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Thin-Air Thursday – A Weak Week of Denial

We HAVE to try to get more bullish.  

HAVE to as in forced against our will.   HAVE to as in forced against reason and rational thought.  We HAVE to follow the herd or be stampeded by it despite screaming FACTS like the ECRI data on the right that CLEARLY shows that the herd is INSANE!

USUALLY, the market (and its investors) understands that where there is smoke,t here is fire.  The last time ECRI was this low (on the way down) was early 2008, by which time we KNEW the economy was stalling and the Government gave us a tax rebate that goosed us for a few months but then we crashed and burned in a horrible, horrible mess that kind of made us wish they hadn't screwed around in the first place.  

The ONLY OTHER TIME ECRI was this low, since the great depression, was back in 2001, but the Nasdaq had long since crossed 3,000 from the other direction and was on it's way from 5,000 to 1,500 – only a 70% drop.  Don't worry though, in 2007 the Nasdaq was all the way back to 2,850 and then only fell to 1,250 and that's just 56% so this time may indeed be different despite the lower low in 2007 on the 6-year cycle that we're again in year 5 of.  

Clearly, things are much better than they were in late 2008/early 2009, right? I believe, at the time, people thought the World was going to end and they were lining up at banks in Europe to withdraw money and the US had 300 bank failures and the FDIC was down to its last $50M to cover the $8Tn worth of cash on deposit (all better now, they have $850M!) and 1,000,000 people a single month were losing their jobs…  Yes, things are better than the end of the World, that's for sure!  

But, are they Dow 13,200 better?  Are they S&P 1,400 better?  Are they Nasdaq 3,050 better?  

The NYSE doesn't seem to think so.   Although the Dow (14,100), the S&P (1,560) and the APPLdaq (2,800) and even the Russell (850) are all within striking distance of their 2007 highs, the NYSE (10,300) is still 21% below at 8,125.  Why is our broadest market index, whose capitalization ($16Tn) is larger than the Nasdaq ($5Tn), Nikkei ($3.5Tn), FTSE ($3.5Tn) and Shanghai ($2.5Tn) and DAX ($1.3Tn) combined being one of the laggards of the group?  

By the way – ROFL to people holding gold – nice returns!  See oil is at least a thing that is actually used by people.  Gold is a DECORATION – it has no real value!  Oh well, I gave up on trying to explain this to gold bugs long ago.  If the fact that gold dropped 30% during the last crash didn't convince them it's not a hedge, nothing will so let's move on.  So oil and Germany were the places to be in the past 6 months, with the FTSE and the NYSE (the two largest indexes besides the NYSE and the AAPLdaq) bringing up the rear and the Nikkei (3rd largest) coming on strong with a 20% power move since January.

AAPL WEEKLYAAPL itself is up 66% since October and, as it's 11.5% of the Nasdaq, has contributed 7.6% of the Nasdaq's leading 26.66% gain.  So, without AAPL, the World's 2nd largest index is up 19%, about the same as the largest index – very interesting.  

I do not, frankly, have the expertise or resources to dissect the DAX and why they are up 38.8% other than the obvious explanation that it's like saying the deck chairs on the back of the Titanic were really popular near the end of that voyage – just before that end of the ship went down with the rest.  

That's right, Germany is the Gold of Europe – for the moment – and people rush to the relative safety of the German markets, now just 12% off their 8,100 all-time high in 2007.  While it may sound "right" that we are 10% under our 2007 highs, what we forget is that, in 2007, we were mispricing (or not pricing at all) the potential risks in the markets.  

Now we KNOW that there are problems that can hamper our bullish earnings forecasts:  Unemployment, Housing Declines, Tsunamis, Nuclear Disasters, Civil Unrest, Sovereign Defaults, State Defaults, Local Government Defaults, China Stalling, India Collapsing, Austerity, Social Safety Net Collapsing…  These were not really big concerns in 2007 and I'm even assuming that Terrorism and a possible war with Iran were on people's radar and priced in.  

VIXThis is not a laundry list.  I'm not talking about asteroids hitting the Earth (not until 2036) or dangerous disease outbreaks (hey, we made it through Bird Flu and Mad Cow) due to Global cutbacks in health care or $160Tn of Credit Default Swaps that we now know no one is ever going to make good on.  Anyway, it's almost April and April is the month the VIX hits it's lows (see David Fry's chart) because the Government doesn't want you to worry in April – they just want the check you owe them for the money you made on their market manipulation before they pull the rug out and take is all back.  

The bull case is, on the other hand, simple and clear – our Government – ALL Governments, for that matter, are NOT going to let the markets fall.  After $13Tn of Global bailouts and Stimulus in the past 3 years, shame on us for not getting the message – our leaders will do ANYTHING to protect their phony-baloney jobs, harrumph!  

The Big Picture

Let's keep in mind that these are our markets WITH almost the entire GDP of the United States pumped in as stimulus.  God help us all if that well ever runs dry as we're barely back to those 2007 levels WITH $4Tn a year being pumped in.  Of course, that $13Tn is simply added to the Global debt pile and wasn't the Global debt pile one of the things that triggered the crisis in the first place?  Oh hey, look at AAPL!  Now, what were we talking about?  Oh yes, AAPL, what a great stock – IPads for everyone, harrumph!  

We discussed the 10 stocks we're using to follow the herd in yesterday's post.  Our Members have had plenty of time to fill up on those and we're beginning our next list of 10 bullish trade ideas this weekend (and see yesterday's chat for a great GLW play).   Not for publication are 12 stocks we are taking bearish positions on while the VIX is this low but I will point out one very good one to close this post.  

If China is stalling (and there is much evidence of that) then obviously FXI ($38.75) is a good short or maybe long EDZ (now $12.08) but, for those of us who subscribe to Aviation News (doesn't everybody?), we saw this morning that Cathay Pacific had a 61% decrease in profits with "slumping cargo demand" and lower bookings while China Southern also reported a 50% drop in their profits with the first drop in domestic flights in 3 years on "lower passenger and cargo volumes and high fuel prices."

What was our conclusion?  Short PCLN!  Not aggressively as we don't like to bet against Captain Kirk but, with the super-low VIX (thank you MSM), the PCLN July $450 puts are just $5.  It's not that we expect PCLN to drop from $650 to $450 but, if they drop less than 10% to $550, we can expect the July $450 puts to jump to the price of the July $550 puts, which are $17, which would be very nice and the point of this play is just to make a quick 20% and run – and any little dip in PCLN can give us that.  

As I said, this was one of a dozen short opportunities we identified yesterday in Member Chat and we lucked out on the airline news today – now we'll see if it does indeed affect PCLN's stock or if they, like the rest of the Nasdaq – are just following AAPL to the moon.  


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  1. Savi

    just testing

  2. diamond

    $DJIA In Top Formation – Stock Trader's Almanac

  3. stjeanluc

    Oil Lines

    R3 – 108.69
    R2 – 107.85
    R1 – 106.80
    PP – 105.96
    S1 – 104.89
    S2 – 104.05
    S3 – 103

    Dollar playing between PP at 80.93 and S1 at 80.71

  4. jerconn

    Thinking of some April SQQQ puts, anyone thinking like-minded?

  5. stjeanluc

    I have updated my weekly volatility chart and what a week for AAPL. The last 52 weeks the stock has averaged 2.7% volatility, but this week we are already up 8%. And that's really absent any ground breaking news…. 

    Also standing out, XLF (and obviously FAS) up above the volatility bands. TLT on the other hand is way below, down about 4.25% when 1.75% has been the average over the last 50 weeks. GLD has also been hit harder than predicted as gold is sliding to more normal prices.

  6. Kwan

    I'm thinking I've been shorting everything too much (and my account reflects this).

  7. JRW III

    Good morning,

     

    IWM      81.41,  81.61,  81.96,  82.12,  82.34,  82.68,  82.94,  83.18,  83.33  and  83.74

     

    I will be unavailable for the most part until after lunch and will respond to any questions then; good hunting !!

  8. lolobear

    Phil – what say you? AAPL crack $600 today?

  9. yodi

    Good morning Phil, I am thinking of you when you remarked the other day your cable service was down. Here is the Mexican service. 6.00 AM local time the internet provider's service is down. Even that I pay for a 24 hour service they only work between 9 and 5Pm. After hours good luck to you. That is why I pay an extra 50 bucks for a USB stick so I do not miss the important things like cancelling an order from last night, because the market has turned etc. But we have sun shine here, so you can eat your bananas for breakfast. Have a good day. Possible with luck my service is back by 10 or 12.

  10. jerconn

    Sorry, make that SQQQ calls, not puts…

  11. Springheel Jack

    Some thought-provoking charts today:

    The rising wedge on SPX that hit wedge resistance yesterday:


    The candlestick setup on SPX over the last two days that suggests that a short term high is close:


    A Vix Sell (equities) Signal triggered yesterday. Tuesday's candle on Vix was also rare. The only instance in 2011 marked the 2011 Vix low:


    Targets for the current breakdown on bonds:


    The H&S on silver suggesting a retest of the lows:


    Overall this is some pretty wild action. 

  12. Pharmboy

    PP for today:

  13. lolobear

    Oh how i wish lflan was around today to trade AAPL.. :-)

  14. stjeanluc

    Look at the S/R lines on AAPL – S3 at $559 and R3 at $617 on a daily chart! Insane…

  15. lflantheman

    AAPL portfolio:    Alert….I'm moving back in today with AAPL longs, probably April 550s.    I'll post after the trade is made.

  16. stjeanluc

    The future of communication….

    http://www.engadget.com/2012/03/15/neutrinos-transmit-messages

    The experiment required the latest particle accelerators at Chicago'sFermilab, which flung the neutrinos over a 2.5 mile track before firing them off at an underground receiver, but it proved the principle: Shrink the accelerator down to the size of a smartphone and neutrino messaging could be huge. Or it could die in a format war with quantum teleportation.

    LOL…

  17. stardawg


    Sandbag the riverbank when you have to, not before.
    Wall Street doesn't want to see the emperor naked. He may be old and fat and flabby, but they don't want to know it. They want to see him regal and royal in all his majesty. And as long as they see him that way, that's the way he is, because they keep on buying. Big ball keep on rolling.—“Buzzy”

  18. rustle123

    Greece is rebounding, unemployment is only at 20.7% (a new record) funny how the news is on CNBC's website but not one mention of it on their broadcast:
     
    http://www.cnbc.com/id/46744550

  19. stjeanluc

  20. stjeanluc

  21. japarikh

    Phil,
      You recommended yesterday that I roll my EDZ and TZA positions down in strike and out to July. Is it wiser to roll this week or wait until after options expiration week? Or does it not matter. I have April calls in both. Thanks.

  22. stjeanluc

  23. lolobear

    AAPL – is this what it always does in the morning before blowing to the top?

  24. stjeanluc

    Once again – USO puts 1/2 off at 1.99, TZA cost is 3.05 and DIA at $1.03.

  25. sagemm1

    anyones TOS not quoting??

  26. jabobeast

    FU PCLN and CMG!!!

  27. stjeanluc

    Yes, slow start on TOS this morning Sage… The Paper Money app was not moving at all!

  28. lflantheman

    AAPL portfolio:   April 575    42.75       40 contracts.

  29. Inkarri1982

    PCLN/The Shat – I believed they killed off his character so no need to feel bad betting against PCLN.  I'm with you Jabob, FU PCLN for killing off The Shat.

  30. dclark41

    Phil
    Looks like we hit bottom for TLT. Would you have any interest rolling the April $14 to the April $11 and sell the April $14 for net .27 cents on the $3 spread?

  31. jromeha

    Phil- I’ve held USO puts and short /qm since you recommended them at 107.50 a few days back(great calls). Do you still like shorting oil into /NG inventories?

  32. peedlew99

    lflantheman,
     
    Are you still comfortable with those 620 calls?

  33. jerconn

    peedle/Iflan – better question are you still comfortable with those $575 calls?

  34. Phil

    Good morning!  

    Happy AAPL $600!!! 

    Dollar 80.82 so don't blame the Buck for market weakness.  Oil back to $105 after giving us a nice touch at $106 again so let's not be greedy off that very solid line, especially with Nat Gas at 10:30, where they might go for a run-up again.  

    We're not likely to get any real bearsh fireworks until the Euro fails $1.30 (now $1.3046).  Keep in mind that the Swiss absolutely do not want that to happen so there's at least once Central Bank on a mission to support the Euro (and thus keep the Dollar below 81) but, it's a relatively small Central Bank so we turn our attention to the BOJ, who don't care if the Dollar or the Euro goes up as long as the Yen gets weaker against someone.  Obviously they prefer both and they have been alternating their Dollar and Euro purchases and it's been working great with the Yen now at 83.26 and the Nikkei up like a rocket at 10,050.  

    Anyway, it doesn't matter WHY the market is going up, we just have to buy stuff and hold it until these levels crack (which may be tomorrow or Monday but still, we have to be patient).  Assuming no big collapse tomorrow, we will redraw the Big Chart over the weekend and the 10% lines will become the Must Hold lines with some possible adjustments and our top 10 list that has now run it's course for S&P over 1,360 will give way to a new top 10 list for S&P over 1,400 and, no matter how silly it seems – we need to follow the market.  

    HOWEVER, we can use that low VIX and insane attitudes to place a few outlying bearish bets, like yesterday's Long Put List.  I mentioned PCLN in the above post but here's the list and the idea is to buy things that are CHEAPER than they were when I picked them and to take profits when they work and then switch to a fresh horse of the ones that are CHEAPER again.  That way, we keep betting on the things that went up even further than where we felt they were overbought.  PCLN, CMG and LVS are tops on my list with PCLN and LVS both plays on China slowing while CMG is just annoying.  Here's the whole list: 

     

    • AXP (was $12, now $56) July $49 puts are $1
    • BIDU (was $11, now $139) June $100 puts are $1.05
    • CAT (was $24, now $113) May $95 puts are .95
    • CMG (was $40, now $401) June $300 puts are $2
    • FAS (was $8, now $103) July $60 puts are $2
    • GE (was $6, now $20) Sept $19 puts are $1
    • GOOG (was $250, now $620) Jun $500 puts are $2.80
    • HD (was $18, now $50) Aug $43 puts are $1
    • IBM (was $70, now $205) Jul $155 puts are $1.05
    • ISRG (was $80, now $531) July $375 puts are $3
    • IWM (was $35, now $70) Aug $65 puts are $1.25
    • KO (was $40, now $70) Aug $65 puts are $1
    • LVS (was $2, now $55) June $50 puts are $1.85
    • MA (was $120, now $425) July $320 puts are $3
    • MMM (was $42, now $89) July $77.50 puts are $1.10
    • PCLN (was $150, then $30, now $650) July $450 puts are $5
    • QQQ (was $26, now $66) July $61 puts are $1
    • V (was $42, now $117) Sept $95 puts are $2
    • XRT (was $15, now $61) June $59 puts are $1.90. 

