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Whipsaw Wednesday – Apple Today Keeps the Fed at Bay

QQQ WEEKLY Yay AAPL!

A meteoric 10% rise pre-market is being celebrated by the Global markets even though it's really only part of the way back to the $644 high that was, very recently, supposed to be a stepping stone on the way to $1,000.  Are we really going to get all excited just because AAPL's earnings didn't suck?  That seems kind of silly as I'm pretty sure they were never going to get to $1,000 by just earning $10 a share per quarter, were they?  

I have nothing bad to say about AAPL.  We were bearish on them at $640 but $550 was our buy target and we didn't take direct action on AAPL yesterday as we were worried they might disappoint so our 1:31 bullish trade idea for Members was the QQQ June $60/63 bull call spread at $2.35 and those should be well on their way to $3 this morning as the Qs are up 2% to $66 pre-market already.  

I mentioned in yesterday's post that we had already played TQQQ (ultra-long Nasdaq) the day before and that one was the more aggressive May $103/110 bull call spread at $4, selling ISRG Jan $350 puts for $4.40 for a net .40 credit on the $10 spread.  Any offset would do, of course but we REALLY wouldn't mind owning ISRG for $350 if it goes on sale (now $560) but, if not, we'll take the free money.  As a 3x ultra, TQQQ will be up 6% this morning, already at our $110 goal and, if they can hold it, we're looking at a very nice 150% gain on just the bull spread with a 2,600% gain on the full spread – either way, not a bad way to play!  

We had also taken the QQQ MAY $63/66 bull call spread at $1.90 on Monday and that deal was so good we didn't feel we needed an offset.  That's the difference between catching the bottom, like we did on Monday and chasing a run, as we did with the Qs on Tuesday – the rewards of being contrarian investors!

One trade that may not be going well for us was the AAPL weekly $575 calls, which we bought for $20.75 against the sale of the May $590s for $22 for a net $1.25 credit.  We didn't think AAPL would pop $600 so fast, so we're a little worried about that one.  Our other shorts – on BWLD, NFLX, CMG and PCLN were, of course, huge winners as well as BIDU and others on our Long Put List (see Stock World Weekly for full list) – some of which will be playable again if we get a good Nasdaq bounce.  

As you can see from our Big Chart, the S&P came within 0.03 of our bounce target at 1,372 and we should gap open to our 2nd bounce level at 1,384 this morning unless Durable Goods are a disaster.  That will put our 50% retracements back in play at Dow(13,000), S&P (1,395), Nasdaq (3,075) NYSE (8,050) and Russell(815).  If we manage to get 3 of 5 of those back over the line – it's time to make some bullish bets but I think they'll act as resistance today and the lack of more QE from the Fed will put a stake through the heart of this little rally before it has a chance to gather more steam.  

[Chart]8:30 Update:  Oh no – the tragedy of FACTS!  Durable Goods are a DISASTER – down 4.2% vs. down 1.5% expected (Economorons miss by 180%) and Ex-Transport we're still down 1.1% vs. up 0.4% expected – a horrendous 375% miss by the people who follow this sort of thing for a living.  How many completely clueless data forecasts can one rally be based on?  On the bright side, this news is so bad it might be good – in that it may bring the Fed back to the table.  

I think the obvious solution to this problem is to have IPhones and IPads reclassified as Durable Goods – problem solved!  Although the report has taken our Futures down a notch, as I said – this news is so bad it's good and now we can all wait breathlessly for the FOMC announcement at 12:30 but that doesn't matter because then we get the FOMC forecasts at 2pm and then Bernanke holds a press conference at 2:15 and THEN – maybe – then it will finally sink in that there will not be another round of QE – at least until the Fed's next meeting on June 20th.  

Can we survive 2 more months without another shot of QE?  Doubtful, the bulls are already jonesing really bad and, as the great Gator explained, "I really hate having to resort to knocking older people in the head to get their money – but I'll do it – 'cause I'm a crack head!"  The investing class is just as hooked on free money from the Fed as Gator was on $20s from his brother and they are just as willing to destroy older people's retirement accounts in order to get another hit from the Fed's Free Money Crack Pipe.  

How can we expect the markets to react when Uncle Ben tells us we're not getting our fix today?  They will howl and they will scream and they will have a little tantrum and that's how we're going to play it this morning – taking the opportunity to add to our bearish bets – assuming they survive into the bell.  Already (8:53)  oil is collapsing back to $103.30 from a silly spike up to $104.50 and we have inventories at 10:30 where anything less than a 5Mb draw is probably going to send us back to $102.  You KNOW we already have those shorts locked in!  

EconoMontor had a good article yesterday titled "What Ever Happened to Peak Oil" and, as you can see from the chart on the right – production has never been higher – even as demand falls off a cliff due to a combination of persistent high prices and advances in energy conversation that are being prioritized more and more each day by Global Consumers.  

Keep in mind that chart is JUST oil – coal and natural gas have also never been more available and, despite Fukushima, nuclear power isn't going away either.  Even as production ramps up to record levels, the economies of scale are driving polysilicone (the material used to make solar panels) to record lows – at $22.10 per kilogram vs. $475 per kilogram in 2008.  This is enabling a sea change in major solar projects, with many previously iffy conversions now becoming viable from a cost-effectiveness standpoint.  Once the energy cartel loses a customer to solar – they don't get them back and, in case you haven't noticed – we're not creating a lot of new businesses to pick up the demand slack lately…

I guess now, looking back, my call to short FSLR at $300 in May of 2008 was a pretty good idea (now $18.64).  I don't do a lot of big write-ups on stocks so this was a treat and a great example of how Cramer pumps a complete joke of a stock, even when it's miles past all rational valuations.  I think my little graphic from that FSLR post says it all – unfortunately.

We'll see how many fools rush in to this morning's AAPL rally.  We'll be adding to our short positions ahead of the Fed and letting our longs ride unless 1,384 fails to hold on the S&P – that would make us bearish real fast!  As I noted yesterday, we took trades on both sides in the expectation we'd get violent swings one way or another.   In a perfect world, we'll cash out on this violent swing to the upside and then cash in on the next violent move down – maybe at 2:30!  

Be careful out there!  


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  1. stjeanluc

    Oil Lines

    R3 – 105.60
    R2 – 104.85
    R1 – 104.29
    PP – 103.54
    S1 – 102.98
    S2 – 102.23
    S3 – 101.67

  2. shadowfax

    Hear the rest of the story on NPR!
    At 3:30 AM mountain time that Brittian is officially in a recession! Now you know why Sara the clown and others hate that propaganda radio. Never on CNBC or FOX non-news, NPR and PSW!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  3. jabobeast

    FU PCLN!!!

  4. stjeanluc

    I guess the market needs a correction on either direction once in a while… We had been lucky with our shorts in the $25KP but we'll give back some today. But it's tough to see how just AAPL can drive the entire market for months to come as the reality of Europe and other issues will set in again. 

    Yesterday's earning strangles will be a mixed bag this morning:

    PNRA – 120/170 strangle. PNRA looks to open around 152 so looking good to collect there.
    AAPL – 510/620 strangle. AAPL looks like around 615 now so that will be close… 

    As I was pointing out to yesterday, these are walk around money gambles meant mostly for PM people who can afford to roll… It worked out well for NFLX on Monday and PNRA looks good now, but AAPL might require some patience… Although they might fade in the day. That's a huge move for them already – we are talking about adding $50 billion of market cap overnight!

  5. Pharmboy

    PP for today:

  6. ariveraA

    Yay Apple!  Complete green across my portfolio even though I don't own Apple… 
    Just repeat after me: This is not 2007, this is not 2007, this is not…

  7. stjeanluc

    Once again, so far, so bad with the economic numbers. The numbers from Great Britain were all below forecast with basically GB being borderlines in another recession. Durable goods order in the US were also below consensus at -4.2% when expectations were for -1.7%.

    I guess iPads and iPhones don't qualify as durable goods!

  8. stjeanluc

    Lines / Pharm – Looks like the AAPL lines are irrelevant today….

  9. BertII

    What just happened to oil

  10. jabobeast

    i want aapl to go down just because of Cramer!!!
     
    what an annoying clown!
     
    FU CRAMER!!!

  11. stjeanluc

    Oil / Bertll – Bad Durable Goods numbers….

  12. kustomz

    Bert, Iran says no nukes

  13. shadowfax

    Lines the same today with trendline resistance at 80.23 and support at78.40, will we break out today?

  14. kustomz
    • Warmest March on record (records date back 117 years)
    • Warmest Q1 on record at 42.0°F — 6.0°F above the long-term average
    • Only one month in history (Jan 2006) has seen a larger departure from long-run average
    • 15,272 warm temperature records broken

      The heat is on, Huey Lewis baby

  15. stjeanluc

    But there is no climate change Kustomz….

    We are finding all that Nat Gas but can't use it to heat our homes because there is no winter… I guess we can use it to generate electricity for the A/C which we will soon be using 12 months a year even in the Northeast!

  16. Pharmboy

    It just doesn't matter: Wednesday, April 25, 8:31 AM Mar. Durable Goods: -4.2% vs. -1.5% expected, +1.9% (revised) prior. Ex-transport -1.1% vs. +0.4% expected, +1.9% (revised) prior.

  17. Lincoln

    Phil: Global Warming Portfolio
    Maybe there should be a portfolio for all the companies who benefited one time from the warm winter?  I've got to believe it helped HOG with perhaps a pullback to come next quarter.

  18. japarikh

    Phil,

    I bought 5 May 600 AAPL calls for $11 yesterday. I’m going to sell into the excitement this AM. This is an example of my investing maturation thanks to you.

  19. Pharmboy

    DIA puts, rolling up to the 128 Mays for 40c, ahead of StJ's 25K post. 

  20. stjeanluc

    Earning strangles – The PNRA May 120/170 strangle sold for $1.35 yesterday can be bought back for $0.50.

    The AAPL strangle sold for $3.99 is now worth $3.50 so even on this one and I would suggest to close it to be safe… Might be a winner later today, but why risk it!

  21. dclark41

    Great numbers from AAPL. It WAS a great quarter. But didn't they lighten their forecast for the upcoming quarter? The stock market is supposed to be forward looking. Even AAPL isn't ignoring the data crossing the wires today.

  22. kurtww

    Phil – I took the weekly 575/May 590 play in my paper account. I closed it just now for a nice $9k profit on 10 contracts. I was worried about it too, but clearly your theory held up! Stjean – your 510/635 sold strangle is also up nicely. That one would have been a lot less stress-inducing in real life, but not as profitable. The essence of trading right there, I guess. 

  23. newt

    FAS May 105 calls are up nicely- thanks.

  24. stardawg

    thank you AAPL :-)  

  25. iTrade

    Long Put Portfolio suggestion for BIDU paid off nicely!  Thanks PHIL

  26. nicha

    AAPL – Sold my May $580 calls at the open for $42.30 when stock was trading at $615. So it still had $7.30 in premium. Got lucky! No more long calls ahead of earnings for me.

  27. rainman

    Anyone catch that PBS special about the markets last night? Well, maybe not a special, I think it was Frontline. Worth watching?

  28. stjeanluc

  29. bobhu

    nicha, great AAPL trade.

  30. stjeanluc

  31. rainman

    Jabo / Cramer — I can no longer have the volume on  while F'in clown is on. He's like nails on a chalk board!

  32. nicha

    bobhu – thanks. It was a nail biting day yesterday till AH.

  33. Pharmboy

    Market going up…..CAT going down.  Those 105 Weekly Puts are good to go from yesterday….

  34. stjeanluc

    AAPL / Kurtw – I actually called for a 510/620 strangle that was profitable early on at the open when I advised to close it. Decay will take its toll eventually if the position is not closed, but earning plays usually have to be watched closely to catch the opportunities!

    So far, 3 for 3 with NFLX. PNRA and AAPL, but a close call with that last one…

  35. Phil

    Good morning!  

    Like our Transport fleet – let's stay grounded today.  That Durable Goods report SUCKED – you can't ignore something like that.  At the same time the housing data isn't so bad, the markets are now giving the Fed no reason at all to ease, nor are Corporate Earnings in general so they are simply not gonna do it!  

    You have to be unemotional when the market spikes against you.  We knew AAPL earnings were going to be the best chance at a positive this week and here they are and we're still not popping our 50% lines at:  Dow(13,000), S&P (1,395), Nasdaq (3,075) NYSE (8,050) and Russell(815) – not even close yet and the Dow is never reliable.  

    Our new Members would do well to read the classic "Don't Just Do Something, Stand There!" as that's our philosophy for playing days like today.  One event does not a trend make so we will watch and wait and see what's happening before we run around changing our positions.  

    The Dollar is at 79.18 but has been hanging tough at 79.15.  The Euro is $1.3214 – still and the Pound is all over the place and currently $1.612 while it's 81.27 Yen to the Buck and EUR/CHF is $1.2017.  

    More telling is silver failing at $31 and gold failing at $1,645 (not even $1,650 this time).  Oil hit $104.50 on the button and is now back to $103.81 while copper is at $3.71, nat gas is $2.009 and gasoline is DOWN again at $3.1042.  Very mixed signals from the commodities with oil inventories at 10:30 and whispers of a pretty big net draw of 5Mb, which I very much doubt.  

    What's wrong with AAPL's picture?  Where's the short squeeze?  How does a stock pop 10% at the open and get no follow-through to the upside?  Isn't that odd?  On our AAPL spread, we sell into the initial excitement and cash the weekly $575 calls for $39 and that plus the net $1.25 we collected puts $40.25 in our pocket against the short May $590 calls, that are now $34 so the trade already worked out at net $6.25, even though AAPL went up much more than we thought but we can put a stop at $35 on the short calls and, with luck, we might do better.  

    Of course we want to DD on the DIA May $127 puts at .80 – that's a no-brainer and, if the Dow goes higher – we'll be happy to roll and see if we can't get a win next week before we give up.  

    Volume is not there at all on this rally – another red flag so let's just be very careful and sit back and watch our levels.  

  36. stjeanluc

  37. stjeanluc

    Not as much damage as we thought as we are more balanced now…

  38. rainman

    Anyone follow PWER?

  39. Phil

    At the open: Dow +0.53% to 13071. S&P +0.95% to 1385. Nasdaq +1.79% to 3015.

    Treasurys: 30-year -0.3%. 10-yr -0.19%. 5-yr -0.1%.

    Commodities: Crude +0.23% to $103.78. Gold -0.05% to $1642.95.

    Currencies: Euro +0.17% vs. dollar. Yen -0.02%. Pound +0.1%.

