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Technical Tuesday – Holding the Line on Light Volume

We closed April positive!

That's right, the Dow finished April with a 1.59 point gain, making 7 consecutive monthly advances.  April is, historically, the Dow's best performing month so we can take those 1.59 points and put them on the refrigerator and maybe take the Dow out for ice cream later to celebrate

The Russell can't come though, it fell 1.1% yesterday and, unlike the Dow, it wasn't jammed up 30 points into the close to maintain a winning streak that would impress all the people who don't bother to look behind the headlines.  The Russell did, however, manage to hold their 50 dma at 817 – or at least they only failed it by a little and, in a World that celebrates mediocrity – that's good enough for the MSM to crow about, isn't it?  

The NYSE is another broad index that was saved by it's 50 dma with 1,856 stocks in the index declining and 1,190 advancing on a day they fell just 0.4%.  That didn't stop 104 out of 2,627 stocks on the full Nasdaq from making new highs – defying gravity while AAPL took a little 3% dive on the day.  The S&P also fell 0.4% but the defensive dividend paying stocks in that index matched their 12-year highs – levels we haven't seen since just before the great crashes of 2,000 and 2008 – so all must be well!  

It's an interesting take on a defensive move as the actual Dividend Pay-Out Ratio has never been lower, barely holding 27 from a high of 63 in 2008, the last time the dividend-payers were anywhere near this popular.  What's going on is the S&P 500 have a lot of cash on their books and, just like the Fed, investors are sitting around like trained seals begging for MORE FREE MONEY fish – maybe if they learn to blow horns with their mouths?  

Stocks pay dividends, in part, to attract investors.  That's not going to happen in this market as you can't keep retail investors away if you beat them with a stick, can you?  No amount of bad data or poor earnings will scare investors out of owning stock – the retail ones anyway – as the professional money is bailing out in droves.  In fact, CFTC data shows the small speculators are the ONLY net longs in the S&P (/ES) Futures contracts with the commercials and large specs on the other side of the trade

As Peter Brandt notes: "In the futures market typically the wisest bet is against the small or unreportable speculator (as opposed to the large reportable spec/futures funds and commercial interests).  So, the gun fight at the “CME coral” is between the small spec on one end of the street and the large spec along with the commercial at the end of the street. In my view, this is like a guy with a knife facing off against a 50-caliber machine gun."  The last 3 times small speculators have been carrying the net longs preceded our last 3 major market corrections.  

Brandt concludes that "ownership in the hands of the small spec is immediatley bearish. The message is that if prices turn down with the small spec in control of the long positions, look out below."  Doesn't that make you feel better?  

Hopefully our some market data will make us feel better this morning and, if not – then maybe it will be so bad that it will be good because – as the conventional market "wisdom" goes – the worse things get the more likely it is that Ben Bernanke will save us – again.  It's a brilliant plan – completely flawless and without any possibility of failure.  No wonder so many stocks are trading at their all-time highs despite earning LESS than they did 5 years ago and despite horrific unemployment and, even if they do have a job – Joe Stiglitz points out that a full-time worker in the US is worse off today than he or she was 44 years ago.

"When you look at America, you have to concede that we have failed. Most Americans today are worse off than they were fifteen years ago. A full-time worker in the U.S. is worse off today than he or she was 44 years ago. That is astounding – half a century of stagnation. The economic system is not delivering. It does not matter whether a few people at the top benefitted tremendously – when the majority of citizens are not better off, the economic system is not working." 

Or, as Cramer would sum up: BUYBUYBUY!!!  And we're off to a great start with a 0.3% drop in  Retail Store Sales and Redbook Chain Store Sales fell from 2.9% to 2.7% but, unfortunately, that's not really bad enough for Uncle Ben to come bail us out and the Futures are taking a little dip at the 8:55 am release.  Don't worry though, we still have the ISM Report at 10 along with Factory Orders and Construction Spending – maybe they will be terrible so we can rally to new highs.

We also get Fed speak from Williams (11), Evans (12:30) and Plosser (2pm) to tell us what to think today.  In other data that we'll be ignoring, Germany had a 1% quarterly decline in Retail Sales, with just a disappointing 0.8% bounce in March after a 1% decline in January and a 0.9% decline in February.  

The quarterly decline does not bode well for the private consumption component of first quarter gross domestic product, the broadest measure of an economy's output, wrote Berenberg economist Christian Schulz in a note after the release of the data.  "Against the background of unemployment at its lowest since reunification, falling headline inflation rates and a pick-up in wage growth, German consumption remains relatively weak," he added, stressing that it is rising fuel prices, not the euro-zone crisis that is likely affecting consumption.

Economorons were projecting that the UK, who's economy is back in recession, would have a PMI of 52 and they came in this morning with just 50.5 but don't worry – like the US, Manufacturing in the UK is just 15% of their economy these days so what's another 3% drop between friends?  "Stop trying to make things, you fat-fingered idiots" said some guy in China…

"A sharp decline in export demand has led to a slowdown in U.K. manufacturing growth, placing the sector in a more delicate position compared to the start of the year," said David Noble, chief executive officer at the CIPS.  "Although still in positive territory, manufacturers reported a slowdown in activity, characteristic of continued problems and poorer consumer confidence across the euro zone," he said.

The details of the survey show that export orders fell at the sharpest pace since May 2009, with the decline coming not only from the euro zone, but also from the U.S. and Asia. And while input prices rose at a slower pace than in March, firms increased their output prices so consumers bore the brunt of much of the continuing rise in fuel prices

BUYBUYBUY!!!

This evening we'll get more PMI data from CHINA! with the HSBC Manufacturing PMI but how can it matter if it's CHINA!  Even P. F. Chang's CHINA! Bistron (PFCB) is up 30% this morning on news they are to be taken private.  

Tomorrow we'll get EU PMI and Unemployment and Spain may crack that magical 25% mark ahead of Greece – quite an achievement for a country no one is worried about!  No one is unemployed in Iceland because they told their creditors to shove it – a very wise move it turns out….  We'll get ADP numbers tomorrow but our Big Kahuna, the NFP Report, is Friday and, if we're very lucky, it will be a huge disappointment and we can whip the markets into another buying frenzy in anticipation of MORE FREE MONEY!

I'd say be careful out there but, really, what's the point?  

PS – Congrats to our CHK players as it took even less time than we thought for the company to straighten out their nonsense!  Our CHK trade idea from the April 19th morning post was:  

I do like selling the CHK May $18 puts for $1.30 and buying the May $15/18 bull call spread for $2 for net .70 on the $3 spread that's $2.65 in the money. 

Sadly, we only did 3 of them in our virtual $25,000 Portfolio but the net $210 purchase is well on track for the full $910 return on the 18th – a nice 328% return in 4 weeks – aren't options fun?  


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  1. stjeanluc

    Oil Lines

    R3 – 106.62
    R2 – 105.89
    R1 – 105.34
    PP – 104.61
    S1 – 104.06
    S2 – 103.33
    S3 – 102.78

  2. stjeanluc

    Chinese PMI came out slightly lower than expected. The Australian CB cut rate by 50 bp when a cut of 25 bp was expected and the Great Britain manufacturing PMI came in at 50.5 instead of the 51.5 expected.

    With all this good news it looks like we might open higher!

  3. newt

    /cl is hitting 104.90- short it?

  4. stjeanluc

    This Chinese PMI number is surprising to me – Europe is clearly on the edge if not in a new recession. The US is not growing at a very rapid pace and Japan is a basket case. Australia is worried about its economy even though they supply resources to China. Latin America is also very dependent on resource export and the latest I read from Brazil is not that great. But China keeps on posting PMI numbers over 50 (at least the official one – the HSBC one was under 50). Where does the demand come from? Are they building more empty cities, unused airports and stocking up metals? Clearly domestic demand can't replace 700 millions OECD consumers who make on average 5 times what the average Chinese person makes! Someone is not telling the entire truth and I doubt that countries would lie about doing poorly….

  5. stjeanluc

    $25KP – The roll from the PCLN Jul 600 to 620 puts was never at $2 yesterday. If someone got that roll, let me know and I'll adjust the position. Otherwise we might have to wait.

  6. gandhjo

    Hi Stjeanluc
    I have a newbie question. I am curious about the pcln trade. Why buy puts long before the earnings. 
    I have a feeling that it is likely to trend up right up until the earnings and then go down after the earnings. So, I would think buying puts on the day of earning or a day before may make more sense.  Please enlighten me and sorry if this sounds like a really stupid question – just trying to learn :-)
    Thanks!

  7. Pharmboy

    With RBA cut and their PMI rolling over (don't they sell mainly to China?), EU in recession and us slowing down, I sure as hell hope that Chinese people are buying things….I don't believe those numbers one bit.

    PP for today:

  8. zeroxzero

    Yawn, good morning!  I woke up yesterday to tropical sun, and this morning I am in a Utah canyon at 9k ft. and it's snowing heavily.  I didn't think I'd be building fires in May, but, as sailors are wont to say, the weather's never normal where you are. Nor is the market, it seems.  Being bearish along with the PSW flow since Feb. has been costly to my trading account — I hadn't quite figured out Phil's long/short balancing technique — but I reduced my long term positions in various funds substantially, and that is turning out to be a very good thing.  Ironically, my AAPL earning play last week added 12% to my trading account, and I am now positioned net short and glad of it.  Crazy weather in both mountains and markets, it seems.

  9. rainman

    Canuck / diabetes — I haven't watched this yet but it's in my queue. I don't know the value of it but thought I'd pass it along. I'd recommend reading the reviews as well.

  10. stjeanluc

    PCLN / Gandhjo – You'll have to ask Phil as this is his trade. But keep in mind that these are July puts so they give us plenty of time to be right… And the current PCLN trend is not really sustainable – given their current prices, the slightest hint of miss could send them tumbling!

  11. Burrben

    Mad Hedge Fund trader makes a case for being short FXE
    http://www.madhedgefundtrader.com/enduring-the-pain-in-spain/

  12. shadowfax

    Phil go away in April
    Volume bar charts yesterday 3 minute; IWM 9 bars off bottom, USO 3, XLF 5 SPY 4.
    Heard from JRW? Maybe he started this, the only used to be lage human trader left and he stopped. A VERY BAD INDICATOR!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  13. stjeanluc

    Speaking of PCLN, they are now diverging from AAPL:

    http://www.bespokeinvest.com/thinkbig/2012/4/30/priceline-and-apple-diverge.html

  14. 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.

  15. dpastramas

    CHK!! :-)

  16. escohen5

    CHK!  

  17. button

    Phil,
     
    Any thoughts on COP?  The stock is paying a 5% dividend now on this drop to $56.

  18. shadowfax

    Did the stock market open or did they gust change the numbers a little?

  19. stjeanluc

  20. stjeanluc

  21. button

    Phil,
    I just noticed the PSX spin off.  I guess the dividend will be adjusted downward.

  22. Pharmboy

    VPHM – May puts sold.  Buy back.  I only had a few.  Revenues are taking a hit.

  23. shadowfax

    44 yars ago I was paid $1.40 per hour and better off!!!!

  24. stjeanluc

  25. Pharmboy

    Homebuilders….what a crock.  I don't care how much 'land' they own…..Shorting TOL.

  26. shadowfax

    $1.40 per hour, $2,912 per year!!!!

  27. rustle123

    44 years ago, I was just conceived and better off.

  28. stjeanluc

    CHK – They are making the first step in what I said was needed last week – rein in McClendon. And the market likes it. That should be a signal to him and maybe he'll change his ways.

  29. dclark41

    stjean
    I think they are taking the ultimate step on McClendon.
    http://finance.yahoo.com/news/chesapeakes-mclendon-step-down-chairman-134400687.html

  30. jasu1

    Wow, /dx getting pounded

  31. ariveraA

    Hi Phil:  Before the COP split, I had a buy-write on COP with a $70 jan 13 call.  Does this call stay in play at $70 even though the stock is now $55? Easy money or missing something?  Thanks.

  32. stjeanluc

  33. deano

    Integrated Device Technology Inc. (IDTI) said it will acquire PLX Technology in a deal valued at $330 million as the manufacturer of semiconductor products looks to enhance its product portfolio. PLX shareholders will receive $3.50 in cash and 0.525 share of Integrated Device for each PLX share outstanding, valuing PLX at about $7 a share, a 76% premium to Monday’s close. PLX shares surged 66% to $6.60 premarket, while Integrated Device shares slid 10% to $6.10.

  34. stjeanluc

    CHK / dclark – He is still the CEO and they could put one of his buddies as chairman but I doubt that it would be well received. So a step forward.

  35. dclark41

    WOW. Now what was said that made the DX reverse?

  36. Phil

    Good morning! 

    Not too many markets are open so super low-volume means we can pretty much ignore whatever's happening.  Some wild gyrations at the open already with AAPL popping $10 to goose the Nas and they are spiking us up and down at will on this low volume.   

    Yay on CHK, that was way faster than we thought!  

    Chesapeake Energy (CHK) +9.8% premarket after announcing that it will name a non-executive chairman to replace Aubrey McClendon "in the near future." The company also will also end a controversial program that grants McClendon minority stakes in CHK's wells as of June 30, 2014, a year-and-a-half before the program was scheduled to end. 

    Chesapeake Energy (CHK+9.8% premarket after announcing that it will name a non-executive chairman to replaceAubrey McClendon "in the near future." The company also will end the Founder Well Participation Program that grants McClendon minority stakes in CHK's wells as of June 30, 2014, a year-and-a-half before the program was scheduled to end.

    Those are our favorite opportunities, when a major stock sells off for silly reasons and we have an opportunity to sell puts for inflated prices to people who want to bet it will go much lower still.  

    Anyway, so the FTSE is up about 0.3% but everyone else seems close so we'll be mainly driven by US data.  The Dollar is at 78.75 despite Australia doing a double-sized rate cut that surprised everyone.  The Euro is back to $1.326 as if it's the mightiest currency on the planet just a week before it possibly falls apart at the seems on the tail of Hollande's election on Sunday.  The Pound is $1.632 and once again bounced off the $1.62 mark this morning.  Just 79.81 Yen to the Dollar has the Nikkei down at 9,320, barely bouncing off the 9,300 line in the futures this morning and EUR/CHF is holding $1.201 and I can't even begin to imagine what this is costing them in April.  

    At the open: Dow -0.06% to 13206. S&P -0.05% to 1397. Nasdaq -0.74% to 3046.
    Treasurys: 30-year +0.22%. 10-yr +0.1%. 5-yr +0.06%.
    Commodities: Crude -0.09% to $104.78. Gold +0.35% to $1669.95.
    Currencies: Euro +0.24% vs. dollar. Yen -0.03%. Pound -0.04%.

    Market preview: Stock futures are flat ahead of ISM manufacturing data later. Groupon +2.7% following its board shakeup yesterday and Delta +2.5% after it confirms it's going to become a refiner. From the earnings cascade, Office Depot +4.3% but BP is-2.2% and Avon is a lipstick red -2.8%Later: Factory Orders, Fed speak 

    "If you think the ministry is talking its eyes off the market, feeling there is little it can do about the yen's gain, you're wrong," says a MOF official after BOJ easing moves and "verbal intervention" havefailed to reverse a rally in the currency. Currency traders are feeling their oats, believing only a far weaker dollar (say ¥75 instead of current ¥79.8) will bring about anything stronger than talk. 