    We'll touch base on these on a regular basis but make sure you understand these are SPECULATIVE shorts.  We pick a few and the market goes up and we lose 50% and we pick a few more next month and we lose 50% and a few more next time and we lose 50% and then it's July and the S&P is at 1,500 and all we need is a nice 150% gain on something and we've got our losses back.  If we never win – then we'd damned well better have some bullish bets that are making good money to offset it because these are now the hedges as we are forced to be bullish until the Fed runs out of money or that asteroid hits the Earth – whichever comes first…

    Thursday's economic calendar:

    8:30 Producer Price Index

    8:30 Initial Jobless Claims

    8:30 Empire State Mfg Survey

    9:00 Treasury International Capital

    10:00 Philly Fed Business Outlook

    10:30 EIA Natural Gas Inventory

    4:30 PM Money Supply

    4:30 PM Fed Balance Sheet

    At the open: Dow +0.03% to 13198. S&P +0.09% to 1396. Nasdaq +0.08% to 3043.

    Treasurys: 30-year -0.14%. 10-yr -0.11%. 5-yr -0.02%.

    Commodities: Crude +0.05% to $105.48. Gold +0.08% to $1644.15.

    Currencies: Euro +0.17% vs. dollar. Yen -0.49%. Pound +0.05%.

    Market preview: Stock futures hold gains following a batch of mostly upbeat economic reports on unemploymentinflation andmanufacturing. S&P benchmark +0.2%. European markets mostly edged higher, even as Fitch cut its outlook on the U.K. to negative. The Dow blue chips look to extend a streak of six straight gains. Still ahead: Philly Fed outlook.

    Jan. Treasury International Capital: Net foreign purchases of long-term U.S. securities were $94.7B, with net purchases by private foreign investors of $60.8B and net purchases by foreign official institutions at $34.0B. Taking into account both foreign and U.S. securities, the net foreign purchases of long-term securities were $101.0B. Foreigners trimmed their holdings of U.S. T-bills by $36.9B

    "Markets are beginning to (rightly in our opinion) view the Fed's commitment on Fed funds as a worthless promise," says ING's Rob Carnell, as thoughts turn to 1992-93, another period when markets had gotten used to low rates forever. The bond market carnage of 1994 ensued. The 10-year is up another 2 bps to 2.28%.

    Initial Jobless Claims: -14K to 351K vs. -7K consensus. Continuing claims -81K to 3.34M.

    Mar. Philly Fed Business Outlook: Business activity +12.5 vs. +11.5 expected and +10.2 in February. New orders +3.3 vs. +11.7 prior. Shipments +3.5 vs. +9.0 prior. Employment +6.8 vs. +1.1 prior.

    March. Empire State Survey: Manufacturing 20.21 vs. 17.5 expected, 19.53 prior. Employment 13.58 vs. 11.76 prior. New orders 6.84 vs. 9.73 prior. Prices 50.62 vs. 25.88 prior. - PRICES UP 100% – OMG!

    More on Empire State Manufacturing Survey: The 6-month outlook conveyed a "high degree" of optimism, while the capital spending index rose to its highest level in more than a year. The large increase in the prices paid index suggests manufacturers saw a sharp rise in input costs

    Prices at the pump put in a new high for the year, the country average creeping up to $3.82 from $3.80, reports AAA. (previous)

    Feb. Producer Price Index: +0.4% vs. 0.5% expected and +0.1% prior. Core PPI +0.2% vs. +0.2% expected and +0.4% prior.

    The ECRI maintains its recession call in the face of improving economic data, saying the Great Recession has messed with seasonal adjustment patterns, skewing recent headline data to the upside. "Can unprecedented, concerted global monetary policy action repeal the business  cycle … it cannot." 

    China is easing lending curbs at three of the nation's four biggest banks, insiders say, letting the banks use more of their deposits to make loans after data showed new loan growth at a four-year low.

    China is already in a hard landing, says JPMorgan analyst Adrian Mowat. "If you look at the Chinese data, you should stop debating about a hard landing… Car sales are down, cement production is down, steel production is down, construction stocks are down. It’s not a debate anymore, it’s a fact." 

    Spanish housing prices slid at an annualized rate of 11.2% in Q4 (7.4% previous), a faster decline than even in the midst of the financial crisis. This is a similar pattern to the U.S., where government efforts to repeal the law of gravity prop things up for a bit, but ultimately fail.

    Property woes that hit the rest of the world years ago are now being felt in Australia where home sales volume fell 7.3% in January to an 11-year low. Household debt-to-income ratio of 150% is higher than the U.S. prior to the financial crisis and funding pressures are forcing banks to hike mortgage rates even as the central bank cuts

    The Swiss National Bank holds rates steady at 0-0.25%, as expected, and "will continue to enforce the minimum exchange rate of CHF 1.20 per euro with the utmost determination." (statement .pdf)

    More from the SNB: "On the Swiss mortgage and real estate market for residential property there are growing signs of imbalances. Should these imbalances increase further, this could lead to considerable risks to financial stability." (statement .pdf)

    China Mobile (CHLmeets Q4 earnings expectations, posting a 4.6% rise in net profit as an increase in mobile data usage offset some of the impact of hefty handset subsidies. Growth could accelerate later this year if China Mobile lands a deal to sell the iPhone. 

    Walt Mossberg's iPad review: "These upgrades are massive … using the new display is like getting a new eyeglasses prescription – you suddenly realize what you thought looked sharp before wasn't." Even more, Apple (AAPL) has improved the screen and cellular speed without hurting the battery life. Here we go again, shares +1.3% premarket. 

  35. lflantheman

    10 more at 37.25

  36. exec

    Phil
     
    Another point of view.
     

  37. lolobear

    AAPL – the stock is dropping but both the puts and calls are going up.  What does that mean?

  38. Phil

    80.79 on the Dollar, falling again.  

    Euro back to $1.3056 as the Swiss struggle to maintain 1.205.   Pound not being supported by SNB laying at $1.5648.  Yen gained 1% overnight so (/NKD) is a fun futures short below the 10,050 line if they can't fix that and get back over 83.50 (now 83.32).  

    Dow theorists should note the 1.5% jump in the Transports this morning.  FRO says oil tanker market picking up sharply as China is ordering oil like crazy for SPR.  Would be nice to find out what their fill status is as that will be an epic short when they have to stop.  

    AAPL harshly rejected at $600 – better luck next time ($591).  

    BAC just crossed $9!  

    LOL – This is really JUST like 1999, when we would sit around laughing at all the new highs…   BUT – that went on from 2008, when it was already silly, all the way through 1999, when it was clearly insane and there was no Government stimulus then – just everyone and his dog putting whatever money they had into anything with a .com in the name.  It caused a lot of hiring and money went to the start-ups, who spent money on office space and computers and advertising, etc.   You really can build an economy on confidence – real or imagined and imagined is what the Government, the IBanks and the MSM are shooting for and one of our problems is we know it's BS but we have to just hold our noses and buy things with a little bit of hedging and some serious stop lines – just in case we're not crazy…

    Stop lines will be official on the weekend with new Must Holds but obviously Dow 13,000, S&P 1,380, Nas 3,000, NYSE 8,250 (still not there) and RUT 813 are a good set to go by at the moment.  Above those lines and it's just silly to be bearish.  

  39. yodi

    lolobear
    General if stocks go down puts go up with calls this is normally the reverse

  40. lolobear

    Yodi – i know.  That's why i'm confused as to why both were going up.  Does that indicate a pattern of some sort?

  41. Phil

    SQQQ/Jerconn – Do you mean shorting SQQQ?  If the Qs are going to 3,500, pretty cheap to buy calls.  If you mean shorting the Nas, pretty cheap to buy QQQ puts.  

    AAPL/StJ – Well the "ground-breaking" news is the IPad shipments coming.  They are already sold-out pre-order so it's just a matter of finding out how many AAPL was actually able to ship and then they will do the math and extrapolate X Billions of additional earnings and people will raise their targets, etc..  

    Nat gas was down 64Bcf and I can't imagine where it was cold last week so I think someone cut production.  Nat gas shot up from $2.26 to $2.32 but 64Bcf at the end of winter is nothing to get excited about – I don't even know where they are going to put the gas this summer as we're bottoming about 30% higher than a normal bottom and, with all the shale production – we might blow past the builds of the last two years, which were about 2,200 Bcf and that would put us to 4,600, which is about 800Bcf more than we actually have storage for in the US.

    Working Gas in Underground Storage Compared with 5-Year Range

    EIA Natural Gas Inventory: -64 bcf vs. consensus of -61 bcf. Futures +1.16% to $2.31

  42. yodi

    lolobear
    In my little opinion The market is wayting for something to happen God knows what but there is little volume!!!!

  43. yodi

    lolobear
    Look at AAPL swings from 600 to 590 and keeping up again no direction

  44. Savi

    Phil—would you short /ng here?
    Thanks

  45. stjeanluc

    AAPL / Yodi and lolo – Check the volatility changes….

  46. lolobear

    stj – what is it?

  47. lolobear

    stj – where do i find that out?

  48. williex

    lolobear
     
    it is called volatility…….. as volatility goes up prices go up.  This is why you only buy options that have low volatility.  You sell high volitility as falling volatility will be in your favor along with the stock price.    Very important to know if you are going to play options.  before you trade here you should spend a weekend studying.  CBOE has some very good online classes on options. 

  49. jerconn

    Phil – I actually meant shorting the Nas by going long SQQQ calls, aren't the April's cheap or would you stick with QQQ puts?

  50. yodi

    Volume on AAPL 16 mil

  51. Phil

    Too short/Kwan – Yep, this is not a thinking man's market.  

    Oil almost back to $106, Dollar 80.675 as Euro rammed up to $1.3075.  Gold back over $1,650 too.  

    Wow, CNBC loving Steve Colbert's take on GS Guy.  Do they get that Colbert PRETENDS to be a Conservative?  I find it amazing that many Conservatives don't get the joke of his show – that his entire character is a farce making fun of Conservative broadcasters.  

  52. knightpilot

     
    The Cathay earnings results are a bit misleading as 2010 was the highest profit ever.  Contributing to the 2010 profit was the sale of HAECO an aircraft maintenance company and some other non core business interests.  Cathay has quite a few cargo aircraft on order and is building a new massive cargo terminal in Hong Kong, so seems like they (Swire Group) think freight is still alive.
    Also Cathay is facing new competition as Fed Ex expands its Guanzhou base, and Emerates cuts into the premium passenger market.  Hainan group is also behind the funding of Hong Kong Airlines, which is basically funded by the Chinese Government they are really threatening to take a big piece of the freight market as well.
    Add it all up and I think the profit drop was more than just a lack of demand.

  53. Savi

    shorted /ng into the excitement—can afford lunch now

  54. japarikh

    Phil,
      Any adjustments for the SQQQ and DXD spreads that we entered last week? Thinking of rolling them out a month. Can you comment on the manipulation that goes on specifically during option expiration week. It seems to be that it's the week that is most dangerous to trade b/c the boys are trying to pin some number.

  55. Inkarri1982

    Greece/Rustle – the interesting part of that article was the last line that said that the numbers were not “seasonally adjusted”. I guess warm weather there would’ve made those numbers print better

  56. bobhu

    Should we roll XRT $55, $56 Calls?

  57. stjeanluc

    It's actually quite surprising that the economy is still growing given the fact that basically any government stimulus is now out of the system…. This is an update to a chart I posted earlier this week:

    All these GOP presidents were helped by massive government spending programs! So much for the party of small government. I guess it makes it easier to get out of recession… Obama is fighting with one hand behind his back now!

    And here is another chart:

    It's just a joke… But I am guessing that neither of these charts will show up on Fox or CNBC! 

  58. rustle123

    Phil/CNBC
     
    The first 15 minutes after 9am was devoted to defending Goldman, trying to discredit the entire op ed piece and then saying it's okay because everyone on Wall Street does the same thing. 

  59. David Ristau

    Larry -

     

    What are the current Apple holdings?

  60. yodi

    XRT decided this morning to roll my Mar 53 caller to Apr 56caller spending 2.65 of the 3.10 I received. Note tomorrow last day to roll

  61. Pharmboy

    How much is the economy expanding minus oil?  I would guess that it is very small if at all.  If AAPL makes the earnings season look better than it actually is, then what about the rest.  Just watch AAPL as it seems to be the 800 lb gorilla. 

  62. rustle123

    I thought this was a joke at first, but the Republican party really has gone off the deep end:
     
    http://www.inquisitr.com/205348/arizona-law-will-give-employers-the-right-to-fire-women-who-use-birth-control/

  63. David Ristau

    Larry, Anyone, Stjean -

     

    What are the current Apple holdings?

  64. peedlew99

    lflantheman,
    Did you adjust the 620's?  Or are you basically creating a spread with 575's? 

  65. Inkarri1982

    StJ – I am sorry but maybe you can help me understand – The current fiscal year budget is at $3.8T I believe and the deficit is going to be about $1.3T.  I also believe the budget is about $100B higher than it was last year. 

  66. rustle123

    In the last few weeks, the TVIX has been a very accurate leading indicator of market direction.  It has been slowly creeping up last two days again.

  67. jerconn

    David – from memory, Lflan sold $620 calls yesterday, bought 40 $575 calls at $42.75 today and 10 more at $37.50 today – that's to the best of my memory…

  68. Pharmboy

    David – Iflan sold the 40 620 Cs, at about $1.20.  Bought 50 $550 April Cs for about $39.XX.  See his posts above.

  69. jerconn

    David – those are April calls

  70. stjeanluc

    AAPL / David – Short 20 of the weekly 620 calls and now long 50 of the Apr 575 Calls.

  71. jerconn

    The sold calls were weeklies, not sure if this week of next…

  72. bobhu

    David Ristau/AAPL:  Long 50 Apr. 575 Calls ans short 20 Weekly(this week) $620 Calls.
     

  73. enni_82

    Pharm,
    What's your opinion on oncolytic viruses? Bright future or never going to work??

  74. Pharmboy

    Hello USO….

  75. Phil

    You are missing the fun this week JRW.  

    AAPL/Lolo – Yes, I predict (in answer to your 9:17 question) that AAPL will open right at that $600 mark but then will pull back and hold $583 on a dip and then drift back to the low $590s but, after that, I'm not sure what will happen.  ;)  

    Bananas/Yodi – I have bananas too!  