    Market preview: There's a torrent of earnings out there, but one stands out a mile and it's named after a fruit. Apple +9.2% after another blowout, taking futures up with it, with S&P +0.6% and Nasaq+2%. Not even weak durable goods can spoil the mood. Investors are also pleased with Boeing's (+2.45%) results, although not so much with Caterpillar's (-1.5%). Later: FOMC 

    10:00 AM On the hour: Dow +0.75%. 10-yr -0.17%. Euro +0.15%vs. dollar. Crude +0.27% to $103.83. Gold -0.3% to $1638.85.

    The market value of the S&P of $12.7T represents 83% of GDP, writes David Kotok. For comparison, it was 47% at the 2009 bottom, 98% at the 2007 top, and 129% at the epic 2000 top. The ratio can change, but its current fair valuation gives Kotok the confidence to stay with stocks, seeing 6-7% appreciation and another 2% in dividends over coming years.

    If a house grows in the forest and nobody buys it – does it make a sound economy?   MBA Mortgage Applications: -3.8% vs. +6.9% last week. Thirty-year fixed mortgage rate with conforming loan balances ($417,500 or less) decreased to 4.04% from 4.05%. 

    "Risk is back on and, quite frankly, the bears might be screwed because if they couldn't take them down this week, the correction is over," Doug Kass says. Among fundamental changes in the market, he says overall earnings and guidance were "far better" than pessimists expected, and general U.S. economic concerns "might have been overstated." - I guess he missed the Durable Goods Report!

    The weak durable goods print puts a slight dent in a nice rally for S&P futures, now +0.6%. Nondefense capital expenditures orders fell 10.5%. Unfilled orders were flat after rising 1.2% in February. Inventories rose 0.4% following a 0.3% rise in February.

    Not a big fan of Durable Goods (too volatile), but the YOY trend (less volatile) is not pretty

    Taking a bow for kicking the can:  "The ball is entirely, squarely in the court of governments and banks," says ECB chief Draghi before European parliament. "Buying time is not a minor achievement," he says of the LTRO, but cautions the ECB is on hold for now, noting short-term real rates are already negative. 

    Move along, nothing to see here….  London underperforms a strong European rally following news the country slipped back into recession in Q1, which was the 4th quarter in the last 6 where the economy contracted. Some economists aren't buying it, saying a sharp 3% fall in construction output and just a 0.1% rise in the services sector don't jibe with other data. FTSE+0.2%.

    Or here:  S&P revises India's outlook to negative from stable, affirms its BBB- rating. BSE Sensex -0.9%.

    Marine Le Pen – who garnered 18% of the vote in France's 1st round of elections – is expected to encourage her supporters to abstain from voting in the runoff. Hollande continues to lead Sarkozy in the polls, but at 54%-46%, the gap is narrowing.

    "2015 is not possible in my view," says John Greenwood of Chinese officials' floating of that year for making the yuan fully convertible. Greenwood helped design the HKD peg to the greenback in 1983 and says any talk of breaking the peg needs to stay on hold until after the yuan becomes convertible.

    Domestic output at Japan's thee largest automakers soars as March numbers are set off against earthquake-influenced totals from last year. Toyota (TM) and Honda (HMC) more than tripled last year's mark, while Nissan (NSANY.PK) doubled its previous tally. Analysts forecast the three companies will see a large increase in profits when they report FQ4 earnings in a few weeks.

    One more from Caterpillar earnings: A lot of the China slowdown talk has been waived off as little more than skewed data owing to the timing of the Chinese holidays. It may be of interest to note CAT saying, "demand in China remained weak after the Chinese New Year, and we now expect the overall machine industry to decline slightly this year." (PR) (h/t Mike Bergen

    The ABB earnings presentation sounds a lot like Caterpillarearnings, where weakness in China is being offset by strength in North America. ABB's order book in China is off 35% Y/Y, up 16% in the U.S. SEB notes the company saying it's uncertain when Chinese demand will recover vs. previously saying it appeared Chinese growth was returning. (earnings)

    More on Boeing's (BA) Q1: Revenue from Commercial Airplanes segment +54% Y/Y to $10.94B, Defense, Space & Security Operating +8% to $8.23B. Backlog increased to $380B, including $42B of new orders. Expects $78B-$80B in revenue for 2012 on delivery of 585-600 planes. 2012 EPS guidance increased to between $4.15-$4.35. Shares +2.3% premarket. (PR

    Corning (GLW): Q1 EPS of $0.30 beats by $0.02. Revenue of $1.92B (+flat% Y/Y) beats by $50M. Shares +1.5%premarket. (PR)

    HSBC (HBC) is set to cut about 2K jobs in the U.K. this week in its continuing drive to cut costs by slashing 30K positions over the next 2 years. HSBC's head count in the U.K. is roughly 52K.

  40. Phil


    More on Sprint's (
    S +4.9%Q1: Postpaid net adds were 263K – down from Q4's 539K, but still a welcome change from the losses seen until recently. Total net adds were above 1M (1.6M in Q4), and postpaid ARPU (boosted by iPhone subs) rose $1.29 Q/Q to $59.88. 1.5M iPhones sold (1.8M in Q4). Free cash flow, closely watched given liquidity fears, was $138M, in spite of a 44% Y/Y increase in capex to $800M. Sprint platform churn was 2% (1.99% in Q4). 

    Apple (AAPL+9.3%, as its FQ2 beat, fueled by margin expansion and soaring Chinese sales, washes away pre-earningsanxiety related to U.S. carrier sales. Sprint's report this morning that its Q1 iPhone sales fell 300K Q/Q also isn't having an effect. Goldmanthinks the report is evidence Apple's long-term margins will be higher than expected. BMO is more guarded, believing Apple's gains will be limited until summer, when visibility for the next iPhone improves. (transcript)

  41. Phil

    SQQQ May $11/12 bull call spread at .30 – 10 in the $5KP, 30 in $25KP.  In $25KP, add sale of 10 $11 puts at .45 to offset.  

  42. kustomz

    GO Bucky!

    LUXEMBOURG (MNI) – The current stance of the European Central
    Bank’s monetary policy is appropriate, ECB Vice President Vitor
    Constancio said Wednesday.
    Speaking on the sidelines of a central bank conference here,
    Constancio said current growth risks in the Eurozone were on the
    downside, while inflation risks were balanced.
    Constancio said inflation risks were balanced because oil prices
    were unlikely to rise further given the slower pace of economic growth.

  43. flipspiceland

    Nerves of steel:
    Kept my 20 badly out of the money Apr, May, June, and 2013 short puts and long calls on AAPL during the slide from 640.
    Only one remains a few hundred FRNs down, the 2013 670.  The rest?  Well, "today isn't a bad day to die".  (with props to Tom Berger's Chief in, "Little Big Man").

  44. stjeanluc

    How insane is that – the weekly AAPL 650 calls are still selling for $0.40. They are still $35 OTM with 2 days to go after a 10% move. If you have PM margin, it's almost worth a shot at free money.

  45. yshenhar

    DIA – was that a DD on the DIA 126 puts (now 0.69)

  46. zipla

    Just checking: On the SQQQ trade, did you mean 20 sold puts — not 10? 10 makes $450 while the spread costs $900.
    TIA

  47. newbie

    kids
     
    It is truly wonderful and revolutionizing that children in the age group Phil refererred to have all these toys and "productivity" tools.
     
    However, as has been mentioned by many for a number of years now, it's important that they all get outside, play soccer, ride their bikes, play in the woods, go fishing (or something similar), catch frogs in the creek, and just generally do SOMETHING besides sending texts to each other all day or sit in the family room playing video games on their 55 inch plasma while dreaming about going to the concert that cost….however much.

  48. dclark41

    What forward data is he looking at?
    "Risk is back on and, quite frankly, the bears might be screwed because if they couldn't take them down this week, the correction is over," Doug Kass says. Among fundamental changes in the market, he says overall earnings and guidance were "far better" than pessimists expected, and general U.S. economic concerns "might have been overstated." - I guess he missed the Durable Goods Report!
    Phil: You say it all the time. HOPE (hoping for the FED) is not a strategy!

  49. stardawg

    zipla
    buy 30 sqqq may 11 calls @ .70 = 2100
    sell 30 sqqq may 12calss  @ .30 = 900
    cost: $200
    sell 10 sqqq may 11 puts @ .45=$450 credit
    $200 less $450 gives you a $250 credit in your account for playing
    Adjust the sizing depending on your ability to roll/double/margin
    Cheers,
    dawg

  50. Phil

    PCLN/Jabob – Greed kills, that's for sure.  Of course, we're still waiting for earnings really but when they can pop it 5% on no news at all – that's scary!  

    Interesting early note auction today at 11:30 but Oil Inventories in 20 minutes even more interesting.

    NYSE rejected at 8,050, RUT rejected at 815.  1,384 is the only really important one.  Big goose from AAPL, who are 4% of the S&P so 0.4% or about 5 points is from AAPL so let's call them at 1,382 sans AAPL and look for 1,390 before we're actually impressed as that would be over 1,384 even without AAPL.  Hope that's not too confusing…

    Warming/Kustomz – AC makers should do well this year, it's one of those things people finally give up and buy when it's hotter earlier in the year.  90% of the homes have AC already in America but that's still 11M without and I'm sure people have put off buying new ones in the Recession.  70% of the people have Central Air so whoever services those should be busy too.  

    Warming Portfolio/Lincoln – That would be funny, especially while it does well in the face of climate deniers.  If you find good candidates, we should consider it.  

    AAPL/Japar – Good man, congrats!  Notice they peaked out at $30, now $28 despite the fact that AAPL is still at $614.  

    DIA/Pharm – I would have gone to the $129s but I decided to DD first and then do the roll if it goes the wrong way on us and gets cheaper because the Dow can drop back to 12,300 next week with no QE and some bad news from Europe and I'd rather have 2x the $127 puts at $4 than 1x the $129 puts at $6 if all goes well. 

    AAPL/DC – Keep in mind that CHINA!!! was about 20% of their revenues and that was an initial roll-out of the IPhone, they may be being realistic in their more conservative forecast for this Q, with no new Global products coming out.  

    AAPL spread/Kurt – Very nice!  Unfortunately, you can't play any old stock that way (the timing of the opportunity must be right as well) but it's very good to learn to recognize those opportunities.  That was one of those that I was super-confident in theory but, in practice, I was very worried when AAPL took off like that because you can't always count on a month-out caller to lose premium that fast.  

    FAS/Newt – Did I pick those?  I'd take that money and run.  

    You're welcome ITrade – that one couldn't have gone much better for us.  

    Oil testing $104 – watch out for head fake.  I'd like to buy more USO puts if they go up but we got in cheap so it would have to be a big move up.  

  51. Phil

    Net down 1.3M – That has to be disappointing!  

     EIA Petroleum Inventories: Crude +4.0M barrels vs. consensus of +1.7M. Gasoline -2.2M vs. consensus of -0.4M. Distillates -3.1M vs. consensus of +1.0M. 

  52. newt

    FAS/ Phil- Yep! like a stalking burglar!  CMG for my family tonight!!!!

  53. rainman

    newbie / something — Catch frogs?!? Are you kidding? They're DIRTY!  </sarcasm> Christ, they even provide bleach wipes for grocery carts these days…

  54. sagemm1

    Phil on Oil inventories is +4 a draw, seems illogical as it would be a build? TIA

  55. rainman

    Phil / Lincoln / Warming — How about pesticide manufacturers for a bullish play? My understanding is that a lot of bugs wintered over this year that would normally die off.

  56. gucci

    Hi Phil  is there news on PCLN or just a bounce today — I still have July 560 put now 8 ish should we add more

  57. kurtww

    stjean – actually I took the trade you mentioned the day before yesterday (510/635 strangle sold for $4.30), same day Phil mentioned the 575/590 play. I closed yours for a net $1500 on 5 contracts at 9:41. Very nice.
    On Phil's trade I would have done even better to close the long and watch the short decay further, but I don't have the stomach for that. By the way, I made a mistake listing $9k profit. That was the daily P/L, and the trade was down a bit yesterday. The net P&L was $5.95 per, so actually $6k on 10 contracts. Still an awesome turnout considering how high they are.

  58. ronresnick

    dclark41 / Doug Kass
    I met Doug a couple of years ago at a dinner.  These days he is just a talking head commentator.  I believe that his fund, Seabreeze, has not made money in at least 2 or 3 years.

  59. ronresnick

    stjeanluc / weekly AAPL 650 calls 
    Great find!

  60. stjeanluc

    Cool Kurtww, glad that worked for you. The 510/620 looks like it will work out anyway…

  61. dclark41

    ronresnick:
    I just don't like this trend of placing such great emphasis on earnings from the past quarter. Certainly, they are important in measuring the performance of a company and they can, over time, provide a history of performance that is worth consideration, but potholes in the road ahead are equally as important.
    Kass saying "the correction is over" is a little over the top.

  62. zipla

    Sorry Stardawg. I still don't see it. With 10 of the spreads yes, but not 30.

  63. kustomz

    610 breaks next test 605…600

  64. stjeanluc

    Earning strangle – If you have not closed the AAPL weekly 510/620 strangle sold for $3.99 for $2.80. That would be a 30% win.

  65. Phil

    PBS/Rain – That Frontline story is MUST SEE TV!!!

    CAT/Pharm – Gosh that writing was sure on the wall.  Sometimes it amazes me the kind of things they let us buy!  

    79.30 – Dollar creeping back up.  Euro failed $1.32 a bit too easily, scrambling to get back now.  SNB is freaking out.  Pound $1,611.  

    Balance/StJ – Ain't it a beautiful thing?  Setting up a portfolio is just like trying to get into a groove on a surfboard – you have to first get a feel for the waves (macros) and then find your balance on the board.  You may fall off a few times but once you get into a groove – you can have some amazing runs.  It's my favorite thing in the world to have a violent move like this and stay around even in a portfolio….

    Constancio/Kustomz – Must be this guy's cousin.  

    $103.10!  

    SQQQ/Zipla – I was just looking for a 50% offset – not greedy.  20 could be nasty if they go against you.  

    Kids/Newbie – My youngest is an active girl but Madeline is a real web geek.  She already has a business "leveling" people in some game.  People pay her and her friend $50 and $100 to level their characters – insanity!  She gets to play games and make good money – a nice scam, sure beats my old paper route when I was 11 although it would be nice if her "job" involved some kind of movement…  

    Hope/DC – I find I often disagree with Kass.  He says so much crap (from the Cramer school) on either side of the fence that he's bound to be right once in a while but people who make these proclamations based on single events are just idiots.  

    $250 credit/Star – You know, if it sounds too good to be true, you probably F'd up the math….

