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April 30th and All is Well – ROFL!

Is this time going to be different?

Sure, why not?  Don't let the fact that we had pretty nasty sell-offs the last 4 Mays dissuade you from being gung-ho bullish into this one – after all – it takes bulls and bears to make a market, doesn't it?  

We've been prone to focusing on the negative lately – mostly because the positive is pretty much all you hear in the Corporate Media and we like to have balance.  If they were too bearish, I'd make a bullish case but this weekend we focused on "Money, Power and Wall Street," and the deteriorating Global situation, which got no better this morning with Spain's -0.3% GDP Report, Eurozone Inflation above forecasts at 2.6%, the S&P downgrading 16 Spanish Banks, California's Tax Collections are running 26% behind schedule, gasoline is hitting record highs in Europe while Business Investment in Europe drops BELOW the 2008 lows:

SPY DAILYShould we be concerned?  Why should we be – look how high the market is!   Doesn't that prove that everything is OK?  It sure proved it in October of 2007, when the Dow was at 14,000 and it was still proving it on Monday, May 19th, 2008 – when the Dow was at 13,028 for the last time until March 13th of this year, when 200-point one-day pop sent us all the way to 13,177.  We topped out around and fell all the way to 12,700 a month later but now we're back and THIS TIME IS DIFFERENT, right?  

For one thing, the SNB spent $4.1Bn propping up the Euro in Q1 – that's a lot of money for a country whose entire GDP is just $500Bn!  Fortunately for the Swiss, their insane money printing did cause their gold holdings to rise by $1.2Bn so their net loss in manipulating the Global economy was "only" $2.8Bn so I'm sure they can sustain this farce for another quarter or two if they wish.  

Farce is too kind a description for the fraud being perpetrated by the Central Banksters, according to the Economic Policy Journal's Bob Wenzel, what had this to say in his speech to the NY Fed last week (the whole speech is a must read):  

Under Chairman Bernanke there have been significant changes in direction of the money supply growth FIVE different times. Thus, for me, I am not at all surprised at the current stop and go economy.

It is my belief  that from start to finish  the Fed is a failure. I believe faulty methodology is used, I believe that  the justification for the Fed, to bring price and economic stability, has never been a success. I repeat, prices since the start of the Fed have climbed by 2,241% and there have been over the same period 18 recessions. No one seems to care at the Fed about the gold supposedly backing up the gold certificates on the Fed balance sheet. The emperor has no clothes.

The noose is tightening on your organization, vast amounts of money printing are now required to keep your manipulated economy afloat. It will ultimately result in huge price inflation, or,  if you stop printing, another massive economic crash will occur. There is no other way out.

Jim Grant stopped by the Fed as well and got in a few licks of his own but we KNOW America is a mess – don't we?  Hugh Hendry argues that China is a far bigger mess than America where Hendry sees a Weimar-like situation where Chinese leaders thought they could get away with fiscal profligacy on the back of strong exports, but the weakness abroad means it might not happen.  "The Chinese market is a casino, pure and simple. It only benefits insiders.  There's no reason for anyone to invest in it" is his very clear outlook on that Nation.  

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China doesn't hold a candle to the disaster that is forming up in Japan, according to Hendry, who calls Japan "The Tranquility That Could Rock the World."  Ultimately, he thinks we'll see one more washout in the market, with 30-year Treasury yields hitting 2.5% (they're currently at 3.125%) and the VIX surging to 80, at which point we'll have a truly 'generational' opportunity to buy risk assets.  Hendry points to the absurdities that abound in the current economic climate:

Why did ten year treasuries yield 14% under the vice like grip of iron-man Volker but yield just 1.8% under the bookish and most definitely Weimar-like Bernanke? Why does France in 2012 flirt with the notion of electing a socialist president intent on reducing the retirement age, imposing a top rate of tax of 75% and increasing the size of the public sector? Why do we hang on the every word of elected politicians when Luxembourg’s prime minister Jean Claude Junker openly admits, "When it becomes serious, you have to lie"?

 

You cannot make stuff like this up. It is simply too absurd.

undefinedThe flip side of the China coin is presented by Frank Holmes of US Global Investments (I just figure we need something bullish to balance things out).  Frank, who is a commodities fan, relies mainly on demographics and mega-trends like 3rd World Industrialization but I would point out that he could have done the same slide show in September of 1929, when the US was an "emerging market" to "prove" stocks were not overvalued.  Sure, almost 100 years later, we wish we had bought GE for .02 in the crash but that didn't stop the crash from happening, did it?  

Nonetheless, we are over the levels that force us to be technically bullish (and we're hating every moment of it as we remain fundamentally bearish) and, if we fail to move back down tomorrow (the deadline I gave to Members lest week) then it's time for another 10 Bullish Trade Ideas to get us through the next silly move up.  I already put up two new Natural Gas plays in the weekend chat and we'll add one a day, just like we did in March, until we have a new set to take advantage of a move up from here.  Trades at that time (some still playable) were:  

 

  • SKX Oct $10/14 bull call spread at $2.20, selling $12 puts for $1.55 for net .65, now $3.17 – up 387%
  • SU 2014 $25/37 bull call spread at $6, selling XOM 2014 $65 puts for $5 for net $1, now $5.69 – up 469%
  • USO June $40/46 bull call spread at $2, selling SCO Oct $26 puts for $3 for net $1 credit, now .20 – up 80%. I liked this one because you were long and short oil at the same time.
  • AA 2014 $10 puts sold for $2, still $2 – even
  • X Jan $25/2014 $20 buy write at $17.04/18.52, now $18.97 – up 11%
  • PEG Sept $30 buy/write at $27.07/28.53, now $27.59 – up 2%
  • HOV 2014 $2 puts sold for .90, still .90 – even
  • BAC 2014 $3/7 bull call spread at $2.75, selling $10 puts for $3.30 for net .55 credit, now $1.80 – up 427%
  • HCBK Jan $7 buy/write at $5.14/6.07, now $5.71 – up 11%
  • FTR 2014 $5 buy/write at $2.43/3.71, now $2.06 – down 15%

We had an update on those trades on 3/2 and my comment on the BAC trade, which was up "just" 36% at the time at .35 was: "36% seems like a lot but it's just .20 out of $5.10 (927%) of potential gains so still very playable."  Now up 427% – it's still only halfway to goal but no longer something I'd enter from scratch.  

We have no reason to fear a continued move higher – it's easy to put together bullish lists like this to take advantage of mindless move up.  At the moment, we have our short-term bullish trades because we aren't quite believers yet and Europe is unsettled to say the least with France's elections on Sunday and riots in Athens and Spain – the situation is iffy at best.  As I said to Members on Friday:  

I simply can't see how people are going to sit down this weekend, digest this data and come to work bullish on Monday.  There's no scheduled meeting/action by the EU and this is not their thing anyway – they already gave Spain all the money it needs and the downgrade is meaningless if the ECB keeps buying their paper anyway so it's not like they need to take new action.   Japan just eased so the ball is in our court and how can the Fed step in when inflation is so high and jobs are looking up and housing is looking up and the market is near all-time highs – that would be beyond insane.  So it's all anticipation of an event that isn't going to happen and the longer it doesn't happen – the more regrets I think the bulls will have.  

We did add bullish trade ideas for BAC, HOV and FAS on Friday – already going back to the well on some of our 10 favorites and we already discussed CHK when it hit $17 last week and Friday we got another chance to make an aggressive entry as they spiked down again.  We also added ECA, as it was a bit more stable (so far).  

So we already have 5 of our 10 upside plays lined up (as long as we're over 3 of 5 of our 50% lines).  As it's the last day of April, we'll watch and wait until tomorrow and we'll be very nervous longs until at least half or May is behind us.  We're by no means giving up our bearish positions – just balancing a bit more bullish and pushing our bear bets back in time as we're pretty sure they are in the right place – we just have to wait for it to be the right time.  

Be careful out there!


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  1. stjeanluc

    Oil Lines

    R3 – 106.55
    R2 – 105.77
    R1 – 105.29
    PP – 104.51
    S1 – 104.03
    S2 – 103.25
    S3 – 102.77

    I have filtered the weekend prices out of the lines to get more accurate prices. 

  2. Pharmboy

    PP for today….

  3. Pharmboy

    biotechs/japar

    I have CRIS, AVEO, NWBO, YMI, DSCO, EXEL, PLX, PDLI. I've kind of neglected this portfolio but have 10 May 5 PLX calls that I'm hoping will come thru.

    CRIS – good if it is stock. Hold and sell Sept $5 calls and puts.

    AVEO – good, I have July $12.50 calls and puts.

    NWBO & DSCO – not sure how much you have of these, but I would hold for future.  DSCO – if you are up, I would sell.

    YMI & EXEL- Good for now.

    PDLI – I would cover and sell puts Nov $6 C.Ps for 90c or better.

  4. Savi

    Pharm—GPRO  —I have the stock but I remember you recommended the options  :-)

  5. emunster

    PHIL, THANK YOU! YES mostly in CASH at the moment. Keep up the great work!

  6. Pharmboy

    Savi – nice.  Those were over a while ago, but this area started with the GXDX purchase last year.  Roche trying to buy ILMN, and now this.   There are others out there…..

  7. jerconn

    Pharm – big pop on PLX before trading…

  8. Savi

    what are the others in your opinion?
    Thanks

  9. stjeanluc

    Here is where we made our money in the 25KP portfolio since we switched to the new format:

    This covers only the closed position, not what we have currently open. A large portion of the money has been made with FAS which is like our little printing press it seems!

  10. kustomz

    Chi PMI 9:45

  11. rustle123

    Will the bots want to paint a pretty close to April before the doom of May?   I'm sure they will try at one point.

  12. stjeanluc

  13. stjeanluc

  14. yodi

    Phil As you noticed BKS hold stock at 12 and sold the 12 caller for some .60 April expired so Iam overall in the plus but what would be your next move if the stock doubles in price not to mention my stock will called at this point. let it go or run after some butterflies? I now wait until after the excitement? But where is the value in BKS?

  15. Canuck

    stjeanluc/FAS-25k
     
    what type of trades were done with fas to get the $13k pop – were they  BCS?

  16. rainman

    CLF starting to look tasty at $60 but I'd wait for  some bottoming action and see if more go away in May.

  17. stjeanluc

    In the $25KP we rolled the GLL to June but we decided to wait until today for the $5KP.

  18. stjeanluc

    25KP / Canuck – It was mostly the April calls we sold (99 and 98) and FAS went down on expiration day conveniently below 98!

  19. jabobeast

     g

    1. 9:46a
    2.  
    3.  
    4. Chicago PMI production drops 11.5
    5.  
    6.  
    7.  
    8.  

     

    1.  
       
       
       
    1.  
      9:46a

      Chicago PMI: Lowest level in 29 months

       
       

     

    1.  
      9:46a

      April Chicago PMI 56.2

  20. wealthwarrior

    Anyone know what happened to JR?  Did he finally make his second TRILLION, buy a small foreign country and retire from day trading? Sure miss his lines, guidance and commentary.

  21. Canuck

    STJ/thanks

  22. stjeanluc

  23. stjeanluc

    Here is the econ calendar for the week. We have important data from Europe, the US and China this week. Combined with May 1 tomorrow, this could make for a volatile week.

    I posted the expected number next to the time of release.

  24. kustomz

    Chi data..sux

     
    JRW, yea miss the guy too. Hope he's ok.

  25. rainman

    Can't get good moves in the indecies? Change them!
     
    9:05 AM Apple (AAPL) and Google (GOOG) could join the Dow in order to keep the index "relevant for a 21st century market," Barron's speculates over the weekend. AA, BAC, and HPQ being seen as possible casualties of such a move. But the paper admits Apple and Google's high share prices would make adding them to the absolute price-weighted index difficult, unless it chooses a new formula. (Read the comments on this)

  26. zeroxzero

    A call from Europe suggested that the EU is now considering various "stimulus" measures.  I have no hard data; perhaps it's a reaction to Hollande, and the possibility that Germany may find itself alone in a hostile group of client states.  It's logical, though.  Good for my oil shorts, bad for U.S. equities, presumably.  Inflation will be happy if true.

  27. stjeanluc

    I read this morning that Dow Jones was thinking of adding AAPL and GOOG to the Dow index. How crazy would that be? Last week when AAPL released and rose $60, it would have added 480 points to the Dow. I guess they would have to revise their weighing system!

  28. stjeanluc

    AAPL taking a small dive this morning – the tax article in the NYT is not really shining a great light on their business I have to say. It's just incredible that all these companies benefit from the great US consumers but all refuse to pay taxes to support their customer base… Once we all make minimum wage because we are broke, who is going to buy the iPhones and iPads?

  29. dclark41

    zeroxzero
    Are you in EDZ?

  30. jromeha

    Phil- when do we roll uso? If it finishes about the same (down .70 or so)…..

  31. rainman

    Kind of looks like someone might know something about VECO's earnings tonight based on today's action and the last few days.

  32. Phil

    Good morning!

    Gosh, I was getting worried we were going to head down but then we got a 7.5% drop in the Chicago PMI from 60.8 to 56.2 and that sounds awful enough to move the Fed closer to the table!  

    Chicago PMI: 56.2 vs. 60.8 expected, 62.2 prior. Employment 58.7 vs. 56.3 prior. New orders 57.4 vs. 63.3 prior. Prices paid 68.6 vs. 70.1 prior.

    March Chicago Midwest Mfg. Index: unchanged M/M.+8.6% Y/Y. Regional auto sector production fell 0.3%, while machinery sector rose 0.6%.

    At least Employment is up but new orders off 10% – not good.  

    Only kidding, of course – no change from last week when I said the only regret I'd have if we were down 200 today is that I didn't go gung-ho bearsh but in now way would it be surprise.  Our plan was to give it until tomorrow before we capitulate and no reason to change that yet.  Keep in mind I'm off to Vegas on Weds so short day then but I'll be posting from there Thurs and Friday, maybe a bit later than usual with time diff.  

