talks with G5+1

    Of course, don’t expect to hear that on CNBC until they absolutely can’t ignore it anymore.  

    Nat gas/Rain – $2.50

    You are welcome Roro!  

    TZA/Canuck – Nice job and I bet you are happy now.  Yes, I think Monday may be OK but the Fed needs the markets down Tues/Weds am.  

    IPAD/Sage – Some people are going to be IPad people and some aren’t.  I want a more powerful "FlatTop" (TM) that’s essentially a laptop with the touch screen built in as one piece because, for me, I just want to be able to run multiple windows on a screen that’s easy to pack and carry for vacations.  On the whole, I LOVE my IPad – the only time I don’t use it is when I’m working but I still use it for a calculator sometimes.  I have cut the stack of magazines and newspapers in my living room to a minimum and read anything that is available in an IPad version on that rather than paper.  I go to BKS less because I now have a convenient way to read the international papers every day as well as most magazines – I could have done it with my laptop but it just is not the same reading experience.  

    USO/Jerconn – I like the Jan SCO spread but look at the support oil is getting despite huge build in inventories.  When there was an 8Mb draw, oil went up $5 but now we have an 8Mb build and we can’t get .50?  It’s stupid and it’s never a good idea to play in a stupid environment because, as Keynes says:  The markets can remain irrational longer than you can remain solvent.  (and he learned that from experience).  

    Big move/Pat – Good jobs data with NFP 8:30 tomorrow and 4 Fed governors speaking to spin it all positive is why I said we’d get our low after the oil report and then head higher into the weekend.  Tomorrow afternoon and Monday will be worth shorting again.  

    Mon/Crussell – I’d take the money off on the 2 April $70s and wait for next week to see how you’ll have to adjust the Jans but you have a nice win on the April and you can always buy a long bull call spread and roll the Jans towards it.  

    Mon/Jrod – See right above.  

    BAC/Angel – Stock of the year!  

    TZA/L4 – You want to own TZA long-term?  I don’t like that because ultras decay over time so why own them and especially why pay premium on them?  Also, I expect a market correction within 30 days, so selling TZA calls naked scares the crap out of me.  

    $103 oil – balls of steel on these guys!  $103.20 was the 8:30 high so I don’t mind going short at $103 with a plan to go 2x at $103.10 and 4x at $103.20 with stop at $103.26 but it’s an expensive way to be wrong.  

  106. exec

    what was that

  107. jerconn

    Highlander – thanks for the info!  Now just need to get some feedback fr Iflan on that…btw, guessing from your PSW name, you might be located near some good single malts, any recos?

  108. Beaufleurs

     lflan, I’m starting slow, maybe buying 2 contracts when you say 10, and building up as my confidence and skill  and understanding grows, so at this point my portfolio does not have any house money as of yet.  Regarding your comments about using house money to be more aggressive and risky, do you generally make a comment as to when a trade suggestion is more aggressive and risky, and when a suggestion is less so?   Thanks.  

  109. Phil

    Qs/Canuck – And doesn’t it feel good to get to cash and sit back and laugh at the shenanigans?  

    By the way, on Futures, when you go to 2x at $103.10, your new basis is $103.05 so, when we get a dip to $103.05, we get half out and now we’re back to 1x at $103.05 and then we’ll shift our 2x up to $103.20 and move the 4x up to whatever it takes to get the line up to $103.20 (2x more at about $103.33), which then shifts the bail-out to about $103.40.  So keep in mind it’s not absolute, your goal is to keep adjusting your basis favorably and, hopefully, catching a good ride down.  

  110. stjeanluc

    FAS / Yodi – You could close that trade (although it’s Phil’s) as there is nothing wrong with taking profits. I do think that it’s safe for tomorrow though as there is more risk on the upside (IMHO).

  111. jrod0725

    Sorry, still confused. I got the take all 3 longs off the table and you said leave the 1 short naked,  but we would have 2 naked, $72.50 and $70. You reference the $72.50 above but I didn’t see a reference to the other naked $70 call.
    MON was $75 last year and now $72 but earnings should be better and overhang down so I like buying 3 April $70 calls for $5.80 ($1,740) and selling 1 Jan $70 call for $3.05 and 1 Jan $72.50 call for $1.68 for net $1,267 ($4.22) on the 3:2 spread and that one I like for the $25KP as well. 

  112. yodi

    stjeanluc
    thanks

  113. Phil

    Good attitude Roro and nice overview of your Futures experience, thanks.  

    GLL/$25KP, Mampcs – Yes, still want to DD at .80 if we can.

    FAS Money/Yodi – No because they expire tomorrow and we don’t see enough likelihood that they’ll fail $65 in 27.5 hours so why waste the dimes?  If you are conservative, of course close it but, if you are conservative – what the hell would you be doing in this trade in the first place?  

    MON/$25KP – Ah, I did not realize we were ALSO short the $70s.  Don’t remember doing it that way.  So then it was not a good idea to kill the long calls early but no biggie as the logic is the same – wait until next week with the naked $72.50 caller AND The naked $70 caller but now we’ll be more inclined to pick up a bull call spread to cover next week unless we get a sharp pullback.  

  114. Phil

    Speaking of sharp pullbacks – how about QQQ Tomorrow $58 puts for .75?  10 in the $25KP.

  115. crussell14

    Phil
    The MON trade was done in an IRA account so unable to sell short calls. Any other thoughts? Thanks again

  116. sbrownA

    Happy New Year Phil, et al.
    Just got back from my trip to visit the kids for Christmas (loved every second of it) and wanted to drop in and say hi.
    I look forward to seeing those of you who can paritipate at the live webcast of Sabrient Baker’s Dozen today at 1:30 PT.
    I will be online for a while if anyone has a question for Sabrient.

    Best,
    Scott Brown

  117. JRW III

    exec / That

    That was me !!

    Update:

    IWM  71.87,  72.15,  72.56,  72.98,  73.24,  73.51,  73.92,  74.28,  74.61,  75.12  and  75.57

    Target appears to be IWM 74.76

  118. lotter

    Phil.
    I think you are innoscent in the BBY rumor, there was an article on Blomberg.com last night @ 7:45pm about it.

  119. rustle123

    Phil/Flipping
     
    I’m a little confused, you’re bearish right now but the 25k portfolio is all bullish.  So not sure if I should start buying back the bearish positions I sold much higher this morning or get bullish into tomorrow.  Need that clear wisdom.

  120. exec

    JR
     
    That targets gone.

  121. palotay

     STJ/FAS – Great call staying out today.  Look at that move!

  122. revtodd64

     Hi Scott,
     
    I plan to be on.  I enjoy looking up stocks on Sabrient and usually check your ratings before buying.  I really like the site information and would like to see some performance updates on stuff like What the Market Wants and the Top 10 lists.

  123. Gingbaum

    Phil,
    Just to clarify, when you say:
    "Speaking of sharp pullbacks – how about QQQ Tomorrow $58 puts for .75?  10 in the $25KP."
    You mean buy.  My understanding is unless you say sell, then we buy?

  124. roro

    Phil…….i really like the way you put things into context………..i have made quite a few successful trades from your observations since being here only 4 weeks……….actually, i think if i went through the ones i took off your reads it is really pretty impressive as hit rate.
     
    i am definitely getting a very consistent balance here i did not have before signing up.
     