    This will doom us all!  Treasury officials will soon decide whether to start issuing floating-rate debt for the first time ever. If approved, as analysts widely expect, it will be the first addition to the Treasury's debt products in 15 years.

    Campbell Harvey, described by Bloomberg as the "father of Treasury floaters," warns the Treasury against issuing floating-rate debt right now, due to rates being at historic lows. "If interest rates go up, it puts the government at risk because they will need to come up with a lot of extra revenue to pay the interest bill," Harvey says.

    "Not suddenly, but over time, gradually higher rates of inflation should be the result of QE policies and (endless ZIRP),"writes Bill Gross, the bond man turning goldbug (?) as he urges a higher allocation to real assets as a way to combat this. Gross also recommends shortish-duration fixed income as well as stocks offering 3-4% yields. 

    "It is metaphysically clear that if we attack the deficit, the economy will go negative," said Jeff Gundlach in a talk last week. The debt ceiling debate will come in the fall, "perfectly timed to make it a centerpiece of the election," he says. Josh Brown's outstanding notesfrom the event. (also)

    German finmin Wolfgang Schauble yesterday continued to insist that the eurozone should maintain austerity as a precondition for "sustainable growth." But everywhere around Schauble the noise is for a softening, particularly in France, where Francois Hollande could win the Presidency. Schauble's resistance could end up being as ineffective as the Atlantic Wall on D-Day 

    Telling supporters the new (or re-elected) French President will be an employee of the ECB, National Front leader Marine Le Pen says she will hand in a blank ballot at Sunday's election runoff between Sarkozy and Hollande. Not totally unexpected, the news is a bit of a blow to Sarkozy, who is desperately courting the right-wing vote.

    "Concentration intensifies the impact of mistakes," says a Dallas Fed presentation, following up March's annual report that called for the end of TBTF. Calling Dodd-Frank "a distraction" to the extent it doesn't "buttress market discipline," the presentation asks for creative destruction to be allowed to work towards restructuring the system.

    More on Pfizer (PFEQ1: Net profit -19% to $1.79B. U.S. revenue -15% to $6B, mainly due to the loss of exclusivity on the cholesterol drug Lipitor in November. International revenue $9.5B, around the same as last year. Expects FY revenue of $58B-$60B vs. estimates of $62.1B. Shares -0.7%.

    The solar industry (TANmay be ready to shine, as Citi analysts point to a potential rise in solar stocks given increased sell-though and production levels. The firm upgrades Yingli Green Energy and SunPower to Buy, and reiterates Buy ratings for Trina Solar, Advanced Energy Industries (AEIS) and MEMC Electronic. YGE+8.5%SPWR +8.2%TSL +6%WFR +4.5% premarket.

    Our favorite commodity:  Cameco (CCJ): Q1 EPS of $0.31 beats by $0.08. Revenue of $563M (+22% Y/Y) beats by $8M. Shares +1.7% premarket. (PR)

    "There is little in the numbers for the bulls," Nomura analysts say of BP's Q1 results. While profit was underpinned by high oil and gas prices, falling production prevented BP from benefiting in the manner of some rivals. Overall output -3% Y/Y, mostly due to the shutdown of its North Sea Foinaven field and the continued impact of its asset-sale program. BP -2.2% premarket.

    More on Arch Coal's (ACIQ1: "Based upon an unprecedented build in power generator coal stockpiles year to date, the continued erosion in natural gas prices and relatively soft global metallurgical demand, we are further curtailing our production in 2012," CEO John Eaves says. ACI -4.7% premarket.

    Valero (VLO): Q1 EPS of $0.31 beats by $0.03. Revenue of $35.2B (+33.7% Y/Y) beats by $9B. Shares +1.2% premarket. (PR)

    More on Sirius XM Radio's Q1 (SIRI): Self-pay net subscriber +148% Y/Y to 299,348. Subscriber base rose to an all-time high of 22.3M subscribers. Churn rate decreased to 1.9%. Records positive free cash flow for the first time ever in Q1. Increases subscriber growth guidance to 1.5M from 1.3M on strength of rising auto sales. Reiterates 2012 revenue guidance. Shares +2.1%premarket. (PR)

  37. Phil


    Facebook (
    FBexpects to get SEC approval this week to distribute its S-1 to investors, Kara Swisher reports, and that suggests its IPO road show could begin as soon as next week. It's added Mark Zuckerberg will take part, in spite of fears to the contrary. Last week, CNBC claimed Facebook's IPO could be delayed until early or mid-June, following a report of a May 17 launch.

    Research In Motion's (RIMM)  BlackBerry World developer's conference, which has gotten underway with a keynote from CEO Thorsten Heins (live blog), could represent RIM's last chance to save itself, suggests John Paczkowski. RIM needs to convince developers its BlackBerry 10 OS, which represents a major departure from BB7, is worth getting behind in spite of the dominance of iOS and Android, and the emerging presence of Windows Phone.

  38. scottmi

    Dollar and oil – today's dynamic duo.

  39. Savi

    wow—whats with the $

  40. rpme

    Plunge Protection Team, doing God's work.

  41. jomptien

    USO/Phil what roll are you looking at in June for the May 39 puts?
    Also, LQMT – those guys you were talking to about AAPL using them in the I5 phone may be right looking at the the big increase since you mentioned it.

  42. Phil

    Wow, ISM was a beat and they jammed us up 100 points on the Dow like lighning!   S&P back to 1,401 in the Futures (1,397 on the index) and over that line you can't be bearish!  Dow Futures testing 13,200, which is 13,250 on the index.  

    At the moment, I'd treat this as a spike but if we hold it for the hour – then it's not.  

    Mar. ISM Manufacturing Index: 54.8 vs. 53.0 consensus and 53.4 prior. Prices index 61.0 vs. 61.0 prior. Employment 57.3 vs. 56.1. Inventories 48.5 vs. 50.0. New orders 58.2 vs. 54.5.

    March. Construction Spending: +0.1% to $808.1B/year vs. consensus +0.5%, $807.3B in February (revised). +6.7% Y/Y for first 3 months of 2012

    Unfortunately – where's the QE if we're putting up these numbers?  Like I said above, it's a can't lose attitude in the market – it may all end badly, but we'll have to give up on our May bear positions and roll back rather than hope sanity comes back in the next 13 trading sessions while our premiums wear down. 

    Oil (/CL) back to the $105 line and it's worked and worked so I have to still like them short here with tight stops, of course.

    Dollar shot up to 78.93 of all things – will be interesting to see how this all resolves.   

  43. shadowfax

    And 40 years ago!!
    Paying for college, an apartment, car, and all the rest working at Firestone Tire changing tires, studding snows. No loans, no help, and went to Canada during a summer brake. I also went to school every summer after high school. I have not been on the equivlent vacation for about 20 years. Yes I was way better off and so was the country but the first big screw up was the Viet Nam war. That is why last week I posted, those who refuse to accept the past are condemed to repeat it not realizing we never got back to the good times 44 years ago since then so this is just another leg lower!

  44. Pharmboy

    ISM beats, but regionals were tepid if not horrid…..how do they do that?

  45. dclark41

    DX at $79 and oil going through the roof!

  46. rainman

    STO CHK Jun $18p's @ 0.80

  47. jabobeast

    FU PCLN!!!
    FU CMG!!!

  48. Phil

    Dollar over 79, Yen flying to 80.23 (weaker), Euro diving to $1.321, Pound $1.619 – not much making sense at the moment but why should it when we're the only market open and 84% of our trades are done by robots? 

    See how you improve ISM – Deliver less stuff but charge more for it!  This is, of course, good for businesses, who love this model but – is it sustainable?  

  49. stjeanluc

    FAS at $107…. 

  50. Burrben

    Yodi / ECA call rolls
    Just wondering if you have a set strategy or set parameters when you start looking to roll the calls?  Do you look and say when the sold call is down 50%, find a roll to the next month?  Or if it's down 50% with a few weeks to go, leave it alone?  I'm going to try this small with ECA, as we discussed.  
    I bought 200 ECA at 21.07 and I'm trying to sell the 2xMay 22 calls for 0.25.

  51. Phil

    Chrysler (FIATY.PK) Apr. U.S. sales: +20% Y/Y to 141,165 vehicles, the best April since 2008. Chrysler brand sales +56%. Jeep +19%, Dodge +2%, Ram Trucks +19%. (PR)

    GM (GM) April U.S. sales: -8.2% Y/Y to 213,387 vehicles. Chevrolet -8.4% to 155,487; GMC +4.5% to 32,603; Buick -16.1% to 15,446; Cadillac -25% to 9,851. Based on higher than expected Q1 industry sales and expectations for U.S. economic growth, GM raises its full-year light vehicle sales forecast to 14M-14.5M units from 13.5M-14M. (PR)

    Pep Boys (PBY -22.6%) craters after the company warnsthat Q1 results will fall below the estimates of analysts due to what it calls a "variety of factors." Shares are also reportedly moving due to concerns from potential-acquirer Gores Group on the serious deterioration in Pep Boys' business.

  52. scottmi

    and the VIX rolls over, submissive as ever…

  53. stjeanluc

    This is when TA fails…

    http://www.priceactionlab.com/Blog/2012/05/notechnical-analysis-for-aapl/

    That’s all for AAPL folks. Do not expect me to offer a technical forecast please. Only those who lack understanding of technical analysis will attempt at this stage to provide a forecast. Anything can happen because this market is at a state not analyzable using technical analysis.

  54. scottmi

    Oil – when that dollar drops back down, will oil spike even higher?

  55. shadowfax

    Phil
    Sorry my friend you are totally wrong! It was 84 % BOTS before JRW Left, now it is 99%!!!!

  56. BertII

    scottmi/ oil
    Here is the test dollar dropping  oil hanging high

  57. zeroxzero

    For those taking a long view: [Excerpt: "“Already the median age in western Europe is higher than that of the U.S.’s oldest state: Florida. That median age is rising 1.5 days every week. Japan had only 40 percent as many births in 2007 as it had in 1947….  These countries will have smaller workforces, lower savings rates and higher government debt as a result of their aging…. China’s rise over the last generation has been stunning, but straight-line projections of its future power and influence ignore that its birthrate is 30 percent below the replacement rate… It will age very rapidly. Only Japan has aged faster -- and Japan had the great advantage of growing rich before it grew old. By 2030, China will have a slightly higher proportion of the population that is elderly than western Europe does today -- and western Europe, recall, has a higher median age than Florida.”]

    http://www.bloomberg.com/news/2012-04-30/china-s-population-crash-could-upend-u-s-policy.html

  58. stjeanluc

    Them oil lines working well so far:

  59. scottmi

    UUP/Phil – time to get out?

  60. iTrade

    PHIL,
     
    DIA May $129 Puts @  $0.56 Now
      –  $0.50 to roll up $2 to the May $131 Puts
      –  $1 to roll out to June $129 Puts
    With 13 days left… it's hard to want to keep in the May position much longer, but the roll up to $131 Puts seems tempting.  What's your thought on this position?
     
    THANKS!

  61. newt

    StJ- Yes the are…. I went short at 105.91 and waiting for it to drop.

  62. edro00

    USO – we can roll our May 39 puts to June 41 puts for 1.47 and the June 41 puts are $1 in the money

  63. BertII

    STJ/ lines   working good but going wrong way

  64. stjeanluc

    Oil lines / Newt – You have to be careful as we have seen that these lines can be only a stop on a the way higher and a place to take profits on the way up! The trend is really strong right now so swimming against the current is dangerous.

  65. stjeanluc

    Like I told Newt, Bertll, by going short you are going against the trend… 

  66. Inkarri1982

    Pharm/ISM – Morning.  My sentiments exactly.  How do they manage to beat on the regional surveys coming back worse than expected?  This is really starting to get annoying. 

  67. newt

    StJ/ Oil Lines- yep…. I have been fighting it for 3 rounds.  Fortunately nickles so far.  I think I'm gonna pause for a bit….

  68. rustle123

    you'd think they announced another round of QE today

  69. newt

    StJ- will you post reversal? if it occurs….

  70. scottmi

    Oil – weekly trendline resistance up at 110.

  71. rainman

    Hmmm… CNBS doing a spot on OWS.  Must be time to sell in May!

  72. rainman

    rustle / QE — Who needs QE with a good ISM? 8)

  73. Phil

    Oil $106 – unreal but at least it didn't pretend to break $105 first.  Good thing Bernanke promised us the high Fuel prices were temporary!   Gasoline a good long over the $3.10 line (/RB).  Not playable short now because Dollar was rejected at 79. 

    China/PMI – I certainly don't trust their Government PMI number.  It's a whole bunch of province managers reporting to Beijing that they didn't go off plan – not too reliable.  They are piling up the metals – copper stockpiles are insane and tin too.  

    Gold only $1,662 – that's interesting.  Dollar 79.03 – last time it was this high, the Dow was 12,900.  

    PCLN/Gandhjo – I am glad you are able to predict, in advance, to the day, when to buy a put.  Please keep us informed next time so we can optimize all of our entries.  ;) 

    RBA/Pharm – They did a drastic rate cut BECAUSE China wasn't buying their stuff.  

    Crazy weather/ZZ – You said it!  The balance thing takes time but the key is taking positions on both ends that you are comfortable rolling with over the long-term.  When we break though an upper range, we add more longs AND press our shorts while we look to cash out or original longs on a dip.  You'll see some of that now as I'm pretty sure we're being blown off today with a big spike up ahead of reality.  

    FXE/Burr – That sure worked this morning.  Down half a point from the open.  

    Volume/Shadow – Nope, haven't heard.  That's a good point, he used to be a lot of the volume!  

    AAPL rejected at $595. 

    COP/Button – They are suffering from having a lot of nat gas and they are "cheap" because they just spun off Phillips 66, which has made their options all funky too (as you are obligated to deliver/buy the Phillips shares) so I would hold off on playing them for a while.  Doubtful they keep the dividend with lowered revs and earnings.  

    And what you said! 

    42 years ago, I got a .50 allowance and my girlfriend and I would go to the Soda Shop/Pharmacy and share a malted (.12) and she would get a $100,000 bar (.06) and I would get peanut M&Ms (.06) and a 2 pieces of gum were a penny and that left me with enough money to go to Carvel and get a sundae later in the week.  

    COP/Arivera – You have to call your broker.  It's complicated now as you will be issued Phillips stock and your call obligates you to deliver it at some blended price.  I hate it when they do that.  

    LOL – $25KP went up.  This is how you find out you're more bullish than you thought…

    VIX is up of all things.  TLT, on the other hand, dove to $116.50.  

    Hussman/Jabob – He's right but the market says we're all wrong.  

    Volume on Dow coming up on 11 is 30M – not too shabby now considering we only had 60M at 3pm yesterday.  

    Wow, I just found out ETrade was stuck and the S&P was actually running ahead of the futures by 4 points.  The Dow, at 13,300 is now lagging, if anything and we'll see how that pans out.  

  74. stjeanluc

    Reversal / Newt – I have signals now that indicate a pause again, but I would not short against a long term up trend. As I explained last week, my principles are to use a longer term trend to indicate the direction of trade and shorter term signals to indicate entry and exit point in the direction of the longer term trend. You can make nickels and dime going against the trend and sometimes you'll catch a true reversal. But you'll have more "luck" going with the underlying trend!

  75. jrod0725

    Did anyone get filled on the May to June EDZ $0.40 roll yesterday in the 25KP? My platform was showing .50 most of yesterday and is now down to .475. Thanks

  76. scottmi

    TPO Profile chart i have up shows a dip which may act as support be support at 105.25.  next good line to short below? Point of control is way down at 99.12. I'd be delighted to see that tested..!

