Guest View
User: Pass: | become a member


Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Whipsaw Wednesday – Dip Buying or Just Dips Buying?

SPY DAILYWas that it?

On February 24th I wrote "TGIF – Sell in March and Go Away?" and I laid out my case for why I thought we were going to fall off the table in March and we have, indeed, fallen right off the table right on schedule since then.  I said that Friday, that the post was intended as a bookend to my September 30th bottom call as I felt that we had captured all of the upside we were likely to see off the "good news" that Greece was "fixed" and the economy was "improving."  

I'm not going to say anything bad about the economy here, I'll let Michael Snyder do that with his "15 Potentially MASSIVE Threats to the US Economy over the next 12 Months" – I think he pretty much covers it!  8 trading days ago (2/24), we had two short trade ideas in our Morning Alert to Members, they were:

  • SQQQ April $13/17 bull call spread at .70, still .70 (even) 
  • DXD April $13/15 bull call spread at net .55, now .70 – up 27%

SPY WEEKLY In Member Chat that day, Exec asked if I was getting bearish and my response was:  

Bearish/Exec – Are you kidding, this is me painting a sunny picture! Give me a few drinks and I'll tell you how off the rails the Global Economy is right now… Do you know how much Kool Aid I have to consume not to scream short on every single stock I see. CAT $116, CMG $386, DIA $130, GMCR we already did at $70, IBM $200, KO $70, MA $415, MCD $100, MMM $88, MO $30, MON $80, MOS $59, OIH $45, PCLN $593 (did them too), QQQ $64, SPY $137, TM $85, USO $41.50 (got 'em), UTX $84, V $117, WYNN $119, XOM $87, XRT $59 (got 'em) – and that's just off my watch list of stock I like to buy when they're cheap! We are not just priced for perfection, we are priced for perfection plus a return to full employment a forgiveness of all debts without write-downs and inflation without rising interest – we are priced for Nirvana!

It's a big list but, of course, they are pretty much all winners now, with PCLN the notable exception (so far).  Later that day, during Member Chat, we added:

  • Oil Futures (/CL) short at $109, now $105.50 – up $3,500 per contract.
  • USO April $40 puts at $1.30, now $1.70 – up 21%
  • SCO July $28 puts sold for $3, now $2.40 – up 20%
  • VXX March $20/23 bull call spread, selling $23 puts for net .85, now net $1.76 – up 107%

My comment on oil at 1:19 that day, as it rose to $110.50 (where we still shorted it), was "We finally got to the point where the price of oil is so ridiculous that VLO is going down!"  These are the kind of signals you look for to determine when the party is truly over – when people start getting hurt…  You know things are bad when I have to quote Sun Tzu to keep Members from panicking but it did turn out that $110.50 on oil was just a spike that reversed the same day and we took full advantage by buying back short SCO calls and short USO puts we had sold as part of spreads, leaving us more aggressively short on oil right at the top.  

If you know the enemy and know yourself you need not fear the results of a hundred battles. – Sun Tzu

That weekend, in chat, we had a great discussion about trend exhaustion that's worth repeating here:  

USO WEEKLY

I agree with not fighting a trend but trends end – otherwise Green Bay would have won the Superbowl this year. How could they lose? Humans are hardwired to recognize patterns – it's how infants learn, it's how we develop smarter behaviors so there are many places in our brain that "feel good" when we recognize a pattern and then our instinct is to follow it. That's why TA is so popular, it's monkey brain candy! It's very easy to look at a pattern and extrapolate that it will simply continue forever because it's exponentially more complex to look at the underlying causes of the current action and determine how long the prevailing forces can sustain the movement.

In absence of money coming in, markets go to zero. I would think that point would have been made quite strongly in 2008 but apparently it's already been forgotten by the monkey-boys. Anyway, so markets need fuel just like a car needs fuel and fuel is money coming in faster than it goes out. We have rising sentiment and cash coming off the sidelines and Central Banks pumping money into the IBanks who unleash their HFT Bots on the markets. That's going to make them rise but not forever – at a certain point, the market gets bigger and needs more and more cash every day to sustain its prices at which point (this weekend) we either get more money or the balloon begins to deflate.

NYMO

That's a simplification, of course, because you have the value of the Dollar and it's possible to game the indexes by pumping key stocks to ridiculous levels (not AAPL but AAPL is a good example of a key stock running the Nas and the S&P) but it all comes back to my VW example. So what if I sold 10 cars out of 100 to ever more excited people who just had to buy a $25,000 Beetle for up to $35,000 – does that make the next 90 cars worth $35,000? According to market bulls, it makes my next 90 cars worth $40,000, $45,000, $50,000 – doesn't matter does it because it went up before so it MUST continue to go up because, as we learned in science – "what goes up, must go up more."

VIX

Not only does that ignore the gravity of the situation but it ignores the FACT that the stock market hasn't gone anywhere for 12 years. It also ignores the FACT, that in order to buy my next 90 cars for even just $35,000, people need to have $3.15M to spend. I had planned originally on selling 90 cars for $2.25M ($25K each) but some idiot came in and gave me $35,000 for my last one so sure I will be tempted to wait a while to see if another guy wants to give me $35,000. Who knows, the pattern has been to get another $1,000 each day so maybe the next guy gives me $36,000 and I can extrapolate getting another $89,000 on top of that $3.15M for my remaining cars – so, unless I have to pay my bills – I'm inclined not to sell for less.

That's where we are now in the market, the Greater Fool theory dictates that each buyer assumes the next buyer will pay more than he did and no one envisions taking a loss but what if my original market research was correct and 100 car-buying people only had $2.5M to spend on cars ($25K each). Now I've fooled my self because, for whatever reason, 10% of my target audience had more money than I thought and were willing to spend more money than I thought on the cars but, after they spent their $300,000 for 10 cars, the other 90 people only have $2.2M and can only afford $24,444 per car – yet I'm pricing them at $35,000 just because the last guy bought it for that.

XLF WEEKLY

That's going to cause volume to dry up, right? As I said, after a while, I may need to sell a car to pay some bills and then I will drop my price but, if I need to sell 10 cars (the same volume that took me up) in short order – I am likely to see a very rapid drop in price.

What's going to allow the price of my cars to continue to rise? A) I have to have no reason to sell for a lower price B) I have to continue to find buyers at my new price level C) Even at $36,000, we reach a point (61 cars) where my population exhausts their $2.5M and I will have 29 cars left and no one will have money to buy.

So there's our gap. In order to keep selling cars for just the same $35,000 we got to now, we need to see a clear path to our buying public having more money. Does it come in the form of lower rates, Free Money from the Fed, more employment or raises for current employment? Do they take it out of their homes, did the price of other things come down or are people substituting one kind of purchase for another and favoring cars over, for example, vacations?

These are all the factors in determining whether or not the price of ANYTHING you are selling is sustainable and that's all stocks are – things that you sell. It's a piece of paper saying you own a piece of a company that, in theory, has some value. If the stock doesn't pay a dividend, then it's all about the earning power of that company now and in the future and you are in competition with many other things people can put money into.

Speaking of which, it should be noted that the EU plans to hit the $1.5Tn mark on the EFSF this weekend but they have yet to sell any bonds to actually fund it. When they do that, where will that $1.5Tn come from – it's almost as much as the US monthly $140Bn bond sales.

Anyway, lots of factors in REALITY that indicate things do not, in fact, go up forever. First you run out of gas, then you lose your momentum and then you'd better hope you're not on a hill (or a wall of worry) or you're going to have a very, very hard time making that last mile (just ask Sisyphus).
 
Of course, with stocks, that boulder gets bigger and bigger as it goes up hill with more and more effort required to add each additional market point (now roughly $40Tn in US equities so each % is $400Bn vs $300Bn in Jan). It can keep going – especially when your sampling (market volume) is so low – just like it was possible for ordinary homes to get to $1M – as long as most people didn't actually try to sell them…
 
That's why I don't like this rally – it's the most dangerous kind – the kind with no underlying support. Yes, I believe inflation will end up supporting these prices and much higher but we aren't there yet and the promise of money is not the same as actually having money. It's kind of like if the firemen put one of those air bags under a building but don't fill it with air and tell you to go ahead and jump and you say "but it's empty" and they say "inflation is coming" – what's the smart move?   

That's how we spend our Saturday's at PSW – discussing the bigger issues!   We also discussed American History, Consevatism, Work Ethics, Philosphy, Politics and Religion – we don't have taboos at PSW – better to get it out of our system on the weekends so we can concentrate on the markets during the week.  

Speaking of the markets:  We had a nice little move up in the Futures this morning as the Dollar was pressed down but it smelled like BS to me and we picked 5 ways to short the Futures in Member Chat at 6:43 as my comment to Members was:  

Nasdaq (/NQ) can be played below the 2,600 line, RUT (/TF) below 790, Dow (/YM) below 12,800, oil below $105.50 (/CL) and gold (/YG) below 1,690 so that's 5 to watch and 3 of 5 below is a green light to short the other two and 3 of 5 above would be a signal to get out. Dollar 79.775 at the moment so we're looking to take back 79.80 to confirm bullishness.

Euro at $1.3133 and below that $1.31 line is a critical breakdown that can lead to panic. $1.57 on the Pound it the same (now $1.5724) and the Yen is at 80.71, indicating they have too many Euros and not enough Dollars – it would be very bad timing for the bulls if they chose today to rectify that

Now it's 8:08 and we already have $105.08 on oil (up $420 per contract), and $1,680 on gold (up $320 per contract), 12,790 on the Dow (up $50 per contract), 2,601.50 on the Nasdaq (down $30 per contract), and 791 on the Russell (down $100 per contract) so, on the whole, the Egg McMuffins are paid for and we can stay bearish as long as the Dollar is over 79.80 (now 79.82) but I sure don't expect the Euro and the Pound to fail their lines without at least some kind of a fight so a quick round of take the money and running on the Futures is appropriate here as we'll likely get a bounce into the open (and maybe better entries to short).  

Of course Greece might be "fixed" again today and we'll see the ADP Report at at 8:30 and AAPL has their big IPad 3 event so plenty of reasons to be a little more bullish today so we'll see how things hold up – just because the market SHOULD go lower – doesn't mean it WILL go lower – surely we've learned that in the past few months….

Greece is, as usual, the biggest wild-card.  Despite all the arm-twisting that's been going on this week, as of this morning, there were just 81 Billion Euros worth of debt holders agreeing to the swap terms with a 3pm deadline out of 209 Billion Euros worth of debt (39%).  Not only is that obviously not voluntary, but how on Earth did they ever claim there was a deal in the first place?  

If participation falls below 75 percent, the second bailout is likely to fail and Greece could default, leaving its creditors — including the Troika of the International Monetary Fund , European Central Bank , and the European Commission — with hefty losses on its debt.  If Athens cannot sign up the required 90 percent of bondholders needed to push through the debt haircut and bailout, it may have to use new legislation for Collective Action Clauses, or CACs.  ARE you prepared for this?  

“Everyone knew it was going to default a year ago,” Peter Toogood, head of investment at Old Broad Street Research, told CNBC Wednesday. “Portugal and Ireland will need another bailout too. These are evolving programs of austerity and bailouts.

We shall see but I certainly don't want to be buying any dips until we see what the dips in Europe finally decide.  So good luck to AAPL and all that but we'll still be leaning short – although we did close yesterday's trading with and upside spread on the Qs, as we figured the Nasdaq would bounce off 2,900, at least.  

(all charts by the great and powerful David Fry!) 


Tags: , , , , , , , , , , , , , , , , , , , , , , , , ,

Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!



Comments (reverse order)


    You must be logged in to make a comment.
    You can sign up for a membership or log in

    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

    Click here to see some testimonials from our members!

  1. stjeanluc

    Oil Lines

    R3 – 108.98
    R2 – 107.97
    R1 – 106.52
    PP – 105.51
    S1 – 104.06
    S2 – 103.05
    S1 – 101.60

    Dollar lines

    R3 – 80.48
    R2 – 80.21
    R1 – 79.99
    PP – 79.71
    S1 – 79.48
    S2 – 79.21
    S3 – 78.98

  2. stjeanluc

    Arsenal / Oknoman & Sunilram – Great game yesterday… It has been a tough season indeed with so many highs and low and some bad luck with the injuries. I heard that that they will have a lot of money this summer so maybe RVP stays with new recruits. We'll see!

  3. stjeanluc

    Germany / Phil – This morning you posted:

    German factory orders come in far worse than expected, -4.9% Y/Y in January vs. -1.7% consensus. Orders are -2.7% M/M vs. +0.5% consensus

    How surprising can that be considering that they are pushing all their potential clients to bankruptcy!

  4. flipspiceland

    Michael Snyder makes the Mayans look like PollyAnna.

  5. stjeanluc

    Strong ADP numbers again (up 216,000) – 3 months in a row is not a coincidence anymore!

  6. stjeanluc

    Might have to start a buying list…

    http://www.bespokeinvest.com/thinkbig/2012/3/6/sector-and-stock-trading-range-charts.html

  7. diamond

    $SPX Drops $VIX Pops Streak Ends – Stock Trader's Almanac

  8. Pharmboy

    PP.  GLTA.

  9. ban2

    Morning Phil
    I eased out of my EDZ Aprl 14 short P's by EOD yesterday for a small profit and would like to switch my hedging to your favorite TZA but after reading Zack's comment's this am (below) I'm going to hold off a bit to see if we take off today or just get pumped for a pm fade.
    Is the TZA spread you suggested yesterday to member I4real the one to go for?
      "If you feel you need the hedge, I'd just buy the April $21/25 for $1.14 and IF we bounce back, then TZA will drop hard and THEN you will get a good price for selling the puts.
    ————
    After Cramer's comments last eve about continued selling coming, seems this morning's pump would be ideal for the big guys to sell into.
    ————————-
    Zack's
    "I believe the estimates of $1 trillion euro damage from a Greek default is WAY overstated. With over $1 trillion loaned out from the ECB to backstop the banks. And with plenty of time for banks and investors to prepare for this possibility… it just won't be that horrible. However, since the market hates uncertainty, then this gloom may persist until the situation is cleared up.

