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Fake-Out Thursday – Dollar Sacrificed on an Altar of Lies

The Dollar is down 1%.

That makes the markets go up 1%.  Mostly, the Dollar is down based on a FABRICATION in Uncle Rupert's Wall Street Journal – the most widely read financial publication in the World (next to Philstockworld, of course!).  Although Jon Hilsenrath, the WSJ chief economist who started this nonsense made it VERY CLEAR that the story was predicated on IF they decide to do more "capital I, capital F," Jon says – THEN this is the kind of bond buying that might happen.  

That's all it took yesterday to send the S&P up 1% but, if there were a volume measure, you'd see that, on the Dow, 25M shares were traded before 11, and just 35M shares between 11 and 3:30 and then 50M shares were traded between 3:30 and 4pm, almost 100% down volume.  The only people that are fooled by these word games are the beautiful sheeple who are so well-trained to buy the F'ing dips that even a misstatement like this sends them into a buying frenzy.  

Ah, fresh meat – we love it!  Oil (/CL) was back at $107 this morning and we already caught a nice dip off our favorite sell spot in Member Chat and gold is giving us a good short entry at $1,700 (/YG) as well.  All we have to do is watch the Dollar and see if it can hold 79.40 once real trading begins.  The Euro is up at $1.324, off the $1.31 line yesterday so up 1% and the Pound is up from $1.57 yesterday to $1.58 this morning and the Yen is loving it at 81.71 (weaker) as they've been solidly backing the Euro over at the BOJ this month and the Nikkei futures (/NKD) shot up from 9,500 yesterday to 9,835 this morning (3.5%) on a 1% drop in their currency so this would be a great spot (below 9.850) to short the Nikkei.  

SPY DAILYFor the Futures impaired, the EWJ April $10 puts at .20 should be a fun way to play the Nikkei reversing, assuming reality sets in at some point.  It's 8:25 now and oil just hit $106.50 and that's our take the money and run spot in the futures as we pick up $500 per contract off my 4:56 comment in Member Chat this morning:    

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.  

Of course, we discussed my oil targets in yesterday's post (and a couple of great short spreads as well), as well as on my TV spot Monday so it's not a big secret where we're drawing our line in the sand and it's very telling that, so far, it's held up quite well for us.  As to our short plays, we cashed in our bullish QQQ spread into yesterday's rally as we thought investors MIGHT be smart enough to understand that the WSJ story was fake and, THEREFORE, there was no reason for the rally but – as PT Barnum pointed out – "no one ever went broke underestimating the stupidity of the general public."  

USO WEEKLYThat's why we held off on rolling up and adding to our short positions with our long profits (except for more USO puts at $106.50, which I thought we were lucky to get) and it looks like we'll be rewarded this morning with an even higher open to short.  As David Fry notes on his USO chart, now that we've gotten bored with Iran as a driver for oil – we're back to old faithful QE3 to justify the insanity of $105 oil. 

Refineries cut 2% off their capacity last week to fake an additional supply shortage and crude imports to the US were cut by 475,000 barrels per day, short-shipping us 3.3M barrels for the week.  Gasoline production was cut by 392,000 barrels for the week but, for the whole week, the draw on gasoline stocks was just 400,000 barrels – indicating the lowest demand measured since the beginning of this century at the same time as we are paying the highest prices of the century!  

According to the IEA, Total products supplied over the last four-week period have averaged 18.3 million barrels per day, down by 6.1 percent compared to the similar period last year. Over the last four weeks, motor gasoline product supplied has averaged about 8.4 million barrels per day, down by 7.8 percent from the same period last year. Distillate fuel product supplied has averaged nearly 3.6 million barrels per day over the last four weeks, down by 7.6 percent from the same period last year – yet there are those who will tell you that the 10% INCREASE in price is somehow not the result of speculation

Note that not only are we still at record inventory levels DESPITE the fact that the US Energy Cartel is shorting us 1,189,000 barrels of production PER DAY (35Mb/month) but that same gang of criminals is EXPORTING 1,246,000 barrels per day for another monthly loss to the US of 37Mb/month.  So we are using 72Mb/month less oil than last year, that's 3.9 days PER MONTH (13%) of total US energy consumption that consumers have cut back trying to save money  - but all that has done is left the door wide open for speculators to jack up the prices to fill in the gap – defying all logic of supply and demand to simply bend you over the gas pump and rape you repeatedly – and you take it, don't you?   

You vote for some schlub and send him to Washington but you can't take 5 minutes to write a letter (or 5 seconds to Email this article) and DEMAND that he do something or maybe, just maybe, next time you will wake up from your mindless political stupor and vote for someone who does have the balls to stand up to these bastards.  

Use this link to contact your Congresspeople and feel free to send them all or part of this article but put in your own personal message and tell them how you feel about being screwed over by speculators and the US Energy Cartel that includes the very banks we bailed out with our tax Dollars and continue to fund with our FREE MONEY from the Fed as well as the refiners who refuse to refine and the drillers who refuse to drill and the shippers who circle their tankers around in the Gulf of Mexico, waiting for a price spike to unload their tankers and, of course, let us not forget the people who want to build a pipeline so we can ship MORE US oil OUT of the country and away from American consumers.  

If you can't spend 60 seconds of your life to make your opinion heard by the people YOU elected to represent you in Washington, then you forfeit the right to complain next time you are raped at the pumps.  You can click "like" on Facebook or "tweet" this article and spread awareness or you can be part of the problem and just keep letting it happen.  This country is being bled dry by oil speculators – that's a FACT – millions of jobs go up in smoke as we pay $130Bn a year more for oil at $105 than we do at $85 and that's just the US – Globally, this is a $700Bn a year problem and that amount doubles as barrels are marked up along the pipeline and those prices flow into food, transportation and other energy-related costs.  

$1.4Tn a year is a lot of money.  And that's just the amount we're paying OVER $85 a barrel.  Oil was $20 a barrel under Clinton and we used MORE oil per day then and had LESS oil in storage and there was LESS oil being produced globally then than there is now.  But let's forget the $6Tn rip-off they've already accomplished (10% of global GDP going to energy costs over what we paid under Clinton) – let's just focus on the 28M $50,000 jobs that are represented by the $1.4Tn we are being ripped off THIS year, on top of the 112M jobs worth of money that has already been sucked out of the economy between $20 and $85.  

WHEN WILL YOU GET MAD – WHEN WILL ***YOU*** DO SOMETHING ABOUT IT?  


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  1. Laddoo

    ipad demo…enjoy!
    http://biggeekdad.com/2012/02/ipad-magic-demonstration/

  2. stjeanluc

    Oil Line

    R3 – 109.41
    R2 – 107.98
    R1 – 107.21
    PP – 105.78
    S1 – 105.01
    S2 – 103.58
    S3 – 102.81

    We have already bounced off the R1 line and it has been holding since 5:00 AM.

  3. docsportif

    Phil/exercise
    Hi, newish member, enjoying your comments and have finally found something I can comment on, sadly not investing related (yet!)
    It has now been shown in scientific studies from Loughborough University amounst others that 3 minutes high intensity exercise per week, yes PER WEEK, is all this is required. The concept is known as High Impact Training. Havn't had much chance to research this further yet but I believe that the research is valid! There was an interesting programme on the BBC last week (Horizon series) about this, you might find it on BBC iplayer if you can access this or You tube.
    Many thanks to Phil and all of you for the continued education/enlightened comment.

  4. stjeanluc

    LInes / Phil – I found 2 articles about your lines in the Education section. I'll go over them and maybe it will be interesting to use that for other instruments this weekend – of interest would be commodities and currencies. 

  5. stjeanluc

    These are really scary numbers…

    http://ftalphaville.ft.com/blog/2012/03/08/913981/the-eurozone-youth-of-today/

  6. stjeanluc

    Good quotes from "The Disciplined Trader" by Mark Douglas:

    http://www.thecrosshairstrader.com/2012/03/how-to-lose-money-in-the-stock-market/

     

    In any particular trade you never really know how far prices will travel from any given point. If you never really know where the market may stop, it is very easy to believe there are no limits to how much you can make on any given trade. From a psychological perspective this characteristic will allow you to indulge yourself in the illusion that each trade has the potential of fulfilling your wildest dream of financial independence. Based on the consistency of market participants and their potential to act as a force great enough to move prices in your direction, the possibility of having your dreams fulfilled may not even remotely exist. However, if you believe it does, then you will have the tendency to gather only the kind of market information that will confirm and reinforce your belief, all the while denying vital information that may be telling you the best opportunity may be in the opposite direction.

    There are several psychological factors that go into being able to assess accurately the market’s potential for movement in any given direction. One of them is releasing yourself from the notion that each trade has the potential to fulfill all your dreams. At the very least this illusion will be a major obstacle keeping you from learning how to perceive market action from an objective perspective. Otherwise, if you continually filter market information in such a way as to confirm this belief, learning to be objective won’t be a concern because you probably won’t have any money left to trade with (italics mine).

    From Chapter Four of THE DISCIPLINED TRADER

    Bottom line:  successful trading is about making money…not about being right.

  7. roberthjrfl

    Phil, how do you get those volume statistics by the hour like you site above?  TIA.

  8. Pharmboy

    Bexarotene for Alzheimer's – well, lot's of things have worked in mice.  Lemme know when something works in humans.  Take Vitamin A then to the max daily dose, it is a derivative of Bexarotene. 

  9. Pharmboy

    PP for today…and I second Jro's comments from the end of yesterday's chat, WTF?

  10. yodi

    Phil never feeling full One of my dogs was over weight Dr. prescript her Slentrol from Pfizer gives a signal to the brain that you are full lost in one month 9% of her weight. Trust will be approved for humans soon. It works great.

  11. stjeanluc

    Interesting amendment proposed by Dems for the XL Pipeline:

    Democratic Senator Ron Wyden proposed an alternative on Wednesday that would ban exports of oil from the pipeline as well as refined products made from the oil.

    We already know that the majority of the crude going through will be exported but it's being sold as a "job creator" and a necessity for US security.

    "You see all over television, commercials and enormous sums of money spent by the advocates who constantly keep talking about how this is going to strengthen domestic energy security," Wyden said. "This amendment guarantees that."

     

    Wyden said his amendment would allow for broad presidential waivers for exports in cases where they were truly needed.

    It would also require that U.S. iron and steel be used in the pipeline to create more U.S. jobs.

    We'll see how that goes.

  12. exec

    Phil,

     
    Don't you just love how they screw the retail investors in premarket.  I'm not sure how JR does it getting out every night given the fact that they take most of the meat out of the trade in premarket.
     
    As usual I make the perfect entry point into TNA on Tuesday, then exited at the EOD with small.  I just can't seem to hold the long overnight.

  13. Pharmboy

    I don't think so yodi……The FDA also warned that humans who consume Slentrol may suffer abdominal distention, abdominal pain, diarrhea, flatulence, headache, nausea, and vomiting.

  14. yodi

    Pharmboy
    You are on the ball but taking it you need to watch the dosis very important

  15. stjeanluc

    Revisiting O'Shaughnessy's strategy:

    http://www.oldschoolvalue.com/blog/book-reviews/what-works-on-wall-street/

     

    Buy 50 stocks with the highest relative strength trading at a price-to- sales ratio less than 1, hold for a year, then repeat.

    This strategy was able to turn $10,000 into $55,002,724. It had a higher maximum Peak-to-Trough decline of -53.40% versus -50.12% for all stocks during that time period. However, the Sharpe ratio fared better at 0.60 versus 0.46 for all stocks. Beta was 1.08 versus 0.99 for all stocks. In single-year returns it beat all stocks 39/52, rolling five-year compound return 43/48, and rolling 10-year compound return 43/43 times.

    I had a post on my blog explaining why the price-to-sales ratio was one of the best fundamentals to use for screening. It has been proven many times. It is also shown that stocks making 52 week highs have a better chance of continuing. If you can combine momentum with strong fundamentals (no CMG and NFLX need apply there), you should be able to pick winners…

  16. kustomz

    Being short the markets one may suffer abdominal distention, abdominal pain, diarrhea, flatulence, headache, nausea, and vomiting.

    Fixed it for you Pharm :-)

  17. 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

     

    Also, I show P-Bars to IWM 80.29 fwiw

  18. iTrade

    PHIL.
     
    March DIA $128 Puts…
    - Bought for $0.80
    - last plan was to wait thru Wednesday to see if the market hold those lines… this FAKE UP with $$ Down is helping hold those lines, but at the sometime give me renewed interest in hold the position.
    - Currently at $1 I could take the profit and exit into a more favorable position, maybe April Puts.
     
    What's your thought?

  19. Pharmboy

    Everything is a poison at the right dose, yodi.  I would not eat if it made me feel sick either.  It will not be approved for humans, and thus I don't see it making it there.  The drug works by decreasing absorption of fat (MTP inhibitor). 

  20. NF**X

    PD – I really don’t mean to abuse my basic-member status – heck, I’m not even sure who sees such a post. But at some appropriate point I’d like to share how much I’ve been “learning” by following and practicing (albeit with real money) – as opposed to, for me, talkin’ (here) with no real sense of purpose. And I think I’m really “getting you” – the occasional harangues are funny and useful.

  21. jasu1

    stjeanluc,


    So what stocks came up on your screen :
    High RS, Price to sales ratio<1.
    Thanks in advance

  22. stjeanluc

  23. stjeanluc

  24. stjeanluc

    Screen / Jasu – I'll run something this weekend to follow up!

  25. peedlew99

    I wrote all my "officials" down here in LA.
     
    Somehow I doubt they'll care.

  26. stjeanluc

  27. jasu1

    stjeanluc 

    Thanks…will look for it

  28. jomptien

    Pharmboy, those symptoms seem to be the case for alot of approved drugs.

  29. yodi

    Thanks Pharm so we will not use it for Phil

  30. morxlntway

    Pharm – for you.
    Hope it moves a little today. i have a mar 5 call i need to get out of.
     
    http://seekingalpha.com/article/418621-protalix-s-regulatory-approval-analyst-q-a?source=email_rt_article&ifp=0

  31. Pharmboy

    morx – it ain't gonna move much now.  I would move out to May.

  32. Savi

    Good Morning—back in the good old USof A

  33. Jbur

    Morning All! Nice slam to MCD this morning. Sold some June 90 puts for $1.22 and will add as and if it drops further. Love this company but have never been able to get into it at a reasonable price. $88.78 is a good price for a long term core position like this.