  77. Inkarri1982

    Evans says tremendous room for more easing?  What the?

  78. rustle123

    I'm sure the market is being helped by Evans talking about tremendous room for easing.

  79. dpastramas

    EUR/USD is crippling down..someone is not listening to these fed presidents..

  80. scottmi

    VIX/phil.. up? my chart in TOC shows it down to 16.44 right now.. from yesterday close of 17.15.

  81. dclark41

    jrod
    I never got it and it seems strange that with EDZ falling off that we haven't seen it today. We are lower now than at any point yesterday. Just one of those things. I am trying to move to June at .45, but no luck with that either….so far.

  82. stjeanluc

    EDZ / Jrod – The roll was over $0.50 yesterday and that's reflected in the spreadsheet.

  83. stjeanluc

    The problem with EDZ is the lack of liquidity of the options and therefore the large spreads. It might be better to negotiate one leg at a time and try to get the best price on each.

  84. newt

    Reversal/ StJ-
    Thanks.
     

  85. iTrade

    EDZ @ $0.50 filled with no problem just now

  86. samz3700

    Phil - 
    CHK – am long at 18 and sold July 17 puts for $1.29 – now .85 
    Would you sell any call to cover on this strength – thanks – leaving puts alone.

  87. dpastramas

    PLX / Deano -You got me there, i have PLX the bio company and was struggling to understand why it is down on such news.  Your PLX is actually PLXT

  88. yshenhar

    DIA 129 p can be rolled to the Jun 130, selling the May 130 for net $0.45 with plan to roll them to the Jun 125 puts, now 0.77
    Thoughts Phil?

  89. dclark41

    EDZ just filled for .48.

  90. Pharmboy

    PLX is down b'c the PDUFA date is …  now.  There are plenty out there selling into the excitement.  I am holding my ground.  GLT us…..FC, pray the FDA does the right thing.

  91. angelcur

    ASIAN/MANIPURATION: ….all the regional manufacturing surveys come in weak here…then national one beats…china…china…china

  92. Phil

    USO/Jomp – I'll be going over the portfolio moves next.  

    LQMT/Jomp – is a strange little penny stock and needs to be played as such but it is a fun gamble.  They just borrowed another $300K, which is about their monthly burn so they've piled up $3.5M of debt at about 8% and the recent not goes to 15% if they are late.  On the one hand, you could say that it's a good sign that people are willing to lend them money but lenders are just as stupid as investors sometimes and the fact that LQMT was touched by AAPL gives them a halo with enough rope to hang themselves if things don't work out.  That being said, they could also be a 10-bagger if AAPL actually uses their stuff so a fun gamble but very much a gamble at .53.  

    4-year high for the Dow!  

    CAT still flat.  SVU not moving, YRCW down (was fun for a day), AMZN flat, DMND dead in the water, RIMM down on analyst day – could be it for them….

    Long view/ZZ – Doesn't matter because, apparently, by then the Central Banks will have printed a Qadrillion more Dollars and we'll all be senile enough to think that makes us rich.  

    UUP/Scott – No real movement on big Dollar move.  I'd ask for .10 and be happy if it fills.  

    DIA/ITrade – Roll to May is tempting but too risky.  Another 200 points up and you're just screwed so it's the Junes, I think.  

    USO/Edro – Very good roll.

    Evans – WTF???  They run with the Evans headline as if he controls the Fed!  

    The Federal Reserve should stay on the sidelines, keeping its power dry in case the economy weakens, said Dennis Lockhart, the president of the Atlanta Federal Reserve Bank on Tuesday in an interview on the CNBC business news cable channel. Lockhart, a voting member of the Federal Open Market Committee, is seen by Fed watchers as a centrist on the central bank, so his views are closely watched. Appearing with Lockhart, Charles Evans, the president of the Chicago Fed bank and not a voting FOMC member this year, again urged the central bank to take more easing steps. He called for the Fed to switch its guidance from late 2014 to an economic trigger of a 7.5% unemployment rate. Lockhart said he was not changing his outlook based on the first quarter's disappointing 2.2% growth rate. Lockhart said he was skeptical that more asset purchases would benefit the economy. "I think there is only so much we can do to stimulate loan demand and to change the risk appetite of the financial system," Lockhart said. 

    VIX/Scott – Yes, I was looking at Etrade and some glitch was freezing the amounts of things so I had to restart it.  

    CHK/Samz – I think you're good to $22, maybe $24.  You might want to consider buying the 2014 $25/35 bull call spread at $1.85 and putting a tight stop on your shares so you end up with a free long call with $10 of upside.  You could also roll your short putter to the 2014 $18 put at $4 while it's still high and that's another $3 in your pocket even if you stop out the July puts at $1. 

    As a fresh trade on CHK, I like selling the 2014 $18 puts for $4 and buying 3x the $25/35 bull call spreads for $1.85 ($5.55) so you're in 3 $10 spreads for about net .50 each with a 1,835% upside potential if CHK is at $35 in 2014 and worst case is you own 1x for net $19.55.  

    DIA/Yshen – Yes but keep a stop on the short puts at about .60 to stay out of trouble.  As the moment, I'd wait a bit on selling the puts in case this little rally subsides.  

  93. kustomz

    RBA rate cut had more to do with supporting their housing market. Canada will become an issue as well.

    Fed cant keep their mouths shut for longer than 24 hours, amazing the BS they regurgitate and we have to digest.

  94. yodi

    Burrben ECA trading that kind of play is the same like watching girls on the beach they all different.
    But lets look at my position from 4/30  I sold the Jan14 20p for 4.10 now 3.60 There is nothing to do about untill you get to Dec13 Just let it sleep The stock I bought I see at 20.15 now 21.35 up 1.20 on my position the May 21 caller I sold for .25 now .75 down .50 . As you can see I am well up on the play already. In case of ECA they pay a aprox 4% div. Last div payment was .20 per share and the next div date is 6/13. The call has still .40 premium on the .75. So no one will call your stock and pay you .40 if he will only get possible .20 in Jun. This call you can possible drain out all the premium during May until you are down to .05 or the highest .10. At that time you will think of rolling possible to JUL as Jun might be a little bit more critical due to the div. Stock paying div are more delicate to handle than the once with out. Non div. paying stocks you just about can drain out all the premium you get as no one pays you for the stock plus premium! Should I find that during the rolling I have to pay in and I like to hold the stock I will sell some more puts to not lay out cash.
    Hope this helps. I do not have a 50% or 25% rule as I do not like to pay for premium.

  95. lunar

    phil, i have May USO 39 puts purchased at .70 and now .35.  i'm thinking of converting to a bullish position by selling 40 puts which are now .70
    i will be hoping that USO is above $40 on 5/19.  what do you think?

  96. newt

    Oil Lines/ StJ- As I have gone back over the oil lines you post I see the trend upward. I need to get a better understanding of how these pieces fit so I can grab a couple hundred $ each day—- I'm a starving artist… so i use these moves to help between projects.

  97. angelcur

    we have some of the worst commercial overcapacity in the country in major metropolitan areas and bunch of new projects starting up…its so dumb…its what happens when fed forces institutions to reach for yield.

  98. lunar

    USO/phil,  ok, just realized that selling 40puts wont improve my situation, i would still have lost .35 which is where i am now.  help!  TIA

  99. stjeanluc

    Oil lines / Newt – The oil lines will generally give you the "pause" or possible reversal lines but you have to look at other indicators to give you the trend. There are many indicators out there to help you do that.

  100. BertII

    Now that they pumped dollar up to .79 they can drop it back to 78.6 for they rest of the week to keep they indexes up without any problems

  101. shadowfax

    Phil
    I remember 2 really different things from about 55 years ago. Buying penny candy and the gas wars caused one place to give 2 drinks with free glasses for a fill up. I have about 6 of the cocktail glasses with the cock on them from my mom. 

  102. Pharmboy

    From PragCap:

  103. Phil

    FAS Money – Gosh, some things never change.  At this point we may as well take out the May $85 puts for .63 as we'll either get a pullback and sell them for more later or we don't get a pullback and we'll need to sell something higher to cover.  Can't turn down selling 2 May $108 calls for $4.10 and let's put a stop on one of the $100s at $12 – just in case (now $10).  

    IWM Money – Ah, here we are too bearish.  TNA at $61.50 and we're not looking too clever but we'll have to wait until tomorrow now to see if this sticks.  

    $5KP – Still too bearish.

    • DMND – Fed up with them for not moving today.  
    • GLL – May $16 calls (.90) can be rolled to June $16s ($1.15) for .25.
    • USO – May $39 puts (.35) can be rolled to June $39 puts (.85) for .50 and we can sell 1/2 the May $39 puts for .35 with a stop at .50
    • UUP – Not worth playing with, let's just take the $100 loss and be done with it.  
    • EDZ – $12.62.  Nothing to do but wait as it's very unlikely they get to $16 so no point in buying out the caller.  
    • DIA – Down to .53 now is a very tempting DD but not smart.  Bottom line is we're down .55 and do we spend .55 to get it back or walk away and find things that are more obvious.  I think, since the July $122 puts were $1.43 yesterday and are $1.14 today, that they are a better roll than June – even if June is higher so let's do that and spend .59 ($590) to roll out and we'll be thrilled to take 1/2 off the table if we get back to $1.70 at any point but we're still betting on a 300-point drop between now and the end of May
    • SQQQ – We're in for net .35 and it will cost us .30 more to move to the June $11s (our calls only) and then, hopefully, when the May caller expires, we'll be able to sell the June $12s to get that money back.  
    • TNA – Funny thing with spreads because they are $1.55 in the money now and "on track" but we're showing a net loss on the spread as the VIX dies.  Who cares?  If TNA keeps going up, we get $1,500 and, if it fails – then we'll be glad we stayed bearish on the rest.  

    $25KP – So balanced it hurts!  Now it's like a Jenga game, you have to be careful which piece you pull out as it affects the balance of the whole.  

    • DMND – Ugh.  
    • XRT – Sons of bitches! 
    • BBY – Up .36 today, better than nothing.  
    • SCO – $33.37 with oil at $106 but I don't see the point in spending $1 to take out the $34 caller.  We can, however, spend $1.30 to roll our $31 calls ($2.70) to the June $30 calls ($4) and that's worth $1.30 to gain $1 in strike and a month of time.  
    • SQQQ – Arrrrg! 
    • FAS – Now, here is where we're too bullish I guess.  Still, we need it the way things are moving.  
    • GLL – We're in June so no worries.  
    • DIA - Down to .53 now is a very tempting DD but not smart.  Bottom line is we're down .55 and do we spend .55 to get it back or walk away and find things that are more obvious.  I think, since the July $122 puts were $1.43 yesterday and are $1.14 today, that they are a better roll than June – even if June is higher so let's do that and spend .59 ($590) to roll out and we'll be thrilled to take 1/2 off the table if we get back to $1.70 at any point but we're still betting on a 300-point drop between now and the end of May.
    • CHK – Yay!  
    • PCLN – Weren't we going for the $620 puts?  
    • EDZ – Fine
    • USO –  May $39 puts (.35) can be rolled to June $39 puts (.85) for .50 and we can sell 1/2 the May $39 puts for .35 with a stop at .50.
    • SQQQ - We're in for net .35 and it will cost us .30 more to move to the June $11s (our calls only) and then, hopefully, when the May caller expires, we'll be able to sell the June $12s to get that money back.  
    • TNA – $60s are now $4 so let's take that and run on 5 (1/2), as that's more than we paid for the spread and we'll ride the $63s half-covered with a stop on 5 at $3 (now $2.25).  Also, a stop on the 5 remaining $60s at $3, at which point we would reset the stop on the $63s, of course. 

     

  104. stjeanluc

    PMI / Pharmboy – I guess the difference is based on who imposed austerity measures (that has worked well so far!) and who decided to push stimulus! With the correlation, they will eventually converge and the US seems to be the leading indicator there so we'll see.

  105. stjeanluc

    $25KP / Phil – I mentioned earlier that we could not roll the PCLN Jul 600 to the 620 puts for $2.00 yesterday. 

  106. Phil

    I knew CNBC had to say it: "Don't sell in May and go away" – Only took them 2.5 hours of the first day's trading to make the call – amazing! 

    Williams' comments:  

     

    May 1 (Reuters) – The U.S. economy will likely grow at a 2.5 percent pace this year, but will take "some time" before it begins running on all cylinders, a top Federal Reserve official said on Tuesday.

    "We have a two-track economy," Federal Reserve Bank of San Francisco President John Williams said at the Milken Institute Global Conference, adding that consumer and business spending are buoying growth, while construction and government spending are dragging it down. All sectors need to contribute for growth to pick up, he said.

    Households are still laboring under big debt loads and the loss of trillions of dollars of paper wealth after the collapse in the housing sector, he said.

    "To think that consumers are going to be the powerful engine of growth over the next few years is not likely," he said.

    Evans is up next at 12:30 and he's like the QE Fairy now.   Plosser maybe gets real at 2pm as he's the biggest hawk they have left so, if you are a bear – he's your last hope!  

  107. stjeanluc

    Updated FAS Money position:

  108. hoss18

    Does anyone else hear a "BAAA"ing sound in this rally?  Just waiting for the buzzing of the shears in the background….

  109. Burrben

    Yodi –  Thank you.  Make's sense to look at premium value instead of % down.  Good advice for div payers as well to avoid those 4 months.  All this basic stuff is so valuable!

  110. sank1

    USO May 39 Puts / Phil,
    I'm sorry I don't understand what you mean by "May $39 puts (.35) can be rolled to June $39 puts (.85) for .50 and we can sell 1/2 the May $39 puts for .35 with a stop at .50."
    In the 25kp, we are long 20 of the May $39 puts. When you say they can be rolled to the June $39 puts, doesn't that mean sell 20 of the May $39 puts and buy 20 of the June $30 puts for a .50 debit ($1,000).
    Not sure what you mean by "we can sell 1/2 the May $39 puts for .35 with a stop at .50.".
    Thanks for clarifying.

  111. lotter

    Phil,
    SQQQ will be doing a reverse 4:1 split on May 10 (effective for holders on May 8).  Is that going to change anything in the $5KP and $25KP rolling decisions?

  112. Pharmboy

    Sank – do the roll first, then turn around and sell 1/2 position of the USO puts you just rolled out of for 35c.

  113. newt

    USO/ 25K: I don't understand what the last part of the change is. we can sell 1/2 the May $39 puts for .35 with a stop at .50.  Can someone clarify?  Thanks.

  114. Pharmboy

    The sale of teh 1/2 position helps pay for part of the roll of USO.  BUT if it hits 50c, you want to buy them back, b'c you don't want the eventual fall to go against you.

     

    So, roll 20 USO puts May to June 39s for 50c.  Then, sell 10 May 39 USO puts for 35c. 

  115. Phil

    44M at 12:07 not too shabby.  On pace for well over 70M at 3pm, which has been a "normal" day lately. 

    USO/Lunar – I'm still thinking they can't hold $105.   We got surprising MARCH PMI – that was a month ago and you have doveish Fed speak in a market where only US Bots are trading – not a day I'd use to guide my decision to flip-flop a position but, on the other hand, we do often get a run-up in oil into the holiday weekend – I was just expecting a sell-off before then.  