    What if the US employment reports are robust?

    Before Greece re-entered center stage I believed that this week's US employment reports were the key to the market. If strong, then it would act as a catalyst to make new highs of 1400+. Now the benefits of a positive report are shrouded in doubt thanks to the Greek tragedy. Note that if the jobs reports are bad, then I am fairly certain it spells the end to this leg of the bull run and best that we all prepare for another 3-5% downside.
    Steve Reitmeister
    Executive VP, Zacks Investment Research

  10. 2can

    Phil /  Sorry about the "DD on TSL" question yesterday.  I forgot we had it in the 5KP.  Appreciate your answer, anyway.

  11. JRW III

    Good morning,

     

    IWM    78.34,  78.66,  79.10,  79.29,  79.56,  79.82,  80.17,  80.46,  81.06,  81.41,  81.69,  82.00  and  82.41

  12. Pharmboy

    ONTY – April $5 puts for 65c or better.  1/4 position JIC we have to roll down.  More on them later.

  13. stjeanluc

  14. Phil

    For your consideration:  

    The Asia and EU charts are a day behind (FU StockCharts!), Asia dropped about half a point and Europe is up half a point today and those make sense since they both tested their dmas but we're making an air turn, which could be a sign of strength or just madness – it remains to be seen.   

     

    Either way, it was a healthy enough sell-off that didn't do too much damage so we need to prepare ourselves to be impressed if we can retake 12,900 on the Dow, 1,360 on the S&P, 2,950 on the Nas, 8,080 on the NYSE and 813 on the RUT.  The NYSE, in particular, is so far down (7,912) that they are in danger of blowing their must hold line but it's super-unlikely that they do that while the Dow and Nas are still 10% over so I don't think we'll get a major breakdown until and unless the Dow fails 12,749 and the Nas fails 2,863 so it's Nas weakness that will give us the best indicator that there's big trouble ahead.  

    That's all on the Euro and the $1.31 line but so many people are betting that line to hold that they will likely buy Euros just to hold it up through expiration (Triple Witching) next Friday – then it's anyone's game.   If the Euro fails before expiration, all kinds of nasty things can happen.  So we're worried about a Greek default, the BOJ picking a bad time to boost the buck and AAPL disappointing us with a mediocre product launch (remember the MacBook Air?).  

    I'm still liking our shorting lines from earlier, especially with the Dollar now at 79.85 but watch that Euro for a bounce off $1.31!  

    At the open: Dow +0.21% to 12786. S&P +0.28% to 1347. Nasdaq +0.48% to 2924.

    Treasurys: 30-year -0.13%. 10-yr -0.05%. 5-yr -0.08%.

    Commodities: Crude 0% to $104.7. Gold +0.24% to $1676.15.

    Currencies: Euro +0.01% vs. dollar. Yen -0.03%. Pound +0.05%.

    Market preview: Stock futures retain their gains after the ADP jobs report hits the right buttons and buyers re-enter the market following the worst single-session loss in nearly three months yesterday. That Greece could be heading for default is neither here nor there for the timebeing. S&P benchmark futures +0.5%. Pandora-25.6% after a bad earnings report. Later: Consumer Credit, iPad 3 frenzy

    February ADP Jobs Report: +216K vs. +173K prior (revised from 170K) and expectations of 215K. 

    Q4 Productivity and Costs: +0.9% vs. +0.8% expected and +0.7% preliminary. Unit labor costs +2.8% vs. +1.2% expected and +1.2% preliminary.

    MBA Mortgage Applications: -1.2% vs. -0.3% last week. Thirty-year fixed mortgage rate with conforming loan balances ($417,500 or less) decreased slighly to 4.06% from 4.07%. 

    Canada's January building permits fall 12.3% vs. expectations of -4% (+10.5% prior). The residential sector -6.6%, non-residential -23.1%. Multi-family dwellings -12.4% (+30.8% prior).

    Investors vote with their feet in Russia's first bond sale since the Presidential election, with the Treasury selling just 8B ($270M) roubles of a planned 45B roubles worth of 7-year paper. Rising concerns about Russia's finances and politics contributed to the poor outcome, which followed a Fitch downgrade warning yesterday.

    It's no longer just the rich, a property agent noting the "very, very recent trend," of middle-class Greeks not just snapping up property, but liquidating all assets to move to the U.K. Money is also moving into U.K. commercial space where Greeks will find far lower taxes and easier overall business conditions, making it unlikely they'll ever want to return home.

    "The triggering of CDS should not be a surprise. It's a mark to reality … and should be  a positive aspect," says ING's Padhraic Garvey of the kerfuffle over the Greek deal. A CDS trigger has already been priced into the market, claims another analyst, who doesn't see it having a huge impact. 

    The German cabinet is set to approve a "road map" for parliament to pass laws approving both the new EU fiscal treaty and the ESM permanent rescue fund in late May, with ultimate ratification by June 15. The treaty will require a 2/3 majority, meaning Merkel will need opposition support. Let the horse trading begin.

    Hovnanian (HOV): FQ1 EPS of -$0.17 beats by $0.26. Revenue of $270M (+6.7% Y/Y) misses by $2M. Shares +4.2%premarket. (PR)

    Chesapeake Energy (CHK) says that it will partner with GEto create products and services to help fuel vehicles running off of natural gas. The companies say that building out infrastructure to support the use of compressed natural gas will contribute to lower fuel costs and vehicle emissions in the U.S.

    More on Children's Place (PLCE): Unseasonably warm weather forcing "aggressive markdowns" coupled with record-high apparel costs to "significantly" impact Q4 margins and earnings. The company sees 2012 EPS of $3.10-3.30, a bit less than Street estimates. Shares -7.6% premarket.

    GE confirms its outlook for double-digit growth across global markets ahead of an investor meeting in Brazil with regional CEOs. The company says that it expects 20%-25% growth in resource-rich nations in Latin America, the Middle East, and Africa – as well as in New Zealand and Australia.

    Priceline.com (PCLN) is leaving rivals Expedia (EXPE) and Orbitz (OWW) in the dust, notes YCharts. While Priceline has grown its revenue by 209% since the beginning of 2008, Expedia has only grown 29.4%, and Orbitz has actually seen its sales drop 10.7%. However, Priceline's search keyword spending is also rising: online advertising expenses rose 64% Y/Y in Q4, and made up 22% of revenue. (yesterday)

    BUT!!!  China Eastern Airlines (CEA) expects a big drop in travel growth this year thanks to slowdowns both at home and abroad. Demand for international passenger and cargo flight is "clearly falling," says Chairman Li Shaoyong, "We are also seeing China's economic growth under pressure."

    Facebook (FB) says its service went down in a number of European countries for about two hours because of technical issues.

    Turning into a commodity already:  Google (GOOGcuts pricing on its cloud storage services by up to 15% following similar price chops initiated by rival Amazon (AMZN). The company also names 5 new front-end storage partners as it increases its push to be a force in the enterprise storage business. 

    Today is the day that Apple (AAPL) is slated to make an expected announcement (live blog) on the launch of the iPad 3 (or iPad HD). Speculation still kicks around that the company could also disclose more details on its foray into making TV sets – based on the invitation to its event that reads "we have something you really have to see." Shares of AAPL +1.1% premarket.

  15. stjeanluc

  16. stjeanluc

  17. tommyt

    Cramer just did official reversat on 5 dollar gas at pump not a problem says that 4.50 alters peoples choice of which restaurant they go to  says hes officially concerned.

  18. msf65

    Executed prisoners are main source of Chinese organ donations

    http://m.guardian.co.uk/world/2009/aug/26/china-organ-donation-prisoners?cat=world&type=article

  19. stjeanluc

  20. jerconn

    Anyone know what time is the AAPL event today?

  21. rustle123

    Wednesday pre-market – 3-7-2012
     
    Dr. John L. Faessel
    ON THE MARKET
    Commentary and Insights
     
    Quote of the day
    “One simply cannot build a growth strategy on accumulating more debt, when the capacity to service the current debt is questioned by the markets.”
    ~ Olli Rehn ~
    European Economic and Monetary Affairs Commissioner
    ~
     
    Greece again… Euro reverses lower
     
    China lowers growth target
     
    Winds of War in Iran as Obama and Netanyahu jawbone
     
    Dow slides 203 pts
     
    McClellan Oscillator is deeply OVERSOLD at minus 266
     
    Favorite overbought / oversold indicator the McClellan Oscillator is deeply OVERSOLD at minus 266. It was the 3rd lowest probe over the last 12-months, Nov 23rd, 2011 was deeper at minus 326. While not at the absolute low of the year this down-stroke in the McClellan is one the top ten lowest readings ever and all came at major bottoms. The McClellan posted its lowest reading EVER at minus 438 on August 8th, 2011.
     
    The CBOE Volatility Index, (VIX) widely considered the best gauge of fear in the market, surged above 20 for the first time since mid-February reaching an interday high of 21.24 and closing at 20.84.
     
    From my technical perspective I think we hold around these levels and likely bounce as “price” hangs close to a thick band of support established in early & mid February. We / price are also “on” the trendline [that support @ (SPX) 1337] off the November and December lows…Super OVERSOLDness also suggests a bounce soon.
     
    On the Negative:
     
    The Dow Transports did not tick new cycle highs in the last up-thrust. I.e. not confirming the classic Dow Theory hypothesis of in tandem new highs.
     
    China cuts its annual gross domestic product growth target for the first time in 8-years, to 7.5% annual growth from 8% on Global slowing.
     
    Global private creditors swap funky Greek bonds. The deal is vital for Greece to cut its debt and get a bailout of euro130 billion ($172 billion) from other countries and the International Monetary Fund. Without the bailout, Greece could default on its debt later this month and rattle markets around the world.
     
    EuroLand Bond Yields remains off highs on the ECB rescues of Greece.
    Greek debt is160% of their GDP.
    Greek 10-year yields 29.46%,
    Italy 10-year (gross) bond yield – 5.03% – off from highs of 7.26% on 11-24. Spanish 10-year (generic) bond yield – 5.16% – off from highs of 6.7% on 11/24.
     
    Again; it all hangs together until the Israelis go after the Iranian nuke sites… 
    _____________________________
     
    The S&P 500 (SPX) closed yesterday at 1343.36  
    50-day moving average support is at 1321.
    After and 8-month downtrend the 200-day moving average support line moved up last week and is now at (SPX) 1258.
     
    Important pullback low price support is 1265 & 1258 (12/30) 
    Then at pullback lows of 1248 registered on (12/28).

  22. rustle123

    Noticing McClellan, if we go negative at one point today, might be a good time to buy some DIA calls for a short term bounce. 

  23. lflantheman

    AAPL event said to be 10 a.m. Pacific time.

  24. stjeanluc

    The first set of GMCR puts is now showing a 50% profit!

    The FAS 88 Put is has hit our first 20% profit target. The FAS 85/89 BCS needs to be watched.

  25. jerconn

    Thanks, Iflan!  I"m sensing strong resistance here at $535, would you have any expectations of returning to the $545 highs?

  26. stjeanluc

    25KP Portfolio – I have moved the closed position with the price history (as shown in the open position table) above the current position recap with the date at which we exited the position. This weekend I will update all the previous positions to close the old table.

  27. acobra65

    Greece/Precedent
    Court rules in favor of "Holdout bondholders" in Argentina debt swap case….. Party On… 

  28. Phil

    GMCR fading fast!  

    Germany/StJ – Not surprising to anyone it seems, as the EU markets are up half a point but I think they are nuts to ignore this constantly mounting evidence that Germany is not exempt from the EU Recession and, if Germany can't escape – why do we think we will?  

    LOL Flips!  

    BA ($72.66) looking sexy on Bespoke chart.  TRV is dangerous because insurance companies are having a very hard time finding places to put their reserves to work with all the low interest rates.  HPQ of course I like down here ($24.20).  

    DECK at $72.50 – remember when we were shorting them at $110 last year and they would not die?  Ah, I do so love Fundamentals!  

    TZA/Ban – Sure, that's a good strategy to start a hedge.  Looks to me like 800 is not going to crack again for the RUT so it's a good stop line for you to use and you can sell a put with a stop there.  If we have strong employment that's a Dollar booster and Fed stopper so not really great news for the bulls.  Bad jobs reports are just bad.  

    79.94.  $1.3106, $1.5712…

    TSL/2Can – Nothing to be sorry about, it's a crap trade that needs to be fixed.  

    Cramer/Tommy – Hard to keep track, isn't it?

    FSLR still going down.  

    Organ donors/Msf – I predict in a few years it will be legal to sell your kidney to someone.  Then we're not too far away from rich people just paying poor people to just kill themselves for money.  

    AAPL/Jerconn – I think it's 10 am over there so 1pm est.  

    Faessel/Rustle – Good point on debt.  Other than that, he's wrong, we have further to fall unless Greece and AAPL really turn things around.  

    $104.50 on oil – congrats to the players!  

  29. scottmi

    NOK – tempted to do some Oct $5 buw/writes.. tempted.. but need to watch more. Think may HAVE to take 1/4 position if spikes down to 4.50.

  30. rustle123

    Faessel/Phil
     
    I agree on a term over the rest of the month, but bought some DIA calls when we were up 10 for the bounce on the McClellan reading.  Looking to get rid of them today.

  31. jabobeast

    FU PCLN!!!
     
    Phil--is it running again because of the convertible/buyback news from yesterday? Doesn't that seem strange to you?

  32. angelcur

    i think its wishful thinking for people to think china is about to take foot off real estate brakes…they are openly hostile to real estate industry…read this carefullly.
    http://www.chinadaily.com.cn/cndy/2012-03/07/content_14773668.htm

  33. lflantheman

    The only thing that might propel AAPL upward would be something unexpected.  Otherwise they probably sell on the news.  Protect your capital.  

  34. angelcur

     charts 1 5  10 minutes) are v v oversold…. set up for a decent bounce 1356 should be decent ..but if they can't bounce then we have a change of character for the market..(BTFD)….