    " No, I do not like big shorting here.  I’m almost tempted to go long off 12,300 on the Dow (12,250 in futures) but that Italy thing is messed up.  Still, I’m pretty sure the Fed is going to say many nice things tomorrow and even if we have a poor jobs report – they’ll still spin that to QE3 so I would not make a big short bet overnight, nor do I feel great about being long so – CASH! "

  125. JRW III

    There is also S/R at IWM 75.09 ish and ascending trend line resistance at 75.30

  126. sbrownA

    Thanks RevTodd,
    Couldn’t agree more on the need to add current performance of WTMW and Top 10 Lists.  It is actually compiled but our current website is in PHP and we are converting to Drupal 7.  When the new site goes live (likely March) the perfomance data will be available daily and as far back as you want it.
    I will keep pushing the development team as I get this request a lot and understand the value in having it.
    See you online later,
     
    Scott

  127. JRW III

    exec / Target

    Yes, I got out too early !!  Humor smileys and other free emoticons at emoticons.funwebproducts.com.

  128. cwan120

    AAII / Angelcur : You mentioned AAII’s % bull vs bear.  Are you a member of AAII?  Is it worthwhile to join?
     
    Does anyone else have experience with AAII?

  129. exec

    JR/IWM
     
    I keep a window open with a 1 minute dollar chart going.  IWM tracks the dollar almost tick by tick. 
     
    It’s amazing the games they play with the dollar to push it over resistance or pull it back.

  130. Phil

    MON/Crussell – So let them run to expiration as you’ve got a rollable spread.  

    Happy New Year Scott!  As you can see from today’s post, I just decided to do one trade this year… 8)  Also, looks like I’m in town next weekend for sure (MLK) but still not sure about the last two weekends.  

    BBY/Lotter – Good!  

    $102.90 with Dollar at 81.235.  

    Confusion/Rustle – It’s all bullish because, as I’ve said, we’re tracking the Fed speak and tomorrow is bullish and then tomorrow afternoon I’ll be adding bearish bets again.  At this exact moment, we are at the bottom I expected this morning and running back up to give the week a big finish and all I wanted to do on the bear side in the $25KP was protect the bullish plays in case we fell through the floor today.  The clear wisdom is cash and wait for silly things like oil at $103.50 to short or BKS at $10 to go long or TLT at $118 to long, etc – it’s always something.  

    Wow, BAC up 7.5% now.  

    QQQ/Ging – Yes buy unless I say selling and also pay attention to context but, when in doubt – ask.  Worst case is I’ll make fun of you….  

    Thanks Roro! 

    QQQ/$25KP – I don’t care if they go lower because I plan to roll to next week $58 puts (now .90) anyway.

  131. zeroxzero

    Since my trading has improved dramatically year-on-year — last year being my first on PSW — I’ve thought about the most important thing Phil has taught me — and I am not being ironic here.  A quoted from exchange from Lord of the Ring’s "Fellowship of the Ring":
    Aragorn: Are you frightened? 
    Frodo: Yes. 
    Aragorn: Not nearly frightened enough. I know what hunts you. 

  132. mampcsA

     GLL DD at .8 went thru in the 25KP.

  133. NF**X

    IRAs – When thinking about how to trade in an IRA account – apart from margin issues – what relevance do we give to retirement year? For example, if I’m 7 years out, how do we think about accumulation of stocks we want long term versus aggressively building cash capital?

  134. roro

    zeroxzero………very cool. i got past the fear and then had to face doubt……..self doubt especially on trade execution and sizing

  135. microflux

    BAC how about:
    buy 2013 7.5 call for .85
    sell 2013 15 call for 7
    sell 2013 5 put for .74
    cost a few pennies for a 7.50 upside ? :)

  136. microflux

    thats sell 2013 15 call for .07

  137. cwan120

    Is BBY a good candidate for IRA?  It does not fit Craig’s criteria.  So, maybe it’s too speculative?

  138. peedlew99

    Phil
    any thoughs on risk assests hanging tough in the face of a tanking euro? decoupling? manipulation ?

    is it tradable?

  139. stjeanluc

    FAS / Palotay – Sometimes it’s better to be lucky than good, but like I told Yodi, I had more fear on the upside. I was really thinking of selling just puts this morning and it would have been great, but tomorrow could go either way so why risk it. 

  140. David Ristau

     

    Easy 12% looks possible right now selling the 90/92.50 call spread on NFLX at between 0.26 – 0.30. The company should stay limited in growth into earnings. They are expected to drop EPS by 0.30 for the quarter bringing annual EPS to 4.10. The company has a PE of 18. 18 x 4.10 is $74. Even a move to 20 PE for whatever reason, means $82 PT. The company is going to have a tough time breaking out with earnings on Jan 23rd. We got our clients into it at The Oxen Group.

  141. angelcur

    iran/it hard to buy any BS from them..i wish bibi would get it over with

  142. angelcur

    ADP reported private nonfarm payrolls surged 325,000 in December, the most since data began in 2001 and nearly double the average monthly increase since May

  143. lflantheman

    AAPL portfolio:   BTO  10  Jan 6 weekly 420 calls for .55

  144. flipspiceland

    @EXEC

    I’d rather take a chance on 4 bites at the apple than 1. You can sell those puts at least three times and perhaps do better than getting 2.00 now for the 2013′s.

    (Sorry I didn’t read it more closely.)

    I’m planning on doing the same thing I’ve been doing each quarter or several times a quarter
    and if JRW III’s chart for the next three months proves prescient, with a major pullback, I’d rather have the opportunity to not be be locked in for the next year on anything.

    Right now it looks like several drugs have pulled back at the first of the year which strikes me as a rotation strategery by the institutions.

    To quote an old saw: “Be very careful out there”.

  145. lflantheman

    Now  put a trailing stop on those 420 calls,  start .10 above where you bought them and trail at .10.

  146. exec

    Thanks Flip

  147. NF**X

    NFLX – David is making a reasoned argument about a NFLX play based on actual numbers analysis. This, by definition (NFLX and reason,) is oxymoronic. No jab at DR at all – just a poke at the ongoing goofiness of NFLX. I actually like the range he proposes, but who knows what happens if NFLX shows any subscriber growth? That’s what people are really focused on – I think. Subs up? They could hit $100 in a day. But I’ve been on the wrong side of so many NFLX plays. Still, I think they’ve already signaled us that subs will not be up for the reported quarter – that signal being the streaming hours tout.

  148. Phil

    Today is a good example of why Futures are useful – can’t make any money on index options but just got a drop to $102.60 on oil and now it’s back to $103.50 for a possible re-load.  Last hour into NYMEX close not a good time to go short so better off waiting to see what happens into 2:35 now.  Who cares what the rest of the market does when you get this kind of action?  

    Dollar 81.23.  

    GLL/Mampcs – Thanks, that’s great (I hope). 

    IRA/NF – I don’t think that should matter much.  I think you have to have a goal to build a dividend-paying portfolio that’s going to return roughly 20% a year.  If you only have 7 years then you’ll "only" make 200% and if that’s not enough – you have problems that aren’t going to be fixed by being more aggressive.   

    BAC/Micro – Sure, that works but more aggressive obviously, between $5 and $7.60 you’re a loser.   Don’t really see the point in selling the call for a lousy .07.  

    BBY/Cwan – Not for an IRA!  I think, for an IRA, if you aren’t 90% certain that you’ll be happy to give the stock to your grandchildren, you shouldn’t be in in the first place.  

    Thoughts/Peedle – Doesn’t make sense so not playing is the answer.  As I’ve been saying all week, the Fed needs to pump ups up this week so the takedown next week won’t hurt too much.  Won’t know if I’m right until next Wednesday at 1pm (10-year auction but, so far "everything is proceeding as I have foreseen".  

    NFLX/David – Playing with FIRE! 

    QQQ Tomorrow $58 puts down to .47 and now we can buy a week for less than .30 by rolling to next week $58 puts so it doesn’t make sense not to in $25KP.  So we’ll have 10 QQQ Next week $58 puts at net $1.05 (now .77).  