  34. kevinb63v

    Phil,
    Should the Apr $40 USO puts be DD at this point?

  35. stjeanluc

  36. sagemm1

    Phil STJ/oil pipeline
     
    I was writing my sen Wyden last week to introduce this very proposal…I hate to assume my note had anything to do with action but nice to see my guys here in OR at work, actually sent the same letter to the White House, the bill will kill that pipeline in a NY minute!

  37. peedlew99

    So, we're for sure going to get the "Greece fixed" headline today, right?  Think it will be good to pop the markets back above resistance?
    "good news" out of Greece has help the market countless times in recent weeks.  What will they do without it!?

  38. Phil

    Good morning!  

    I had a nice, therapeutic post this morning so I'm ready to get bullish if we get our technical signals.  As you can see from the chart on the right, StJ has done a great job re-creating our Big Chart and it's very clear that we will be watching S&P 1,360 and RUT 813 for proper signs that this is more than a bounce and we'll be really impressed if the NYSE can pull off 8,259 but that's 200 points from it's 1% gap up open so I kind of doubt that's going to happen this week. 

    That means – we're NOT going to be bullish into the weekend so no point in fooling ourselves today, right?  

    The Dow is our bounciest index at 12,912 and that makes DIA a fun short again.  I'm liking the March $129 puts at $1.05 enough to go for 10 in the $25KP and 5 in the $5KP with the expectation that we will DD at .65 if the Dow retests 13,000.  Greece is likely to be "fixed" today (3pm) and we'll see if it pumps up the markets but if it's EITHER a sell on the news event OR if Greece turns out not to be fixed – we could have a fantastic sell-off so it's worth gambling on.  

    Oil already fell to $106.50 and now probably pumped back up to $107 into nat gas inventories at 10:30 but that ship has sailed for nat gas, now back at $2.29 after touching $2.28 last night – really bad.  So oil is resting their hopes on a dead alternative and, of course, there's plenty of pipelines to blow up – or say were blown up – doesn't seem to matter…  

    Dollar 79.45 is the line to cross to make the bears happy.  On the Euro we would like to see them fail $1.32 (or hold it if you are bullish) and the Pound below $1.575 would be bad for the bulls.  The Yen is at 81.58, slipping back a bit with the Euro and the BOJ is crazy not to buy Dollars here but I think they have now cast their lot in with the Euro, possibly based on how they think the Greek deal will go down today so VERY interesting if Greece falls apart this afternoon on many fronts.  

    At the open: Dow +0.58% to 12912. S&P +0.76% to 1363. Nasdaq +0.71% to 2956.

    Treasurys: 30-year -0.33%. 10-yr -0.09%. 5-yr -0.03%.

    Commodities: Crude +0.32% to $106.5. Gold +0.78% to $1697.05.

    Currencies: Euro +0.63% vs. dollar. Yen +0.58%. Pound -0.3%.

    Market preview: Equities on either side of the Atlantic are higher, buoyed by optimism that Greece will be able to complete its debt-swap deal today. S&P benchmark futures +0.7%, and even mixed jobs data (III) can't dampen the mood. Budweiser company AB InBev +3% following Q4s, but McDonald's is -3% after it cautions on its outlook.

    Initial Jobless Claims: +8K to 362K vs. +4K consensus. Continuing claims +10K to 3.42M

    German January industrial production rises 1.6%, beating expectations for +1%, and rebounding from December's 2.6% decline. - Isn't that still net down 1%?

    Two bears on a "risk on" day: "To me this feels no differentfrom the start of 2011, but with one major difference. Profits are sliding instead of rising robustly," says SocGen's Al Edwards. Morgan's Graham Secker says it's rare for stocks, oil prices, and bond prices to all rise in lockstep – a "very reliable sell signal for stocks."

    The ECB leaves policy unchanged, its benchmark rate remaining at 1%. 

    The Bank of England leaves policy unchanged, its benchmark rate remaining at 0.5% and the size of its second asset-purchase program still £75B; the total of the two QEs is £325B.

    Draghi press conference: "Money market funds are starting to return, and they were the first to fly away," says Draghi, calling the LTROs an "unquestionable success" that has removed tail risk. LTRO 3? The "ball in is the court of the governments and banks" to support the recovery. 

    Draghi press conference: Addressing concern there's been a break between the ECB and the Bundesbank, Draghi says the vote on going forward with the LTRO was unanimous. "I don't think the Bundesbank is isolated … (it) has never been alone in its views."

    Draghi takes a detour to address ideas the ECB is the loosest of the major central banks. He claims the makeup of banks' assets distorts the figure and the way he sees it, the BoE and the Fed are far looser and have greater balance sheet risk than the ECB.

    Draghi press conference: Responding to a question regarding Juergen Stark's description of the bank's balance sheet as "shocking," Draghi says the former ECB member has his facts wrong. To review: Stark resigned from the ECB not necessarily because of its expansionary policy, but because of the low-grade collateral the bank began accepting as security for loans.

    Draghi press conference: Far from thinking about tightening collateral rules, Draghi says they "can be looser, much looser." The statement causes some laughter in the room as it suggests there is essentially no downward bound on what institutions can present to the central bank in exchange for freshly minted euros. European shares return to near the day's highs, and why not. - When this news sinks in, the Dollar should get stronger.  

    The euro sheds a chunk of the day's gains as Draghi's press conference - which can be best described as a victory lap by a man who feels he has won a big battle, if not the war – moves towards conclusion. European shares remain solidly higher, Stoxx 50 +1.4%. Euro +0.6% at $1.3233. 

    The Swiss National Bank spent 17.8B Swiss francs ($19.56B) buying foreign currency last year as it fought to combat the "massive overvaluation" of the franc and cap it at 1.20/euro. The SNB's credibility should be boosted after it said it swung to a net profit of 13.5B francs in 2011 from a record loss of 21B francs in 2010. (PR)

    The dollar is solidly higher against the yen following last night's somewhat shocking trade and current account deficit announcements. Trained by 30 years of data, markets are not used to Japan being in deficit. The country's abandonment of nuclear power amidst rising oil prices is likely an important factor. Dollar +0.7% to ¥81.64.

    We'll have to wait!  The Greek government will announce the results of investor participation in the country's bond swap on Friday at 1 AM ET, says a source. The deadline for investors to make their election is 3 PM ET today. Confidence remains that participation will surpass 75%, putting the ball in the government's hands to activate the CACs.

    As The Daily Telegraph puts it, "Greece's decline in 140 characters or less" – "#Greece youth unemployment rate has risen to 51.1%. It was 39% in 2010, 28.9% in 2009, 26.3% in 2008, 24.5% in 2007," tweets entrepreneur Alberto Nardelli. (previous

    Bespoke isn't getting worked up about 3 straight weeks of increases in jobless claims. On a seasonally adjusted basis the mark stands close to recent lows and on a non-seasonally adjusted basis it falls in line with first week of March numbers dating back to 2000.

    Markets are buying into Greek optimism it will receive approval of over 75% for its bond swap, thereby allowing it to proceed. Stocks are building on earlier gains, with the Euro STOXX 50 +1.3%, and the euro is +0.3% vs. the dollar. 10-year yields on Italian bond are -17 bps at 4.77% and those of Spain are -6.5 bps at 5.023%.

    Government officials step up efforts to ensure that data on economic reports doesn't leak out to traders looking to profit from early information. One of the latest ruses that appears to be in play is a sophisticated effort by some users to slow down government websites as they release data while speeding it up for themselves.

    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

    Despite concerns to the contrary, the 6 major powers that will resume talks with Iran over its nuclear program manage to find common ground, calling on Teheran to give the IAEA access to the Parchin military site. Satellite images of the base show an attempted cleanup of radioactive traces, "possibly left by tests of a nuclear-weapon trigger".

    Maybe CHINA! not so wonderful for Industrials after all?  Caterpillar (CAT) and  other heavy machinery vendors are facing growing competition from Chinese firms such as Sany, Zoomlion, and XCMG, who are now stepping up their efforts to acquire foreign companies for their technology, brands, and distribution networks. Chinese companies accounted for an estimated 15% of the revenues of the top 50 construction gear companies in 2010, up from just 1.6% in 2003.

    Boeing (BA) expects to receive around 200 orders for its new 737 MAX jets in China in 2012, as well as "several dozen" bookings for 777s and deals for 747 aircraft. However, Boeing is set to face increased competition for its 737s in 2016, when the C919 from Commercial Aircraft Corp. of China will be ready for export.

    Not good enough to justify $100:  McDonald's (MCD) same store sales rise 7.5% in February. Breakdown by region: +11.1% in U.S., +4% in Europe, +2.4% in Asia/South Pacific, Middle East, Africa. The company mentions Japan and the timing of the Chinese New Year as influencing the apparently weak Asia number. Shares -2.9% premarket. (PR)

  39. Phil


    ROFL!
      Starbucks (SBUX +0.9%) shares open higher on news the coffee company will announce a "new strategic initiative" in the premium single cup category. CEO Howard Schultz will host a webcast today at 5 p.m. PST. GMCR -5.4%.

    Must be nice to be Zuckerberg:  Facebook (FB) plans to use its bridge loan to fund taxes for employees who exercised their restricted stock, according to a SEC filing. Shares of Facebook cleared on SharesPost at $40.50 at last look. 

    I'll bet this is one IPO you'll have no trouble buying:  In addition to a new $5B revolving credit line, Facebook (FB) has obtained a one-year $3B bridge loan, and it has added 25 underwriters to the original group of six for its IPO. Facebook has also given a breakdown of on its regional performance, with the U.S. and Canada providing $462M of ad sales in Q4, Europe $306M and Asia $95M

    Trying to goose the Nas:  Apple (AAPL) has its price target boosted to $660 from $600 at Goldman following yesterday's new iPad announcement. "The new iPad and lower price point for the iPad 2 will enable Apple to continue its momentum and tablet market dominance." New estimates: FY12 EPS $42.52 from $40.36, revenue to $152.4B from $148.3B. 

    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.

  40. stjeanluc

    Changed the formatting to use colors rather than boxes to indicate where we are!

  41. jmm12

    stjeanluc
    Can you post the link to your blog?

  42. dclark41

    sageman:
    I like Wyden's proposal on the surface, but won't they just find some other way to export oil regardless of what stipulations are placed on them. Perhaps the President has it right.  Those in the oil industry will always think "me" first regardless of how much damage they cause to their own country.

  43. dclark41

    ….and yet they continue to talk about how much the Keystone pipeline will help reduce high gas prices.  ………and the solar storm!!!!!! As Phil said: "It's already over!!!"
     
    "The sun erupted Tuesday evening, and the effects should start smacking Earth between 1 a.m. and 5 a.m. EST Thursday (0600 GMT and 1000 GMT), according to forecasters at the U.S. government's Space Weather Prediction Center. They say the storm, which started with a massive solar flare, is growing as it speeds outward from the sun."
    http://www.philstockworld.com/2012/03/07/solar-storm-headed-toward-earth-may-disrupt-power/

  44. edgewater

    Could someone please explain DD..doubling down..am I correct in assuming that it means you roll down the option 2x
    Thanks

  45. dflam

    Phil/AGNC: what do u think of Jan.$25/27BCS with Jan. $25 P ?

  46. stjeanluc

    We need pay more attention to the $5KP portfolio and I am going to convert it to the same format as the $25KP with targets specified because we missed the boat on the DMND spread – the Mar 22.5 calls topped at $3.60 on Tuesday. The problem is that the 24 topped at $2.35 and we never got the $1.35 we were looking for. 

    Ideally, it would have been better to kill the longs and keep the shorts waiting for them to expire next week, but in this portfolio we don't want to use margin so short calls are not in the cards. But we had closed to a double on our hands and we let it go…. That's why the new format is better because we can scan where we actually are and take the appropriate action.

  47. Phil

    Damn, we could have held those GMCR puts one more day!

    IPad magic/Laddoo – I love that guy.  He should do commercials for them. 

    Execise/Doc – Thanks, worth a try.  

    Oh Shit animated emoticon

    Greece and Spain youth unemployment out of control.  I think the only reason they aren't rioting now is because the EU passport lets people just leave the country for work but Portugal rising and soon the unemployed will go to France and Germany and then the nationalism kicks in and presto – we're back to the same root causes of WWII after the depression.  Thank goodness we don't have any inflation or it would be a perfect storm….    

    Good Douglas quote, StJ.  

    Volume/Robert – I use Power Etrade Pro's volume numbers which, over the years, seem to be consistent with other reports I see.  I like using the Dow because, now that C is out of it, it tends to not have crazy volume swings for no reason and it's also easy to see if one component is causing the spike for the day.  Also, 90-200M per day is a lot easier to keep in your head than 1,700,000,000 to 4,200,000,000 on the NYSE so I like it as a quick glance.  That's why I tend to call out volume numbers during the day – I like to keep track later and see where the peaks and troughs are.  At the moment (10:11), we're at a meaningless 20M on the Dow, which means this morning pump job can be easily reverse.  To some extent, I treat it like counting cards in blackjack – assigning + and – to moves during the day based on the volume behind them so, when I see all of the upside volume disappearing in a sell-off, I can be reasonably certain that the Bots got their exits and it was a sucker's rally.  

    Slentrol/Yodi – I think drugs are a last resort.  I don't generally have a problem with discipline once I decide to do something.  

    $106!  Dollar at 79.39, could be worse than I thought for oil if Dollar pops up.  Gold $1,691.  

  48. stjeanluc

    Blog / Jmm – The articles you want to look for are:

    http://lemoyne-mappingthemarket.blogspot.com/2011/01/fundamentals-what-to-screen-for.html

    http://lemoyne-mappingthemarket.blogspot.com/2011/02/fundamentals-what-to-screen-for-part-2.html

    I have not posted on the blog in a while as I post the same stuff here.

  49. peedlew99

    Anyone know why we dropped after the open?

  50. peedlew99

    I can't bring myself to have CNBC on… I've had it off for months!  

  51. shadowfax

    Lots of sell sell sell.

  52. dclark41

    Kevinb63v:
    Did you miss this yesterday?
     

    Phil
    March 7th, 2012 at 3:30 pm | PermalinkIgnore this user

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

  53. stjeanluc

    Youth unemployment / Phil – There was a good show on TV5 (French station) on a young family in Portugal. The husband had left to live in Switzerland to make some money and the wife worked in Portugal for 520 euros per month (minimum wage is 480 euros I believe). She had government subsidies of 60 euros for her kids. She could hardly get by and ate at her parents every day to save money. The show mentioned that they had all these young people in the same situation, taking jobs making 30 or 40 euros per day max even though they had college degrees! There was a shortage of nurses in the hospitals even though they train too many but can't pay them! It was just eerie. 