    Oil/Sage – I'm talking the net of oil + gas + distilates.  The headline number doesn't matter.  That's why you get such wrong reactions off that report sometimes.  I know you are newer so you have to learn this stuff – a lot of our guys have had this stuff drilled into them for years now, so it's sort of a given that we forget to mention anymore.  

    Pesticides/Rain – That's good old MON, I like them anyway for good macro reasons.  I'd rather wait for a nice sell-off though.  

    PCLN/Gucci – Since when do they need a reason?  I did see some bullish notes on airlines but nothing particular.  July $560 puts are back to $8.20 and we could have/should have taken $11.70 yesterday and not been greedy but I still like this as an entry for a short position on them but, if you are already in, I'd save the money for a possible roll-up opportunity – in case they do pop.  

  66. ronresnick

    dclark41 / Doug Kass
    I am a very close friend of Seabreeze's third party marketer.  All I know is that Doug does not make money — and that is all I need to know for me to pay no attention to him.

  67. angelcur

    SP 500 futures up..nq up silly in response to APPL earnings long as it stays below 1390ish bears have the ball. …1390ish and 1400ish neutral… above 1402 the bulls are back in control…US sovereign cds worst performer over last 5 days…+24%…odd
    BRUTHA ^^^666 on cnbc now

  68. rainman

    WTF? First hot dogs, now cheezburgers!: Pizza Hut unveils cheeseburger crusted pizza guess it isn't as bad (yet) as the Heart Attack Grill: 2nd Heart Attack Grill Victim? Woman Collapses While Eating Burger who also lost their 600 lb spokes "model". 
     
    How long before ALL restaurants have warning labels on the door?

  69. nicha

    Off topic here – anybody have the new Toyota Prius C? I am thinking about buying it.

  70. tommyt

    Im suprised loyd b isnt wearing his boy scout uniforn for his great guy cnbc interview.

  71. rainman

    Phil / Mon — Whad'ya think, around 68 for another look? Looks like the bottom of the upward sloping range right now is around 67 (two year chart).

  72. hoss18

    Kass just playing his book, looking for someone to sell to…..Phil's right, watch those lines, they tell the tale.  Something's bugging me about AAPL's numbers that has me thinking they may settle into a range here for a while.  While I wouldn't short them, there are two things that stick out to me in their numbers.  
     
    First, their margins exceeding by so much.  On the face, the may be impressive, but it also covers over softening iPhone sales in US/EU/Japan(and YES CHINA makes up for alot of that I know, but that may be more of a pop because of the newness, which may wear off).
     
    Second, they guided down hard.  This makes me think they know something we don't.  Now maybe it's as Phil says, they are acknowledging the China rollout was a one time thing, but it could also be that the margin blowout was a one time deal and margins may come back down.  People are looking the other way because it was a blow out quarter, but their guidance is alot lower, even than their traditional conservative guidance.  I would be wary of margin compression.
     
    I'm NOT building a case for shorting AAPL.  I think they are a great company hitting on all cylinders, rather, my case is they settle into a range until the next generation iPhone comes out.  That range probably runs from the lows in the 550s up to 640.  They need something more than just an upgrade of the existing products to really push them, hopefully, that comes with i5, but who knows.

  73. zeroxzero

    Phill;  What would be a good idea to play over-the-top U.S. electricity [A/C] usage this summer? Utilities are rate-regulated, so not much mojo there, I wouldn't think.  Carrier is part of United Technologies, hardly a pure play.  Nat. gas?

  74. Phil

    Seriously, a Lloyd Blanfien infomercial?  

    Now that things are a bit calmer:  

    FAS Money – Gotta love it!  Down $100 is fine with us since we're in the premium selling business, not the predicting business.  

    IWM Money – $200 gain?  Would have sold another call at $6 but missed it (now $5.40).  Let's sell 2 July $55 calls for $8.  

    $5KP – Sorry, I thought we had $127 puts on DIA.  Either way, a DD was appropriate.  EDZ strangely unmoved, others all on track(ish).  

    $25KP – So relaxing….

    • DMND up 2.5% today 
    • XRT – Only up 1%, which is encouraging 
    • BBY – Back at $22.
    • SCO – On track
    • SQQQ – June 
    • FAS – Good balance now
    • GLL – Giving it until next week. 
    • DIA – Average $1 means we look to sell 1/2 for $1+ 
    • CHK – I like them still. 
    • PCLN – Blew $700 by being greedy yesterday.  Very poor decision after my morning lecture that we shouldn't take $800 for granted, right?  Hopefully we'll be smarter next time but, for now – let's make it 5 of the $560 puts (now $8.20) 
    • EDZ – Still like those. 
    • USO – You know I like those.  

     

  75. sunilram
  76. stardawg

    zipla   opps got the math wrong.  must need another coffee as kids were up 3 times last night arg……
     
    buy 30 sqqq may 11 calls @ .70 = 2100
    sell 30 sqqq may 12calss  @ .30 = 900
    cost: $1200
    sell 10 sqqq may 11 puts @ .45=$450 credit
    cost for the spread: $750 debit
    if phil meant 30 not 10 of the 11 puts, the credit would be $150
    so you are risking $750 bucks or assignment on the 11 put sale, to make $2250 by may expiration……
    hope that is right……someone else check the math :-)

  77. lol730

    Why is oil disappointing?
    If consensus was +2.3 and actual -1.3.
    Does it mean that they expected that we will have more stored and we actually have less.
    Am I reading it opposite?

  78. rainman

    sunilram — I agree 100% 8) 

  79. dclark41

    Well said Hoss. Thank you.

  80. 1020

    Newbie/Kids   I agree.  We are fortunate (and cursed) to have ability to give the kids anything they "think" they need to have. We'll usually ask them to consider the reason why and thankfully, the answer "our friends have it" is a response they have grown out of. 
    They do enjoy the wonderful "experience" of traveling with their family, seeing and doing things that many their friends may not…..
     
    We encourage them not to think like "crowd" - though in today's world, it's hard not to.  :)

  81. 1020

    Phil – I've had the "turd with eyes" on mute…..

  82. Lincoln

    rainman: bugs
    We spend most of summer in NC mountains at 4,000' elevation where they never had mosquitoes until the last few years where you might actually see a couple now.  I was told mosquitoes can't survive certain cold temps, not sure if that's winter or summer since 50 deg at night not uncommon in summer.  In any case they are now seen at higher altitudes coinciding with warmer temps. FWIW  Still don't need AC at least! 

  83. Phil

    LOL Rain – I have to go check that place out in Vegas!  

    At the Heart Attack Grill, signs warn customers that "This Establishment is Bad for Your Health." Customers also arguably know what they're biting into when they order a "double bypass burger," which comes with two half-pound burger patties and bacon (with the option of adding even more bacon).

    I had to cut down to a 2/3 at Fudruckers as I've gotten older but I never had the balls to add bacon and cheese to a one-pounder.  

    MON/Rain – Net $65 and I'm in.  

    Electricity/ZZ – I would think there are a lot of utilities worth playing.  Best would be the ones that use the most nat gas in a place where it will be hot.  

    They goosed the Euro back over $1.32 into the close – on the button.  Pound is $1.613 again but check out silver – dove to $30.12 – what's up with that?  

  84. nicha

    rainman/MON – how about selling the Jan $65 put for $5 on a drop or GTC? 

  85. stjeanluc

    IWM Money / Phil – We bought back to short IWM calls yesterday and those would have moved against us today so it makes sense that we are up more than we should if we had the BCS. The long IWM calls are up $700 for the day!

  86. nicha

    rain/MON – which would be the gap down to $72.69 in mid January.

  87. stjeanluc

    Heart Attack Grill / Phil – They had them on Food Network once and the place looked great if you don't mind dying early. All the waitresses were dressed as nurses and if you finished a Quadruple Bypass, they would roll you out in a wheelchair to your car. Also, if I recall, anyone over 300 pounds ate free or something like that! Insane if you ask me…

  88. Phil

    SQQQ/Straw – I cost $900 for the 30 spreads at .30 and then it's offset by $450 from the sale for net $450, which is .15 each $1 spread.  Upside is $3,000 at $12 so a profit of $2,550 max.  If you are assigned, you own 1,000 SQQQs at net $10.85 so risk is around $1,000 if they drop 10% (but rollable, of course).  

    Oil/Lol – Like I said last night (and very good discussions last night if you missed it), they were expecting about a net 5Mb draw so anything less was a disappointment.  

    IWM/StJ – That's why we need 2 more covers.  

    Heart Attack Grill/StJ – I love it.  Can't wait for them to have their day in court and justify killing their customers.  A great statement to make on America in the 21st century. 

  89. pstas

    EUR/USD- any insight on the continued strength- (FXE)?

  90. rustle123

    If anyone wants a free subscription to Forbes:
     
    http://www.rewardsgold.com/mags/forbes_gd/sg_forbes_pg1gd.htm

  91. stjeanluc

    $5KP / Phil – Since we have the DIA May 126 in this one, does it make sense to DD on the 126 at $0.72 now?

  92. scottmi

    What up with that/Phil – LOL! nice to see Deon giving Gore the respect and attention he deserves. ;-)

  93. 1020

    Phil – Avoid HAG and go to In and Out for a great burger. You can order a double double – animal style, if you need to test your heart…..
     
    http://www.in-n-out.com/
     
     
     
    Seriously, be prepared to be impressed – for only 1.75…… :)

  94. stjeanluc

    Heart Attack Grill / Phil – Well, the day in court was covered as you had to sign a release I believe for the big stuff… 

  95. rainman

    nicha / MON — I don't like to place GTC orders on opening orders (closing is OK). In a crash (flash or otherwise) there is too much to worry about and too many opportunities to make a commitment to MON now.  I'd rather put a watch on it for $5 and decide once it's hit. Otherwise the trade looks decent. I'm putting a watch on MONt for < $74.20 (just above the gap) and will watch it closer at that point. The gap is a good point though and right now the 200 DMA is in the gap so we might add downward momentum if we get a death cross in addtion to the gap fill.

  96. zeroxzero

    Ingersoll-Rand seems to be the best U.S. public company for A/C applications.

  97. 1020

    A write up on In and Out:
     
    http://www.esquire.com/the-side/feature/top-fast-food-restaurants-0909#slide-1

  98. Phil

    11:43 AM Europe closes sharply higher for a 2nd straight day. Stoxx 50 +1.7%, Germany +1.8%, France +2%, Italy +2.7%, Spain +1.7%, U.K. +0.2% (after data showing a slip back into recession). Euro flat at $1.3201.

    11:34 AM The Treasury sells $35B in five-year notes at 0.887% - not quite the lowest sale yield on record – in an auction wrapping early because it's Fed day. Bid-to-cover ratio of 3.09, vs. a recent average of 3; indirect bidders take 47.5%, vs. a recent 46%. Direct bidders take 9.4%, vs. a recent 11.8%

    11:48 AM Treasurys trim losses slightly after a solid early auction of five-year notes: The 30-year yield +0.015 to 3.14%; 10-year +0.01 to 1.99%; five-year +0.01 to 0.86%; two-year +0.01 to 0.28%. Still to come for interest-rate watchers: the Fed Open Market Committee policy statement at 12:30 p.m., forecasts at 2, and the Bernanke press conference at 2:15

    12:00 PM On the hour: Dow +0.53%. 10-yr -0.04%. Euro +0.09%vs. dollar. Crude -0.17% to $103.38. Gold -0.21% to $1640.35.

    "There is a lot of pent-up demand," economists and policymakers are too negative on the economy, says Lloyd Blankfein. The "big risk is that things go right" with the global economy. TLT+26%TBT -49% Y/Y. 

    The favorite to become France's next president, Francois Hollande says the EU fiscal compact will not be ratified by his country. Markets in Europe are up sharply, with Paris +2.3%. Take your pick: oversold bounce, Apple, Sarkozy to pull an upset, or just maybe the hope for a trashing of austerity policies that are choking much of the EU.

    As the quick rise and now slide in Citigroup's Economic Surprise Index in 2012 begins to resemble 2011, Bespoke notes the similarity in the S&P price action between this year and the last. If the pattern continues to hold, selling in May and buying back after Labor Day may work out nicely.

     

    BofA's 30 favorite "Global Wave" stocks - high-beta stocks, often with low S&P quality rankings and cyclical earnings growth:ANRACIALVCVCCEXECCLFCREIPGLVLT

    LBTYALSI,MWVMUNFXNIHDNVDAOIBTUPLDSNDKSTXSIRI,SPWTRW

    VMEDWLTWDCWLLWYNN.

    Why is Saudi Arabia pumping oil at the highest rate in nearly 30 years just to put the crude into storage? One theory is that the Saudis are worried about tensions between Iran and the West escalating; another is that they are preparing for peak power demand in the summer. But neither quite address the fundamental reality: Stockpiling in a high-price environment is counterintuitive.

    This is why we stick with BTU!!!   S&P places its junk-level rating on Arch Coal (ACI -2.4%) on watch for a potential downgrade, saying it believes weak coal demand is increasingly likely to cause the company to fall short of the rating firm's previous sales and earnings estimates for this year and next.

    Q2 solar demand has been better than expected, Digitimes reports, with Taiwanese cell vendors reporting stable pricing and a pickup in orders from European customers. However, much of the Euro demand stems from installations being made ahead of Italiansubsidy cuts, and pricing has stabilized partly because the losses being posted by solar firms leave little room for additional cuts. 

    Jefferies trims its estimates for Buy-rated Ford (F +1.1%) ahead of the automaker's Q1 report slated for later this week. The price targets drops a buck to $15, while FY12 EPS goes to $1.46 from $1.52 to factor in adjustments to tax rates and international profits.

    Corning (GLW +5.8%) rallies after beating Q1 estimatesand offering a relatively upbeat outlook for its pressured LCD glass business. Corning predicts glass price declines "will be much more moderate" in Q2 than in prior quarters, with volumes flat for Corning's internal glass ops and up slightly for Samsung Corning, which recently lost a major deal. In addition, the Specialty Materials business is expected to grow 10%-15% thanks to strong Gorilla Glass sales.

  99. Phil


    Swedish appliance maker Electrolux (
    ELUXY.PK +7.1%) soars on strong earnings thanks to price increases in North America. "The (U.S.) is probably past the bottom of a home-building slump," says the CEO. Whirlpool (WHR +7.5%) – which reports tomorrow – also flies on the news.