  149. NF**X

    IRA – Thanks. Maybe aggressive not right word. I think I get ya tho. I was probably being inarticulate in the ask. Let’s say I have $500,000 in a particular IRA account – and I’m 7 years out from retirement. Am I looking at this account – now – as only a place I make accumulation trades for future purposes? Or can I use a portion – too – to make WCP-type trades in service of creating more accumulation buying power? After hours. Not urgent.

  150. zipla

    Hi Phil,
    Thanks for the advice on the the FAS Jan $72 short calls. Holding and watching but looks like I’ll have to make a move now.
    Another question: I always seem to have difficulty figuring out how and when to exit spreads. Here’s one: I have 10 10 TZA Jan $30/39 BSC, bought as a hedge some time ago (4.46/2.21) for net $2.25. Closing it I’d get about 0.36. but of course there’s the profit on the short 39 which today is $2056 so am I right in thinking I exit at $2446  Or should I now sell the 30s and get about $500 and let the 39 expire to take the full 2206 which would give me 2706 and so have a 2.7 exit. Or should I hold on, or should I figure out something else as a hedge.
    Thanks as always.
      

  151. Winston

     GIVE THANKS/PHIL
    Have not done my 10,000 hours, but a couple of years at PSW, and moved from fishing with a single line to owner of a commercial trawler (metaphorically speaking). Now I fish with many lines. It is amazing when you go over the same information time and time again, eventually it clicks. Like planting trees; being the house, 20% sale items, selling into the excitement. and patience. I just sold an AAPL Jan 12 340/390 BCS financed by the sales of Jan 12 275 Put. The trade was put on one year ago for a net credit and exited five minutes ago for a 49 dollar per contract profit. No point in waiting till opex to see what happens, and I will just sell 10 of those VLO puts to make myself net the round 50.
    I no longer worry about opex coming as I have adjusted well in time for most positions that go against me. I still make some howlers (RIMM, TBT, TRGT) but I play the percentages and my winners outdistance my losers by many miles. 
    I would never be in this position if it were not for Phil. He is a treasure, pure and simple. The goose that lays the golden egg if we care to listen and practice. Phil, a mighty big thank you.

  152. lflantheman

    Kicked out of the Jan 420s at  .75.   I’ll take the $200.   It all adds up.  I’m now considering whether the 420 weeklies should be sold into tomorrow.

  153. jmm1951

    cwan120/IRA/BBY
     
    This is just my personal opinion, but I don’t think it is particularly good for an IRA. What are you looking for? Volatility, seasonality, earnings growth, dividend, long term prospects,short term capital appreciation? It seems to me that all of these could be found better in other stocks.
     
    It all depends what you want to do with an IRA. Do you want to live off it now, or just accumulate for the future? To me an IRA is just another kind of brokerage account that operates under slightly different rules regarding taxation and use of margin and I don’t see why you would not do the same trades you would do in any other account, but adjusting where necessary for not being able to use margin, and taking advantage of not having to pay taxes except on withdrawals. No matter what kind of account you are trading in the ultimate aim is to make money to spend some time in the future, or to leave to your heirs, or maybe to pay for your care when you become senile.

  154. lflantheman

    AAPL port trade:    Bought 10 contracts   BCS     Jan monthly 415/425     4.90   8.82  /   3.92

  155. jomptien

    Iflan/APPL,
    Great calls on this one. I haven’t done all of them and the ones I was late on did Jan 390/380 BPS instead, trying to be somewhat conservative – all doing well.

  156. enni_82

    This could be a major boost to housing, if true. Doug Kass tweeted the link:
    http://blog.american.com/2012/01/january-surprise-is-obama-preparing-a-trillion-dollar-mass-refinancing-of-mortgages/

  157. JRW III

    ADP today reported that employment in the U.S. nonfarm private business sector increased by 325,000 from November to December on a seasonally adjusted basis. The estimated advance in employment from October to November was revised down slightly to 204,000 from the initially reported 206,000. …

    Employment in the private, service-providing sector rose 273,000 in December, which is up from an increase of 176,000 in November. Employment in the private, goods-producing sector increased 52,000 in December, while manufacturing employment increased 22,000.

    Employment on large payrolls—those with 500 or more workers—increased 37,000, and employment on medium payrolls—those with 50 to 499 workers—rose 140,000 in December. Employment on small payrolls—those with up to 49 workers—rose 148,000 that same period, up from the 109,000 jobs created among small businesses last month. Of the 148,000 jobs created by small businesses, 18,000 jobs were created by the goods-producing sector and 130,000 jobs were created by the service-producing sector.

    But remember how close ADP was in predicting November’s numbers; it was almost half of ADP’s projection at 120,000, about the rate needed to keep up with population growth.  ADP has a track record of overshooting the mark, but it’s usually good at picking up on trends.  I’d guess that this means a better December, even seasonally adjusted, than November.

    So , you can figure out whether this is a new Bull , or a Bull Trap today !! 

  158. zipla

    APPL/lflan
    On BCS Jan monthly 415/425     4.90   8.82  /   3.92, I’m seeing prices like 8.80/ 3.95 for more like a 4.90 entry.
    Am I missing something?
    Thanks

  159. palotay

     STJ/FAS – I ended up biting the bullet, and playing for a pullback on FAS.  I sold the $72 Call for $0.77, and sold the $69 Put for $0.31.  I’m planning on closing at the end of the day, no matter what.

  160. sagemm1

    Hey even a blind squirrel finds an acorn once in awhile…my patience took over my disgust back in the green for the day!!!

  161. jamesvu2000

    Anyone have an opinion on a tbt or tlt pin tomorrow?  thinking it TBT might pin at 19.

  162. yodi

    palotay
    FAS now that is what I call a gambler!!

  163. NF**X

    Winston – Great stuff. And congrats. My first lesson on my second foray with Phil is/was less chat, more reading and learning. I too need to see/do something a bunch of times before it kicks in. PD my fave teacher. Reminds me of a very senior very scary law school prof that everyone had to take for Property – but everyone but a few followed into electives. He was a tough guy – even at 85. Spoke slowly. Carried a big stick. Once told me after calling on me: “Well, now we don’t see that very often…you’ve managed to lose your case in the opening statement…” Love that guy! Took every nutty class he taught.

  164. JRW III

     

    January Surprise: Is Obama preparing a trillion-dollar, mass refinancing of mortgages?

    By James Pethokoukis

    January 4, 2012, 3:46 pm

     

     

    This could be just the beginning. If President Barack Obama’s legally dodgy appointment of Richard Cordray to head the consumer finance agency should stick, it may open the door to more such actions. Here’s Jaret Seiberg of the Washington Research Group:

    To us, the most important takeaway from a recess appointment of Cordray is that the President could use this same maneuver to put a housing advocate in charge of FHFA.

    And why is that important? The Federal Housing Finance Agency is the regulator and conservator of Fannie Mae and Freddie Mac. And the FHFA currently has an acting director, Edward DeMarco. If Obama replaces him with a “housing advocate” via the same recess appointment process, here’s what might happen next, according to Seiberg:

    That could lead to a mass refinancing program for agency-backed mortgages that would go well beyond the existing HARP program. That could hurt agency MBS pricing and result in higher financing costs going forward. Yet it also could be a big boost for the economy and housing going into the election

  165. Phil

    $102.70!  Dollar 81.20.  Gold $1,625. 