    AAPL taking a hell of a dive, if they find a floor the Qs might be a good upside momentum play but, if they don't find a floor, long way to fall.

    Oil right on the $104 line with the Dollar at 78.87 – we need to see 79 for some good, bearish action and that means the Euro below $1.32 and the Pound below $1.62,  both should be pretty bouncy with EUR/CHF still so low (1.201).  Yen just failed the 80 line thought so they should be buying Dollars this week, which means it's going to be interesting.  

    At the open: Dow -0.06% to 13221. S&P -0.15% to 1401. Nasdaq -0.22% to 3062.

    Treasurys: 30-year +0.18%. 10-yr +0.1%. 5-yr +0.02%.

    Commodities: Crude -0.64% to $104.25. Gold -0.65% to $1653.95.

    Currencies: Euro -0.2% vs. dollar. Yen -0.19%. Pound +0.13%.

    9:59 AM Stocks add to losses following the weak Chicago PMI print. S&P 500 -0.5%, Nasdaq -0.5%. A bit more from the report: Production declines to 57.1 from 68.6, the lowest level since Sept. 2009. Supplier deliveries declines to 55.6 from 57.8, the lowest level since September 2011. (full report, .pdf)

    Market preview: EU shares and U.S. stock futures are lower after Spain sinks back into recession and following mixedpersonal and income outlays data, with the S&P benchmark -0.2%. Barnes & Noble blitzing 91% on Microsoft's investment in a new Nook unit, while Sunoco is +21%, Gen-Probe is +20% and Demand Media is +36% after merger news or speculation. LDK Solar -8% in the wake of earnings. Later: Dallas Fed Manufacturing Outlook, Fed's Fisher.

    San Francisco Fed President Williams sounds an optimistic note about the economy, and tells Handelsblatt he sees no reason "to raise the money printing machine" (as the translated version puts it). He slams Europe's austerity policies, saying they make it even harder to tackle government deficits and debt.

    Mar. Personal Income and Outlays: Income +0.4% vs. +0.3% expected, +0.2% prior. Personal spending +0.3% vs. +0.4% expected, +0.8% prior. PCE core price index +0.2% vs. +0.2% expected, +0.1% prior.

    Suckers!  CFTC data shows the small speculator as the only net long in S&P futures contracts, with the commercials and large specs on the other side of the trade. It's not immediately bearish, says Peter Brandt, as small specs sometimes get it right, but when this group is the only net long, things could move quickly if the market does turn down.

    Goldman's Jan Hatzius expects Friday's NFP payroll numberto be just 125K vs. consensus of 165K, thanks to payback for the warm winter when most of the job surge came from the cold states. He also notes Goldman's proprietary economic indicator showing a clear deceleration.

    Off by 200%!  Canada February GDP -0.2% vs. +0.2% expected, +0.1% previous. Y/Y +1.6%, +1.7% previous. The loonie – recently going strong thanks to talk of rate hikes by the BoC – takes a tumble, -0.6%to $1.0142.

    More on Canada GDP: The Feb. decline – the worst print in more than 2 years – comes as mining and oil & gas extraction declined 1.6%, led by a 7% decline in mining, led by a 19% decline in Potash mining – a dive surely telegraphed by weak Q1 sales of the fertilizer reported by Potash (POT) and Mosaic (MOS). Improvement, however, is on the way, says Mosaic.

    Italian and Spanish banks put the ECB's LTRO #2 to good use, loading up on more of their government's debt – Italian lenders increasing their exposure by a record €23.7B to €323.9B, Spain by a near-record €20.1B to €263.3B. "The willingness to get further exposure is lowering," says an economist. What about LTRO #3?

    This will burn off the excess:  The number of rigs drilling for natural gas in the U.S. falls to 613, the lowest level in 10 years as low prices force producers to cut back. Perhaps anticipating slowed production, gas prices last weekpulled back from their free fall. The number of rigs drilling for oil was off a hair, but remains near a 25-year high. 

    OPEC output reaches its highest since 2008 as extra crude from Iraq, Saudi Arabia and Libya more than compensated for the lowest Iranian supply in two decades, a Reuters survey says. OPEC supply averaged 31.75M bpd in April, up from 31.32M in March; the biggest increase came from Iraq, where production topped 3M bpd, nearly equaling Iran's output.

    Gold takes a quick tumble, dropping nearly 1% in minutes to $1.650/oz. (taking silver along for the ride, or vice versa). The fall comes as HSBC hits the tape, cutting its 2012 average gold forecastto $1,760 from $1,850 on a "sharp decline" in Indian demand and reduced expectations for QE.

    About time!  Shares of YRC Worldwide (YRCW +28.3%) skyrocket after the firm announces that it scored unanimous agreement from lenders to reset certain financial covenants over the life of its loans to allow the company to retain proceeds from certain property auctions. 

    Office supply stocks show weakness in early trading, possibly as a result of a channel check conducted by Cleveland Research that showed soft sales at Staples – widely-considered thebest bet to survive of the three big names. OMX -3.4%, ODP -3.1%,SPLS -1.5%

  33. japarikh

    Pharm,

      Thanks for the help. When you say you have AVEO $12.50 calls and puts, are you short those calls & puts or long?

  34. Phil

    Barnes & Noble (BKS+79% premarket as Microsoft (MSFT) wades into eBooks with a $300M investment in the company's Nook and College operation. 9to5mac notes the deal seemingly puts an end to patent litigation between the companies and that BKS would seem to be abandoning Android as their future e-Reader OS.

    Barnes & Noble (BKS +83.9%) CEO William Lynch claimsbig things will flow out of the firm's blockbuster e-book deal with Microsoft. The unnamed venture will help extend the Nook bookstore to hundreds of millions of people and will put to rest a patent dispute between the two companies, but inquiring minds want to know if Nook products will resonate with college kids?

    Apple (AAPL) and Samsung (SSNLF.PK) accounted for 74% of the mobile phone industry's Q1 revenue and 100% of its profit,estimates Raymond James' Tavis McCourt. That doesn't mean no other vendor made money, but that their relatively small profits were offset by the losses of others. McCourt thinks Apple and Samsung's dominance is a problem for GOOG and MSFT, and could lead them to court fast-growing Huawei and ZTE. (previous

    Apple (AAPL) and Google (GOOG) could join the Dow in order to keep the index "relevant for a 21st century market," Barron'sspeculates over the weekend. AABAC, and HPQ being seen as possible casualties of such a move. But the paper admits Apple and Google's high share prices would make adding them to the absolute price-weighted index difficult, unless it chooses a new formula.

  35. morxlntway

    Pharm – you didn't mention CLDX but they are creeping back up.

  36. japarikh

    Pharm,

      Also, for NWBO (I have 450 at $0.46) and DSCO (I have 33 at $6 after their reverse split), would you add or just hold?

  37. rainman

    MSFT / BKS — One has to wonder if MSFT will try to give Nook's Android  the boot.

  38. Burrben

    Phil –  Do you know how hard you make it to put on bullish trades ? :)    Especially after I just watched Ep 1 and 2 of Money/Power????

  39. Inkarri1982

    Morning All – So two reports came back worse than expected and we are going into the European close down only slightly?  This is just funny! 

  40. rainman

    Guy on CNBC saying GE spends $77k / congress member / year in lobbying.

  41. sagemm1

    oil seems to be getting a lift, from somewhere??

  42. sagemm1

    Ink/funny…only if you are not looking at my P/L:0

  43. Burrben

    Yodi, Canuck / ECA  - Thanks for the explanation yesterday, very helpful.  Yodi, I'm going to try you're way on the calls, and I'll keep it updated in a google spreadsheet for tracking.  
    PS:  I wish the girls down here in Nicaragua were more to my liking.  For that I'd need to move to Russia….and no way the GF is letting me near Eastern Europe!

  44. japarikh

    Phil,

      What are your thoughts on ERF? I bought this 5 yrs ago for $42 (before joining PSW I might add). Have been collecting ~$400-$1000 per year in dividends. Thinking of DD at current price but wanted to get your opinion first. Other thought was to roll this position into LINE or VVC instead. Thanks.

  45. 2nifty

    Speaking of AAPL…I switched from long-time Iphone use to Samsung Note on Saturday. Mini tablet/phone all in one. Fantastic! Glad I never bought an IPad. Thanks to the person who recommended Note last week (Nicha?)

  46. Burrben

    ECA falling.  -2.73% today.  19.99×20.00.  

  47. crussell14

    St. Jean,
    In the $25k portfolio, the spreadsheet shows we bought PCLN $600 put at $9.00 and therefore showing a profit. But, this was the result of a roll so would it not make more sense when we roll to show our true cost basis which more truly reflects the current loss? Thanks

  48. rainman

    2nifty — What was the catalyst for your switch? I thought Apple was a religion.

  49. nicha

    2nifty/Note – wasn’t me. Maybe kustomz.

  50. etradingsignals

    Crussell14: When we rolled, we took the losses from the closed position and subtracted it from our realized profit.

  51. 2nifty

    Frustrated with small screen on Iphone, but didn't want to lug around a $700 tablet. Favorable reviews on Note. ATT offering big discount, only $299 with subscription, heard rumor might go down to $229. Yes, I feel like a real rebel! Everyone who sees me using it wants one.

  52. terrapin22

    2nifty / Note – I made the switch in Feb when Note first came out and mentioned it last week.  Very happy with it! 

  53. terrapin22

    SVU – Goldman Sachs started coverage of the struggling supermarket chain with a sell rating.  argh!

  54. Phil

    I'm trying EM but these markets do make it hard, don't they?  

    Bots/Rustle – I just read they are now 84% of the trading – when are they going to stop this crap?  Average hold time of a stock is now 23 milliseconds.  

    BKS/Yodi – I'd say the run-up is overdone and the $12 caller (this is the problem with being greedy and selling front-months) is $10.30 and opened at $12.50 but the Jan $17.50s are $8.20 so you can roll to 1.5x the Jan $17.50s and pocket $2 and buy 1x the 2014 $15/20 bull call spreads for $2.60 so you are in for net .60 and you are completely covered on 1x with your stock and 2x covered on 1/2 the short callers with 2 of the bull calls THAT THEY PAID FOR.  I'd also put a stop on 1/2 the stock at $22 so you'd end up with 1/2 x the stock and 1x the bull call spread covering the 1.5x callers – you can always buy more longs if they cross back over.  

    AAPL $589.  MSG making new highs – I thought Linsanity was over?  

    JRW/Wealth – He went on vacation and never came back – maybe he found religion?  I just dropped him a line.  

    I love that calendar, StJ!  Great to combine US and Europe.  

    AAPL and GOOG/StJ – No way at current weighting.  Would turn the Dow into an obvious joke – as opposed to the subtle joke it is now.  

    Who/StJ – See Holmse's presentation from the morning post – CHINA!!!  There are so many companies who are in the process to shifting the US to a depleted market status and moving on to greener pastures.  Sure they'll still sell us stuff – that's what AMZN is for, isn't it?   What they won't do is build. manufacture or directly sell in the US – that's why you see such an amazing amount of vacant retail space in NYC now – the people who used to have unlimited budgets for "flaghsip" stores in NYC are now competing for slots in Singapore, Beijing, Bombay, Macau, Dubai, etc…  

    USO/Jrom – Tomorrow is capitulation day if we don't have a nice 2.5% correction between now and then.  

    Hard/Burr – Good!  It should be hard.  As I've said before, my biggest regret in 2008 was simply not pounding my fist about how bad the economy looked.  No one wanted to hear it as we were going up and "they didn't want to miss the rally."  Lesson learned there was Cash is King and there will always be opportunities to buy companies cheap – IF YOU HAVE CASH.   Look at the March list – we bought SKX, X, HOV and BAC when they were crashing (see logic in original post).  Why?   Because we had a long-term fundamental desire to own them – no matter how beaten up they got in the short-run.   Now we have CHK, ECA, BAC again, BBY, HPQ – plenty of things to dip your toe into if you are bored.  You can sell a 1/4x put on them and collect a little premium month after month and – if the market does drop 20% in a month – you'll be damned glad you still have 75% of the allocation in your pocket to DD with.  If you have to think long an hard before putting your money into a position – then I'm doing my job!  

    ERF/Japar – I like them at this price ($18.17).  They are heavily invested in shale so you could get very screwed over by changes in fracking regs but, otherwise, it's like CHK and ECA – a chance to get in for a long-term play on the eventual recovery of nat gas prices.   I think a small intro position on a buy/write, selling the Oct $17 puts and calls for $2.80 nets you $15.37/16.19 which is as good as it gets on a 12% dividend payer.  If you stay small – you'd be HAPPY to DD at $16.19 and then again at $14 (on the next buy/write).

    ECA/Burr – That's good because we didn't buy them yet!  Nat gas heading the other way – $2.19 now.  

    QQQ Weekly $65 calls have very little premium at $1.95 (maybe .08) so let's call those a buy at $2.05 as they cross over the $67 line with a very tight stop at $1.95 and that's how we can play for an AAPL bounce

  55. stjeanluc

    Portfolio / Crussell – As Etrad mentions, I posted the loss in the closed positions above and it's really the best we can do for now. I try tracking the cost on positions in DIA and USO because we have so many of them, but it would be too time consuming to do it for all the positions – for example it's our 2nd roll for PCLN.

  56. yodi

    Burrben
    ECA Well I closed the trade today obviously not the same as Friday I took advantage of the drop and got in at 20.10 sold the Jan14 p for 4.15 and entered the May 21c for .25 and not at .40 as last week But as I said You can not judge the position as of one day it needs to devolop You can sell the May 20c as well but it is not so good selling calls on down days.
    Girls Never been at you place here in Cancun you can find some good looking once. But you can always change to pot!!!

  57. stjeanluc

    Who / Phil – With Europe tanking and the US being bled dry I am not sure that they will be able to replace 600 millions consumers with average income over $40K a year in Asia or the Middle-East over the next 10 years. The average income in these countries are 25% of what it is in the OECD countries! The transition could be painful!