    Yeah, we need to fight to keep private health care!  The ugly details emerging from a report out from the Minnesota AG aren't painting a pretty picture for medical debt collector Accretive Health (AH -21.1%). What the company calls "revenue cycle operations" is alleged to include embedding incentivized debt collectors in hospitals and providing them with a script to help them elicit payments from patients before treatment takes place. (previous

    Friggin' Cramer:  Shares of SuperValu (SVU -1.5%) trail off after Jim Cramer claims "everybody hates it" on last night's Mad Money lightning round. Apparently, everybody doesn't include analysts with Jefferies who were out with positive comments only two days ago. SVU -25.5% YTD.

    Shares of Panera (PNRA +7.1%) spike higher after the restaurant operator clocked better-than-expected Q1 earnings and raised its guidance for 2012. New products and a bounce in catering revenue helped fuel an operating margin that rose to 13.5% for the period.

    High-beta Universal Display (PANL +6.4%) is outperforming most of its tech peers. Possibly helping are Corning's positive remarks about its Samsung Corning JV, which supplies glassfor Samsung's OLED displays. In addition, PANL has announced a 2-year materials supply agreement with Fraunhofer IPMS, which is looking to develop OLED lighting panels.

    Aided by today's tech rally, Baidu (BIDU -3.5%) has pared the AH losses seen due to its Q1 report and guidance. Barclays(Overweight) thinks Baidu's guidance is conservative, the result of a slow start to April and ad spending being pushed out to 2H. Goldman(Neutral) remains positive long-term, but is worried about near-term competition from vertical search/directory sites, and margin pressure from Baidu's giant R&D investments. (transcript

    Topeka Capital's Brian White, who made waves by setting a $1,001 PT on Apple (AAPL +9%) 3 weeks ago, is raising it to $1,111 following the company's FQ2 beat. Apple trades at just 8.1x (ex-cash) White's CY13 EPS estimate, and he sees a new iPhone, Apple TV, iPad Mini, and possible iPhone deal with China Mobile sustaining its momentum. (more) (transcript)

  100. rainman

    Mon — Oops. Dropping below the 200 DMA isn't the death cross.

  101. Phil

    Forbes/Rustle – I don't want them badly enough to give out my Email address but thanks!  

    DIA/StJ – Yes, I thought we had $127 puts in both but the idea was the same either way.  

    Gore/Scott – He's a better actor than most who do that sketch.  He's actually a very funny guy, just acts like a stiff in public.  

    In and Out/1020 – We don't have those here.  I'm all spoiled now with kobe burgers and don't even go to Fudruckers anymore – we make our own every other week during BBQ season but that's all I want to stuff into my kids – or myself.  

    Release/StJ – We have a wings place around here that makes you do that.  

    IR/ZZ – Too much other stuff is the problem.  You know, that road leads back to BBY as a retailer of appliances.  

    CAT costing the Dow about 36 points!  Accounts for the Dow lagging.  AAPL adding 1% to the Nas, accounting for them leading so, on the whole, everyone is up about 1% if we take out distortions.  

      

  102. dclark41

    Phil/Hcbk:
    I have owned HCBK since June of 2011 Bought 100 shares at $8 and Sold  puts that I was assigned. So I hold 500 shares and am net +$145 through because of numerous put sales. Can you help me make the next move. HCBK is a long term hold for me and about half the size of the total position I would consider owning.  Is selling the Jan'13 calls and puts a good move here? I only get around $1.45 for that. Or should I wait for a higher VIX to try to get better premiums? The stock (technically) looks to have more room to run upwards from here. What would you suggest? Thank you.

  103. stjeanluc

    Just piling on the black gold…

    http://www.bespokeinvest.com/thinkbig/2012/4/25/oil-inventories-above-estimates-for-fifth-straight-week.html

    We might have to actually use it to make room soon!

  104. angelcur

     for a "risk on" day..euro trades poorly and bonds trade very well for "risk on" day growth stocks massively outperforming value… PHIL! we should have loaded up on venezuela when chavez cancer disclosed its up +107% ytd!

  105. zeroxzero

    I'm getting the vibe that Hollande's candidacy is giving hope to the German austerity foes.  If France starts to block German initiatives, Euro equities —  Spain/Italy — might soar.

  106. Inkarri1982

    Hello ALl – I read the Lee Adler article on home prices rising and although he makes some good points, home prices can rise but who will be able to afford them?  Was the point of his article only to show that home prices have continued to increase?  Or was he saying that as a way to show that the economy is improving?

  107. newbie

     

    rainman
    April 25th, 2012 at 10:33 am | PermalinkIgnore this user
    newbie / something — Catch frogs?!? Are you kidding? They're DIRTY!  </sarcasm> Christ, they even provide bleach wipes for grocery carts these days…
     
    When I was a young kid my brother and I would serach the swamp all afternoon in the hot sun  and catch little frogs (not the big leopard frogs). We then walked up the hill and sold them to the bait shop for 3 cents each. If we were lucky, we got enough to split a bottle of pop.  I can't remember the last time I saw a frog   (:
     
    I wouldn't mind spending one sunny day a week catching frogs these days, if I could get about $20 a piece for them………
     

  108. rustle123

    Which will be better for the stock market, if Sarkozy wins or loses?

  109. jabobeast

    Phil--are you surprised by the pop and strehe ngth in PCLN? I know it is NOW highly correlated with AAPL bacause they sell the same goods, but a 3-4% move that is holding even after the AAPL hype seems to be slowing? Or am I blind because of my bias? Pretty scary to see this jump so much because of AAPL. Definitely sweating their earnings in less than 2 weeks!

  110. peedlew99

    I prefer Darrel Hammond's Al Gore to the real one. 

  111. newbie

    Kids/Newbie – My youngest is an active girl but Madeline is a real web geek.  She already has a business "leveling" people in some game.  People pay her and her friend $50 and $100 to level their characters – insanity!  She gets to play games and make good money – a nice scam, sure beats my old paper route when I was 11 although it would be nice if her "job" involved some kind of movement…
     
    "leveling"? I don't even know what that means! That's pretty good money for an eleven year old. Does she need any subcontractors? (I'm available)
     
    I'm sure your kids will grow up with a good entrepreneurial "awareness" even if it is not "interest".  I had to really laugh a week or two ago when you said one wanted to be an actress and one wanted to be a singer (if I remember right), but their "backup" plans were to go to Yale, or something like that  :)

  112. angelcur

    AL=CIGAR STORE INDIAN
    I THINK WE GET LESS DOVISH FROM THE FED…SWAG WISE

  113. lolobear

    CAKE – Anyone have a play for this at all?  Any sentiments?

  114. rainman

    Phil / wings — What do they make you release? :)

  115. crussell14

    Phil
    I missed the PCLN July $560 put trade. Would you recommend doing the trade today or waiting? Thanks

  116. lolobear

    LVS – momo stock.  Also, anyone have some play on this?

  117. aussie260

    Frogs – My kids were catching frogs and watching tadpoles in our backyard this past weekend :)

  118. jabobeast

    12:34p

    Fed stands pat, sees gradual improvement

    By Greg Robb The Fed April 25, 2012, 12:34 p.m. EST
    Federal Reserve on Wednesday stood pat on interest rates and said economic growth will remain moderate over coming quarters and then only pick up gradually. Full Story

    12:34p

    Dollar pares loss, Treasurys up after Fed
    10 Year Treasury Note
    /quotes/zigman/4868283/delayed
    10_YEAR 1.98 +0.00 +0.05%
    5 Year Treasury Note
    /quotes/zigman/4868109/delayed
    5_YEAR 0.86 +0.00 +0.35%

    See All Quotes (4)

    12:33p

    Gold, oil add to losses after Fed announcement

    12:32p

    Fed holds rates before forecast, Bernanke presser

     

    By Steve Goldstein April 25, 2012, 12:32 p.m. EST
    WASHINGTON (MarketWatch) — The U.S. Federal Reserve on Wednesday kept interest rates at the same level it has since December 2008 and made no substantive tweaks to either its asset purchase program or the language describing the economy ahead of the release of a new… Full Story

    12:32p

    Fed holds policy steady as expected

    12:32p

    Fed keeps plan to hold rates low until 2014

    12:32p

    Fed: Oil prices will affect inflation temporarily

    12:32p

    Fed repeats market strains are big downside risk

    12:32p

    Fed sees moderate growth, then gradual pick up

  119. Phil

    Fed Statement – Whole Lotta Nothing!  

     

    Release Date: April 25, 2012

    For immediate release

    Information received since the Federal Open Market Committee met in March suggests that the economy has been expanding moderately. Labor market conditions have improved in recent months; the unemployment rate has declined but remains elevated. Household spending and business fixed investment have continued to advance. Despite some signs of improvement, the housing sector remains depressed. Inflation has picked up somewhat, mainly reflecting higher prices of crude oil and gasoline. However, longer-term inflation expectations have remained stable.

    Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth to remain moderate over coming quarters and then to pick up gradually. Consequently, the Committee anticipates that the unemployment rate will decline gradually toward levels that it judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The increase in oil and gasoline prices earlier this year is expected to affect inflation only temporarily, and the Committee anticipates that subsequently inflation will run at or below the rate that it judges most consistent with its dual mandate.

    To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

    The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.

    Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who does not anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate through late 2014.

    What a joke!  Market acts all surprised.  Now we'll get a gut reaction but bulls can hold out hope until Bernanke denies them 3 times at 2:15.

    Gold spiked down to $1,615 – back at $1,633 but I bet that's the real number. 

     

  120. yodi

    lolobear
    LVS yes many

  121. zeroxzero

    Aussie:  I had a small frog attach itself to my chest while showering yesterday.  And pretty much everyday.  Plus salamanders and lizards scurrying around my feet, three types of mosquitos, RV-sized cockroaches, tarantulas, land crabs, snakes, and all kinds of bugs.  Hell, I found my cereal box full of  [small] ants the other day and just mixed 'em in with the yogurt — a behavioral legacy of living in the Amazon jungle for a time.  You'd be amazed what you can get used to in the tropics.

  122. aussie260

    Zero – Well it is not very buggy here in Northern California, but we do have a resident bobcat that sauntered right across the driveway at 7am this morning like he was the family pet. We also have a family of deer and gorgeous hawks that sail overhead all day looking for gophers (plenty of them!).

  123. Savi

    zero—pray tell where you live?

  124. rdn4evr

    zz- Eewwww!

  125. Pharmboy

    Oh my….SGEN is getting back to where we want them…..$20, break baby….then GSK, or someone, buy them…..50% premium would be perfect!

  126. dpastramas

    Gartman saying QE is put off for many months. Is he credible? Never heard of him before. 

  127. alik

    Hello Phil, I have several questions: 1) Is there an ETF that allows to short German Bunds (a German version of the “widowmaker" trade)? I am thinking about doing that if and after Hollande gets elected (and European markets crash).2) What do you think about GLW? The best part in their report that somehow slipped unnoticed in commentaries is that their fiber-optic segment is starting to get better. This dovetails with better than expected report from AFOP yesterday.

  128. Pharmboy

    22.5 SGEN May Calls doubled…..damn shame that I didn't get filled yesterday.  Volume is heavy in those, I still smell something, just cant tell if it is rotten or sweet!

  129. Savi

    Phil--your opinion on /RB?
    Thanks

  130. stjeanluc

    Did you get out OK of the AAPL strangle Dpas? It's looking very good now…

    As lflan was saying yesterday, the big jumps after AAPL earnings can usually be faded the day after. Looks true today.

  131. Savi

    Pharm—did try your SGEN calls but did not get filled :-)

  132. lolobear

    yodi – what's the play on LVS?

  133. Savi

    should be :-(

  134. Pharmboy

    SGEN – I am going to try again, selling the June 15 Ps for a 10c play.  Just a few. (buy the May 22.5s).

  135. jromeha

    Dpast – never heard of Gartman!? I think he is a pretty solid futures guy… He's no phil , but still pretty solid. He's more swing trading though (from what I remember).

  136. aussie260

    Dpast

    http://cloud.thegartmanletter.com/about.aspx

  137. newbie

    1020
    Ignore this user Newbie/Kids   I agree.  We are fortunate (and cursed) to have ability to give the kids anything they "think" they need to have. We'll usually ask them to consider the reason why and thankfully, the answer "our friends have it" is a response they have grown out of. 
    They do enjoy the wonderful "experience" of traveling with their family, seeing and doing things that many their friends may not…..
     
    We encourage them not to think like "crowd" - though in today's world, it's hard not to

    ___
    Teaching young people to "think for themselves" is the best gift you can give them as parents. I guess I've always thought that doing "chores" for an allowance each week is a good idea, no matter how affluent a family is. I took out the garbage, fed the dog, and cleaned the house. If they want an iPod, you could match them $10 for each dollar they put up. Enough money of their own so they "feel it", but enough contribution  from mom and dad to make it possible.
    If Mitt Romney had ever had to actually work for a living, he'd be a better person (and thus, probably not a candidate). And no, driving an air conditioned new car to an air conditioned office where he sat every day in a big leather chair doing leveraged buy outs of companies and then firing half the employees and "earning" 10's of millions of dollars a year does not count as "work"  (in my book).
     
    When I was about 15, I decided just as the snow melted that I wanted to buy a ten speed bike that summer.  I saved every single penny I earned all summer long. Cut grass, anything I could do. Sanded furniture for my dad's furniture refinishing business.  I even had a little notebook that I wrote down every penny in, with the date, the work, the amount, etc.  By August, I had $65 ( a LOT of money for me). My mom could see how hard I was working on it, but she could see I was only halfway to the $130 I would need for the bike, so she gave me the rest. I was shocked! but unbelievably happy and thankful.  I got the bike a few weeks later. I spent hours spraying WD-40 on every pivot point, and waxing the frame tubes. I rode like the wind, every day, farther and farther.  I went on to have a decent "career/hobby" of racing bicycles for the next ten years. I had a custom bike built for me when I was about 22.
     
    I really don't think of myself as an old curmudgeon, but I get bugged when I see 12 year olds with cell phones and iPods, PARTICULARLY when they seem to be completely oblivious about what they have. I think they should all be required to visit the Foxconn factory before they get an iPod, maybe even sit at the bench turning in 3000 microscopic screws. Many of us here are old enough to remember going to the store and paying $8 for a "record" that had 5 songs on each side (and that developed "skips" after a month of use).
     
    But what the F do I know, I don't have any kids.
     