  35. exec

    JR,

     
    How are you positioned?  If at all?

  36. rustle123

    If anyone watched CNBC this morning, it was a Republican love fest.  First they had founder of Staples, Tom Stemberg, then Eric Cantor (the weasel), then Mitt Romney's old campaign advisor and then Mitt.  Joe Kernan was so happy today.  He was able to make up plenty of info and no one called him out on it.  This was his conversation with Tom Stemberg:
     
    Joe:  So Mitt helped you create Staples by financing it?
    Tom:  Yes he did
    Joe:  How many employees do you have at Staples?
    Tom:  We have 100,000
    Joe: So Mitt Romney created 100,000 jobs and the public owns Staples right?
    Tom:  We are a public company and have shareholders
    Joe:  So Mitt also created wealth for all your shareholders
     
    It was sickening, and then it got worse when Tom Stemberg had to point out that when Obama first came to office the unemployment rate was 7.8% and hasn't been at that level since so he's not doing that good of a job.  Are people that dumb?  Was screaming dipshit, he came into office during an financial armageddon, you can't turn that around in a few months. 
     
    Won't even get to Eric Cantor who speaks with his teeth clenched to try and get the truth from getting out.  He was caught lying already on 60 minutes and never commented on that.  And Mitt is a total joke with a plan that is so good because in his words, will lower the tax rate but still have people pay the same percentage they are paying now.  That's fair, Mitt pays 13.5% on about 43 mill and the average person making 100k pays over 20%.  Sorry for the rant, I don't know why I ever turn on CNBC.

  37. stjeanluc

    Dennis Gartman is not a goldbug… never was, never will!

    http://ftalphaville.ft.com/blog/2012/03/07/912361/dennis-gartman-and-the-goldbugs/

    Except when he is pushing goldbug theories of course!

  38. kustomz

    Phil Canada
    this headline from March 2011
    Municipalities issued building permits worth $6.8 billion in March, a 17.2% increase from February and a level not seen since June 2007. The gain was mostly the result of advances in the residential and non-residential sectors in Ontario.

    In the non-residential sector, the value of permits edged down 0.4% to $2.8 billion, following a 72.7% increase in February. Lower construction intentions for industrial and commercial permits more than offset a record high value for institutional permits.

    From today
    Municipalities issued $2.5 billion worth of permits for single-family dwellings in January, down 2.2% from December, following three consecutive monthly gains. Lower construction intentions in Quebec, British Columbia and Alberta more than offset advances in the seven other provinces

    In the commercial component, the value of permits declined 22.5% to $1.2 billion, after increasing 1.8% in November and 34.6% in December. The decrease came mostly from Alberta, where the value of permits for office buildings and warehouses declined following notable rises the previous month. Declines were also reported in six other provinces.

    Talk about cooling off

     

  39. stjeanluc

    CNBC / Rustle – Joe Kernen is just a cartoon character now. He brings absolutely nothing to the table… Unwatchable!

  40. flipspiceland

    @Iflantheman
    Well, Felipe posted a buncha pictorial charts showing that women spend nearly as much time with their Ipads, as they do 'sleeping'.
    The mind reels……..

  41. stjeanluc

    Contrary to what we hear in some political circles, oil imports in the US are down now and are poised to go down even further in the future:

    http://ftalphaville.ft.com/blog/2012/03/06/911241/oil-in-time/

     

    U.S. oil imports are set to almost halve between 2000 and 2035 owing to rising domestic output from both conventional and shale fields, increased ethanol blending and improvements in vehicle efficiency. By 2035, the United States will be importing just 6 million barrels of oil per day (b/d), down from almost 11 million b/d in 2000.

    In contrast, China’s oil imports are set to surge from around 1 million b/d to more than 12 million by the end of the period. India’s import needs will soar from less than 2 million b/d to around 7 million. Members of ASEAN will be importing almost 4 million b/d.

    China will overtake the United States as the world’s largest oil importer by around 2020, according to the IEA, with other Asian customers adding to regional import needs. …

    China relies on the Middle East and North Africa for almost half its oil imports, in contrast to the United States, which sources most crude and condensate from other countries in the western hemisphere, with extra supplies from West Africa.

  42. JRW III

    exec / Position

    Tried shorting, didn't work; now waiting !!

  43. exec

    Big News in Cleveland…….the finally got rid of the lifer politician Kucinich…..thank God, he's been an embarrassment to our city forever.
     
    The bum didn't have the dignity to go out gracefully.  In his concession speech he criticized his opponent for not conducting an campaign that lacked integrity.  Now that is laughable.
     
    In any case…..this is a sign of things to improve.  BUY BUY BUY!

  44. dpastramas

    The 1.31 line has been breached (EUR/USD). Trying desperately to retake it.  This is fun fun fun

  45. Inkarri1982

    Good Morning All – Does anyone know where I can find estimates/charts for the amount of margin outstanding?  TIA

  46. exec

    JR

     
    I'm thinking a test of your .66 line before we turn.

  47. stjeanluc

    Speaking of CNBC:

     

    Former Massachusetts Gov. Mitt Romney responded to criticism that his proposed tax plan would cause a three trillion dollar deficit in an interview on CNBC on Wednesday morning. Romney said that despite private financial firms scoring this plan, it really can't be determined yet because details would have to be worked out with Congress, except that it would "cut the top marginal rate across the board by 20%," and be paid for by limiting deductions and "additional growth."

    "I think it's kind of interesting for the groups that try and score it because frankly it can't be scored," Romney said of his tax plan. "Because those kinds of details are going to have to be worked out with Congress, and we have a wide wide array of options."

    So basically, the plan is not a plan because the details have to be worked out still… And what kind of an idiot still believes that you could still base a plan on "additional growth" generated by tax cuts! Unreal…

  48. kustomz

    Props to Kucinich for having a smoking hot wife. That may change now that he's a nobody.

  49. l4real

    Iflan/ Apple
     
    Well said!

  50. exec

    Kustomz,

     
    That just goes to show that you can be an imbecile and still attract decent tail.
     
    What's really incredible is this guy was actually a candidate for president of the United States.  Unbelievable…..if only the rest of the country knew what we in Cleveland know. 
     
    Phil, the Republican's don't have anything over on the Democrat's when it comes to poor candidates.

  51. scottmi

    Shorting/JRW – i saw the same thing yesterday.. RUT in particular, several days moving down but volumes? and TZA barely seemed to notice. Doesn't look like much anxiety about this DIP. 

  52. jomptien

    Exec, I don't live in Cleveland but I always liked him. What did he do in Cleveland?

  53. scottmi

    RUT-TZA – ah but i suppose i do the math and sure enough, TZA has gone up 15% to a 5% RUT decline… i guess i'm just not feeling it.

  54. stjeanluc

    25KP – The GMCR puts are now up 75%. Let's protect these profits!

  55. l4real

    Scottmi/ RUT-TZA
    I agree with your observation with the lack of relative movement for TZA with the recent selloff.
    My opinion is that it may have something to do with the low volumes and relatively low spike in the VIX.

  56. kustomz

    TZA/VIX Why would there be anxiety when everyone believes the markets wont fall and whenever we get a sell off the markets bounce back killing any hope for shorts.

  57. exec

    Scott,
     
    Helped destroy it. 
     
    When he was Mayor he went on an anti business campaign all in the name of being for "the little guy".  He decided he was going to really stick it to those evil business's.  What resulted was almost all of the larger companies/employers, left the City. 
     
    We know have a lot of very poor people in the City and nobody to employ them.  We also have a bankrupt City because there are no long any revenues.  It's a total mess. 
     
    He sure did show them.

  58. danny3399

    Anybody know why USO is rising so hard

  59. JRW III

    Looks like a few more days of this before getting direction:

     

     

  60. rainman

    danny / USO — /DX is getting clubbed.

  61. stjeanluc

    Look at VLO today, up over 7%

  62. lflantheman

    aapl portfolio:   10 more April 500s BTO at 44.65.   These stand alone

  63. exec

    JR

     
    I should have saw that spike coming.  They held IWM strong even with the dollar rising.  Should have know they would pull the plug on the dollar to pop it through.

  64. stjeanluc

    PP on the dollar is 79.71 – holding so far!

  65. stjeanluc

    VLO should be up as well as the other refiners with the crack spread over 30 again, well over the historical average! That's obviously not helping gas prices!

  66. yodi

    JRW European bank's margin call look at DB up 1.16

  67. diamond

    WUCK???
     
    Seeking Alpha:
     
    The Trailer Park Index: After overlaying a chart of mobile housing sales with single-family housing sales, ConvergEx Group's Nicholas Colas calls the breakout in mobile/manufactured units a potential leading indicator for a housing market recovery. "The broader demographic trend that many housing experts believe will eventually turn the residential property market are already at play in the mobile home market." Comments

  68. Burrben

    Lflantheman / AAPL  - What's the reason behind going into more calls?  If there is a sell off are you putting a stop in to limit losses to a reasonable amount?

  69. dpastramas

    AAPL / Iflan – Do you expect something spectacular today? Or just want to ride the ride the market bounce?

  70. Phil

    Well, this is not fake so we'll have to respect the move up until it reverses.  Dollar down to 79.73 (0.25%) and market up 0.5% and we'll see who breaks first.  

    FAS Moneay – Fine so far. 

    IWM Money – Dead center

    $5KP – Nice double bottom move on TSL so let's spend .60 to roll down to the $6 calls and DD at $1.35 for a new net of $2.10 on 10.  I think we're very oversold and could easily push to $8.  Let's buy back the DMND March $24s for $1.10, taking advantage of this sell-off.  

    $25KP – GMCR March $65 puts at $2.60 is good enough for an exit on the rest.   No other changes until we see where things are coming down.  

    This is the bounce we expected and why our 3:28 play yesterday was the QQQ weekly $63/64 bull call spread, which is already .78 (up 41%) – and now we use that money to pay to roll up our shorts or to at least lock in the profits if we decide to give up but we have  to make that decision soon because we only have .22 more to gain on the longs….

    European markets are closing now and up 0.5% UK, 0.6% Germany and 1% France so we'll have to see if we can keep it going or if this is it.  Euro back at $1.315, Pound $1.575 and Yen 81.07 so BOJ buying Yen again, probably trying to time it with Greek deal, they are pushing back deadline to tomorrow to get to Greece's 90% but I don't think they'll make it.  Watch 79.75 on the Dollar, below that and above where the Euro and Pound are now and we have to get more bullish.  

    Oil (/CL) back to $105.50 is another shorting opportunity if they cross back under.  Report was a draw overall but no reason for them to be at this level.  

    EIA Petroleum Inventories: Crude +0.8M vs. consensus of +1.1M. Gasoline -0.4M vs. consensus of -1.4M. Distillates -1.9M vs. consensus of -1.4M. Futures +0.07% to $104.78.

  71. rustle123

    out of DIA calls for 25% profit, will look to buy back if market sells off again but won't be holding them going into tomorrow if I do buy them back.

  72. chasw

    JRW,
    Time to enter TZA?

  73. lflantheman

    The 10 new April calls are the only stand-alones.  On these I have a stop at AAPL price of 530, lest we get a downdraft.   I have a sell at option price 50.00 for 5 of them and let the others ride, if we pop.    Everything else is spreads, which can be left alone.

  74. Burrben

    Anyone / Phil on /CL
    Is phil saying "If /CL goes BELOW 105.50, then short.  Don't short until this is under 105.50 or hit's 106 and crosses below 106"?  Just wondering if this is how you play the 0.50 lines.

  75. lflantheman

    Moving the above stop to 532 as AAPL goes northward.

  76. button

    Phil,
    It looks like we are nearing the retracement targets from yesterday's drop.  How do you feel about buying the SDS March 16 Calls now with about $0.10 premium.  If the retracement is accurate we could have a pretty quick drop from ?ES 1355ish.

  77. joemayo

    Phil  I have a March 24/26 BCS on FAZ   How should I best manage this trade?  I started as a play for XLF at 14.25 
    Thanks

  78. kustomz

    From what Im reading its the Fed talking up QE weakening the $….yet again….after the measly drop yesterday.
     

  79. jmm1951

    Interesting business model
     
    I was talking to a Haitian business women yesterday in the flea market. She sells items of clothing. Buys a bulk package from a supplier for US$2000 and supplier delivers. Supplier also transports merchandise in a guagua to regional flea markets. She has 2 employees, a male cousin and a young helper (called an adjutant!!). Flea market was hundreds of tables, barely enough room to walk between them, with merchandise at all in piles on tables. No prices marked, no specials or two-for-ones. Price $1.50 for a pair of Haynes boxer shorts. I asked what profit margin was, but she did not know that as she buys the merchandise in bulk, and the retail prices are suggested by the supplier. Many of the merchants are illiterate or innumerate.  Sounds like a rip-off, but several members of her family support themselves this way and have done so long term. Yesterday was a "slow day" but she took about US$130 in sales, so it might be a good business, because Haitian construction workers here make about US$7.50 per 10-hour day--but the houses are beautiful and very reasonably priced (so who cares?).

  80. lflantheman

    AAPL moving up.   Someone must have seen Tim Cook carrying an iTV into the building.   

  81. dpastramas

    APPL / New word in our ivocabulary -> Haptic. Go appl !!
     
    http://www.fastcompany.com/1823140/if-apple-does-make-the-ipad-3-screen-haptic-it-would-change-everything-again?partner=gnews

  82. yodi

    jmm1951
    Haiti Have a friend in Belize does the same they sell the clothing per kg. Imports it from the US in container load Some countries like Mexico do not allow the impertation of 2nd hand clothing

  83. kustomz

    Crazy move in AUD, Aussie #s were weak yest and most believe a rate cut is coming next month. Shows how much Bernanke can skew the world.

  84. yodi

    scaled in some more stk of MAKO on the dip

  85. peedlew99

    Huh? Was Uncle Ben speaking somewhere?
     
    Wh doesn't know that we're going to have QE forever and so is everyone else????  Why does it still move the market?

  86. yodi

    lflantheman
    AAPL what you think tine to cover some calls ???