    SQQQ/Jerconn – I love playing ultras when they go this low but it's a high-risk thing.  You can sell the SQQQ June $12 puts for $1.80 so net $10.20 is another 10% down or 3% up on the Nas to 3,130 or you can JUST pick up the June $11/18 bull call spread for $1 and offset that with a QQQ June $64/65 bull call spread at .70 so you get .40 back UNLESS the Qs drop $1.70 (2%) and then SQQQ should be up 6% to $12 (less possible decay) and your $1 is locked and all you need is another 3% drop in the Nas and you make another $1 up to $7.  If you combine that logic with stopping out the losing side with a 50% loss – it's not a bad spread.  

    Wow, great chart set Jack, thanks!   I wish I had those earlier for my post.  

    AAPL/Lolo – It's not really tradable today.  He went to cash for good reason, you can't always get a clear picture and this ($600) is a very risky spot.  As Pharm notes, you have a range roughly from $559 to $617 where there is almost no resistance so unless AAPL is up to $617 or down to $559 – it can go either way very fast.  I have more faith in the $600 line holding (per my 5% rule) and, using that, we have a run from the $400 breakout of 50% and $200 so we can expect a $80 pullback (20% of the run) to $520 but that doesn't mean we can't first get a 20% overshoot to $680 so the move is to play AAPL short off the $600 line with VERY tight stops above it.  

    Oh, there's Lflan going long.   We'll see how that works out.  

    Neutrino Messaging/StJ – I already use quantum communications with Tina.  At any given moment I may or may not be listening to her…  ;)  

    PCLN with a nice pop on my short call.  China is very far away so no one cares about the actual news, just the word CHINA! means it must be good for stocks.  

    Nudity/Star – I totally agree but watch out when that small boy finally points his finger…  

    Greece/Rustle – Also far away and, Hey – look at AAPL!  

    How is it that people are not freaking out about a one-month, 95.59% increase in prices paid by Manufacturers?  PDF, page 4.  

     

    The prices paid index rose a steep 25 points to 50.6 in March, suggesting that manufacturers observed a sharp increase in input costs. The last time the index was this high was in summer 2011. The prices received index inched down two points to 13.6, suggesting a modest increase in selling prices. Employment indexes were positive and higher than they were last month, indicating a continued improvement in labor market conditions. The number of employees index rose two points to 13.6, and the average workweek index climbed 11 points to 18.5.

    That was the summer of 2011 when the S&P fell from 1,370 to 1,074….  I know – ancient history, blah blah – this time is different, new paradigm…  

    EDZ/Japar – I'd roll while the VIX is so low and we're toppy-looking.  If you're going to be bearish and put money into shorts – then be bearish and put money into shorts.  Moves up tend to be slow, moves down can come 5% at a clip – not something you want to miss so, if you are going to commit bearish, waiting can cause some serious regrets if things do go your way.  

    TOS/Sage – I'm good.  Have you tried restarting?  Sometimes, if you don't do your update, it starts to get flaky.  

    Shatner/Ink – I think he's taking a break as he works on new show but I can't imagine either one of them wants to give up on that gig.  Although it is possible he's cashing out and they wanted an excuse for why their top spokesman is doing the smart thing and taking his Billion off the table (3% of the stock).  Also, he's not the only one:  

     

    Date Insider Shares Type Transaction Value*
    Mar 14, 2012 FINNEGAN DANIEL JOfficer 2,601 Direct Automatic Sale at $646.14 – $652.46 per share. 1,689,0002
    Mar 12, 2012 FOGEL GLENN DOfficer 1,700 Direct Automatic Sale at $645.61 – $651.53 per share. 1,103,0002
    Mar 5, 2012 CURRIE ADRIANOfficer 500 Direct Automatic Sale at $645.42 per share. 322,710
    Mar 5, 2012 DOCTER JAN LDirector 79 Direct Disposition (Non Open Market) at $645.86 per share. 51,022
    Mar 5, 2012 DOCTER JAN LDirector 366 Direct Acquisition (Non Open Market) at $0 per share. N/A
    Mar 5, 2012 SODER CHRISOfficer 5,197 Direct Automatic Sale at $645.90 – $648.92 per share. 3,365,0002
    Mar 5, 2012 MILLONES PETER JOfficer 900 Direct Automatic Sale at $646.16 – $648.86 per share. 583,0002
    Mar 4, 2012 FOGEL GLENN DOfficer 3,671 Direct Disposition (Non Open Market) at $645.86 per share. 2,370,952

    TLT/DC – Maybe just a bounce on the way to oblivion.  Fundamentally, it's ridiculous for our rates to be this low.  From the news above, foreigners are fleeing and it's pretty much only the Fed and the banks the Fed funds buying our notes.  People just aren't that dumb and we're starting to look riskier and riskier as we rack up another $1.5Tn in debt this year IN ADDITION TO the $1Tn+ the Fed is adding to their balance sheet.  We may not count our Central Bank's balance sheet as debt but the rest of the World sure does.  I have been saying for ages that the rest of the World will wise up to this scam at some point and we broke our channel so, if we don't bounce by next week – I'd look elsewhere for a bullish play.  

    USO/Jrom – I hope you caught my comment about $105 holding – you have to respect those lines.  Now back at $106 and we'll see if they can get over it but nat gas back to $2.30 already, despite the Dollar down to 80.70 so I'm pretty confident on long puts on oil as well as shorting them at the .50 lines ($106, $105.50…). 

  76. stjeanluc

    Inkarri – These figures also include spending at the state and local levels…

  77. kustomz

    Anyone else watching oil yoyo..strange stuff going on

  78. jabobeast

    Phil--what could possibly make CMG or PCLN ever move down? WTF? Every f n day they seem to hit new all-time highs??? Is AAPL going to take them over?

  79. edro00

    UK TO COOPERATE WITH U.S. ON BILATERAL AGREEMENT TO RELEASE OIL STOCKS -UK SOURCES
    RTR 11:25 BRITAIN EXPECTS FORMAL REQUEST SHORTLY FROM U.S. TO RELEASE EMERGENCY OIL RESERVES -UK SOURCES

  80. stjeanluc

    Wow, oil smacked all the way to the S2 line at 104!

  81. Savi

    fyi—1/2 uso puts filled at 1.98-

  82. Pharmboy

    1/4 out of USO
     

  83. tommyt

    anyone know what caused oil to drop 1.75 in 30 seconds weeee.

  84. peedlew99

    Has anyone else been following the YPF story out of Argentina?  
    The oil major was state owned, then sold to the spanish a few years back.  Recently El Presidente has been making noise to renationalize… crushing the stock (which pays a fat dividend).  Argentina caps oil and gas prices, right now at about 50% of real price… so there has been no development for years… and they're blaming that on YPF.  This morning a leader from one of the states yanked YPF's contract to drill… then hilariously also said they won't be allowed to abandon the fields!
    Oddly, YPF is way up this morning.  go figure.

  85. peedlew99

    hey!  What happened to oil at 11:26????

  86. Pharmboy

    HTF at its best…..USO right of S2 pivot.  Unreal.

  87. Phil

    FAS Money – Act of faith at this point.  We're going to pin something tomorrow and I super-doubt it's $16 and we're at $15.60 now on XLF so I don't see any point in not waiting.  

    IWM Money – RUT barely holding 820 and we'll just roll that March call tomorrow.  

    $5KP – Damn, TLT killed us and it ain't coming back.  Oh well, we'll see what we can play next week.  

    $25KP – Same old, same old.  Busy day tomorrow but watching and waiting for now.  Don't forget to take those USO profits, which just topped out at $2 as that's $4,000 cash back in our pocket and we'd be happy to DD again if they shoot back up but the key is we have reduced our net entry back to $2 on 20 and we still have a month to play.    

    VIX back to $15.20 (VXX $22) despite another big bullish move in the markets.

  88. peedlew99

    was it because Pharmboy got out??

  89. stjeanluc

    $25KP – Remember we had a target of $1.99 for the USO puts to take off 1/2 the position. We got to $2.00 so I have to assume that 1/2 was gone on that spike!

  90. Phil

    The problem with USO is that WE are the buyers at $104 when we get out of our short positions.  That's why I hate having too many people following the same trades – makes for messes when we end up stopping a perfectly good drop.  

  91. bobhu

    Phil, FAS is unstopable, I have short Apr. $99 Calls with loss.  what do you think buy Apr. $100/108 BCS for $4.45 and sell Apr. 95 Put for $3.20 to cover.  $1.15 for $8 spread?  TIA.

  92. peedlew99

    Wow.  
    Phil, Take the short oil money and run here?  Or 1/2 out?  I shorted USO yesterday morning.

  93. Phil

    Oh, rumors SPR will be released again – Woo-hoo!!!! 

  94. Pharmboy

    SWEET MOTHER OF ….. 

  95. kustomz

    …BABY JESUS!

  96. kustomz

    Mixed signals …forexlive
    “Details of the timing, volume and duration of the emergency drawdown have yet to be settled but a detailed agreement is expected by the summer, one of the sources said.”

    …Zerohedge U.S., U.K. AGREE TO EMERGENCY OIL STOCKS RELEASE, REUTERS SAYS

  97. biodieselchris

    AAPL 595 call and CMG 410 call in the bag: betting this insanity follows through at least through tomorrow. I'd bite on PCLN too but the 660 call is still over $3.
     
    Shatner is back – the latest commercial features his voice only though. It was LOL funny too.
     
    Picked up some of Phil's protection plays (July puts). MA, QQQ, LVS. Added JNK 37.74 puts to that as well, although this fund manipulates the price by lowering the dividend every month.

  98. Phil

    POV/Exec – I mentioned that yesterday.  More volume going down than going up is NOT a reason to be bullish.  They make a good point that you shouldn't worry that it's low volume as long as you are along for the ride and that's true – just make sure you only have positions you can get out of once the ride stops.  

    AAPL/Lol – With the Big VIX this low, the internal VIX of AAPL has more of an effect so, when AAPL dropped sharply, their internal VIX shot up and both puts and calls shot up in price – counter-intuitively on the Call side, of course.   

    By the way, oil dropping because the SPR is released is GOOD for the markets as it's not about a slowdown (even though I think the timing is masking a slowdown that was going to take oil down anyway) – it's just another form of manipulation as we challenge China for the title of the World's Most Manipulated Economy.

    Nat gas/Savi – It's too low to short but it could go much lower.  In Europe last summer, they had to PAY commercial users to take gas out of the pipelines as they were over capacity.  So they actually paid people who had commercial storage capability to fill up their tanks with NG so $2.30 can fall to negative .30 if the trend goes that way but I think CHK et al will cut 10% to 20% of production long before they let that happen.  On the other hand, if the Government actually passes some kind of Pickens plan – they could double overnight.  LONG-TERM, I'm pretty sure that will happen so I like CHK and if they drop 50%, I like them more but, in the short run – nat gas is a con flip.  

    CNBC rushes the oil apologists onto the air.  Too funny.  Last time Obama released the SPR was June 24th last year and oil fell from $100 to $75 in August and was still $76 in October and Gasoline fell from $3.17 to $2.45 around the same period – all into the last market run-up.    So compare that with the jackass on CNBC saying that this release won't do anything for more than a couple of days and other TOTAL BS!  They just lie to your face – constantly.  Doesn't matter what the facts are because they assume no one will check – it's disgusting!  

  99. stjeanluc

    USO and Oil / Phil – There might also be a lot of algo buying as both oil and USO stopped on support lines!

  100. Weasle

    So is the falling dollar the excuse for propping things up today, even though the rising dollar yesterday almost nothing to drop the market (DJIA anyway)?

  101. biodieselchris

    Oil: what a bunch of crap to pull on the penultimate options day. Now the markets will run and put holders get screwed.
     
    I just realized if AAPL drops 20% tomorrow I'll turn $100 into $300,000. Not that I'm hoping for a Black Friday or Flash Crash or an iPad delay of some sort ….  :) :) :)

  102. jerconn

    PHil – If like me I'm not in USO right now, what do you recommend – the April 41 puts?

  103. dpastramas

    Oil back at 105.2$!!!! WTF?!?!?!

  104. Inkarri1982

    Apparently the WH is saying the report on the oil release is innacurate according to ZH

  105. Phil

    11:42 AM The U.S. and U.K. have agreed to release emergency oil stocks, reports Reuters. Brent Crude (BNO-2%, WTI Crude (USO)-1.1%

    11:54 AM More on the reported oil reserve release: The story is based on the say-so of two British sources and a formal request from the U.S. to the U.K. is expected "shortly." This follows a Wednesday meeting of President Obama and PM Cameron. Details on the timing, size, and duration of the drawdown have yet to be settled.

  106. yodi

    biodieselchris
    counting birds on the roof

  107. dclark41

    USO: Perfect example of "sell into the excitement" regardless of the reason USO dropped.

  108. biodieselchris

    Yodi, what? to make 186,000% in one day?
     
    you don't say…

  109. Pharmboy

    SPX 1400.  There you go boys.  Now, whaddya gonna do when they come 4 u?

  110. jabobeast

    FU EDZ!!!

  111. lflantheman

    AAPL portfolio:   Noon update.   Back into the fray.  I don't mind telling you that my entry this morning sucked big time.  Not the decision to re-enter, but the timing.  Could have been much better.   Anyway, I'm the owner of 50 April 575s, which I will hold until profitable.  And they will be, as AAPL will certainly exceed 625 before April expiration.  If it they become profitable sooner, then I'll cover, to enhance earnings.   I have considered some weekly covers today, but tomorrow may out some news about first day sales that could 'blow my covers' so to speak.  

  112. zeroxzero

    Yodi:  Internet:  I'm on a Carib island, and the phone line-based internet was too slow and too erratic.  I hooked up with the local cable TV company service, they had just added a 10MB service [download; upload, 1MB] which comes in at an honest 9.2MB.  I had to dig a short trench from the street, but the good news is that I'm now hooked up to a Miami ISP, so I can get Netflix [hey, I've got kids, not the stock!].  Outages are very rare.  Don't know what your TV situation is there.

  113. zeroxzero

    Oil: it's the Ides of March today.  "We come not to praise oil, but to bury it."

  114. Pharmboy

    Well, they need to show good earnings this quarter, they got it.  20% in the first Q, now they can coast the rest of the year, no?  Sickening. 

  115. yodi

    biodieselchris
    Good if these birds are in your hand !!!

  116. Phil

    Cathay/Knight – Good point but passenger traffic is down, that's the key.  Cargo down too but it's the passenger sales that PCLN needs.  Also, if airfares come down, their percentage goes down with them – that's a double hit on their revenues but it doesn't cost them a penny less to provide the service.   Obviously not that anyone is buying my premise so far as they are up another 10% this month.  