    Signals/NF – Just not worth the aggravation.  As to the IRA – to me, that money is fairly holy if it’s for retirement.  Ideally, you would want to put that excess margin to use in a WCP account if possible but, otherwise, you just need the discipline to keep $100K of the IRA cash in a more aggressive account that you play $25K of and use margin.  I’m no tax adviser but I think the whole idea of trying to save money on taxes to the point where you tie your hands behind your back and are unable to trade sensibly is ridiculous.  You only pay tax on what you make and if you can only make 10% in an IRA but 20% in a proper margin account – you are NOT better off saving the 7% taxes (assuming no offsets or long-term gains).  You can always start a hedge fund and only pay 15% anyway!  

    $102.35 and falling fast!  Still, $102.25 is a good bottom so be careful there.  

    TZA/Zip – As a rule of thumb, when you are down 50% on a vertical is time to do something with it.  It can come back fast but not too likely to get past $35 so you can just pull the $30s but that idea made a lot more sense when they were $2, not .55.  If you had done that at $2, you could have left the caller naked and now you’d be really pleased or you could have spent more money to roll the $30s out to something like the March $27s, to give yourself position and leverage for the next few months.  When you are the sucker who paid premium, don’t be an even bigger sucker by letting it dwindle away to nothing.  

    Wow Winston, thanks!  I’ll be calling you when we’re ready to film a commercial.  It’s very gratifying to hear that – your experience is exactly why I wanted to start this service in the first place – to help ordinary investors trade like the pros and thanks you so much for the energy boost that gives me to know that the trees I plant here are bearing fruit!  

    Trillion Dollar Refi/Enni – That’s the same thing I proposed in 2008 to fix the whole thing in the first place!  In fact, that’s part of the proposal I handed to Geithner 2 years ago!  

    Jobs/JRW – So random I just wait for NFP (and even that’s a joke). 

    $101.88!  

    TLT/James – Very dangerous to play.  $118 on TLT is defended by the Fed – that’s the best bet so TBT tops out about $19 now. 

  166. palotay

    Yodi.  Maybe, but 6 points on FAS in 3 hours seemed a bit excessive, and due for a pullback.

  167. Phil

    Law school/NF – Wasn’t that Kingsfield?  

    101.64 – Now that is a Wheeee!  

  168. BertII

    Oil was crushed into the nymex close just the oposite of what has happened for the last 4 days when they run up  usually into market close

  169. palotay

     Out for a whopping 0.08.  

  170. Savi

    Phil—was in/out   in/ out on oil—whee and whew—thanks

  171. jcaesar

    JRW – Funny how the article says the appointment is "legally dodgy."  Actually they’re just saying what the Republicans are saying.  It’s dodgy because it’s a recess less than the customary 10 days.  So I guess Congress take the President to court? 

    How much do you want to bet that if Bush had had to deal with a quarter (nay, a tenth) of similar stonewalling from the Democrats in Congress, that he would have just made recess appointment over night? He also, would of course, have had the Dems waterboarded for good measure. 

  172. BertII

    That was so unexpected all I could do was watch all the way to 101.55

  173. Savi

    Iflan--thanks for all the aapl plays--have done a few of them and they worked out great—really appreciate your sharing

  174. dpastramas

     Cant we get a similar Wheee on gold?

  175. 490union

    Phil….re FAS…Bot Jan 21 BCS   58c @6.90 & 62.00c @ 4.85  sld 50p @1.90  net close to 0.FAS now high @ 71.00,what about  selling 58c and leaving 62c naked into a down next week or too greedy? Thanks in advance for all your help and advice

  176. NF**X

    Kingsfield – In the flesh, man. (If you like that movie, its worth reading One L by Scott Turow – before he became a huge crime writer.) Thompson Marsh was his name – RIP. We called him The Turtleman because – tho 6′ 7″ – he had a turtle-ish head and moved thru the hallways at a speed that would never be noted by a motion detector. A freak of nature – became a highly recruited law prof right out of law school. What a cat.

  177. zipla

    APPL/lflan
    Disregard earlier post. I was reading it wrongly. It’s net 4.90
    Thanks.

  178. neetcorp

  179. jasu1

     Phil,
    If "they" are trying to run it up today and friday, "they" need to hammer the /DX into the close? So, would you go long /CL? now at 101.80.   Thanks

  180. revtodd64

     jcaesar – Just the point I was getting ready to write about.  It is not legally dodgy, just part of the Byzantine structure of government that both parties use to gain leverage against each other.  If the Republicans hate it, stop the filibuster and vote on Presidential appointees, yes or no.  It would be more accurate to call it an aggressive legal gambit to actually get some appointees in place now that he is entering his fourth year as President.

  181. JRW III

    jcaesar
     

    The point of the post was economic, not political !!

  182. jabobeast

     jcaeser—maybe the Dems and Reps should be waterboarded???  ;-)

  183. blodgy

    exec – you indicated correlation between IWM and dollar charts.  May I ask what dollar chart you are referring to? Thx.

  184. neetcorp

    Pharmboy,
    Will you by DNDN @ 10

  185. revtodd64

     JRW – Thanks for the post.  It is a very intriguing possibility to follow up on.  Like jcaesar, it bugs me when the press puts in biased statements like that.  I think this could be a good thing for homeowners, if done well.  My agency had a big contract as part of the stimulus package to help homeowners avoid foreclosure.  It did some limited good, and the head of the NY Fed actually visited us here in Poughkeepsie, but it was really to small to matter even here.  Now the funding has dried up and we laid off the staff.  Phil has said numerous times, why not bail out homeowners, thus helping the banks clean up their books in the process, rather than bail out the banks and leave the homeowners high and dry.  It just makes bankers rich and pushes a string for homeowners/consumers.  Again thanks for posting, certainly something to watch as Obama’s strategy unfolds for the election.

  186. angelcur

    http://www.businessinsider.com/language-of-ndaa-legal-to-imprison-americans-2012-1
     
    i predict some far left/right nutjob cites this when he blows something up or kills someone

  187. danny3399

    lflantheman Hey guys new to the forum, and it has been great so far. I was wondering if we want to play earnings in aapl in Jan what you think the best way to play it. Or has the stock ran up to much already.   

  188. l4real

     JRW
    Do you still see a major correction soon?

  189. yodi

    I see a lot of new members on the site Soon we need to give Phil a new wheelbarrow to go to the bank !!!!!

  190. Phil

    Again on oil – notice how fast it goes down compared to up.  Big indicator that the moves up are total BS and, of course, indicates why going long in the futures is CRAZY!  

    Nice Savi!  That’s the way to play it

    Dodgy/JC – Don’t even get me started.  First of all, it’s less than 10 days because the GOP won’t adjourn the Senate just to stop Obama from making appointments here and on the National Labor Relations Board as they hope leaving a seat unfilled there will force the whole Board to shut down.

    A President generally makes recess appointments when he is aware that his nomination does not have the necessary 60 votes to beat a filibuster.

    Therefore, Senate Republicans hope their “gaveling in gaveling out” every few days, in order to not officially adjourn for the year, will block any such recess appointments.

    TPM’s Brian Beutler writes, Republicans were engaging in an "extra-legal attempt to nullify a key portion of an act of law" by blocking Cordray’s nomination to head the agency. 

    Bush, by the way, averaged 21 recess appointments per year for 8 years, his father 19 and Reagan made 30.  Obama has made under 30 total since taking office against almost 600 blocked appointments by the Reps (a record by over 200%)!  

    Gold/Dpast – One can only hope.  At the moment, I’m hoping for the Nas to pull back.  

    FAS/490 – That’s a bit greedy.   You get a full payout at $62 and that’s looking good – why risk getting burned?  If you want to do that, with the $58s at $13.20 (only about $1.25 in premium), you can cash out and take the April $60/74 bull call spread for $7.60, which should hold their value well and takes $5.60 off the table (your entire potential gain) and then you have another $14 spread to protect you from a big move up on the $62 calls ($10), which you can roll up to the Feb $66s ($9.70) and so on.  