    Copper rejected at $3.85 again.  Nikkei stopped at 9,400 – if everything is so good, why can't they take 9,500 back?  Yen back to 80.16 – they should be thrilled.  

    Euro $1.322, Pound $1.622 – back in .30 lock-step  - Yep, so natural…

    Erotic glasses/Shadow – That doesn't sound like something I want to know more about but I do remember all those giveaways at gas stations and the way they used to run out to your car and wipe the windows and check the oil and whatever else and I always had toys from gas stations to play with.  After all, who's your best friend if not Big Oil?  

    That's an interesting PMI comparison, Pharm.  We had the Chicago PMI yesterday and it's the same as the ISM with prices rising to mask less actual orders.  

    Also, the cliff didn't come in March (despite the surprising drop in GDP), the problems showed up in April: 

     



     

    Category APR MAR FEB JAN DEC
    Chicago PMI 56.2 62.2 64.0 60.2 62.2
    New Orders 57.4 63.3 69.2 63.6 67.1
    Production 57.1 68.6 67.8 63.8 64.9
    Employment 58.7 56.3 64.2 54.7 59.2
    Prices Paid 68.6 70.1 65.6 62.4 63.8



    Still, we won't get those reports for another month so no sense worrying about them now.  
     
    PCLN/StJ – I thought the morning spike would have done it but I do see the spread is too wide so nevermind.  
     
    USO/Sank, Newt: The May $39 puts are .35 and the June $39 puts are .85 so it costs .50 to roll the May $39 puts to the June $39 puts.  NEXT STEP – We sell 10 (1/2) May $39 puts for .35 ($350) to offset part of the $1,000 we spent on the roll and we set a stop at .50 ($500) to keep us out of trouble if oil suddenly turns back down and puts our short putter in the money.  
     
    And what Pharm said! 
     
    SQQQ/Lotter – Yes, thanks for reminding me.  We need to be out by the 9th.  
  116. lflantheman

    Phil…I hate to bother you with this on the board.  I have tried several times to make a quarterly subscription payment to your company via my credit card company.  The cc company sees it as a 'fraudulent charge out of las vegas".   Your people have contacted me but only by email, with no number for me to call and discuss with someone.   So I'm up against a wall here.  The cc company thinks it is a fraudulent attempt to charge my card and I've been unable to find a way to discuss this with your people.  I want to get this resolved but I'm getting extremely frustrated here.  Please, have someone email me a TELEPHONE NUMBER that I can call and work out this problem.  I appreciate it. 

  117. newt

    USO/ Pharm- Thank you.

  118. sank1

    Pharm, Phil,
    Thanks for the clarification on USO.

  119. yodi

    Burrben Here is an other play just slihgtly different to Phil's yesterdays suggestion.
    BA bull spread Jan14 70/82.5 as per Phil but sell the Jan14 65p just about for free and 7.40 ITM Good to have PM margin though. An other sleeper.

  120. newt

    USO/ Phil- Thank You.

  121. shadowfax

    Phil
    It was a male chicken on the glass. See how far we have gone coctail glasses had roosters on them, but filled with booze for the road. Until about 2,000 Montata and Wyoming had drive through bars. Now I don't go to bars, drinks at friends houses means staying overnight now. Everyone has an opinion but I liked it more social and excepting bad things are going to happen no matter what you do and giving up freedoms leads to another saying, those that trade freedom for security get neither. Sorry you took it the erotic way.

  122. angelcur

     Iraq's credit risk surged to the highest in almost two years as a dispute between the central government and authorities in the Northern Kurdish region threatens to undermine the Arab nation's oil exports. 5-year credit default swaps for the country sitting on the world's fifth-largest crude deposits reached 467 on April 23, the highest since August 2010, according to CMA. The contracts jumped 108 basis points from the lowest level in more than four months on March 19, surpassing a 17 basis-point gain in average Middle East credit risk, excluding Iraq, and a 41 basis point advance for nations in central and eastern Europe in that period.

  123. angelcur

    iflantheman maker of 100k in profits for the board is paying a subbie!!?? you need a manager. phil would be a good one!

  124. jabobeast

    pcln bearish play..???
     
    http://www.cnbc.com/id/47248115?__source=yahoo|headline|quote|text|&par=yahoo

  125. 1020

    shadow/chicken – I know what you meant….. :)

  126. shadowfax

    With a 20 minute brake we did turn on the IWM accending trend line and now below R2 with the dollar up from the opening. Looking a lot like a top  and or a flush. It has to retake the 82.68 line and R2 soon or this was only a test even with some small volume increase. FWIW

  127. pat_swap

    Phil/DIA
    Instead of rolling to July 122 Puts what about the roll from May 129 P to May 131 P and reducing the number of contracts by half so that there is no cost to roll. There will be small decrease in the delta of the overall position.
    Kindly clarify the shortcomings for this roll. Less time is one thing but if DIA falls delta on 131 will increase more rapidly than the 129s.
     
    Thanks.

  128. Gingbaum

    Phil,
    With respect to the SQQQ reverse split, I am short June 14 Puts. Do I have to do anything, or will the options roll over to the new prices.  Please explain.
     
    Regards
     

  129. newt

    Shadow- hows the back?

  130. scottmi

    Markets up, oil up, dollar up… the ISM report wasn't THAT good.

  131. Phil

    CC/Lflan – Greg's getting right on it.  

    BAC still cheap (assuming bull market) as are CHK, FCX, GOOG, HOV, HPQ, OIH, SVU, TASR, WFR, WMT – plenty of things to add to our top 10 list (see yesterday's post) IFF we hold these levels.  

    Cocks/Shadow – I knew what you meant.  ;)  

    And now, some news we can all ignore:  

    12:00 PM On the hour: Dow +0.91%. 10-yr -0.19%. Euro -0.11% vs. dollar. Crude +1.06% to $105.98. Gold +0.05% to $1664.95.

    1:00 PM On the hour: Dow +0.89%. 10-yr -0.16%. Euro -0.13% vs. dollar. Crude +1.41% to $106.34. Gold -0.05% to $1663.35.

    Today's strong ISM number adds to the divergence begun last year between the U.S. and European manufacturing sectors, writes Sober Look. As manufacturing is a relatively small part of U.S. output, it doesn't mean a total decoupling, but forecasts of a U.S. recession in 2012 hardly seem to make sense anymore.

    image902.png

    More than the entirety of the S&P 500's capital gain since 1932 has come during the 7 days surrounding the end/start of the month, writes Eddy Elfenbein. "If you slice and dice any data long enough, you're bound to find some anomaly," he quickly adds, not positive there's a tradable angle here. 

    The ECB's liquidity blitz is feeding through to the money supply, writes Ambrose Evans-Pritchard, seeing a "glimmer of hope for the austerity wasteland" of the EU periphery. Don't get too excited though – M1 money supply isn't growing in the Club Med countries, it's just slowed its rate of decent. "Be thankful for small mercies." 

    The Fed criticizes some large banks for how they calculated their potential losses in this year’s stress tests and for the dividends they intend to pay out, Bloomberg reports. Among the causes of concern are the marking down of all house prices at the same rate regardless of region.

    Bolivian President Evo Morales announces the nationalization of Spain's Red Electrica (RDEIF.PK), and orders the military to guard the company's installations. The energy giant is 20%-owned by the Spanish state, with foreign pension funds also big holders. This follows the seizure of Repsol's Argentinian subsidiary YPF last month. 

    BP (BP -1%) says it is "very comfortable" with its position in Argentina and isn't worried that the nationalization of Repsol's stake in YPF threatens its interests in the country. "We have a long track-record of investing in Argentina, and historically we have aligned ourselves with Argentina's long-term interests," BP CFO Brian Gilvary says. (earnings)

    Power plants are renegotiating coal contracts and finding other ways to reduce coal deliveries as cheap natural gas weakens demand for their longtime staple fuel. In Q4, coal consumption by power generators fell 18.8% Q/Q and 9.4% Y/Y; as the price of natural gas has been cut in half from a year ago, the shift in power production surely has accelerated since.

    Is that the new word for it?  Caterpillar (CAT -0.45%) deploys a "contingency workforce" of managers, support staff and retirees at its plant in Joliet, Illinois, where around 800 IMA workers have gone on strike. The action comes despite the company backing down from trying to impose pay cuts on some staff.

    China may have a population of 1.3B and Australia just 22M, but it is the latter that provides more revenues for GE and on which its shifting its focus. Whereas China is difficult to deal with, Australia has a free market and a reliable legal system, so it's just so much easier. And being full of resources, it provides GE with plenty of opportunity.

    ROFL – what a con that was to flush the retailers ahead of this:  Shares of Sears Holdings (SHLD) run 10.1% higher on heavy volume after the company issues its outlook for Q1. Hedgeyecalls the report the most positive sales/inventory shift the retailer has seen in over 4 years and notes the improved inventory mark. 

    I don't know these guys but I like this sector:  SolarCity, an installer of rooftop solar energy systems, becomes the latest firm in its sector to signal its IPO intentions, yesterday saying it had filed a draft registration statement with the SEC. However, notwithstanding a bullish solar report from Citi (III), listing is not easy, as BrightSource can testify

    More on Citi's upgrade of SunPower (SPWR +11.4%) and Yingli (YGE +9.3%): Analyst Timothy Arcuri says checks indicate sell-through for solar panels "has increased significantly in the past 1-2 weeks," particularly in struggling Europe, and utilization rates have also risen. He sees this as a sign of a "cyclical bottom in margins," and predicts demand will exceed supply later this year. In late August, Arcuri smartly called a bottom for the chip equipment industry. (also)

  132. Phil


    Sectors on fire!
      A number of restaurant stocks are moving higher after P.F Chang's China Bistro lands a P-E buyout and earnings reports from key names come in strong. Movers: KONA +12.2%CAKE +4.3%,RRGB +4.2%TXRH +10.2%JACK +2.9%.

    Hard drive equipment maker Intervac (IVAC +13.8%) soars after beating Q1 EPS estimates, and reporting its order backlog grew 26% Q/Q to $41.3M. Other HDD industry players appear to be getting a lift: WDC +3.1%STX +3.7%XRTX +2.2%Needham (Buy) argues Intervac is nearing an "inflection point," with the industry due to reach max capacity by the end of 2012, and notes the company has been trading at just ~20% above book value.

    Veeco's (VECO +15.1%) stronger-than-expected Q1 results and Q2 guidance are also giving a lift to Rubicon Technology (RBCN +11%) and (to a lesser extent) other LED industry names:LEDS +3%CREE +3.4%AIXG +3.5%GTAT +4.2%. However,CanaccordSterne Agee, and Needham are staying cautious on account of concerns about weak LED end-market demand. Canaccord thinks LED TV sales will determine Veeco's 2H and 2013 performance.

    Rare earth stocks trade higher following a report that China will begin issuing a new special tax permit to all rare earth producers that will be required in order to legally produce light rare earths, such as cerium and lanthanum, and the concentrates from which all rare earths are derived. MCP +2.7%AVL +2%REE +1.3%.

    Plum Creek Timber's (PCL -4.9%Q1 earnings fell 24% as the REIT was hurt by weaker earnings at its real estate business where segment sales rose but missed expectations. For the quarter, EPS was $0.18 vs. $0.24 consensus; revenues rose 22.5% Y/Y to $337M vs. $332M consensus. Q2 EPS guidance was lowered to $0.15-$0.20 vs. $0.27 consensus. 

    Masco (MAS +6.6%) gains on a solid Q1 earnings beat late yesterday. Profit swung into the black as stronger sales volume from new home construction and remodeling sales channels and growing market share boosted its top line. Growth was especially strong in its hard-hit North American business, which struggled last year with tepid demand amid a weak U.S. housing market.

    Nice to be able to short a stock and then get on the CC with management and hit them with accusations – that used to be illegal but now you get celebrated for it apparently:   Herbalife (HLF -16%plummets after David Einhorn reportedly questions the company's disclosures during the earnings conference call.  More on the Herbalife (HLF -19%plunge: Saying the company listed 3 groups of distributor as "at the low end" in a previous filing, Einhorn noted the company stopped disclosing this in its latest 10-K, and wanted to know why. The company responded it did not view the info as valuable. Seems harmless, except now investors have the idea Einhorn is short HLF. 

    While Las Vegas Sands (LVS +1.7%) keeps raking in money from its Macau resorts, it's the planned mini-Las Vegas in Spain that could really pay off in the long-term despite the hefty $35B price tag for the project. With Spain's economy tanking, the company is in perfect position to leverage costs lower for a complex that would be roughly half the size of the Vegas Strip and stand a chance of anchoring the continent's scattered gambling population.

    $106.34 – WOW!  

    Ford (F) April U.S. sales: -5% to 180,350 vehicles. Cars -11.2% to 64,789: Fusion +2% to 21,610, Focus +12.5% to 19,425, Mustang -4.6% to 7,801. Utilities -1% to 50,724: Escape -20% to 16,986, Explorer +6.6% to 13,419, Edge +12.4% to 10,520. Trucks -1.1% to 64,837: F-Series +4.4% to 47,453. (PR)

    Volkswagen (VLKAY.PK) April U.S. sales: +31.5% to 37,525 vehicles, its best April since 1971. Jetta -7.6% to 15,658, Passat 10,096. (PR)

    Research In Motion (RIMM -4.6%) heads south as itsBlackBerry World developer's conference fails to impress. RIM has been handing out a BlackBerry 10 prototype phone with software almost identical to that of the PlayBook, and has talked up the brilliance of its virtual keypad and camera software. IDC believesRIM's global smartphone share fell over 50% Y/Y in Q1 to 6.7%.

  133. Phil


    Mobile phone shipments fell 1.5% Y/Y in Q1 to 398.4M,
    estimates IDC
    , as soft Euro sales and slowing emerging markets growth made life difficult for most firms not named Apple (AAPL) or Samsung (SSNLF.PK). But smartphone shipments rose 42.5%, and made up 36% of total sales. Nokia's (NOK) phone share fell 600 bps Y/Y to 20.8%, while Samsung and Apple's rose to 23.5% and 8.8%, respectively. ZTE's (ZTCOY.PK) share rose 110 bps to 4.8%. 

    The next $500Bn:  Could Apple (AAPL) turn into an iCarrier? Mobile industry adviser Whitey Bluestein thinks it's possible, arguing Apple has the distribution channels, content, and customer loyalty to pull it off, and has obtained patents that cover mobile network architectures. But those giant iPhone subsidies Apple's carrier partners are paying could get in the way. There's also the fact that being a U.S. iPhone carrier hasn't been very profitable lately.

    Three lunchtime questions:

    1) Where have all the oil hedgers gone?

    2) Another weak May? Don’t be so sure

    3) What should Europe do?

  134. Burrben

    Oil – Holy Crap, 106.33?   Ok, last time I kicked myself for weeks not being short oil somehow at 107, then 108, then 109.  I must have told 20 people how pissed I was last time missing the move from 109 down to the low 100's.
     
    Help me not miss it this time!  Buy some USO puts, layering in? 20% allocation?  
    I don't want to short the future and hold over night.

  135. Pharmboy

    DIA/pat – do the time and down roll.  Better position for time and you can sell premium against it.  I know it cost a bit, but these tend to work better with time on your side, vs. delta.

  136. David Ristau

    Hey all,

    Just placed clients long in $WYNN stock and into May18 125/120 bull put spread. Great Macau results and LVS was solid as well. Stock broke key resistance at 135 and confirmed golden cross today.