  87. peedlew99

    This could be a flush for the next move down.  

  88. Phil

    PCLN/Jabob – No, people love buybacks.  These are particularly poorly timed I think but it's the kind of thing we're only going to be right about in retrospect.  

    China/Angel – Yes, they MUST cool off their real estate market.   People live in the sewers in Shanghai because they can't afford the land above ground – how long can that last?   People here can't relate to a command economy – from China's perspective, they literally gave it too much gas and overshot the mark so now they are happy to put the car in reverse and back up to the target they set.  It does not even occur to the Chinese Government that they SHOULN'T attempt to burst the housing bubble because they are confident drivers and they feel that if housing goes too low, they will just shift gears and apply the gas again.  Meanwhile, unlike our Government, they aren't going to respond to all the back-seat drivers, trying to tell them how to run their economy (the mightiest on Earth thanks to their driving).  

    AAPL next week $550 calls can be sold for $6 and that pays for the $525 puts at $7 so it's a net $1 bet that AAPL doesn't pop to new highs on their roll-out with a big bonus if they screw up.   Good if you don't mind buying AAPL to cover if they shoot back up!  

    Love fest/Rustle – Unfortunately, people are that dumb.  I got it out of my system yesterday but good summary of today's BS.  

    Oil creeping to $106 – that would be nice (to short).  

    Gartman/StJ – I like that FT girl, she gets it.  

    Canada/Kustomz – That is a crazy-fast slowdown.  The funny thing is it's now so low that $1.44Bn next month will be a 20% bump and people will scream it's a recovery – that's what they do now that our housing numbers are practically zero – a gain that wouldn't have been a rounding error 5 years ago is treated like it's a sign of a new boom.  

    IPads/Flips – Those girls love their IPads.  Tina is always playing scrabble with the soccer Moms and my Mom and her friend are constantly on theirs and they use them for phones with Skype, which is kind of cool so I don't know if I count it as all that strange since they used to have phones in their ears 8 hours a day and now they chat and play games and text on the IPad instead – it's just a new way to socialize.  As a guy, I use mine to read the news and look stuff up on the web – haven't gotten into it as a phone yet as it gets in the way of my reading.  

    Oil/StJ – That's the China/India infinite demand myth that keeps oil prices high because, if you treated China and India as more mature economies or assumed they would not be so stupid as to base their economy on oil going forward, then the whole "tight future oil supply" BS goes right out the window.  

    Margin outstanding/Ink – Do you mean in the $25KP?  That would depend on your broker but you can set the whole thing up in TOS Paper Money and it will give you some sort of figure.  

    Poor candidates/Exec – What?  Too bad it's the middle of the day…  Obama, Biden, Clinton, Richardson and Dodd were the serious contenders in 2008 – Kucinich ran but no one voted for him, he was gone in Iowa.  You may as well count Vilsack because he also said he was interested in being President and no one cared (although he did score Secy of Ag so he was taken more seriously than Dennis).  It's March and look at the idiots that remain in the GOP!

    USO/Danny – The inventories had a draw, that's all the excuse they needed and why we take $1 and run in the futures (or .25 for that matter) and set .05 stops on our losses.  Now we are back over $106 and still waiting for a pullback and we only play the .50s so either they go under $106 and we re-short or they test $106.50 and we play a rejection there or a cross back under.  At $107, I would begin buying more USO puts.  

    Dollar hanging on at 79.75 and Euro rejected at $1.315 and Pound rejected at $1.575 (hard to get good crosses when EU is closed).   

    Trailers/Diamond – Seems like flawed logic to me.  I said 2 years ago that trailer companies would do well as a substitute for housing.  To me it indicates how awful things are.  

    I think it's time to take profits on the QQQ bull call spread  (.79) and apply the money to improving short positions, just a feeling as I see the Nas struggling at 2,940.  

  89. lflantheman

    Yodi. Yes. This morning,s are up now so let,s convert them all to spreds now and just watch the action

  90. Phil

    Oil/Burr – We only short negative crosses or rejections at .50 lines and our stop is always .05 over the line (or .02 if you are fast, anything over the line is bad).  This is not an always rule but, lately, the .50 lines (and the .00s of course) have been reliable, the .25 lines have not.  So, at this exact moment, we're just falling back below $106 so it's game on until we cross back over it.  

  91. Burrben

    Phil –  I learn something everyday.  I'm sure you wrote that "negative crosses" 50 times already, but it's the 1st time I understood it!

  92. lflantheman

    Now in 50 apr 500/550 spreads in the aapl port. Stj, i got 16.70 for those last 10. I,m going to an all afternoon meeting now and will be off the board. We are covered, safe, and we,ll see in a few minutes what Cook and aapl have for us.

  93. rainman

    bpastramas / haptic — Just goes to show you that Apple fans have blinders on. Haptic feedback is not new. It's only new to Apple. That doesn't mean it won't cause a stir like voice recognition did.

  94. Inkarri1982

    I am sure we have all read something about this new Sterilized QE3.  I still firmly believe that 1) if sterilized QE is so great, why didn't they do it in QE1 and/or QE2 2) With Twist still on-going for a few more months and ZIRP still in place, why would something like this even be considered unless they are scared straight at what's coming down the pipe…just my two cents.

  95. dpastramas

    Haptic / Rainman – Just had the same debate with an ex Nokia friend. Nokia has been using haptic feedback for quite a while, but its not the same.  Haptic feedback is the phone vibrates when the screen is touched. Haptic screen, is the texture of the screen changes according to what it is displayed.  Nokia was supposed to be working on this since 2007, but Apple will get to cash on it
     
    http://gizmodo.com/319318/nokias-haptikos-technology-makes-physical-keyboards-obsolete-hopefully

  96. Phil

    SDS/Button – If you are playing that close to expiration, you need to be concerned about the AAPL event but the March (next week) $16s are .55 and were .82 yesterday and .40 the day before so it's a resonable risk/reward if you are looking to make the bet.  

    FAZ/Joe – Well you are betting on about $14.50 next week to get max gain ($2) and it's now $1.30 so it's a matter of how much faith you have that XLF doesn't go higher than this.  You have some wiggle room as FAS is $26.12 so if you wimp out now, you really have a 3% cushion for a 1% move in XLF to $14.75 so, if you think XLF will be $14.75 or higher, then you are lucky to get $1.30, if you think XLF will be below, then $1.30 is too little to take.  You should be doing these calculations every day and have targets where you know you will stop out if you have to.  Meanwhile, I would cash the $24 calls at $2.26 as that's more than you would have gotten on the 100% spread and pick up the April $23/27 bull call spread for $1.90 so you have .36 in your pocket and a $1.90 spread that's $3 in the money protected by a $1 caller that expires next Friday.   Of course then you are betting that XLF holds $14.25 – you have to pick your poison…  

    Business/JMM – We have flea markets in the US too.  You will always find manufacturers who are looking to dump bulk goods cheap and, if the price is right, you will also find buyers.  Likely it's the same slightly defective stuff they send to outlet stores in the US except here they charge people $6 a pair and our idiot consumers are thrilled to save $3.  

    Haptic/DPast – I would think that's a huge waste of battery life.  

    Flush/Peedle – Good call at 12:11!  

    Congrats Burr!  

    Missing the AAPL event Lflan?  Oh noooooooo!  

  97. rainman

    Inkarri / QE3 — There will be new QE3 schemes until the banks are out of trouble and obviously they are not in the clear yet. Imagine what would happen if one of the too big(ger) to fail banks had problems at this point? They'll keep lining the banks pockets until the housing market clears up and the bad assets are sold off at the expense of the tax payer (and/or saver).

  98. Phil

    FSLR on a death march! 

    $106 line on oil no fun at all other than very quick nickels so far.  Would be nicer if oil went higher first and I think they may hold up into tomorrow's nat gas inventories but, after that, we're starting to get into our end game for this month's contract rollovers.  

  99. kustomz

    Very low volume in the futures /ES /TF /YM /NQ, up up and away

  100. Lincoln

    Phil; I have been selling some strangles and straddles on some stocks that I would like to own but also don’t mind selling naked calls against since the moves to the upside shouldn’t be parabolic, and of course scaling in 1/3, 2/3 then 3/3 (total of 30 contracts) if needed, (ie. DUK, GE, INTC).  My goal is to generate income at least as good as what the dividends would be if I owned a full position. GE @ 18.78 I have short 20 Mar 19calls and short 20 19 puts.  There is $600 premium left between the 2, I’ve got $1,000 profit at this point so 62% of max profit.   I’m thinking of moving to April and back to 10 each 19 puts and calls thus foregoing  that $600 premium but creating the flexibility to go to 20 and 30 contracts as adjustments again. Or better to go out to May and start a 18/20 strangle? Or wait for remaining premium to decay more?  Or better suggestion?  TIA

  101. rainman

    bpastramas / haptikos — I'll beleive it when I see it. I'm very dubious that 0.1mm movement can mimic the swing of a keyboard with nearly 100 times the throw. Of course the new chicklet keyboards on laptops don't have nearly that much swing so maybe that's the comparison they are making. Changing the texture of the touch screen itself would be altogether different and I'm not convinced the Nokia article is saying that unless they are saying the 0.1 mm movement is at the pixel level and not the screen level that they state.

  102. i zega

    Phil, do you have a favorite technical indicator to forecast the direction of /DX?
    Thanks in advance

  103. rainman

    Phil / FSLR — FSLR has lost thier cost advantage.

  104. jromeha

    Honestly, HD & haptic doesnt sound too novel to me or that big of a deal…. They are going to have to come up with something better than that! Im short /NQ right now….

  105. rainman

    Phil / trailers — Funny, I thought about the increase in Motorhome sales after the crash in the same way. But I guess all those unemployed,  that are no longer looking for work, also have no need for the wheels.

  106. Phil

    11:51 AM European shares close at the day's highs, lifted late onoptimism about the Greek PSI progress and QE chatter out of the Fed. Stoxx 50 +0.8%, Germany +0.6%, France +0.8%, Italy +1.1%, Spain -0.1%, U.K. +0.5%. Euro +0.3% at $1.3150.

    12:00 PM On the hour: Dow +0.62%. 10-yr -0.12%. Euro +0.28%vs. dollar. Crude +1.37% to $106.14. Gold +0.83% to $1685.95.

    11:25 AM The Fed considers a new "sterilized" bond purchase program, still aimed at boosting the economy, but also designed to calm inflation fears. With this plan, the Fed would still conjure up dollars to buy long-term bonds, but would then engage in a "reverse repo," borrowing back the money for short periods. And all it took was one serious down day in stocks.

    Today's Fed leak should come as no surprise following yesterday's big sell-off, writes Josh Brown, especially as the leading GOP contender has made clear his displeasure with Bernanke. In addition to stocks, crude oil and gold got their tails in the air following the report. "The Fed is not playing games … they want this market rolling higher. Fight it at your own peril."

    The bulk of its Treasury holdings in 2007 expiring in 12 months or less, the Fed now holds mostly paper of 5-year or longer term. Same for the BoE. The ECB? It has taken on a barrel of credit risk because of the suspect collateral is has accepted. All 3 will face a tricky task unwinding their schemes without disrupting markets. Or, like the BOJ, maybe they never will unwind.

    Byron Wien on the wake-up call that might actually prod Congress into action on the U.S. debt: "At an average interest cost of 2.3%, it only takes about 8% of federal revenues to service the debt, but if the deficit keeps building at more than $1T/year and the average interest rate on government obligations rises to 3%, by 2020 the cost of debt service could rise to more than 20% of revenues."

    Nomura's Richard Koo sees recent strong economic data as only "temporary," with much of it, such as auto sales, attributable to pent-up demand. The Jan. 1, 2013 "fiscal cliff" Ben Bernanke recently warned about – when several tax cuts expire and mandatory spending cuts agreed to last August begin – will mean the "loss of a major support for the U.S. economy."

    QEII in the U.K. has knocked another £90B off the value of pension funds, according to the NAPF. The pension group says the BoE has jacked the cost of the government bonds many boards are obliged to buy. The subsequent lowered returns lead to deficits which must be filled with money siphoned from operations, hurting jobs and investment

    European shares and the euro race back to the day's highs on the Greek debt swap news as the deal looks to be on they way to climbing past the key 66% level. Participation below that point could have scuttled the PSI and the bailout with it, leading to some sort of disorderly default. Stoxx 50 +0.6%, euro +0.3%. U.S. shares rise in tandem, S&P 500 +0.6%.

    Bloomberg calculations show Greece with a 58% participation rate for its PSI so far. Key levels to breach: 66% in order for any sort of debt swap (and subsequent bailout) to go through, 75% is the government's goal, 95% the level at which CACs may not have to be activated.

    Should the ISDA do its job and trigger CDS if Greece activates its CACs, the biggest losers will be Unicredit (UNCFF.PK) and German banks. But while the sums are small, not triggering the contracts will "destroy the CDS market for sovereign debt," writes Ambrose Evans-Pritchard, thus deterring "investors from buying any Club Med bonds."

    Angela Merkel has been fretting about Portugal's rising bond yields, Reuters reports, and while PM Pedro Coelho insists his country won't follow Greece in restructuring its debt, Markit's Gavan Nolan isn't so sure. "The markets look at its growth prospects and worsening debt/GDP ratio and…take a dim view of its fiscal sustainability," Nolan writes. 

    Allied Irish Banks (AIBYY.PK +3.6%) may cut 2.5K jobs,25% more than signaled in April as it seeks to trim expenses amidst continuing losses. The bank is a ward of the state, having received a €20.7B capital injection, which gave the government a 99.8% share.

    The House yesterday approved a bill by 370-39 that gives the Commerce Department the authority to impose duties on non-market economies with undervalued currencies (i.e., China and Vietnam). With the Senate passing the measure on Monday, it now goes to President Obama for his autograph.

    China begins filling its emergency oil reserve at Lanzhou, according to an executive with CNPC. The country is working towards completing its 2nd phase of stockpiling by storing 168.6M barrels by early 2013. ZH notes the contrast with the U.S., now considering a release of reserves amidst election season.