    I wonder why European manufacturers even go to China when you have low wages so close… Of course in Germany there is no minimum wage and a lot of people there work for even cheaper than that. I read about what they call micro jobs where people in the former East Germany work for 1 euro/hour. Welcome to the new world comrade!

    BTW, TV5 the French station here in the US is available on Comcast and FiOS and worth the money as you get a different perspective and with subtitles in many cases. And I don't get commission! FiOS also has France 24 which is their lower budget CNN but has good info as well.

  54. kustomz

    peedlew, Tell you what I noticed…Futures trading was very sporadic overnight and this mornings volume is the lowest I've seen for a normal trading day…lack of participation…for now.

  55. harip

    Phil,
    Your opinion on buying nihd  (buying long calls or selling long puts) for long term in IRA
     
    thanks

  56. yodi

    Phil the emphasis rests on "once I decide to do something."  

  57. Phil

    Pipeline/StJ – If they make it out of steel, how are people going to blow it up?  

    Pre-market/Exec – I demo'd that in Vegas – the BS that goes on in the Futures is completely ridiculous, yet Billions are made and lost every day based on trading you can manipulate yourself – scary.  

    $10K to $55M/StJ – How long?

    COH making 52-week highs.  M too.  TGT, STX – strange bunch.  

    DIA/ITrade - We got out of ours in the $25KP as they are MARCH and expire in 10 days.  When you are the sucker paying the premium, you need to be looking for those exits unless you are a highly skilled momentum player.  Those $128 puts topped out at $1.84 on Tuesday and even if you didn't get the message to get out and even if you don't understand the rules well enough to know that a pullback to $1.60 at the close should stop you out, then the next day's open at $1.40 that went back to $1.50 and then down to $1.10 by the end of the day should have given you SOME indication that it was time to get out.  

    I really cannot help people if you can sit there and let a double drop all the way back to even – this kind of trading is not for you if you can't learn to take profits off the table.  

    Thanks NF!  Actually everyone can see your comments (Basic), you just can't see Premium comments except before market, after 3pm and on weekends.  I think it's always helpful to get people's takes on how best to learn from the site – it's really beneficial to new people.  

    Nat gas not very exciting but oil will pretend it is.  Let's let them run up and we can short the best cross we get (now $106.30), probably $106.50 but I'm not sure they even have the "gas" to get that far – not without getting the Dollar lower (now 79.35) 

     EIA Natural Gas Inventory: -80 bcf vs. consensus of -84 bcf. Futures +0.5% to $2.31.

  58. stjeanluc

    Nick Anderson

  59. sagemm1

    Phil  thinking about a TLT 116/117 MAR BCS in anticipation of next weeks auctions trying to get .45 debit any thoughts?

  60. stjeanluc

    $10K to $55M / Phil – I believe 50 years (1952 to 2003). Not bad I think… The S&P return would have been $2.4M in the same time period.

  61. jasu1

    Phil,
    BTU at 30.6. Low during 2009 crash $18….Your thoughts on selling a 2014 $25 Put for 4.75-5.00. Or do you still want to see it below 30? 

  62. exec

    JR/P-Bars

     
    What is that?

  63. Phil

    Now CNBC is running with "Sterilized Quantitative Easing".  Thank goodness they don't teach 1984 in the schools anymore or a lot more people would realize how closely we are following that script….  

    FAS Money – ($90.26) – I'm comfy here with XLF at $14.70.  I don't see $15 and I still expect $14.50 for next week's pin.  

    IWM Money – ($55.41) – My only regret will be that we didn't sell more!  

    By the way – I hope people remember that the idea of these was to CONSERVATIVELY make money using this strategy.  These are not set up for taking big risks and that, of course, limits our gains.  The $25KP is where we're going for big gains and, so far, is an excellent example of what can happen to you when you go for big gains….  

    AAPL/Lflan – I called for taking AAPL off the table yesterday (and we kicked ass with the short spread).  I think they need a rest in the very least so if Greece is not "fixed" tomorrow morning, you might want to consider taking a little time off.  Don't forget today's move up is on a GS upgrade and only $3.50?  More like GS looking for bag-holders, I think.  

    • A fun way to be an AAPL bear at the moment is to sell the March $535 calls for $8.10 and buy the $550/535 bear put spread for $9.60 for net $1.50 on the $15 spread that's 100% in the money.  If you keep it to an amount that you are comfortable doing a 2x roll on the short calls to April whatevers and you stop out the short spread at $5, then you have a net $3.50 short $534 call in the end and, at the moment, the March $535 calls can be rolled to 2x the April $595 calls so the bet here is that AAPL doesn't break $600 in 40 days with a huge bonus if they go lower or stay flat next week.   This also makes a nice bearish cover to a long play you don't want to take off the table.  

    $5KP – Of course 1/2 back out at $1.34 – this is why we double down!!!  DMND a bit disappointing but we'll wait.  TLT I guess no one is getting .90 for?  

    $25KP – XRT will have to be rolled but next week.  GLL OK as long as we stay below $1,700.  SCO always exciting.  FAS balanced.  SQQQ will have t to be rolled.  USO hopefully improves this afternoon and TLT seems in the bag.  

  64. Phil

    Here comes $107 again.  Dollar 70.245 though so not the way we wanted it and a more dangerous short than we would have liked.  All stops are being pulled out today to goose the market but next week is auction week with a Fed meeting on Tuesday and Bernanke speaking Weds at 9 and CPI and PPI and, of course, end of quarter option expirations – It's going to be CRAZY!  

     

    Tuesday Mar 13

    Retail Sales
    [Star]
    8:30 AM ET

    Redbook
    [Bullet
    8:55 AM ET

    Ben Bernanke Speaks
    9:00 AM ET

     

    Weekly Bill Settlement

    Jobless Claims
    [Star]
    8:30 AM ET

    Money Supply
    [Bullet
    4:30 PM ET
    Quadruple Witching

             
  65. stjeanluc

    The ECB is a great profit machine:

    http://ftalphaville.ft.com/blog/2012/03/08/914601/how-to-successfully-corner-a-market/

    Of course it's easier when you own the market!

  66. Canuck

    TLT flirting with breaking below $116.

  67. kustomz

    Forexlive
    A Greek minister told Reuters that the finance minster told cabinet that the PSI is going well.

    Looks like we are going to get a lot of this chit today. Expect a roller coaster ride

  68. Phil

    WFM makes new highs – it's good to serve the rich!  UA, EAT and BUD too though so the poor are having their own party somewhere.  LEN just made a 52-week high, that shows buying is pretty indiscriminate.  

    $107 on the nose!  1/2 out at $106.80 means you have a stop at $107.10 and you still make .05 minimum!  

  69. Springheel Jack

    I posted three very bullish charts in the premarket & they're all worth a close look here IMO. ES still on March contracts.

    First the ES chart where I was looking for a retrace from 1365/6 ES are to 1357.75 in an overall IHS scenario targeting 1388

    Second an IHS on NDX formed from the low:

    Third a short term bull scenario for EURUSD after a bounce establishing a rising channel yesterday morning:

    I'm not a bull by inclination here but the technical case for more upside looks compelling, mad as that might seem. Worth noting also that I have rising trendline resistance on SPX near that ES IHS target. We'll see. A break below the lows today with any confidence would open up the gap fill and possible lows test and obviously the 1366 and 1377 areas are still strong resistance.

  70. yodi

    Any body else experiencing a very slow renewal of the web site ????

  71. JRW III

    exec / P-Bar

    Phantom bar (a test spike showing a future target)

  72. bobhu

    yodi, Website is fine here, central Jersey.

  73. Phil

    DD/Edge – Doubling down is buying more of the same, rolling an option to 2x means taking, for eample, a $4 March option and rolling it to 2 $2 April options – usually with the goal of improving your strike.  It doesn't have to be exact, sometimes we roll the loss only (if we are in deep trouble) and sometimes we do a 1.5x roll but, if you scale into positions and allow yourself the possibility of 2 2x rolls (to 4x), it is very rare that you can't ride out a move against you (but, when you can't – it usually really sucks). 

    AGNC/Dflam – Keep in mind that between now and Jan, they will pay out $3.75 in dividends so that's your "handicap" on the stock.  I'd rather just sell the 2014 $27 put for $5 and be done with it at a net $22 entry and, if they go lower, THEN you can look at a bull call spread.  Figure if AGNC holds $27 through the end of the year, you'll gain about $1.50 on the short calls anway so it's not really like you have to wait for 2014, just that this way you make just one, comfortable sale and don't have to worry much about it for 2 years.  

    Cool, oil hit $107 again and failed so a DD and you're still at $107.05 average and now you stop out 1/2 at $106.85 and your new basis is $107.25 so a stop at $107.10 and you still have a nice win.  

  74. angelcur

     U.S. offers israel bombs if it "delays" attack…hahahahaha

  75. sagemm1

    Phil/ BAC (options strategy question)…I apologize for the dumb question and TIA!
     
    On 2/22 you wrote a trade suggestion for BAC "A more conservative play on BAC is selling the Jan $7.50 puts for $1.15 and buying the $7.50/10 bull call spread for $1.05 for a net .10 credit ($7.40 entry) as your worst case and a $2.10 profit if BAC goes up $1.89 into Jan expirations."
     
    I have the worst case entry but I am having trouble calculating the 2.10 profit can you explain, I see the 1.45 in the BCS (2.50-1.05) but then I add the 1.15 for the put sale and come up with 2.60…what am I missing?

  76. angelcur

    thats from bloomy quoting an israeli news site..you can't make this stuff up..
     
    ttp://www.theaustralian.com.au/news/world/us-arms-offer-to-israel-to-delay-hit/story-e6frg6so-1226294214500

  77. angelcur

    if that is true its disguxting on so many levels

  78. exec

    JR

     
    P-Bars…..right on the money.

  79. Inkarri1982

    WSJ headline – Oil rises on optimism over Greece deal.  So higher energy costs will help an economy already in down in the dumps?  Okay.

  80. exec

    Inkarri

     
    Don't waste your time attempting to look at things logically. 
     
    Just remember…..the only thing that makes sense is that nothing makes sense.
     
    Resistance if futile!

  81. kustomz

    Also, I show P-Bars to IWM 80.29 FTW

    Great call JRW.

     

  82. exec

    JR/P-Bars

     
    Where did you see P-Bars in premarket?

  83. biodieselchris

    DECK 55 puts for 0.05. TOo late the get in, the buy triggered a bunch of bids now at 0.05.
     
    if DECK and GMCR get whacked over the next week and I'll be happy.

  84. JRW III

    Springheel Jack / Charts

    Really good job today !!

  85. rustle123

    More Fast Times at 'Fast Money' High

    Mar 8, 2012 | 11:44 AM EST

    Stock quotes in this article:
    AAPL, QQQ

    • I offered some observations on Apple and the broader market.

    First of all Rat, you never let on how much you like a girl. "Oh, Debbie. Hi." Two, you always call the shots. "Kiss me. You won't regret it." Now three, act like wherever you are, that's the place to be. "Isn't this great?" Four, when ordering food, you find out what she wants, then order for the both of you. It's a classy move. "Now, the lady will have the linguini and white clam sauce, and a Coke with no ice." And five, now this is the most important, Rat. When it comes down to making out, whenever possible, put on side one of Led Zeppelin IV. 
    -- Mike Damone, Fast Times at Ridgemont High
    On Wednesday night's segment, along with Melissa "Stacy" Lee was Dan "Stoner" Nathan, Guy "Spicoli" Adami, Tim "Pirate King" Seymour and Pete "Mr. Hand" Najarian.
    I offered some observations on Apple (AAPL) and on the broader market.
    Let's go to the tape!
    I explained to the gang that the preoccupation with Apple has become a borderline mania. Consider how much of "Fast Money" is devoted to discussion of the company every evening or that the shoeshine boys are all recommending Apple as well as every noninvestment professional I meet at parties in Palm Beach.
    This preoccupation reminds me of something that Warren Buffett once wrote: "What the wise man does in the beginning the fool does in the end."
    The problem with shorting Apple (or any company that has such strong fundamentals) on valuation is that price is not a good justification for shorting — and I have the scars on my back to prove it over the years!
    What is almost certain to me is that the big upside earnings surprise in the most recent reporting period will not likely be duplicated.
    Every Apple investor should be focused (and should be monitoring) three basic fundamental issues facing the company:

    1. a worsening of macroeconomic conditions;
    2. possible supply disruptions; and
    3. the potential for increased platform competition.

    These will be the keys to Apple's future success or failure.
    Tim asked me if I viewed Apple as a metaphor for the market, in the sense that the investment masses are all crowded into the best momentum stock extant — that is, Apple — and I wholeheartedly agreed.
    My exposure to Apple is through my PowerShares QQQ (QQQ) short.
    We then went on to discuss the market.
    As I discussed a week ago on "Fast Money," I continue to see a pullback and view Tuesday's market swoon as the first shot across the bow.
    I see a number of technical, economic, political and geopolitical issues that are unresolved or leaning in the wrong direction that suggest, to me, that the S&P will be trade between 1300-1400 for the foreseeable future. And the lower end of that range is what I expect over the next few months.

  86. rustle123

    the above is from Doug Kass

  87. JRW III

    exec / P-Bars

    Not pre-market, fron Tuesday !!

  88. Phil

    CNBC really pushing the "Greece is fixed" angle.  

    $5KP/StJ – Good point but I think DMND, in particular, reflects people panicking ahead of the earnings re-statement and, they may be right – but I think it's the kind of news people will be able to buy on – kind of like when they finally put a number on the BP disaster – it doesn't fix things, but at least you have a finite amount of damage on paper. 

    Why drop/Peedle – Because the open was just pumped up Futures BS.  

    Now 11:45 and Dow volume getting to 40M so after 10:11, took another 1:30 to make the 2nd 20M in volume and that's been up volume but it's the same volume the bots were selling from the open.  That means we probably top out once all the suckers from the EU are cleared out at 11:30 – let's see.  