    Turow/NF – I read a couple of his (Burden of Proof, Presumed Innocent) when he was popular but never heard of One L (maybe because there was never a movie).  

    Long oil/Jasu- Not from the way it’s dropping .20 at a clip – risk of loss is too great I think.  Don’t forget, that Iran statement that they would meet about nukes is them capitulating before the embargo even starts – all talk and no action over there means oil can drop like a rock (which is a popular Christmas gift in Iran).  

    Nutjob/Angel – Were the original tea party crew nut jobs?  Was this country founded by nut jobs?  Isn’t this exactly the kind of crap our forefathers died for when founding this country (well, not my forefathers, Grandpa Max still called America "The Colonies")?

    Welcome Danny!  You kids be careful playing with AAPL now… 

    New Members/Yodi – We closed Premium in Nov/Dec as I had a bunch of days away and didn’t want too many new guys – now I’m back in the command center and don’t mind a few extra questions so we opened the gates back up.   Still close to the limit on Premium though so may close again if this keeps up.   

     

     

  191. jerconn

    Neetcorp – I don’t know where Pharm is today, but he doesn’t like DNDN…

  192. Savi

    Phil—video is cool  :-) —you are just a wealth of information—how do you find these things to match situations LOL

  193. acobra65

    Phil/Kingsfield
    My 1st year contracts professor @ 8:00 AM , about 6"5 and 245 lbs bellowing every nasty word you could think of while intimidation you, embarassing and humiliating you made "Kingsfield" look like a pansy a**….. LOL.  His theory was, "If you can’t stand up for yourself in here, what’s going to happen to you in the court room representing your client….. BTW he talked the same way to opposing counsel… Always intimidating them… What a trip………

  194. l4real

     Phil
    You mentioned you feel that the market may correct. Do you feel it’s because of the Treasury auction and or fundementals?

  195. mampcsA

     Stj, since i’m planning to follow the 25KP trades very closely this year, if you give me edit permissions to the google spreadsheets, i can update the 25KP trades on a regular basis (in case you need any help there of course).

  196. NF**X

    One L – It’s his true account of his first year at Harvard Law. Slim tome – required reading for all likely law students – but entertaining for all.

  197. Phil

    Matching/Savi – That’s just the clutter that’s floating around in my head.  That’s why I love this format as I can write something AND drop the link that I’m associating it with which makes me feel much more like I’m conveying my whole perspective on something than I could with just a couple of sentences.  

    Law/Acobra – I was pre-law my first year.  Fortunately, they made you intern at a law firm and I realized I didn’t want to spend the rest of my life writing term papers.  I wish I had gotten a law degree though as I’ve since learned that most trial lawyers are totally unprepared anyway and I was simply taking it too seriously at the time.  

    Correct/L4 – No the drop next week will be coordinated by the Fed, probably to fill the gap back to 12,000 ish on the Dow but after that, I don’t think earnings will support a move back to where we are now (12,400) and then perhaps panic and a serious pullback to 11,500 or maybe a bit lower if earnings are actually bad.  Once that’s digested, I imagine the Fed will ride to the rescue and the rest of the year will be a party.  

    One L/NF – Cool, hopefully I can get it on my IPad.  

  198. zipla

    So Phil,
    I also have two other hedges that look like they should be adjusted using the logic as applied to TZA.
    I have VXX Jan 33/35 BCS the net for which was 1.06 (3.17/2.11) and now is about .51 (1.45/.94)
    And EDZ Jan 16/23 with the net entry at 2.08 (3.51/1.43) and is now about 2.2
    What’s the best way to adjust to keep a hedge. Thinking I should do it now while there’s some premium, but then there could be a large correction next week so perhaps I should wait?
    Thanks

     

  199. cwan120

    BBY in IRA / Phil & JMM:
    Thanks for the advice.  Great advice!
     
    Just came back from a long meeting.  Only 10 minutes left before market close.  Might as well call it a day.

  200. scottmi

    Consumer Finances – TDAmeritrade sends out a brief economic analysis note every day. Yesterday’s highlighted auto sales and is expecting improved numbers, and one of the supporting points was improved consumer finances: 
    We expect the recovery in auto sales to continue this year, as there are several supporting factors, including a great deal of pent-up demand, improvements in credit conditions and consumer finances, increased availability of models affected by the natural disasters, and the introduction of new models.
    I found this very suprising and called the analyst. Her basis and source for improved consumer finances was the Household debt to equity ratio, which has dropped from 164 to 145.. Source being US govt stats and Fed Reserve numbers.  Well.. i’m not sure the debt to equity tells the whole story. i suspect equity has fallen greatly too..

  201. angelcur

    NUT JOBS// YAH the site should be called PLANTERS PUNCH>>> i am  good with being a nutjob YOU?
    1281 resistance is going to be tough to break through.
    idealscenario is stocks  mark time today…. gap higher tomorrow on good news from the jobs report….send the shorts running for cover and get every under-exposed portfolio manager shitting to buy into something….  that’ll push the SP to 1300 or more get everyone excited about owning stocks again…then we ar edown next week..throw in a bottle of whiskey and a naked woman/man
     

  202. Phil

    Funny how it seems like an up day because we had such a bad start but we’re just flat again, at the same place they pushed us up to in Monday’s pre-market.  That is not a solid way to start the year…

    VXX/Zip – That’s still on track as it won’t take much of a dip to put you in the money.  EDZ is in the money and getting your money back on an insurance play is a good thing.  Since they are both "winnable" at the moment and since you want a solid hedge into next week – I’d say wait until we’re sure we’re not crashing next Wednesday before rolling out the bottoms of the spreads.  

     Cullen Roche says the year-end rail traffic report from the AAR that shows a 2.2% Y/Y gain in carloads and 5.4% increase in intermodal volume is a "positive story," as well as a contributing factor to his call that a recession isn’t imminent. According to the AAR, the year ending strong with 16 of the 20 carload commodity categories tracked by the group seeing Y/Y increases. 

    Orders for heavy-duty trucks rose 12% Y/Y in December and+46% from November, according to market research firm ACT Research. Although macro-freight metrics remain mixed, December’s heavy-duty order volume was the second-highest month since early 2006, and is giving a lift to trucking stocks: Paccar (PCAR +4.4%), Navistar (NAV +3%) and Cummins (CMI +2.3%).

    RBC says its index on consumer outlook in the U.S. increased in January to 45.2 from a December reading of 40.3 – marking the highest level the sentiment gauge has seen since July. The current conditions index rose to 36.1 from 29.8, while the expectations index jumped to 55.1 from 52.1.

    Watch for Q4 earnings misses in the oil patch, Barclays warns, due to shortfalls in refining results and weakness in the North America gas market. Among the big three, the firm expects COP to report a somewhat bigger miss than CVX and XOM due to its heavier exposure in those areas, and XOM’s earnings will be propped up by gains from the closing of Apache North Sea sales. 

    Tesoro’s (TSO -7.1%surprise warning of a Q4 loss on weaker margins slams energy stocks, with Valero (VLO -3.3%) and Marathon Petroleum (MPC -5.6%) deeply in the red. Until Q4, the three refiners had been helped by a discount for crude oil because of an artificial glut caused by infrastructure constraints at Cushing, Okla., but that cost advantage has narrowed. 

  203. zipla

    Thanks Phil. Since becoming a member in Oct this has been a fun, educational — and profitable — ride.
    I am extremely grateful.
    BTW with a morning post like yesterday’s — cartoon history, Greek arts theory references among other things — the membership would be worth paying just for the great morning read alone!
     

  204. flipspiceland

    @Felipe

    Once again and for the umpteenth time, thanks for the /CL trade.