  58. nicha

    Phil/companies looking for greener pastures – when I was in Bombay I found out that Levis has rented a large place for $100,000 a month but was barely doing $10,000 in business a month. Same with all foreign brands Outside or in malls. They are all staying put so that they have a presence in the city. Also, Starbucks opening soon with a JV with Tata. Starbucks will initially open stores in all Tata hotels and then move on to opening stores in affluent locales.

  59. mrmocha

    GPRO - don't recall if I got that one from you, Pharm, but if so then thanks!  I had a few MAY 70 calls, and it's my first biotech hockey stick in quite awhile…

  60. jabobeast

    PCLN green again…
    WTF??
     
    FU PCLN!!!

  61. Pharmboy

    Japar – AVEO – I have sold = amts of both calls and puts.

    CLDX – morx – my response was to Japar on a question asked in my post….sorry.  I am in CLDX.

    Japar – hold on NWBO and DSCO.  Get out even if you can.  there are better things out there.

  62. lflantheman

    Long PCLN

  63. Pharmboy

    mrm – I think I noted them a while ago in a post, but I was out on a pop.  They then cratered.  Either way….hockey sticks are good.  I am waiting quietly/patiently for PLX and SGEN to come in….but I am carrying a big stick….

  64. scottmi

    SVU/terra – i am happy with the silly analyst comments on SVU right now. it's not going away and with it's dividend is a GREAT buy write. if you feel like your current position has been 'hit' good time to add another slice. At today's price, buy teh stock and sell the 2014 $5 puts and calls and you get a 12% dividend! If someone calls you away, it's a 77% gain assuming the puts expire worthless. or if it drops down to let you buy in again, you get in again for $5..and you sell the buy write again. i really like this play. no stress at all.

  65. dpastramas

    PCLN / Ilfan – Do you have a particular play in mind? Thanks

  66. Phil

    Today's end can't come quick enough for Europe which slowly bled throughout the last half of the day, closing at session lows. Stoxx 50 -1.6%, Germany -0.6%, France -1.8%, Italy -1.6%, Spain-2.4%, U.K. -0.6%. The euro -0.2% to $1.3228. It's a good day in the bond market, with Spanish yields -10 bps to 5.78%.

    That says it all.  They had a lousy finish and we can expect the same, I think.  

    Euro and Pound still holding up. Yen now 79.80!  Dollar 78.89.

    SVU/Terra – They are struggling because they keep getting downgraded!  Otherwise, the cash flow is fine – even with the 5% dividends.  

    Transition/StJ – That's why it's silly.  I didn't even get into that Global unemployment report in today's post but that thing is ugly!

    GENEVA (ILO News) –Despite signs that economic growth has resumed in some regions, the global employment situation is alarming and shows no sign of recovery in the near future, says the International Labour Organization (ILO). 



    The ILO’s World of Work Report 2012: Better Jobs for a Better Economy says that around 50 million jobs are still missing compared to the situation that existed before the crisis. It also warns that a new and more problematic phase of the global jobs crisis is emerging. 

     



    First, this is due to the fact that many governments, especially in advanced economies, have shifted their priority to a combination of fiscal austerity and tough labour market reforms. The report says such measures are having devastating consequences on labour markets in general and job creation in particular. They have also mostly failed to reduce fiscal deficits. 

    Second, in advanced economies, many jobseekers are demoralized and are losing skills, something which is affecting their chances of finding a new job. Also, small companies have limited access to credit, which in turn is depressing investment and preventing employment creation. In these countries, especially in Europe, job recovery is not expected before the end of 2016 – unless there is a dramatic shift in policy direction. 



    Third, in most advanced economies, many of the new jobs are precarious. Non-standard forms of employment are on the rise in 26 out of the 50 economies with available information. 

    Fourth, the social climate has aggravated in many parts of the world and may entail further social unrest. According to the report’s Social Unrest Index, 57 out of 106 countries with available information showed a risk of increased social unrest in 2011 compared to 2010. The two regions with the largest increases are Sub-Saharan Africa and the Middle East and North Africa. 

    Green pastures/Nicha – Yes because $100K seems cheap to them vs Western cities but, after a while, a loss is a loss…

    PCLN up to its old tricks.  

  67. dpastramas

    Schizo market.. Now i am long puts and calls on PCLN, hoping to make a buck on the calls to roll up the puts…

  68. Phil

    If it's possible to roll PCLN July $600 puts to $620 puts for $2 – that's our play in the $25KP and Long Put Portfolio.  Earnings next Wednesday!  

  69. yodi

    Any one please Problem with TOS On the Help header System I start with a total memory of 260000 K after 2 or so hours the total memory kreeps up to 1,250,000K and the operations on the platform becomes slagish slow. I have had so fare 5 different operators from TOS looking at it one says it is the computer even that I have the same problem on different computers others say is the lousy service provider in Mexico even that I had the same problem in Germany perfect service providers at different places. The next operater reloaded from the old TOS to Ameritrade TOS nothing works. Has any one of you ever have this type of problem?? Thanks

  70. Burrben

    Yodi –  That's funny.  I'm going to wait until manyana to enter the ECA play.  I think there is a little more weakness to be found.  Re: Pot, I'm from N. California where the finest herb in the world is grown.  There is more knowledgeable farmers there, and more excellent strains than anywhere in the world, with Amsterdam an arguable exception.  Herb down here is skunky and dry…kinda like from mexico….the prisons are also filthy and they don't allow international inspectors.  Therefore I stick to my Tona beer and FlordeCana Rum..

  71. jabobeast

    AAPL tanking and now only up 25+ since earnings..
     
    PCLN up 100+ since AAPL earnings..
    insane

  72. yodi

    Burrben As they say the grass is always greener on the other side of the hedge. Same with entering trades. Just remember the market is just another casino Have a look at AAPl today is it not a good day to sell Puts 585 just the other week they were screeming 610!!!! what is the value if any?

  73. newbie

    Gasoline price today Minneapolis  $3.69
    about what it's been for a couple weeks

  74. Phil

    35M on the Dow at noon means this is a very slow dip with no conviction but, on the other hand – may simply be a lack of buyers against disciplined sellers.  

    VIX back to 17.30, TLT at $117.50.  Dollar 78.90.  

    AAPL down 2.4% hitting 2.5% rule and Nas down 0.65% with AAPL good for about half of that so if the other components begin to sell off – Nas could quickly go doen to match other indexes, who are down 0.5%+ except the Dow, where there are just 9 of 30 green components.

    Memory/Yodi – I get low memory messages on my HPQ that runs TOS sometimes but I just reboot it.  It's a standard unit out of the box so I just assumed it does need more Memory.  My main desktop has tons of power and Ram and that TOS session doesn't crash.  

    Poor DECK – hitting $50.  They were like PCLN until they weren't. 

    11:00 AM On the hour: Dow -0.23%. 10-yr +0.14%. Euro -0.20% vs. dollar. Crude -0.63% to $104.27. Gold -0.24% to $1660.75.

    12:00 PM On the hour: Dow -0.2%. 10-yr +0.11%. Euro -0.20% vs. dollar. Crude -0.62% to $104.28. Gold -0.29% to $1660.05.

    About time!  Let’s just say it: The Republicans are the problem. (Washington Post)

    The dollar dips below ¥80 for the first time in 2 months as one of 2012's favorite shorts – the yen – burns a few bears. After falling more 10% in a straight line in February and early March, the yen has recouped much of the loss due to: 1) the BOJ again being too timid with easing, or 2) a leading indicator of renewed global financial stress. FXY +0.6%.

    Treasury prices continue to rally, the 10-year note yield off another 2 bps to 1.91%, the lowest level in nearly 3 months. Equity and Treasury prices have faithfully moved inversely to each other over past years, but the move higher in stocks since last fall has not led to a sell-off in government paper. Operation Twist in action?

    Another one!  April Texas Fed Manufacturing Outlook: Business Activity Index -3.4 vs. 10.8 prior. Manufacturing production 15.6 vs. 11.1. New orders -1.0 vs. -0.3. Capacity utilization 1.4 vs. 12.3. Shipments -0.8 vs. 8.6. Employment 11.8 vs. 21.7.

    Strong rentals, weak housing: The national rental vacancy rate declines to 8.8% in Q1 from 9.7% a year ago, reports the DOC. The median asking rent rises 5.6% Y/Y to $721/month. The homeownership rate declines 100 bps from a year ago to 65.4%, with the median asking price off nearly 7% to $133,700.

    Optimism Is Up, but the U.S. Housing Market Faces a Painful Shift (Knowledge Wharton)

    Falling home prices drag new buyers under water (Reuters)

    U.S. Stocks Appear To Lose Their Fizz (WSJ)

    Notes from the DoubleLine Lunch with Jeffrey Gundlach (The Reformed Broker)

    The election of Hollande in France will herald the birth of the EU "growth bloc," writes Ambrose Evans-Prtichard, 200M strong, a majority in parliament, and ready to end the austerity demands of Germany. What will Berlin's pro-EU rhetoric mean when Germany no longer calls the shots, he wonders. Meantime, Sarkozy narrows the gap 6 days before the election.

    Spanish economy in “huge crisis” after credit downgrade (Reuters)

    Venizelos appeals to Greeks to stop the far right (Ekathimerini)

    Ed Yardeni thinks the rally in crude oil is running out of gas, and stable prices should reduce inflationary pressures around the world, "especially important in emerging economies since fuel costs account for larger shares of budgets than in developed economies. This would allow the central banks in China, India, and Brazil to continue to ease their monetary policies.”

    Story boosting oil today:  Prospects dim that major oil consumers will drive down prices this summer by collectively making a large injection into the market from emergency oil stockpiles. "Hollande will withdraw support from the U.S.-British plan to release strategic oil stocks if he beats President Nicolas Sarkozy," which would essentially end the prospect of a coordinated plan, KBC Energy Economics predicts. 

    Gas prices continue to slip, as AAA's Daily Fuel Gauge shows the average U.S. price of a regular gallon of gasoline is $3.816, down from $3.819 the day before, $3.858 a week ago, $3.925 M/M, and $3.931 Y/Y.

    Freeport McMoRan (FCX -0.5%) underperforms the broader market so far today despite a bullish note from Barclays which describes it as the "most under-appreciated" growth story in the entire U.S. metals and mining group. The firm reiterates its Overweight rating while maintaining a $63 price target.

    Sears Holdings (SHLD -3.3%) swings lower as the company continues to confound investors trying to get inside the mind of Eddie Lampert. Though selling off bits and pieces of assets may ultimately bring in more cash than selling off the whole firm at once, traders openly wonder if plans to license Sears brands and enter thehyper-crowded cloud storage space are inspired business plans or headfakes to buy more time for an extended going-out-of-businesssale?

    Goldman analyst Stephen Grambling kicks Supervalu (SVU-3.75% to $5.91) while it's down, starting coverage of the struggling supermarket chain with a sell rating and giving it a 12-month target of $5. Grambling expects gross margin and free cash flow to remain under pressure, and that the company will struggle to grow volumes. - Duh!

    Monster Beverage (MNST +17%) soars after the WSJreports Coca-Cola (KO -0.3%) is interested in buying the company, and could sell bottling assets to pay for the deal. Monster shares have been halted after hitting circuit breakers. Update (11:58 ET): Monster has resumed trading, and is now up 26.2%

    27% of CIOs surveyed by UBS expect Cisco (CSCO) to gain share this year, the best reading for the company in 4 surveys. The CIOs are more cautious about Juniper (JNPR): only 10%-15% plan to trial Juniper's high-end QFabric Ethernet switch platform this year, and none will fully deploy until 2013. Cisco has been picking up share in markets such as videoconferencingEthernet switching,routing, and storage networking. Earnings are due on May 9. (previous

    We're going to need to check with Jackie on this one:  Mark Zuckerberg has signed up for an account with Viddy, the suddenly-hot mobile video-sharing service believed to be looking for funding at a $370M valuation. This naturally is leading observers to wonder if Viddy is Facebook's (FB) next Instagram, especially given the similarities between the services. One thing's for sure: if Zuck wants to buy Viddy, don't expect Facebook's board or underwriters to stop him. 

  75. Phil


    Amazon (
    AMZN +1.8%) is adding to Friday's post-earningsgains in spite of Microsoft and Barnes & Noble's (BKS +67.3%tie-up. Microsoft's cash will allow B&N to take the Nook global, the company asserts, and hopes are up it will also let B&N match the aggressive e-book pricing Amazon is expected to show following the DOJ's settlement. David Carnoy thinks the largest benefit will be greater consumer confidence in B&N's longevity. (more)

    Apple's (AAPL -2.1%surging Chinese sales, which took center stage in its FQ2 report, have analysts giddy imaging future possibilities. Deutsche's Chris Whitmore, who estimates Apple sold 6M-6.5M iPhones in China in FQ2, thinks it could sell 35M in 2013 even without a deal with China Mobile (CHL), as 3G adoption keeps soaring. Whitmore also notes Apple only has a small share of the Chinese smartphone market (though the iPhone's cost is part of the reason why). (previous

    Apple (AAPL -2.2%responds to a weekend NYT column noting its low overall tax rate. The company touts its U.S. job-creation efforts and charitable donations, and says it has paid $5B in federal and state taxes over the first half of FY12. Jay Yarow isn't impressed, pointing out Apple includes UPS positions among the jobs it has created, and that its payment figures are inflated by taxes withheld from employees

    Start-Ups Look to the Crowd (NYT)

  76. lflantheman

    dpastramas….On Friday I placed a trade for May 4 weekly 760/765 for 2.50.  The bid and ask at that time were 1.60 and 3.60.   The trade went through at 3:08 pm and I noted it at 3:58 pm.     Today the same spread is a 2.80 to 3.60 spread.    So the spread would be more expensive today, with PCLN up, but my contention is that it will have upward pressure on it for the rest of the week, with earnings pending next week, and that at expiration Friday it will be above 765.  You would NOT want to put this order in at ask, or as a market order.  My order on Friday was placed hours before it finally was accepted by the market. 