    1 Euro/Hour/StJ – That's just sick.  As I keep saying, you have to pay slaves more than that as you have to figure out how to clothe and feed and house them for that money and minimum wage doesn't cut it, especially if Master has to use some of his lovely land to house the workers.  So they've actually come up with a better system than slavery, where they don't have to care for the children and they don't have to take care of the workers who get to old and they don't have to pay cash to get the people up front (even the headhunters are hurting in this economy) – the Masters have slaves that VOLUNTEER to come work for them and the even go into debt paying for the gas it costs them to show up at work.  It's truly amazing what kind of conditions you can get people to accept if you strip away their dignity and wrap it all up in a flag…

    NIHD/Harip – I love these Telcos as long-term holds but this one doesn't pay a dividend so hard to love for me.   You could dip a toe in the water selling the Jan $15 puts for $2.10 – it's a nice return ($2 on net $13 is 15% at 100% margin with 30% downside protection for free) and a very good cushion.

    Emphasis/Yodi – I always planned on changing my evil ways at 50 so it's my last year to have fun.  

    $106.80 holding strong on oil, will be very nice when it finally breaks.  

    TLT/Sage – How about the March $115/116 bull call spread at .57, selling the $114 puts for .43 for net .14 on the $1 spread?  Makes a very nice 614% in 8 days if TLT holds $115.  Very nice if you have spare margin and, if not, then just the bull call spread pays 75% over 8 days – that doesn't suck. 

    50 years/StJ – I'd rather trust Buffett to hold my money.  

    BTU/Jasu – I don't WANT to see it below $30.  That's a good net entry ($20) and just make sure you have leeway to DD or roll and you'll be HAPPY if they go to $18 because it means you get to buy more.  

    Bullish/Jack – That's what this rally is all about, triggering technical bullish indicators to get max inflows as the Fund boys head for the exits.  At these volume levels, I don't trust a thing that's going on.  

    Bombs/Angel – LOL, that's hysterical.  Are they, perchance, bunker-busters?  

    BAC/Sage – You are buying a $2.50 spread for $1.05 and selling $7.50 puts for $1.15 so a .10 credit and you get paid $2.50 for the spread at $10 so I guess I was thinking the spread was $2 at the time and added a dime to that and came up with $2.10 instead of $2.60.  

    $107 again!  They are too kind to us… 

    Weapons/Angel – OMG, I was joking but it's true!  

    the US administration offered to supply Israel with advanced bunker-busting bombs and long-range refuelling planes.

    You know why we're "making" them wait – because we haven't finished building our next generation bunker busters yet.  I'll bet Israel gets to test the first one! 

  89. angelcur

    clam sauce and warmish coke…there is a well waffled date
    ran ready to reengage with iaea, but will never stop nuclear program…haha

  90. Springheel Jack

    JRW – Thanks mate :-)

    Phil – Agree. I don't trust it either but I'm respecting the trendlines and S/R levels while they last. If we do see a spike up into SPX trendline resistance in the 1390 area then I suspect that will be a great short entry & I'd switch short there. 

    Meanwhile the stats for Thursdays are bullish, the stats for a gap fill today are dire, and we're following the usual b/s script of early weakness followed by strength so far. 

  91. Phil

    Kass/Rustle – All good points but AAPL is just a runaway train when it gets going – like it is today.  Kass should probably switch to CMG if he wants a better value short.  In fact, for those of you not too burned by this morning's AAPL short play ($535s now $10.10 and $550/535 bear spread $8.40), CMG is looking very tasty:

    CMG March $415/400 bear put spread at $7.90, selling $395 calls for $5.10 for net $2.80 on the $15 spread that's 100% in the money with a week to go.  

    Respect/Jack – As I said in the post, since it's into the weekend and I could not, in good conscience, go long on this basis – may as well stay short for 3 more days.. 

  92. aussie_opt

    lflan/Phil: Held off on that AAPL short this morning, but just watching it drift up to $540 on low volume…any thoughts on shorting it here?

  93. lflantheman

    Phil, I agree that it's dangerous to short AAPL in the present environment.  I prefer to stay long AAPL and short something else, perhaps even the QQQ if DSP is need.    That's why I inquired earlier as to how to best protect the April 500/550 calls, while holding them.  Rather than short AAPL, perhaps a short QQQ play to get partial DSP.  

  94. lflantheman

    Phil, stated differently, let's say I insist on holding the April spreads above, and insist that I won't buy AAPL puts or do any kind of AAPL short.  Then, what would you use for downside protection on the bull call spreads?

  95. cwan120

    Hi, Phil, a general rule-of-thumb question:
    You taught us that it's a good idea, in general, to pay $0.50 to roll the long leg of a hedge down $1 in strike.  What about rolling flat to next month?  How much to pay for such a roll?  I intentionally not to specify an underlying stock, as I am hoping that there is a rule-of-thumb regardless whether it's DIA, SPY, VXX, TZA, EDZ or whatever?
    Thanks.

  96. bobhu

    TLT, I think another good trade is buy March $114/115 BCS and sold March $115 put for even or 1 cent credit.

  97. JRW III

    Our “Let’s Pretend” Economy:

     

    From Tyler

  98. angelcur

    bunker busting..of course they were!

  99. bobhu

    My 2 cents for shorting AAPL, a lot people think AAPL will drop big after the iPad event, it did but not big enough yet very short timing.  Press seens like the new iPad.  The people were shorting start to cover and long people start to buy or trade from long side.  Don't short it.

  100. bobhu

    Just got filled on my TLT trade(Mar. $114/115 BCS, sold Mar. $115 for 1 cent credit), will see.

  101. Pharmboy

    $TRIN has been falling all morning…..bullish for stocks.  Now the first test is here $137 on SPY.  $TRIN is holding but could it be?  Please turn up. 

  102. zeroxzero

    docsportif:  Is that related to strength training or aerobic capacity?  Because if it's the latter, I can give up the treadmill/bicycle/jogging and leave my cardio training in my wife's capable hands!

  103. edgewater

    O'Shaughnessy's trading model does not reflect these amazing results in his Equity Funds managed by James P O'Shaughnessy (CEO) They have done mediocre to poor.I held them for years.
    Thank you Phil for responding to my DD question.I'm new here and need to understand how to protect myself before I make a trade.( not ready yet)

  104. Weasle

    Wouldn't it be funny to see the Dow back at ol' 12,980 later today?  I get the feeling that Greece will get us there…

  105. angelcur

    zero shaking hands with the unemployed ey?

  106. rpme

    Phil, I am in…WTF. Could not get on the site all day, no more Bloody Mary's with breakfast I guess.

  107. bobhu

    Phil/CMG trade, Mar. $415/400 BPS shows $12.45 on my TOS, $410/400 BPS is $7.70.  mistype?   Thanks.

  108. zeroxzero

    docsportif:  See R. Pryor quote, #1 http://www.alternativereel.com/includes/top-ten/display_review.php?id=00077; strange how Pryor pegged the time frame years ago!

  109. JRW III

    Speaking of fake, the 10:30 rally seemed really fake (not supported by anything)

     

    As Mentioned in the Classic Reminisces of a Stock Operator:

    When Big Money wants to SELL the first thing they do is BUY . . .

    This drives their competition out of their short positions so they can't
    cover on the way down to slow the down move. Also this builds their
    war chest of longs to sell from a higher level. So they clean out the
    shorts as they buy then they clean out the longs when they reverse and
    sell everything bought on the way up. Makes for massive profits to the
    bigger operators and gives them a clear path on the reversal.

    Also once an important channel line is broken then typically the market
    will come right back down to test the break out area. So if you buy the
    breakout you may have to sell on the test only to have the market
    reverse again and head on up again for a clear move on up to higher
    highs. Point is you've got to look out a derivative or two to see what
    is really going in these markets and don't chase a market let it come to
    you.

    And Hussman this week said:

    Last week, the estimated return/risk profile of the S&P 500 fell to the worst 2.5% of all observations in history on our measures. This is not a runaway bull market. Rather, it is a market that again stands near the highs of an extended but volatile trading range. I am convinced that the breakdown of the market from this range has been deferred only through repeated and extraordinary central bank actions.

    So, long at your own peril !!

  110. Phil

    LOL – Oil did it again, up to $107!  That time after visiting $106.75.  I guess, somewhere, there is a bull as happy as I am with this narrow range but this is just too funny today.  No big moves but a dozen opportunities to make $200 per contract is just as well.  

    Finally getting a good move this time! 

    11:45 AM European shares close at session highs as it appears Greece will clear its debt swap participation hurdle. While CDS may still be activated, the market has shrunk to the level where it's hard to imagine it causing a disruption. Stoxx 50 +2.2%, Germany +2.5%, France +2.5%, Italy +1.7%, Spain +1.8%, U.K. +1.1%

    12:00 PM On the hour: Dow +0.45%. 10-yr -0.22%. Euro +0.81%vs. dollar. Crude +0.63% to $106.83. Gold +0.71% to $1695.85.

    U.S. household net worth rose by $1.19T in Q4 to $58.5T, according to the Fed's latest flow of funds report (.pdf) – the first increase in 3 quarters. Rising stock prices and a somewhat-improving job market offset a $367.4B decline in the value of household real estate. Nonetheless, household debt rose 0.3% Y/Y after steadily falling for 3 years, and other forms of consumer credit rose 6.9%. - Not sure if that's good or bad as clearly household debt to value ratio getting worse, how would that be good (unless we're all going to get EU bailouts)?

    Unemployment rose to 9.1% in February from 8.6% previously (no seasonal adjustment), according to Gallup. Gallup'sunderemployment measure – combining unemployed with those working part-time but wanting full-time work, rose to 19.1%. "Regardless of what the government reports, (these) measures show a substantial deterioration since mid-January."

    Caroline Baum: Beware Analysts Torturing Jobs Data to Fit Model: (Bloomberg)

    Freddie Mac's latest survey of lenders indicates that the average rate on a 30-year fixed moved down 2 bps to 3.88%, while the increasingly popular 15-year variety shed 4 bps to land at 3.13%.

    The latest Duke/CFO Magazine survey shows CFOs are more upbeat and ready to hire. CFOs plan to expand their work forces by 2.1% on average over the next 12 months, and 68% of CFOs are actively trying to fill job openings. “Increases in CFO optimism have historically preceded improvements in the overall economy,” the survey director says.

    The RBC U.S. consumer outlook index rises to 47.5 from 45.1 at February's read. It's the highest level since September 2008, helped along by a big jump in the jobs index from 52.1 to 57. The inflation index, however, also rose, popping to 78.3 from 74.2

    Participation in the Greek debt swap is likely to be "very, very high," says the IIF's Charles Dallara. Participation forecasts are the new EFSF leverage rumors as his comments send European shares back to the day's highs. Stoxx 50 +1.8%. Euro +0.9% at $1.3263. 

    The ECB announces it is again accepting Greek debt as collateral in repo transactions, suggesting the bank is convinced the PSI deal will go through. (PR

    On the other hand:  The volume of Greek paper protected by CDS drops to a record low of $3.16B ($5.6B a year ago) ahead of the debt exchange. With CDS pricing in a 97% chance of default, anybody with sense has likely booked profits before waiting to see what the ISDA decides.

     Triple trouble in Europe, US and China brings out the bears (Telegraph)

     "Vastly overblown," is how Stephen Roach (formerly MS, now a Yale prof) describes fears of a hard landing in China. A big fanof China's central planners, Roach says they've done yeoman's work controlling inflation and the next task is to wean the country off of a reliance on fixed-income investment at the expense of consumption.

    In pictures: Rallies after Putin wins Russia election (BBC)

    A bill being weighed by Congress would allow newly-public companies with less than $1B in annual revenue to avoid some of the more onerous requirements placed on publicly-traded firms by Sarbanes-Oxley for 5 years. Passage of the bill could lead to a pickup in tech IPO activity, which remains far below 1995-2000 levels even as many startups achieve $1B+ valuations

    FHA commissioner Carol Galante plays down fears of a bailout, saying fee hikes and funds from the foreclosure settlement will replenish the agency's insurance fund. The OMB is on record estimating FHA's reserves could run out this year, forcing the agency to seek nearly $700M in taxpayer money.

    A pair of University of Chicago law professors say the U.S. government needs to regulate new financial products the same way it tests new drugs for safety. An FDA-style agency "would approve financial products if and only if they satisfy a test for social utility. The test centers around a simple market analysis: Is the product likely to be used more often for hedging or speculation?"

    Bank of America (BAC) played HAMP like a violin - mostly preventing homeowners from receiving mortgage modifications, but doing enough to reap financial rewards from the government, according to a 2nd whistleblower suit. The Obama administration last week declared BofA back in its good graces in regards to HAMP.

    Fed Move Likely by June, Ex-Insider Says (Barron’s)

    Annaly (NLY -1.8%) suffers another tough day, seemingly punished for its deliberately conservative leverage stance amidst a flattening yield curve that is sure to hit the dividend. In this lies opportunity, writes John Gerard Lewis, as investors should take comfort the company is being managed for the long-term

    A number of select employment-related stocks are running hot after the rise in jobless claims doesn't alter the general perception that the labor market is trending positive. Also in the mix, M&A speculation stirred up last week on word that Monster Worldwide was exploring strategic alternative and more chatter this week that LinkedIn could be taking a look. Gainers: LNKD +5.5%MWW +3.8%,KELYA +3.1%MAN +2.8%DHX +5.1%.

    Shares of drug companies that produce HIV treatments move up on news that three clinical trials suggest healthy people should take HIV drugs to prevent infection with the virus that causes AIDS. The big winner would be Gilead Sciences (GILD +2.2%), which makes the first HIV treatment the FDA is reviewing for possible marketing as a preventative measure. 

    A new report out from Bank of America casts a bit of a dark cloud on solar with its thesis that the "mini-bubble" in the sector is ending as subsidies dry up. The dire outlook from BofA goes on to say the firm expects price declines in panels and upstream materials to continue unabated. The Market Vectors Solar Energy ETF (KWT) isup 1.8% on the day, but has fallen 68.4% over the last year. 

    More on solar (previous): Though analysts continue to pile on with negative sentiment as low natural gas prices and a loss of subsidies taint solar as "completely uneconomic," it's not a complete washout for the sector. BofA's Joe Osha says Yingli Energy (YGE), ReneSola (SOL), and Trina (TSL) are 3 names that may survive the carnage.

    A regulator in Sweden gives Sodastream (SODA -1.4%)notice that it has decided to terminate without action its investigation into any potential abuse by the company relative to its dominant competitive position in the market. In Sweden, 20% of all households own a Sodastream product. - Yeah, but they also own fondue pots….