    Thought you all might find this interesting:

  137. newt

    Oil / Burrbe- I second that!  I want my MTV.

  138. Pharmboy

    XRT – $60 May/June calendar P spread is 66c debit.  good risk reward.  Out at 50c, but otherwise, this one should pay off nice in a sell off.

  139. Phil

    DIA/Pat – Those May contracts expire soon and if we have another big up day tomorrow – then what?  If you don't mind pumping more and more money into it (that you can afford to lose), that's fine but it's not an appropriate action for our limited portfolios, where we'll be thrilled to get out even at some point.  Personally, I think this is a BS spike up and it's a fun gamble but that doesn't make it smart.  

    SQQQ/Ging – You don't have to do anything, the puts will hold against the adjusted price BUT, when they reverse split an ultra – they begin a new cycle of decay from the new, inflated price. 

    Oil/Burr – I like sellingthe SCO May $34 puts for $1.65 and buying the June $30/33 bull call spread for $1.80 for net .15 on the $3 spread with SCO at $33.28 so, if they even twitch down, you're looking at nice gains.  Also, the SCO June $33/36 bull call spread is just $1 and that pays 3:1 if oil is back around $102.

    If you want to be aggressive with USO here ($106.33), the May $40 puts are just .62 and were $1.06 yesterday so even a 50% retrace would give you a very nice pop but a realistic stop at .50 would be prudent.  

    RUT with a pretty good pullback, Nas well off highs with AAPL testing $590.  Not much pullback on Dow or S&P yet.  NYSE topped out right at 8,200 but holding near it.  

    Dow volume popped to 56M – I think part of the volume story is that other markets are closed and it's the first day of the month so long funds all over the world must be putting cash in to start the month against an absence of sellers.  

  140. scotbraze

    Phil / 5kp,
     
    I never got a fill on the TNA spread @1.30 and I am feeling way too bearish at the moment.  I am trying to get the rolls mentioned just a bit ago, but some are not cooperating.  Do you have any suggestions for a bullish offset if one missed the TNA trade?
     
    Also, you said to sell half (of 5) of the May USO puts @ .35, they were .30 when i looked.  sell at .30 or wait to see if we go down a bit over the next day or 2 before covering?
     
    thanks scot.

  141. stjeanluc

    Despite what we hear, apparently there is no correlation between taxes and employment:

    http://economix.blogs.nytimes.com/2012/05/01/taxes-and-employment/

    Here, too, there is little evidence that taxes affect employment one way or another. Almost half of the countries with a bigger tax wedge employ a larger percentage of their working-age populations than the United States does, and more than half of those with a smaller tax wedge have lower employment ratios. [...]

    There is simply no evidence that cutting taxes at the present time will do anything to raise employment.

    Just the facts M'am!

  142. BertII

    This is what I get for trading on my B-day dollar up oil up dollar down oil up no shorten today should have listened to STJ follow the trend

  143. Inkarri1982

    Read this on a Charles Hugh Smith post:
     

     

    European banks do not have enough money for deposit redemptions (people withdrawing their cash from the banks) and the only way to get it is to have the European Central Bank (ECB) print money out of thin air thereby devaluing every euro, thereby destroying purchasing power (you get your money but it buys less).
     
    And what collateral are the banks providing for these loans? The sovereign debt of countries that are insolvent. Why not sell the bonds to raise the capital that is rightfully owed to depositors so that they could receive their money at par? Why then bond prices would tumble and governments would be forced to borrow at much higher interest rates. But borrow from whom? Insolvent banks that must have money printed to give depositors their money back at a fraction of its worth from when they deposited it. Not due to market forces which indicate their labor is worth less but because everybody just wants what's rightfully theirs.
     
    So to summarize this, the ECB prints money to buy the bonds of insolvent banks which are backed by the bonds of insolvent nations. The result of which is insolvent nations or in reality the people thereof are not only poorer, they are now responsible for paying back money that was their property to begin with… at interest.

  144. stjeanluc

    Not looking good for RIMM in the US:

    http://www.engadget.com/2012/05/01/comscore-us-smartphone-share-march-2012/

    Image

  145. stjeanluc

    The trend is your friend Bertll, even when the trend is wrong!

  146. scottmi

    Oil/Burrben – the bots actually have a line of code addressing you:
    '--0093245: monitor(Burrben'PSW;uso,sco,cl;seek capitulate=1) loop buyup until true '
    isn't that special?

  147. stjeanluc

    In the meantime, my longer time frame indicators for PCLN are now turning slightly bearish. Of course longer term is relative to the underlying time frame. I plot indicators at 4x and 15x the chart time frame. 

  148. shadowfax

    newt thanks!
    Back doesn't hurt so much when tryig to do things like wash dishes, just forward arms out type stuff. So far no improvement although not worse with right leg weakness or numb foot. What it did do is prove the real problems are T1 to C3 and now I'm back to waiting for answers from doctors that fear another code on the table before they finish. Last Friday they at least realized the emergency surgery was because I had already stopped breathing a few times. Now all they need to accept is if they don't fuse where the discs were removed history is going to repeat itself. What is really hard for me is almost all the symtoms prior to stopping breathing have returned, history repeating itself, and I remember what they don't.

  149. stjeanluc

    On the other hand, $750 is S1 for PCLN so we need to go through that before entering a trade!

  150. jromeha

    Pharm – Im just verifying what you said. THe recommendation hearing for PLX is going on right now so we should have an answer sometime after hours?

  151. shadowfax

    Phil lack of selling
    Again why you get the big bucks. What's you thought  about XLF up and holding?

  152. jromeha

    Phil – what about the VIX? Do you like them here? I mean we have the French elections this weekend…That should at least be good for some rise in the VIX….

  153. shadowfax

    Another troubling sign is AAPL failed at $600 again. How long can oil hold up the market plus the DOW? Will 0% interesthold up more than the banks? Bucky is uppy. Answer to these is the "rest of the story!"

  154. Phil

    Too bearish/Scott – Gosh, that should have been addressed at the time, not AFTER you get an unhedged move against you.  I guess, if I had to pick a bull play (which I do not believe in at the moment as I think this is a blow-off top) based on QE27 or whatever we're getting, then it would be a BAC July $8/9 bull call spread for .47 and that gives you a double if BAC gets back to $9 and should't hurt too much if you give up on them if they fail to hold $8.  It's less aggressive than FAS but still pays very well if the Financials keep going up.  

    Good post Ink but very sad.  Still, it's a Ponzi scheme and will keep going until it stops unfortunately.  

    AXP making new highs.  

    Now Nas giving back almost half the day's gains.  All up to AAPL into the close.  

    RIMM/StJ – Actually, 3.7/16 = 23% while 0.8/4.7 = 17% so not much more loss than MSFT to the big boys.  That's it though, that's all the positives I have on RIMM or, should I say, the new MOT.  

    ROFL Scott! 

    XLF/Shadow – That's a very surprising move but based on QE expectations which make no sense when the market is up on strong ISM numbers but maybe they know the jobs are going to tank us?  

    VIX/Jrom – Not really low enough yet at $16.20, was $13.66 in March but you can sell VXX (also $16) June $18 puts for $3.20 and then buy the VXX June $15/18 bull call spread for $1 and you make $5.20 in profits off the net $2.20 credit or, worst case, you are long VXX at net $15.80. 

    Dow 61M at 2pm.

  155. stjeanluc

    French elections / Jrom – There is not much of a surprise expected for the elections in France… It can only to the upside if Sarkozy is re-elected. Hollande's election has to be priced in already as he has been leading the polls for the last 6 months or so. If it's not priced in, then the markets are really inefficient! Which I guess is not to be discounted…

  156. stjeanluc

    What can the BOJ do to affect the FX markets:

    http://ftalphaville.ft.com/blog/2012/05/01/980981/dear-bank-of-japan-so-you-tried-the-easing-thing-a-gazillion-times/

    The Swiss solution might not be applicable in Japan…

  157. yodi

    Phil Need to have a similar input on VECO as yesterday on BKS
    Bought Stock at original at 22.02 now 34.44 rolled some calls and hold the May 28c for 1.75 sold, now 6.40 I made my money on them and don't call me greedy as it is not my fault the stock goes up by 14% in one day. So we roll the caller to? and buy a long out bull spread possible with a sale of a put but the put sale will not be to good today. What you think?

  158. exec

    Phil,

     
    I've been busy so I haven't looked at the market in two days.  I opened my home page a few minutes ago and had this headline glaring at me………………"Dow hits more than 4-year high as economy fears ease"
     
    I had to laugh.  Wasn't just last week that they were reporting the world was ending.  I swear….this market is such a joke.

  159. stjeanluc

    Missing the good old days in Russia as the parade for May Day:

  160. yodi

    Phil Veco the secret is to find a realistic value to the stock

  161. stjeanluc

    And apparently they have a poor image of the new labor plans in Spain:

    That's May Day in the world today!

  162. Burrben

    Phil / SCO
    SCO just seems to burn me everytime I play it.  The decay is pretty harsh over time.  How about a USO Bear Put spread?
     
    I also thought about selling SCO longer term calls as a "income" play since the decay is so bad on the underlying…

  163. Pharmboy

    jro – u are correctorama on PLX. 

  164. shadowfax

    Another thing to add to the spook is this up run is a couple days too long and we could find ourselves back were we were on the 24th by Friday

  165. stjeanluc

    Steven King is channeling Warren Buffett:

    http://www.thedailybeast.com/articles/2012/04/30/stephen-king-tax-me-for-f-s-sake.print.html

     

    I guess some of this mad right-wing love comes from the idea that in America, anyone can become a Rich Guy if he just works hard and saves his pennies.Mitt Romney has said, in effect, “I’m rich and I don’t apologize for it.” Nobody wants you to, Mitt. What some of us want—those who aren’t blinded by a lot of bullshit persiflage thrown up to mask the idea that rich folks want to keep their damn money—is for you to acknowledge that you couldn’t have made it in America without America. That you were fortunate enough to be born in a country where upward mobility is possible (a subject upon which Barack Obama can speak with the authority of experience), but where the channels making such upward mobility possible are being increasingly clogged. That it’s not fair to ask the middle class to assume a disproportionate amount of the tax burden. Not fair? It’s un-fucking-American is what it is. I don’t want you to apologize for being rich; I want you to acknowledge that in America, we all should have to pay our fair share. That our civics classes never taught us that being American means that—sorry, kiddies—you’re on your own. That those who have received much must be obligated to pay—not to give, not to “cut a check and shut up,” in Governor Christie’s words, but to pay—in the same proportion. That’s called stepping up and not whining about it. That’s called patriotism, a word the Tea Partiers love to throw around as long as it doesn’t cost their beloved rich folks any money.

     

    This has to happen if America is to remain strong and true to its ideals. It’s a practical necessity and a moral imperative. Last year during the Occupy movement, the conservatives who oppose tax equality saw the first real ripples of discontent. Their response was either Marie Antoinette (“Let them eat cake”) or Ebenezer Scrooge (“Are there no prisons? Are there no workhouses?”). Short-sighted, gentlemen. Very short-sighted. If this situation isn’t fairly addressed, last year’s protests will just be the beginning. Scrooge changed his tune after the ghosts visited him. Marie Antoinette, on the other hand, lost her head.

    Good stuff all around…

  166. rustle123

    Phil, thx for the SCO bcs.  Great call at these levels. 

  167. newt

    Shadow-
    Wow! Thats some tough shit.  Remember YWTED.

  168. jromeha

    Pharm – is there a live blog like other drug approvals? I tried to search on the street but no luck so far. Thx…

  169. shadowfax

    Just got the answer to what happen next door yesterday right after the close and another death to the downturn. House for sale upside down living in a 45 degree house cutting back on everything including health care. She dies of a heart attack and had the bigger pension. Now it is way worse for him besides loosing his wife. I bet another emty house, down to 1 full time neighbor. I think it can't get worse but it does. Super nice lady that walked 2 miles a day even in snow storms, she needed more than exersize.

  170. rainman

    stj — Is that a steaming pile of sh*t that guy's holding in that pic?

  171. Pharmboy

    Selling a few May $5 Ps on PLX.  70c.

  172. shadowfax

    BTW Califorians
    Her salery was from a state job, cutbacks, you know the story, he worked in a hardware store.

  173. stjeanluc

    Indeed Rainman….

  174. shadowfax

    Can't spell or type when upset, or make sense of this. It is just not fair anymore.

  175. Inkarri1982

    Shadow – Can you re-type when you can, I didn't understand your previous post.  TIA

  176. Inkarri1982

    Neevermind Shadow…understand now.  Sorry to hear that.

  177. jerconn

    Phil -selling question – I have INTC calls, 2013 $15 and $22.50 calls.  They might actually have been your call, some time ago you were banging the table for INTC. Obviously, they are doing well,with Intel at $29.  I like holding on for the ride, esp to get the lower tax rate by holding on…but I've gotten burnt a few times holding on and losing the profits.  Nobody here has a crystal ball, but what would be your take at this point?  Sell half when in doubt, or perhaps election year and good year for techs, we can be optimistic? 

  178. alik

    Hello Phil, I noticed several stocks with very low P/E, PEG, recent earning beats, high analyst target prices,etc. They all look too good to be true. In each case I see the cheese but not the mousetrap. Do you have an advice/opinion on any of them:  TA, RICK, TSEM, PRU, JCI, HES

  179. Pharmboy

    IBIO – buying 200 shares.  Starter position.

  180. shadowfax

    This topsided country just doesn't get it is beyond cutting back, people are dying early that worked all their life and for me this isn't even the second one. Three last year about the same story and even my friends and family don't get what is happening to people. There are points in life where you can't turn back the clock. It means life or deathtoo often.

  181. dpastramas

    CHK / Phil – Today AMC they announce earnings.  Do we hold the position or its better to sell before the bell?  Any insights for a negative surprise?

  182. Phil

    VECO/Yodi – Well I hope you learned from BKS yesterday that ALWAYS selling into the excitement is a valid plan!   Unlike BKS, they are not overpriced on a one-shot deal.  They had great earnings and guided higher but that sector is very flakey so, on the one hand, you could be happy with your very nice gains and be done with it.  If you want to make it a long-term play then I don't see any point in owning the stock as they don't pay a dividend and you can cash out at $34 and buy 2x the May $26/34 bull call spreads at $5, and roll the callers ($6) to 2x the July $32 calls at $4 and that means you are net $8 on the spread with $26 in your pocket and you make $16 more before you owe your callers $2.  If VECO goes higher, you can stop out 1/4 of the callers at $4 and 1/2 at $5 or you can add another 1x long spreads when they cross $35 and then each $2.50 more they move up – something like that.  Or you can just pocket your $7.75 profit now….  If all goes well on the spread, figure you've got the $26 in your pocket and then you recover net $12 from the spreads for $38, which is +$16 so worth the extra work I suppose.  

    Joke/Exec – Yes, it is a joke but it's on the small investors.  The Dow may be higher but the S&P was 1,422 at the beginning of April, also spiking to new highs on the first of the month.  It was all downhill from there back to 1,357 but that was way back on April 9th and people just don't look at ancient history anymore.  It was a different World back then what with the Dark Ages and Dinosaur attacks, etc. – you just can't compare it to modern times….  Here's a flashback:  

     

    Monday Musings – New Quarter Not So Shiny

    As I pointed out to Members this morning – the Global Markets have bluffed their way through the first quarter and now comes earnings season and it's time for the economy to show it's cards and now we'll see who ends up with all the chips!  