    Expect even greater Chinese involvement in Middle East and North Africa affairs over the coming 2 decades as its oil imports will continue to explode higher even as the U.S. halves its import needs, according to IEA data. China has a far greater reliance on supplies from MENA than does the U.S.

    It’s not yet time to worry that oil prices will derail the U.S. economy, James Hamilton writes, as price gains have done no more than reverse an earlier drop. Consumer spending on energy goods and services declined on a seasonally adjusted basis between September and January, reflecting a mild winter, low natural gas prices and consumers finding ways to reduce energy consumption.

    "We estimate that by 2020, the U.S. overall will be the largest hydrocarbon producer in the world," says Robin West, calling shale discoveries the energy equivalent of the fall of the Berlin Wall. Affordable energy from cheap natural gas – an advantage China can't quickly capture – will be key in revitalizing American manufacturing.

    Valero Energy (VLO +5.2%) CEO Bill Klesse predicts new supplies of crude oil from Canada and the American mid-continent will allow Gulf Coast refineries to expand exports of gasoline and diesel as North America lowers its dependence on offshore oil, Canada'sGlobe and Mail reports. VLO is a key customer for TransCanada’s (TRP) Keystone pipeline.

    Shares of homebuilder Hovnanian (HOV +2.5%) rise afterreporting an after-tax loss well below a year ago, and revenue increased nearly 7%. Contract backlog at the end of January totaled 1,730 homes with a sales value of $578.4M, Y/Y increases of 28% and 33% respectively. Other homebuilders rise too: DHI +2.7%LEN+3.1%KBH +3.1%PHM +2.6%

    Gaming company stocks (BJK +2.1%) rally – helped in part by positive sentiment stirred up by gambling revenue data from Macau and the big boost in revenue that Shuffle Master saw from its electronic-gaming segment. Gainers: MPEL +6.5%MGM +4.2%,BYD +3.8%WYNN +2.2%

    Of course not!  Phil LeBeau doesn't think

  107. Phil


    Of course not!
      Phil LeBeau doesn't think Ford (F +1.3%) investors should stress out over the $58M in stock awarded to CEO Alan Mulally as part of his compensation package given his contribution to the automaker socking out record profits in 2010 and 2011. Ford's share price has soared 650% since the options were granted in 2009. (video- No one in the top 1% thinks there's anything wrong with other people in the top 1% making insane amounts of money…  

    Retail is just fantastic:  Abercrombie & Fitch (ANF +0.9%) tells the audience at a BofA conference (slides - .pdf) it could close as many as 180 U.S. stores this year, but that it will invest $300M in opening new international stores. The retailer adds it expects same-store sales to be flat in 2012, and is "encouraged" by its early results in China.

    Insiders including the CEO have been selling shares at footwear purveyor Deckers Outdoor (DECK -5.7%), according to SEC filings. Shares hit a new 52-week low.

    Nike's (NKEnew Flyknit shoes will prove good for runners and maybe great for investors, analysts say. Nike is using "micro-level precision engineering," where changes can be made nearly on the fly to account for new demands, and the process is so efficient NKE might be able to move production out of Asia and eventually make customized shoes per individual specifications.

    ROFL – How many years have I been saying this?:  First Solar (FSLR -5.1%) is this morning's worst S&P performer as questions mount about the company's fundamental viability. FSLR reportedly is cutting production at its operations in Germany and Malaysia, delaying the opening of a plant in Mesa, Ariz., and will not open a facility in Vietnam as it originally planned. 

    Two downgrades for Pandora (P -23.2%) after its big Q4 miss. Raymond James cuts its rating to Market Perform, expecting shares to be range-bound until seeing "greater traction with mobile monetization… and improved operating margins." Citi cuts shares to Neutral and drops its price target to $17 from $25, slamming "no profitability track record and no near-term profitable outlook."

    Groupon (GRPN -2.8%) is selling off, and the culprit might be a deal between American Express (AXP) and Twitter. The deal allows AmEx cardholders with Twitter accounts to have retail discounts automatically loaded onto their cards after making tweets with specific hashtags. Initial partners for the program include Best Buy, McDonald's, and Whole Foods. (yesterday)

    Apple's (AAPL) Roach Motel will at some point "prove less formidable than assumed," writes Holman Jenkins in the WSJ. As devices become cheaper, Apple's "bonanza-selling" of $600 devices will end and margins will start to fall sharply. Meanwhile, "picking a device won't mean locking yourself into an ecosystem."

    Three lunchtime reads:

    1) Friday's jobs report: the high and low predictions

    2) Death of buy and hold?

    3) After three years, we’re all hooked on free money

  108. yshenhar

    Live coverage of the Apple event - http://www.engadget.com/2012/03/07/apple-ipad-3-liveblog/

  109. tradermoksha

    Phil, i was wondering how to short the italian index.I'd prefer  to do it with a bull call spread. and i 've learned here that is better not to play with the bear put spread. i just know there is the EWI on the nyse but not a short italy etf. same for shorting the german dax (EWG). how would you play these index short? thanks

  110. Pharmboy

    VRTX….oh, so very very nice to us……

    GILD….selling 1/4 position in April $40 puts….

  111. angelcur

    ZERO HEDGE/QE yes…and its possible fed planting that qe story in anticipation of market weakness on what is going on in greece… spain stocks down 5% ytd…way worse than rest of europe… Spanish regions will have to raise taxes and introduce co-payment programs for health …and education to meet the central government budget deficit target…spain is going to be a problem sooner than people think

  112. angelcur

    http://www.privacysos.org/node/509
     
    did you guys see this aclu getting involved now..

  113. Phil

    So far, I am not wowed by AAPL presentation.  

  114. Inkarri1982

    Fight the Fed at your own peril – I know we've heard this the last few years and I think Ben has made it clear that part of his goal is to drive stocks higher, but at what point do people just get fed up with the non-sense.  Wasn't it in 1929 that the bankers were lending money to try and prop up the margin-bubble that ultimately ended in disaster? Are they not doing the same now but to a much more grandiose extent via the CBs?  I just find this whole thing very frustrating.    

  115. Phil

    That engaget presentation is fantastic.  Great use of Web 2.0!  

    So it's a high-res IPad.  I'm fine with mine thanks and if it chews up batteries faster, then I won't let them take mine away.  

    Ooh wait – there's a home button!  

    Quad core graphics so my kids can play angry birds.  They say 2x performance.  

    Better camera.  

  116. Burrben

    The Apr 500 puts continue to fall.  Now $42.  

  117. morxlntway

    after the show, Phil, for one who didn't enter the TSL (5K) trade would you think this is a good entry? Would you sell a cover?
    thanks ( & thanks for the patience reminder)

  118. Phil

    Camera on IPad is now as good as camera on IPhone only you can't put this one in your pocket and I have a 15 megapixel camera at home that's half the size of the IPad.  

    I mean really, I love AAPL but does it not occur to anyone that an 8 x 10 inch flat screen makes a really lousy camera design?  

    This is the kind of crap Detroit used to do when they ran out of ideas for actually new things…

    OK, integrated voice dictation – that's a huge plus.  There's a key on the keyboard to talk. 

    4G LTE – Now we're getting into stuff I care about! 

  119. Burrben

    Someone delete my above comment, it's dumb.
     
    The AAPL Apr 500 calls continue to fall : $42.50

  120. jmm1951

    Flea markets
     
    Yes, the clothing here is new and imported from Haiti, but I know you can buy used clothing packs by weight in Miami for export.
     
    Here are a few pictures I took  this morning of homes built with $7.50 a day Haitian labor. Once the Tea Party has abolished the US government, the US will look more like this. One of these stylish homes with 2 levels, granite top kitchen, 4 bedrooms,  4 1/2 bathrooms and a large garage, patio, balconies,  solar, etc will set you back US$250,000. The extra half bathroom is for visitors.
     
    http://www.flickr.com/photos/75175129@N05/

  121. jmm1951

    iPad camera
     
    Photos linked to above were taken with iPod. The thing is quite useless for taking pictures outdoors as you cannot see anything in sunlight. Much prefer my $90 Sanyo rechargeable camera that takes great stills and video by comparison.
     

  122. Phil

    If I can get that dictation to understand all my stock symbols and options lingo, I can finally move to my island and do chat from a hammock! 

    Ipad can be a WiFi hotspot to your other devices – I will be liking that on the road.  

    Features so far.  

  123. Lincoln

    jmm1951: Looks great, why don't you host the next PSW get together :)

  124. Inkarri1982

    I believe that can be done now with the current jailbroken iphones and ipads.

  125. Phil

    9 hours on 4G so we give up 10% of battery life for speed – that's a shame.  A little heavier at 1.4 pounds.  

    $499 for 16Gb, $699 for 64Gb – oh wait, that's not 4G – $629 and $829 and not 128Gb is a big disappointment.  

    Pre-orders start today.  "Biggest rollout ever" 

  126. Phil

    Time to short the Nas, I think – everything curling over.  Oil $105.81 because it turns out the new IPad doesn't run on gas.  

    Dollar back over 79.80 so all short plays are on!  

  127. 1020

    Yup, the NQ is rolling over…..

  128. Inkarri1982

    The WiFi hotspot feature I mean.  I have that on my jailbroken iPhone 4s.

  129. Phil

    Volume/Kustomz – Wow, I just looked.  53M on the Dow at 1:45 – that is crazy low.   

     

    DARREN MURPH A FEW SECONDS AGO

    BTW, there's definitely a Home button on this new iPad. Definitely.

  130. Phil

    That just totally cracked me up.  

    Wow, they just demo'd a simulator game and now Tim Stevens comes on and says "absolutely incredible" and I'm flashing back to the last MSFT rollout I found myself stuck at!  Now we're missing Jobs….

  131. 1020

    Ipad – I was hoping for something like this….
     
    http://www.youtube.com/watch?v=9s2oYUy_cVY
     
    :)

  132. l4real

    Phil/ IPAD- Gas
     
    That's funny! you are in rare form today my friend!

  133. kustomz

    AAPL sell off has an effect on currencies and ushers in risk off across the board!? That is way too much power! This is nuts.

  134. Phil

    GE/Lincoln – Sounds like a good plan.  You're doing the right thing, don't be greedy and keep yourself flexible but, if you REALLY want to own GE at a lower price, why not just sell the Jan $17.50 puts for $1.55 and leave them?  The Apr $19 puts are .65 but if you are going to take 1/2 profits that's .30 so the Jan $17.50s are like 5 sales anyway and much safer.  Of course you could sell the Jan $20 puts for $2.75 instead since you are selling the calls anyway and then there's really no reason to mess around with short-term puts.  

    Seriously?  Now AAPL is demoing another game…  I fear they don't have much else to show us today. 

  135. peedlew99

    Wow!  That's it???
     
    Sorry.  Lame.  
    What happens a year or two from now when exact pads and phones that are 90% as good as apples cost $50 and are sold in the grocery store check out line?

  136. bobhu

    Phil, where are you watching the iPad event live?

  137. Phil

    I can't believe they don't demo Angry Birds – that's what everyone actually plays.  

    Indicator/IZega – Sure, I watch the Euro, the Yen and the Pound.  

    Oooh – Garage Band has "smart strings!" 

  138. stjeanluc

    No huge new features that will make me give up my current iPad! 

    Faster graphics – I don't play games on my iPad.
    4G – Less than 30% of people use their iPad on a wireless network!
    Better camera – The only useful one is the front one for Skype.
    WiFi hotspot – You have been able to do that with Android phones for 1 year now! No great shake!

    The higher resolution could be nice for my PC remote control app as I can view more of my screen. But other than that, not overwhelmed. There is only so much they can add to that tablet.

  139. stjeanluc

    But obviously all the Apple fans will upgrade the iPad 2 they just bought 1 year ago…

  140. dpastramas

    Appl / so we load up some puts? Who's brave enough?

  141. bobhu

    peedlew99, Are you shorting AAPL?

  142. rainman

    Luckily the fed doesn't include energy prices in their inflation numbers:
    Who's Really To Blame For Higher Oil Prices?

  143. jerconn

    Phil – a QQQ puts play?

  144. peedlew99

    I took a small short on the NAS

  145. ban2

    jmm1951
    cool pics of the DR
    6yrs ago we rented a villa in Costambar. 5 brm 5 bath own pool; cable, internet and maid service, 1 blk from the beach for $1100/wk
    Neat little area with 5-6 rest. , nice beaches own golf course and seemed pretty safe though everything guarded.
    Easy taxi up to new marina and casino (well new back then)
    might go back some day if I can round up my 2 boys to spend a week together with us
    Belonged to some guy in LI., NY

  146. jabobeast

    mr stick?
    FU mr stick!!!!

  147. rainman

    That wasn't now stinkin' stick! That was a BTFD! :)

  148. rustle123

    under business news on CNBC.com they have "Jersey Shore" star Snooki is engaged, pregnant, pathetic

  149. stjeanluc

    The correlation between the market and Apple is just unreal… Might as well only play AAPL anymore!

  150. stjeanluc

    Snooki / Rustle – Shorting tanning beds manufacturers now!

  151. NF**X

    I'll sell u some AAPL puts, dpast.  

  152. David Ristau

    The Oxen Group entered a 50% position with $APOL 48/50 Bear Call Spread. The company looks limited in upside and profit for college scheme seems dead in the water. Analysts abandoning these stocks…headed lower. Pays 14%.

  153. rustle123

    Snooki/stjeanluc
     
    She spray tans (sad that I know that) , short those companies and Absolut, Smirnoff and Grey Goose. 
     

  154. rustle123

    There's someone talking about Apple's impact on CNBC right now that looks like he's a character from the Walking Dead.

  155. NF**X

    AAPL Puts – This week 520s for $1.75?   Takers?  Lol.  Kinda boring being a mere basic member.

  156. Phil

    FSLR/Rain – Their cost advantage was an illusion anyway. When copper production sinks, they are screwed as they run out of cadmium-telluride, which is what they use (50% of the global supply) to make their cells.  

    Better Photo editing, that's useful.  