    Blog War: Howard Lindzon Says Timothy Sykes is a Cancer…A Malignant Tumor of the Web (Howard Lindzon)

    Jon Stewart Interviews Bruce Springsteen for Rolling Stone (Rolling Stone)

  111. Inkarri1982

    So based on that graphic, the Fed will print money, give said money to banks and then kindly pay them interest on the newly printed money?  Well, at least they are consistently adding fuel to the "tax-payer funded bank bailout" rocketship to the poor house.

  112. yodi

    Phil I am just returned looking at this Bear put spread of CMG the same cost 12.65 Mar12 and not as you quoted 7.95 or am I seeing something wrong?

  113. oknoman

    Phil/Oil BS: Thanks again for continuing to pound the table on this oil BS. I am fed up (and have taken my share of losses shorting as well)! I have sent of another e-mail to our elected representatives (thx for the reminder), voicing my outrage (and using your data). Gas price is such an omnipresent part of our daily lives that it serves as a constant reminder of the buggering we are all taking – it really is the poster child of so much of what is wrong today in America.

  114. yodi

    Iflan AAPL are you covered all your Apr 500. Looking at my graph from this morning starting at 532 this one is just holding very well on my line actually exeeding. I am still nacked on this show 541 now. Do you see still a down draft ?

  115. palotay

    Pharm/Depo – Looks like they report today at the close.  Any thoughts on how to play this?  I'm currently long a decent amount of stock, which is currently uncovered.

  116. exec

    JR/Peril

     
    I'd have to agree.
     
    The big question is how long can they sustain the bubble until it finally pops.  It reminds me of the internet bubble.  I remember saying for what seemed like years that the pricing was ludicrous…..but day after day after day it continued to go up.  Finally it unraveled but it was long after it should have.
     
    This could go on for some time…..my guess…..after the election.
     
    Of course….that's why we cash out before 4pm.

  117. Pharmboy

    DEPO – u and me both.  I am staying uncovered.

     

    $TRIN is now rising.  Hopefully a pullback…..
     

  118. zeroxzero

    Oko:  A brilliant idea to pull my underwater oil shorts out of trouble.  It's an election year.  One of these candidates needs to say they will, if elected, "launch an investigation into the manipulation of oil prices so we can bring gasoline down to affordable levels for the American people."  And if I can think of it, so will someone on their staffs.  I feel much better already.

  119. lflantheman

    yodi….I have nothing now but bull call spreads in the portfolio.  Yes, I do see AAPL pulling back.  It can't just go up every day through April.  So we need to establish a downside play, but I don't want to get out of the April 500/550s because I'm quite certain they will come in.  Perhaps we just need to short the QQQ to protect some of the AAPL positions.  That's sort of like shorting AAPL anyway. 

  120. Phil

    $106.50 baby!  Very sharp bounce – could be a commercial for not being greedy.  

    AAPL/Aussie – I still like the same play but we can bump it up $5 now.  It will take analysts a weekend to realize a product refresh will not add more earnings and really I thought AAPL showed that it's already lost a step post-Jobs with that very lame roll-out.  The 4S was released in October 4th with the same hi-res screen and the same updated camera and AAPL flew up from $360 to $426 (20%ish) and then pulled back to $390 and later (Nov) to $363 as the excitement wore off.  Also, note that AAPL had fallen from $422 to $360 on Job's sickness/death and people thinking AAPL didn't have anymore up its sleeves.  Since then, they've announce Siri in the Phone but not the Pad, hi-res on both and better cameras on both and, in both events – they failed to really do anything exciting in TV, despite persistent rumors.  I think if you keep shorting AAPL looking for a re-test of $500, you will ultimately be rewarded.  

    Oil back to $106.90, gold up to $1,700 again. Both still good shorts but watch 79.20 on the Dollar as a stop.  

    AAPL/Iflan – I stand by my play this morning for hedging, especially the type of positions you have as it's rollable and you make quite a lot of money if AAPL does make $550 to cover.  I don't think the Qs fall too far without AAPL but, if AAPL falls, we could get a spectacular failure on that index as AAPL forces QQQ to divest of many, many stocks there will be no buyers for. 

    If you INSIST on those conditions, then yesterday's SQQQ spread is the way to go and you can even offset with AAPL short puts since you don't believe they can possibly fail $450 – it's like free money!

    Flat/Cwan – That depends on the price of the spread doesn't it?  It also depends on if rolling a month actually puts the stock into a target zone you are comfortable with or if it enhances your risk.  Earnings dates come into play, as do dividend dates so the rule of thumb is not to pretend there's some mindless rule of thumb and do a proper evaluation of each position and the risk/reward profile before simply rolling them out.  Also, I don't know why you would have DIA and SPY – just pick one thing and concentrate.  It's not like we have any divergence these days. 

    TLT/Bob – Tiny bit riskier but I like it.  

    Pretend/JRW – You can see why I'm such a big fan of inflation – it's growth you can really count on for the long haul.  

    No problem Edge and welcome!  

    Site issues/Rpme – Greg tells me that, for some reason, Comcast people could not get in this morning.  It's not us, it's them but I have no idea why and I'm on Comcast in NJ and don't have a problem as I access the site on the web just like anyone else.  

    CMG/Bob – I see $19 for the $415 puts and $6.80 for the $400 puts so about what you have.  I don't think I was looking at April ($25.40 & $16.40 now) but that trade sure isn't working now.  Actually, you can buy the March $410 puts for $14.50 and sell the $425 puts for $29.50 for net $15 on the $15 spread and then you can't lose if CMG goes lower (as you will always owe the putter +$15 back) but you can make $15 if CMG does some silly pop.  You can pick up that spread and sell the April $420s for $5 and assume you at least either make $1 on the time decay or pick up some free cash on a move up.  

    Very important quote JRW! 

    ROFL – $106.60 again!  

  121. yodi

    Pharm Depo OK you are on just bought my Mar 7c for 5cents

  122. stjeanluc

    Politico cranking out the little violins:

    http://dyn.politico.com/printstory.cfm?uuid=7CB893FB-C29C-444C-93E7-E7103D9B7686

     

    For members of Congress, the thrill is gone.

    They don’t make national policy anymore. They can’t earmark money for communities back home. The public hates them.

    And perks little and big, from private jet travel to a little free nosh now and then, have been locked down by ethics rules.

  123. Pharmboy

    LOL yodi….I hope DEPO comes in.

  124. Springheel Jack

    exec

    Time may be running short for the bulls now. Sell in May and go away has been very reliable the last couple of years. 

  125. stjeanluc

    Hard to believe that AAPL is now as big as MSFT and IBM combined:

    http://www.bespokeinvest.com/thinkbig/2012/3/8/the-100-billion-club.html

    And all that with cell phones!

  126. zeroxzero

    More on Oil: [From FT March 8 2012]   "Brazil is strongly associated with rising oil production in Latin America, yet the region has another rising star shaping prices and industry trends: Colombia.  Over the past five years, Bogotá has had as much new crude oil production as Brazilia has done, contributing to increased non-Opec supplies. Oil output in Colombia increased by nearly 450,000 barrels a day between January 2007 and December 2011, compared with 500,000 b/d in Brazil over the same period, according to estimates by the US Department of Energy."

  127. stjeanluc

    Commodity snapshot:

    http://www.bespokeinvest.com/thinkbig/2012/3/8/bespokes-commodity-snapshot.html

    Below we provide trading range charts for ten of the most widely followed commodities.  In each chart, the green shading represents between two standard deviations above and below the 50-day moving average.  Moves to the top of or above the green zone are considered overbought, while moves to the bottom or below the green zone are considered oversold.

  128. shadowfax

    Bull BOTS may have run out of gas, lost the 50 SMA.

  129. stjeanluc

    Oil / Zero – Still Brazil produces close to 3 million b/d now while Columbia is at 900,000 b/d or so. But it should not be a big surprise as they are so close to Venezuela and its 2.5 millions b/d. But good for them… maybe they can diversify the economy away from other less legal industries!

  130. angelcur

    now i get it!.. bloomy running headline on Greek Sovereign Bongs..haha..bongs!

  131. stjeanluc

    That will make a good short soon:

    http://www.thereformedbroker.com/2012/03/08/morningstar-savages-groupon/

     

    Regular readers know I've been hating on Groupon ($GRPN) since before the IPO, I made it pretty clear that I was not a fan of the model or the opportunity for a daily deals stock.  I had some great intel from merchants who used the service and salespeople from competitors about why this should never have been a multi-billion dollar company.

    Morningstar put out a piece of research on the stock this morning that I thought cut right to the heart of the matter – the barriers for competition are effectively zero…

  132. Phil

    Another strong bounce on oil.  When will we learn to play the long side too?  

    Fed/Ink – It is an amazing thing.  We ultimately get stuck with the bill and that bill will be Trillions at some point.  

    CMG/Yodi – See above, either I was looking at April or did the math wrong so no trade as the numbers aren't good enough. 

    Oil/Okno – Thanks.  I'm not joking when I say what BS it is that people don't take the time to contact their reps.  What's the point of making the effort to vote if you're not going to let the people you vote for know what you want.  What do people think the top 1% do.  I don't agree with Christie, for example, but I sure get to talk to him because I travel in those circles.  I've been to Washington to lobby for things so I'm a bit of an extremist but to not even register your position on things you care about is just madness – I can't even believe there are people on this site who are the kind of people who would just sit back and let things happen to them.  

    Greece's own Minstry of Finance, which holds the public pension funds, will NOT go along with the bond deal!  

    AAPL Cap/StJ – Yes but, realistically, is there a company on that list you'd rather own?  Maybe BRK.B because of the diversity and shame on Buffett for not buying AAPL at $85!   IBM may pass AAPL when Watson takes over 50M call center jobs (just $1,000 per year per job to IBM = $50Bn) and I'm not sure how those 50M people will be able to afford IPhones and IPads when their jobs disappear but I'll bet all the CEOs in all the companies that employ them will be able to buy 3 each – so I guess it evens out.  ;)  

    What were we looking for in yesterday morning's post to be bullish?  

    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 have 12,900, 1,364, 2,965, 8,066 and 803 - close but no cigar for the bulls so far

  133. stjeanluc

    AAPL / Phil – As a short term investor, there is nothing more attractive than AAPL right now, but in the long run (20 years or more) there are plenty of businesses on that list that can do well. And yes, IBM would be my first pick! 

  134. Phil

    Greek Bongs/Angel – Could boost the export biz.  

    GRPN/StJ – I said that when they first came out.  In fact, Kwan and I figured out an App that could do the same thing better than they do but no one wanted to give us $1M to develop it and I keep reminding him that $8Bn valuation could have been ours…  We could still jump in and mount a very credible attack on them for very little money at some point. 

    $106.50 again!   OK, so now we should consider a long off that line I guess.  I hate to play oil long because I don't believe in the position and that tends to make one too nervous when it goes against you – that's why I generally just wait for shorting opportunities.   But, you can play long with the same rules as short and hope we get a "Greece is fixed" rally at 3pm. 

    Dow volume at 2:30 is 58M, so not even 20M since 11:30 is slowed to 7M per hour – and it's still not going higher! 

     

  135. Phil

    1:00 PM On the hour: Dow +0.62%. 10-yr -0.22%. Euro +0.86% vs. dollar. Crude +0.72% to $106.92. Gold +0.88% to $1698.75.

    2:00 PM On the hour: Dow +0.53%. 10-yr -0.22%. Euro +0.81% vs. dollar. Crude +0.42% to $106.61. Gold +0.87% to $1698.55.

    Grey market "when issued" pricing for the new Greek bondsis ranging from 17 to 28 cents on the euro, reports the FT. For reference, that price range is where Greek debt stood last autumn and far worse than Portugal's current pricing. Either someone is about to make a lot of money buying this paper, or exactly nothing has been accomplished and Greece is set to default again

    Global wheat production is expected to be 690M tons, according to the U.N's FAO, a bit less than last year, but still the 2nd highest amount on record. Good gains in India are likely to see East Asia matching last year's record level, and even drought in Argentina and Brazil is being offset by increased plantings.

    Go HOV!  Home builders add to yesterday's rally sparked by optimistic talk from Hovnanian (HOV +10.2%) that spring selling is off to a strong start, with 38% Y/Y growth in net contracts and home prices remaining relatively stable. Builders KBH +5.7%LEN +4.8%PHM +4.8%. Retailers HD +1%LOW +1.5%. But James Brumley cautions: Is the industry getting better, or just not getting any worse?

    Take that Chipotle: Taco Bell (YUM +0.5%) says that it'spartnering with Frito-Lay (PEP +0.5%) to develop the Doritos Locos Taco – featuring a shell made out of Nacho Cheese Doritos chips. The taco debuts today after the company says it tested through the roof in select markets.

    AU Optronics (AUO +2.1%) follows the tech sector higher after reporting February sales of $948M – up 29% M/M and 3% Y/Y, and further evidence of improving conditions for the LCD panel market. Strong shipment growth was seen for both large and small panels. Also rallying are rival LG Display (LPL +2.6%) and LCD glass supplier Corning (GLW +2.1% - previously). 

    Amazon (AMZN) will launch 2 new Kindle Fire models in the second half – a 7" model and a 10" model – according to Digitmes, which adds prior rumors about an 8.9-inch Kindle Fire arriving were inaccurate. Meanwhile, tablet vendors are said to be "concerned" about reports that Apple (AAPL) will launch an "iPad Mini" featuring a display in the 7" range (IIIIII) later this year. 

    Giant carrier subsidies for mobile devices are wreaking havoc on the wireless industry, says T-Mobile USA (DTEGY.PK) exec Cole Brodman, whose company has seen major subscriber lossesdue to the fact it doesn't offer the heavily subsidized iPhone. Nomura recently lamented the impact iPhone subsidies are having on Verzion (VZVOD), AT&T (T), and Sprint's (S) margins.

  136. rpme

    Phil, I went long AAPL at $310 last year on your advice and sold the Jan 540 CC today, based on comments this week. Learning or more to learn?

  137. jmm1951

    Something interesting happened today. A Seeking Alpha article suggesting that Interoil (IOC) is a definite short, which had a lot of interesting discussion comments, was erased. I wonder how many SA short side articles are wiped out and never seen. The article and the discussion raised very serious concerns about the company, its management, and its valuation.
     
    http://seekingalpha.com/article/415811-interoil-a-definite-short?v=1331224450&source=tracking

  138. aussie_opt

    AAPL – Thanks, Phil.