  138. dpastramas

    AAPL / StJ – Thanks for asking StJ, but i got slapped. I saw AAPL marching to 620 and i closed it at for 6$ (3$ loss).  I am really bad at timing, always get out at worst possible moment, and this goes for the winning trades as well

  139. angelcur

    DENNIS GARTMAN MAKES ABOUT 5 MILLION A YEAR IN HIS NEWS LETTER/RESEARCH BIZ..I VE SUBSCRIBED TO HIM FOR YEARS THERE IS NO COMPARING PHIL AND DENNIS ONE IS AN OPTIONS JOCKEY WITH A MACRO BENT THE OTHER IS A CYCLONE OF SOMEWHAT EFFECTIVE TRADE BLOVIATION..HE HAS AN ETF ACTUALLY

  140. dpastramas

    Gartman / Thanks guys! I just know him by name, zerohedge makes fun of him sometimes. Well from what i see the markets dont share his POV of no new QE or Twist. 

  141. newbie

    aussie260
    April 25th, 2012 at 12:33 pm | Permalink
    Ignore this usFrogs – My kids were catching frogs and watching tadpoles in our backyard this past weekend
     
    FANTASTIC!!

  142. sagemm1

    WTF a refinery blow up or what? oil near 104 again pump into the close?

  143. stjeanluc

    Timing / Dpas – You need to work on the patience/not panic aspect of the trades and waiting 10 more minutes at the open gave an opening to get out with a small profit. But these earning trades are tough… Worst case scenario, these calls roll nicely up at least $30 with the premium in AAPL! Right now the weekly 620 are about $2.24 and they roll to the May 680 or the June 740. Which is kind of insane come to think of it.

  144. 1020

    interesting….
     
    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2029057

  145. aussie260

    Fantastic/Newbie – Yes, it is.  
    Although they are still modern kids…  
    My 7 year-old son sets his alarm to get up by 6:15am PST so he can hear the TOS bell ring at the market open and sit with me while I trade for an hour before he has to get ready for school.  His favorite stock…AAPL, of course!
     
    Don't worry – he also loves to play baseball, ride his bike and is a top student and reader :)

  146. kinkistyle

    Things looking up for Japan. 
     
    Aflac shares surge on Japan sales outlook

    "Aflac shares surged 7% to $44.90 early Wednesday, landing the insurer's stock among the top S&P 500 gainers. After the market closed Tuesday, Aflac said sales at its Japanese business will be up 10% this year."
     
    Japan firms' production returns from China: report

    "Japanese manufacturers are repatriating some of their production lines back to Japan from China, as Chinese wages grow rapidly, the Nikkei business daily reported Wednesday. The producers were increasingly making high-end items in Japan, though some low-cost items were still being made in China, the report said."
     
    Foreign visitor numbers nearly back to pre-disaster level

    "Foreign visitor arrivals in March were almost back to the same level as in 2010, which marked a full-year record, according to Japan National Tourism Organization."
    Yeah! Its gonna take a little more than a tsunami and a nuclear meltdown to stop Japan!

  147. 1020

    Newbie/no kids    I'm sure you know more than you think…. :)

  148. yodi

    lolobear
    many to list I can send them to you via email if you are interested I found it a great stock to play. My base of the stock is 48.63 playing always puts and calls against it.

  149. txchili

    IWM long put rebuy – I did some of the March put list, one was IWM Aug 76 bought 3/19 for 2.55 and cashed on the dip for 45%. TYVM. Now looking to rebuy, but I don't see IWM regaining 83 as they seem to be making H&S right shoulder now, so am thinking of buying some Aug Ps again. Do you like the 77s @ $3.05 or the 76s @ 2.76 or some other strike.  Thanks again

  150. Pharmboy

    There goes USO.

  151. jromeha

    WTF is with oil?

  152. Ottomatic

    So Exxon increases its dividend therefore oil shoots up.  I am not sure I see a connection. 

  153. peedlew99

    Thought on the metals here?  Phil?  anyone?
     
    This miners are up, at last.  If this rally gets follow through, hard to imagine the metals not joining in.  But also hard to imagine escape velocity rally without QE3 .

  154. sagemm1

    Lets see No QE3 dollar goes down, Euro up and oil up…I am missing something, right?

  155. Phil

    Dow volume 49M at 12:36

    Dollar 79.33, oil $103.40, gold $1,629, silver $30, copper $3.69, nat gas $2.008, gasoline $3.0867.  

    Euro $1.3187, Pound $1.613.  

    HCBK/DC – Well they pay a .32 dividend (5%) so that's worth keeping the stock for and if you have 500 shares is a 1/2 position then why not sell the Jan $7 calls for .60 and the $6 puts for .40 and then you drop your basis to about $6 (assuming it's $7 now) and you'll collect .32 to drop you to $5.68ish and even if you get called at $7 you'll be happy and if you get assigned 500 more for $6 – also not too bad.   Most likely, you'll be able to roll the caller to a 2014 $8 call down the line.  

    Venezuela/Angel – No thanks.  Even though I'll take that dictatorship over our Kleptocracy any day.  

    Hollande/ZZ – Interesting that his push-back on austerity may be an EU market booster (short-term).  

    Adler/Ink – Anything that's not down is good at this point but prices are massively skewed by Government intervention and banks allowing or not allowing foreclosures and short sales in any given month so it's ridiculous to draw any conclusions from the data at the moment.  

    Frogs/Newbie – We used to fish golf balls out of the lake at the local club – great way to spend a summer day and we'd get 10 cents a piece for them.  If I knew then what I know now – I would have saved every one of them as they're up 1,000% since then!  

    Better/Rustle – I think losing Sarkozy will send a lot of people running for the sidelines on the uncertainty.  

    PCLN/Jabob – I'm not surprised by anything PCLN does as there's no fundamentals to it.  Correllated with AAPL is just and excuse.  Obviously then it's correlated with the Nasdaq as that moves in lock-step with AAPL and that means there are probably 800 other stocks it is "highly correlated" to.  You are way to emotionally invested in this stock to be objective.  It's in a descending channel, it bounced off a rising 50 dma (where you should have lightened up) at $675 and now it's retraced 1/3 of the drop from $775.  There's nothing special or magical about them and you either BELIEVE they will miss earnings or you should get the hell out because you will be reamed on this stock if they have a good earnings report (May 9th).  

    Hammond's Gore/Peedle – The classic!  

    Leveling/Newbie – That's because it can take maybe 40 hours of game play to make a new character usable (you have to gain skills and find weapons and armor in tedious ways while you "level up") and there are many older game players who are willing to pay to be handed a more developed character they can play with.  My daughter and her super-geek friend have figured out a way to level 5 or 6 "newbies" at the same time by having their high-level character help the new ones level up so they've created an efficiency that makes money doing tedious, repetitious tasks in a fairly automated fashion.  This allows them to get paid very well for their time spent.  Frankly, I don't know about Madeline but her friend has certainly put in his 10,000 hours and is quite the expert at the game – so I guess you can devote the next few years of your life to that if it's your ambition…  Jackie is the actress/singer who will go to law school if things don't work out.  Maddie is the artist who wants to be a scientist and will be a party girl who mooches off her sister if things don't work out so my kids are all set, I think…

    Oil back up to $104 – WTF?  Gold $1,640 – gotta take those nickels and dimes while you can.  

    CAKE/Lol – I like them, they are packed all the time, high-end customers not too price sensitive and EAT had good numbers so I sure wouldn't bet against them.  

    PCLN/Crussell – I think they tank on earnings but if they get to $11.50 again ahead of time, I'd take 1/2 off and put a stop on the rest.  

    LVS/Lolo – I hope they go up on earnings as they will make a good short but very dangerous to play earnings as a casino can make their books say pretty much whatever they want. 

    Market boster:

    12:57 PM Spain's largest banks "appear" sufficiently capitalized to withstand further deterioration in economic conditions, says the IMF, but not before admitting opaqueness in lenders' reporting regarding loan forbearance leaves a big hole in the quality of the agency's stress tests

    Gartman/Dpast – He likes to make pronouncements.  QE is off for many months though.  

    Bunds/Alik – I have no clue, I don't play those things.  I like GLW very much, they are in the Income Portfolio.  Still a good deal at $14.13 and you can sell the 2014 $12 puts and calls against them for $5.10 for net $9.03/10.52 and that makes their .30 dividend a nice 3.3% while you wait.  

    A more aggressive way to play GLW is the 2014 $10/15 bull call spread at $2.75, selling the Jan $15 puts for $2.10 for net .65 on the $5 spread.  

    Gasoline/Savi – I don't see how people can afford it but that won't stop them from running it back up into the holiday.  The $3.10 line is a good place to go long on /RB with tight stops but it's a better play on a Thursday than it is on a Wednesday as you get closer to the weekend.  

    Returns/1020 – It's interesting but they are going too far back and comparing manual apples to digital oranges.  Things change too quickly to do studies that go back 35 years for comparison.    

    Oil $104.50 – now I know we're on Punk'd!  

    IWM/Tx – Good job taking the money and running.  I'd be waiting on Bernanke and Friday's GDP and, if we go up, you'll get a better entry.  If not, MA is still ridiculously high, as is PCLN still.  

    XOM/Otto – I suppose people figure if XOM is making that much money, business must be strong.  To me – I think selling even 10% less oil for $103 is a good business.

    Metals/Peedle – Everything jammed up for no particular reason.  Gotta be cautious here but FCX still my favorite long, followed by ABX.  

    Sounds right to me Sage.  

  156. sagemm1

    Pay no attention to the man behind the curtain:)

  157. Phil

    Good time to DD on USO May $39 at puts at .67 in $5KP and $25KP.  

  158. scottmi

    OIL – perhaps there are rumors of QE..?

  159. stjeanluc

    The "fun" stocks to watch for tonight are (with the average move):

    CROX – 5.68%
    CRUS – 11.50%
    SKX – 7.67%
    LVS – 5.28%
    CTXS – 7.81%
    AKAM – 13.5%

    I'll come back later with some ideas on strangles if anything looks interesting.

  160. dpastramas

    AAPL / StJ – Thanks for the advice and your interest. I dont have much margin available and didnt want to commit all this amount for the rest of the month. I hope i can make better use with other trades. Now lets see if uncle Ben can talk in our favour

  161. zeroxzero

    Peripheral European equities are not at the top of anyone's buy list right now.  But the Hollande victory made me curious about the possibility of a trend change, and I had a conversation with people in Europe who tell me that there are large companies [e.g., Iberdrola] trading at half of their book value — companies with very substantial non-European exposure.  We are going to put together a list of them with ADRs and buy them, since it's much cheaper to buy in the U.S. [3% roundtrip Euro bank commissions.  FWIW, in the event that Germany's "austerity" push starts to really lose ground in Europe, which may not be as unlikely as it presently appears.

  162. scottmi

    What a day for traders.. dollar working back and forth like a yo-yo

  163. zeroxzero

    Savi – I'm in the Caribbean, far enough south to never get a cold front from up north.  My U.S. residence is at 8.600 ft. in the Rockies, and we get lots of wildlife action here, too, along the lines that Aussie sees.  Only we don't have bobcats — only mountain lions.  You never see one, only their scat.  But they see you all the time.

  164. Phil

  165. yshenhar

    Looks like the DIA 126 puts will hit the break even target today – do we take 1/2 out on the same day?

  166. wappler

    Phil/BWLD,
    I've followed your BWLD earnings play and took the winnings off the table this morning, thank you very much!  Having said that, the stock is now back up almost 9%?  What would be your suggestion for a reload of the short position?  TIA!

  167. ccsincsd

    zz
    We were in Cancun a few weeks ago.  Returning from a eco/excursion.  Long, straight, very quite road out from "jungle".  A huge mountain lion (Puma) darted straight across the road 100 ft in front of us.  Was smeared by a on coming SUV.  The local nearly broke down in tears.  No one ever sees them except for a terrible accident like this.  It was very sad.

  168. Phil

    Whole Fed Report – Nothing encouraging from a QE standpoint.  

    The Fed reduces its 2012 jobless view to 7.8-8.0% from 8.2-8.5% projected in January. Inflation is estimated at 1.9-2.0% from 1.4-1.8%. The GDP growth outlook is raised to 2.4-2.9% from 2.2-2.7%.  Seven Fed members see the first rate hike in 2014, up from 5 previously.

    That's two strikes on QE. 

  169. angelcur

    the lifeblood  of a kleptocracy is its many unregistered party members…..a dictatorship has a less enthused but more lock step street formation..i would still opt for O over Chav-vie any day 
     
    ttp://www.bloomberg.com/news/2012-04-25/hollande-says-france-won-t-ratify-euro-fiscal-pact-as-it-stands.html
     
    market will ignore this for a few weeks then bam…
    fed more hawkish in outlook
    energy stocks trade terribly
    dollar surging
    bond sell-off picking up

  170. angelcur

    ttp://www.bloomberg.com/news/2012-04-25/hollande-says-france-won-t-ratify-euro-fiscal-pact-as-it-stands.html
     
    try that its cleaner

  171. Ottomatic

    It's Bernanke hour!  Drink every time he mentions price stability. 

  172. Savi

    Phil  / Iflan—--I have the following APPL position—any advice on adjusting it?
    long 4 may 625 calls at 40
    short 4 may 650 calls at 20
    april short 615 calls expired worthless
    Thanks
     
     
    Thanks

  173. dpastramas

    QE forever…

  174. angelcur

     hahaha…bernanke "we are prepared to do more if needed"….shocker

  175. yodi

    zeroxzero
    Greetings from Cancun, Which part of the Caribbean are you living in ?

  176. zeroxzero

    Angel:  Yeah, Phil went a little over the top in preferring Chavez's regime to the U.S. political system.  I wrote it off to hyperbole; I lived under martial law in Colombia, with drunken soldiers pointing automatic weapons at your head just in fun, and wonder how much time he has actually spent countries where the rule of law is determined by how much, and which phone numbers, you carry in your wallet.

  177. angelcur

    http://online.wsj.com/article/BT-CO-20120425-715082.html
     
    BUY THE EURO QUICK

  178. angelcur

    Zero it was total hyperbole Phil is a man of large ideas but stomaching that sea of red might be much even by our exagerrated sense of egalite..

  179. zeroxzero

    Yodi: I'm about 1600 km northwest of you.

  180. deano

    Not sure if everyone knows this already but WSJ streams updates thru the day – ie comments from the fed speak:
    http://stream.wsj.com/story/markets/SS-2-5/

  181. sagemm1

    missed last part what did he say about risking more inflation to provide a minor improvement in unemployment?

  182. Inkarri1982

    Sage – He was asked why the Fed isn't QE'ing now.  I think he said that the gains from more QE would be doubtful and may not be worth the risk.

  183. angelcur

    guys stop asking zero where he lives he isn't telling!!

  184. yodi

    zeroxzero
    So you are in the US and not in the Caribbean?

  185. angelcur

    he's got a turret on his house nuf said?

  186. Phil

    Of course, the way this market is trading – maybe 3 strikes is a grand slam?  