    Good play Savi – In and out is the way to go.  

    Disaster hedges/Japar – Not until next week when we see if things are just going up and up or if we snap back after expirations.  As they are hedges against bullish positions, the first thing we need to do is make sure we are taking more bullish positions and THEN we put a little more cash into the hedges to tighten them up.  As to the manipulation, when they run the market up like this into OpEx, it's usually because they are selling calls and buying puts ahead of a takedown.  Don't forget, if you are a fund that bought PCLN for $550 last month and you know the only reason it's at $650 is because you jacked it up.  Then you don't care that the VIX is only 15 because you are selling the $550 calls to some sucker for $120 to lock in your gains and then you will let PCLN drop like a rock, kill your caller worthless and now you have a $430 basis with PCLN at $550 and the VIX is at 25 and you can sell $550 calls for $30 while it drifts along at a price you don't mind supporting.  In short – it's good to be the king.

    XRT/Bob – We're just going to roll them straight across so tomorrow is fine but today is fine too

    Government spending/StJ – Funny how 70% out of 87% of Government Spending increases were under the Reps.  Well, funny in that tragic sort of way that reminds us what total suckers American voters are.  

    CNBC/Rustle – It must really piss you off, as one of the Wall Street guys who doesn't rip off his clients, to hear that BS.  

    Momo heaven (and Jabob Hell) today with CMG at $407 and PCLN at $660 – F THEM!  NFLX up 3.3% too – why not?  

    XRT/Yodi – Good roll. 

    Economy/Pharm – Ex AAPL ex bank reserve reversals earnings are already negative.  You want to take oil out too?  

    Birth control/Rustle – WOW!  I guess the Arizona Republicans took this literally:  

  117. kustomz

    Never trust a midday market high..I said thur or friday for market tops JRW thinks its next week…Need to see high volume to confirm ..

  118. Pharmboy

    AAII sentiment…to the moon.

  119. stardawg

    HERE COMES THE LUNCH TIME ROLL….BOUGHT TZA 18.07

  120. zipla

    Hi Phil,
    I'm short EDZ March 16 puts, expiring tomorrow. The roll to the April 16s is about even. Is that the best way to play this?
    Thanks,

  121. angelcur

    as spx crosses 1400, s&p says improbable ANY amount of economic improvement will bring back US AAA rating…ha

  122. angelcur

     German Debt to Grow to 2.14 Trillion Euros. Germany's debt will continue to grow this year and next, confounding the hopes of Finance Minister Wolfgang Schaeuble that it is stagnating, citing a forecast by the IfW economic institute. Debt-crisis measures alone will add 54 billion euros to accumulated debt this year and help bring the total to 2.14 trillion euros, or 81.6% of economic growth, Kiel-based IfW's calculations show. Debt will grow by another 85 billion euros next year. The euro's stability rules stipulate that the debt of individual member states must remain within 60% of annual gross domestic product.

  123. rustle123

    CNBC/Phil
     
    You have no idea how much GS frustrates me as well as that vampire Cramer on CNBC.  There are many good advisors but most of them do not work in any of the big firms.  That's why I went independent 8 years ago.  They would try and get me to push people into funds or bank stock they were doing deals on.  It was pathetic.

  124. Tarpoon88

    stjeanluc, Phil, the daily 25k portfolio summaries are very helpful, thank you. 

  125. Pharmboy

    RIG!

     

    For the question regarding viral attack on cancer (ONTY, etc) I think they will work, and they will get better as time goes on.  I think cancer will be controlled to some extent in the future.  Maybe not in our lifetime though.

  126. Pharmboy

    BDC – those MA 415 puts might, just might, come in….my AAPL 555 puts are up, barely.

  127. rainman

    Restickulous!

  128. Pharmboy

    SPX/SPY is still outside the BB.  Retail must be flooding in the market.

  129. biodieselchris

    Iflan maybe you should just buy the Jan14 – 890's for 32 and walk away

  130. cwan120

    Why do I have a feeling that this board sounds more and more like Family Radio aka Harold Camping?
     
    Just a joke… a joke…  I hope…

  131. hextra8

    Phil -
    I have TLT March $115 calls, expiring tomorrow. Do you recommend a roll? Thank You.

  132. Beaufleurs

    Lflan, what about for some of us, maybe buying some april bcs just to be in the game?  I'm still holding some april and july bcs, but feel like I should maybe add more contracts at this point.  

  133. Pharmboy

    High yield bond funds are selling off hard…..money coming out of them as well….PCK, NAC, etc.

  134. Pharmboy

    That doesn't make sense on the HY funds, they earn more than the S&P on a steady income, although the return on the S&P is higher since the beginning of the year.  I smell fish, and this one is really rotten…………..

  135. peedlew99

    check out the WICKED RSI divergence on the big 3!  Damn.  Wear out the bears just in time for an actual correction?  Maybe.

  136. zeroxzero

    There's a good performing fund called Atlantic Investments that was brought to my attention.  They hold, inter alia, Energizer; Joy Global; Ashland; Flowserve.  Any comments welcome.

  137. flipspiceland

    @Felipe
     
    Now, now……..my short puts on CMG are one of the most consistent highlights of my trading p'folio in some time.
    "…..today with CMG at $407 …..f' them!…."
    How about a little respect for a real performer, with no significant drop in over a year?
    Forsake WFR,  embrace CMG!

  138. Phil

    Momos/Jabob – The only thing that will take them down, other than a shift in sentiment, is some sort of misstep on earnings, guidance, etc.  That's why I like the long puts that are way past earnings – gives us loads of time to be right.  CMG is fast food with a p/e of 60 vs 18 for MCD so it's simply NOT sustainable as they get bigger.  EVEN if they get 3 times bigger – if the p/e comes down to 20, they end up going nowhere so they have to get 3x bigger and still have prospects for much more growth just to sustain this kind of valuation.  This is not a dot com company, this is a company that makes food and needs people to come and buy it.  KKD, SBUX, GMCR (who used to have stores), BWLD – they all go through their crazy to the moon phase and they all crash horribly at some point.  The trick is to just keep riding the wave and take the loss and reset the shorts at a higher strike over and over until it's time for reality.  Unfortunately, it can go on for a very long time – especially in a bull market.  

    BWLD is a good one to look at as they went from $10 around IPO to $45 in 2007 and then crashed that year back to $20 and then restarted back to $45 but then got caught in the big crash and back to almost $10.  I was pounding the table on them back near the IPO price and now they are $90 BUT they grew into their valuation and their PE is 23, not 60 and they only have 827 stores and a $1.6Bn market cap while CMG already has 1,230 locations (including one ShopHouse) and a (*choke*) $13Bn valuation.  To be fair, CMG does have 4x the earnings ($200M) of BWLD ($50M) so maybe you can argue that $8Bn is fair but $13Bn – as I said: *choke*…

    At least PCLN actually earned $1Bn to semi-justify their $32Bn valuation.  But that means that CMG would be over-valued, even if they were a dot com.   Let's not forget that AAPL's p/e is 12 going forward – to run up PCLN or CMG just because AAPL is going up is ridiculous but people don't differentiate – the logic is, if AAPL can go up 66% then stocks that are only up 30% must be a great deal.  What can you do except let the sheeple buy and short them at the tops?  

    Got that $105 line to short on oil again.   Dollar 80.54 with Euro jacked up to $1.308 and Pound back over $1.57.  

    YPF/Peedle – That's why I don't touch those local oil cos in that part of the World. 

    FAS/Bob – Whatever the loss is, that's what you should roll the $99 short calls up to.  So they are now $12 and, if your loss is $8, you can sell the $89 puts for $2 and sell the $110 calls for $6.  Once you get behind, stop trying to win and concentrate on getting even.  Your spread is good but if you are looking to cover the loss on the $99s, you want to go way further out in time and give yourself a chance to roll like the Jan $105/130 bull call spread at $10, selling the $75 puts for $11 so you have a $1 credit and $26 of upside protection against your short caller and then you can roll him along to whatever makes you comfortable.  

    Take the money and run/Peedle – Really, you have to ask?   ALWAYS sell into the initial excitement.  We are in doubt (that this is the bottom) but $105 was our immediate goal, as was $1.99 for the USO puts on 1/2 so of course you sell half – it has to be a reflex or you will simply miss these opportunities.  

    AAPL/BDC – I wish you luck on that short play!  

    USO/Jerconn – Our SCO spread in the $25KP is still around where we started.  That's probably a better bet than chasing USO at the moment.  

    AAPL/Iflan – I think your original instinct to go to cash was a good one.  $600 is a tough nut to crack.

    Ides/ZZ – LOL.  

    EDZ/Zip – I'd pay .50 to roll out to July $14 puts ($3.80), may as well go for some position but nothing wrong with a straight roll if you think we roll over sooner than later.  

    S&P/Angel – That is good timing.  As to Germany, all those rules will be ammended/suspended as they print more and more money.  

    LZB making new highs.  That was one of our September's Dozen I think. 

    GS/Rustle – Hopefully this news is good for your biz, maybe wake up/wise up a few people. 

    Happy June 2008 level on the S&P – Ah, those were the days!  

  139. Phil

    No cross back at $105 oil, now trying $105.50.  Why should the non-confirmed release of the SPR be bullish for oil, which was testing $105 before the rumors started?  

  140. Pharmboy

    Why, Phil?  Why not? B'C they are squeezing all the juice out of the fruit until there is nothing left but useless, bitter scraps. 

  141. terrapin22

     Phil / RIMM – I'm in 2014 20/30 bull call spread since mid Feb.  Down about 30% on long calls.  down 15% overall.  plenty of time to go here.  just wondering if you would adjust.  thanks. 

  142. stjeanluc

    Anyone sees a correlation in that chart?

    If I didn't know better I would say that the Bush White House manipulated the oil market by adding 30% to the SPR in order to create shortage. But that would probably be seen as partisan!

  143. biodieselchris

    CMG with an $8B valuation would truly be a dream come true.
     
    It's funny that I have to dream about reality.

  144. angelcur

     one of the guys i follow on twitter saying aapl back to 20% of Naz 100..that is near where they rebalanced last time.

  145. Canuck

    Phil/SPXU,
    got an early assignment on my SPXU Mar $12 puts – should I hold the etf, or sell and sell the Apr or Jun $12 puts?  I had been rolling these since Jan from a hedge gone bad.

  146. angelcur

    bush had oil buddies obama has wind buddies..they are loyal to their friends…(bathos)

  147. biodieselchris

    What's up with this "It's So Warm" talk. I ran two days ago in sideways blowing sleet (that sucked), and it has't cracked our January average high here in 2 weeks.
     
    sucks

  148. Pharmboy

    BDC – yeah, but in the midwest they are having record temperatures (80 in March!) and tornadoes are a bit ahead of schedule…..UR weather for the most part does suck!  :)

  149. rainman

    bio / warm — The costal range of oregon got 5" of snow the other day. Feels like a pinapple express here in the Portland area today.

  150. angelcur

    so gradually th eboard is frustrated with not having more bullish exposure..osme are talking about getting long..(you know hwere i was shorting it!!) seems like with the level of angst rising here we could format oursellves as an indicator..phidas overwrought/overbold indicator

  151. Pharmboy

    AAPL red…say it ain't so Joe!

  152. biodieselchris

    I'm burning enough NG at home right now to keep global prices up all by myself. Freezing!

  153. Phil

    Thanks Tarp.  

    RIG/Pharm – That might be a nice bull play for the weekend set.  

    Camping/Cwan – It's hard not to discuss how silly this is but I do hope everyone is buying SOMETHING, nonetheless.  You just can't fight the herd on this one and there should be all the time in the world to be short when it all falls apart.  

    TLT/Hextra – It's not really a roll, it's a re-bet, isn't it?  As I said above, I think TLT has gotten dangerous and if you want to make a bearish bet on the market (which is what that is) then one of the above put plays are probably more fun.  

    Rotten/Pharm – To the core.  

    TLT/DC – Damn, if that's how it performs with huge inflows – I'd hate to see what happens when money flows out! 

    RSI/Peedle – That's exactly what they do.  We won't know until next week if this is real or a blow-off top.  Still feels like a blow-off top to me but nothing to do but let it play out at this point.  

    Atlantic/ZZ – If you have a link I could take a look.  Generally I feel, if you have time to watch, that you are better off making your own basket and, of course, selling calls for income.  

    CMG/Flips – Congrats on those but, at some point, you have to admit it's a bit much.  

    RIMM/Terra – IF you are going to stick with them, THEN you want to adjust but wow, do they suck.  Down 15% only I think I'd walk away and buy HPQ, who have a better chance of recovering (although less chance of being bought).  On your spread, you can roll the $20s down to the $13s for $1.85 and roll the $30s to the $20s for $1.30 so net .55 to move down $8 is a good deal, even though you sacrifice some upside.  

    SPR/StJ – I was screaming about that for years while Bush was doing it.  He added 200Mb but, more importantly, the wars burned another 150Mb/year at the same time, overall, he added over 1Mbd of demand between 2003 and 2008, when he finally filled the reserve to capacity (and he tried to get approval to double the size of the reserve and fill that!).  

    AAPL/Angel – Does it work that way?  I guess it does, that was the problem last time, AAPL got too big and they cut it back (didn't last long).  That means if AAPL falls, the results could be really catastrophic.  

    SPXU/Canuck – So your net is about $12?  At $9.24 I'd sell the Jan $10 puts for $2.65 and buy the $10/14 bull call spread for .85 so your net on a re-entry, worst case is net $8.20 and your upside is $5.80 if they get back to $14 and you get $1.80 for just making $10 (keeping what's in your pocket on the spread).   So, it's a bet S&P doesn't hold 1,400 for the year and, if they do get to 1,600 (up 14%) and SPXU falls 45% to $5, don't you want to DD at $5 and have 2x at net $6.60 anyway?  

    Wind buddies/Angel – Oh yes, same exact thing.  That's like saying Obama wants to spend $120Bn a year on health care to heal people while bush spent $600Bn a year killing people so they are all loyal to their friends – no different…   Who are we to judge, right?  

    Warm/BDC – It's 50s in NJ with 70s forecast for next week.  I call it warm.  

  154. stjeanluc

    And to think that these AAPL Apr 600 calls were $0.21 when Apple crossed over $400 back in late December. They traded at a high of $32 this morning. That would beat inflation even in Zimbabwe…

  155. lunar

    so this is what an AAPL correction looks like…slow and steady.

  156. stjeanluc

    Lflan, aren't you worried that this AAPL move could turn more violent if people decide to start protecting their profit from that parabolic move!