  139. Weasle

    10 minutes to go on Greece… suspense is killing me…

  140. Inkarri1982

    Weasle – I don't think we find out the actual results until 1am EST

  141. ban2

    Phil
    I'd like to add to my TZA spreads

    What about buying Apl 18/21 BCS for $1.23 debit (TZA only dropped to $19.70 today on this run up so a dip could easily get it over 21 by April -ex)
    and pay for it by selling the July 16 P for $1.53 as it's hard to imagine market climbing into July to drop TZA to 16 -- 
    so .30 credit for $3.00 spread.

    tia

  142. Phil

    Big Greece if fixed rally.  Not surprising since Europe closed up over 2% and I imagine some announcement to the effect that all is well is in the bag and then I expect Funds to sell into the excitement.  Dow volume 62M at 3 on the dot so we'll see – I say another 62M at least and the S&P, now 1,367 – finishes flat or lower. 

  143. Pharmboy

    Why am I not surprised.  Low volume moves the market, er, the casino.

  144. bobhu

    CMG at all time high AGAIN…lol

  145. Inkarri1982

    Wait for it…wait for it….here comes the FU CMG…

  146. Burrben

    Oil – 107.02

  147. scottmi

    USD/CAD – dollar really sucking against the loonie today down to .9895 with a big part of that being a strong move up with the CAD.

  148. Phil

    79.13 was the low on the Buck and they still couldn't hold $107 on oil.  Why?  Probably because we're selling too much and causing volume where they really don't want it.    Dollar 70.20 now, oil $106.80.

    Euro $1.3265, Pound $1.5824, 81.6 Yen to the Buck.  Gold $1,701, Silver $33.87, copper $3.79, nat gas $2.28, gasoline $3.3186.   Oh and NKD back to 9,840 after a very nice dip to 9,780 at 10:30 and I do still like them short below 9,850 but, if we finish up more than 1%, then it's not a smart bet overnight.  

    AAPL/Rpme – I'd get out of the stock and flip to a long-term bull call spread with an offsetting short put and you can still sell calls against that.  If you cash out at $542 and buy the 2014 $500/650 bull call spread for $61 and sell the $330 puts for $20 (where you came in), then you are essentially in the $500 calls for net $41, which is EXACTLY the price off AAPL now only you have $501 of cash in your pocket in exchange for capping your upside at $650 (but you can always add another spread when AAPL goes over $600 and then you won't miss anything – except for tying up a ton of money).  TOS says the ordinary margin on selling the $330s is just $33 so $468 of spare buying power left – not bad!   Also, I'm sure you understand that this set-up will weather a sell-off better than the stock and leaves you way more flexible and we haven't even discussed selling calls but you can sell 1/2 the April $550s for $18 and you only need 5 sales like that and you have a free long spread!  So, maybe a little more to learn but, if you know enough to follow this trade now – it's all masters program from here on out…  

    IOC/JMM – Sam Antar thinks they are crooked and Sam knows crooked!  SA is very wimpy and does pull stuff if threatened by Company reps and such.  I would have liked them short at $75 in Feb but back at the 200 dma (57) I don't think they are as interesting as they are super-manipulated.  If they fail the line, then maybe a momentum play down.  

    TZA/Ban – I like that spread.  Think about it this way, if the RUT goes up to 840 and jams the $16 puts into the money, don't you want to be short on them anyway?  

    Pisani says Greece got 95% participation all of a sudden!  See the sheeple rush in as CNBC says there are no wolves in the meadow.  

    CMG/Bob – Well they gotta try for $400.  

    Dollar may be down on expectations of QE3 next Tuesday.  No matter how many ways the Fed says no, people will still play for it.  

  149. Phil

    See, that was fun on oil, now we made .50 going up and we can flip short back at $107!

  150. cwan120

    With such a low volume, play stick?

  151. Pharmboy

    VIX stoopid play….very stoopid….why do they even report it when they don't know if it is a buy or a sell?  Stoopid. (Yes, I misspell it on purpose!).

  152. Pharmboy

    MLPs in the energy sector just sitting there……BBEP, PGH, etc.

  153. Pharmboy

    BIotechs…no dice.  PP still very good on entries for day traders……

  154. jash

    tza april 17/18 b/c  @.60  selling april  17 puts @.60 leaves a bit of downside .zero cost trade with good profit potential

  155. edro00

    Phil, AAPL Margin
    "  TOS says the ordinary margin on selling the $330s is just $33"
    My TOS says the margin is $5,330 per contract – which TOS are you using

  156. Phil

    10-year closing low on nat gas and that's $2.292 with a big save off $2.235 at 11:30!

    3:00 PM On the hour: Dow +0.72%. 10-yr -0.26%. Euro +0.98% vs. dollar. Crude +0.62% to $106.82. Gold +1.17% to $1703.65.

    The deadline for participation in the Greek bond swap officially ended about 5 minutes ago. Officials expect to be up most of the night tallying totals, with "preliminary results" due at 8 AM local time (1 AM ET). Amidst rumors of 80% participation, an official says, "whoever gives percentage rates now is naive."

    "The worst is yet to come for Chinese developers," says S&P, which believes more rating downgrades are on the way. The agency believes property prices may be down 10% Y/Y by June, with sales volume little changed. With things gloomy now, sell-side analysts are pinning hopes for the sector on a 2nd half rebound.

    Bank of China (BACHF.PK) is among Asian lenders filling the gap left by retreating European banks, sharply increasing property loans in the U.S., especially in NYC. "China … has capital that needs to be put to work," says an analyst, exactly the opposite of the issue facing many EU banks. - LOL, that's the same scam that the Japanese fell for in the 80s!

    Banks that have rallied recently may be cheap in tangible book value but aren't the ones to own, Keefe Bruyette says, favoring JPMorgan Chase (JPM +1%) and U.S. Bancorp (USB +1.6%), which trade at higher book values but will improve earnings this year. Bank of America (BAC) is +30% YTD, but even CEO Brian Moynihan admits it must “show the earnings progress."

    UPS (UPS +1.1%) and TNT Express are said to be near a merger agreement after initially rejecting a €4.9B ($6.5B) offer, Bloomberg reports. Sources say the two sides are close to a deal on both price and conditions attached to the offer that may lead to job cuts and require divestitures to win antitrust approval. An announcement may come as soon as next week.

    Internet hotshot Pinterest blows past Twitter and closes in on Bing in a ranking of the websites that produces the most referral traffic. The visually striking manner of presenting user photos prompted Facebook's Mark Zuckerberg to "like" the Friendsheet app that aims to produce the same results on the social networking site. (Earlier: Why Google should buy Pinterest

  157. jmm1951

    Phil/IOC
     
    Problem  is that as far as I can see they have the highest implied volatility of any stock I can find and the option spreads are huge. What you said about Sam Antar is what I was saying. A bunch of IOC longs (or one person using several names, perhaps) were saying things like "Sam Antar is a convicted felon, so you can't trust anything he says." My own experience of criminals from working for a while in  top security prisons is that they will lie like hell about the offenses they are charged with while there is the slightest chance of a successful appeal or clemency, but that otherwise they are no less truthy than anyone else, and  that it is the unconvicted  criminals who are more likely to deceive the public. Anyway, the discussion was deleted from SA.

  158. peedlew99

    So what's next in Europe?  How many weeks until the next "crisis"?  Think we can hit 1400 before then?

  159. angelcur

    isnt htis insane to see the market effectively cease to trade

  160. peedlew99

    jmm,
     
    I read the link.  It was interesting that in the comments most were in support of IOC… then if i clicked thru on the user and read their past comments, most have ONLY EVER commented to defend IOC.  
     
    Could I be a total scam.  With one or two guys in a bucket shop and a few dozen user-names… trolling for negative IOC articles?

  161. Phil

    TZA/Jash – Aggressive but I like it.  

    Margin/Edro – I use their paper money account to check ordinary margin.  Seems about right to me but I'm spoiled with PM.  

    Uh-oh, only 68M on the Dow at 3:30 and S&P still 1,367 – I need a big seller to come in to confirm my theory.  

    Bonds being pushed lower (higher rates) on Greece news?  Maybe just US bonds suffering by comparison to "fixed" EU or maybe a reaction to the Dollar but smells like we may get a nice entry opportunity on TLT ahead of Auction Week yet again.

    IOC/JMM – I know Sam, we get together once in a while as he's in NYC and writes for us.  He's a convicted felon who now works with the SEC and FBI busting fraud.  As far as I know, the man has never told me anything that wasn't true.  He's really into his new life as a crime-fighter – I wouldn't brush off what he has to say about a company as he knows all the tricks – because he used to use them and invented half of them.  

    Ah, here comes my seller.  

  162. lflantheman

    AAPL portfolio:    Bought March 17  Bear Put Spreads (10)    555/530   for  16.28/3.56.   This is partial DSP for the portfolio.  It pays about double if AAPL drops below 530 by end next week. 

  163. Phil

    QQQ tomorrow $64 puts are fun at .07.  

  164. lflantheman

    There you have it stj…..I've done it again.  Remember, every time I buy DSP for the portfolio it goes bye bye.   We shall see. 

  165. scottmi

    PWER – "..swing low, damn Power One..swinging low to challenge my faith.
    Swing low, damn Power One..is it time to doubledown or to get out..?"

  166. Phil

    SQQQ ($12.34) April $12 puts can be sold for .70 and the March $12 calls are .55 so net .15 credit means you own SQQQ at $11.85 worst case.  

  167. edro00

    AAPL Jan14 330P
    My TOS paper money says $3355 margin per contract
    Could someone else check please ….

  168. edro00

    Damn -  I managed to sett 1 Jan14 330P checking margin, guess I'll hold overnight

  169. yodi

    IOC While you guys are discussing the stock I have been playing it. agree some very high premium Just yesterday bought the stk for 54.53 and sold the 50 Mar call for 6.30. Well not being greedy was looking for some good down side protection so trading today for 60.00

  170. yodi

    Flan Hope you are not scaring AAPL

  171. stjeanluc

    Margin / Edro – It is correct in paper money or real money! When Phil said $33.00 you have to multiply by 100 for the margin for 1 contract. But in TOS you will see the $3300 + put value as margin locked up. So if you sell the puts for $20, you'll lock up $5300 per contract, but $2000 is the proceed from the put sale so doesn't affect your buying power.

    TOS Paper money is correct usually except for the 3x ETF where it's wrong by a factor of 3x (big surprise).

  172. edro00

    AAPL Margin Jan14 330P
    Now that actually sold 1 Jan330P  at 20.625 TOS is holding 5362.50 hostage as margin
     
    Phil,  I know you put a lot of work into your recomendations and we all appreciate them, but you need to find (ANYONE KNOW OF A GOOD MARGIN CALCULATOR?) a better margin calculator.
     
    stjeanluc has already pointed out TOS papermoney calculates margin incorrectly
     
    Thanks

  173. stjeanluc

    AAPL / lflan – Didn't you tell me to whack you in the head for taking downside protection on the portfolio? Or shorting AAPL for that matter!

    As far as I know, it's a bullish signal!

  174. edro00

    Well nevermind – sorry Phil

  175. Phil

    Margin/Edro – That's what I said.  $3,300 per 100 options is $33 per.  And your mistaken order, by the way, is why I only check margin on my Paper money screen!

    Looks like high hopes into the close but S&P is flat.  Volume just 76M at 3:53 so would have to be one Mofo of a settlement to get to 120M – although that too is a symptom of a really BS move up because they reel in the buy orders into a stick and then force market on close orders to settle near day's highs (taking advantage of many ETFs that balance at close).  

  176. Phil

    Looks like just 102M, pathetic day, and it was all down/flat volume since 3pm.  So, when I look at volume like this, what do I see – big volume down, low volume up, big volume flat to down again – that's net selling for the day!  This is why you see all the stats showing outflows of money from the markets even as the indexes go higher and higher – essentially they are inflating the balloon while taking the air out at the same time – a neat trick.   

  177. Phil

    Arrrg!  GMCR just filled the damned gap to $55!!!  Too bad but we were behind in the portfolio so it wasn't worth risking a nice profit we already had on those $65 puts ($1,500), now $8,500…  Oh well… 

  178. Phil

    LOL, from 2/28:  

     

    GMCR is at $66.66 so we'll consider that a sign to wait for their apocalypse. 

  179. stjeanluc

    These GMCR puts would have gone a long way to heal the $25KP… but there will be more!

  180. Pharmboy

    Yeah, and the market goes up in the AH. 

  181. strether

    Phil
    It is intelligence and insight like this that makes your work so invaluable:
    Looks like just 102M, pathetic day, and it was all down/flat volume since 3pm.  So, when I look at volume like this, what do I see – big volume down, low volume up, big volume flat to down again – that's net selling for the day!  This is why you see all the stats showing outflows of money from the markets even as the indexes go higher and higher – essentially they are inflating the balloon while taking the air out at the same time – a neat trick.  
     
    Strether

  182. jerconn

    PHil/GMCR – they totally fell of the cliff, what happened over there?  Down 20%!

  183. stjeanluc

  184. kallenjr

    4:28 (Dow Jones) Just a few months after Starbucks (SBUX) inked a deal with Green Mountain (GMCR) to sell single-serve coffee pods for GMCR's Keurig brewers, it's announcing plans to start selling its own brewer with its own pods this fall. Entering the single-serve coffee brewer space poses a big threat to GMCR, which has lead that industry since it started gaining traction a few years ago. GMCR last month unveiled a new, higher-end brewer too that requires a new pod, but even with its loyal customer base for Keurig's it will have a tough time competing with the worldwide power of SBUX branding. SBUX shares add 1% after hours to $51 while GMCR tanks 19% to $50.37.   

  185. peedlew99

    I wish I were wildly bullish.  Seems so much easier to be committed to the fraud. Maybe that was Orwell's point!
     
    My brother has been loving this run… getting to rub in my face how smart "THEY" are… and how "THEY" are going to fix everything.
     
    He doesn't even play the market.  Just is an Obama supporting fox news watcher.  go figure.

  186. rdn4evr

    Peedlew – "Obama supporting Fox news watcher"?  Isn't that an oxymoron?

  187. yodi

    peedlew99
    Just is an Obama supporting fox news watcher.  go figure.
    Are you sure he surely has his wires crossed
     

  188. jjflash

    Phil – What platform do you use for futures trading? Also for general option and stock trading.