  77. Phil

    IEconomy from Barry

     

    The third installment in the very insightful and popular NYT iEconomy series is front page of the Sunday NYT.

    Part 1: An Empire Built Abroad: How the U.S. Lost Out on iPhone Work

    Part 2: A Punishing System: In China, Human Costs Are Built Into an iPad

    Part 3: Protecting Profits: How Apple Sidesteps Billions in Global Taxes

    Some of the details of Apple’s corporate tax-avoidance maneuvers according to the NYT are:

    • Apple’s federal tax bill was $3.3 billion on reported profits of $34.2 billion last year, a tax rate of 9.8%;

    • Apple allocates 70% of its profits outside the U.S. note that the value is created in the US, but the low end manufacturing is overseas.

    • Nevada shell company let’s Apple’s U.S. business sidestep California state taxes.California corporate tax rate = 8.84%, while Nevada = 0%.

    • California gives tax credits to Apple for conducting R&D in the state worht more  $400 million since 1996;

    •  The “Double Irish With A Dutch Sandwich” routes royalties and profits through Ireland and the Netherlands and the Caribbean. On paper, Ireland “generated” one-third of Apple’s revenue last year.

    •  Salespeople working in high-tax countries are employed by subsidiaries in low-tax countries.

    • iTunes sales “happen” in Luxembourg -- a tax dodge with local incentives. In 2011, iTunes S.à r.l.’s revenue exceeded $1 billion

    The full series is Pulitzer bait, and deservedly so.

    >

    Click thru for giant graphics

    ‘Double Irish With a Dutch Sandwich’

    Shrinking Corporate Tax Rates

    >

    Source:
    How Apple Sidesteps Billions in Taxes

  78. Phil

    AAPL $587.50 is the 2.5% line, not getting back to $591 from here would be a weak bounce and sign of more to come tomorrow.  

    QQQ weekly $65s still $1.95 and I still like them to play the bounce.  

  79. Burrben

    Scottmi / SVU
    Sorry to be the  arithmetic challenged guy here, I was just trying to figure out your numbers.
    Say we bought the stock at 5.91, and sold the 2014 5 calls and puts for 3.10.  Net entry is $2.81.  
    From what I can SVU pay's a 5% div, I'm not sure how you are getting a 12% div.  Sorry I don't understand.  And how are you figuring out the 77% gain if called away at $5.  
     
    Thank you for your help.  I'm only asking specifics since I'm putting together a spreadsheet and I want to get all the calculations correct.

  80. txchili

    AAPL taxes – They are doing everything that is legal and done by most international companies. GE was severely criticized and the issue went away. It would be impossible to change the tax code to make AAPL taxes greater as the corp tax lobby would not let that happen. If w don't think this effects consumer sentiment on buying their products, then its a non threat IMHO>

  81. scottmi

    QQQ Weekly/Phil – what kind of target do you have for these QQQs this week?

  82. Canuck

    Burr/SVU
     
    same math as last night.  2.19 profit if called at 5 on a cost base of 2,81 = 77%

  83. pat_swap

    Hi Phil,
    roll for the USO 39 May Puts in the 5K portfolio?
    regarding general question on rolling long puts – does it make sense to roll one month out and one strike below and reduce the number of contracts to keep the overall cost of the roll to the minimum. There is a gain of one month but you are one strike below and that too with less contracts. I guess more difficult to recover the losses.
    thanks

  84. 2can

    Burrben / "Stream Transport"   Thanks for the tip earlier on the program.  My ISP is a 3G network from the ICE, Costa Rica's Telcom monopoly.  I only get a meg of speed  occasionally, with 500 KB most of the time.  Too slow for streaming. Can't wait to try to down load streaming vid. Hope it works with a 3g signal.  
    I've met  a few people living in Nicaragua.  A cancer surgeon with a charitable clinic in Managua, and the rest were all traveling surfers checking out my home break.  Are you a surfer by chance?

  85. 2can

    Oil might be rejected here at 104.50.  Possible chance to reload

  86. mrmocha

    Pharm / NWBO – "I would hold for future".  You got us out of this one last summer, but at the current price is it worth a re-entry as a dice roll or are you still generally dour?

  87. kustomz

    Lawyers representing participants in the Northern Mariana Islands Retirement Fund have filed a motion to dismiss the pension plan's Chapter 11 bankruptcy filing. And experts say the outcome could have widespread implications for other public pensions in the U.S.
    http://www.pionline.com/article/20120430/REG/120429889/chapter-11-case-could-trigger-wave-of-public-pension-fund-bankruptcies&utm_source=Issue%20Alert&utm_medium=email&utm_campaign=Alert%2FInsider

  88. Burrben

    Canuck  -  Duh.  Ok, thanks.  Any idea about the 12% div number?  
    2Can – It should work fine.  Use it as a browser, so put in http://www.pbs.org, navigate to what you want to download, and once the flash starts playing, you'll see the stream.  Works for almost all streams.  I only have 512kb down here, 1meg if I use my backup cellmodem.  I'm a intermediate longboarder, and generally surf hermosa, yankee, and remanso.  I'm in talks to build a small surf house up near popoyo to use as a rental too.  So pretty up there…  Where is you're break?

  89. Pharmboy

    mrm – since japar is still in it, hold.  I would not re-enter.

     

    Savi – nanosphere. NSPH – I owned them and was out for a profit over 2.  They are getting attractive again….but i want them to go below 1.50.

  90. CaFords

    Yodi – TOS – Same problem here, just click on the "collect garbage" button on the help tab for a temporary fix.

  91. Phil

    Nat gas $2.27 – shutting down those wells finally seems to have done the trick.  Gasoline $3.1176, oil $104.50. 

    FAS Money – No changes since I think we're going to crash still (but I'm not sure so we remain wish-washy.  

    IWM Money – Last Monday was $3,363.  Last week did not go the way we thought and it's $3,495 today.

    $5KP – That one is much worse than last Monday (up $405) but a slight improvement over Friday (-$1,115).  

    • DMND – So annoying. 
    • GLL – Tomorrow roll.  
    • USO – Tomorrow roll
    • UUP – I'm not even sure I want to renew that one.  
    • EDZ – We can roll the $13s to the June $13s for .40 and, since we sold our last cover for .40 – doesn't seem very expensive so let's do that today because if we finish like Europe, then EDZ will shoot up and we won't get this roll so cheap.  
    • DIA – Tomorrow roll.  
    • TNA – Cover seems to be very neutral. 

    $25KP – Pretty steady.  We were up more but generally we're on track with a neutral(ish) group of trades.  Question when you are balanced is "are you selling enough premium?" 

    • DMND – Different than $5KP as it's not naked but need better moves than this.  
    • XRT – Why won't they die?  
    • BBY – Why are they dead? 
    • SCO – ($34.34) On track for a net of $1,500, currently showing as net $845 – you should always be aware of the potential of your spreads and if you are on or off track.  This was short-term and we have 3 weeks left – it's right where it should be and we've heard no oil news to make us change our minds that $105 is too much.  
    • FAS – Longer spread but out of money Octobers means this spread is about selling front-month premium to pay for long spread.  Long spread was $8,200 and we sold $2,120 worth of May calls and $3,900 worth of July puts so seems like a good plan that's on track.  Clearly by the time our 4 long puts are a problem we'll be in the money on our 20 long spreads and, overall, we wouldn't mind clearing $20K there.  On the other hand, if FAS falls, we're thrilled to pocket $2,120 for our first month (out of 5 we have to sell) to go towards making our long-term bullish INSURANCE free.  
    • GLL – Already rolled and doing better than unrolled ones in $5KP.  
    • DIA – Tomorrow roll
    • CHK – $18.28 baby!  Why did we only do 3?  
    • PCLN – Noted earlier – +$2 roll to $620 puts if possible.  
    • EDZ - We can roll the $13s to the June $13s for .40 and, since we sold our last cover for .40 – doesn't seem very expensive so let's do that today because if we finish like Europe, then EDZ will shoot up and we won't get this roll so cheap.
    • USO – Tomorrow roll. 
    • SQQQ – $10.93.  I'm pretty comfortable with that target.  We'll see how the week goes.  
    • TNA – Cover holding neutral.  

    Gets kind of boring when we're all balanced, doesn't it?  Oh well, making money is nice too.  

  92. newbie

    Bank Failure / Minnesota
    http://bankimplode.com/blog/2012/04/27/savings-bank-fsb-dba-interbank-fsb-maple-grove-minnesota/
    This is about 4 miles from where I live.
     
    April 27, 2012 – 6:20 pm

    Savings Bank, fsb D/B/A Interbank, fsb, Maple Grove, Minnesota, is the 20th FDIC-insured institution to fail in the nationwide this year. The agency estimates that the cost to the Deposit Insurance Fund (DIF) will be $117.5 million.

    Inter Savings Bank, fsb D/B/A InterBank, fsb, Maple Grove, Minnesota, was closed today by the Office of the Comptroller of the Currency (OCC), which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Great Southern Bank, Reeds Spring, Missouri, to assume all of the deposits of InterBank, fsb.

  93. stjeanluc

    TOS Memory / Yodi – It could come down to what OS you use and how it manages memory and garbage collection… On my system, running TOS 12 hours a day, memory usage is pretty constant. It's a memory hog, using 380 MB of memory, but out of 12 GB so no big deal. 

  94. 1020

    You know, I will think twice before buying another Apple product. I realize that other companies "do it" but unlike G.E., Apple is not as interwoven into our society like a G.E.
     
    I can just say NO to anything with a half eaten apple as a logo….. :)

  95. Pharmboy

    Oh WSJ….I see you decided to read PSW.

    LONDON (Dow Jones)--The sudden willingness of European drug companies to launch hostile takeover bids — underscored by numerous bids this month — underlines the depth of the sector's problems and its need to find new products, while also tapping into emerging markets for growth.

    It also highlights the advanced stage of many biotech pipelines which give M&A propositions more certainty, at least in theory, analysts say.

    "The asset values of many biotech companies have become more visible and therefore look more secure, so a pharmaceutical company can look at those late-stage assets and …

  96. Phil

    SVU/Burr – You figure the Dividend from the new basis, not the current stock price.  Just because you dropped your net cash entry to $2.81 doesn't mean they don't pay you the same .35 dividend.  Same on the call away – $5 – $2.81 = $2.19 = 77% of $2.81 but, of course, you also get about .55 in dividends so it's even better total return.  

    Aside from playing SVU ($5.91) and selling the 2014 $5 puts and calls for $3.10 for a net $2.81/3.91 entry (and collecting the dividends while they last), I also like the 2014 $3/5 bull call spread at $1.40, selling the $3 puts for .65 for net .75 on the $2 spread and your worst case is being in 1x at net $3.75 but, of course, you don't get the dividends.  

    AAPL/Tx – I agree it's a non-issue but just an example of how stupid our tax code is.  I didn't use this chart today as it was off-topic but look how ridiculous it is to pretend we're going to balance the budget by cutting and not raising taxes:  

    undefined

    Corporate Income tax at $191Bn in a $16Tn economy is the ENTIRE problem the US faces in balancing the budget.  That doesn't include the fact that we don't charge oil companies and miners for extracting our natural resources – like most rational countries do.  In fact, we PAY the oil companies to take our oil!  On the other side, non-defense discretionary is $431Bn so if you cut 100% of it, we'd still have an $800Bn deficit.   This country needs to grow up and balance it's budget – if we just do that – so many other things would fall into place.

    EXPE still making new highs.  Maybe heading to a PCLN multiple!  

    QQQ/Scott – Just looking to protect bearish positions against a stick – my target is hopefully it stops out and we don't need to roll bear bets up.  Meanwhile, looking weak so far but as long as Dollar is under 79.90, bulls still have a good chance.  

    USO/Pat – Tomorrow.   Your thinking is right, you always need to be mindful of whether you have a realistic chance to recover your losses.  Going to June is tough as it's summer driving time – lots of reasons to keep oil high.  

    Pension/Kustomz – That is interesting but only if granted.  

    Bank failure/Newbie — 20 this year is serious improvement over prior years.  Also, amounts have been lower this year with few in the Billions.  Do you know anyone who was affected?  I imagine they won't even know the difference other than a new sign outside the next day. 

    LOL Pharm – Nice to be an opinion leader, isn't it?

    Great play from a great writer, Rperi! 

  97. scottmi

    SVU/Burrben – 12% is the effective dividend rate you get on the $2.82 out of pocket … .35 per share / 2.82 = .124. Your commission rates may vary. For me, with commissions for a 100 shares would be $35 (annual dividend) / $291.54 (my cost, with commissions for buying 100 shares and selling one put and one call) = 12.00%   This calculation does not take into account the margin buy power used (which is relatively low as your exposure on a $5 put is only around $50).

  98. angelcur

    even doves backing away from qe3, but really its imminent.

  99. scotbraze

    Phil,
     
    The EDZ roll is now $0.50 (missed the .40 roll unfortunately), do you still like the roll or wait for it to come down a bit?
     
    thanks scot.

  100. stjeanluc

    Corporate taxes / Phil – Here is a summary of what various sectors pay in taxes in this country…

    And yet, Kudlow and the GOP keep on bitching about the 35% tax rate which no one pays and talk about a 20% rate that most would still work to avoid because they get a better deal now anyway!

     

  101. roma_

    guys
    is tomorrow trading day or day off?

  102. stjeanluc

    And as far as the deficit is concerned, if we taxed as much as the average OECD countries as a percentage of GDP (all levels of taxation included), we would have surplus every year! And if we taxed like Germany who is always the example of the country doing well, we would be bringing $1.5 Tn more in revenues every year. So a $500 Bn surplus…

    The United States Is a Low Tax Country

  103. morxlntway

    EDZ – I also have the May 12/15 calls. My inclination would to be, listening to your bearish sentiment, to hold to see which way we go in May. Your critique would be welcomed.
    Also have the 12 short puts, the last of the 15's we sold way back. Rolling works! When i knew i was going to have to roll and could also dbl dwn, i sold the same quantity at a lower strike while the market was high, then i could lose a little in the roll and still come out ahead. (or at least even).