    Europe/ZZ – Of course you should keep in mind that without the austerity measures – there is a gaping black hole of debt that cannot be filled.  

    DIA/$25KP, $5KP, Yshen – Yes, 1/2 out at $1 or more but tight stops to lock in $1.  Not a problem as we get 3 day trades in 5 days and we've used none.  Might not be a problem when Ben is done.  

    LOL – Bernanke just said that high gas prices are only temporary.  This is year 3 of him saying that.  

    BWLD/Wappler – I'm not too enthusiastic about doing anything until we get that GDP report Friday.  Notice above Fed has raised outlook so we'll see if that's reflected in the actual report.  

    Mountain lion/CCS – Interesting.  I live on a mountain and, over the years, the deer here have become surrounded by roads.  15 years ago, they were dead on the side of the road all the time – now, hardly ever and the population is back at high levels – just a few generations and we have evolved deer who are smart enough to stay out of the road – encouraging….

    Bernanke warns on taking action if data is better than expected – interesting.  How much more weakeness do we need to go the other way?  He says they are prepared to act but no current need.   I guess he could be more clear but not much – no QE is coming.  S&P making another run at 1,390 but I think they are spiking out the shorts.  

    Dollar has been dumped to 79.15 again – does not make sense. 

    Columbia/ZZ – When I was down there, I had some REALLY good phone numbers!  

    EU/Angel – Amazing the kind of things we're willing to ignore.  

    Good stream Deano, thanks! 

  187. Pharmboy

    I call bull….u call $h1T!

  188. angelcur

    Columbia…sigh…3 strikes is a home run i love that..appropriating it  NOW!

  189. dpastramas

    At least CHK is coming back up..

  190. rpme

    Phil, dollar is doing the Bernanke Shuffle…

  191. zeroxzero

    Angel:  Actually, my very extensive collection of firearms is in the U.S.   I am forced to use charm here, which I have in scant supply.  But 10 years in NYC and ten years in South America forced me to practice up, and I have only fired a round in the direction of a person in the U.S.  Over his head, but a .45 fired at night creates an impressive muzzle flash, so it was sufficient.

  192. rainman

    Phil / evolved deer — That's an interesting thought. I think we've evolved some mute coyotes around these parts.

  193. sagemm1

    Thanks Ink

  194. Inkarri1982

    Sage – You're welcome.  I also believe he said that Fed would be unable to help in case we do go off a financial cliff next year while at the same time, maintianing the higher GDP forecasts. 

  195. Phil

    AAPL Conference Call + Q&A Cloud: 

  196. zeroxzero

    Phil:  Admittedly European governments will have a huge hole to fill, and I guess they'll do an "Iceland" and we'll see what happens.  But I'm not buying Eurobonds, I'm talking about large cap peripheral equities.  What's the connection?

  197. palotay

    PLX is having a great day.  Pharm do you have a price target where you will start taking profits at?  May 1st is quickly approaching.  This SA article mentioned $9.25
     
    http://seekingalpha.com/article/441931-protalix-what-you-need-to-know-ahead-of-the-may-1-pdufa-date

  198. Phil

    Inflation/Sage – You could also interpret it that they are willing to error on the side of inflation if unemployment gets worse, which would be bullish.  

    S&P rejected again. 

    Dow volume just 74M coming up on 3pm but we've held up all day so far. 

    Equities/ZZ – Defaults tend too have pretty strong ripples.  Just saying a degree of caution would be prudent – "Neither a borrower nor a lender be" would be a good rule for selecting companies.  

  199. lolobear

    AKAM – oh that's a good one. I'm thinking calls. Anybody else?

  200. peedlew99

    I might dip a toe on the US $….  What's the pressure lower at this point????  Seems like a low risk trade.
     
    Phil, you like UUP better than the euro cross?

  201. jabobeast

    AAPL up 49 points--great earnings.
     
    PCLN up 35 points--unreal.
     
    FU PCLN!!!

  202. stjeanluc

    Word cloud / Phil – Was that from a Carl Sagan rerun? All these millions and billions….

  203. angelcur

    zero i remember those kids following you home late at night the garage the gun bambambam

  204. stjeanluc

    AKAM / Lolo – Well there has been 3 beats that followed 3 misses so tough to tell which way it's going to go. And these guys can move a ton one way or the other and the way I see it, options prices don't reflect the risk right now. I looked at a strangle but I really don't like it much now.

  205. zeroxzero

    Accepted, Phil, thanks.

  206. Phil

    Dollar was smacked down from 79.40 to 79.10 while Bernanke spoke (now 79.12) – that accounted for the market move back up.  

    PCLN shot up to 720 (F them!) but CMG just $412 and AAPL sticking at $610.  XLF made $15.40.  

    Even Pisani is saying how addicted the market is to QE – looking for the faintest scrap to get excited about.  

    Previous Fed meeting was March 13th and we had the same no QE but not a Bernanke conference and the markets did shoot higher that day and topped out the next Monday.  At the time, they were sure we'd get QE3 at the April meeting – now there's no way they can be sure about the June meeting.  

    Santelli says floor traders are saying we're two bad jobs reports away from QE3 so that's what they are hanging their hats on – ridiculous!  

    Can't change my stance based on this but tomorrow – if we're over 3 of 5 of our 50% lines  - we will have to add some bullish hedges.  

    PCLN July $560 puts are $7.40 and can be rolled to the July $580 puts ($9.60) for $2.20 – that's a good roll for the $25KP as well as the Long Put list.  

  207. lunar

    phil, stj
    are we keeping the qqq june 60/63 bcs open?  TIA

  208. Phil

    UUP/Peedle – I'm not big on currency trading.  I just liked the UUP calls as they had limited risk.  The May $21 calls are just .90 and that's just .02 premium so a nice way to play the Dollar bullish for the next few weeks. 

    Word cloud/StJ – When you look at a word cloud and can't find a single negative – the stock is a buy!  

    Whitney makes a good point:  "If you have money, you can make a lot of money – if you need money, these are dire times."  

  209. peedlew99

    Us $ is right smack dab on support.   Still inside a pennant that's been forming for months.  I'm buying support, but if we drop through, I'll follow.  Wish I could post the chart.  It's a beauty.

  210. stjeanluc

    My play for tonight:

    CTXS – May 65/87.5 strangle for a bit over $1.00 ahead of earnings tonight. They usually move less than 8% and this strangle gives about 15% on each side.

    Once again, walk around money (very small position and PM margin if possible) and be prepared to roll… And catch every opportunity to close for a profit tomorrow morning.

  211. Phil

    QQQ/Lunar – Yes if you need an upside hedge.  It's at $2.60 so far so a very nice one-day gain as a straight play but, as a hedge – it's another potential .40 of protection against a continued move up.  

  212. stjeanluc

    Negative / Phil – I see a "maybe" and a big "just" in the word cloud. Seeds of doubt?

  213. jromeha

    Im down more on CMG going up $9 than yesterday when it lost 14$!!!!!!!!!!!! WTF! ?

  214. jromeha

    What I meant to say is Im down more on CMG going up $9 than I made yesterday when it lost $14…

  215. jasu1

    Phil,
    Knowing there is no QE3, EDZ MAY14/16 BCS, still a trade? or would you recommend another strike BCS?
    Thanks

  216. zeroxzero

    Yodi:  I do in fact rent a condo in Miami.  Maybe WNW would be more accurate.

  217. yodi

    zeroxzero
    Miami for me is not the Caribbean it is just an other part of the US I lived in WPB for some time.Miami is I think 300 KM away from Cancun

  218. mrmocha

    BWLD - if you think today is pure silliness and want to start scaling into a short position I just got the MAY 80/75 bear put spread for 0.55. 

  219. mrmocha

    Phil - I thought 'no QE' was bad for commodities, so whazzup with GDX and SLW today?

  220. Pharmboy

    PLX – I am out of 1/2 of my stock position.  $10 is my target.  I have the BCS in May as well.

  221. jabobeast

    How/Why the FOCK did PCLN go up 40+ points today because of AAPL???

  222. zeroxzero

    Yodi:  Quite right. Not that much wildlife in Miami Beach.  At least, not the sort that jumps on you in the shower — unless you have a more exciting love life than I.

  223. Pharmboy

    Re – dic – u – lous.

  224. peedlew99

    I think the US markets are just terrible shorts.  I like EDZ as a hedge, but what about buying puts on the european indexes?  IEV options have no volume.  Any other ways to make that trade?

  225. peedlew99

    I think the miners HAD to bounce.  But no QE should start to be a further weight on gold… Is there any other reason to buy it other than expanding money supply?  At least the miners pay you to own them.

  226. Phil

    Seeds/StJ – Wow, that's a stretch!

    CMG/Jrom – What?  Oh, I see on 2nd take.  The volatility is down now – this is why we "ALWAYS sell into the initial excitement" but at least you are not so greedy that you ignored that (Rule #1) AND Rule #2 – "When in doubt, sell half" so you won't have to hear Rule #3 which is "If ignored Rule #1 and were too greedy to at least follow Rule #2 then what the Hell do you expect to hear in Rule #3 that would make a difference to a greedy bastard like you who can't follow two simple rules?"  

    EDZ/Jasu – Things not at all going as we thought so I'm just going to have to punt until tomorrow and let our levels tell us what to do.  

    No selling into the close – we're at the highs for the day, which makes no sense to me but we'll figure it out tomorrow.  I have to run to a meeting so later all. 

  227. Lincoln

    If that PCLN/APPL correlation isn't indicative of some crazy sh$t, I'm totally befuddled.

  228. Phil

    "Everyone is confused," writes Josh Brown about Fed policy, "I saw Hilsenrath walking out of a Starbucks in Northwest (D.C.) with two different shoes the other day." Brown thinks this new transparencyis a mistake because it makes crystal clear the Fed itself has little clue as it just moves from data point to data point.

  229. peedlew99

    IMHO the
     

    EURO STOXX 50 is on the top line resistance of a falling trend channel.  Maybe follow a break-out, because clearly nothing matters anymore and Europe has some room to run to catch back up with us…. but in case reality still makes a slight difference to the price of equities, I'm selling here with a stop above the recent high.

     

  230. zeroxzero

    Phil:  Just had a look at Icelandic stock performance since their crash.  Not too good, one might say, so your admonition is well-taken. http://www.bloomberg.com/quote/ICEXI:IND/chart

  231. lflantheman

    stjeanluc and whoever else is interested.  I'm up for the 10k MoMo discussion, now that AAPL has reported.  Now AAPL is really boring (just buy some January slightly in-the-money bull call spreads and fugidaboudit).   Maybe we'll put some into the AAPL port if it pulls back a bit.  But today I was looking at PCLN and see them making a huge move upward which I suspect may continue up until earnings.  I almost went long on them today.  If I see them moving upward tomorrow I will strongly consider it.  Now the way I play a MoMo is to just ride the wave.  If you study the 5 day chart you can 'see' a 3 day upward wave.  If you look at the 3 month chart you see that it has pulled back from a place it has inhabited just recently, and that is above 750.  Today's move was on good volume.  If it moves up on volume in the morning I would seriously consider going long, with plans to sell before earnings.  stj and MoMo lovers…….what say? 

  232. nicha

    Iflan – I am for the 10K portfolio!
     
    Btw, the AAPL trade from yesterday worked out great. 

  233. stjeanluc

    MoMos / lflan – You know I am in as well…

    Regarding strategies with MoMos, I believe that you have to leave all sort of rational thinking behind and just play the momentum. These guys are MoMos for one reason and one reason only, price action – up or down. Trying to reason with earnings, P/E and all is just a waste of time IMHO – it's dumb for most investment but MoMos are mostly dumb (and very smart) money. This is one class of stocks where TA might work best… Not much thinking required, you need to leave emotions and feelings behind and ride the waves. Cut your losses quickly though as moves are violent one way or the others and there are plenty of entry points. That's the way I look at it… 

  234. dpastramas

    PCLN / Iflan – Totally agree with StJ on how to view MoMos.  Its all about trend and charts.  Having a look at PCLN i would be still cautious to jump in bullish. It is still trapped in the downward channel since 04/10. I would wait for a strong day closing above the channel.  
    And on top i think it is very important to see how AAPL trades from now on.  Its is the mother of all Momos (with a fundamental twist). I already read some technicians in twitter, are not impressed with todays volume and some have already flipped short. We shall see..

  235. lunar

    lflan, i'm interested in the MoPo as well.

  236. lolobear

    MOMO portfolio – i'm all up for it. 

  237. lolobear

    You might as well call it the MOFO portfolio cuz it just keeps screwing me over. 

  238. emunster

    DEF in on the MoMo'S

  239. peedlew99

    As a follow up to my question about oil price manipulation… I found a remarkable article that must be read by anyone who cares to understand the forces behind the price of oil.
     
    Written by Chris Cook's formerly a Director of the International Petroleum Exchange.  Amazing.  
     
    http://seekingalpha.com/article/151480-the-abcs-of-oil-manipulation

  240. palotay

    CTXS/STJ – I'm liking your earning strangles.  CTXS looks like a winner.  Do you usually just close the entire strangle tomorrow to play the volatility crush, or do you close the winning side, and wait for the other to expire?

  241. lflantheman

    stj…..I agree with what you say 100%.  We have to identify trends, up or down, and play them accordingly.  I think we should take them on one at a time, and PCLN is a good place to start.  Now with 10 k we will have no margin.  This is going to have to be done with calls and puts and spreads. at least in the beginning.   And we need to spread risk early on, so as not to 'blow' the virtual account.  Here are some things I would put up for discussion.    Position sizing:   I would risk no more than $1,000  on any one play.   Cutting losses:  No more than 20% loss before you move on.   Taking gains:   We will have to talk about this, but I tend to let winners ride more than most..   Entry points:  I think we agree here already.  We enter when it is clear that we are in an uptrend or downtrend re the MoMo.  TA details I leave to those who study them more than I do.  I will be the student here as regards TA.   Should be fun.  Keep thinking and commenting and we will cement it together as we go.

  242. jfawcett

    Phil / QQQ's – After I asked the question on taking profits yesterday, I realized my mistake on not pulling the trigger early, especially since AAPL was reporting.  Same on SDS, can not be in these as long as I have been.  Lessons are expensive and I  will recover.  Lesson learned, this type of mistake will not be duplicated.  Thanks for your and the teams hard work.  Your students are learning the ropes.

  243. drmtv10

    Hi,
    ITUB  (ITAU Unibanco), a banking interest holding concern in Brazil, pays about 4% monthly dividend and seems to be at lower end of its range.  Is the div rate comparable to a US based company, due to foreign tax?  Is this a good trading vehicle to get exposure to Brazil?
    Thanks all.