  189. Maya1

    Stj
    I think lflan came in at the right time for AAPL in December.
    They are good, no phenomenal, even….but c'mon?
    So put spread is not a bad idea.
    I did a profitable put spread in Jan to protect a position….it means having margin, of course. hoever, it worked out great, and cost me nothing.
    However, if the stock had gone in opposite direction, I could have withstood a 10% downdraft in the underlying , before having to scramble and roll or cover the short puts.

  190. angelcur

    stabies sellling th erazor AND the razor blades SOON gmcr getting nailed

  191. peedlew99

     oxymoron?
     
    no.  just moron.
    I think people might be surprised by how many are like him.  He has no bedrock issues.  Can be anti-war, then pro-war.  Whatever the "programing" is.  He hated Obama a few months ago.  But now that "they" seem to be pulling us through…
     
    I think he is mostly pro-establishment.

  192. Pharmboy

    TXN cutting forecasts.  Verizon closing call centers.  Trenton running out of toilet paper.  FnA..what are they gonna wipe with, dollar bills?

  193. Pharmboy

    Wow, TXN off 10% in AH – must have hit stops, now back up to even…..what a time we live in, no?

  194. jmm1951

    Yodi/IOC
     
    OK, the Seeking Alpha article and discussion has reappeared. Interesting stock, though rather difficult to trade without taking on a lot of risk. Your strategy of selling ITM covered calls against the stock might just  be the best bet.

  195. stjeanluc

    AAPK / Maya – lflan and I are just joking now… I don't have an opinion on the trade now but every time he has try to "buy" protection it has failed because AAPL keeps going up. Might not happen again, but it's just funny now!

  196. stjeanluc

    How can you even negotiate in good faith with these people:
    http://tpmdc.talkingpointsmemo.com/2012/03/dems-irate-as-house-gop-prepares-to-violate-budget-deal.php

    Signs mounted Thursday that House Republican leaders, under pressure from their conservative members, will submit a budget that calls for cutting federal programs beneath the levels they agreed to in the bipartisan August debt limit. Democrats warned that violating the agreement could spark a government shutdown fight later this year.

    I would not even negotiate next time…

  197. stjeanluc

    Best performing stock these last 2 days while we bounced back!

    http://www.bespokeinvest.com/thinkbig/2012/3/8/bounce-back.html

    2 of the top 3 are refiners. I guess the high crack spreads must be helping. Not the American drivers though!

  198. wappler

    stjeanluc,
    I totally agree on your ‘no-negotiation next time’ comment above. The cardinal sin of the democrats is the apparent need for tolerance and to ‘understand the other side’. Understand maybe, but as in ‘know thy enemy’, but not to empathize with the other side.

    As a matter of principle, Republicans only play ‘win-lose’ and to engage them in an attempt to play ‘win/win’ is plain foolish. This reminds me of Charlie Brown naively trusting Lucy (peanuts.wikia.com/wiki/Football_gag) – just how gullible can you be?

  199. wappler

    stjeanluc,
    On another note, my IOC position is doing extremely well (thanks again for your help structuring it), but based on today’s discussion in this forum I will now take the money and run like a jackrabbit, LOL!

  200. stjeanluc

    Good thing Wappler! I am glad it worked out well.

  201. stjeanluc

    IOC / Wappler – I went back to our conversation and at the time you were talking about a Feb trade and I told you to go with selling a 3/1 put ratio that did pay off 100%. But did you also go for a March trade? That would also be profitable though!

  202. jmm1951

    IOC
     
    Even if it is a con, it can probably go on for a long time yet. But if they actually do ever start to build the 40-mile pipeline and the floating tanker terminal that will make it possible to get their landlocked gas to lucrative Japanese markets,  then that will be public knowledge long before production starts. 10% per month selling ATM calls is tempting.
     

  203. dclark41

    I thought this was a pretty good explanation of how gasoline is priced in the US.
    http://www.philstockworld.com/2012/03/08/the-story-behind-us-gas-price-pain/

  204. stjeanluc

    As I mentioned I was going to do, I have performed a monthly volatility analysis on the stocks on the S&P500 and some ETF and published it in the same spreadsheet as the weekly analysis. You can find it here:

    https://docs.google.com/spreadsheet/ccc?key=0Asgfso25VaEPdHdfTDV3VzE2ZVItSWNiZ2xXM0FFM0E

    Once again, you might need to copy the link to your browser to open it.

    I still have to do some checking as some of the stocks didn't show up in my scan. I'll have a more definite list on Sunday and then I'll be open to suggestions if you don't see your ticker symbol there.

    Here is a screenshot and an explanation:

    For example, since everybody is trading AAPL, over the last 5 months, AAPL has moved on average in a range of 5.56% up or down – so based on today's price, you would expect AAPL to be between $511 and $572 in a month time. But over the last 10 months, the range has actually been greater so there is a chance that AAPL could be between $506 and $577. In the table I have added the statistics for 50 months and 100 months.

    These are not predictions, they are only statistics based on volatility, but this is in part what option pricing is all about so it could be useful for those of you selling premium. And if you check, you will see that stocks or ETF with the highest volatility in percent will generally command the highest premium. If you are a viewer, I don't know if you can do sorting, but sorting by volatility could be interesting.

    Note: ^GSPC is SPX in my system.

  205. Burrben

    StJeanLuc – Man you are like 20 Elliots! Mucho Gracias Hombre!

  206. angelcur

    poor eliot!

  207. peedlew99

    Ha!  How much time did they buy?
    pricing for the new Greek bonds to be issued as part of the exchange ranged from 17 to 28 cents on the euro, a highly distressed level, according to indicative quotes seen by the FT.

  208. dclark41

    peedlew99
    but will anyone even care?

  209. kustomz

    Complete anarchy in FX markets..I love it!

  210. Peter D

    Yeah, no kidding.  Kudos to stjeanluc!  This is definitely useful for premium sellers.  Is there a way to find a "peak" volatility in certain period as it's when the short put sellers get whacked?

  211. Phil

    Good morning!  

    Futures are pretty flat despite the Dollar hitting 79.45.  Euro is $1.322, Pound $1.578 and 81.69 Yen to the Dollar and, guess what – EUR/CHF is $1.2054!  

    Everything is off the highs slightly.  Nikkei hit 10,000 but 9,965 in the Futures and now back to 9,905 finishing at 9,920 on the index.  The BSE was happy at 1.7% and the Hang Seng finished up 1.4% but the Shanghai pulled back to 0.3% but, of course, they are just getting the news that "Greece is fixed" again.  

    Greece says €172B of bonds were tendered by private investors in the debt swap, making the participation rate about 86%. (PR

    More on the Greek debt swap results: The country intends to amend the terms of all Greek law covered bonds (activate the collective action clauses). This would bring the participation rate to 95.7%. 

    The IIF welcomes the PSI results, and says the Greek debt-swap plan reduces the risk of contagion and represents a "major opportunity" for Greece to move ahead with its reform program.

    The result of the Greek bond swap means the country received high enough participation to avoid default, but not enough to avoid activation of collective action clauses (CACs). This will likely force the ISDA to declare a "credit event" has occurred with regard to Greek debt, thus triggering CDS payouts.

    Reuters Reports That Hedge Funds Have Found Greek Default Trigger Loophole.

    Despite the band-aid put on the Greek situation with the recent bond swap, the Greeks are inevitably going to default down the road, or write down 100% of their debt, says Wells Fargo Advisor's Scott Wren. Additional bailouts are likely, and other European nations such as Portugal and Spain may even jump on the bandwagon.

    Legal Skull-Duggery in Greece May Doom Portugal. Europe has ring-fenced Greece's debt crisis for now but its escalating recourse to legal legerdemain has shattered the trust of global bond markets and may ultimately expose Portugal, Spain, and Italy to greater danger. "The rule of law has been treated with contempt," said Marc Ostwald from Monument Securities. "This will lead to litigation for the next ten years. It has become a massive impediment for long-term investors, and people will now be very wary about Portugal."

    Greece's New Bond Yields May Reach 20% After Exchange, Morgan Stanley SaysYields on Greece’s new bonds may climb to as high as 20 percent amid “material risks” stemming from implementation of terms for the biggest sovereign restructuring in history, according to Morgan Stanley. Traders are offering to buy and sell the potential new bonds at yields on 11-year securities of 22 percent, according to a person familiar with the prices who declined to be identified. Yields on exchanged Greek debt may be about 13 percent to 17 percent “in the medium term” as the nation faces an election and seeks to comply with terms of its bailout and debt-reduction programs, New York-based Morgan Stanley said yesterday in a research report.

    Next!  The European Commission has sent a team of experts to Spain to check its budget deficit data, according to Spanish website Expansion. No details were provided as to the source of the report. (Spanish report, web-based translation

    Draghi's Oil Dilemma Risks Exacerbating Recession: Euro Credit. ECB President Mario Draghi is trapped between accelerating inflation and slowing growth, making it hard for him to defend countries such as Italy and Spain from the ravages of recession. The central bank yesterday revised its inflation forecast for the euro area to an average rate of 2.4% this year, up from a December prediction for prices to rise by 2%. The new projections show the economy may contract .1%, down from a previous forecast for .3% growth. With at least six of the 17 euro nations in recession, the latest forecasts may mean Draghi, who cut interest rates at his first two monthly meetings as head of the central bank, won't be able to reduce borrowing costs further as efforts to resuscitate growth by lending unlimited funds to banks lose steam.

    German consumer inflation comes in at +0.7% M/M in February and +2.3% Y/Y, in-line with consensus. But trade surplus widened in January to €14.2B vs. €13.9B in December and consensus of €13.5B. 

    Germany's Monetary Doyen Slams ECB's 'Shocking' Balance SheetThe doyen of German monetarism has denounced the stimulus policies of the European Central Bank as a dangerous leap into the unknown, giving voice to growing misgivings among the German policy elite. Jurgen Stark, the ECB's former chief economist and Germany's board member until two months ago, said the blitz of lending had corrupted collateral standards and risked inflation. "The balance sheet of the euro system isn't just gigantic in size but also shocking in quality," he said. Unlimited lending to banks for three years has pushed the ECB's balance sheet to over €3 trillion (£2.5 trillion), overtaking the US Federal Reserve to become the world's most activist bank.

    News so bad, it's GOOD!  Several disappointing economic readings out of China this morning. Retail sales +14.7% in Jan.-Feb., vs. +18.1% in Dec. and +17.5% consensus. Factory output +11.4% in Jan.-Feb., vs. +12.8% in Dec. and +12.4% consensus. Fixed asset investment slowed to +21.5% vs. 20% consensus but the lowest level since 2002Consumer inflation falls to +3.2%, a 20-month low, leaving room to further loosen monetary policy to support growth.

    China's Economy a Bigger Worry Than Yuan: Samual Sherraden. Domestic and foreign economic pressures are causing cracks to emerge. Domestically, over-investment and excess capacity weigh on China’s economy. The housing market is deflating and the local-government debt on banks’ balance sheets will limit future fiscal stimulus. Monetary authorities are constrained from further easing for fear of inflation. And China’s major export markets — the U.S. and Europe — are facing slow growth at best.

    Chinese Politburo Member Signals Wealth Gap Breached Unrest Trigger PointChina’s wealth gap has now exceeded the point that triggers widespread social unrest, according to figures revealed by Politburo member Bo Xilai, in a rare disclosure of the country’s income disparity. China’s Gini coefficient, an index of the income gap, has exceeded 0.46, Bo, the Communist Party Secretary for Chongqing Municipality, told reporters in Beijing today, without giving specifics. The index ranges from 0 to 1 and the 0.4 mark is used as a predictor by analysts for social disturbances

    Australian Gold Sales Collapsed.

    Overall, Europe is flat out of the box this morning.  That's not good with Greece "fixed" and all.  I was expecting a "sell on the news" event and we'll see how traders want to position themselves into this weekend but it's certainly not in the interest of the Fed to boost the markets at the moment – not with $150Bn worth of bonds to push next Mon, Tues and Weds…  

  212. jjmaz

    Phil,
    1st time poster, novice options trader, learning alot from your site.
    I may have gotten quite lucky, bought GMCR Mar 17 $60 puts yesterday. Was thinking of just watching the stock movement this morning, and not taking any immediate action. Your thoughts? Thanks

  213. yodi

    Good morning Phil, May I remind you of our further discussion re business plan. Regretfully only a few people have shown interest as the write up did not come as before from you. However may I suggest to email me your Phone number where I can get hold of you over the week end for further discussions if required. 

  214. Phil

    Thanks Strether.  

    GMCR/Jerconn - Here's my comment from last May 10th:  

     

    GMCR/Scott – I doubt SBUX would care about their bad accounting as long as what they do is clean (although, to some extent, it’s nice to trust your business partner). What I saw about GMCR this weekend was the new machines they sell are more money ($149 and $179) and one of the "features" is that they have a filter cup and you can put in your own coffee, tea or cocoa without buying the K-cups. This seems kind of insane but it indicates they are getting pushback, as I expected, on the K-cup pricing and they are trying to cover their tracks by front-loading machine sales revenues to keep the books looking good. No way would I ever go long on them and I still think, long-term, the shorts will pay off but when is the big question. They are like FSLR – there’s no real future in them but they are a great tool for the market manipulators to herd the sheeple in and out of constantly generating fees and spread revenues over and over again – who wants to give up on that?

    Good point Lol – SBUX must have known about the issues. All they are doing is branding their coffee in K-Cups and selling the machines – not like they are in partnership with GMCR.  

    As I often point out, the problem with being a good fundamentalist is timing.  GMCR (and FSLR) looked like crap to me almost from the moment they IPO'd and I've learned not to get in the way of IPOs but, once a stock hits a certain point (like 50x forward earnings) – I have trouble believing people are THAT stupid when something is so glaringly obvious to me.  Unfortunately, they often are and we have to wait for the madness of the crowds to subside – and sometimes that can take several quarters or even several years but, in the end – a bad business is a bad business.  You just have to remain solvent longer than the markets can remain irrational…

    Meanwhile, SBUX making 52-week highs and that is also silly as they cannibalize their own business to some extent with this system but, again, the front-loaded $100-200 per machine and bulk sales of K-cups will make them look terrific for a quarter or two and then they'll also probably snap back down but, unlike GMCR, SBUX does have a real business to fall back on so they're not a short I would go after unless they get real silly.  

    Big Chart:  Once the RUT is over the line, we're bullish again.  No point waiting for the NYSE.  Of course, this being Friday, bullish would be neutral going into the weekend.  