    I will await your next in and out insturctions with bait on my breath.

  205. Phil

    Debt to Equity/Scott – It’s worse than that because the ratio has been dropping due to defaults wiping out the debt and those people are off the borrowing cycle for 7 years so they aren’t running over to the dealer to buy a new car.  The Fed minutes CLEARLY indicated that credit conditions were worse, not better – I’d be curious to see her notes… 

    Good plan for the week Angel!  

    Well, another one bites the dust and we’ve gone nowhere – which is better than down and who knows, maybe the "fix" Europe again tomorrow and maybe we create 300,000 jobs.  Nahhhh…..

    Thanks Zipla.  

    Bait breath/Flips – No more mackerel sandwiches for you! 

  206. dpastramas

     Corrent / Phil  - And you believe all this is going to happen till Jan 25 FOMC?  Will be quite a ride, might as well buckle up :-)

  207. angelcur

     volume 30% lower than same week last year …one more bad day of deterioration in europe and i doubt we ignore it…if europe/china stable to higher and good jobs report then upside..and i will be hsoritng the mackeral out of it

  208. ccsincsd

     Collar/Phil    
    Phil.  I’ve found a few collar w/ stock trades that are "100% guarantee" winners …. if only the stock was available for short sale.
    Example
    short the stock at 10, sell the 10 put for $1.80, buy the 10 call for $1
    But, TOS says the shares are not available.  
    Is there a way to use options to mimic the short stock?  Selling a DITM call?
    Thanks,  Steve

  209. scottmi

    TDA Debt-Equity/Phil – Here is the pdf they sent out.  Just a brief thing. I expect the fed numbers are willingly and uncritically used by corporate brokerage floggers.

  210. elliotteldrich

  211. dclark41

    Phil
    How much of the employment report is related to the holidays? Is it right to be suspect with any of these labor reports because of the number of job seekers that dropped out last month and now the holiday effect(if any)? What happens if those that dropped out get encouraged and motivated to return (because of the recent reports)? Aren’t we set up for some disappointing employment numbers soon?

  212. lflantheman

    Bea…post 12:24.   I usually do make a comment as to the risk of a trade.
    Danny….3:10    We are getting a pretty good runup already into earnings.  Very likely I’ll be mostly in cash in the AAPL port at earnings time.  I sometimes take a very small amount though and make a high risk, high return play, just for fun.   But I’ll describe it beforehand.   I think we nee to squeeze AAPL for all we can get before earnings. 

  213. sagemm1

    Wonder how this will fare for nflx
     
    6:37 PM Desparate to lift weak DVD sales, Time Warner (TWX) has strong-armed Netflix (NFLX), Redbox (CSTR), and Blockbuster (DISH) into doubling their wait time for offering new DVD releases via their rental services, to 56 days, in exchange for maintaining the right to purchase DVDs from Time Warner at wholesale prices

  214. rpme

    Phil, just read Bill Gross, it seems you agree on many things, most importantly QE3. We are at DEFCON3, confidence is high.

  215. zeroxzero

     Acobra/Kingsfield:  My contracts professor first year was smaller and tweedier but histrionically sarcastic and merciless in seeking out ignorant foxholers.  Meaning most of us, most of the time.  He was also gay; my accidental third-year apartment-mate was also gay, and a friend of his.  I thereby gained the honor of being the first in my class  called upon to recite the facts on the first day of Contracts.  Being the helpless rodent in a vivisection class is a cruel fate indeed.

  216. angelcur

    ZO/well at least you weren’t abused before the knife was put to you…if you hadn’t been a rodent things might have been different.(.see i got all caught up in that imagery!)

  217. rdn4evr

     Hi All and Happy New Year!
    Sorry I haven’t been contributing much but I’ve pretty much been sick the whole time since the PSW meet in October.  Pneumonia, strep, colds, you name it.  I’m blaming it on my son starting high school and bringing home a bunch of new germs, but now i’m choking down a bunch of green juice to see if that’ll help the immunity.  
    Anyway, just got my Christmas present to myself – a new Macbook Pro, and now I’ve got to decide how to configure it between Windows and Lion.  I need Windows for Schwab’s Streetsmart Edge, and probably Excel and Word, but I’m hoping to use everything else in Lion, including TOS.  
    What do you guys with Mac’s do? 

  218. mb22

     rdn4evr -
    You could try parallels for the Mac.  It will allow you to toggle between the operating systems or you can just have it run with Mac OS as a single window.  I find it slows my machine, so I only use it when traveling.  I ended up transferring my actively traded accounts to TOS due to the platform, it is much more Mac friendly than my other brokerage account.  When I trade in the windows based account, I use another laptop – being able to use the trading platform is the only reason I hung on to it, I am all Apple otherwise!

  219. Burrben

    Phil / QQQ Strangle ahead of jobs data

    I’m wondering what you think of this trade.  The VIX is at 21.48 and options are not expensive. 
     
    With QQQ at 57.61, let’s:
    Buy one January $58 put
    Buy one January $57 call
    Debit of about $2.17
     
    Hoping for a move to the downside for the most bang for the buck if vol’s increase.

  220. Burrben

     Phil / QQQ Strangle.  Disregard.
    I think jobs data comes out at 8.30am.  Too little too late….

  221. deano

    AA income play could be a little bumpy tomorrow – note the timing just before earnings:

    Alcoa to close or curtail 12% of smelting capacity

    http://www.marketwatch.com/story/alcoa-to-close-or-curtail-12-of-smelting-capacity-2012-01-05-1739310

  222. scottmi

    Markets – gotta be careful out there, and if you are trading without a plan, it’s going to be nothing but a heartache.

  223. Pharmboy

    dNDN – not really a fan of them. I would rather have my $ in IMGN or ARIA. I am traveling still. I will be back Monday.

  224. Phil

    Nice little dip in the futures so far. About 0.4%. 

    Dollar 81.24, oil $101.37, gold $1,625.  

    Asia down pretty sharply, led by Hang Seng down 1.4% and Nikkei down 1.3% with Shanghai off 0.33% and BSE down 0.5%.  

    Volume/Angel – Good point, that’s why we have to stay very suspicious of the move up.  Without volume, there is no foundation laid to support the move.  

    Collars/CCS – I’m not a fan but what stock are you talking about.   Even if you are collaring a high dividend payer, it’s usually just tying up a lot of money for a little return.

    TDA/Scott – I think that’s the wrong PDF. 

    Big Chart – Well, it LOOKS good but it’s not.  As noted above, there is no volume foundation supporting this move so it could vanish in a puff of smoke and then it will look like an Island Top, which is very negative and the becomes the Head for a Head and Shoulders formation that takes us back to the late Nov lows so very bad if we don’t move higher very soon.  

    Employment/DC – They make all sorts of "seasonal adjustments" which make the reports pretty useless this time of year.  As I pointed out earlier today, we had a "fabulous" report last January re. December’s jobs and that gave us about 3 weeks of rally before we fell off a cliff as the next report went back to hell as all the temporary jobs evaporated.  

    Keep in mind that anything less than 150,000 jobs added in a month isn’t even enough to keep up with population growth, anemic as that is.  The only reason we didn’t fall off a cliff in November was because they reduced the size of the Civilian Work Force by 315,000 people - a shocking move but no one in the media even squawked about it.  That’s why these figures are nonsense.  