    EWI/TraderM – If you want to short it, just buy puts or sell calls, not complicated.  June $15/13 bear put spread is $1 and you make 100% if they fail to hold $13 or you can just sell the April $13 calls for .75 and then they have to move .50 against you just to get even – that's better than shorting by .50!   Same would go for EWG but I wouldn't go short ahead of Greece being fixed again tomorrow.  

    347/Angel – Now you know why I'm shopping for a new country.  Game over for this one in 20 years or less the way things are going…

    Frustrating/Ink – As you saw from the last two days, if you keep riding the rising wave and staying in position, you can make huge money on spectacular drops.  What took them a month to grind up was erased in 2 days – that's fun if you play it right but if you play shorts with a strategy that you need a 20% drop instead of a 2% drop – then you will always be frustrated waiting for your black swan to come in.  As I keep saying with the $25KP – we're just trying to keep ourselves in position and, eventually, we expect a big dip but, meanwhile, it's our job to just keep rolling our losing short positions higher in strike and longer in time while we wait.  You can't be "frustated" by a 75 point bounce in the Dow after a 150-point drop – that's perfectly normal and if that's all they can get by dropping rumors of more free money – you should be more confident that down is the stronger pull. 

    TSL/Morx – I do like the April $6/7 bull call spread at .52 and you can sell the $5 puts for .45 for net .07 on the $1 spread – that's a nice way to play.  

    Home/JMM – Forget the house, who's the cutie?  And I hate to burst your bubble but 30 years of Republican rule in Texas have already brought the prices of similar homes to those levels down there.  Florida is next.  Texas truly is a miracle if you are rich – housing is cheap, food is cheap, labor is cheap and you can shoot people who step on your land…

    $100 price drops on old-style IPads – people won't like that but AAPL wouldn't do it if it cost them margin. 

  157. angelcur

    China Eastern Airlines Corp., the nation’s second-largest carrier, sank 0.7 percent after Chairman Liu Shaoyong said he expects a “big” drop in travel-demand growth….

  158. rainman

    What? "The new iPad"? Going to be fun searching for that on the web!

  159. Phil

    D'oh – That was it?!?  No one more thing – buh bye AAPL thanks for playing.

    DECK $70!  

  160. stardawg

    aapl presentation over…….missing jobs…but come cool stuff…..AAPL just crossed over its previous close…..:-)

  161. Phil

    Oh, I would be exiting bullish AAPL positions, by the way…

  162. rustle123

    An 81 year old African American woman was the sole winner of the 336million powerball last month.  She now is a major Romney supporter.

  163. exec

    Phil/Republican Idiots

     
    Of course they're running nothing but idiots.  Everyone knows that as soon as the elections over this fake rally is going to implode and whichever idiot is in office is going to take the blame. 
     
    Why do you think the Dems what Obama in there.

  164. stjeanluc

    Powerball / Rustle – I heard she is starting her own SuperPAC named for Romney – Powerballs!

  165. rainman

    Wonder what they'll call the next "new iPad", is this the last one? Maybe the iPaper instead?

  166. kustomz

    Market makes me nauseous. Sick to my stomach just thinking about whats making it move. QE, more easing, CB's in an orgy of printing, Europe on the verge of what, no one can clearly explain. Yet I'm to believe that everyone will just follow blindly into the unknown..I say NO MORE!!! Lets shorts this SOB!! Who's with me!!!!…..Silence…. crickets…. tumbleweeds

     

  167. stardawg

    hate to be a bear pumper but THERE SHE BLOWS ….aapl… i mean…:-)

  168. rdn4evr

    Ooh, this little AAPL dip just might ruin CMG's normal 2:30 express elevator up, but I'm sure I should have more faith.

  169. Pharmboy

    Dis' bear is very hungry…..

  170. rainman

    kustomz / blindly — Blindly following the puppet masters is better than being the puppet I'd say. It is sickening, but what's the alternative? If the government(s) could get their heads out of their asses, maybe there would be hope of change (not to be confused with election slogans).

  171. rainman

    Pharm / hungry — That can't be real, can it?

  172. jromeha

    Phil – you like shorting oil here? They had a stupid spike up to close… Like you said, they will have to start rolling these contracts over, Iran tensions are cooling (somewhat), etc…..

  173. jmm1951

    Phil/Cutie
    Private equity investment--long term hold, Buffett-style. Pays dividends. Spinoff of minor subsidiary expected in third quarter 2012.

  174. lolobear

    AAPL being a bit stubborn going down. 

  175. rainman

    jmm / hold — Good one!

  176. Phil

    NFLX racing to catch up to DECK – another joke of a company.  

    That's a cool demo 1020 – if they could do that, I'd own at least 4.  

    Live/Bob – Sorry, it was the link above from Yshen. 

    QQQ/Jerconn – Volume too low to get excited about shorting.  I'd still go with SQQQ March $13/14 bull call spread at .55 and sell the $13 puts for the same with SQQQ at $12.81 as that's a nice upside potential and an easy roll to next month playing the Nas not to pop 2,950 for the next week.  

    If the Nas pops, then I'd like a QQQ put but volume so low you must fear the stick (60M on Dow at 2:33)

    APOL/David – Not bad.  Outstanding student loan debt becoming a huge problem and mostly due to APOL-type continuing Ed, not regular colleges.  Something likely to blow up there eventually.  

    AAPL short/NF – See my short play from earlier.  Already up nicely.  

    LOL Rustle! 

    Oil/Jrom – Unless you are very nimble on the futures, I'd say the next good short opportunity will be 10:30 tomorrow (nat gas inventories) 

    LOL JMM – Very nice dividends from the looks of it.  

    Speaking of Republican idiots:  

  177. Pharmboy

    Rain…real….is this market real?  I think, I am waiting…patiently waiting….but I will take morsels for now.

  178. angelcur

    my ideal short selling setup would be to have stocks  stay approx  they are  now thru close… a gap higher tomorrow morning to the 1356 level  e voila!  and do throw in a bottle of whiskey and a naked woman too please..
     

  179. angelcur

    wheres that magical sloppy buyer?…

  180. jabobeast

    FU CMG!!!!

  181. rustle123

    Pharmboy/Bear pic
     
    That might be my favorite bear pic yet.

  182. rainman

    Pharm / real — Maybe apple will be the bear catalyst?

  183. morxlntway

    TSL – June 5s are .45c.

  184. yodi

    AAPL players Taken all cover soff exept the March short possible will be worthless so I will not buy back nice profit for the day

  185. jerconn

    Phil, I'm in USO weekly $39 long calls, somewhat profitable, take them off the table or hold overnight? 

  186. kustomz

    My screener must have froze..66m shares traded by 3pm. Someone needs to put a fork in this market.

  187. stjeanluc

    The competition for the new iPad:

    http://www.engadget.com/2012/03/07/new-ipad-competition-specs/

    Interestingly, all these new Android tablets are thinner and lighter than the iPad. This used to be the opposite. The iPad screen is definitely better, but the new ASUS tablet has some good specs. We'll see.

  188. jromeha

    Pharm – I thank you for all your answers about ARNA in the past…This will be my last one :) I guess Im curious why you are not so hot on ARNA now? Havent their tests been positive? Havent the further studies alleviated some of the concern about cancer in rats? You were very high on them going into their last review, why not now at 1.70ish going into June? I mean surely they have to at least pop up to 2.50ish before June… That would be almost a 50% gain in 3 months…

  189. angelcur

    Luxury watchmakers are hoping a stronger-than-expected recovery in the United States and global exposure will help them sail through a more challenging market in China, where the days of unstoppable growth are ticking by.

    "Asia is the market which everybody is more concerned about. People are concerned because they know that if Asia is going down there will be big problems," Thierry Stern, chairman of Geneva-based watchmaker Patek Philippe, told Reuters at the world's biggest watch and jewels fair in Basel on Wednesday.

  190. jabobeast
    1. 3:00p
    2.  
    3.  
    4. Consumer credit surges again in January
    5.  
    6.  
    7.  
    8.  
    9. By Greg Robb March 7, 2012, 3:00 p.m. EST
    10.  
    11. WASHINGTON (MarketWatch) – U.S. consumers increased their debt in January by a seasonally adjusted $17.8 billion for a third month of sharp gains, the Federal Reserve reported Wednesday. Over the three most recently reported months, consumer debt has gained an average of… Full Story

     

    1.  
      3:00p

      Jan. consumer credit well above expectations

       
       

     

    1.  
      3:00p

      U.S. Jan. consumer credit jumps $17.8 billion

  191. angelcur

    yah those indispensable 100k complications will be gathering dust when the worthy orientals relaize a g shock can tell time for 50 bucks..

  192. stjeanluc

    And here is a summary table of what is new in the iPad:

    http://www.engadget.com/2012/03/07/new-ipad-vs-ipad-2/

    Once again, not overwhelming besides the screen. But thicker and heavier… 

  193. lolobear

    Phil, what's holding AAPL from dropping like a rock?  Being off 1% isn't really  a drop. 

  194. Phil

    1:00 PM On the hour: Dow +0.59%. 10-yr -0.07%. Euro +0.24% vs. dollar. Crude +1.22% to $105.97. Gold +0.68% to $1683.55.

    2:00 PM On the hour: Dow +0.61%. 10-yr -0.05%. Euro +0.21% vs. dollar. Crude +1.13% to $105.89. Gold +0.74% to $1684.45.

    3:00 PM On the hour: Dow +0.72%. 10-yr -0.11%. Euro +0.27% vs. dollar. Crude +1.6% to $106.37. Gold +0.76% to $1684.85.

    January Consumer Credit: +$17.78B, well above expected +$11B. Non-revolving debt (student loans, car and personal loans) led, up $20.7B, while revolving debt (credit cards) fell $2.9B.

    Private creditors are getting a sweet deal and should rush to accept the Greek debt swap, wrties Nouriel Roubini. Official creditors such as the ECB may take no losses now, but the exchange means they (actually the taxpayers) will bear the cost of Greece's future insolvency.

    Higher oil prices likely will knock a quarter-point to a half-point off GDP, prompting the Fed to go "very easy" with monetary policy, Goldman's Jan Hatzius tells CNBC. The Fed will "keep rates low for a very, very long time, and it’s more likely than not they will engage in another round" of QE. He also predicts tomorrow's nonfarm payrolls will show 200K jobs created.

    Wells Fargo (WFC) may shut or consolidate branches as the lender – unable to replace lost revenue from a number of new financial regulations – looks to cut costs. Bank of America (BAC) is also considering same, but JPMorgan (JPM) says it is expanding its branch network – though nowhere near the scale it had previously talked about.

    JPMorgan sings GE's (GE +2.1%) praises after the conglomerate confirms its outlook for double-digit growth in emerging markets and Australia in 2012 and 2013. The firm believes GE's portfolio is "uniquely well-positioned" to deliver growth in these markets of a macro slowdown, and thinks its gas, aviation, and healthcare businesses will fuel strong Chinese sales.

    Netflix (NFLX -0.8%) gives up big early gains and turns red as Tim Cook says iCloud – with 100M customers – now supports movies that can be downloaded to any Apple (AAPLdevice.

    Apple (AAPL) has decided to keep the 16GB versions of the iPad 2 around at price points of $399 (Wi-Fi only) and $529 (Wi-Fi/3G). The price cuts stand to make life even more difficult for rival high-end tablet vendors, which in turn could spell trouble for chip suppliers such as NVDAATML, and CY. However, Barnes & Noble (BKS +4.8%), whose Nook Tablet goes for $199-$249, is actually spiking higher. Amazon (AMZN +1.5%) is largely unchanged. (more)

     

    Some worthwhile numbers from today’s Apple iPad event:

    Apple

    • 362 Apple stores
    • 315 million iOS devices sold through last year
    • 62 million in the last quarter
    • 585,000 apps created
    • 25 billion app downloads
    • 1080p movies and TV shows for iCloud and the new Apple TV
    • 15.4 million iPads sold in the fourth quarter of 2011
    • 200,000+ iPad apps

    The New iPad

    • New iPad specs: 10 hours of battery life, 9 hours with 4G; 9.4 millimeters thick, 1.4 pounds
    • Improved “Retina” display
    • 2048 by 1536 pixels displayed on the new iPad, with 264 pixels per inch
    • 44% greater color saturation than old iPad
    • 5 megapixel sensor on the new iPad camera
    • A maximum of 73 mbps downlink with 4G LTE on new iPad
    • A5X chip with quad-core graphics capacity
    • Supports 1080p video recording
    • Voice dictation feature
    • Same pricing as last iPad: Wi-Fi models are $499 for 16 GB, $599 for 32GB, $699 for 64GB; $629, $729 and $829 if you want 4G
    • iPad 2 now starts at $399 and $529

    Source: Apple, AllThingsD, WSJ

  195. Inkarri1982

    Frustrating/Phil – Thank you sir!

  196. Pharmboy

    jro – I am not high or low on ARNA.  We did very well up to 7.50 2 yrs ago, where many took their profits.  Do I think they get to $2.50, possibly, but I am patiently waiting for a pull back of some sort overall…..  Let's see what VVUS gets with the FDA.  I think the BCS that I noted a few days ago is still valid, and a nice one to scale into, but I do not see ARNA moving like it once did. 

    Obesity is an epidemic in this country as well as possibly some EU countries…but all I am reading is where will it stop on the drug field?  I think ARNA has an uphill battle, as does VVUS and OREX.  We want to eat everything, take a pill and magically lose weight?  Will insurance pay for it?  IF ARNA put in the phentermine with their drug, they would hands down be the company to beat, but they chose a different route, and things look ok, but not stellar. 

    I have been very selective at what I have recommended here over the past few months with my last write up in January.  I do not want to push things when something is clearly out of wack.  Selling puts are attractive, but with the VIX low…I am not sure it is the wisest thing.  I don't want to be a downer, but I am not excited right now about anything, except being short….that is my downfall.

  197. lolobear

    And now AAPL actually coming back up… oh dear

  198. lolobear

    Am i missing something on AAPL?  Jeez i expected it to tank like the titanic. 