    We discussed PMIs that were falling all over Europe and Asia. 

    These are NOT cards you want to be playing with unless you are forced.  That's the thing, GS, JPM, MS, Fund Managers, etc – they HAVE to play.  Since they have to play whatever cards that are dealt – they do the logical thing – THEY BLUFF!  Although what's scary about the Banksters is that, when they bluff, it's like the dealer bluffing because they control so much of the game and their only real goal is to get you to play so they can rake your money (see Friday's post for more on this scam).  

     

    As you can see from our Big Chart, we have still not done any technical damage to our major indexes and that's keeping us from being gung-ho bearish at the moment.  The NYSE over 8,250 is going to be a bullish sign, as would the Russell retaking and holding 840 (but 836 is our shorting spot on /TF Futures).  The 820 line on the RUT will be our first bad break of the week as it will also be the 50 dma so that, 8,200 in the NYSE and $102.50 on oil are going to guide our technical trading for the moment.   

    The Dollar was all the way down to 78.90 again pre-market but, as we move closer to reality, it's flying back to 79.40 and that does not bode well for our open.  That suits us fine as we did follow-through with our plan on Friday and added a bunch of short positions into the closing rally because – as I said in that morning's post – we don't care IF the markets are rigged, as long as we can see HOW they are rigged and place our bets accordingly.  

    Our $25KP was down $11,807 at the time and we cashed out the AAPL Portfolio.  My comment in the Morning Alert was:

     

    SPY DAILYThis chart indicates bulls are deluding themselves, we failed the long-standing uptrend for the second time and we need a strong week to get it back and, so far, no good.  That 142 line on SPY is S&P 1,420 so anything less than that by week's end is a big bearish indicator.  RUT and NYSE are shaping up for fails at 8,200 and 820 so watch those lines but, if they can push the Dollar below 79 then a bounce in all of our indexes is not out of the question and above those levels we have to remain technically bullish.  

    VIX & VXX are not about the same at 16.25 and 16.85 so this will be interesting.  AAPL had a nice bounce this morning to $607 and, without that, where would the Nasdaq be (flat at the moment) – or the S&P (down 0.1%)?

    TLT spiked down to $111.80 and rammed back to $113 so that was exciting.  Cramer is giving me a headache with his pump job this morning – his volume increases as his credibility falls seems to be the formula…

     

    Our ISM is GOOD!  Not great but not as bad as Europe and that should be able to get us back to green this morning – now we'll see if it sticks: 

    Mar. ISM Manufacturing Index: 53.4 vs. 53.0 consensus and 52.4 prior. Prices index 61.0 vs. 61.5 prior. Employment 56.1 vs. 53.2. Inventories 50.0 vs. 49.5New orders 54.5 vs. 54.9

    So the Day went much more bullish than we thought because of the surprisingly good ISM numbers.  Are you getting a sense of deja vu yet?  Today it was 54.8 vs even lower expectations of 52.5 (and it was April today, not March).  

    exec 

     

    BTFD is a living breathing phenomenon.

     

    Resist at your own peril!!!

    Phil  

     

    Construction/JMM, Exec – Without turning that sector around, I don't see any way we have long-term economic strength.  I think a lot of people in the housing sector have been hanging on based on promises of an imminent turn-around that just keeps failing to materialize as do the banks, who are sitting on Trillions of Dollars worth of CRE and residential properties that they think will fetch more than they paid for them and help them avoid putting losses on the books.  If that dam breaks – we still have a major leg down in real estate.  The Fed knows this, that's why they keep talking about the need for a housing fix – that's one hole even the Fed won't be able to fill if it begins to harm the banks (mark to fantasy has prevented that – so far).  

    Let's add 5 PCLN July $530 puts at $5.80 in the $25KP

    Phil  

     

     

    Forgot to mention – of course oil (/CL) is still a short off the $104 line or $104.50 if we get that.  

    Gold (/YG) $1,685 is also a good shorting spot.  Keep in mind with both gold and oil, we are still waiting for the next Iran rumor.  

    jabobeast  

     

     

    FU PCLN!!!!

    Phil  

     

    Europe closing up about 1.5% so we're lagging so far.   They're up because our ISM was good – kind of silly but what can you do?  Also good news:  

    U.S. auto sales for Q1 are expected to come in at four-year highs after the U.S. economy improved and financing terms eased up a bit. A survey of analysts sees March sales of 14.75M vehicles – below February's mark of 15.1M but still 10.9% higher than sales from a year ago. Industry watchers say automakers have hit the "sweet spot" with lowered incentives and double-digit sales increases pointing to improved profits. 

      lflantheman April 2nd, 2012 at 12:09 pm

    AAPL portfolio:   I have sold 10 April 600 puts for 9.50.   This is a strong move upward. 

    Phil  

    835 on the RUT again (/TF) for you brave shorters (836 is the actual line). 

    Phil  

     

     

    1,3285 is right about the spike high on the Dow from the 16th.  S&P is over 1,420, Nas topped out at 3,135 on the 27th, NYSE needs 8,326 (from Monday, the 19th) and it was 848 on the RTUT on the 27th (Tuesday).  

    Volume at 12:45 is 45M on the Dow, not very impressive so far.  

    Dollar 78.98, still very weak.  

    USO/Yshen – 3 weeks is plenty of time.  Iran peace talks the week before expiration so I still like the April $40 puts, now $1, but still not cheap enough for a DD. 

    Cleveland Fed President (and FOMC voter) Sandra Pianalto is seeing more evidence the economy is in a self-sustaining recovery, but she is not at the point of even thinking about withdrawing extraordinary monetary stimulus as it could be another 4 or 5 years before employment reaches what she considers to be the "maximum" level. 

    Pharmboy 

    SQQQ – someone just loaded up on the Jun 10/9 BPS.  38c.

    Pharmboy 

    Someone just hit SELL in SLV.

    Phil  

    DIA/Jerconn – I'd go for the $132 puts at this point but, if we pop these levels tomorrow – we could go pretty far up from here so be careful.  

    Interesting that FXI has barely budged with all this excitement over China.

    A useful chart shows the policy doves overwhelmingly in control of the votes on the FOMC. The hawkish crew – Fisher, Plosser, Kocherlakota – is sitting out the votes in 2012. 

     Phil April 2nd, 2012 at 2:10 pm

    USO April $40 puts now .86 so that's a DD in the $25KP and let's get 5 for the $5KP.  

    Phil  

    DIA April $131 puts now .87 and we can roll them up for .33 to the $131 puts ($1.20) so let's do that in the $25KP.  In the $5KP, we have 3 $131 puts to roll up for .32 and $130 puts (.65) that will cost .55 to roll up so let's do that and add 2 more at $1.20 for 10 April $132 puts in the $5KP.

    shadowfax 

    Buy BOTS slowing!

    Phil 

    Blow off top or on to new highs?  

    If we do head down from here, it's an ugly double top but, if we break up from here – it's a nice breakout after two months of consolidation!

    Autos/Shadow – I don't know.  This time, the auto companies are offering financing to anyone with a pulse and many families have been sitting on cars since 2008 that they would have normally turned in so it's very possible that high gas prices are pushing people to trade in a gas guzzler for an economy car this time around.

     

    78.965 on the Dollar.  We have Fed minutes tomorrow and no QE there as well as Motor Vehicle Sales, which should be strong and Factory Orders, which is the most likely miss.  What I think is more likely, is disappointing data from Europe (not that it matters).

    Volume is a total joke at 64M at 3:30.  Possibly we'll sell off now into the close as this joke of a pump-job is erased.  

    Phil 

     

    Seller/Shadow – It's not one guy, most likely but a different fund each day that picks an opportune moment to sell.  As I said above, I'm voting for a sell-off into the close based on the overall clues (low volume, weak dollar, double top, lack of any actual reason to go up) so we'll see.  Actually it looks like it started already but you never know until they ring that bell. 

    Pharmboy 

    Ring that bell….that is when volume actually picks up, b'c suckers cant sell their option positions except some indexes.  

    Phil 

    Same programs/Shadow – That's what the 5% Rule is all about.  They all TRY to write unique software but the reality is there are basic market forces at work that tend to shape them (there are only so many ways to dam a river) at a basic level and then the "flourishes" that are applied are usually done by committee and between the tendency of people to focus on round numbers and the many, many roundings that go in inside the program – they all tend to converge at certain key points.  All we have to do is identify those convergence points and it's pretty easy to map out the rest. 

    Well, pretty lame gains compared to Europe – we'll see how Asia reacts this evening. 

    Phil 

    106M so 40% of the day's volume in last 30 mins (and mostly in the last 5) and it was all down.  Since the morning was down on heavy volume, on the

  183. Phil


    Phil
     

    106M so 40% of the day's volume in last 30 mins (and mostly in the last 5) and it was all down.  Since the morning was down on heavy volume, on the whole, I'd say today we had more down volume than up but all that matters is the print, right? 

    shadowfax 

    AAPL close is out of sinc blowing over bollinger upper band! Are the fools going to AAPL as a safe place?

    Pharmboy 

    shadow….aim, fire

    Phil A

    Dollar 78.84 now (9:15) – goosing the Futures back to green.

    Big Chart – Technically bullish.  If the RUT is over the line (840) it's time to BUYBUYBUY until we fail again.  Dow is still the laggard.  

    Phil 

    Good morning! 

    Dollar holding the line at 78.85 so far and our futures are flat after Hong Kong up 0.8%, Shanghai up 0.47%, India up 0.82% but Nikkei down 0.6% in Asia and Europe dead flat at the moment.  

    Euro $1.333, Pound $1.602, 82 Yen to the Dollar.  Oil $104.70 (rejected at $105 all night), gold $1,679 (rejected at $1,685), silver $33.02 (holding that line), copper $3.943 (finally rejected at $3.95), nat gas 2.13 (still awful) and gasoline $3.375 (awful in another direction).  

    Almost no news at all – just waiting on data (and the Fed):

     

     

     

     

     

     

    Wow, had I known, I could have just cut and pasted this all in the morning and gone to Vegas a day early.  Maybe tomorrow I'll just repost all my comments from the 3rd…

  184. japarikh

    Phil,
      Do you think this is a double top on the DOW?

  185. Pharmboy

    PLX….wow, is someone afraid.  Those poor soles that bought yesterday are now 15% under…..

  186. Phil

    VECO/Yodi – The real secret is set up a trades so you don't have to care!  

    Chocolate covered pretzels/StJ – I love those!  

    SCO/Burr – I'm sure it's not personal.  It's the same thing if you go in the money.  If you hot dog it and try to pay premium on an ultra, you will be burned 9 out of 10 times.  You can do the USO bear but, as I pointed out above, those May $40 puts on USO were .62 and already up 10% at .68 – not bad for 90 minutes work.  A bear put variation would be the $41/40 bear put spread at .58 but you're spending the same money, limiting your upside and it's difficult to get out of when you make a quick 10% – that's why I liked the puts better.  

    Did they cancel the Occupy Protests or is it just because I'm watching CNBC that it seems like they never happened?  

    INTC/Jerconn – Very nice!   I'd sure take the money at $30 so now $29, why not.   When in doubt, sell half and all that…  If you don't want to sell them, then you can sell the Jan $25s for $4.50, which is effectively selling them for $29.50 but you not only get $4.50 now and reduce the long gain to capital gains but you also get to take the loss on whatever over $29.50 INTC ends up at.  This trade works best if you stop out your stock at $27.50 and then don't need to re-enter unless it crossed back over.  

    List Alik – Happy to look this evening if you remind me.  I intend to have a long list ready in case this rally continues.  

    CHK/Dpast – Depends what position but the one in the $25KP is fine, I think.  they were down on nonsense, not on expectations they would miss.

    Double Top/Japar – Per the above recap of the 2nd – it's a Triple Top!  

  187. angelcur

     remember adp in morning early…i think 170k expected…miss risk is fairly high
    hedgies would probably prefer a miss to get euro surge and more qe talk though..ha!

  188. shadowfax

    japarikh
    Ther are doubl tops upon double top. While Phil was digging this up I went progressively back to 3 years and this even resembles 2008. I have trend lines from everywhere that all end about here and we ignore those countries that are in recession, they don't matter, this time is different.

  189. lolobear

    Look at the stock price movement of DECK and OPEN the last 3 months.  DECK just fell off a cliff… i'm thinking OPEN does the same. 

  190. Dennis

    Great perspective from that recap, Phil.   The commentary by you and Pharmboy and Shadowfax and Iflantheman is amazing.  

  191. rainman

    Phil / chocolate — That's not a pretzel.

  192. BertII

    Rut doing a serious reversal  almost back to even

  193. dpastramas

    PLX / Pharm – Are there news out yet? The decline is accelerating..

  194. scottmi

    Time machine – so if we go back to beginning of April, we see oil spikes down nicely for two days, the Dow ran down for a week, and the dollar, well the dollar got mojo!

  195. scottmi

    Pretzel – it's a greek gyro (pronounced 'Euro")!

  196. jabobeast

    Wow--April 2nd…amazing

  197. Pharmboy

    dpast – bear raid….hold steady.

  198. BertII

    Pharm/ PLX some one is afraid or some one knows and we are screwed

  199. Pharmboy

    look a those mofo's……go go go

  200. rainman

    pretzel — Should have shaped it like the euro symbol.

  201. japarikh

    Pharm,
      What do you think PLX will go to if it gets FDA approval? $12?

  202. morxlntway

    where will PLX go if it doesn't?

  203. Phil

    Oh nooooooooooo – RUT failing to hold 820!  

    "Here comes Mr Market – he's going to be mean to me….."

    ADP/Angel – That's a tough one to call, they were miles over NFP lately, mostly because private sector hiring lots of hamburger flippers while Government lays off people with real jobs.  

    Soar and ignore/Shadow – Hey, it worked out so well the first time.  

    OPEN/Lolo – Other than both being "Momos" what possible connection is there between DECK and OPEN?  

    Thanks Dennis and thanks to all – it does take a village full of idiots, you know…

    No pretzel/Rain – 8(   

    April 2's Dow high was higher (13,316) than today – what the Hell are the CNBC people smoking?   Isn't it amazing how they just ignore the facts and start screaming "New Highs – BREAKOUT" when it's not even true?  It didn't even occur to me to check because who would lie about such a thing but I was just looking at the chart to see how far we fell (12,700 on the 10th) and it turns out that it was from a higher high.  

    And how many guests did they have lined up telling the sheeple not to sell in May?   "It's better to stay in the market, the trend is our friend, let's stay in this market" says the guy on right now.  He actually said those consecutively…

  204. Pharmboy

    bert – screwed….I am already there……

  205. scottmi

    Tsunami – harley from japan found on canada beach

  206. Pharmboy

    PLX – If approved $8-10 – and sell into the excitement tomorrow.  GET OUT IF YOU ARE UP and dont want to risk it…..or 1/2 cover if playing.  If not approved.  $4. 

  207. BertII

    Pharm my cost basis is 6.00 should have doubled down at 5.80 and sold half at 6.15

  208. Pharmboy

    I am now 1/2 covered at $10.  Sold puts at May $5s and have the bull call spreads……

  209. BertII

    Rut down for the day

  210. shadowfax

    Lipstick on a pig, seconds after the close nothing but red.

  211. Phil

    Wheee, what a ride!  

    S&P held up at 1,405 and Dow held up at 13,280 but Nas and RUT could have taken the day off in the end.  