  104. 2can

    Burrben   I'm on the Osa Peninsula near Panama.  Pan Dulce, Backwash and Matapalo are my home breaks.  I'm a long boarder too now.  (just can't paddle a short board anymore).  This area is off grid and has been a good place for eco- vacation rentals.  I know Nicaragua has had a bad rap on and off, but I sense the tourist potential is opening up for you up there.  A vacation rental on a surf break is a pretty good combo.  There are a good number of US retirees moving from Costa Rica to Nicaragua these days.  Least that is what I hear.

  105. Phil

    EDZ/Scott – It's not an emergency until next Wednesday (Wednesday before expiration week is when you really should have all your rolls done). 

    20%/StJ – Absolutely, it they drop it to 20% then companies paying 16% aren't doing their jobs and ones paying 9% will no longer be satisfied with just half off.  It's all such BS!   When you have a house in college – the rent and utilities is $1,000 and there are 5 guys – they each need to kick in $200 but if one guy has a room 2x the size because his girlfriend is always sleeping over and 2 other guys share a small room – then $200 each isn't fair, right?  So one guy pays maybe $400 and the two guys sharing pay $125 each and the other 2 guys pay $175 each and everyone is happy.  No one ducks out of paying or takes deductions or claims their salary is overseas etc. – you all come up with the money to pay the rent so you don't screw each other.  That's how taxes should work – it's not very complicated if the principal of the system is everyone pays their fair share – not everyone sees a rulebook and we reward the best cheaters – that's just insane….

    Tomorrow/Roma – We don't do May Day in the States.  

    EDZ/Morx – I'm saying that Europe ditched into the close and if we do too then Asia down tomorrow (if they are even open) and EDZ will move your way.  Not saying to give it longer than tomorrow to see some progress.  Even is good (vs the althernative)!  

  106. Pharmboy

    Notice how my little sector of the world is paying very little taxes?  It's because of all the research that we do!  Now, there are things discovered in the academic labs that pharma piggy backs off of for their discoveries, and this is getting more apparent every year, but IF pharma paid a bit more in taxes, then research funding could be ramped up. 

    Now, biotechs are picking up that slack in the pharma engine, and much of it is hokus pokus….but there are a few companies that can pull rabbits out of a hat!

     

    RIGL has formed a nice base.  Selling a few 7.5 Sept Puts for 1.25 or better.  Trying for 1.30.

  107. sagemm1

    lows seem to be holding today anyone think a stick is coming?

  108. Pharmboy

    XCO continues to shine a light in my little portfolio….1020 – U are green now!  Selling some calls in here….whew.

  109. yodi

    TOS Thanks all for the advice Possible will buy a bigger computer when I go to Germany in Jun. Even the garbage part does not help. As Phil says just reload

  110. newbie

    Phil wrote:
     
     I imagine they won't even know the difference other than a new sign outside the next day.
     
    That's normal procedure for an FDIC takeover from everything I've ever heard. The lead guy on the team walks in at 4:55pm and tells the President "We're the FDIC, your bank is now in our custody. You're fired, but we need you to stay for two weeks to help straighten out this mess". 5 Minutes later, at 5:01 (Friday), 8 more guys walk in and tell all the tellers to close their drawers, back away from the counter, and don't touch a keyboard. Nobody leaves the building until we have everything inventoried". By 5:30 there are 30 guys in black suits in the bank. Yep, Monday morning the bank has a new name, a new owner, and back in business.
     
    I read Sheila Baird say the FDIC has NEVER failed to successfully pull off one of these operations.
     
    Maple Grove is a VERY upscale and young suburb on the north west corner of Minneapolis. My impression is this was a bank that catered to the upper middle class. By definition, that means, no, I don't know anybody.

  111. threeputt

    My old man worked as a contractor for the FDIC closing banks for the past several years.  Apparently the list of outstanding banks to close is shrinking, and there is not much contract work available with the FIDC at the moment.  However, there is similar work picking up closing credit unions.

  112. jromeha

    Oil – are you F#CKING kidding me!?!?!?! After today's reports of surpluses, etc?

  113. Inkarri1982

    Jron – I think you meant to say "Are you FRACKING kidding me?!?!?!?!"

  114. 1020

    Pharm – XCO may have a hard time getting thru 7.50….and they report earnings after the close tomorrow.
     
    Could be an ugly report.

  115. sagemm1

    Phil/May day not here in US…seems like it was today 50mm in dow with 90 minutes left, wow!

  116. scottmi

    DX – pretty good market commentary on the dollar..bearish, pointing to big move lower.

  117. Pharmboy

    1020 – yep.  That's why I am covering my stock…..

  118. newt

    SCO/ Phil: Can you walk me through the returns of this?  I followed with a ND of 1.98 and sold a put for NC of 1.21.
    Thanks.

  119. pstas

    PCLN- not particularly bullish but sold the wkly 740 puts against my July 600's. Can be rolled down to 2X May 650's if needed.

  120. newbie

    However, there is similar work picking up closing credit unions
     
    In addition to the bank I mentioned,  the "Hmong Credit Union was also closed (this weekend, I think)

  121. sagemm1

    why are credit unions having troubles, housing seems they keep things a lot closer to home or are they as much victims of the housing crisis as the banks?

  122. shadowfax

    Yodi Phil
    I have a laptop with 4 gig ram and it runs out now. My big custom system has 24 gig and never erver skips a beat. For a small investment max out your ram. Tiger Direct has phone help that will fix you up for a small investment in not loosing money. Under administrative tools, system configuration,and startup shut off all programs. No need for all that stuff running in background, when you need Adobe Reader or whatever it will autmaticly pull it up anyway and those programs suck up lots of ram.Last not recommended is windows is constantly updating sucking up more ram. You can unload all updates and turn off auto updating. Yodi connection is unlikely as they are either up or down, Its ram menory or lack of.

  123. Phil

     

    BLOOMBERG EXCLUSIVE: Economist Paul Krugman and Republican presidential candidate Ron Paul go head to head on fixing the U.S. economy at 4pm ET today on Bloomberg Television’s “Street Smart.”

    Tune in beginning at 3pm ET for Krugman, who will be guest-hosting “Street Smart” until 5pm ET.  On the heels of yesterday's controversial NYT piece, where Krugman called on Federal Reserve Chairman Ben Bernanke to do more for the U.S. economy, Bloomberg TV anchors Trish Regan and Adam Johnson will ask Krugman to explain exactly how more stimulus will create jobs and put the economy back on the growth track.

    Then at 4pm, Krugman will face the ultimate debate with Ron Paul, who has called for drastic cuts in spending. 

    Watch via livestream here: http://www.bloomberg.com/tv/ or download the free Bloomberg TV+ iPad app on iTunes to view on your mobile device.

    To find Bloomberg Television in your area, visit http://bloomberg.viewerlink.tv/.

  124. scottmi

    Oil – looks like a spike to take out short stops. interesting volume spikes 4 minutes apart on the 1 minute chart..

  125. yodi

    Burrden  The ECA play from this morning has shown already it's first shoots. as the stock moved from 20.10 to 20.77 and the Jan14 put has even dropped from 4.10 to 3.85 as the May caller has picked up some steam from .25 to .47 so you see the increase in the stock covers very well the caller.

  126. rpme

    It feels strangely quiet today…

  127. Pharmboy

    FXE Put Call ratio is 10.7…talk about a crowded trade.

  128. edro00

    Yodi
     
    I have an old laptop (2002) with 1GB that runs TOS just fine.  Your computer is stuffed with too much stuff.
     
    1.   get autoruns.exe from microsoft – just search for it.  Delete everything you do not use.  Do not delete microsoft stuff yet.
     
    2.  go to http://www.blackviper.com, go to Popular Content/Windows Services and click thru to your version of windows
    3.  Follow his instructions to set up your computer in his "SAFE" configuration, this will stop all unused services from taking up resources.
     
    email me @ edro000 at CSdotCOM if you need more help

  129. kustomz

    Europe goes to bed and volume drops off a cliff. Looks like they along with Asia make up a great deal of our daily volume.

    Krugman and RP, good thing I skipped lunch today.

  130. yodi

    edro00
    Great on TOS will try that this evening and possible come back to you. Thanks

  131. Phil

    1:00 PM On the hour: Dow -0.24%. 10-yr +0.14%. Euro -0.20% vs. dollar. Crude -0.44% to $104.47. Gold -0.02% to $1664.45.

    2:00 PM On the hour: Dow -0.26%. 10-yr +0.16%. Euro -0.15% vs. dollar. Crude -0.36% to $104.56. Gold +0.1% to $1666.45.

    3:00 PM On the hour: Dow -0.31%. 10-yr +0.14%. Euro -0.11% vs. dollar. Crude -0.06% to $104.87. Gold +0.12% to $1666.75.

    PFP Wealth Management's Tim Price gets all revolutionary on ZeroHedge, saying that, "if social and political disorder is what it takes to shift an unsustainable status quo in which vampire banks and clueless bureaucrats suck the life out of the productive economy, bring it on." 

    The expected retirement age is now 67 up from 60 during the 1990s, and a new low of 38% expect to retire comfortably, according to Gallup. That the workforce participation rate will continue to decline (and take the UE rate with it) doesn't jibe with that poll result. Additionally, 33% expect Social Security to be a major source of income, up from 27% just before the financial crisis. 

    If you "sell in May," make sure to buy them back after Memorial Day, as data going back to 1928 shows the stock marketdoes just fine during the summer months. Much of the putative underperformance of shares during the middle chunk of the year can be traced to one month – September. "Sell by Labor Day" – not as catchy, but maybe more on the money.

     While Spain's IBEX 35 index is within couple of percentage points of taking out its epic March 2009 low, the Spain ETF (EWP) has already done so. Off 43.5% Y/Y and with  nearly 50% of its assetsin high-yielders Telefonica (TEF), Santander (STD), and BBVA, EWP yields more than 11%.

    More sovereign defaults maybe on the way, the ISDA is set to soon announce revisions to the legalize surrounding CDS contracts. There remains a quite a bit of nervousness from the Greek experience when, for awhile, it appeared fancy European footwork was going to allow Greece to default without the ISDA saying so, and thus keep the insurance contacts from triggering.

    Shares of FreightCar America (RAIL -5.2%) trail off after UBS cuts its price target to $25 and trims 2012-2014 EPS estimates. Though the company has good backlog for 2012, analysts see lower coal demand pressuring new orders moving forward.

    Grocery stocks underperform the broad market after report from the Commerce Department shows that consumers pared back spending compared to income in March. After catching a lot of M&A chatter earlier this year, the sector is starting to get downtrodden as the ability to pass off higher food and gas prices to thriftier U.S consumers doesn't look promising. Decliners: TFM -5.3%SWY-2.3%KR -0.8%WFM -0.6%

    Annaly (NLY) CFO Kathryn Fagan exercises options to purchase 37.5K shares of company stock at $13.25 each, upping her stake in the company by nearly 15% to 290.5K shares. This follows purchases last week by the CEO and CIO.

    Shares of Exceed (EDS +74.4%) skyrocket after the company knocks out solid earnings numbers for 2011 in an audited report after accusations of fraud circled around the company last year. The Chinese sporting goods seller shows revenue of $522M and net profit of $74M on a market cap that still stands south of $100M.

    Medtronic (MDT +1.2%) gains after being upgraded to Buyon valuation earlier today at Lazard Capital, citing the company's new product growth potential.

    North America will lead global energy investment this year, with companies spending $392B on upstream capital and operating expenditures in the region, according to IHS CERA. Projected 2012 capex alone is $274B, driven by the boom in oil sands, shale gas, etc., which should account for $128B of the total; total North America spending is expected to reach $528B in 2016.

    Invest $100 a month in Chevron (CVX +0.1%) and "call me in 10 years," Deutsche Bank's Paul Sankey quips, emphasizing the long-term nature of his Buy call on the stock. He shies away from a precise investor entry point, seeing CVX as "a waiting game" – waiting for final capex spending to emerge, for volume growth to start in 2014, for resolutions in Ecuador and Brazil, and lots more.

    Chesapeake (CHK +3.6%) is upgraded to Outperform by BMO, which notes CHK has lagged other energy stocks by at least 20% in the wake of the McClendon controversy. Yet CHK boasts "a a deep and wide asset base, and one that has fundamental value," and uncertainties around low natural gas prices and asset sales are now reflected in the stock price.

    Dell (DELLsays its $999 XPS 13 ultrabook, launched toreviews that praised its looks but criticized its display, is receiving nearly "3x  the expected demand," with interest coming from both enterprises and consumers. Intel (INTC) has to be pleased a pre-Ivy Bridge ultrabook is faring this well, given its huge investment. NAND flash memory vendors SNDK and MU also benefit from ultrabook adoption.

    Driving home commentary about how Intel's just-released (INTC) Ivy Bridge architecture was built with small-form-factor devices in mind, Intel is showing off a desktop PC board featuring a Core i3 Ivy Bridge chip that measures just 4 inches square. Intel will likely try to expand the PC's addressable market by promoting such designs for applications such as home entertainment systems and Internet appliances. (also

  132. Phil


    CLSA 
    expects Broadcom (BRCM) to beat Q1 estimates tomorrow on the back of strong Wi-Fi/Bluetooth/GPS chip orders fromApple and Samsung. However, the firm is maintaining an Underperform, and warns guidance from Apple suppliers points to a Q2 slowdown. Moreover, it thinks overall traction for Broadcom's baseband chip business is limited (FBR disagrees), and joinsNomura in asserting Qualcomm (QCOM) has taken Wi-Fi share at HTC.