  199. Phil

    USO/Jerconn – The calls?  I'd take advantage of this move and cash out – $106.50 is generous without something blowing up.  

    You're welcome Ink.  

    AAPL/Lolo – Not going to tank probably, just not enough upside catalyst to go higher now and probably a retest of $500 as people realize the party is over (until their next spectacular numbers, when we can buy again).  They are up on a 50% run from $360 to $540 since November so a 20% pullback to $500 is good and healthy at this stage.  I still think they are worth $700 – just not today….

    70M at 3:27 – we're really cookin' now! 

  200. Phil

     

    Business Insider – ECRI CHIEF ACHUTHAN: I’m Sticking With My Recession Call, The Numbers Are Still Awful

    ECRI chief Lakshman Achuthan is on CNBC. Last year he called for an imminent recession. Since then the economy seems to have improved quite a bit. He’s still not backing down. Here are some key points he’s making:

    * Mostly the financial markets are responding to Fed juicing.
    * He admits the jobs picture has done a bit better.
    * But jobs will get bad again, as the consumer flags.
    * He says he always predicted the recession would come in the first half of 2012, so he still has time.
    * The “full array” of leading indicators is not negating his recession forecast.
    * GDP, industrial production, sales growth, etc… he says they’re all getting worse.

  201. zeroxzero

    ???  -  Any AG guys here?  
     

    Schmallenberg virus worrying Europe's farmers

     

    Virus which leads to deaths and deformities of livestock during pregnancy spreading across continent.

  202. Phil

    USO April $40 puts back at $1.37 so let's get 20 more for $25KP. 

  203. Phil

    AAPL next week $550 calls down to $2.55 and $525 puts at $8.25 so net $5.70 off our $1 entry is up 470%, not bad for 3 hour's work!  

  204. newbie

    kucinich/hot wife
    They've been married for quite a while. I read a lot about them several years ago once I saw her picture, because I wondered "how the hell"? But the story was that they fell in love with each other very quickly when they met. It speaks highly of her, because she wasn't out just to get some kind of "hunk" to marry. I've heard her speak (on  video) and she is very eloquent. I believe (not positive) that she is very active in some kind of Third World improvement project of some kind. It is nice to know that there are still a few women out there who will marry because they find somebody who is "nice" and super smart, and very liberal and conscientious. Maybe there is still hope for ME.

  205. Phil

    Poor DECK – $67.82 now.  Seems like the ref should step in and stop the fight!

  206. yodi

    AAPL at 535 we can take out the covers again and do not tell Flan what he missed

  207. jabobeast

    WTF??? CMG and PCLN made up yesterdays loss???
    FU MoMos!!!

  208. kustomz

    The move in AUD, dead cat bounce?

    newbie, thats very nice of you to say. Or maybe he's just packin.

  209. newbie

    Let's drown Grover Norquist in the bathtub. It would be a public service.

  210. Phil

    Reality check – Bullish index goals for this morning were:  

    12,900 on the Dow, 1,360 on the S&P, 2,950 on the Nas, 8,080 on the NYSE and 813 on the RUT.

    We're at 12,855, 1,354, 2,938, 7,992 and 796 so – NOT bullish, just a bounce.  

  211. Weasle

    Phil,
    You mentioned that you didn't think Greece could get the bond deal done, but what do bond holders have to gain by NOT participating in the swap?  Won't they just get nothing instead (once Greece defaults)?  I'm obviously missing something.
    I'm just imagining that Thursday or Friday's PSW headline will be "Greece Fixed (again!)".

  212. JRW III

    Anyone know the timing of Greek news tomorrow? Is it scheduled?

  213. bobhu

    Can't get  into Apple store website to order the new iPad, too many people ordering??

  214. jromeha

    So we have ONE f#cking down day and now back to going straight up!?!?!!?! I hate this market soooooooooo much!

  215. angelcur

    hes already drowning in himself

  216. stjeanluc

    Greek schedule / JRW – I am guessing at the best possible time to screw as many people as possible!

  217. lolobear

    jabo i'm taking a page out of you.
    FU AAPL

  218. cwan120

    Hi, folks,
    After waiting on the sideline for so long, I finally decided to buy an iPad.  I actually feel so old when all of my friends have one for eons!
    So, what do you folks think of 32GB vs 64GB?  Is it necessary to have more memory?
     

  219. dclark41

    cwan 120:
    right now you might get a FU Ipad. :)

  220. yodi

    AAPL 531 is not good enough for me to cover

  221. angelcur

    and if his naem for sam smelper would this tax reform issue be around at all?.."grover norquist"..has a certain thud to it

  222. stjeanluc

    Greece / JRW – I just read in "Le Monde" that the deadline for tendering bonds is Thursday at 9:00 PM. I am guessing European time. Up to now only 39% have agreed to the exchange. That's not good!

  223. yodi

    Possible I pat sales are not to good in Greece possible go for default tomorrow

  224. jerconn

    mrm, can we get you to buy some AAPL calls here?

  225. bobhu

    yodi/AAPL, you better cover now, my 2 cents.

  226. bobhu

    I covered at $528+.

  227. yodi

    jerconn
    to late today

  228. Inkarri1982

    Pharm – Are you still buying YMI?

  229. diamond

    cwan120 – RE: 32GB vs 64GB?
     
    64GB is better if you plan on having a lot of songs and aaps.

  230. Phil

    $66.91 on DECK – For the love of God, make it stop!!!

    Greece/Weasle – I'm not so sure anymore, I assume from the Dollar going down that others think they know differently.   What they have to gain, in theory, is triggering the CDS insurance and getting paid back in full – that's a pretty strong motivation to tell Greece to stuff it but, most of the bondholders are banks and other companies and I don't think you want to piss the EU off.  I do expect Greece to be "fixed" again tomorrow and we'll get a pop and we'll roll up our puts and wait for the next dip.  

    IPad/Bob – I'm sure they are stuffed.  A lot of people have been waiting to buy whatever new IPad is out.   If it had Siri and stereo and 128Gb, I might have bought one.  As it is, I don't use my 3G enough to "need" 4G so I'll just wait for the next one – or Maddie's birthday, whichever comes first as she wants my current one.  

    Memory/Cwan – I use mine as an IPod on the plane so I like as much memory as possible.  Otherwise, I never came near using my 64Gig or 32 of it until I tossed my songs on – oh, and some movies and TV shows. 

    Selllers showing up into the close – taking advantage of the StickBot. 

  231. stuman

    CRM – chart looking toppy to me.  Shorting by buying a some April $140 puts and will look to sell calls if this baby moves higher.    

  232. dpastramas

    JRW / Correction, deadline is 22:00 GMT+2 (Athens, time) or 21:00 France time as per StJ.  So 15:00 Eastern time

  233. jmm1951

    Pharm/Obesity
     
    Obviously there are plenty of drugs that kill the appetite for food, but none that do that without incidentally affecting other systems of human physiology in a potentially negative way. For example, you don't see so many fat alcoholics or heroin addicts. Since most antipsychotic drugs make people fat, it is likely that successful anti-obesity drugs will make people psychotic, just as antipsychotics can cause symptoms of Parkinson's disease as a side effect, but drugs for Parkinson's disease can make people go paranoid.
    I don't think we will ever see the "killer app" for obesity, but eating less food is a surprisingly effective and cost effective treatment for the uninsured.

  234. kurtww

    cwan – songs, apps and above all movies. If you have kids that will like to watch videos on the iPad, get more space. Especially with the high res screen. My movies usually take 1-2GB each depending on compression, etc. High res will be bigger. Not an issue if you are streaming Netflix, but for trips you can't beat a bunch of movies on one to keep the kids happy.

  235. yodi

    bobhu
    AAPL I do not buy or sell them with the 20th or 50th so I will see what gives tomorrow would have covered at 535 but i think the exitement should be over by now

  236. bobhu

    yodi/AAPL, you are correct on the TA, I was just taking profit.

  237. stjeanluc

  238. Phil

    At the close: Dow +0.64% to 12841. S&P +0.71% to 1353. Nasdaq +1% to 2939.

    Treasurys: 30-year -0.31%. 10-yr -0.12%. 5-yr -0.12%.

    Commodities: Crude +1.43% to $106.2. Gold +0.79% to $1685.35.

    Currencies: Euro +0.27% vs. dollar. Yen +0.32%. Pound -0.1%.

    Market recap: Stocks rose as signs of a jobs recovery helped shake off yesterday's jitters, and a mere suggestion that the Fed is weighing a new form of stimulus sparked a bullish reaction. The news, plus a smaller-than-expected supply increase, boosted oil prices. Banks rose as Greece inched closer to a debt restructuring agreement. NYSE advancers led decliners three to one.

    Foreclosure Sales Flood Market (SmartMoney)

    Return of the Bear? (Points and Figures)

    LOL, what a manipulated crock!  And no investigation will be held…  Jon Hilsenrath seems to back off an earlier WSJ piece – which sent stocks higher – suggesting the Fed is considering additional bond purchases, asserting the article is more about what the bank might do "IF, capital I capital F," it decided more easing is necessary. For the moment, officials see no need for another program, he says.

    The ECB is not expected to cut its benchmark rate from 1% at its policy meeting tomorrow. Further, President Draghi may signal the bank has done enough lifting, and no further special operations are in store. Near-term liquidity issues may have been addressed, but the still-weak EU economy may force Mr. Draghi into more action before long.

    State and Local Government Borrowing Constraints (Modeled Behavior)

    Criminal Libor Probe of Banks Is Under Way, U.S. Tells Judge (Bloomberg)

    Move along, nothing to see here:  The industry is just waiting for one company to make the first move, says Carlos Ghosn (NSANY.PK) of the glaring need to cut auto production capacity in Europe. Attempts to cut costs, however, tend to devolve into political struggles among the countries that stand to lose jobs. "You can't keep (this) up for long … You'll go bankrupt," says Sergio Marchionne (FIATY.PK). 

    Indonesia says it will take more of the profits from its mineral resources by limiting foreign ownership of mines, in a move likely to scare off new investment in the world's top exporter of thermal coal and tin. The government will require foreign firms to sell down stakes in mines and increase domestic ownership to at least 51% by the 10th year of production. FCX -1%NEM -0.8%.

    Attn Pharm:  Bayer (BAYRY.PKcontemplates making a bid for Pfizer's (PFE +0.9%) animal-health unit in the neighborhood of $14B-$18B, according to research firm Leerink Swann. Pfizer has been discussing a potential sale since last summer with a number of companies, although an earlier report tips off that Sanofi may be taking itself off the list. 

    Broadcom (BRCM +3%could replace Texas Instruments (TXN +1.5%) as the combo chip supplier for the next generation of Amazon's (AMZN) Kindle Fire, Lazard says, estimating the design win could add $30M to BRCM's 2012 revenue and better position it in the tablet market. The firm also says BRCM is well positioned to maintain the combo chip business for Apple's latest iPad.

     

    What to Sell If Capital-Gains Taxes Rise (Barron’s)

    Rush Limbaugh and the poisoning of the GOP brand (Salon)

  239. stjeanluc

    Lines / Phil – What do you use for your Must Hold line? I would be curious to try to draw lines for other instruments – dollar, oil and foreign indices as a reference. Thanks.

  240. kustomz

    Update for the Iphone is out 5.1

    If you have icloud just go into settings, general then click software update.

     

  241. angelcur

    spu getting it after hours anyone see anyhting?

  242. newbie

    iflan / aapl
    important question-can you give me your personal estimate of what percentage of AAPL shares are owned by Retail versus Institutional?   Do you think the percentage that is owned by Retail has INCREASED measurably over the last 6 months?   Thanks

  243. biodieselchris

    I'm trying to accumulate Jan14 options (like DIA 150's) on down days, when it's easier to game the large bid/ask spreads. As long as this thing is going to inflate away, I might as well be leveraged 35:1 !!

  244. biodieselchris

    oh man, missed it on DECK; 55 front month's for 5 cents is a great bet. They might be half of that on 3-17. I hope I can snag a few tomorrow before the 42.50's hit that price.

  245. Beaufleurs

    Hi Phil.  In an unsure market such as we have now, I'm wanting to add some companies to my IRA from my watch list of stocks to buy when they are cheap…but I'm nervous about which way the markets are headed in general.  What is your feeling in general on buying  puts a few months out as a little  insurance on these stock purchases.  I understand that the creates a higher break even point and the cost eats in to the profits.   Thanks.

  246. lflantheman

    newbie…Go to yahoo and look under AAPL then major holders.  About 70%of shares are owned by institutions and this has not appreciably changed over the past few years to my recollection.  
    Well, AAPL did what we thought it would do in light of the announcements.  A pullback.  Didn't last long but the downward trend may carry through for a few days.  
    Phil, question for you.  You are a master at hedging.  We hold 50 April 500/550 bull call spreads in the AAPL portfolio.  These stand to make 80 + % if AAPL over 550 at April expiration.    Assuming I want to hold these (which I do, as I believe AAPL will be over 550 at April expiration) what is the best way to hedge against downside?  

  247. Canuck

    Pharm/Hungry Bear
    must have been Gene Simmons' bear.

  248. ronresnick

    Kucinich / hot wife
    Now that is he out of office I would buy a Jan 2014 put on that relationship.

  249. mrmocha

    jerconn / AAPL - I already had calls going into the event today, got stopped out around 526 while in a meeting for a decent loss, so I likely caused the EOD bounce instead 8)

  250. jmm1951

    Beauf/buying puts
     
    Don't let Phil see that! He will go nuts and you will be burned at the stake for promoting the heresy of buying premium. I will try to intercede on your behalf and plead for clemency, but since this is Phil's board I won't offer any suggestions on better strategies. However I would love to know what the undervalued stocks are, because my IRA is 40% cash and I have a hole burning itself in my pocket.