  157. angelcur

    not quite what i was saying..but my bad! i gave you an opening for a tendentious twist..lol!…but for sure bush had his oil buddies i think he was a wild catter warnt he?

  158. angelcur

    db removes apple form short term buy list…XLF/AAPL fighting again

  159. kustomz

    Lunar I would be careful…AAPL correction, could be a setup to run up the markets this afternoon..

  160. peedlew99

    HEY… been away for a while.  look  AAPL down!  Did that asteroid hit??

  161. lunar

    kustomz, thanks.  i'm actually hoping for that because i also, independently of lflan, entered the fray this morning with long calls, although they are july.

  162. peedlew99

    Those AAPL 620's were quick easy money.  A bit of a gut check this morning… but 27 cents now

  163. jmm1951

    Why me, God?
    Day started out OK with a quick short of AAPL at the $600 line and McMuffins paid for. With nothing much to do, I started  to play around.
     
    With NOK starting the day at $4.93, I felt that with the ex-div date for the annual dividend of about 5% coming up in early May, we were not going far below $5, at least not for long. Having 2500 shares, I thought it would be a nice idea to turn them into cash, sell April $5 puts and possibly get my shares back before dividend date if assigned, or keep the premium if not assigned and buy them back before ex-div, so I sold the shares for $5.03 (up 2% on the day). So what happened? Apparently someone came on CNBC and talked about Nokia planning a Windows 8 tablet computer (nothing particularly new in this news to anyone who follows NOK) and the stock promptly rocketed up as high as $5.40, and has now settled back to  $5.25. Since I was long 30 contracts of the $5 2014 calls  uncovered and short 25 contracts of the April '12 puts, not an unmitigated fiscal disaster on the day, but a bit of a pisser all the same.
     
    There is a house in New Orleans… not to do what I have done…

  164. stjeanluc

    FAS is quite the portfolio killer today…. FAS Money and the $25KP taking on the chin even with the short puts and the BCS! These short Apr calls are moving fast!

  165. 2can

    Phil / I read your answer to Bob re; FAS, And I think I  have a similar situation, with another added problem.  I'm way to short in my account, and my naked April 95 FAS short calls are eating up around 12,000 per contract in margin.  Is there something I can do to lower my margin requirements in this trade. and cover it too. If I close the trade, I loose 50%.  I'm about out of margin, so my options for getting more bullish are limited by the  FAS situation.

  166. angelcur

    jmm thats a heavy burdon!

  167. lflantheman

    10 April 575s at 32.20

  168. Phil

    12:53 PM European shares close mostly in the green and pretty much at session highs. Stoxx 50 +0.8%, Germany +1%, France +0.5%, Italy+1.2%, Spain +0.4%, U.K. -0.1%. The euro +0.4% at $1.3087

    1:00 PM On the hour: Dow +0.28%. 10-yr -0.03%. Euro +0.42% vs. dollar. Crude -0.34% to $105.08. Gold +0.86% to $1656.95

    2:00 PM On the hour: Dow +0.22%. 10-yr +0.04%. Euro +0.54% vs. dollar. Crude -0.29% to $105.13. Gold +1.17% to $1662.05.

    The euro gets its tail in the air on comments from the ECB's Ewald Nowotny who says he sees no need for further central bank action and rate cuts are not a point of discussion right now. The ECB has done its job, he says, other players must do their part. FXE+0.4%.

    More on Adrian Mowat's China hard-landing call: While Beijing has plenty of fiscal and monetary flexibility to combat a slowdown, easier policy might just lead to more capital formation which China already has too much of. It's nothing to be scared of, he says, as it's already being reflected in equity prices, which are getting very cheap. (video)

    A bit of a drastic move, China sacks Bo Xilai as Communist Party secretary of Chongqing (pop. 30M). Trying to reduce wealth disparity, Bo made Beijing uncomfortable with his Cultural Revolution-ish policies. "The strongest indication of elite tension we have seen since the arrest of Chen Liangyu," says Victor Shih. 

    The IMF formally approves a €28B loan (€10B of which is money from the 1st bailout) to Greece – it's share of bailout #2. The decision allows for the immediate disbursement of €1.65B to the country. The IMF's share of this rescue is a good deal less than the first go-around.

    Don't be fooled by stress tests into thinking U.S. banks are nearing recovery, Roger Nusbaum warns, comparing the sector to tech stocks – "earnings have gone up plenty since 2000… yet there are plenty of stock prices just a fraction of what they once were." Nusbaum also says the argument that valuations are cheap on a book value basis is flawed since more real estate writedowns are likely to come.

    Shares of Peabody Energy (BTU +3.8%) jump higher on reports that Berkshire Hathaway (BRK.A +0.2%) is seeking a buyout of the company. - Very annoying how Buffett keeps buying up companies I like!

    Shares of coal companies outperform as a group after economic data and M&A chatter helps take a bit of the stink off the sector. Gainers: ACI +4.7%PCX +4.6%BTU +3.7%ANR +4.4%.

    Stung by low U.S prices for oil (WTI), Canadian producers are increasingly turning to rail to transport product and receive the world price (Brent). Baytex Energy (BTE) is among those betting the wide differentials will continue, now moving 15% of its heavy oil production by rail, and expecting to do more.

    Sears (SHLD +2.5%plans to close 62 more stores in the first half of this year, in addition to the ~120 poorly performing Sears and Kmart stores the retailer has already announced it will close. (also

    Though PC shipments fell Y/Y in Q4, IDC estimates PC CPU sales rose 14.2%, thanks in large part to a 9% increase in selling prices. The increase stems from the adoption of Intel's (INTC) Sandy Bridge and AMD's Fusion, which pack integrated graphics processors. Intel is believed to have gained 30 bps of share in the desktop CPU market from AMD, and lost 80 bps of share in the server/workstation CPU market thanks to AMD's Bulldozer launch. (Q3 data)

    Research In Motion (RIMM +2.5%) shares rise amid news China Unicom (CHU +1.7%launched internet service for BlackBerry users. The gain comes despite an MKM report pointing to channel checks which note "abnormally" high warranty returns at Verizon for BlackBerry 7 models; many are said to lock up right out of the box and need immediate replacement.

    China will be the world's largest smartphone market in 2012, says IDC, as the proliferation of cheap Android (GOOG) phones lead it to account for 20.7% of global shipments (the U.S. is pegged at 20.6%). The data underscores Apple's (AAPL) need to boost itsChinese share by expanding its carrier partnerships (III), though the iPhone's high unsubsidized price will make it tough to gain share with lower-income consumers.

  169. peedlew99

    YPF now up 6% with no stated reason.  CRAZY?  I was about to cut the loss yesterday.

  170. Phil


    Cautioning a surge in mobile capex is unlikely in spite of
    soaring data traffic, Auriga expects global carrier capex to rise at a modest 2%-4% pace in 2012. As a result, the firm recommends buying telecom chipmakers such as Cavium (CAVM) and EZchip (EZCH), whom it thinks can overcome a subdued capex environment by gaining share and entering new markets (small base stations for Cavium, edge routers for EZchip). (previously)

    17% of the world's population used a social networking site in 2011, estimates eMarketer, and it sees that number rising to 20.4% this year. Facebook (FB) has single-handedly been responsibly for much of this growth: though the company still gets over half of its revenue from the U.S., only 17% of its user base is expected to be American in 2012. 

    Though iTunes gets less attention than the Mac, iPhone, and iPad, it's now closing in on an $8B annual revenue rate, thanks largely to skyrocketing mobile app downloads, and Apple's (AAPL)superior ability to monetize them. Based on the some back-of-the-envelope math, Eric Jackson thinks iTunes could be a $32B business by 2015, with an Apple TV possibly delivering additional upside.

    Why I left Google (MSDN

    ANALYSIS: When a Congressman Becomes a Lobbyist, He Gets a 1,452% Raise (on Average)(Republic Report)

    Three lunchtime reads:

    1) Citi's risk: Global business

    2) Bank of America: Too crooked to fail

    3) New iPad: A polishing of the old

  171. txchili

    AAPL I have some $400 Jan 13 calls that are uncovered. I think it continues to go up, but want to protect some profits and try to hold thru expiration to get long-term capital gains. I know use your suggestion, when in doubt sell half so I am thinking about covering 1/2 now and waiting on covering the rest. Any other suggestions?
     
    Thanks

  172. Phil

    Barry's key takeaways on GS Controversy:

    Publicly Traded Banks: When firms shifted from Partnerships to publicly traded banks, their priorities changed.
    Profits First: Meeting quarterly profit estimates became job 1; everything else, including the corporate culture, was secondary.
    Not Just Goldman: GS may have lost $3b in cap yesterday, but I doubt they will lose many clients. Where are they going to go, to the choirboys who work at Morgan Stanley, or to the philanthropic organization known as Deutsche Bank?
    Derivatives are Opaque: The issue with complex products is lack of transparency. Derivative fees are opaque, the products are complex, and muppets clients do not understand how much margin is built in.
    Counter-Party vs Fiduciary: The complexity of these products often leads to clients relying on their salesman. They shouldn’t — they are not your adviser, they are your counterparty.

    This is the last I plan on discussing this topic for the foreseeable future . . .

  173. scottmi

    CHK – October $20 puts offered for $1.11. Nice way to get an October buck+ cover, for a 55% return on just $200 margin hit currently.

  174. yodi

    lflantheman
    I see you have a very great buying spread on AAPL I still have some short 595 callers due tomorrow in the stable showing small profit now which direction are we going tomorrow???

  175. ricpar

    Hi Phil, Any thoughts on SDRL? Have done well with it in the past..

  176. peedlew99

    I'm a big fan of SDRL

  177. Pharmboy

    WOW…..A 40-year career at Johnson & Johnson can really pay off, especially if you cap it with a 10-year stint as CEO. That's the company's explanation for the whopping $143 million retirement package owed to William Weldon (pictured), who steps down as chief executive next month.

    The total comprises $95.1 million in deferred and long-term compensation, plus pension benefits now worth $48.4 million, to be paid out monthly post-retirement. To be clear, that won't be in April, when Alex Gorsky takes the CEO's chair, because Weldon is sticking around as chairman. However and whenever it's paid, Weldon's pension is bigger than those of than 90% of CEOs at S&P 500 companies, The Wall Street Journal reports.

  178. scottmi

    CSX up 7% today..!

  179. peedlew99

    QQQ right at 66.6.  Phil that's your line!  but I love it

  180. stjeanluc

    These numbers are just ridiculous Pharm… That another $14 millions for each year he was the CEO!

    I am not against people making money, but risk takers, not operators like this guy and Pandit at Citi. Bill Gates started his business, Ellison started his business and many others so let them profit from it. But nowadays, glorified general managers get away with millions of dollars. The gene pool in the USA probably has over 100,000 people who could do his job!

  181. lflantheman

    AAPL port   Bought to close the 20 Apri 620 calls for .21

  182. peedlew99

    Shareholders need to revolt.  When does this end?  It get worse every year and the public just yawns and reads a tweet from Lady goo-goo

  183. biodieselchris

    Kustomz, good call on AAPL during its drop.
     
    If you're still bullish I present AAPL and QQQ overlay, 3 months. Good lord.

  184. biodieselchris

    Ctrl-F instances of 3 stocks on phil's chat board here up to this point (not including my message)
     
    AAPL, 70
    PCLN, 24
    CMG, 17
    TLT, 11 (TBT 0, no longer a friendly pick, this one is)

  185. stjeanluc

    FAS has moved on average around 7.5% a week (up or down) over the last 50 weeks! This week, it's up close to 15%. That and AAPL – quite unreal.

  186. Phil

    By the way, I think it's funny that, in the news above they call it a "drastic move" because China is getting rid of a politician who was taking a stand against the top 1% while right here in the USA, half the population is trying to do the same to Obama… 

    Good article, Angel:  

     

    Gasoline shipments from Europe across the Atlantic Ocean are set to plunge to the lowest level since August over the next two weeks as U.S. gasoline buying declines, a Bloomberg News survey showed.

    Traders and oil companies booked or probably will hire 16 ships up to March 29, according to the median estimate in a survey yesterday of seven shipbrokers, traders and owners who specialize in shipping the auto fuel. That’s two tankers fewer than in the two weeks to March 22.  U.S. gasoline demand fell 7.2 percent below a year earlier last week, the biggest decline in more than two years

    AAPL correction/Lunar – Tons of dip buyers around for them.  

    LOL Angel – I know but had to be pointed out.  

    Asteroid/Peedle – Looks lie the money is pouring into NFLX again.  

    NOK/JMM – Amazing how this market now moves 10% on rumors.  Very scary time to invest. 

    FAS/StJ – Same as last year, you just have to ride out the big moves.  Last year it was down and everyone thought we'd never recover, now it's too high?  That's the game of trading a 3x…

    FAS/2Can – Sure, it's easy to cut margin – close the trade.  Apr $95s are $14.50 and I assume you are down about $7.50 and you are using $120 of margin for each $7.50 so kill it.  Now, next issue – do you still want to be short the financials?  If so, maybe shorting GS with a July $130/120 bear put spread at $5.15, selling FAZ July $18 puts for $1.40 for net $3.75 on the $10 spread.  Or you can pair the short FAZ with and FAS July $115/105 bear put spread at $5.30, net $3.90 in the $10 spread.  There's a couple of ways to bet financials don't go higher but I'm still overall bullish on the financials so perhaps a FAS Jan $100/115 bull call spread at $6.50, selling DMND Jan $20 puts for $3 for net $3.50 on the $15 spread.  See, lots of ways to play with much less margin. 

    No reason/Peedle – It's a stock, what more reason do we need?  

    AAPL/Tx – Well that's pretty greedy!  Just sell deep calls to cover if you want the tax benefit.  You can sell the Jan $480s for $134 and that's net $614 and you have $134 of your current $197 off the table so $64 still at risk and if AAPL goes all the way down to $450 you can probably get $60 for selling the $400 puts and if you don't like AAPL enough to do that – that answers your question, doesn't it?  If AAPL goes higher, you have $134 free to buy a new $600/700 spread ($35).  

    That goes for all you AAPL fans, by the way.  I say this over and over again but if you think AAPL is going from $600 to $700 then just buy the Jan $600/700 bull call spread for $35 (not even) and sell the 2014 $410 puts for $35 and if you don't REALLY want to buy AAPL for net $410 – why on earth do you want to play them for $700? 

    Margin on the short $410s is $42 and cash is zero and you make $100 in Jan less whatever you still owe on the puts if you are right.  What is the point of paying for short-term risk when you can make such a simple trade for 150% on margin?  If AAPL goes down, THEN you can put more money in and adjust your spread (assuming you want to stick with them) but if $4,200 in margin can net me $10,000 in Jan less maybe $2,000 I still owe on short puts that I'd be happy to own the stock at anyway – why do I need to look for more dangerous trades? 