  244. stjeanluc

    Strangles / Palotay – You have to close them when you see a profit! Waiting for expiration is asking for trouble unless expiration is one day away with a delta of 0.04! This morning I closed the AAPL strangle quickly with a small profit because of the uncertainty. Waiting until end of day would have yielded a 50% win, but I'll take the 12% without the stress especially since PNRA turned out well out of the gate.

  245. lflantheman

    stj/CTXS….good call, and have I told you lately that I LOVE those short strangles?  The trick is to not try and make a killing, and to put your calls and puts way out, studying the chart patterns beforehand, as you did, to be sure you are far enough out.   If one side gets too close you can just roll it.  You have to have margin for these plays, but I like them.   You may remember I played PCLN like this recently, though not around earnings.  

  246. stjeanluc

    $10KP / lflan – I agree on position sizing, as we will have to diversify to spread the risk. And we will have to be very careful to choose strikes with tight spreads and plenty of liquidity as I mentioned before. With AAPL is not a problem, but with others, you can lose 20% just with the bid/ask spread.

  247. lflantheman

    jfawcett….taking profits….this is a problem that I see coming up over and over among traders.  A trade is made, does well, then pulls back to a loss before you are able to take profits.  Here is one thing you can do to avoid this.  Let your computer do your profit taking for you!   Example:   Say you bought  10 AAPL Jan13  550 calls yesterday for $70 and wanted to take 1/2 your profits at 20% and the rest at 40% gain.  Then just place 2 orders GTC (good till cancelled), the first STC 5 calls for $84 and the second STC 5 calls for $98. Then fugedaboudit.  Let the computer do the sale for you.  I do this quite a bit.  I also use stop-loss orders, but that is another discussion.

  248. stjeanluc

    Strangles / lflan – I have to tell you that I was still slightly worried about AAPL this morning but when the econ data came in I thought we were good once the big jump passed by! 

    The key in these strangles is to have the correct data on hand – for example, if you can sell a strangle with 15% protection on a stock that moves on average 8%, you can take a shot (and make it small – $200/day is $50,000/year). For example, I looked at AKAM this afternoon and the best I could find for a decent profit was only about 12% protection and they move about 13% on earnings. It turns out that they have moved only about 6% down so far, but why force it?

    But these are just fun play to keep us entertained! And they are also good for learning to manage trades that go against you. For example, on the AAPL trade I told Dpas this afternoon that the weekly 620 calls can be rolled to the May 680 calls. And to the June 740 calls after that. Straight, no DD… You can go another $30 up if you DD the position. That's good learning there. And if you start with one contract you don't put yourself in a hole.

  249. lflantheman

    stj…..PCLN has not nearly the volume as AAPL, so slippage on bid/ask will have to be taken into consideration.  That's one of the reasons I don't play GOOG much.  Usually large bid/ask spread.   But there are ways to mitigate this.  One way is to play a stock using what seems like a ridiculously low bid.  To do this you have to not give a rat's arse whether the trade goes through or not.  I'm surprised at how often it does go through, and I get my options on the cheap.  I  used to do this with Phils recs a lot.  He would say "Such and such a call is a great buy at $1.50"   Then I would put in an order for $1.30, often filling.  Another way to mitigate slippage is to buy spreads rather than straight-up calls or puts.  Correct me if I'm wrong, but it seems with spreads you neutralize the slippage, as you are buying and selling simultaneously. 

  250. lflantheman

    I've got a dinner date in a few minutes, so I'll see everyone tomorrow. 

  251. Inkarri1982

    Courtesy of ZH – $8.7B in outflows from equity funds

  252. gandhjo

    Hi stjeanluc
     
    I was going through your emails and you pointed out the following in one of them. I am curious – what does "roll to" mean in the context of rolling weekly 620 calls to May 680 calls. How does it work?
    But these are just fun play to keep us entertained! And they are also good for learning to manage trades that go against you. For example, on the AAPL trade I told Dpas this afternoon that the weekly 620 calls can be rolled to the May 680 calls. And to the June 740 calls after that. Straight, no DD… You can go another $30 up if you DD the position. That's good learning there. And if you start with one contract you don't put yourself in a hole

  253. stjeanluc

    Roll / Gandhjo – You will see this a lot on this site as this is one of the base principles of what we do here. Suppose that the calls (or puts) you sold are in the money at expiration (or before and you have a good opportunity), rolling means buying back the calls and selling the same amount of contracts (or more depending on prices) at a higher strike and a later date. You could also just roll up at the same date but by increasing the number of contracts. All the combinations are possible as long as you come out about even. 

    For example, the AAPL weekly 620 calls are now around $2.00. Looking months ahead, I see that the May 680 calls are also around $2.00 (this is an example, the prices may vary). The roll is as follows – you buy back the weekly calls and your sell the May calls even. It's basically a wash and you get extra time and more room. Now, you could decide to roll to the May 650 at $3.00 if you want and add money to your pocket. It's a matter of choice and willingness to risk. 

    As a matter of fact, I don't sell (and neither should anyone) an option without looking at future months to see what my potential rolls are. It's part of the plan. Planning allows you to stay calmer when things go against you. It doesn't mean that you will not worry, but you'll be better prepared.

  254. stjeanluc

    Spreads / lflan – It is indeed the best way to fight slippage and will allow us to keep our position size reasonable – some of the options in the momos are over $10.00 and 1 contract ties up $1000. But as Phil says, you need to be patient as it takes time to squeeze them. Of course, with all these Momos, we can sell weekly spreads and wait only 5 days…

  255. stjeanluc

    Cramer in full AAPL  BUY, BUY, BUY mode now…. Scary!

  256. randers1

    RE Momo's: It would be good to research the IBD 50, it is a true gogo momo index. The research has some validity- technicals, but it has very little value basis . It could good to know what the sheeple are herding into and out of.

  257. zeroxzero

    Peedle:  Great oil article, thanks!!!

  258. jfawcett

    Iflan / Profits – Excellent advice.  Thanks!

  259. Phil

    Great oil article – Cook was director of the International Oil Exchange – nice to have an authority weighing in.  

  260. stjeanluc

    Why raising taxes on the job creators will not hamper growth… but could actually help:

    http://online.wsj.com/article/SB10001424052702303425504577353843997820160.html?mod=rss_opinion_main

     

    According to our analysis of current tax rates and their elasticity, the revenue-maximizing top federal marginal income tax rate would be in or near the range of 50%-70% (taking into account that individuals face additional taxes from Medicare and state and local taxes). Thus we conclude that raising the top tax rate is very likely to result in revenue increases at least until we reach the 50% rate that held during the first Reagan administration, and possibly until the 70% rate of the 1970s. To reduce tax avoidance opportunities, tax rates on capital gains and dividends should increase along with the basic rate. Closing loopholes and stepping up enforcement would further limit tax avoidance and evasion.

    But will raising top tax rates significantly lower economic growth? In the postwar U.S., higher top tax rates tend to go with higher economic growth—not lower. Indeed, according to the U.S. Department of Commerce's Bureau of Economic Analysis, GDP annual growth per capita (to adjust for population growth) averaged 1.68% between 1980 and 2010 when top tax rates were relatively low, while growth averaged 2.23% between 1950 and 1980 when top tax rates were at or above 70%.

    But then again, why use facts and evidence when propaganda to advances one self interest has worked so well!

  261. hoss18

    Great oil article, thanks. Explains a lot, and I would be willing to bet, based on the relatively small size of other commodity markets, it’s not the only manipulation going on……..

  262. bdonnelly713

    Phil/all, any take on precious metal stocks reaction to a say nothing new fed statement? A lot that I follow like SSRI and AUY ended the day up 4 to 5%.

  263. mrmocha

    stjeanluc – Regarding momos, I have been playing them to fail since December; admittedly not the best timing, but I have crafted the right strategy.  I buy an OTM monthly put a month or two out, then each morning if it is trending up, I sell a weekly put to cover, with a fairly tight stop.  If I still own the cover just before market close, I buy it back (never cover overnight) and use the profits to roll my long put.  Some of these have come in big, others I'm still waiting.  Case in point, AMZN, BWLD, NFLX, and PCLN have been winners for me lately, but I've been doing this with CMG for the entire recent 100 point move and am down a few thousand bucks, but on the big dump coming someday I will nail it.  So, a specific example: this morning based on market momentum I sold the CMG weekly 405 put cover, closed it at the end of the day, and the proceeds were enough to roll my May 410 put up a strike.  So this strategy gets you free or subsidized rolls, and naked exposure hoping for big overnight drops; the only downside risk is the overnight pops, which thankfully have become less frequent since the market topped.

  264. scottmi

    Good tune with some taught energy.. and kinda like my search for trades lately: "…climbing walls, chewing up time, looking for joy where there's none to find." 
     

  265. zeroxzero

    Does SCO decay in the manner that USO does [ X 2]?

  266. jromeha

    Seriously, what planet am I on? DOllar down again? Oil up? SO sick of this sh!t!!!! Phil, do you like /DX long here? I mean I have to think people are going to be selling today and tomorrow going into the weekend… Or maybe Im just hoping… IVe been getting murdered lately…

  267. Phil

    Good morning!  

    Strangeness continues with Asia essentially flat, Europe looking flat too and our Futures are up a little with the Dollar at 79.065.  

    It just doesn't make any sense for the Dollar to have gotten weaker off the Fed statement but the Euro is up at $1.3232 and the Pound is $1.6191.  The Yen is stronger too at 81.19 and EUR/CHF is way down at $1.2014 so it seems to be the same game where the Franc is forced down which turns on the SNB presses to buy Euros which knocks down the Dollar.  

    Woops, now 78.98 on the Dollar and our Futures just shot up 0.25%.  Even the WSJ says no more QE yet the Dollar is falling fast.  

     

    Fed Outlook Suggests No New Moves

    The Fed modestly toned down its assessment of the economy and reaffirmed plans to keep short-term rates near zero through late 2014.

    Oil $104.40, gold $1,653, silver $30.90, copper $3.73, nat gas $2.174, gasoline $3.119.  

    78.94 – EUR/CHF also dropping fast – $1.2013.  This is like a joke. 

    I sure can't find any Futures I want to go long on but it's too scary to short with the Dollar diving like this. 

    Thursday's economic calendar:

    8:30 Initial Jobless Claims

    8:30 Chicago Fed National Activity Index

    10:00 Pending Home Sales

    10:30 EIA Natural Gas Inventory

    11:00 Kansas City Fed Mfg Survey

    1:00 PM Results of $29B, 7-Year Note Auction

    4:30 PM Money Supply

    4:30 PM Fed Balance Sheet 

    "Our conclusion today is that we misjudged (the) FOMC's inclination to provide more stimulus in the current context," says Nomura, dropping its QE3 call. As the Chairman made clear though, QE3 is only off until a bit of a market stumble, and then it will be back on. (see also

    Investors have become "consumed and blinded" by economic data, says Jim Cramer. We've been infected by the "hedge fund media complex," where traders are under the mistaken perception that the economy must remain weak to keep the Fed on the team, helping stocks go higher. "Don't fear good economic data," Cramer says. "When we see higher employment and a Fed that recognizes that growth, then we will start to get a real demand for money."

    Treasury Secretary Timothy Geithner lashes out at Mitt Romney's comments that he will improve U.S. trade relations with China by declaring the emerging giant a currency manipulator: "By just calling them a name? Like you can solve problems in the world, a very complicated world we live in, by calling people names?"

    Sterling roars back from an early slide following news the U.K. economy reentered recession in Q1, now +0.2% for the day. The pound has had a big 2012, rallying hard against the greenback and lately against the euro as well. Pawel Morski notes the U.K. economyhas performed worse post-2008 than it did post-Great Depression. Is sterling set for a fall?

    South Korea's GDP grew 0.9% in Q1, in-line with estimates. It was the fastest pace in a year, and a marked improvement from the 0.3% growth notched in Q4.

    Japan could face rolling blackouts and forced usage cuts this summer if temperatures are higher than normal, cautions Economy Minister Yukio Edano. The country is set to shut its last operating nuclear plant next month. Over the coming decades, Japan "should move away from its reliance on nuclear power as quickly as possible."

    BofA cuts its forecast for U.S. natural gas but sees a floor "soon" in the absence of a further decline in coal prices. “Although we expect continued low nat gas prices this summer, we do not believe that prices have to go a lot lower from the current levels for the market to come into balance," the firm predicts. 

    Encana (ECA +2.8%) shares rally after Canada’s biggest natural gas producer by volume reports a Q1 profit that beat expectations, despite North American gas prices that fell to theirlowest quarterly average in 10 years during the period. Commodity price hedging contributed $358M in realized after-tax gains, helping counter the gas price slump

    Hess (HES -7.2%), today's worst S&P 500 performer,continues to slide after the company said it won't meet its production target from the Bakken shale field. "Progress in the Bakken has been the key underpinning for optimism of a turnaround," Credit Suisse writes, adding Hess is "drilling certain acreage to capture leases as opposed to focusing just on the sweet spots." 

    High fuel prices dented results at Delta Air Lines (DAL-0.6%) and US Airways (LCC +3.2%), which suffered ~14% increases in basic fuel prices and were only modestly able to push up fares and revenues. But DAL believes it will be “solidly profitable” over the full year “despite higher fuel prices," and LCC says it is "encouraged with the overall strength in passenger demand."

    Another BRIC about to fall:  Not joining in the worldwide rally today was Brazil (EWZ-0.8%), dragged down by a plunge in Itau Unibanco (ITUB -5.7%). Rising defaults forced the lender to raise provisions for bad loans by 38% as the country faces the downside of a consumer credit boom. Keep an eye on tomorrow's earnings from Banco Santander's (STD) – from Spain (with its own issues), but with large Brazilian operations.

    And then there's:  Answer: Australia. Question (courtesy of Dylan Grice): "What do you call a credit bubble built on a commodity bull market built on a much bigger Chinese credit bubble?" The country has 5 of the world's most 15 expensive cities, runs a current account deficit despite booming commodity sales to China, and has seen a steep rise in debt/income. Shares: EWA +10.9% YTD, the aussie: FXA +1.1%YTD.

    Troubles in Europe prompt Meredith Whitney to come out "wildly bullish" on the agriculture-commodity belt from Texas to North Dakota, where investors "can play every industry on that basis." She also warns away from regional banks, where some of this quarter's solid earnings reports are attributable to one-time loan-loss provisions that won't be repeated.

    Not mattering at all: Barclays (BCS): Q1 net loss of £337M on additional PPI provisions and an accounting loss related to its own debt. Adjusted pre-tax profit of £2.45B. Total revenue -25% to £5.52B. I-bank revenue +3% to £3.46B.