    Rovio CEO Mikael Hed, whose company's estimated valuation has soared as quickly as its game downloads, tells CNBC Rovio is "actively looking" for new acquisitions, as it tries to diversify its revenue base. But in the meantime, Rovio is opening its first Angry Birds theme park (video), and announcing Angry Birds Space(previous) has seen 50M downloads in 35 days. Game developer Glu Mobile (GLUU) has frequently been the subject of M&A talk.

    The Australian Parliament is investigating why software and media downloads from Apple (AAPL), Microsoft (MSFT), and other foreign companies are often far more expensive in Australia than elsewhere. For example, a copy of Microsoft Office 2010 Professional costs $349 in the U.S., but $883 down under. Likewise, Mac OS X Server goes for $499 in the U.S., and $728 in Australia.

    As Google (GOOG) tries to improve the low mobile ad ratespartly responsible for its falling cost-per-click, it can take comfort in the fact that nearly half of all mobile searches are for local information, thus making them relatively easy to monetize. Moreover, research firm BIA Kelsey expects spending on mobile ads from U.S. local advertisers to grow nearly 6x from 2011 to 2015, to $3.37B. MM andVELT could also benefit.

    Automobile manufacturers face a mysterious dalliance by Google with the industry as the search giant remains committed to helping develop technology to create self-driving cars. While a Googlemobile is not on the radar, companies such as GM, BMW (BAMXY.PK), and Audi (VLKAY.PK) plan to move ahead with development to stay a step ahead. Working against the concept: Tough government regulators and drivers who still remember the Blue Screen of Death that showed the infallibility of software quite regularly.

    Informal retail checks from Baird's William Power find the iPhone 4S is still the top-selling device among the U.S. carriers who offer it (in spite of Q1's sales declines), reinforcing his bullish stance on Apple (AAPL -2.6%). However, he adds Nokia's (NOK) Lumia 900 is still being heavily promoted by AT&T (T), and many company reps own the device (perhaps because Nokia is paying them to).

    Hon Hai Precision (HNHAF.PK), parent of top Apple (AAPL) contract manufacturer Foxconn, fell 7% on the Taipei exchange after reporting Q1 net income fell 31% Y/Y to $510M, thanks to low margins and higher wages. The results stand in stark contrast to Apple's record FQ2 margins. Foxconn recently agreed to hike wages and change its labor practices following a critical report from the FLA. (also)

    Three lunchtime reads:

    1) Summers: Growth, not austerity, is best remedy for Europe

    2) Housing ends slide but faces a long bottom

    3) Gallup: Gold still Americans' top pick among long-term investments

  133. shadowfax

    yodi
    Becareful on buying a new computer because newer with faster processing will not solve a low memory problem. You have to have more memory in this or a new computer. Seriously 8 gig of ram at a minimum, bet you have 2 0r 4 now and the slow kind. All these neat trading programs with real time charts has to run in Ram or it will be delayed time!

  134. jromeha

    Today I found out an acquaintance of mine passed away Saturday from an IED blast. He was a legit good guy with only around 18 months left before retirement. We trained together before our deployment and I went down to Helmand Province to inspect his office just two weeks ago. He leaves two young daughters. He had their pics on his desk and their drawings pinned up all over his wall. Now they will be growing up without a father. I cannot publish his name b/c I believe the family has not been notified yet. Ill post the hometown news link and funeral information when I get it.  I know there are a lot of people in need these days…However, any of you should be so inclined a donation to his widow and daughters would certainly be a worthy cause.

  135. jabobeast

    aapl crashing…
     
    pcln next.. i hope

  136. terrapin22

    Burrben, 2can / surfing – I was at witches rock surf camp in Tamarindo, CR in January.  Fun time.  the day I arrived was opening day for the new airport terminal in Liberia.  quite a few nonstops on offer from new york.  I'd like to try Nicaragua or Bali next.  Will be out in Montauk on wkends this summer.   

  137. lolobear

    Phil, what are your thoughts on GMCR??

  138. lolobear

    OPEN – these are momo's i made money on last earnings b/c Phil gave some good suggestions.  Phil a la compnay – any thougths?

  139. scottmi

    Gallup Gold – goes to show how irrational people are. 28% say is best long term.. but is probably less than 2% that actually own ANY gold be it physical, paper or via miners. and of course, demonstrates the invalidity of gallup polls…

  140. scottmi

    PCLN/Jabo – what is it about hope phil is always saying?   apple not crashing.. just gonna say hello to it's 50dma for old time's sake.  PCLN, like all these other darlings, is gonna POP on May 9! i don't trust these mofo MoMos one bit.

  141. rustle123

    And here comes the stick try to paint a better April.

  142. rainman

    jromeha — My condolences.

  143. Phil

    Sick/Sage – With 57M at 3:13 they don't need a stick – a twig would do it.  

    TOS/Yodi – My Sony Vaio is essentially a gamer's laptop and it handles TOS with no problems (and I also have a Toshiba LCD screen that it powers as a 2nd screen just fine.  The Sony is a bit heavy but being able to run 2 screens off the laptop like that is golden.  That plus my IPad and I'm ready to work anywhere.  

    Takeovers/Newbie – Very cool. 

    Dollar 78.88.  Yen not even trying at 79.81 (BOJ closed, I guess). 

    Oil with yet another short entry at $105 on a nice, BS spike.  

    PCLN down to $759 – gravity can get to be a bitch when you get that expensive.  

    SCO/Newt – So you paid net .77 and if SCO finishes at $34 then the spread is worth $3 and the short puts expire worthless and that's net $3 back – not too complex….

    Credit unions/Sage – The real unemployment rate is between 16 and 19% and some of those people just can't pay their bills anymore.  Credit unions are local and don't have other lines of business so if a town with a factory closes down – it can really whack a credit union.   

    Thanks Shadow, Edro. 

    Volume/Kustomz – I do feel sometimes it's just us and the bots trading.  

    Jackie says Viddy just like Instagram but with pictures so it does make sense for FB acquisition.  She also now needs an IPad 2 to do further investigations as the 1 has no camera!  Viddy is already using the Facebook "like" button so that deal may be done already.  

    I'm so sorry to hear about your friend Jrom, let us know what we can do when you can. 

    GMCR/Lolo – They have that SBUX thing and now DNKN is pushing their cups so they are back to SOUNDING good and I wouldn't bet against them at $48.68 but I sure don't love them either.  Keep in mind the only way I really like to play these things is to wait until people get too excited about them and then go short.  I imagine you could play them up from here to maybe $60 and catch a ride but I'd rather see them back at $90 and go short again.  

    OPEN/Lolo – Same deal as GMCR – we caught them when they were stupid and made an easy short – now they are just overpriced but neither a screaming short or a long.  Like GMCR, if they can pop $45, you can use that as a stop to ride them higher.  

    April dangerously close to being in the red if we close here.  

    62M on the Dow with 22 minutes left – dead but appropriate way to end this month.  

  144. palotay

    Lolobear – I'm very short OPEN heading into earnings.  Long a ton of October $35/30 Bear put spreads.  I'm also short a lot of calls.  The list of competitors keeps increasing.  Expenses are supposed to increase substantially this quarter (Management alluded to this on the last conference call), and revenue growth has been incredibly hard to come by on the stock.  It is looking like they are going to show negative YOY earnings growth, which should (in a normal market) be the nail in the coffin to these lofty valuations.  But who knows.  The stock is tightly held, and manipulated routinely to mess with the high short interest.

  145. newt

    SCO/ Phil:  I know- I'm switching between creative brain and math brains today…. sorry about that.

  146. lunar

    phil, would you take a 10cent loss or hold the QQQ weekly 65's overnight?

  147. stjeanluc

    Sorry to hear about your friend Jrom…. 

  148. Pharmboy

    Take me back then…..and put me out of my misery…this market is mysterious and seriously flawed. 

  149. shadowfax

    jeromeha
    So sorry to hear that. We need to find a better way, just emagine if all that tallent and money went to solving issues fairly, the world wouldn't hate us. My Friend asked me Friday if I knew how to deprogram from the military mind. I don't know how but I promised to help.

  150. Burrben

    Re: Laptops.  This is what I'm buying when I go home in June.  Great trading computer.
    http://www.pcworld.com/article/253029/gamer_alert_asus_g75_laptop_with_ivy_bridge_processor_nvidia_kepler_graphics_available_for_preorder.html

  151. Pharmboy

    Nice big, fat red candle formed on XRT, but not quite engulfing but could it be a double top??…..For the love of yours truly….please follow through….

  152. jabobeast

    so sorry about your friend jromeha

  153. shadowfax

    Phil
    I was just thinking why doesn't everyone go home, its all bots anyway. I am still waiting for oil to fade, dollar to rise, and weeeeeeeeeeeeee!

  154. Phil

    GRPN's only momentum is down.  

    Tomorrow Australia is supposed to ease, if they don't, it's a downer for the Dollar.  German Retail Sales will be interesting, UK PMI will shock if not down, as will our ISM.  Construction Spending seemed to be weakening, Evans speaks at 12:30 and he's an uber dove so MORE FREE MONEY at 12:30 and then Plosser (uber hawk) will come to take the punch bowl back at 2pm – so an interesting day on tap for sure!  

    SCO/Newt – Just need to re-learn the math using creative side.  

    QQQ/Lunar – It was just stick protection, I have no reason to think we'll pop overnight BECAUSE there's a loss on the Qs into the close.  

    AAPL is down 3.2% now, that's a 2.5% rule violation and a perfect retrace off a 4% drop, which is what you would get if you had a normal tapering off of a drop from 2.5%, 1.25%, 0.675%..  BUT, that's not what we had, we had the 2.5% and 1.25% drop in the same day and that means it's much more likely that AAPL's drop is ACCELERATING, not decelerating so we expect them to follow through to 5% down at about $573 and the bounce zone is going to be $579.

    Zooming out, AAPL fell from $640 to $560 ($80) and bounced 50% to $620 but was rejected there and the next critical line is $580, which is the short-term bounce zone (not an exact science) as well so we'll call that a critical breakdown spot for AAPL if they fail it but I'd say a test is inevitable, which means continued downward pressure on the Nas.

  155. Phil

    Nice Burr! 

    Going home/Shadow – It is crazy when we're the only humans left.  Would be cool if we could trade in a virtual world and see all the counterparties….

    That was not a good close – totally artificial BS on the Dow and S&P but the RUT and Nas faded out.  

  156. Phil

    Ron Paul and Paul Krugman debating on Bloomberg. 

  157. scottmi

    Another BS day, but reducing positions and increasing oil short (SCO calls). 

  158. shadowfax

    BOT close with the winner being sell bot.My guess is tomorrow we continue down. Is JRW answering Phil? Soon we need new lines and he is by far better than me.

  159. Pharmboy

    TVIX at (cough cough)….  6.66.

  160. scottmi

    New $100 bill – while y'all listen to Ron Paul and that sicko Krugman, have fun with Hidden Meanings in the New $100 Bill.

  161. 2can

    Really sorry to hear about your friend Jrom

  162. deano

    jromeha – condolences on the loss of your friend. I look forward to getting the link.

  163. Phil

    Thoughts/EM – Yes, see that post. 

    JRW/Shadow – No word, he hasn't been on since 4/4 it seems.  

    $100s/Scott – Maybe the economy is improving – that guy certainly has too much free time! 

  164. chasw

    Jrom,
    Sorry about your friend

  165. roberthjrfl

    jromeha – very sorry to hear about the loss. Please post the link when you can.

  166. Pharmboy

    Whilst I like some of Ron Paul's thoughts, the 'free market' does not work…..Glass/Segal's removal showed just that….he has also never offered what he would do to 'stimulate' those jobs back.  If defense is such a large portion of our budget, and much of that is 'manufacturing', cutting defense to not police the world would cause even more problems.  After WWII, there was a labor force ready to go into manufacturing and other high paying/based jobs.  Those no longer exist here.  What would he do?

  167. jromeha

    All – Thanks, I appreciate it.  He wasn't actually a friend, just an acquaintance. I only spent a couple weeks training with him and one day last week for our inspection of his office.  I ve lost a couple people much closer to me than him during this "Global War on Terror" but this individual's death is much harder to deal with. He didnt have much time left until his retirement… And I guess the big thing for me is I have a soon to be 4 year old daughter and anything to do with anyone's daughter/s tugs on my heart a little more than other tragedies. We were swapping stories about cute things our daughters do/did last week and now they will be growing up without their father.  That's what I cant get out of my head.  Anyways, Ill post the info when I'm allowed. Thank you all for your time.
    Elias 

  168. rpme

    That was a lot of closing volume.

  169. Phil

    At the close: Dow -0.11% to 13214. S&P -0.42% to 1397. Nasdaq -0.66% to 3049.

    Treasurys: 30-year +0.06%. 10-yr +0.08%. 5-yr +0.02%.

    Commodities: Crude -0.1% to $104.82. Gold +0.11% to $1666.65.

    Currencies: Euro -0.11% vs. dollar. Yen -0.53%. Pound +0.22%.

    Market recap: Stocks failed to gain traction after a batch of underwhelming headlines, including news that Spain's economy is officially in recession and weak readings on U.S. personal spending and manufacturing. Financials and techs slumped to losses, while energy eked out gains. Apple sold off again, -3%. NYSE declining issues topped advancers two to one.

    CNBC ‘freaking out’ over decline in ratings for Andrew Ross Sorkin and Maria Bartiromo (NY Daily News) - According to Nielsen ratings obtained by Gatecrasher, from April 2011 to April 2012, “Squawk Box” is down 16 percent in total viewers and 29 percent in the important 25-54 demographic bracket that advertisers buy.  On Tuesday, the show drew its lowest numbers of the year in total viewers — 99,000.  According to the Nielsens, "Closing Bell" is also seeing its third straight quarter of decline.  From April 2011 to April 2012, the show is down 16 percent in total viewers and 11 percent in the 25-54 demographic.