    Of course, keep in mind I'd rather wait for AAPL to pull back to $520 but this is a trade idea for the true believers, who don't think such a thing is possible.  

    CHK/Scott – Just make sure you REALLY want to own them because, as I said earlier, Nat gas can fail $2 at these storage levels. 

    SDRL/Rip – I like them but not so much at this price ($38.11).  Look at their Aug and Oct dips – very drastic and not the first time they've done that so not the kind of stock I want to buy at the top of a channel.  2014 $25 puts fetch $3, which tells you how dangerous they are but, if you really want to play them, that's an entry I can get behind.

    JNJ/Pharm – You've gotta love these comp packages.  After all, JNJ was at $65 in 2002 and it's still at $65 today – surely that's worth $100M at the very least!  

    CSX/Scott – Transports up 3.3%.  It's like someone read that people were still on the sidelines due to weak Transports and decided to fix that.  

    QQQ $66.6/Peedle – Oh that is definitely Llloyd's sign!  And, by the way, Lady Gaga says:  

    The new show is easily the most fun I've had on stage in ages, + YOU'RE not even there yet! IM GONNA DIE OF EXCITEMENT. Throw ice if i do.

     

  187. Phil

    Wow, $11.50 for shorting AAPL tomorrow $585 puts and calls and it's still too scary to bet against a 2% move.  

  188. JRW III

    If you day-longs have not taken profit yet, you might want to think about it here (IWM 83.05)

  189. Phil

    rich people are bad infographic

  190. edro00

    "I am emailing you today b/c I know of insider information that will be damning at best for JPMorgan Chase. I have decided to play the role of whistleblower b/c I no longer have faith and belief that what we are doing for society is bringing value to people. I am now under the opinion that we are actually putting hard working Americans unaware of what lays ahead at extreme market risk. This risk is unnecessary and will lead to wide-scale market collapse if not handled properly."
     
    Full text here http://comments.cftc.gov/publiccomments/viewcomment.aspx?id=57019

  191. JRW III

    Unless, of course, you see Mr Stick as we did on Tuesday !!

  192. kustomz

    Bio simple to see there's an agenda to push the markets, all you have to do is look at the $ today

  193. kustomz

    Just to add I had a target of 592 on the rebound.. AAPL made it back to 490.40ish.. going to rethink if its a weak close

  194. stjeanluc

    Rich and mortgage / Phil – And despite the fact that more rich people default on their mortgage than poor people (on bigger mortages too), the poor still get blamed for the financial crisis because they bought houses they could not afford. I guess if you repeat often enough on Fox and CNBC it must be true. As my friend used to say:

    "Things that are perceived to be true are true in their consequences!"

  195. Pharmboy

    It's all good, edro.  It's all good.

  196. stjeanluc

    Another good quote… From Russell Kirk's foreword to the Seventh Edition of his seminal 1953 work, The Conservative Mind:

    [T]he conservative abhors all forms of ideology. An abstract rigorous set of political dogmata: that is ideology, a "political religion," promising the Terrestrial Paradise to the faithful; and ordinarily that paradise is to be taken by storm.

  197. Pharmboy

    Good, Kansas State won.  Now I can focus.  Oh, SGEN is up.  Nice.  Selling a few calls to cover at $20.  1/2 cover.

  198. Pharmboy

    CLDX – if you can get it, Aug $3/4 BCS for 55c.  We will sell the $3 put if we can get a little pullback for a free trade.

  199. lflantheman

    Sold 30 March weekly 585 calls for 4.10

  200. Pharmboy

    Bought a little stock as well. CLDX.

  201. terrapin22

    Phil or anyone / Long shot pics – St. jean luc pointed out the apple calls below.  That would have been an amazing return.  Not that far fetched when you consider Apple's stock had flatlined since July and built a strong base to launch from in anticipation of the Ipad 3.  Okay, 500 would have been more realistic.  We should put together a list of "long shot" plays at the beginning of each quarter.  I know paying premium is a sin so we could offset with short puts. 
    "And to think that these AAPL Apr 600 calls were $0.21 when Apple crossed over $400 back in late December. They traded at a high of $32 this morning. That would beat inflation even in Zimbabwe…"

  202. Phil

    JPM/Edro – Not sure I believe it's real so close on the heels of the other one.  It's in a comment section on the CTFC, which makes it look legit but anyone can post there with no filter or review.  I will, of course, be thrilled if the GS letter really is forcing a crisis of conscience on others but, as Colbert pointed out, 12 years and millions in the bank first – then grow a conscience… 

    Dow volume 107M at 3:41, better than most recent days, should be over 140M at close.  

    Mortgages/StJ – Not only that but think of the loss difference.  A poor person is 20% underwater on a $150,000 home and the bank gets hit for $30K, a rich person (almost twice as likely to default) is 20% underwater on a $1.5M home and the bank is out $300,000 but what does the bank do?  They spread the cost of default out on ALL homes so the 99 people who buy a home for $150,000 pay $3,300 each in excess fees to cover the $330,000 of defaults while the guy buying the $1.5M home covers the same $3,300 – maybe even less because "he's not a credit risk" and he's better able to shop for the best deal.  

    3:00 PM On the hour: Dow +0.33%. 10-yr -0.05%. Euro +0.49% vs. dollar. Crude -0.08% to $105.35. Gold +1.04% to $1660.05.

    Treasury prices rebound from sharp early losses, but yields remain at multi-month highs, no longer unable to ignore solid economic news and a surging stock market. The 30-year is at 3.41%, the 10-year at 2.28%. 

    No central banker can admit it, writes Jim Leaviss, but today's group doesn't care about inflation, instead busily pressing real rates into negative territory to "erode the debt burden through stealth inflation … in the U.K., the eurozone, and the U.S., central banks are keeping bond yields low enough to stop their governments from going bust – and that’s not going to change for the foreseeable future."

    Pump it up!  The Fed is still set to launch QE3, with an announcement coming as soon as the April meeting, says Goldman's Jan Hatzius, fading what the economic headlines, stocks, and bonds are trumpeting. Yes, the economy is moving, he admits, but the Fed believes it needs to grow faster to bring unemployment down.

    Describing the recently weakened yen as still "super strong," Nissan's (NSANY.PK) COO , asks for more. Mazda's (MZDAY.PK) CEO agrees, unworried the yen could actually move to a level deemed as weak.

    The AAR's weekly gauge of rail traffic shows that for the first ten weeks of 2012 U.S. railroad cumulative volume is 1.4% lower than a year ago. Across the continent, Mexico's YTD railroad traffic is down 7.2%, while Canada has seen a pickup of 6.7%. - Canada shipping oil to China

    Piper Jaffray raises its price target for Apple (AAPL -1%) to $718 from $670, reflecting the company's growing market share in smartphones and tablets. Looking forward, the firm estimates Apple will sell 385M iPhones and 176M iPads in 2015, driving $80 in EPS on $320B in revenue, and adds that Apple Television isn't even factored into estimates. If so, it could add an additional 4% to each year's revenue estimates.

    More findings from the iFixit iPad teardownQCOM (+0.1%) power management IC; LCD believed to be from Samsung; TXN(+2.4%) driver device, FCS (+4.4%) filter chip; Elpida DRAM and flash memory from Toshiba; power management chip probably fromCRUS (+1.7%); quad-band linear power amplifier module from TQNT(+1.9%).

  203. Phil

    Long shot/Terra – I wasn't that bullish in Jan.  Right now I'd look at GLW, WFR, HPQ, RIMM, BAC (still but no one believed me at $5.50, why should they now?),  BA, HOV, YRCW…  Not hard to pick them but hard to win when you play for big moves.  

  204. stjeanluc

    Long shots / Terrapin – Well, the AAPL Jul 890 are now $1.62. Not as good of a deal but at this point almost a sure thing!

  205. peedlew99

    What kind of magic spell keeps oil over $100 with this?
    and yes… I'm furious at myself for not taking 1/2 off on the spike down!
     
    U.S. gasoline demand fell 7.2 percent below a year earlier last week, the biggest decline in more than two years

  206. stjeanluc

    I have the Dow volumes fractionally lower than the last 2 days!

  207. NF**X

    AAPL/iflan – we pinning 590 or 595 tomorrow?

  208. Phil

    161M is final Dow volume on Etrade.

    Dow up 500 points in 7 days but that's no longer 5%.  

    Oil/Peedle – We noted yesterday that they didn't have too many contracts to roll at NYMEX so probably no urgency to dump this week. They cut 20M today so down to 109M barrels to roll by next Weds, usually under 25Mbd is not a problem for them.  

     

    Click for
    Chart
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Apr'12 105.50 106.18 103.78 105.30 15:57
    Mar 15
    105.11
    -0.32 348569 105.43 109489 Call Put
    May'12 106.00 106.70 104.29 105.83 15:57
    Mar 15
    105.65
    -0.30 152853 105.95 262393 Call Put
    Jun'12 106.73 107.23 104.90 106.37 15:57
    Mar 15
    106.22
    -0.26 81183 106.48 157402 Call Put
    Jul'12 107.13 107.61 105.46 106.92 15:57
    Mar 15
    106.76
    -0.22 39654 106.98 92702

    Call Put


    AAPL mania aside, $570 seems like a logical pin. 

  209. stjeanluc

  210. lflantheman

    Good Afternoon:   Sorry I had little time to trade or be on the board today.  My trades suggest I should have spent less time trading.   So, impatience got the best of me and I came in long again this morning.   Could not get the fills I wanted and paid too much for those 50 April 575s, and since then we've pulled back some.  This afternoon I bought back the 620 calls for a few cents, as they were over 80% profitable, so why risk holding them.  My final trade today was to sell the 30 Mar weekly 575 calls.   Reason for that was to extract the overnight premium from them, which was 4.10 at the time of the trade.   I only traded 30 of them so that if AAPL ramps up tomorrow I'm still gaining.  If it drops, I'll be losing on the April calls but I'll collect the 12k or so from the short March calls, and the Aprils have 5 more weeks to mature.  So, best case scenario for the portfolio is for AAPL to close at 585 tomorrow, then we can move into next week.   What will happen tomorrow?  I don't know.  I'm sure people are lined up overnight for the iPad, but what that will do to or for AAPL stock, I'm not sure.   Sometimes they sell on the news, as you know.  So, I should basically have stayed home today.  My instinct for the past 2 days was to sit on cash and I became impatient.  Now I'm in 'repar strategy mode'   I needed more discipline.    So I'm a bit irritated right now.  I'm going to go watch my son play soccer then have a glass of wine.   I'm sure that will help.  Later.   

  211. Phil

    Too funny:  

     

    FARGO, N.D. (AP) — A North Dakota newspaper columnist sat down to review her town's hot new Italian restaurant, rhapsodizing about the chicken Alfredo, crisp greens and "two long, warm breadsticks."

    But because the restaurant was the Olive Garden, Marilyn Hagerty's earnest assessment swiftly became an Internet sensation, drawing comments both sincere and sarcastic from food bloggers and others. For the 85-year-old Hagerty, the response was bewildering — and it threatened to make her late for a bridge game.

    The Olive Garden is "the largest and most beautiful restaurant now operating in Grand Forks," she concluded. "It attracts visitors from out of town as well as people who live here."

    By Friday morning, her appraisal had received more than 290,000 hits on the newspaper's website. The second most-read story — a report about the University of North Dakota's Fighting Sioux nickname — got a mere 5,500 views.

    "I do not get it," Hagerty said Friday. "I mean, I'm sitting here minding my own business yesterday morning, trying to get my Friday column finished off so I could go play bridge. And all of a sudden, all hell breaks loose."

  212. Pharmboy

    Stats from PragCap:

    Germany’s DAX: +20%, 96% annualized

    S&P 500: +11%, 52% annualized

    S&P 500: up 67% of all sessions, just one -1% day in 51 trading sessions.

    Nasdaq 100:  +19%, 91% annualized, up 73% of all sessions.

    Homebuilders Index: +23%, 110% annualized

    S&P Financials: +21%, 100% annualized

    Apple, the world’s largest company: +45%, 216% annualized

  213. stjeanluc

    Looking at 18 months charts, it sure does look line the 10% lines have turned to support lines. They were consistently resistance last year and have provided some support so far this year.

    It could be argued that the SPX line could be slightly lower than the current 10% line – like around 1340/1345 which has been support all year. But close enough!

    Looking at the other indices, it would be tough to move the lines as we are not even above the highs of last year on the RUT and 835 has proven a tough line to cross this year. And it's the same for the NYSE.

    In any case, something to look at over the weekend!

  214. Pharmboy

    Houston….CA tax revenue is, um, cratering…….

    Compared to last year, State tax collections for February shriveled by $1.2 billion or 22%. The deterioration is more than double the shocking $535 million reported decline for last month. The cumulative fiscal year decline is $6.1 billion or down 11% versus this period in 2011.

    WTF…CA is the largest state….who is buying what…or is everyone moving to the Midwest?

  215. Pharmboy

    So Phil, you posted here that the Empire Prices Paid index was up 50%…but the Philly was down 50% and not noted in the links with the Empire one….Tell me, what's up with that?

  216. Pharmboy

    Here is a good read on what is happening in the oil space that Phil is noting…but it may start to turn back up, so be careful with the shorts.  Gas usage in the US is going down, being exported, thus driving up our prices.

  217. jerconn

    CA may have the largest immigrant base of any state as well, could be the welfare stuff has outgrown the tax inflows at this point..

  218. ronresnick

    stjeanluc / glorified general managers
    I learned a lot about large corporations for the first time after Highbridge Capital Management was purchased in stages by JPMorgan in December of 2004.  I agree that senior executives at large corporations are general managers.  But more than general managers, I saw that they are, essentially, politicians.  At the highest levels of the Asset Management Division at JPMorgan I saw political skills on display far more vividly than knowledge about markets or skills at investing.  I saw the promotion of loyal sycophants over smarter, more competent people who didn't play the "game"; Machiavellian power strategies, disinformation campaigns to damage the standing of rivals, etc.  The non-investment executives at big financial companies are way overpaid.  (The portfolio managers are also overpaid, but at least their contributions can be quantified.)

  219. barfinger

    Phil, I hope you will be patient with the following question, since I rarely play BCS: I opened BAC Apr 8/9 BCS two days ago. I feel most comfortable straddling the current price, although I notice you never seem to do that…. As you know, BAC has taken off so the whole spread is in the money. I'm thinking it might make sense to pay a little  to push the short 9s out to 10s, expanding my potential profit considerably. What do you recommend in this sort of situation?