    AAPL now red at $581.  

    Dow volume finished at 121M so same old con with all the buys being sold at the close – it's BRILLIANT!  

  212. BertII

    Aapl back at 582 down for the day

  213. samz3700

    That looks like a horrible day for the RUT was up 1.8% tagged 83 and then preceded to give it all up and then some after hours.
    I am no TA guy but that really blows (technically speaking).

  214. dpastramas

    FACEBOOK TO GO ON IPO NEXT MONDAY $FB
     
    Prepare your puts guys..

  215. stardawg

    hi all
     
    where do you see us at the open tomorrow?  any guesses?

  216. angelcur

    Pool reporter Josh Gerstein of Politico writes that Obama is at the presidential palace, where he is expected to sign a 10-page strategic partnership with Afghan President Hamid Karzai, pledging U.S. support for Afghanistan for 10 years after NATO combat troops withdraw in 2014. 
    Reuters reports that the President will designate Afghanistan a non-NATO ally, the first such designation of his presidency.

  217. Pharmboy

    GO PLX>>>>>>>>>

  218. scottmi

    PLX!!

  219. dpastramas

    PLX :-) … Pharm thanks!!

  220. morxlntway

    guess its approved. thank you pharm

  221. sparky123

    PLX Thanks again Pharm!!!!!!

  222. jromeha

    HA! Withdraw, that is funny. Maybe military will withdraw. Youll still have 60-100K civilians and contractors making ridiculous wages over here for MANY years.

  223. jerconn

    Pharm, pull out the champaign!

  224. jromeha

    Nice pick (as usual) Pharm! Do you expect a bigger jump tomorrow? If it remains in the 7.5 range tomorrow are you selling or holding out for 10$?

  225. terrapin22

    Pharm / PLX – thanks!  same question as jromeha – sell tmrow or wait for 10?

  226. jabobeast

    is there a reason PCLN is moving up after hours?

  227. rustle123

    StJean/Stephen King
     
    Great great letter.  Thank you for posting.  Phil, you should team up with the horror master on some political points for the stie.

  228. jabobeast

    TRIP up 18% AH-- don't tell me this is going to pop PCLN like EXPE did???

  229. lolobear

    OPEN – down 16% – Phew, almost didn't buy.  Bought the puts at 3.50 and we'll wait and see tomorrow. 

  230. lolobear

    ** i meant to say 3.50 pm… bought the May $40 puts… yay

  231. threeputt

    OPEN
    Open Table (NASDAQ: OPEN) reports first-quarter EPS of $0.4 versus the estimated $0.34 per share, beating by +17.6%. Revenues came in at $39.4M versus the estimated $39.56M, missing by -0.4%.
    Trading 36.00 (-7.68) after hours.

  232. stjeanluc

  233. Pharmboy

    PLX – as is wrote above, cover into the excitment tomorrow. Either the May or June $7.50 calls.  I will cash out the Bull calls spread at 2.30 or better (Good to call order), and … holy crap..who recommended OPEN Oct 35/30 bull put spread…????  Thx for that one!

     

    OK, back to reality….After a 1/2 or 3/4 cover with the calls, I would sell as many $5 May puts as possible.  I do not think they fall that far, but it could pull back some.  Then, start a small accumulation of stock again.  I see $10 by EOY.

  234. lflantheman

    Phil….Thanks for your and Greg's assistance today.   Problems solved. 
    AAPL portfolio……remains in cash.   Noise out there today re smartphones.  Mostly that,.  Be patient.  You will be able to repurchase AAPL at a lower price than today's close. 

  235. Pharmboy

    IBIO….he he he…. up AH on the PLX approval…..

  236. palotay

    • 4:36 PM OpenTable (OPEN): Q1 EPS of $0.40 beats by $0.06. Revenue of $39.4M (+17% Y/Y) misses by $0.2M. Expects Q2 revenue of $38.5M-$39.8M and EPS of $0.36-$0.39 vs. consensus of $41.3M and $0.37. Expects 2012 revenue of $158M-$164M and EPS of $1.49-$1.64 vs. consensus of $168.2M and $1.53. Shares -9.6%AH. (PR
      Comment!
      [TechEarningsOn the Move]

    4:51 PM More on OpenTable's Q1: International revenue, while up 14% Y/Y, was flat Q/Q at $5.6M (14% of total), which will add to existing fears about the segment. North American revenue +7% Q/Q and +17% Y/Y. North American seated diners +13% Q/Q and +33% Y/Y, international +5% Q/Q and +45% Y/Y. Installed restaurant base and subscription revenue rose only slightly Q/Q – is a restaurantbacklash brewing? OPEN -19.6% AH. (PR
    Comment!
    [TechEarningsOn the Move]

  237. palotay

    My OPEN 35/30 Put spread is looking real good!
     
    Thanks for PLX Pharm! Congrats.

  238. jabobeast

    Phil--do you think TRIP beating earnings (and EXPE) means anything for PCLN??? I don't get it?  AAPL, EXPE, TRIP, AMZN, etc.. why do their earnings beats impact PCLN so much? I try to ignore these AH moves but EXPE last Friday caused an almost 30 point jump in PCLN.. When do these guys lock in profits before risking a May 9th disappointment?
     
    FU TRIP!!! 

  239. txchili

    Phil – INTC tax treatment – If you buy back a sold LEAP option before expiration you have held over 12 months, the potential LTCG treatment is changed to STCG. We may want to buy back the option for other reasons and taxes should not be the main issue, but it is good to know if your LTCG options are near expiration. 
    IRS Pub. 550 pg. 57
    However, if you are the writer of a put or call option (you sold the option) and you buy it back before it expires, your gain or loss is reported is considered short-term no matter how long you held the option

  240. Canuck

    Juvenile Diabetes/Lfaln, Phil, Sage, Rain,
    Thanks for the kind words of support, advice, …  it's getting easier day by day and thankfully we have the excellent BC Children's Hospital within a few minutes of home. 
    Just found out from a Neurologist friend of mine that they have successfully transplanted Islet cells into older teenagers and gotten them off of insulin.  There is hope!!

  241. jabobeast

    buying pcln on the Trip news is stupid

    when you have a chance take a look at what trip said then go and see how many competitors you have. Priceline is only one of 6. PCLN will be down by the close tomorrow. Trip is a display advertiser you can not determine how well pcln willl with the trip's clicks.. no correlation.. also business can go to other competitors. PCLN will not blow out earnings.. I would be selling pcln on any rally tom.. or going short until the gap is filled

    Expedia was a much better gauge.

  242. jabobeast

    above copied from YHOO board

  243. newt

    StJ/ Oil- you mentioned earlier that there are several indicators one should track prior to farting around with oil futures.  Can you tell me which ones?
    Thanks.

  244. sagemm1

    Canuck yes they are doing islets transplants but that would also put your child on anti rejection drugs for life, in fact they are seeing some failure of those transplants…the move is in the right direction but not there yet.

  245. stjeanluc

    Indicators / Newt – I use proprietary indicators in my charting systems, but some of the good oldies like RSI, MACD and Stoch can give you a good picture. Once again, look at various time frames. For example, if you want to use RSI and you trade on a 5 minute chart, look at a one hour chart and look at what it tells you. If the one hour chart is bullish, enter only long positions in the 5 minute chart and opposite! But you need to experiment a lot until you find what works for you.

    Check on Stockcharts.com, they have some nice explanations on indicators and which ones to combine to avoid multicollinearity  which is using 2 or 3 indicators of the same category – for example momentum like RSI, CCI or others. And many other tips…

  246. newt

    StJ- Thank you.

  247. jbaker2447

    Pharm — thanks for the PLX guidance and all your valuable contributions!

  248. Phil

    TA/Samz – I does look damning but this market is not about TA – it's about whoever gets the last word in to stampede the crowd in or out of various assets for the day.  

    Facebook/Dpast – I think it's just a road show, not the actual IPO.  

    Tomorrow/Star – I don't think today's little show fooled anyone.  NKD futures were 9,550 on Friday and 9,305 this morning, now 9,365 despite Yen back over 80.  BRICs come back from a day off and see what?  Our ISM didn't suck as much as theirs?  Why should that make them happy?  Especially with oil at $106 again.  

    PLX – Fantastic Pharm!  

    OPEN/Lolo – Very nice!  

    Big Chart – Tested and rejected 2.5% lines on Nas, RUT and NYSE.  S&P held their 2.5% line and Dow bounced right off -2.5% line, which it should as it's an overall lagger.  The critical losses remain those 50 dmas (RUT already blew it) or the Dow blowing 13,200 or the S&P failing 1,400.  

    OPEN/Palotay – I never liked their model.  We were gung-ho short last year at $100 – just sad at $40, like GRPN and NLFX and FSLR and DECK – a lot of those stocks that made our lists at some point.  Please God PCLN and CMG join them!  

    TRIP/Jabob – I believe, to some extent, that the better everyone else is doing the more difficult it is for PCLN to profit from unsold rooms and plane seats.  On the other hand, busy is busy but TRIP had a PE of 27 before earnings, EXPE is still at 13 AFTER their great earnings run, AMZN is not the same but PCLN is starting at 36 and now the expectations are set that they'd better have spectacular earnings or people will begin to wonder why they have $760 tied up in this stock.  

    Taxes/Txchili – Maybe I have this wrong but the question was what to do to not take the short-term gain on the stock he already had so the play was to sell the good protection of the $25 call (about 15%) so he could wait the year on the stock without too much money.   At the end of the year, he'll take the capital gains on the stock (15%) and, if the stock is over $29.50 then he can sell the stock at, for example $32 and pay the gains on that but then buy back the short put for $7 and take a $2.50 short-term loss on the short call.  Make sense?   Don't forget, this is as opposed to just selling INTC now and paying a short-term gain on the move from around $22 to $29 (+$7).  

    Transplants/Canuck – If not urgent, I think it's best to be very patient about choosing that kind of "cure".  These things tend to move forward by leaps and bounds a few years after the first ideas hit (partly due to the patent cycle).  It's such a major focus of study right now (#1 health problem in America) that in about 10 years, whatever they are doing now will seem like using leeches by comparison.  

  249. Phil

    Wow, do you think the WSJ is reaching just a bit with this headline vs. the actual fact in the lead paragraph?  

     

    • Asian Shares Rise on U.S. Data

      Most Asian stock markets were modestly higher Wednesday, and the U.S. dollar remained well-supported after a surprisingly strong U.S. manufacturing report. Australia's ASX was up 0.1%

  250. lolobear

    GMCR – check this out  http://twitter.com/#!/61point8/status/197468897618837504/photo/1

  251. scottmi

    Phones - old cellphone (no smartphone yet) user lookign for first smartphone.  i see the love for the samsung note at $299. i can get it but ATT service not so good where i live. The Verizon alternative suggested is the Droid 3 at a ratehr attractive $49.  Anyone have/know this phone? Just as good as any other or..?  any feedback appreciated.

  252. lionel

    Pharm/ A big thanks to you on PLX.
    Great pick and follow on trade management advice.
    Phil/ WSJ is a great source of information. It is the official news vector of the rigged US capitalist system – we shall rename it "PRAVDA USA"

  253. newbie

    Canuck
    I assume we're talking Type 1, not Type 2, correct?

  254. newbie

    RUT / TZA
     
    I've been watching the chart of TZA for almost two and a half years, on almost a daily basis and I have NEVER seen a chart as bizarre as today's. I hate to use the word "parabola" in it's original dictionary meaning, but that's what it look's like. Like a string held up on each end, and allowed to form it's own natural path.
     
    I'm not saying it means anything, I'm just saying I don't remember ever seeing it before.
     
    Also, as Phil and others mention here occasionally, that when the machines are "programmed" to do certain things there is usually a "timing" factor involved. Notice todays reversal of TZA and RUT starts at about 2 minutes before Noon, nearly to the second?   What, do all the big boy trading desks holler out "OK, Noon, time to  flip the switch the other way"?
     
    Almost enough for me to start believing in the whole "bot" and "manipulation" thing………….:)
     
    The other thing is, I turned the radio on this afternoon and heard the Dow was up 65 points, so I figured, "Great, another day of taking it in the backside on my TZA"  Then I look at the TZA chart and it is like "through the looking glass".  Flat for the day, but with a range of almost a half percent.
     
    And yes, I do know about Phil's "3 out of 5" type rule(s), and I do know about "mixed market" days, but this is more divergence between indexes (today) than I remember seeing on most days over the past month or two.  And THAT divergence, the last month or two, has been way more than I remember over say the last year or so.
     
    I don't know much about TA or market analysis, but even somebody  like me has to ask if the divergence of  various branches of the equities market are forecasting a downward cycle. I suppose that the amount of divergence vs correlation we see over the next couple of weeks or so should probably tell us a lot?
     
    Or am I all wet and too ignorant to know better?

  255. newbie

    lionel / WSJ
    WHAT??
     
    Do you mean to tell me that the Murdoch paper is not the purest form of objective financial journalism the world has ever seen?
     
    Shocked, I say, shocked!

  256. newbie

    44 years ago a Baskin  Robbins ice cream cone cost 12 cents, and when I got really really lucky, I could get one.
     
    44 years later I just stare though the window  (and most of them in my state have closed anyway).
     
    BUT, the best ice cream ever made, 'far as I'm concerned.  Put's Haagen Daaz and the other snob ice creams to shame. Anybody remember "Dacquiri Ice"?

  257. newbie

    Phil
     A week ago you asked the board to "find some good news"  to talk about.  I ain't seen any yet!   jrohma's fellow fighter dies, shadowfax's neighbor dies  (one of the saddest stories I've heard in a while).
     
    Every day seems to get harder to keep going, and the end of a shotgun looks better and better……………
     
    "Dear Mr. Fantasy, Play us a tune, something to make us all  happy,,,,,,,Do anything, take us out of this gloom, Sing a song, play guitar, make it snappy…………… "
     
    -Steve Winwood and Traffic, 1967

  258. lionel

    Newbie/
    Look at Europe opening higher.
    WSJ was right!
    The problem is that they are ALWAYS right…until we crash/ we have volume.
    Let s enjoy the ride up and offload our longs.

  259. samz3700

    Euro is dropping like a stone – Euro PMI 45.9 for April – down from 47.7 in March - 
    European shares had been up on US data according to WSJ – that's if you ignore IBEX down 1.35%
    US futures reverse to and go negative

  260. samz3700

    Euro looks like it might test 131.50 –  support seems a long way down at 130.60 – looking at the trading range over the last six months.

  261. samz3700

    Euro just failed 50 and 100 ema.

  262. samz3700

    Make that 131.50 as well – key support looked like 131.58

  263. samz3700

    Euro is off close to a full cents in under two hours. 

  264. flipspiceland

    ",,,,please God PCLN and CMG join them…"
     
    Please leave CMG out of that prayer.  CMG 250, 300, 350  short puts have been berry berry good to me.  Berry Good.  If you want your fee next year, pray for CMG 300s to remain the quarterly cash cow they have been for the Flipster for over a year. On the other hand I have decided to take a contrarian view as of March of 2011 to your continual prayer for a more realistic price for CMG and have thrown caution to the wind.  That seemingly insane P/E is not part of the equation in gambling with a Mo-Mo, it has instead been the adoption of the mentality of a Big Game Hunter as regards that partickler security that has provided a more than nice offset to my untimely foray into AAPL .

  265. Phil

    Good morning! 