  251. zeroxzero

    Checking in, after checking out early and wandering around a bookstore for a few hours, a nice antidote to the induced mania of eternal market bullishness.  It's hard to shake the impression that 1/ the Fed may be able to hold up the stock market indefinitely, but 2/ if there is a misstep — and I suspect Europe will provide one, in the form of a soaring dollar when the reality of Europe's numbers become universally apparent, the U.S. equity selloff could be epic — and Phil's "10% drop" estimate conservative — because if Europe's "Dive" klaxon sounds, it's not going to over quickly – we could see "serial unravelling.
     
    A European advisor advised yesterday that I take profits and reduce positions substantially on Euro funds that we rarely touch [done], since they had an amazing run-up in less than a Quarter, and, while no market timer, he was once an options trader at Lehman, is Spain-based, and doesn't need a television to see the carnage that the strong[er] Euro is inflicting there.  Scary times.

  252. zeroxzero

    Jmm/Obesity:  You're a very funny guy!!

  253. jmm1951

    zerox/Obesity
     
    I know, but fundamentally I am deadly serious. Artificially induced loss of appetite is not compatible with good health.

  254. zeroxzero

    Jmm;  I realize this is no medical forum, but I would ask you the following.  My father suffered with a weight problem, although he maintained himself through sheer willpower.  The rest of the family never had that problem;, none of us ate much, nor cared to.  When my mother took him to task at the dinner table one day, he answered "You don't understand.  I could eat everything in all of your plates and not feel full.  I have never felt full in my entire life."  I figured he was exaggerating.  But in my own family,  I now have a son with a weight problem who told me the same thing: "I stop because I'm supposed to.  I never feel full."  I've read that this is a genetic disorder [although my father and my son are not genetically related].  Is this real?  I've noticed another similarity between my father and my son — they both are quite sensitive to pain, tickling, etc., whereas my [skinny] mother and the other four skinny people in my family are relatively pain-insensitive.  Just asking.

  255. Pharmboy

    YMI/link – yes. Long term hold.

  256. Inkarri1982

    Pharm/Thanks!

  257. kinkistyle

    Puts/Beau: Put on your flame-retardant pants!    LOL Just kidding :D   If you really like a stock and want to initiate a hedged position then you want to SELL puts at a strike price at which you would love to own it.
     
    Buying puts not only caps your gains but it also pits time AGAINST you as the premium seeps away every day the put doesn't go ITM.     Selling puts not only pays off if the stock goes up, but it also pays off if the stock goes absolutely nowhere, and if the stock drops and you get assigned at the strike price — well you wanted to own them anyway right?  Now you got them at a price you love to own it at and you got a further discount thanks to the premium you made on the put.  Closest thing to a win-win in this game.

  258. diamond

    PhilFed Sends Asset Price Message

  259. Phil

    Good morning!

    Today is yet another day of reckoning for Greece and the eurozone: bondholders have until 3 pm ET to decide whether to accept the €206B debt swap, and depending on the report you read (I,IIIII), creditors representing up to 60% of the loans have agreed. Greece needs 66% to trigger CACs but still default, and 95% to avoid it.

    Greece being fixed again is overriding some other bad news and the Dollar is dropped to 79.63 (but should bounce off 79.60) to give the futures a 0.25% pop.  Asia was up 1% except Japan, who was up 2% despite this:

    Japan posts a couple of its largest deficits on record, with the trade deficit widening in January to ¥1.382T ($17.0B), up 245.9% Y/Y. Its current account deficit totaled ¥437.3B for the same month, larger than the ¥322.4B expected by economists.

    Why does this news make the Nikkei jump 2%?  Because it knocked the Yen down 1% – aren't the markets ridiculous?

     

    Emerging-Market Engines Falter

    Fresh signs of economic weakness in Brazil are adding to a growing worry for the global economy: that the emerging markets that have boosted growth in recent years are slowing.

    The Euro shot up to $1.317 and the Pound to $1.576 against a weak Yen and Europe is just opening now so we'll see what's what.  Oil is $106.50 and a very tempting short but there's no resistance up to $107 so not the smartest entry here – only If we get our Dollar bounce at 79.60 and a break back below $106.50 (before testing $107) and only if you're very nimble on those Futures this morning.  

    More likely we head higher, with Gold at $1,693 so really, just a watch and wait kind of thing. 

    Oops, yep, looks like Europe is opening up around 0.75%.  

  260. Phil

    Thursday's economic calendar:

    7:30 Challenger Job-Cut Report

    8:30 Initial Jobless Claims

    10:00 Quarterly Services Report

    10:30 EIA Natural Gas Inventory

    4:30 PM Money Supply

    4:30 PM Fed Balance Sheet 

    Yesterday's productivity report shows unit labor costs rising faster than core inflation, "an unsettling development for Fed policymakers who have premised their low inflation outlook on … lack of cost-push inflation," says RBS. For companies, higher labor costs are hitting along with perky fuel prices, promising to squeeze margins and threatening predicted double-digit rates of earnings growth.

    Why incompetent people are too incompetent to know they’re incompetent (The Star)

    Very Good!  Reflections on the crisis, thus far… (Alphaville)

    Seeding the Next Fortunes (Barron’s)

    Australian February employment falls 15.4K vs. expectations for a gain of 5K. The unemployment rate edges up to 5.2% from 5.1%. Only yesterday, the RBA left rates unchanged, but said a persistent rise in unemployment would merit a cut. The aussie slides on the news, -0.4% at $1.0542. Shares in Sydney +0.5%.

    Brazil's central bank cuts its benchmark rate by 75 basis points to 9.75%. Economists had been expecting a 50 basis point cut, but interest rate futures markets had priced in a healthy chance of 75.

    How Keynes overwhelmed Hayek (Times Literary Supplement)

     

    Investors With 60% of Greek Bonds Agree to Swap. Investors with about 60 percent of the Greek bonds eligible for the nation’s debt swap have so far indicated they’ll participate, putting the country on the verge of the biggest sovereign restructuring in history. Greece’s largest banks, most of the country’s pension funds, and more than 30 European banks and insurers including BNP Paribas (BNP) SA, Commerzbank AG (CBK) and Assicurazioni Generali SpA (G) have agreed to the offer.

     

    Greek Debt Restructuring Expected to Put CDS Market to Test. It isn't yet known if Greece's debt restructuring will trigger payouts on insurance-like contracts called credit-default swaps covering the government's debt. But if it does, it will touch off the biggest-ever CDS auction for sovereign bonds and determine how much banks and others will have to pay to settle the swaps. 

     

    China Puts Jump to Three-Year High as Dominance Shrinks: Options. China's shrinking dominance over global economic growth is driving trading in the options market, which the cost to protect against losses in the nation's biggest companies is the highest compared with the U.S. since 2008. Options on the Hang Seng China Enterprises Index of 40 companies from PetroChina Co. to China Construction Bank Crop. cost the most since the collapse of Lehman Brothers Holdings Inc. when compared with contracts on U.S. stocks. The difference, or skew, shows investors are increasingly bearish on the index of Hong Kong-traded China shares.

    You know they need a rally when GS wheels Abby out:  Stocks are undervalued at current levels, and more and more investors are realizing that, coming off the sidelines and back into the stock market, observes Abby Joseph Cohen. Using one particular metric, the S&P 500 is pricing in a 7% decline in corporate profits for each of the next five years. "That’s possible," Cohen says, "but it’s not likely."

    The 1% Captures Most Growth From Recovery (WSJ)

    Shiller: Don’t Resent the Rich; Fix the Tax Code (Part 3) (Bloomberg)

    Though oil prices have soared in part due to fears of geopolitical tensions triggering supply shortages, inventories are currently well above historical norms, notes Bespoke. Global crude inventories are currently north of 345M barrels, whereas the norm for this time of year is closer to 325M. Inventories traditionally peak in early May around 335M barrels. (earlier)

    U.S. legislators are looking to tighten the sanctions on Iran by targeting Asia-Pacific, Russian and other insurers involved in Iranian deals prohibited under American law. The lawmakers also want to widen U.S. sanctions to all Iranian banks and to foreign institutions engaged in non-oil transactions with the country.

    Shale gas and oil will add $5 billion to Ohio’s economy by 2014 (Cleveland.com)

    The Senate may vote today on two rival measures related to TransCanada's (TRP) Keystone pipeline, but both face difficulty in receiving the 60 votes necessary. A GOP amendment to the highway-funding bill would allow Congress to OK the project without Pres. Obama's approval, while a Democrat proposal would ban exports from the pipeline. 

    New York's Suffolk County tiptoes on the brink of bankruptcy with time running out to pay out hundreds of millions of dollars in short-term payments due later in 2012. The municipality will sell $90M in new debt and plans on laying off workers in an attempt to bridge the gap. Also on the brink: Stockton, CA (previous)

    Ever wondered why many ebooks seem way over-priced? The DOJ reckons Apple (AAPL) and 5 major publishers have beencolluding to raise prices and undermine Amazon (AMZN), and plans to sue, the WSJ reports. The publishers include Simon & Schuster (CBS), Penguin (PSO), and HarperCollins (NWSA), with some of the parties involved in talks to settle.

     

    U.S. Warns Apple(AAPL). The Justice Department has warned Apple Inc. and five of the biggest U.S. publishers that it plans to sue them for allegedly colluding to raise the price of electronic books, according to people familiar with the matter.

    After witnessing Apple's (AAPL) iPad event, Jolie O'Dell thinks the company may be losing some of its marketing polish in the post-Steve Jobs era. O'Dell cites Tim Cook's presentation, the new iPad's ambiguous naming, and Apple's use of the word "resolutionary" on its iPad page as evidence a company known for its attention to appearance and detail fell short of its usual standards. (more- "Resolutionary"?  I missed that one – SELLSELLSELL!!!

    Can you build a human body? (BBC)

    The search for the first replicator (New Scientist)

  261. Phil

    Oil (/CL) just failed $107, gold (/YG) $1,700 with the Dollar very bouncy off 79.45 so those are the stop lines for the short plays.  

  262. msf65

    Pharmboy,
    What do you think about this? Breakthrough in Alzheimer’s. Cancer drug shows promise in reversing symptoms in mice.
    http://www.case.edu/think/breakingnews/breakthrough.html

    Maybe we should watch how this develops for possible future investment.

  263. msf65

    Well the drug they used is bexarotene, brand name Targretin, developed by Ligand Pharmaceuticals. Later Eisai bought rights to Targretin. Eisai is traded on Tokyo Stock Exchange. Patent in the US expires in 2016.

  264. Phil

    79.37 on the Dollar – they got the Euro up to $1.3244 and the Pound to $1.58 so 1% moves in currency are giving us 1% moves in the indexes.  

    You would think it would help oil more but still stuck at $107 but gold is $1,703 so we have to wait until 10:30 probably to get a good short.  As planned, we'll be rolling up our puts into the initial excitement.  

    We have 1,360 on the S&P to watch and 800 on the RUT as well so plenty of good indicators but the Dollar is being brutalized this morning and that's that so far.   

    Lines/StJ – Those Must Hold lines are the result of major computations and it's not just a formula as you have to first decide where a proper consolidation base is.  Our indexes were calculated using the 2007-2008 highs and the crash lows (consolidations AND spikes) and then verifying them with various up and down consolidations over the course of a year.  I think I've done a write-up or two on the 5% Rule, perhaps in the Education or Portfolio sections and there may be commentary under the strategy section.  Going forward, let's have public discussions on creating lines for oil and other stuff so maybe everyone can learn how to plot them (on weekends, of course).  

    Thanks Kustomz – that was easy.  

    SPU/Angel – The $40M fruit juice company?

    Buying puts/Beaufleurs – I hate that.  We SELL puts, we don't buy them.  If you want to add, for example, BA at $73.50, then rather than buy the stock and spend $6.20 for the Jan $70 puts, which means you don't break even until $79.70 and don't make $6.20 until $85.90, why not SELL the Jan $70 puts for $6.20 so your break-even is $63.80 and you make $6.20 as long as BA doesn't fall more than 5%?  This is not a complicated concept – I don't understand why people are so resistant to it when we prove, year after year in our long-term portfolios, that it's a better way to buy.

    CNBC warning about solar storm "this morning" yet it should occur to to non-Fox viewers that we are scientifically advanced enough these days to narrow it down a bit further than that and a proper man of science may be able to use the interweb to discover that the storm passed 2 hours ago and it's not news at all.  

  265. kallenjr

    Phil,
    Anything special about 10:30 AM and Gold? Stock market timing or other gold exchange timing?

  266. Phil

    And what JMM and Kinki said!  

    Bookstore/ZZ – I find it's helpful to just walk around New York City and count the empty retail space.  Any downtown will do – in a good economy, you just don't have this much empty space.  Also, the almost total lack of residential and commercial construction – the lack of road crews fixing things – the lack of shopping bags in the malls – I've even noticed I now rarely have to wait for gas.  If I'm not waiting for gas – doesn't that mean less people are buying it?  Anyone else notice this?  

    Never feeling full/ZZ – I'm like that.  I have a huge appetite and I still eat the way I did when I was in my 20s and ran 7 miles a day – not good.  Even worse, I can afford to eat whatever I want and, even worse, I eat about 5 or 6 business meals a week and, even worse, I sit on my ass all day.  I do know better and this is probably my last year (49) before I will have to enforce discipline on myself as I doubt I'll be able to carry this extra weight into my 60s without repercussions.  As we know, it takes 10,000 hours to become an expert at something so it's back to the gym for me with 14 hours of walking a week added to my schedule, it will still take the whole decade to turn myself back into a walker/runner, which means, logically, that I'll also probably have to watch my diet at the same time – I'll let you know how it goes…

    Good chart Diamond, I might use that.  

    Nice video Kustomz – I think you guys wrote my morning post! 

    10:30/Kallen – Not so much gold but the nat gas inventory often marks the point in the week where the oil bulls finally give up, although we're getting a nice drop from $107 to $106.65 already as the Dollar comes back a bit (79.39) and gold nudged under $1,700 again with the RUT confirming under 800 and S&P rejected at 1,360 as well but I'd take small gains off the table, not play for big drops.  

     On to new post!  

  267. jromeha

    Wtf are we up for!?!? How is the $ down so much!?!?

Dashboard

 Sector Performances (Today)

 Thermal Imaging