  220. stjeanluc

    CEO / Ronresnick – Apparently that's what it takes now… As Phil mentioned, the JNJ stockholders have not been rewarded at all (well, there is a dividend) over the last 10 years and yet the CEO leaves with $140 millions. Not much that the shareholders can do as they can't even replace the boards who make these stupid decisions! 

    I started my own business, when I have good years I am paid well (but so are the employees), in bad years, I am the first one to take a pay cut and if the value of my business doesn't increase when I retire, I will not be able to cash out as much as I would if I had grown my business. And if I screw up completely, I lose everything. But for these "operators" it's the complete opposite, good years they are paid well, bad years, they get raises and no matter what the results are, they get huge payouts when they leave. And if they screw up, the taxpayers bail them out and they still get their big bonuses because "a contract is a contract" (see AIG). Contracts for the union guys on the other hand are completely renegotiable (see GM) – after all these little guys are not the "job creators". 

    Adam Smith is turning in his grave and Marx is laughing out loud….

  221. ronresnick

    CEO / stjeanluc
    The asymmetric risk profile you describe correctly is, to me, the crux of the problem, and leads right to the moral hazard issue.  Please see:  http://dealbook.nytimes.com/2009/04/02/hfo-hfo-hfo-another-view-are-we-insuring-moral-hazard/

  222. jmm1951

    Greg Smith
     
    Not sure what to think of this. No one from GS has come out and specifically denied they had ever heard GS employees talking about clients in a derogatory way. Of course it is no great surprise that there might be a laddish element in a predominately male field of business, but then again these days employers have codes of conduct. Even when I was running the medical department in a maximum security prison a few years back,  there was a definite code. Inmates had to be addressed as "Mr." and employees or contractors who didn't comply could be disciplined or not invited back. Of course it was not unknown for the alternative form "scumbag" to be used in private conversations, but generally people who used this terminology were pretty circumspect with regard to whom was listening and didn't survive long in that environment (meaning that they quit the job, not that they found a shallow grave).Of course banking is not a regulated profession, but perhaps it ought to be.

  223. kinkistyle

    lflan:  You have been on such a tear that you are entitled to a miss or three.  Bravo on the incredible performance! It seems like you have a contingency plan ready so that will also be very educational for those of us following you to see how you navigate through this tough spot.

  224. stjeanluc

    Good article Ron…

    Executives and portfolio managers at those firms enjoyed an asymmetric risk profile: if their trades succeed, they make millions of dollars; if their trades lose money, the public shareholders lose millions of dollars, and the executives and portfolio managers go on to new jobs where they can roll the dice again.

    There lies the rub… and true in many places. Carly Fiorina comes to mind… and she was trying to bring that "business savy" to politics!

  225. stjeanluc

    I don't think that we'll hear that on Fox News either:

    http://reason.com/archives/2012/03/13/gingrichs-despicable-gasoline-price-prom

    Former House Speaker and current Republican presidential hopeful Newt Gingrich has promised voters that gasoline will be $2.50 per gallon after he becomes president. In fact, Gingrich thinks he may even be able to get the price down to $1.20 per gallon. "His promise to go the moon is easier to achieve," says Michael Lynch, president of the oil consultancy Strategic Energy and Economic Research. "We may see $2.50 per gallon gas again, but not because of anything that any president does." Gingrich’s pitch is attractive to consumers who are confronting pump prices that average $3.83 per gallon and which are expected to go even higher later this year. Why doesn’t Gingrich promise free daily ice cream and cake for everybody while he’s at it? [...]

    While it is true that the Obama administration has ruled out drilling on vast areas of the federal estate, the number of oil and gas rigs operating in the U.S. has nonetheless increased markedly in recent years. Indeed, it is not surprising that as the price of petroleum soared so too did the number of drilling rigs. The oil and gas rig count has increased to more than 1,900, up from around 700 [PDF] in 2000. As an historical note, the total number of U.S. oil and gas rigs peaked at more the 4,500 [PDF] in 1981. [...]

    If Gingrich wants to lower oil prices, perhaps he should stop his saber-rattling against Iran. “If there’s an effective diplomatic outreach here that pushes back the prospect of a military confrontation with Tehran, we probably have something on order of $20-$30 a barrel geopolitical risk premium that could drop out of the oil price very dramatically,” wrote Tim Evans, energy analyst at Citi Futures Perspective in New York in the Financial Times. Oil consultant Lynch agreed. "The recent run up the price of oil is almost completely the result of concerns about losing Iranian oil or Iran attacking shipments in the Strait of Hormuz," he says.

    So let's see, we have seen charts showing that the SPR is full to the brim, we consume less oil than before, we have more drilling than 10 years ago and somehow Obama is to blame for high gas prices… 

  226. jthoma

    Interesting that several of the California bond funds got hit big today- wonder when it happens to the national funds? Could be that when rates move up a muni fund is a better play in that maybe you also get increase in default risk

  227. kustomz

    Pharm do you know of any bulk nutrition suppliers by any chance?

  228. Inkarri1982

    CA – Having lived in CA for the last 25 years, I can honestly say that things don't look too good.  If you drive around south LA, you can see street vendors all over the place.  People even set up food stands on their front lawns.  There are "For Lease" signs all over the place.  My office is in downtown and I can tell you that it is not as busy as it once was.  What you will also see are apartment buildings springing up all over the place and a lot of these homes under $300k are being sold to lower income people with gov't guaranteed loans.  I do notice that traffic is not as horrible as it once was as well.  I don't think I have seen CA in this bad of a shape in the 25 years I've lived here. 

  229. msf65

    Lflan,
    at least it proves you are human. : )
    And I am sure it will be very educational for the rest of us.

  230. hoss18

    Barfinger……the real question is how much are you paying for how much additional gain, versus the risk of not making the new strike.  Then, ask yourself, can I do better somewhere else.  What I have learned from Phil over the last two years is when doing BCS, adjusting is the key.  They don't do well really until the very, very end, and sometimes on the really volatile ones that can literally be the last few days before expiration.  I have ridden that bronco and been bucked off lots of times.
     
    So, in your example, the question I would ask myself would be, "how much am I paying for another $1.00 in profit?".  If it's, for example, $0.33, I might take that providing I think there's a good chance(if it hasn't happened already), the stock will exceed the new strike(and there's a HUGE question to ask yourself too).  Think about it, if BAC gets over $10, you just paid $0.33 for $1.00 in additional profit.  So you made what 3x your money?
     
    Now, once you have that line of questioning settled, you have to ask yourself, "in this timeframe, is there anywhere else I could maybe do better?"  Or, can I beat 3 to 1 on something else?  Or, can I make 2 to 1 on something else that has a greater probability of succeeding. 
     
    Just sharing my experience hoping to help…..spreads are funky, but can be fun…..

  231. stjeanluc

    That's cute how they pushed the oil prices $0.50 when they re-opened at 6:00 PM…

  232. angelcur

    EXECUTIVE SWEETS AND THE COD PIECE BRANDISHERS..well yes the president IS to blame for EVERYTHING that goes wrong and each manages to blame his predecessor(isn't that why we elected him)..so this insures that NO one is to blame a priori for anything..perfect accountability stasis and you make a great partisan divide!!….my favorite prexy was bill c..now i am pretty sure that nafta the repeal of glass steagall and the uptick rule have proven more damaging than anything done by the CICs who came after him..now oddly enough i would vote for him again..why?..because i believe that presidents are essentially benign..they all seem to possess this odd admixure of thin affect and narcissism..so they can walk about and glad hand and seem self confident even when they don't have a clue or shouldnt be confused with anyone who gives a shit….i am not going to name any names..but i KNOW we have had a few of THOSE the last 30 years..nixon a singularly unattractive fellow..(kind of like mitt darker plus sweaty) had a finer strategic mind (in my opinion) than perhaps any president in office since his election..bush senior and junior? not all that erudite…(hold the laughter its  supposed to be dripping with bathos)..clinton raw intelligence: maybe peerless perhaps lincoln and jefferson smarter..but his priapism got the best of him (and nothing got the best of his priapism..unlike TJ's ..how did that man write and handle the staff of chief at the same time!!).barack is the smoothest man i have EVER seen..he just walks on air..smooooth..how good is he?……i am willing to wager that Pres O not Romney will be our first billionaire ex president(romney is not going to be president..newt [if not me no one!!] has decided this)..biden should drive a clown car and cheney should live in a mausoleum..so in the long run unless there is a matchless tumbrel of horrific events like the revolution.. civil war ww2 (you fill in more of such moments in time)where events shaped and were altered by our greatest leaders … so aside from the extremes(and assuming they are not psychopathic gods) what exactly do presidents do? ..they protect the turf for the status quo by polarizing us from one another..and nurturing the true elities..ron is right in these times having the right twist on what to say and who to preen..is a required armetarium of deft feints for the sycophant..they are all statists..meanwhile our own mendicant ways are reflected in the ciphers we elect….who are not merely mendacious but sadly venal as well 
    .

  233. jmm1951

    Health care costs in private medicine
     
    Tonight I had to take a pregant  woman  who had severe vomiting, headache, fever, and chills to the Emergency Room at a private hospital in the Dominican Republic. Since she did not have insurance, it was necessary to pay cash as follows:
     
    Labwork: Blood count and urinalysis  300 pesos (8 dollars)
    Medication: Injection of Tylenol            400 pesos
    Consultation fee:                                  500 pesos
     
    Total 1200 pesos which is slightly more than US$30
     
    The next step was a visit to a pharmacy for 1) painkiller, 2) anti-nausea drug, 3) antibiotics . Combined cost 2345 pesos which is about US$60.
     
    Total damage US$90, of which US$70  was for medications.
     
    Interesting to compare with the US where, last time I went,  a visit to an Emergency Room cost $400 just to walk through the door and register. Of course it is an apples and oranges comparison, because wages are much lower in the Dominican Republic, but the blood tests, the urinalysis, the Tylenol injection, the diagnosis, and the other medications from the pharmacy are all the same things that you would get in the US where it would cost you $400 just to walk  through the doors of the ER and register, with everything else extra. Can higher wages in the US alone account for the vast difference? As I said, this was a private clinic, not a government facility. One difference was that although lab results were printed out on a rather faint dot matrix computer, there was very little computerization. The patient's name was entered in the billing computer, but no address or phone number. There were no consent forms. On entry, once lab work was ordered, you paid cash before the blood was drawn,and then on finishing up the doctor hand wrote another ticket that you took to the cashier and paid.

  234. 1020

    Phil/Olive Garden  That's cute – I bet Marilyn is a hoot!   :)

  235. Pharmboy

    Kust – sorry.  No se!

  236. zeroxzero

    Jmm:  I've heard that extremely high percentage of women in your country have Caesarean births – low medical costs come with risks.  In this instance, since normal live births are very inexpensive in public hospitals, doctors liberally perform caesarean sections to make higher fees.  True?

  237. zeroxzero

    And no wonder I can't figure out how high Apple's price could possible go: "…the consciousness problem is inherently similar to another famous problem that actually has been proved unsolvable: finding a self-consistent set of axioms for deducing all of mathematics. As the Austrian logician Kurt Gödel proved eight decades ago, no such axiomatic system is possible; any system as complicated as arithmetic contains true statements that cannot be proved within the system."
     
    "Gödel’s proof emerged from deep insights into the self-referential nature of mathematical statements. He showed how a system referring to itself creates paradoxes that cannot be logically resolved — and so certain questions cannot in principle be answered. Consciousness, in a way, is in the same logical boat. At its core, consciousness is self-referential awareness, the self’s sense of its own existence. It is consciousness itself that is trying to explain consciousness."

  238. angelcur

    sounds like merleau- ponty in the phenomenology of perception

  239. ronresnick

    Thank you, stjeanluc.

  240. Phil

    Good morning!

    Looking very flatline into expirations.  Asia all flat except Shanghai up 1.3%, Europe flat at the open, our futures are flat as a pancake….

    Someone got the markets right where they wanted them….

    Dollar 80.61, Euro $1.30748, Pound $1.5722, 83.57 Yen to the Dollar, 1.2074 EUR/CHF. 

    Oil $106.10 (gotta wait for a cross or $106.50 should be good short on /CL), gold $1,656, silver $32.54, copper $3.90 (up from $3.82 yesterday), Nat gas $2.26 and gasoline $3.29, which can be played bullish (/RB) over $3.30 as we should get the usual weekend pop.  

  241. Phil

    Got to $105.75 but bouncy here because it's $1.3051 on the Euro ($1.30 tough to break) and that knocks the Dollar back off 80.75 and the Pound is also on the $1.57 line exactly so waiting for those to break to re-bet oil lower (below $105.75) or for a bounce to $106 as long as the Dollar isn't falling too much. 

  242. Phil

    Friday's economic calendar:

    8:30 Consumer Price Index

    8:30 Real Earnings

    9:15 Industrial Production

    9:55 Reuters/UofM Consumer Sentiment

    Asian shares are mixed as many traders see out the week on the sidelines. Japan +0.1%, Hong Kong -0.1%, China +1.3%, India+0.2%.

    4:35 AM EU shares open moderately higher following firm U.S. jobs and manufacturing data yesterday, although options expirations could keep markets on edge. Euro STOXX 50 +0.1% to 2598,80, its strongest since August, London +0.1%, Paris +0.1%, Frankfurt+0.15%, Madrid +0.2%, Milan +0.7%.

    The U.S. will need about $4T in savings to get the deficit back to a sustainable level over the next decade, says Treasury Secretary Tim Geitner. However, to get there, we need to focus first and foremost on strengthening the economy over the short term, Geitner says. Despite the fiscal challenges, we simply can't "cut our way to growth."

    Appraisers, lenders, and investors could still be overestimating property values, according to a Cleveland Fed study as valuation methods that work in normal markets don't work in weak ones. Also is the accounting angle, as overvaluation allows banks to shift losses from heavily scrutinized loan books to under-the-radar REO portfolios.

    Some of Wall Street's largest portfolio managers are saying the bond market is at a turning point, and facing the end of one of the longest bull runs in its history. Why? Inflation. An improving jobs market, stronger dollar and rising commodity prices are adding to pricing pressures on everyday goods. As a result, the Fed could be forced to raise interest rates sooner than expected to keep inflation in check.

    The sell off in Treasurys may have more to do with China's falling trade surpluses than anything happening with the U.S. economy. Greenback emission from America's trade deficit might be falling into hands less-friendly and less-willing to recycle surplus dollars into long-term U.S. paper, suggests Bruce Krasting.