    Bullish/Peedle – It makes my head hurt to be bullish.  Mostly because I have to repeatedly hit myself in the head with a baseball bat every time I begin to think or have the urge to read (which is the gateway drug to thinking!).   Unfortunately, liquor doesn't help me get more bullish – beer goggles don't make stocks look attractive to me, even at last call.  Pot doesn't work either as I get too paranoid that the markets will crash.  Thanks to my IPad, it's easy for me to look at charts upside down – that helps a little but, in general, I have to just let other people be geniuses buying stocks for now and, just like 1999, some guy may buy a $60,000 Porsche with Yahoo! on the custom plates but, just like 2000, I'll buy that car from him for $30,000, slightly used, when he sells it to raise cash to cover his margin calls.  Very sorry to hear about your brother….

    Futures/JJFlash – I use ThinkorSwim, very happy with it.  

    TXN/Pharm – And the very strange thing is the weakness was in OMAP processors, which are in the Kindle Fire, Samsung Nexus and the Nook.   I guess they are another victim of AAPL's success but this should be hitting AMZN, Samsung and BKS if people connect the dots.  

    Good point on Dems Wappler – they need to radicalize or they will just get pushed around every time.  Sad but you do have to fight fire with fire in this case – like standing up to a bully – it's the only thing they will ever understand.  Charlie Brown needs to kick Lucy in the head one time…  

    Nice study StJ!  Maybe find a way to identify stocks or ETFs that are currently exceeding standard range over past 30 days?  That would indicate that their current premium is likely exaggerated and a good candidate for selling.  

    Welcome JJMaz!  Hopefully you are working your way through the New Members Guide and our Education and Strategy sections but, when push comes to shove – we only have 2 actual rules at PSW:

    • Rule #1 – ALWAYS sell into the initial excitement
    • Rule #2 – When in doubt, sell half.  

    So, no matter how much you are loving your short and no matter how greedy you are after getting a 500% or whatever gain in 24 hours and think you will get 1,000% or whatever lotto fantasy is now rattling around in your brain – at least take 1/2 off the table and lock in the win.  If you take 500% off the table and the other half end up 1,000%, you still make 750% overall.  On the other hand, if you take 500% off the table and the rest goes to zero – you are still up 250%.  Unless 500% is your normal one-day return (182,500% a year), taking a 500% gain off the table will IMPROVE your overall trading performance – that's always a good thing.  

    Yes, Yodi, we'll talk over the weekend.  

    Friday's economic calendar:

    Monster Employment Index

    8:30 Trade Balance

    8:30 Nonfarm Payrolls

    10:00 Wholesale Trade 

    6:10 AM Overseas: Japan +1.6%. Hong Kong +0.9%. China +0.8%. India +2.1%. London -0.1%. Paris -0.2%. Frankfurt +0.2%.

    US Budget Deficit Hits All Time High In February. (graph)

    Aside from Greece, the big story of the day is likely to benonfarm payrolls, which are expected to show employment grew solidly for a third month and added 210K jobs. The unemployment rate is expected to have held steady at a three-year low of 8.3%. - Didn't Gallup just tell us that unemployment is way up?  This will be interesting.  

    The ISDA Determinations Committee will hold a meeting at 8 AM ET to decide whether a credit event has occurred relating to Greece. 

    U.K. industrial production -0.4% M/M in January vs. +0.3% expected, and -3.8% Y/Y vs. -3.1% expected. Italian industrial production -2.5% M/M vs. -1.1% expectedFrance +0.3% vs. -1.3% prior- Wow, economists really are morons.  How can you be this far off when it's your JOB to study these things?  

    Productivity Slows, Hiring Should Gather Momentum (Northern Trust)

    Cool, I always knew my birthday would one day be a national holiday!  Spanish unions call a general strike for March 29 after failing to reach a deal with the government on labor reform. 

    The yield on Greece's new bonds could climb as high as 20% amid "material risks" related to the country's mass sovereign restructuring, suggests Morgan Stanley. One source says traders are already offering to buy and sell the potential new bonds at yields on 11-year securities of 22%.

    More clueless forecasting:  Australia posts a $713M trade deficit in January vs. expectations for a surplus of $1.59B as the Lunar holiday causes a sharp drop in exports to China and poor weather disrupts iron ore shipments. "We expect these to be temporary drops … still, it does show the drawback of relying so much on the resource sector," says an economist.

    Russia and India were not part of the GE growth showcase — Even though they represent the “R” and “I” in the BRIC moniker, GE did not have a country head from either Russia or India on the agenda. The revenue contribution in Russia is still relatively small and India growth has been somewhat disappointing. 

    Yay!  Senate Democrats defeated a Republican proposal yesterday that would have given a permit to TransCanada's (TRP) Keystone pipeline, though the margin was close, with Republicans just four votes shy of the 60 they needed.

    Gas Prices Must Come Down, Consumers SayConsumers fretting about soaring gasoline prices say President Obama and Congress must act to keep them from rising further, a Gallup Poll finds. An overwhelming number of consumers — 85% — say Obama and Congress should take "immediate" action to keep a lid on prices. After nearly four weeks of daily price increases, regular gasoline averages $3.76 a gallon nationwide. Industry analysts still expect a $4 top by Memorial Day, although prices could rise to $5 a gallon if escalating tensions in the Middle East disrupt crude oil shipments. At $5, about 30% of those surveyed by Gallup say they would have to make major changes in their lives and significant cutbacks in spending. About 28% say $4 gas would prompt similar changes.

    Banks Foreclosing on US Churches in Record Numbers. Banks are foreclosing on America's churches in record numbers as lenders increasingly lose patience with religious facilities that have defaulted on their mortgages, according to new dataThe surge in church foreclosures represents a new wave of distressed property seizures triggered by the 2008 financial crash, analysts say, with many banks no longer willing to grant struggling religious organizations forbearance. 

    A Brief History of Goldman Sachs(GS), The Most Hated Bank In The World.

    NPD estimates U.S. retail video game industry sales fell 24% Y/Y in February. That's not a pretty figure, but is better than January's 34% decline. Software sales fell 23% Y/Y, and hardware sales fell 18% 

    One options trader places a big bet that D.R. Horton’s (DHI) rally is over, “someone with a strong belief the stock’s going to go down," the head of equity derivatives trading at MKM Partners says. “When you see a trade of this size, it’s usually savvy money."Homebuilder stocks have been hot, as the XHB ETF has surged 61% since Oct. 3; DHI has jumped 72% during the period. 

    Chipotle(CMG) Stock Price Rises on Aggressive Growth Plan.

    Google (GOOG) manages to eke out a marginal marketshare expansion, taking 66.4% of the U.S. search market in February after nabbing 66.2% in January, according to ComScore. Microsoft's (MSFT) Bing inched up to 15.3% from 15.2%, while Yahoo's (YHOO) share fell once again, to 13.8% from 14.1%.

    Disruptions: No More Innovation for the Fun of It (NYT)

    Amazon (AMZN) could be the big winner from the DOJ's suit against Apple (AAPL) and 5 top publishers, says Jeff Roberts. The suit could once more grant Amazon the power to determine e-book pricing, which means it could aggressively price them to boost Kindle demand. However, publishers would lose if consumers become accustomed to lower e-book prices, thereby threatening their high margins. As for Apple, the issue is a sideshow.

    Miniature E-Books Let Journalists Stretch Legs (NYT)

    The (rapid) decline of the media industry (TECHi)

    Why the iPad 3 Won’t Replace Your Laptop (PC Mag)

  215. Dennis

    I surrender.  You write more than I can read!   Amazing work, I don't know how you do it. 

  216. jmm1951

    …every time I begin to think or have the urge to read (which is the gateway drug to thinking!)

     
    Unfortunately I was hooked young, because my father was a pusher, or sales rep as pushers were then known as, for Oxford University Press. They didn't pay very much at all, although there was a free car and gasoline, so when we had no food we had to turn to books. On cold nights when there was no heating, one could always curl up in bed with a copy of Fowler's Guide to English Usage, or a volume of the Shorter English Dictionary. Bibles were more of a trading medium than for reading, as nice leather-bound Bibles could be swapped for other books or merchandise at booksellers. Of course this was before TV ended the pursuit of knowledge as we know it.

  217. wappler

    stjeanluc,
    Re IOC: Yes, I set up another (smaller) position just a few days ago when it retraced, but now I'm out, better to be safe than sorry!

  218. wappler

    Phil/Startups with a bad business model,
    In my opinion, Pandora is another example.  I had hoped for a decent earnings announcement to short into the initial excitement, but that did not come to pass.  Seems like a good short when it is 14+.

  219. newbie

    Oil
    It is world wide fungible. Doesn't matter how much is produced where, it is going to "flow', no pun intended, in whatever direction, and to where, it will get the best price. Period.
     
    For years and years I have been hearing the cliche's about "American Energy Independence". If you talk about gas, coal, burning cornstalks, solar, bio-shale or whatever the hell it's called, harvesting "heat" from magma, windmills, watermills, etc—-that's all fine and good and I hope those are all viable long term options.
    And to tell the truth, I don't know ANYTHING about the world oil market, and I would like PHIL to comment on what I'm saying. But there is no way that congress could, even if they wanted to (and they absolutely don't) pass ANY kind of law that would keep oil drilled from U.S. land or the gulf of mexico IN THE U.S.
    If oil is $7 in Australia, and $3 in U.S., the oil is going to Australia, doesn't matter where's it's drilled or piped, if Big Oil can transport it there and still make more money than they would here.
    Phil, what say you?

  220. newbie

    I always seem to make posts that SOUND like they were written AFTER I read something by Phil or one of the PSW pro's here, or AFTER I saw Phil on TV, but once again, I PROMISE I wrote this BEFORE watching the Doug Kass CNBC video tonight (which was actually a few minutes ago – 3:00am Saturday)

    The Skeptical Eye
    We have a new Guest Contributor this week. Not a lot
    is known of his background, however, the entire SWW staff had a group meeting, and the
    consensus was that he is probably an escapee from a Mental Health Treatment Center.
    You might find him to be not only irreverent and interesting, but just a little “off”.
    During the staff meeting, words like “uncontrollable”, “mentally unstable”, “wild man”,
    “loose cannon”, “implacable” and several other words less fit for print were mentioned.
    We tried to put a leash on him at one point….. Later, at the emergency room, the doctor
    asked “so, what was it that put these huge teeth marks in your arm again?”. Our man had to
    admit “The Skeptical Eye”.  Doc says “big teeth”?  Our man:  “Like garden trowels”.
    He may return from time to time, we don’t really know. We did see several large men in white
    coats with butterfly nets running around the grounds outside Stock World Weekly Tower here
    this week though, just after the Eye ran in through the lobby and jumped the elevator to the
    “secured” 44th floor, where we keep the cage.

    ______________________________

    The Article>

    Let’s cut the crap. The time to buy a $540
    stock is not when it is a $540 stock, but
    when it is a $380 stock. Such as Apple was in
    October. The time to buy a $380 stock is not
    when it is a $380 stock, but when it is a
    $140 stock, such as Apple was in mid 2009.
    An even BETTER time to buy a stock that
    REACHES $540, is when the stock is $12, AND
    before it has split 2 for 1 twice, such as
    was the case in 1996 on the day Apple
    Computer Incorporated announced that one
    “Steve Jobs” was going to return to manage
    the company on an “interim” basis.
    I remember the day distinctly. Nice and
    sunny, not too cold. I was in my “cubie”,
    designing a Machine Vision System for use in
    the automated manufacturing line of a medical
    device startup company. With the radio on, as
    usual, the news came across. Having, even at
    that point, been working at a deep systems
    level of Apple machines (on which said
    Machine Vision System was being programmed)
    for more than 7 years, I knew this was IT.
    This was the BIG THING. The know-nothing
    business press had been whipping the “Apple
    is gonna go bankrupt” hysteria for months.
    We had a Computer Systems Administrator, you
    know, one of those PeeCee dweebs who thinks
    Windoze is the greatest advancement of
    mankind. He was always asking me when I
    was "going to get a “real” computer”. He
    liked to make a big show of calling his
    “broker” three times a day to check up on his
    Compaq stock. Like he was "Mr. Big Cheese". By the way,,, how’d that work
    out for you, dick brain?
    I leaned over my cube wall and hollered
    “Better load up on Apple Stock, Job’s is
    COMIN’ BACK! He’s gonna take that thing to a
    Hundred Dollars!
    Oooooooh, how little I knew.
    Peter Lynch used to talk about “ten baggers”
    and  “15 baggers” in his books. Those were
    his kind of metrics of great success stories,
    in stocks he bought for Magellan, or wished
    he’d bought.
    So, how many “baggers” is Apple, now trading
    at $540, compared to the “relative low” in
    ’96 when the brilliant guardians of all
    things business in America had written Apple
    off as a basket case that would soon
    disappear? A reader who has “skimmed” this
    article quickly might do a quick mental calc
    and think; lemme’ see, 540 by 4 is about 135,
    by 10 is a shade over 13, so, ballpark, maybe 
    4 x 10, so in the area of 40. A 40 would have
    made Lynch so happy he’d pee his $4000 suit.
    BUT, a more CAREFUL reader of the story,
    would have noticed the whole “2 for 1, TWICE”
    part. Nice little detail there, eh? So, let’s
    do that math again, with some care. $540 is
    NOT $540, it is $2160. $2160 by $12 is a ONE
    HUNDRED AND EIGHTY BAGGER. 
    That's right my friends, $1000 in 1995 would
    be $180,000 today. $5000 would be $900,000. To me, that’s some money.
    From a company written off as weeks from
    bankruptcy to the largest company in America
    by cap. I think maybe Steve earned his money.
    So, did I take my own advice and buy Apple
    after Steve came back?
    Of course not, what do you think, I had money
    at the time? Come to think of it, do you
    think I have money NOW?
    Everybody and their mother (and their
    mother’s mother) either owns Apple stock
    right now, or they want to own Apple stock
    right now. And yeah, I wrote that before watching the Doug Kass thing tonight.

    The Apple is eventually going to fall from
    the tree of hype. Newton told me that
    himself. But he didn’t tell me when.
    Don’t let it fall on you.

    If you've made big money off it, take the money and run screaming. Don't be holding the bag when your mother's mother's sister's husband's taxi driver no longer has any money left to buy it.

    -The Skeptical Eye

  221. newbie

    oops, I meant $7 GASOLINE, not oil

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