    Doug Kass: Fair Market Value Update (The Street.com)

    Our growth fixation is positively baffling (FT.com)

    Trouble In Stocks, Focus On Commodities (The Short Side of Long)

    Illinois is slated to offer $1.8B of general-obligation debt tomorrow at 185 bps over benchmark AAA yields, 34 bps more than a similar sale 6 weeks ago. "(It) should be trading even cheaper," says Cumberland's John Mousseau. Nuveen's Tom Spalding disagrees, saying GO paper has first claim on taxes with which to pay bondholders.

    Already facing the wrath of the SEC, Egan-Jones invites an EU investigation, cutting Spain to BB+ from BBB-. "What for requests for support from the banks," says the independent agency, noting the assets of the country's 2 largest lenders exceed GDP.

    Lloyds (LYG) earnings could fall 16% next year and RBS 8% as the banks will face higher funding costs when Moody's unleashesits May downgrades, says Citigroup. The report comes ahead of Lloyds earnings report tomorrow at which the bank is expected to show a small profit after losing £3B in 2011 Q1.

    Natural gas is flying higher+4.7%, perhaps encouraged by the fact that producers are cutting back on drilling. "The Jeff Gundlach trade is having an insanely good day today," writes Joe Weisenthal. The bond man said last week he would like to go long natty/short Apple with 100X leverage. Apple -3.1%

    Sunoco (SUN +19.6%) continues to lead all S&P gainers after its acquisition by Energy Transfer Partners (ETP +2.9%). ETP ismost enamored with SUN's stakes in Sunoco Logistics (SXL -1.3%) and its network of refined product pipelines, terminals and trucks; ETP is paying plenty for the general partner interest in SXL, but it's a bargain vs. KMI's recent deal for EP

    LOL!  Coca-Cola (KO -0.5%) releases a statement saying that it's not in talks to buy Monster Beverage as reported by the WSJMNST-0.2% to $65.40 after hitting as high as $83.96 in intra-day trading.

    In proof of how low solar industry expectations have become, LDK Solar (LDK +9.8%) is now up sharply after delivering a brutal Q4 report (III) and even worse Q1 guidance. Likely helping is LDK's disclosure it has cut 22% of its staff this year. In addition, LDK's guidance for 2012 revenue of $2B-$2.7B is largely above a $2.04B consensus, though many are doubtlessly skeptical of its ability to hit that range. 

    Verizon Wireless (VZVOD) has launched an $80/month prepaid plan featuring unlimited voice and text, and 1GB of data. That likely contributed to today's weakness in Leap Wireless (LEAP-3.9%), which stands in Verizon's crosshairs. Leap and fellow discount carrier MetroPCS (PCS +4.1%) were crushed on Thusrday after reporting major net add drops. Barclays predicts the nationwide giants will continue taking prepaid share.

    Howard Schultz and Kevin Efrusy are stepping down from the Groupon (GRPN) board, reports AllThingsD, citing sources. Schultz's departure is to be immediate, while Efrusy will not stand for re-election in June. Shares -9.8%.

    More on Groupon's (GRPN -10.6%board shakeup: Schultz and Efrusy will be replaced by "accounting types," a source claims. The move comes 6 days after Bloomberg reported Groupon wants to hire at least 2 new directors to restore investor confidence following itsQ4 restatement, while suggesting the board would be expanded to make room. That's apparently not the case, and the Street isn't happy.Update: The new board members are AmEx CFO Daniel Henry and Deloitte vice chairman Robert Bass. GRPN +2.2% AH.

    Mobile Spam Texts Hit 4.5 Billion Raising Consumer Ire (Bloomberg)

    Under Catholic pressure Paul Ryan backs away from Rand, Objectivism (The Raw Story)

  170. Phil

    Volume/Rpme – Yeah, finished at the standard 127M with half the day's volume in the last 15 mins.  

  171. Canuck

    Phil/KGC ($8.95),
    buy/write Jan 13 $9 p&c for $2.70, acb $6.25/7.62, with a 44% return in nine months if called away, or is there a better place to put your money in this sector?

  172. pstas

    http://www.bloomberg.com/news/2012-04-29/analysts-see-record-s-p-500-as-2012-advance-over-for-barclays.html

    Individual price forecasts for stocks show the combined projection for the benchmark gauge has climbed to 1,569.74, according to more than 10,000 analyst estimates compiled by Bloomberg. That compares with the October 2007 high of 1,565.15. At the same time, strategists who base their predictions on assessments of the economy say this year’s 12 percent rally represents all the gains investors will see.

  173. Phil

    The DJIA finishes April with a 1.59 point gain, its 7th consecutive monthly advance – the longest winning streak in 5 years. April also happens to be the Dow's best-performing month of the year, and 2012 marks the 8th consecutive time the index has posted green in the year's 4th month. - Up 1.59 points after a 50-point stick into the close – isn't that special?  

  174. Phil

    They're back:

     

    In addition to a detailed schedule of every event that is planned from 8 am to 8 pm tomorrow, OWS has also posted a large to-do list for anyone who wants to join in on the protests tomorrow, along with a list of useful advice in case you find yourself facing arrest.

    What To Bring

    (1) An affinity group: An affinity group is a group of people you know and trust. Before going to the demo, bring together a group of 2 or more friends and discuss your plans for the day, the tactics you plan on using, how comfortable you are risking arrest, etc. Everyone should have an affinity group, even if its just casual or informal. Once at the march, stick together and try to leave together. If someone has to leave early, make sure they do it safely. Make sure you have each other's phone numbers. It might be a good idea to pair together more experienced protesters with newers folks. Most importantly, look out for each other.

    (13) Know how to Mic Check: One easy way to convey information to large groups of people is by using the People's Mic. One person (or a few people) first yell ¨Mic Check!¨ Everyone who hears them responds by echoing ¨Mic Check!¨ After that, one person says a few words and pauses to let the crowd repeat those words. If you hear someone mic check, let them know by repeating too; that way, the people around you can also listen. However, if you disagree with what someone is saying, you don't have to repeat it. This is a useful way to make spontaneous, democratic decisions. However, you should also be aware that false or misleading information can sometimes spread quickly this way, so don't assume something is true just because it was said over the People's Mic. (Hint: If you hear people chanting ¨Shame!¨ or ¨The whole world is watching!¨ it often means that police brutality and/or arrests are happening nearby. If you're trying to avoid arrest, go the other way. Or, if you want to help or document, head over!)
     


  175. rpme

    Phil, how about some May statistics, maybe its time to short the sh*t out of this thing. I am saying this in my best Spock voice, cannot get emotional…right Iflan.

  176. Phil

     

    Stiglitz: “A full-time worker in the US is worse off today than he or she was 44 years ago.”

    Barton Biggs: China Rebound to be 'Positive Surprise in Months to Come'.

    Neighborhoods crumble as thousands of homes sit in legal limbo, Sun Sentinel finds

    Yale’s Shiller: World in a 'Late Great Depression'  "Our whole economy has been affected by variations in confidence. Central banks are sort of trusted, but the actions they have often affect people’s confidence by appearance rather than substance. We’re not in the most trusting mood now,” Shiller tells CNBC.  The Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England have propped up their respective economies via liquidity injections known as quantitative easing, tools designed to spur recovery but dubbed by critics as printing money out of thin air.

    CAM Italy

    The Head Of This Italian Art Gallery Keeps Setting Prized Pieces On Fire To Protest Cuts

     

    Earlier today, the Treasury forecast that in the third and fourth fiscal quarter of 2012 (April-September), the US would need a total of $447 billion in new debt (split $182 billion in Q3 and $265 billion in Q4), bringing the total debt balance to just over $16 trillion by the end of September. While this is a commendable forecast, and one which certainly has provided to alleviate rumors that the US debt ceiling of $16.4 trillion would be breached by the mid/end of September, the chart below shows that it may be just a tad optimistic. 

  177. stjeanluc

    Some important numbers between now and tomorrow's open – Chinese Manufacturing PMI, Australian rate decision, Great Britain PMI and at 10:00 USA ISM Manufacturing. Could be a fun morning if you like roller coaster rides!

  178. stjeanluc

    These 2.5% lines are getting a workout…

  179. drmtv10

    Hi Phil,
    What is your opinion on BA at the moment?  Is the breakout above $75 is for real, on its way to $90+ (Jan) or still stuck in $70-80 range and earnings pop will dissipate soon?  Already short BA Jan 65P (up about 40% and keeping'em), looking to ADD a debit spread (Jan 65/75) for about $7.  Appreciate your opinion.  Thanks.

  180. shadowfax

    Phil
    I don't understand what the chart or graph actually mean. I see flat a bump and flat at the end and maybe optomistic expectations in the chart. Please explain.

  181. crussell14

    Iflan
    Some of us are in your PCLN 760/765 weekly. Please keep us posted on how you are playing it. Thanks

  182. sagemm1

    Spain cut again

  183. emunster

    PHIL, Sorry I was out all day playing golf in 30 MPH winds and rain, So MUCH FUN! NOT. I did see your post, thanks. My thoughts are. These markets are driving me Crazy! LOL. I believe you are RIGHT ON THE MONEY, with your thoughts on the Markets and all the Money Printing BS! YOU ARE DOING A FANTASTIC JOB!!! I am mostly in cash, So I look forward to the NEW Income Port, as I need Income, since I am between opportunities. I love the thought of selling premuim, although I have not really done much. Its crazy this market goes up in 2012 when we are looking at the abyss. So I love the PUT list. I have not really jumped into any portfolios, but I should have on the $25K when it was down, and you made the comment about now would be a good time to start. I have learned more in a month as a voyeur member, and now about a month or so as a BASIC member, than I have in 25 years or trading. Going to start a Futures account, just need to fund it, and then follow you. I want to make some dollars for my morning McMuffins (LOL). PHIL keep doing what you do, so people like me have a CHANCE to survive whats happening to the US. Thanks. 

  184. Canuck

    Type 1 Juvenile diabetes:
     
    anyone have any experience with this condition?  My 6 year old stepson was just diagnosed the other week.  We are a bit overwhelmed at the moment.

  185. stjeanluc

    China PMI manufacturing looks like it came in lower than estimates – 53.3 as opposed to 53.6.

  186. lflantheman

    Canuck….Yes, we in the medical field are quite familiar with Type 1 Juvenile diabetes, and you are likely to find much expertise in your nearest medium to large city.  The treatment methodology is very well honed and i'm sure he will do well. 

  187. jfawcett

    RE: Laptops – I am currently traveling, again!  My 5 yr old Vaio just acquired a memory problem so I purchased a ASUS U46E-2640M Platinum 14" Laptop. i7 Processor/ 8G Ram / 720G HDD, $700 at Office Depot.  A very fast machine! As with many, TOS and PSW are always open as well as spreadsheets, etc.

  188. Phil

    Nikkei down about 70, not sure who else is open today. 

    KGC/Canuck – HMY is my favorite junior gold and they are low in the cycle at $9.61 but when ABX is at $40, why would you want anything else?  They make enough money in a year to buy HMY or half of KGC but only trade at 4x KGC's valuation.  You can buy ABX for $40.43 and sell the 2014 $40 calls for $6.75 and the $35 puts for $4.55 for net $29.13/32.07, which is 20% off if put to you and a nice 35% if called away.  If you want more leverage, you can sell the same puts against the $30/40 bull call spread at $5.75 for a net $1.20 entry on the $10 spread and your break even is $35.60.

    Interesting Pstas – Good view into how people see things differently, depending on what they choose to call data.  

    May/Rpme – I am not a big believer in trading off the calendar.  BUT, the fundamentals (the Global ones) say it is a good time to cash out and run!  You can short, of course, but be careful because it's a very irrational market and the last time selling in May did not work was in 2007, when we had similar conditions in a market that was also overbought but refused to fall.  

    Big Chart could go either way – I don't think tomorrow's low-volume action is likely to be very telling but I'd take a break of the NYSE and RUT either over their lines or below their 50 dmas pretty seriously.  Since my theory is the Nas follows through down with AAPL, then we'll look for the Nas to test 3,023, which is another day down like today (0.74%) and the S&P is just about 1% over their 50 dma as is the Dow so this will be interesting if we do get a pullback. 

    BA/DrM – I always love BA.  It's a $50Bn company that does $70Bn a year in sales and has a $600Bn order backlog to fill.  What's not to like?  The only problem with BA is the very direct effect terrorism or an accident has on them as would a liquidity crunch so I don't think you ever want to have more than a 1/2 position on them until you wear your basis down to a negligible amount.  Nothing wrong with your idea.  From scratch I'd start with selling 2014 $60 puts for $4.85 and buying the $70/82.50 bull call spread for $6.20 for a net $1.35 entry on the $12.50 spread and worst case is you have 1x at net $61.35, which is about 20% off.  So even if a crisis knocks them down to $40 – you're looking at 2x at about a $50 average.

    Chart/Shadow – That's right, it's just saying that their projections are very optimistic compared to the norm.

    Spain/Sage – Dying the death of 1,000 cuts. 

    Thanks EM!   

    JD/Canuck – That sucks.  Our prayers are with you.  They are into human testing on many potential cures already, I have great faith something will come along in relatively short order – meanwhile, it's a discipline he'll have to learn but kids are super-adaptable.  

    China/StJ – Not a big miss but not reversing the trend either. 

    There's no middle ground in a debate between Ron Paul and Paul Krugman. Paul: "I don't want the government or Federal Reserve fixing the rate of interest… Governments aren't supposed to run the economy. The people are." Krugman: "I want the market economy to be left as free as it can be, but there are limits. You do need the government to step in to stabilize." (video)

    You know they are getting desperate when they RELEASE THE KRAKEN!  Slow growth is still growth, so Abby Joseph Cohen remains confident in the upward long-term and the U.S. "will avoid another recession." 

    Janney's Mark Luschini is worried about slowing economic data; though not indicative of a recession, they're "not overly encouraging in what is necessary to support elevated equity prices or enough to bid up earnings."

    After decades of stifled, lackluster growth and negative interest rates in Japan, it may take a political remedy to move the rigid, ultra-conservative Bank of Japan to act more boldly on its policies. Some politicians are now calling for changes in the Bank of Japan Act that would make the BOJ more accountable, or even hand some control over to the Diet to help manage the country's monetary policy.