    "Greece has made tremendous progress to implement wide-ranging painful measures over the past 2 years," says IMF chief Lagarde following approval of €28B towards bailout #2. Another official says the IMF predicts Greece's debt/GDP ratio will drop from 165% at 2011's end to 116.5% in 2020 – a nice sense of humor there.

    The anti-Greece:  The recovery in Iceland continues as the country repays, ahead of schedule, a $443.4M loan to the IMF. A balance of $1.04B remains on loans it took from the IMF in the wake of the financial collapse. The country's reserves now stand greater than its short-term debt.

    Chile's central bank holds its benchmark interest rate at 5%, in line with expectations. Analysts had been expecting no change due to increasing inflation pressures in the region. In February, the inflation rate hit 4.4% on a 12-month basis, the central bank's inflation target is nearer to 3%, plus or minus one percentage point.

    China Corporate Espionage Boom Knocks Wind Out of U.S. Companies.

    Dividend hikes could continue to fuel the stock market rally, S&P's Howard Silverblatt believes, noting the overall payout ratio among S&P firms remains a very low 30% vs. the historical 52%. He expects issues to "continue to increase, with well over 60% of the S&P 500 issues increasing their 2012 payment over 2011." 

    Stress Tests Pass Fed's Flim-Flam Standard: Jonathan Weil. The most important thing to understand about the Federal Reserve’s latest stress tests is what they were not intended to do. Their purpose wasn’t to test whether the nation’s biggest banks could survive a financial blowup like that of 2008 without government assistance. Rather, the Fed designed its tests to measure the effects a hypothetical crisis would have on banks’ regulatory capital. Capital is the financial cushion a company has available to absorb future losses. While the Fed would like for us to believe that regulatory capital is the same thing, it’s quite different. And too often it bears little resemblance to reality. That’s why the results of the Fed’s “comprehensive capital analysis” are more about public relations and manufacturing confidence than they are about disseminating reliable information on banks’ health. Citigroup Inc. (C) was deemed well capitalized under the government’s methodology when it got bailed out in 2008. So was CIT Group Inc. when it filed for bankruptcy in 2009. Just because some banks flunked doesn’t mean the test was credible. Quite the contrary, to buy into the Fed’s conclusions, you would have to accept the theory that market values for many types of financial instruments don’t matter in a crisis. This would be foolhardy.

    Securitization Risk Rising as Standards Ease, Moody's SaysThe riskiness of new securities backed by assets from car loans to commercial mortgages is rising from the lows seen after Lehman Brothers Holdings Inc.’s 2008 collapse, according to Moody’s Investors Service. Easing underwriting standards and “untested” issuers and assets are contributing to the trend, along with structural features of transactions that can boost risk, the New York-based ratings firm said today in a report. Greater dangers are likely to follow, analysts Claire Robinson and Joseph Snailer wrote. Shoddy securitizations helped fuel a lending bubble last decade that sparked the worst U.S. housing slump and global financial crisis since the 1930s. Moody’s and competitor Standard & Poor’s drew criticism after awarding top grades to risky mortgage debt that later experienced record defaults, with the Financial Crisis Inquiry Commission created by lawmakers calling them “key enablers of the financial meltdown.”

    Nomura Debt Rating Cut by Moody's to Lowest Investment Grade

    Bad Loans at State-Run Banks Add to India's WoesWhen people talk about Europe’s “government debt problem” they mean something easy to describe: countries that borrowed more money than they can easily pay back. In India, it’s a bit more complicated.

    Matt Taibbi serves up his newest can of vitriol for "too crooked to fail" Bank of America (BAC): "not bankers or capitalists, but a class of person that was never supposed to exist in America: royalty." BofA has defrauded everyone from investors and insurers to homeowners and the unemployed, Taibbi alleges, so why does the government keep bailing it out?

    Following Greg Smith's op-ed heard round the world, Jim Cramer says he's no longer able to defend ex-employer Goldman Sachs (GS). There are now far too many stories of Goldman taking advantage of clients in derivatives trades, says Cramer, to believe the company's claims of innocence. "Too many clients have lost money. Too many stories have come out. They are not a vast conspiracy"

    Goldman(GS) Heir Speaks: Greg Smith Was Right, They Ruined My Great-Grandfather's Company.Henry Goldman III, the great-grandson of Goldman Sachs founder Marcus Goldman, says he agreed with Greg Smith's New York Times op-ed criticizing the firm's predatory culture. "I thought it was spot on," Goldman told Business Insider in an exclusive interview.

    The West ups the pressure on Iran by several more notches: following EU orders, Swift, which handles over $6T worth of international payments a day, will tomorrow cut off Iranian banks blacklisted by the EU from its messaging system. While the U.S. welcomes the move, some in Congress want all Iranian banks to be disconnected. (PR

    Cheap Natural Gas Unplugs U.S. Nuclear-Power RevivalThe U.S. nuclear industry seemed to be staging a comeback several years ago, with 15 power companies proposing as many as 29 new reactors. Today, only two projects are moving off the drawing board. What killed the revival wasn't last year's nuclear accident in Japan, nor was it a soft economy that dented demand for electricity. Rather, a shale-gas boom flooded the U.S. market with cheap natural gas, offering utilities a cheaper, less risky alternative to nuclear technology.

    Iran Buys U.S. Wheat Again, Trade Set to GrowIran has purchased 60,000 metric tonnes of U.S. wheat, the U.S. government said on Thursday, raising the two-week tally to 180,000 tonnes, which industry sources said reopened grain trade ties between the two countries embroiled in a stand-off over Tehran's nuclear ambitions. 

    Scarce Oil? U.S. Has 60 Times More Than Obama Claims.

    Wal-Mart (WMT) scores a coup of sorts as it will open storesat 12:01 AM – 8 hours before Apple (AAPL) opens its own outlets – to begin selling the new iPad. The arrangement also allows Wal-Mart to get the jump on rivals Target and Best Buy.

    Chris Whitmore, take your perp walk. Apple's (AAPL -0.7%) failure to hold $600 is blamed on the Deutsche Bank analyst who proclaimed around midday that AAPL's parabolic rise had gone too far. Whitmore made clear his firm was just taking profits after rising 50% since October. Many Streeters share the skepticism, but they've been burned too often in the past to say so. 

    The new iPad went on sale today in stores across ten countries just hours after Apple (AAPL) shares touched $600 for the first time. Australia was the first country in which the iPad was sold, with Wal-Mart (WMT), Best Buy (BBY) and RadioShack (RSH), as well as Apple, selling it in the U.S. 

    This is not a misprint: Apple (AAPL) is not the most belovedstock among analysts, at least in terms of percentage of buy ratings. Most beloved is Agilent (A), rated buy by 94% of analysts covering it. Five others boast more than 90% buy ratings: AMTHALESRXBLL,NOV. Apple is tied for 7th place at 89% buy, but it's covered by a whopping 55 analysts.

  243. Phil

    Philly Fed/Pharm – I see BS data all the time that I don't report on.  I kind of feel like it's part of my job although it rubs my censorship bone the wrong way but my thoughts are that I'm a little better at knowing what "smells right" than most people so, when I see a data-point that doesn't make sense – like yesterday's Philly Fed Prices Paid – I don't mention it until it's confirmed as it's just confusing if I post conflicting data without detailed examination.  Even SA, in the news I copied yesterday – left out the Prices Paid stat, as it just seemed not to make any sense at all as the other numbers lined up well with the NY Fed.  After all, which is likely to be wrong – that prices went up 100% or that they went down 50%?  Also, as ZHedge notes:  

    Well, we just got the US version of this Heisenberg Economic Uncertainty principle, when as part of the just released Philly Fed index (which also printed better than expected despite a drop in New Orders and Shipments), we saw Priced Paid…. tumble from 38.7 to 18.7!!??

    Why the surprise? Because 90 minutes prior to this, we just got The New York Fed telling the world that prices paid in fact soared by virtually the highest amount in real terms on record! In other words, in New York survey respondents are experiencing soaring inflation, while 90 miles Southwest, manufacturing firms were awash in deflation.

    Do they even try to manipulate the data anymore? 

    That said, while this is a carbon copy of what happened in early 2011, the final outcome was both series eventually succumbing and plunging far lower as the "economy" rolled over following the expiration of QE2 benefits. Sad to say, this merely confirms once again that 2012 will be nothing short of a 2011 carbon copy in virtually every regard.

    Coming up on $106 oil again.  Dollar 80.666 (thank you Lloyd), Euro $1.3069 (than you Linda Lovelace), Pound $1.5736, 83.75 Yen to the Dollar and EUR/CHF $1.2069.  Gold is down to $1,648 again, silver $32.42, copper $3.903, Nat gas $2.261, gasoline $3.2945 (no break over $3.30 yet).  

    CA/Pharm – That's a big f'ing deal!  Every day I'm seeing more doom and gloom from CA – might beat Portugal out as our next major crisis (unless France votes in the Socialists and beats them all).  

     

    Giving an impassioned and polished attack on the speculation and profiteering that led to the economic crisis that has engulfed Europe, Hollande told the 20,000-strong crowd: "My enemy is the world of finance." Belatedly, French company directors, investment bankers and market movers are waking up to the growing popularity of a presidential candidate who promises to raise taxes on rich individuals and big business in order to boost growth.

    With the first round of the French elections barely two months away, the polls suggest that Hollande is choosing the right adversaries. On the day he visited Dijon one survey suggested he would win a straight contest with President Nicolas Sarkozy, gaining as much as 60% of the vote.

    A few days after Le Bourget, Hollande unveiled a 60-point programme for government. In recognition of the parlous state of French finances, there is a commitment to reduce the budget deficit to 3% (from well above 5%) by 2013. The list of austerity measures includes a freeze on public sector recruitment. But the route to sound accounts is principally by way of tax rises rather than cuts, and most of them are directed at the upper tiers of French society.

    BAC/Barf – Straddle?  I never straddle.  If you don't like a stock enough to hold it without paying to protect it with a put, why be in it in the first place?  As to adjusting the spread, I'm going to guess it's an April spread as March would be a silly question and Jan doesn't have $8s or $9s and after April it's just random months.  So, the $8s are $1.33 and the $9s are .58 and you are thinking of PAYING .39 to roll the short calls up to the .19 $10s.  NO WAY – that is not at all smart.  BAC is at $9.24 and you are paying .25 in PREMIUM (only suckers buy premium) to REMOVE .39 of downside protection you currently have – no, no, no and no.  

    And what Hoss said! 

    If you MUST put more money into the trade because you can't stand to just have a nice winner, why not buy the Jan $7.50/10 bull call spread at $1.38 and sell the 2014 $7 puts for $1.13 for net .25 on the $2.50 spread so, if BAC is at $10, you make $2.25 less whatever remains on the short puts.   If you object to selling the $7 puts because you are worried BAC will head lower – why on earth would you be considering blowing off your protection, buying premium and betting on $10 in the first place?  

    Cali/Jthom – Ah, that's what I'm seeing, CA risk profile looking worse and worse.  

    And what Ink said!

    Rambling/Angel – Wow, I could spend a good day on that one! 

    Health Care/JMM – This is what I keep trying to explain to Conservatives.  The model they are using for Obama Care assumes we will continue to pay insane prices for basics.  That makes no sense when the Prez can just fly Air Force One to the DR and pick up 10M viagras for .20 each.   We are played like the World's suckers by our Health Care industry.  Unfortunately, the danger of Government Health Care is that the Reps can get hold of it and suddenly we'll have $10,000 pill prices paid to big campaign contributors and we'll be paying $1,000 for $200 lab work from somebody's cousin who got approved while the other one didn't (see Florida urine testing BS for a good example of how this works).  

    The Reps, if put in charge, will turn Obama Care into a massive cronyism machine and rape the country once again – especially since they will be able to blame it all on Obama.  Systems like this only work when honest people are in charge who look out for the interests of the American people. 

    I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country. -  Thomas Jefferson

  244. jmm1951

    Phil/Florida urine testing
     
    Yes, as I mentioned before the Florida urine testing for state employees is done by a company called Solantic, which was founded and owned by Governor Rick Scott, although now in, ahem, a blind trust (whatever!) run by his wife.This is enormously costly (did I mention that I paid $US2 yesterday for a blood test for a 3 year old?) not only because of the testing, but because many people who work round-the-clock shifts, like in prisons and hospitals, have to get up in the day time when  they are supposed to be sleeping and travel to a testing center which may be far from home. This leads to more absenteeism, hence more overtime, and hence more cost to the taxpayer.

  245. pstas

    Systems like this only work when honest people are in charge who look out for the interests of the American people.
    A stunning admission. Perhaps your first step on the road to "recovery". How ironic it would be to declare statism a treatable addiction and have Obamacare cover rehab.

  246. barfinger

    Hoss and Phil: Thanks for the comments. When I said "straddle", I meant buying a spread where the short call is out of the money and the long call is in, rather than what I usually see done here, buying a spread where both sides are in the money to start with. Anyway, yes, this is the April 8/9 BCS, and I figured I wasn't paying .39 to roll the 9 to the 10, because the 9s are already 0.24 in the money, or maybe that's just confused thinking. If BAC holds 9.24, I get $1.24 instead of $1, so my net cost is $0.15 for the chance at another full $1.
     
    Just trying to take advantage of a BCS moving immediately my way.
     
    I sold no puts, and bought no puts.

  247. jmm1951

    Walmart opening at 12:01 to sell iPads
     
    Walmart Supercenters are open 24 hours a day anyway. This must have been written by someone in Noo Yawk where Wally World has yet to penetrate and electronics are sold off the back of trucks by Lebanese entrepreneurs with mirrored designer sunglasses.

  248. flipspiceland

    "Matt Taibbi serves up his newest can of vitriol for "too crooked to fail" Bank of America (BAC): "not bankers or capitalists, but a class of person that was never supposed to exist in America: royalty." BofA has defrauded everyone from investors and insurers to homeowners and the unemployed, Taibbi alleges, so why does the government keep bailing it out?
    Why does theBamster government continue to bail it out? 
    Why isn't Geithner fired intead of catered to?
    If this were Bush, you can bet every ounce of gold in India that it would be "Why does the Bush Government keep baling it out?"
    Caveat: I can't stand the sight or sound of Bush.

  249. angelcur

    yes it was a rawhide moment..but nevertheless the only agenda both parties share is: centerfuge the fact we coalesce over self interest!
    forget hollande..the french may elect him but as they fade into well deserved irrelevance their corporate chieftains will abandon the republic for less taxing envorons..alongwith their zillionaire 'socialist' calrisima

  250. angelcur

    so the gop is totally blowing itself up i am hearing that gingrich will throw his support behind santorum at the convention and will become party chairman if santorum becomes th enominee good lord…torquemada rides again!

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