    Cool chart from Barry:  

     

    Click for ginormous graphic


    full graphic after the jump

     



     

  225. Phil

    My bullish premise – a picture that’s worth 1,000 words:  

     

  226. Phil

     

  227. scottmi

    TDA/phil – hmm. the right one comes up when i click on the link here. oh well. is not secured,  here is the text from it:

    TD Economics

    January 5, 2012

    Data Release: U.S. new vehicle sales end 2011 on a high note



    New vehicle sales totaled 13.52 million units in December (on a seasonally adjusted annualized rate basis), slightly below November sales of 13.59 million units. The final two months of the year posted the highest sales rates since August 2009 when the government-backed cash for clunkers program gave sales a post-recession boost. Aside from that artificially inflated month, this was the highest level of sales since August 2008.

    December’s numbers bring the 2011 tally for U.S. auto sales to 12.74 million units. While still a far cry from the 16+ million units seen prior to the recession, sales are 22% higher than the lows seen in 2009.

    Sales of the Detroit-3 brands jumped 13% during the month, led by a 37% surge in sales of Chrysler vehicles. Honda and Toyota continued to struggle in December, with Honda’s sales down 19% on the month and Toyota’s flat (0.4%). For the year as a whole, these Japanese automakers were the only brands to lose market share.

    The light truck segment continued to outperform, with a 9.9% gain in December, while passenger car sales were up by 7.8%. Overall, the share of light truck sales in 2011 increased 1 percentage point to 52%, while the share of passenger car sales slid to 48%.
    Key Implications


    Auto sales are entering 2012 with some much-needed momentum, and the outlook for sales remains bright overall.

    We expect the recovery in auto sales to continue this year, as there are several supporting factors, including a great deal of pent-up demand, improvements in credit conditions and consumer finances, increased availability of models affected by the natural disasters, and the introduction of new models.

    Still, uncertainties surrounding the global economic outlook and a slower pace of economic activity in the U.S. during the first half of the year will weigh on consumer confidence and limit sales. Overall, we forecast new vehicles sales to hit 13.4 million units in 2012, marking a gain of 6%.

    Dina Cover, Economist
    416-982-2555

  228. Phil

    NFLX/Sage – Not good for them to have delayed content.  People pay up for fresh and this is just another way in which NFLX’s cheap contracts are being re-negotiated now that Studios are seeing how much damage it does to their own sales.  As I have said here often – NFLX is a non-business, they leach off the intellectual property of others and don’t even own the means of distribution (the web), which they are also essentially stealing by not paying a fair proportion of their use.  That’s why their growth model is bogus (they already use 1/3 of all US bandwidth with 20M subscribers and, in foreign countries, they would be over 100% very quickly) – it’s simply a criminal enterprise (figuratively) waiting for the laws to be written that can finally shut them down. 

    Gross/Rpme – He’s really insightful but it’s difficult to trust him as he always has an agenda, of course so it creeps me out a bit when he agrees with me so closely.  

    Welcome back Rdn!  I drink a lot of Vitamin Water to combat kid germs – the kids drink it too instead of sodas.  I use my IMac for just the Web (Safari works fine) so can’t help on configuration.  I need a new laptop and am considering a Mac but it’s replacing a 17" HP and AAPL doesn’t make one that big so I’m a bit iffy as it’s mainly just one of my desktop screens but it’s also my road computer and, if possible, I’d rather go bigger than smaller. 

    QQQ Strangle/Burr – Not sure when you would place that trade as jobs data is 8:30 but paying $2.17 for a move on the Qs would have to be 5% to do you any good – not for me as you are the sucker paying $2.17 of premium where you guarantee yourself one side loses no matter what so you ONLY win on a big move and you lose on a small move in either direction or flat – probably 80% against you on that.  Ah, I see you caught on to the 8:30 thing…

    Psychopaths/Scott –  A long time ago.  

    The psychopath never takes a bath
    Cause he'll wash away his hate.
    And we crowd and bark
    In the damp and dark,
    as old Scrooge comes through the gate.
    All your life you've toed the line
    Never dreamed and never resisted
    And now your running out of time
    All you ever feel is bitter and twisted.
    All your life you've lived a lie
    All closed up the way you existed
    Now your running out of time
    All you ever feel is bitter and twisted.

  229. Phil

    AA/Deano – Yeah, we should have pulled back on the number of open puts.  I think we may have to tomorrow – I forgot it was 25 – too many and we should have just been happy not to have a loss.  

    Heatache/Scott – I thought you were going for Bonnie Tyler.  

    That TDA is what I see but I thought it was going to be supporting data re debt/equity, that’s all.  

  230. diamond

    Phil – RE: "… I need a new laptop and am considering a Mac but it’s replacing a 17" HP and AAPL doesn’t make one that big …"
     
    Au contrair, mon ami:
     
    17-inch MacBook Pro
     

  231. grenowoods

     My son in Computer Engineering in university is on his second 17" MacBook Pro (he’s welcome) that is now a couple of years old. The specs on the latest one are out of this world. On another topic, sort of, somebody just gave me their old iPhone 3G. I was reluctant at first but I have fallen in love with this thing (I always had a dumb phone). I couldn’t imagine having anything else and the 5 is coming out this year which, IMHO, should have LTE support and a 4 1/2" screen. That will knock the socks off anything out there.

  232. rdn4evr

     Thanks MB22 and Phil,  After thinking about it, I really just need Windows for that stupid Schwab SS Edge; I just really like their charts even though the account is a guaranteed loser because I can basically only buy premium, not sell it.  So, if I could find something with charts as easy to read, then I could not have to worry about slowing down with Parallels and Windows.  However, this thing is pretty fast, and I’m going to upgrade it with an SSD drive.  I had a Mac Pro from about 2005, which they obsoleted a year later by switching to the intel chips.  A year or so ago I got a Toshiba 17" laptop, and while it is a workhorse I can honestly say I’ve never hated a computer so much in my life.  The fan runs at about 55 decibels non stop, and it has a 15-20 minute battery life, along with a 10 lb ac adaptor.
    The great thing about these new MBP’s, is that they use the same trackpad movements as the iPad/Iphone (pinch/swish/etc), which is just totally awesome.  I hope I’m not disappointed, but it just seems that there’s a lot of "things just work better the way they’re supposed to" value in the Apple products’ pricing premium.  We’ll see; when I was in the Apple store telling the Genius/screenwriter/actor (really) all the things I needed my computer to do he stopped me and told me it was making his brain hurt.  I told him welcome to my world buddy.  But I mean really, how on earth can Apple be trying to tell people that they can use their spreadsheet  program for business apps despite the fact it won’t perform or recognize Excel macros?

  233. Phil

    Good morning!

    Normal 3am pop but no enthusiasm to it so far.  

    Shanghai turned up into the close – 0.7% but Hang Seng finishing down 1.2% and Nikkei about the same with BSE down 1%. Very tempting to short them (12,350 still the short line on the Dow (/YM)) but this is some massive manipulation and I can’t imagine they’re going to stop in pre-market after all this effort to keep us at Tuesday’s open.

    So bed for me, not worth playing. 

  234. Phil

    Oh yes – been reading local papers from around the World and Europe and Japan are in or will be in Recession and I’m not sure the US isn’t and don’t even get me started on China so still loving Dow shorts.  

  235. gardling

    Can anyone recommend an online service for transferring money from the US to a foreign bank without getting ripped off on bad exchange rates and high fees ? In my case I need to transfer money to Sweden. Any help would be appreciated.
    Thanks

  236. roro

    Just looked at the BIG chart for the Dow……….getting back within striking distance of the April and July tops at 12,750.
     
    The Dow, S&P, the DAX and FTSE are all riding very similarly looking ascending channels.
     
    The DAX and FTSE100 are pushing the tops of current ranges at  DAX6100/6125, FTSE5650/5700 in respective channels and the next upside target I see for the S&P500 looks like a possible shot at 1300.
     