    Also not mattering:  Deutsche Bank (DB): Net profit of €1.38B, short of €1.64B consensus. Deutsche didn't give guidance, but noted conditions remain challenging, and said an economic recovery will mainly benefit U.S. banks. Shares -2.5% in Frankfurt. (PR)

  268. Phil


    Banco Santander (STD):
     Q1 net profit of €1.6B (-24%) vs. consensus of €1.64B, including €3.13B in loan-loss provisions (+51%), partly due to "the economic situation in Spain and Portugal." Shares -0.2% in Madrid. (PR)

    Mobile payments juggernaut Square says it's now handling$5B (annualized) in transactions, up from $4B just a month ago and $2B in October. Square, said to be seeking funding at a $4B valuation, is popular with small businesses not only because of its low fee and ease-of-use, but also its ability to pay merchants within a day of a purchase, compared with 2-5 days for regular credit-card payments. PayPal Here has its work cut out for it. 

    Las Vegas Sands (LVS): Q1 EPS of $0.70 beats by $0.11. Revenue of $2.76B (+30.8% Y/Y) beats by $190M. Shares+2.2% AH. (PR

    More on Las Vegas Sands' Q1: Casino revenue +21.8% Y/Y to $674M, helped by higher hotel occupancy rates and improved rolling chip volumes. Singapore biggest contributor to improved EBITDA. Sees VIP initiatives in Macau helping to improve results. Shares +0.7% AH. (PR)

    Shell (RDS.A) Q1 earnings of $7.66B, up 11% from the year before. The company warns oil prices will be volatile in the coming months. (PR

    UBS issues cautious comments on Harley Davidson (HOG+5.9%) despite the motorcyle maker's seemingly strong Q1 report and subsequent rally. Analysts with the firm warn that the company shipped everything they produced during the period and dealer inventory trended higher despite the strong sales numbers.

    Shares of Sears Holding (SHLD) spike 4.5% higher on a day devoid of any company news of note. Speculation is bound to center on the notion that another FOE (Friends of Eddie) attack on shorts is in play.

    Cheesecake Factory (CAKE): Q1 EPS of $0.37 beats by $0.01. Revenue of $436M (+4.1% Y/Y) misses by $3M. Shares -2.1%AH. (PR

    Crocs (CROX): Q1 EPS of $0.31 beats by $0.05. Revenue of $272M (+19.9% Y/Y) beats by $6M. Shares -8.4% AH. (PR)

    AstraZeneca (AZN): Q1 net profit fell 44% to $1.64B, well short of consensus of $2B. Revenue of $7.35B (-11%) vs. consensus of $7.98B. The loss of patent exclusivity and challenging market conditions have "made for a difficult start to the year," CEO David Brennan said. Brennan, CEO since 2006, quit, to be replaced temporarily by CFO Simon Lowth. Shares -3.6% in London. (PR III)

    Huge winner in Income Portfolio:  Skechers USA (SKX): Q1 EPS of -$0.07 beats by $0.14. Revenue of $351M (-26.2% Y/Y) beats by $15M. Shares +19.7% AH. (PR

    And one I'm glad we stayed away from:  H&R Block (HRB-16.3% AH after announcing plans to cut 350 jobs and close ~200 company-owned offices as part of arealignment, expecting the move to save up to $100M by the end of FY 2013. HRB also says it is searching for a new CFO; current CFO Jeff Brown will remain on the job during the search process.

    Xilinx (XLNX): Q1 EPS of $0.49 beats by $0.08. Revenue of $559M (-4.9% Y/Y) beats by $28M. Shares +7.5% AH. (PR)

    Sprint (S -1.6%) finished lower following its Q1 report, partly due to worries about its net add figures. Bernstein (Underperform) thinks Sprint's large Q/Q drop in net adds, together with disappointing figures (III) from AT&T (T) and Verizon (VZ), indicate the U.S. wireless market is saturated. It's also worried Sprint isn't selling enough iPhones to absorb its 7.5M unit/year commitment. Wells Fargo (Outperform), by contrast, praises Sprint's ARPU growth and4G buildout progress.

    Smartphones finally account for the majority of Japanese phone sales, according to comScore, as a country that has beenrelatively slow to abandon feature phones starts to come around. Android (GOOG) accounted for 61.4% of Japanese smartphone users as of February, and the iPhone 34.2% – the latter is impressive given Apple (AAPL) still lacks a deal with top carrier NTT DoCoMo (DCM).

    Apple (AAPL) is by far Cirrus Logic's (CRUS) biggest customer, due to its use of Cirrus' audio codec chips in the iPhone and iPad. Thus, Cirrus' guidance for a soft June quarter and stronger September quarter suggests the next iPhone will arrive this fall. Cirrus is also taking out a $100M credit line to support the ramp of "multiple new products this fall." That might just suggest a smaller iPad will also be arriving. CRUS +7.5% AH. 

  269. Phil

    Redrum/Jrom – In a logical World, I would love the Dollar here (now 78.95).  It was certainly clear to me that, unless things get much worse, there is no chance of more QE but Japan has just pledged another $130Bn and China isn't tightening and Europe has got to bail or fail – this move is total BS.  As you know, I don't play currencies in general because they are stupid and very, very expensive when you make a mistake – if that's the focus of your trading, I hope you have amazingly deep pockets because even George Soros loses a Billion here and there trying to guess FOREX moves.   On oil, we haven't lost an SCO spread all year and that's been what, 30% a month of more?   Are you doing so well with your futures gambling that you can't just make a sensible bet like the SCO spread in the $25KP and just leave it alone?  

    To play the Futures, you need to have two conflicting attitudes.  Attitude #1 is to take a $1,000 loss before it becomes a $2,000 loss and keep your head clear as it's no big deal (and if $1,000 isn't what you can lose on a roll of the dice playing craps – you shouldn't be in the Futures at all!).  Attitude #2 is that winning $300 is A LOT OF MONEY and you have to take your gains off the table.  Sometimes you will get lucky and your quick stop doesn't trigger and you get a nice ride down but MOST OF THE TIME – you make a tiny bit of money and get out.  

    MOST OF THE TIME – I look at the Futures and have no reason to play.  If a set-up doesn't look dead obvious, why even start.  Even when it does look obvious – you're still going to be wrong about 40% of the time so how on earth can you afford to play when it's not obvious?  

    If you don't KNOW something – if you don't have some CURRENT piece of news that you don't believe is being reflected in the Futures yet (like AAPL's earnings and the Nas Futures on Tuesday evening) – then DON'T PLAY!

    Macros don't matter in the Futures.  Hell, they hardly matter week to week in this insane market!  The Futures are about the mood of the moment and, of course, they are so thinly traded in the off hours that the fact that you are playing affects the outcome and, in fact, WHATEVER you bet in a thinly traded contract will be targeted by Bots who will do their best to push you out of your position.  If you aren't good at or can't afford to scale in – Futures are a very bad idea.

    For example, here's gold (/YG) MAYBE crossing the $1,650 line.  I'm willing to go 1 contract short if they hit $1,649.50 and, at $33.20 per dollar – I'm willing to set a stop at $1,650.50.  So I wait PATIENTLY for a proper cross of $1,650.  Meanwhile, I'm watching the S&P at 1,391 and I'm not going to pull the trigger on gold if the S&P is over 1,390.  The RUT is at 813.5 so I want to make sure it's going down as well and, of course, the dollar is 78.95 and I want to see 79 to be comfortable going short.  Oil is $104.34 so over $104.40 is a no-play on the gold short.  The Euro is $1.3251 and I must see it fail that line ($1.325) to make the short gold play too.  The Pound is $1.619 and that has to stay under $1.62. 

    So I have many, many reasons NOT to pull the trigger on my gold shorts but, if I get my confirmations – then I am happy to jump on gold short until they begin to fail.  

    I could use the same logic to short the S&P (/ES) off the 1,390 line or the RUT (/TF) if they re-test 815 but, for now, I think gold is good for a $10 drop if the Dollar bounces back and that's $332 per contract, which pays for the Egg McMuffins.  

    Meanwhile, gold now $1,651.30 so I'm very glad I have my discipline or I would have stopped out already.  

  270. stjeanluc

    MoMos / MrM – thanks for the information. I will look into that strategy but we will go a different path for the portfolio as we decided to go without margin to allow everybody to participate. It seems to me that you have a good plan though.

  271. Phil

    See, now things are looking a little more realistic.  Dollar back over 79 and Futures down about 0.2%.  Oil $103.92, gold $1,648, RUT 809, S&P 1,385 so the Egg McMuffins are paid for. 

    6:00 AM Overseas: Japan flat. Hong Kong +0.8%. China -0.1%. India -0.1%. London +0.1%. Paris -0.6%. Frankfurt -0.5%

    Sheila Bair: Watch out! Is the Fed pushing us into another bubble? (Fortune)

    Earth to Ben Bernanke (NYT)

    U.S. Debt Culture and the Dollar’s Fate (National Interest)

    The Top 1% Saw Their Incomes Rise 8 Times,1979-2007 (Forbes)

    According to Sueddeutsche Zeitung, a working group of euro countries is in talks to figure out how cash-strapped banks can borrow directly from the ESM - a direction previously opposed by Germany and the ECB. If true, it prompts the question: Just how bad are things again in Europe?

    The European Commission's economic sentiment indicator fell more than expected in April to 92.8 from 94.5 the month before. Consensus was for 94.2. European stocks turn lower: London +0.5%. Paris -0.4%. Frankfurt -0.2%.

    Eurozone consumer confidence comes in -19.9 vs. -19.8 expected and previous

    After rebounding to 68% in 2011, U.S. home ownership hits a new all-time recorded low of 62%. Only 53% of Americans believe their home is worth more today than when they bought it, down from a peak of 92% in 2006. Still, 70% think it's a good time to buy. (Gallup)

    Alcatel-Lucent (ALU): Q1 net profit of €398M on a €659M gain for the Genesys sale. Operating loss of €289M vs. €64M last year. Sales of €3.21B (-12%) fell short of consensus of €3.9B, led by a 12% drop in North America. Says risks in Europe "remain high," and notes the North American transition from CDMA to lower-margin LTE gear is accelerating. Shares -12% in Paris. (PR

    Chrysler (FIATY.PK): Q1 net income of $473M, up from $116M a year ago. Quarterly sales +33% to 523K vehicles. Confirms full-year guidance of ~$1.5B.

    A reality check for Facebook investors (Market Watch)

  272. dclark41

    Phil
    So a bad employment number is good, right? I just want to make sure I understand the new paradigm! :)

  273. Phil
    March 2012 April 2012 Comments
    Information received since the Federal Open Market Committee met in January suggests that the economy has been expanding moderately. Information received since the Federal Open Market Committee met in March suggests that the economy has been expanding moderately. No real change.
    Labor market conditions have improved further; the unemployment rate has declined notably in recent months but remains elevated. Labor market conditions have improved in recent months; the unemployment rate has declined but remains elevated. No real change. The unemployment rate is down, but few jobs are being created, and people are dropping out of the labor force. The improvement isn’t that large.
    Household spending and business fixed investment have continued to advance. The housing sector remains depressed. Household spending and business fixed investment have continued to advance.Despite some signs of improvement, the housing sector remains depressed. Shades up their view on the housing sector. I would be more cautious.
    Inflation has been subdued in recent months, although prices of crude oil and gasoline have increased lately.Longer-term inflation expectations have remained stable. Inflation has picked up somewhat, mainly reflecting higher prices of crude oil and gasoline. However,longer-term inflation expectations have remained stable. Shades up their view of inflation, finally. TIPS are showing higher inflation expectations since the start of the year. (5y forward 5y inflation implied from TIPS.)
    Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. No change. Mentions of the statutory mandate are always meant to hide the distasteful aspects of what they do.
    The Committee expects moderateeconomic growth over coming quarters andconsequently anticipates that the unemployment rate will decline gradually toward levels that the Committee judges to be consistent with its dual mandate. The Committee expects economic growth to remain moderate over coming quarters and then to pick up gradually.Consequently, the Committee anticipates that the unemployment rate will decline gradually toward levels that it judges to beconsistent with its dual mandate. Shades up its views of future GDP growth.
    Strains in global financial markets have eased, though theycontinue to pose significant downside risks to the economic outlook. Strains in global financial markets continue to pose significant downside risks to the economic outlook. Shades up its view of risks from global financial markets.
    The recent increase in oil and gasoline priceswill push up inflation temporarily, but the Committee anticipates that subsequently inflation will run at or below the rate that it judges most consistent with its dual mandate. The increase in oil and gasoline prices earlier this year is expected to affect inflation onlytemporarily, and the Committee anticipates that subsequently inflation will run at or below the rate that it judges most consistent with its dual mandate. No real change.
    To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. No change.
    In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014. No change.
    The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability. The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability. No change.
    Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. No change.
    Voting against the action was Jeffrey M. Lacker, who does not anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate through late 2014. Voting against the action was Jeffrey M. Lacker, who does not anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate through late 2014. No change. Thank you, Mr. Lacker.

     


  274. newt

    SKX: I love it.I Did the BCS you suggested- Oct 11/15. Thanks.  Advice for max returns?
    Also /NQ was great yesterday- thanks.  And so was FAS play.  I appreciate the tutelage.

  275. deano

    "TASER beats by $0.06, beats on revs (TASR) 4.15 : Reports Q1 (Mar) earnings of $0.07 per share, $0.06 better than the Capital IQ Consensus Estimate of $0.01; revenues rose 10.8% year/year to $25.6 mln vs the $22.72 mln consensus. The increase in sales versus the prior year was driven by the continued adoption of the TASER? X2 Electronic Control Device (ECD), as well as a significant order to the United States Army for the X26 ECD… Gross margin in the first quarter of 2012 was 59.4%, compared to 52.8% in the same period last year."

  276. deano

    More TASR: "While we have been greatly encouraged by pre-orders from agencies for the AXON Flex ahead of the shipping date, expected in May, we anticipate meaningful sales bookings in the back half of the year. Along with the momentum for our newer products, the Company maintains a strong cash position and has zero debt, which leaves us well-positioned to drive profitable growth and drive value for all of our stakeholders. Additionally, the continued strong cash generation ability of the business positions us to be able to repurchase up to $20 million of company stock this year."

  277. 1020

    Gosh Phil, you make futures sound so difficult.  1,000 loss and a 300 gain?  Actually, it's the other way around.
     
    And yes, some days, you do not take a trade. That's the hardest part. Patience.
     
    Sell strength – Buy weakness.  :)

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