    HSBC is lowering its gold price forecasts for 2012 and 2013, now expecting an average price of $1,760 an ounce this year versus an earlier forecast of $1,850. The bank cites weak demand from the Indian jewelry sector and lower expectations for additional economic stimulus measures in the U.S. 

    Delta Air Lines (DALpulls the trigger on its anticipatedpurchase of the Philadelphia refinery from ConocoPhillips (COP) spinoff Phillips 66. The deal includes pipelines to get the fuel to JFK, LaGuardia and other airports. DAL says production at the refinery combined with agreements to exchange refined products from the refinery for jet fuel will provide 80% of its jet fuel needs in the U.S.

    How to shoot yourself in the foot:  Hulu's media industry owners, desperate to protect existing revenue streams from the threat of cord-cutting, plan to require users looking to stream network TV shows prove they have a pay-TV subscription, the NY Post reports. It's added NBC owner Comcast (CMCSA) will insist on authentication model for streaming the 2012 Summer Olympics. (previous)

    A pension fund representing Brockton, MA workers is suingGoogle (GOOG) over its proposed "stock split," which will create a new class of non-voting shares and guarantee Larry Page, Sergey Brin, and Eric Schmidt's future control of the company. The split has already become the target of much criticism.

    Research In Motion's (RIMM +1.9%) estimates keep heading lower. The latest to cut is RBC's Mark Sue, who thinks RIM will sell just 9M BlackBerrys in the May quarter, down from 11.1M inFQ4. Sue thinks RIM is in danger of seeing its global smartphone share fall below 5%, and that its loss of scale will lead to further operating margin erosion, with cash burn possible next year.

  189. kongen

    Roma \ May day.  We don't have an official holiday, but it is celebrated by some:
    "Hoorray, hooray, the first of May,
    Outdoor f**king starts today!"

  190. jromeha

    Not quite sure I understand why the Aussie cuts rates more than expected and their dollar is UP against ours!?!?!?

  191. Phil

    Good morning!

    Despite the RBA cut, Dollar was pounded down to 78.60 this morning, now back at 78.76 with the Euro pulling back from $1.3275 to $1.326 and the Pound just bouncing off its lows at $1.62.  The Yen bottomed out (stronger) at 79.63 and now back to 79.80 and EUR/CHF just tested $1.201 but is holding that line for now.  

    The Reserve Bank of Australia cuts its benchmark rate by a larger-than-expected 50 bps to 3.75%, as "economic conditions have been somewhat weaker than expected, while inflation has moderated." (RBA statement

    Australia House Prices Fall for Fifth Quarter, Rate Cut LoomsHouse prices in Australia's major cities fell for the fifth straight quarter in the three months to March, underlining the weakness of the housing market in general and adding to pressure for an immediate cut in interest rates. The Reserve Bank of Australia (RBA) holds its monthly policy meeting Tuesday and is widely expected to cut its cash rate by at least 25 basis points to 4.0 percent given benign inflation and disappointing economic growth outside of mining. Housing has been particularly weak with the government's measure of prices for detached houses falling 1.1 percent in the first quarter, twice the drop forecast. Prices were down 4.5 percent on the same quarter last year, a far cry from the heady growth pace of 19 percent seen as recently as 2010.

    China's official April PMI rises to 53.3 vs. expectations of 53.5 and 53.1 previously. The print is well above last week's HSBC "flash" PMI of 49.1 (HSBC's final April read will be released tomorrow). Shanghai -0.4%. - Of course it seems like China may be totally lying like they did in 2008:

    Aussie PMI perhaps more accurate (and no wonder they went for a drastic cut):

    Japan had a tragic day and ended up down 1.75% at 9,359 and the Shanghai was down 0.35% but Hang Seng and BSE are closed. 

    Japan's Nikkei closes down 1.8% to 9,350.95, amid a strengthening yen, eurozone uncertainty and concerns over U.S. economic growth. Markets in China, India, Singapore, Taiwan and Indonesia are closed for public holidays.

    FTSE seems open and they are up about 0.3%.

    Oil (/CL) touched $105 yet again at 4:25 and again it pays off for the early birds at $104.75 (so far).  Gold $1,662, silver $30.85, copper rejected at $3.85 again, now $3.83, nat gas keeps flying, now $2.33 and gasoline still falling at $3.10

    Fed's Fisher: Too Soon to Talk About Tighter PolicyAlthough he believes the Federal Reserve has already provided too much stimulus to the economy, a veteran central banker said Monday now isn’t the time to start calling for a tightening in monetary policy. Looking at the various programs the Fed has run to expand its balance sheet by buying bonds to stimulate growth, “it’s not clear to me [the programs have] been fully productive, or even counterproductive,” Federal Reserve Bank of Dallas President Richard Fishersaid in an interview with Dow Jones Newswires, held on the sidelines of the Milken Institute Global Conference in Beverly Hills, Calif.

    Pimco Planning for 'Lackluster Economy': El-Erian"Our strategy is based on a lackluster recovery. So we are assuming it will be a lackluster economy, Pimco CEO Mohamed El-Erian told CNBC's Closing Bell on Monday. Jobs and economic data in the U.S. have been been weakening, "and that’s a problem," he told CNBC during the annual Milken Institute Global Conference. "The last thing we need is a repeat of 2008, 2009, 2010 where the year starts strong" and then declines.

    ECB Loans Plant Seeds of European Disintegration: Euro Credit. European Central Bank measures to stem the region's debt crisis threaten instead to undermine the euro. ECB loans worth more than $1.3 trillion have been recycled into government bonds, capping borrowing costs. As Italy's reliance on its local institutions increases and Spanish banks accelerate purchases of domestic government securities, however, the economic ties that bind the fate of euro members to each other loosen, weakening the incentives for cross-border support to defend the currency union. "As the local bond markets have become owned only by domestic institutions, there is less and less incentive for the other countries to support and bailout one of those," said Stephane Monier, who helps manage more than $150 billion as head of fixed income and currencies at Lombard Odier Investment Managers. "Basically you're planting the seeds for the disintegration of the euro zone."

    Global Investors Resume Exit From Euro DebtGlobal investors resumed their exit from euro zone bond markets in April, cutting their holdings of the bloc's bonds to their lowest level in over a year as sovereign debt woes re-emerged to hit Spain and Italy again. The surveys of 55 leading investment houses in the United States, continental Europe, Britain and Japan showed holdings of euro zone bonds in balanced portfolios fell to 24.5 percent, compared with 26 percent in March and substantially lower than the 26.9 recorded at height of the crisis in November last year. "Tensions are now rising again as the ECB's tonic wears off," said Dirk Wiedmann, Head of Investment at Rothschild Wealth Management. On aggregate, the poll shows investors upping Japanese and UK bond holdings to compensate for euro zone reductions, while there was a small shift from government and investment grade allocations to speculative "junk" holdings within an overall steady U.S. debt exposure. "Elections in the euro area may spark renewed political uncertainty amid the euro debt crisis," said Giordano Lombardo, group chief investment officer at Pioneer Investments.

    Europe, in Slump, Rethinks AusteritySpain has joined seven other euro-zone nations in recession, according to data released Monday, providing new evidence that austerity policies are failing to spark confidence in the region's economies ahead of a week of expected anti-austerity protests and a string of important national elections. Almost every piece of new economic data in recent weeks has reinforced the impression that swaths of the European economy are contracting. The worsening economic picture is raising political tensions around the euro zone—both French and Greek elections this weekend are expected to castigate incumbents.

    Berlin Insists on Eurozone Austerity. Wolfgang Schäuble said the only way to achieve the economic growth that was needed in the region was to continue to rein in budget deficits and pay down debt, praising the tough new Spanish budget – which contains €27bn in new taxes and spending cuts – as an example. “The first precondition in order to have sustainable growth everywhere in Europe is fiscal consolidation,” Mr Schäuble said at a press conference with his Spanish counterpart, Luis de Guindos. “If now we talk about growth, it shouldn’t be understood as a change of direction. That would be a mistake.”

    Greece's Venizelos says election could decide euro membership-report. Greece's Evangelos Venizelos, who will lead the ruling Socialists into the May 6 election, said in a newspaper interview on Tuesday that euro membership is not a certainty regardless of the outcome. "There are certain misconceptions that worry me: for instance, the misconception that whatever happens we are not going to leave the euro," Venizelos is quoted as saying in the Guardian.

    Reinhart, Rogoff See Huge Output Losses From High DebtThe U.S. and other developed economies with high public debt potentially face “massive” losses of output lasting more than a decade, even if their interest rates remain low, according to new research by economists Carmen and Vincent Reinhart and Kenneth Rogoff. In a paper published today on the National Bureau of Economic Research’s website, they found that countries with debts exceeding 90 percent of the economy historically have experienced subpar economic growth for more than 20 years. That has left output at the end of the period a quarter below where it would have been otherwise. “The long-term risks of high debt are real,” they wrote. “Growth effects are significant” even when debtor nations are able to borrow “at relatively low real interest rates.”

    Obama Fails to Stem Middle-Class Hollowing OutBarack Obama campaigned four years ago assailing President George W. Bush for wage losses suffered by the middle class. More than three years into Obama’s own presidency, those declines have only deepened. The rebound from the worst recession since the 1930s has generated relatively few of the moderately skilled jobs that once supported the middle class, tightening the financial squeeze on many Americans, even those who are employed. “It started long before Obama, but he hasn’t done anything,” said John Forsyth, 58, a railroad-car inspector and political independent from Lebanon, Ohio. “He kept pushing this change, change, change, and he hasn’t done anything.”

    Banks Ease Rules On Some LendingConsumers found it easier to get credit cards and auto loans in the first quarter of 2012, but standards for home and business loans remained tight, the Federal Reserve said Monday. The central bank's quarterly survey of senior loan officers at American banks and foreign ones with U.S. operations also showed lending demand grew across the board as banks moderately loosened credit standards for the first three months of 2012, compared with the previous quarter.

    BofA(BAC) to Cut 2,000 Jobs. Amid the banking industry's relentless belt-tightening, even Bank of America Corp.'s moneymakers aren't safe. The Charlotte, N.C., company is planning about 2,000 staff cuts in its investment banking, commercial banking and non-U.S. wealth-management units, said people familiar with the situation.

    IRS Reviews Chesapeake(CHK) CEO's Perk. Chesapeake Energy Corp. disclosed Monday that the Internal Revenue Service was reviewing aspects of a controversial perk that allows longtime CEO Aubrey McClendon to purchase a small stake in every oil or gas well the company drills.

    One Of Jim O'Neill's Favorite Economic Indicators Just Came In Awful:

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  192. Phil

    Understanding/Jrom – What you have to understand is that the first move off something like that is usually an attempt to spike out the people who got it right.  You are playing a very low-volume, manipulated market and then you are surprised by the manipulations?   Notice I haven't been calling many Futures lately – that's because I only like to play when I'm sure and that way, MAYBE, I'll be right half the time and cash management can take care of the rest.  

    If you wanted to play Dollar up, you could have played RUT down or Nas down, which I was fairly sure about at the close and is, in fact, the worst performing indicator so far this morning.  Playing currencies is madness – just my opinion from watching them for 40 years.  

  193. Winston

    Phil / Parking Cash  - buy long term strangle, sell short term strangle
     
    Phil, this is one of your ideas from a while back. You mentioned finding a low volatile, dividend paying stock (e.g. IBM and BAC I think were the examples you used) and then buying a long dated strangle. The difference in strike prices was a guaranteed return, and to pay off the remaining bought premium you showed how to sell short term OTM strangles each month to gradually reduce the outstanding premium. All going well, you end up with a 'free' long strangle which would be turned into a 20% a year return through the continued sale of OTM strangles. I do not know whether your views on this strategy have changed. Looking for suitable candidates I came up with XOM and the following trades:
     
    XOM Jan 14 80C/90P bought strangle costs $24.08 (a debit trade)
    XOM Jun 12 82.5P/87.5C sold strangle for $1.05 (should give an indication of the monthly possibilities
     
    So, the long dated strangle guarantees a payout of $10 (the difference in strikes) and that leaves $14.08 to pay off, which could be theoretically done in just over 13 months (lets say for 5 of those months one needs to roll, so a conservative 18 months to pay off). Then you get 6 months of selling strangles and pocketing the premium. I have difficulty seeing the downside exposure to this strategy, but I am sure it exists.
     
    Your views appreciated, thanks.

  194. deano

    From WSJ:

    The U.K. parliamentary committee probing illicit voicemail interception by News Corp.'s shuttered News of the World tabloid released a final report Tuesday concluding that News Corp. Chief Executive Rupert Murdoch is "not a fit person to exercise the stewardship of a major international company" and accusing several former company executives of misleading parliament.
     
    The report says Mr. Murdoch and his son, News Corp. Deputy Chief Operating Officer James Murdoch, presided over a culture of "willful blindness" at News Corp. It also singles out James Murdoch for displaying a "lack of curiosity," even "willful ignorance," when handling fallout from the phone-hacking scandal as the manager overseeing News Corp.'s British newspaper unit, News International, from late 2007 to 2012.

  195. newt

    Is /cl still playable?

  196. Phil

    Strangle/Winston – The problem is if the stock isn't as steady as you think and goes up or down outside your range.  Essentially, it's a more conservative variation of FAS Money or IWM Money but the idea is the same – just keep selling front-month premium and the rest will take care of itself.  

    Murdochs/Deano – Getting off lightly by allowing them to claim they didn't know about it. 

  197. sagemm1

    Canuck, I have type 1 diabtetes it is surely something your child can learn to adapt to, in the end what  a diabetic needs to do is the same thing that any doctor would tell any patient everything in moderation, get good sleep and exercise. really it is that simple. There are things like insulin pumps that work very well or like myself smallish penlike dispensewrs that are easy to caryy around, make sure you monitor but understand your kid is a person with diabetes not a person defined by diabetes. Good luck..you can handle it.

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