    The technical indicators I use (RSI, SStoc and CCI) are all well into OverBought  although technicals can stay O/B or O/S for a very long time.
     
    Using Phil’s premise that the central banks will stimulate then 12, 750 again for the Dow looks reasonable, however on the flip side since this is a no volume rally subject to vanish in a whiff of smoke and if the FED fails to deliver stimulus or repeats its stance of the last FOMC then I would be looking to take a very large short position starting with the DOW as it is front running the other indexes.
     
    That is my theory. In the meanwhile I will keep playing hit and run, waiting and watching for the right time.

  237. roro

    Since the Dollar is up at significant resistance maybe what better time to crash it with printing than immanently.
     
    Or, one more deep selloff , and then bring it, but as Phil points out it is more difficult to control or stop a panic than it is to avoid one.

  238. kramer36350

    Complete Cheatsheet For What To Buy Ahead Of QE3
    SocGen on the sequences of events:
    Weak Q1 12 GDP and softening inflation pushes the Fed to another round of monetary easing, in 2 steps:

    In January, the Fed pledges to keep real rates at 0% until unemployment falls below 7.5% or inflation moves above 3%,
    In March, the announcement of another round of QE, concentrated on MBS purchases (c. $600bn over 6 to 8 months)

    Essentially buy gold and MBS
    http://www.zerohedge.com/news/complete-cheatsheet-what-buy-ahead-qe3

  239. roro

    Iran intending to conduct naval/military exercises in Straits of Hormuz in next several weeks…….

  240. roro

    German factory orders m/m print at -4.8% vs expected of -1.6% and previous month of 5.0%. DAX holding 6100.

  241. Burrben

    Phil, Roro / DX
    Woke up today for the 3am’r, but since there was no setup I decided to dial in my charts for DX and CL
    While looking at the DX Mar12 Future on the ICE (nybot), I get a Bid/Ask and Last
    But I also get a underlying price for the Index USDX also on the ICE.
     
    So when Phil is talking about the dollar on here, is he talking about the USDX Index or the DX Future forward month contract?  I don’t have TOS, so I can’t see the details for /dx on their platform.

  242. roro

    Hey Burrben…….not to front run Phil, but I use a quote off of optionsXpress US Dollar Index last at 81.12/13 b/a for the March 2012 contract ($1000 x the US Dollar Index)
     
    I also trade an FXCM platform out of London that permits CFDs. FXCM has its own DowJones Dollar Index and it is currently quoted at 9980 so you can see the correlation to the futures contract. (the CFD offers much better margin so a benefit for traders not able to play the futures and it allows scaling in/out with $10,000 lot sizes as opposed to the Big bite of futures)
     
    The same platform also allows access to all of the major European and Asian equity indexes which is a big plus imho, especially as I have been regulary shorting into the Spanish ESP35/IBEX since last summer.
     
    Hope that is somehow useful ifo

  243. roro

    DAX bouncing back higher from the 6100 line after shallow pullback on big drop of German Factory orders……….
     
    ………fundamentals are again back to how much/how fast can the printing presses print???

  244. roro

    Phil………..can I apply for a nightshift?……….I need extra money! I show up on time and I try hard and I am honest.

  245. Phil

    12,353 on the Dow futures – Yawn!  See, didn’t miss anything by sleeping.  

    Dollar (/DX on TOS) 81.15, oil $102.28, gold $1,623, silver $29.36, copper $3.42, nat gas $3.015, gasoline $2.75.  

    Meanwhile, the Euro was rejected at $1.28 and the Pound rejected at $1.55 so both lines to watch as it’s plain silly to be bullish if the Euro and Pound are back at year lows.  77.11 Yen to the Dollar so at least the BOJ is making progress but the Swiss have lost their touch now at 1.2175 EUR/CHF – probably forced into inaction due to the scandal, which is removing some of the underpinning support for the Euro.

    We’ll see what the jobs number is and we’ll see how high they can take us off that number but, either way, I want to pick up shorts into the weekend – EVEN THOUGH there is no reason to expect us to go down until Tuesday morning – so, just in case.  

    Gold/Kramer – I’m not sure about that.  Gold has maxed out on the inflation that never comes story already – $600Bn over 6 months isn’t enough to move anything, just a little can-kicking money.  

    Gemany/Roro – Like I said, Recession in Europe for sure.  And Germany is the BEST of the bunch.  

    Dollar/Burr – Yes, (/DX) on TOS.  If you can’t subtract the difference between what I see and what you see to make a benchmark, then try opening a paper money account on TOS, which is free.  I love their charts anyway.  

    Nightshift/Roro – Sure, figure out how to make money off it and we can talk!  8-) 

  246. jmm1951

    Psychopaths/Wall Street
     
    Having spent most of my life working with mental patients, prisoners, sex offenders, and drug addicts, I would say that most of them are psychopaths in the sense that they care only about meeting their own needs and do not care in the least about broader social issues. However psychopathy is probably built into corporations, where the stated aim is to enrich the management and shareholders, or in the military where the stated aim is to project US power and kill its enemies. So the military industrial complex is inherently psychopathic because it values only its own survival and cares little for communities, the environment, or the future except for its own profits. Hence the psychopaths are the most qualified to run them.

  247. roro

    Thx Phil………i’ll get to work at that……….2 things you need to know though; i am a slow learner but once i get it it i never forget, and i cannot talk as fast as you write.

  248. roro

    I forgot to take note of where I read this but yesterday PM Harper threatened to ensure employment in Canada would be stimulated by govt programs.

  249. Phil

    By the way, nothing against Roro but that brings up one of my pet peeves with "job seekers."  What the hell is wrong with kids these days that they ask for jobs and they ask for money but they bring nothing to the table?  When I would apply for a job – I would learn about the company I’m applying for and I would take the opportunity, when meeting with someone, to make a pitch on why it would be profitable for them to hire me.  Maybe it’s my English/Jewish family background but I never even asked about the money – to me, that made it seem like I didn’t know what I was applying for and, of course, if it was an entry-level position – I had no intention of staying at that level for long anyway.  

    Maybe I’m out of touch as I haven’t applied for a job for over 2 decades but I used the same attitude when raising money from VCs and I was very good at that and I’ve hired hundreds of people myself (but not sat through most if the interviews) and I look for similar qualities in others and used to often find them (getting on 10 years ago now) but now, it’s just "I need a job so give it to me please."  So, to all you job seekers out there – try to keep in mind that the person ("job creator") you are asking for a job is an ENTREPRENEUR, who probably worked very, very hard to get where s/he is and they do not want to hire you to LOSE money – they want to hire you so you can make them more money.

    Make your’self valuable and, to get a job more easily, you need to know what value-strengths you have and apply for jobs where those strengths can be PROFITABLY put to work for the company you want to work at.  Applying for random jobs just because they have a sign on the door or an add in the paper isn’t efficient.  Use the Web and apply where you add value in a place where you fit – if you BELIEVE you fit in somewhere, you’ll have a much easier time convincing a potential employer of the same.  

  250. roro

    Points well taken Phil………sorry, did NOT intend to offend and I agree with your take. As for me, my attempts at humor often fall short or end up being not all funny.

  251. roro

    Looking at the daily chart for the Dow and price is pushing up against the edge of the top Bollinger band for the 4th day in a row.

  252. pstas

    they ask for money but they bring nothing to the table?
    Now, I wonder just where and how they learned that?

  253. deano

     they ask for money but they bring nothing to the table?
    Sounds like the next generation of bankers to me!

  254. Canuck

    Job seekers,
     
    I had a marketing Prof in Univ who constantly drillled us with the idea that when you get a job you had better think every day "what I am going to do today that will help my company make more money than I did yesterday" because if you are not thinking that, someone higher up the food chain will be.

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