    Dollar 79.205, Euro $1.316 (full point down from Monday), Pound $1.6215, 80.26 Yen to the Dollar (rejected at 80.50) and EUR/CHF at 1.2015 – still.  

    Oil (/CL) doesn't seem to care at $105.82 as they are expecting a big net draw this week, maybe down 5Mb but a sharp move down at 10:30 if the Dollar is still up and inventories disappoint.  I still like the short off the $106 line anyway, as long as the Dollar stays over 79.20 but I am worried this is where we top out for the moment.   

    Gold is $1,655, silver $30.79, copper $3.82, nat gas is rockin' at $2.36, gasoline (/RB) back to our $3.10 line again, where we like it long and I'd call that the play to make with the Dollar UNDER 79.20 if it falls back.  

    As noted by Samz – Europe indexes gapped up at the open and then were smacked down by reality (so far – it tends to be a temporary condition) this morning as PMI dropped another 4% for the month.  Spain back at Friday's lows. about another 1% to go and they retest the April 23rd bottom.  

    Eurozone final manufacturing PMI comes in at 45.9 vs. 46.0 expected and down from 47.7 in March. It's a 34-month low. (PR)

    German PMI manufacturing (final) comes in at 46.2 in April vs. 46.3 expected and 48.4 previous. It's a 33-month low. (PR

    Eurozone unemployment in March comes in at 10.9%, in-line with expectations and up slightly from 10.8% previously. It's a euro era high. Spain (24.1%) and Greece (21.7%) had the highest rates. Austria (4.0%) and the Netherlands (5.0%) had the lowest. (PR)

    German unemployment rises by 19K vs. an expected 10K fall. Unemployment inches up to 6.8% from 6.7%.

    Wednesday's economic calendar:

    7:00 MBA Mortgage Applications

    7:30 Challenger Job-Cut Report

    8:00 Daniel Tarullo Speaks

    8:15 ADP Jobs Report

    9:00 Treasury Refunding Quarterly Announcement

    10:00 Factory Orders

    10:30 EIA Petroleum Inventories

    12:30 PM Fed's Lacker: Economic Outlook

    3:24 AM Asian stocks post gains on the back of improved manufacturing data from the U.S. and China. Japan +0.3% to 9380. Hong Kong +1.3% to 21374. China +1.8% to 2438. India +0.4% to 17383. 

    The Chicago Fed's Charles Evans continues to carve out a spot on the FOMC as maybe its most dovish member, essentially advocating a nominal GDP-targeting strategy. Evans says "strong accommodation" shouldn't go away until the economy sustains 4% growth for awhile. Of 2% inflation, he says it's "not a ceiling." Evans is not a voter this year

    "This is not a place we want to find ourselves," says Philadelphia Fed chief Plosser, describing the U.K., which is now going on 3 years of inflation "temporarily" above target even as the economy stagnates (otherwise known as stagflation). Sticking to script, he expects higher rates will be necessary well before late 2014.

    Central bank policies may spark growth in developed countries this year, but have created an "ocean" of credit that will inevitably lead to inflationary risks down the road, says Bill Gross in his monthly letter to investors. Central bankers had no clue how much debt was really out there in 2008, and still don't know now, Gross says. Now they've drained all the wine from the wine cellar, and are looking for to others to restock it.

    "The worst mistake Pres. Obama made" was not getting out front to embrace the 2010 Simpson-Bowles deficit reduction proposal, Alan Greenspan says. Mark Gongloff reacts: "Remind me again why Alan Greenspan is still giving speeches to anybody other than pigeons in the park?" (video)

    The April Rasmussen Employment index slips 3 points to 80.7, above the best levels of 2011, but down a 2nd consecutive month from February's 87.7.

    China's factory activity cooled for the sixth consecutive month in April, but at a slower pace, suggesting conditions are stabilizing. HSBC's PMI rose to 49.3, up slightly from the 49.1 flash reading and above March's 48.3. (previously)

    Japan could face "the day of reckoning" sooner than expected if the government fails to raise its sales tax and investors demand higher returns on government bonds, Moody's warns. The tax hike would leave Japan facing weaker economic growth, but the country needs to "bite the bullet" and start fixing public finances.

    After years of luring workers with the promise of lucrative pensions, state governments are now scrambling to revamp public pension policies in the face of massive budget crunches. Since 2009, 43 states have increased contribution requirements or changed the age when a retiree can get benefits, and the moves are now triggering a spate a legal and political battles over whether states are reneging on their promises to millions of public-sector workers.

    In what could be a precedent-setting case, a public pension fund – the Northern Mariana Islands Retirement Fund – has filed for Chapter 11 bankruptcy protection. The fund is just 38.8% funded due to benefits that kept going up while funding and returns didn't. A dismissal motion has been filed by lawyers representing beneficiaries. 

    Home foreclosures and delinquencies were lower in March and in Q1, CoreLogic reports, whittled down by increased usage of loan modifications, short sales and aid supplied through the national mortgage servicing settlement. But the national foreclosure inventory remains nearly unchanged at 1.4M, or 3.4% of all homes with a mortgage.

    After adjusting for inflation, home prices are not just back to 1998 levels, they're back to 1895, writes Jack Hough, who says the real rate of appreciation for homes is 0. This doesn't mean they can't be a good investment, he says, noting rental yields over 10% in much of the country. Even after expenses, it's a decent deal when financing can be had at 4% or less.

    UBS (UBS): Q1 profit -54% to 827M Swiss francs ($910M), after an accounting charge of 1.16B francs related to the bank's own debt. Including the charge, its I-bank posted a pretax loss of 373M francs; ex-charge, a 730M francs pretax profit. Wealth management profit +24% to 803M francs. (PR

    A significant number of investors plan to vote tomorrow against UBS' (UBS) 2011 compensation plans. Advisory groups and institutional investors are upset by the lack of disclosure over how pay is calculated and the high proportion of variable pay. (earlier: UBS profit falls

    Overall U.S. auto sales rose 2.3% in April, held down by a quirk in the calendar – last month had three fewer selling days than April 2011. Toyota (TM) and Chrysler (FIATY.PK) enjoyed strong showings, while GM was hurt by a big drop in sales to fleet operators. Annualized sales came in at a 14.4M pace, remaining on track to rise by 10% or more this year vs. 2011.

    transcript of David Einhorn's questions and management answers on the Herbalife (HLF -26%) conference call shows Einhorn trying to home in on how many retail buyers of the product there are out there vs. distributors who are buying. It's the age-old question for multilevel marketing companies, several others of which are also tumbling: AVP -7.9%NUS -13.3%USNA -5.6%. (earlier)

    And what this guy said!  Following Herbalife's (HLF) 20% plunge, D.A. Davidson's Tim Rainey agrees with the company that the selloff creates a buying opportunitydismissing David Einhorn's probing: "If anyone else had asked the question, we would have wondered why time was being devoted to such basic inquiries… This was an excellent quarter from an excellent company with high ethics and strong accounting."

    The pride of the S&P 500 is Sears Holding (SHLD) as it rips a 17.1% gain on heavy volume off of its Q1 outlook that points to improving performance. Though 6 out of 7 analysts covering Sears rate it a Sell, the 96.4% YTD run of the short-busting stock has the divided attention of analysts. The question of the day on SHLD: How far does the dismemberment go?

  266. Phil


    From last year's buy list:  
    True Religion Apparel (TRLG): Q1 EPS of $0.40 beats by $0.04. Revenue of $106.8M (+13.9% Y/Y) beats by $4M. Shares+9.4% AH. (PR)

    Caesars Entertainment (CZR): Q1 EPS of -$2.24 misses by $1.44. Revenue of $2.27B (+4.3% Y/Y). (PR- I will have to go and personally check on this immediately!  

    Good one to add to our long list:  Genworth Financial (GNW): Q1 EPS of $0.09 misses by $0.02. Revenue of $2.43B (-5.5% Y/Y) misses by $0.14B. Shares+5.7% AH after the company changes CEOs. (PR)

    Chesapeake Energy (CHK): Q1 EPS of $0.18 misses by $0.10Revenue of $2.42B (+50.1% Y/Y) misses by $290M. Revises its capex budget for drilling and completion costs to $7.5B-$8B from $7B-$7.5B in 2012 and $6.5B-$7B from $7.5B-$8.5B in 2013. Shares -1.8% AH. (PR- It's very hard to beat when you are expected to grow at 55% while the stuff you sell hits an all-time low! 

    Expedia (EXPE -1.4%) gives back a bit of Friday's huge post-earnings gains after Barclays' Anthony DiClemente downgrades shares to Underweight. DiClemente arguesExpedia's strong hotel bookings growth is "being driven by deep discounting" that's hurting its margins, and thinks it's limited cash balance will limit future stock buybacks. He's also not crazy about Expedia's valuation.

    A German court rules Microsoft (MSFT) infringed Motorola Mobility's (MMIGOOG) patents in making its Xbox gaming consoles, and orders Microsoft to remove Xbox and its Windows 7 operating system software from the German market.

    As PayPal (EBAY), Google (GOOG), and others bet big on a mobile payments market many expect to take off, consumer security and privacy fears could limit near-term growth. A survey asking U.S. consumers about the technology found large majorities opposed to sharing tracking and contact info with stores they visit. Perhaps most worryingly, 74% said they're unlikely to adopt mobile payments. (previous)

    On expiration day?  This is gonna be wild!  Facebook's (FB) IPO is set for Friday, May 18, the WSJreports. CNBC earlier claimed Facebook could begin trading on May 16 or 17. 

    As Facebook (FBgets ready to go public, the USPTO hasgranted it a patent for the concept of a personalized news feed, now used by legions of web sites (including most social networking peers). The patent could prove useful in litigation with Yahoo or any other Web player of importance. Also of note: recently-acquired Instagram has surpassed 50M users less than 3 weeks after crossing 40M.

    Analyst reactions to Research In Motion's (RIMM -5.7%)BlackBerry Wold conference aren't enthusiastic. RBC (previous) likes some of the BlackBerry 10 features and apps that were demoed, but expects the huge edge held by iOS and Android in available apps to remain a problem. JMP is disappointed by the absence of new commercial hardware. Pac Crest thinks RIM is further behind the competition than Palm was when it released webOS in '09 (and that didn't end well).

    Barclays' Ben Reitzes issues another bullish note (previous) on Apple (AAPL +0.5%), predicting strong June quarter Mac and iPad sales will offset a Q/Q iPhone decline. He sees Apple's June Worldwide Developer Conference as a possible catalyst, given it could feature the introduction of new MacBooks (presumably Ivy Bridge models), iOS 6, and new features for Mac OS X. (also

  267. Phil

    Euro/Samz – Wow, in the time it took me to write that post we had quite a dip.  Dollar punching 79.30, oil $105.77, gold still $1,655.  

  268. flipspiceland

    @Felipe
    I'm guessing your answer but I have just about broken even, up a penny, on my June $5 short puts on TASR.
    On expiration or before, would you advise cutting my position (150 short puts) to avoid having the stock put to me?
    Would I be right in saying that you would—rather than tie up $75,000 in the stock and selling, say, March 2013, $5.00 calls when they open up—--that a Bull Call spread is a much better move? 

  269. lionel

    I love this market
    Euro bank stocks opened 2% green and in less than 3 hours are 3% in the red.
    That is intraday volatility.
    Wash, rinse and repeat.

  270. Phil

    TASR/Flips – My worry on TASR is that they get bought by a gun company at some point.  Their entire market cap is $258M so, as soon as they become a real threat to SWHC ($550M) or RGR ($1Bn), they become a target.  So a spread is not likely to pay well in a buy-out but the stock has been a frustrating hold (unless you take non-greedy exits at $6.50 and wait for the pullbacks to $4).  Of course I like selling the Dec $5 puts for .90 for a net $4.10 entry (stock now $4.64) but 150 puts is quite a lot!   TOS does tell me, however, that the net margin on that sale ($13,500) is just $13,920 so, as long as you REALLY want to own 15,000 shares of TASR at net $4.10 ($61,500) then $13,500 is a nice 22% 7-month return even on the full allocation.  If the stock is put to you, the Dec $5 calls can be sold at .60 – even though they are .36 out of the money and that too is a very nice return on the cash you tie up in the stock – especially if it's 50% margin ($30,750) to sell 150 $5 calls for $9,000 with a call-away at $5, up another $5,400 from here.  See why I love this stock?  

     

    TASER reported an electrifying first quarter 2012, with net sales of $25.6 million, beating estimates by $3 million and $0.07 earnings per share, beating by $0.06.

    Sales increased 10.9% over first quarter 2011 sales, mainly because of continued adoption of the new Taser X2, and a big order to the US Army for the Taser X26. Many new orders of the X2 came from law enforcement agencies around the United States.

    From the first quarter, 2012 conference call, CEO Rick Smith expects strong sales to continue over the year. Over the last couple years, because of the recession and budgetary reasons, law enforcement agencies haven't replaced their capital equipment. Now they are starting to replace their equipment, and that's good for TASER. The company is also seeing traction in its video segment. The company has many pre-orders for its AXON Flex product for May, and expects many bookings for the back half of the year.

    TASER has historically focused on selling its products to the army and law enforcement agencies rather than to civilians. That's because government purchases have legitimized the products and is a testament that they are effective and practical. This will increase civilian use. People defending their home and neighborhood watch people might purchase a TASER instead of a gun since they know it's effective enough for law enforcement use.

    Sales to the US military, which is the most modern military in the world, will also encourage sales to other countries. From the quarter 1, 2012 conference call, the company is focusing on key international sales. Australia, France, and Brazil are new markets that sales teams are working on. There's a large distributor in the UK that's doing well. The company is expecting many more X2 orders to develop internationally, and its confident that sales will continue to reach record levels.

    Still my stock of the Decade!  

  271. flipspiceland

    @Felipe
    See why I never take your advice for fixed gospel? 

    Thx for your analysis and nixing the Bull call spread, though I gambled you might go that route intead of tying up the margin.
    I do have a preference for having it put to me (if it's a teeny bit below $5.00 in june) and selling the calls since you have been a bull on this one for years.
     

     

  272. zeroxzero

    I'm coining money today on my oil short position, but I'm concerned.  Since this article is by subscription, I'm reproducing a large piece of it rather than simply posting a link.
     
    "Marginal oil production costs are heading towards $100/barrel
    Posted by Kate Mackenzie on May 02 12:01.

    Bernstein’s energy analysts have looked at the upstream costs for the 50 biggest listed oil producers and found that — surprise, surprise — “the era of cheap oil is over”:

    Tracking data from the 50 largest listed oil and gas producing companies globally (ex FSU) indicates that cash, production and unit costs in 2011 grew at a rate significantly faster than the 10 year average. Last year production costs increased 26% y-o-y, while the unit cost of production increased by 21% y-o-y to US$35.88/bbl. This is significantly higher than the longer term cost growth rates,highlighting continued cost pressures faced by the E&P industry as the incremental barrel continues to become more expensive to produce. The marginal cost of the 50 largest oil and gas producers globally increased to US$92/bbl in 2011, an increase of 11% y-o-y and in-line with historical average CAGR growth. Assuming another double digit increase this year, marginal costs for the 50 largest oil and gas producers could reach close to US$100/bbl.
    While we see near term downside to oil prices on weaker demand growth, the longer term outlook for higher oil prices continues to be supported by the rising costs of production.

    This is important because, as Bernstein analyst Neil Beveridge and colleagues note, the cost of producing marginal barrels of oil plays a big role in determining oil prices."

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