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Monday – “Markets in Turmoil” According to CNBC – Must be Time to Buy!

What a fantastic contrary indicator!

CNBC hit the panic button this weekend with their "Markets in Turmoil" special report where they trot out their crisis team of Jim Cramer and Maria Bartiromo in an attempt to stampede all the remaining sheeple out of the markets on Monday Morning (see our Friday morning post for our view on why we thought Friday's drop was going to be a bear trap).

"An awful May is replaced by the start of a frightening June" is CNBC's opening voice over and it gets dumber and dumber from there as "America's Financial News Network" bangs the fear drum right at Asia's open (9pm) and then uses the panic in Asia to prove their point to EU and US traders that there's something to worry about.  

I could go on and on about how ridiculously evil this network is and how horrible it is that we allow these Financial propaganda networks to manipulate the markets to the benefit of the highest bidder but, in the long run – who cares?  If you watch CNBC and take it seriously – just like people who watch Fox to find out what's going on in the World – you reap what crap you have sown.  

SPY DAILYWe are not, in any way, gung-ho bullish but we're also not going to play bearish.  On the whole, as we reviewed in this week's Stock World Weekly (available free this week!) - we are "wishy washy" in our positions, cashy and cautious and doing just a bit of bottom-fishing as we HOPE (not a valid investing strategy) that this is the bottom as we HOPE the G8 takes some rational action.

We made a bullish play on the Futures at 9:13 last night, while CNBC was clearing out all the suckers at Dow (/YM) 12,000 but we took that money and ran as we popped over 12,075 (up $375 per contract) early this morning and flipped to a bullish play on oil (/CL) off the $82 line and those contracts are already $82.40 – up $400 per contract at 8am.  

We were also very excited to see AAPL back at our buy point of $555 early this morning as AAPL is pure rocket fuel for the Nasdaq when it bounces and AAPL can move quickly back to $580 on any hint of good news and that's a 4.5% move up that should be good for a 2-3% pop in the Nasdaq – maybe more if the SOX stop dying for a day or two! 

So thank you CNBC for being the blatantly manipulative joke of a network you are – we continue to make bank betting against you on a regular basis – just like the people who pull your strings…  As we often say at PWS – "We don't care IF the game is rigged, as long as we can figure out HOW the game is rigged and place our bets accordingly."  

During Friday's excitement (over 300 comments in Friday's Member Chat) we played both sides of the fence but had aggressively long trade ideas for TLT (short at $130.36) as well as spreads on TQQQ ($41.96) and XLF ($13.50) – playing for the pop we anticipated this morning.  We'll see how those go before we get all excited but our small, virtual portfolios are very bullish while our brand new Income Portfolio has a virtual $500,000 ready to deploy on the bull side as soon as we confirm that the World is not going to end (at least before December 21st).  

See my comments on "The Week Ahead" in Stock World Weekly as well as our chart of the action this week, which includes Euro-Zone GDP and mucho Fed speak although this morning Cleveland's Pianalto said: "The seasonal adjustment process could be behind the strong January and February prints and May's weak one, she says, but taken together they continue to give a picture of a slowly growing economy that needs no further stimulus."

Nonetheless, GS says: "Our confidence that the FOMC will ease policy once more at the June 19-20 meeting has also grown," and they see the Fed committing to purchases of MBS and Treasurys – "considerably more powerful than an extension of Operation Twist."  Of course listening to GS is almost as bad for your portfolio as sticking with Cramer but the trick to GS is figuring out where they are in their own commitments and this is an early statement that's probably an accurate take on the Fed, rather than a manipulative attempt to scare people out of bearish positions (so they can get more for themselves, of course).

Now it's 9:15 and oil is touching $83.40 and our Egg McMuffins are paid for (up $1,400 per contract and thrilled to take it and run!) so we really don't care what the market does this morning as we're wishy-washy with bets on both sides and cashy enough not to care which side wins but, for the sake of the well-being of the Global Economy – we are kind of rooting for the bulls this week!  

It's going to be a very exciting week but it's ALL about Europe, not our own Fed.  There will be many, many rumors but we need ACTION from the ECB, IMF, EU, BOJ, PBOC, BOE and the Fed in order to reverse this bearish trend – words just aren't going to do it for us anymore so, while we REALLY want to be bullish down here – we still need Mr. Market to show us the levels – starting with 1,284 on the S&P and 2,757 on the Nasdaq – the 200 dmas that MUST be taken back in order for us to get comfortable riding that bull again.  


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  1. stjeanluc

  2. grenowoods

    Wow – CHK just announced that they'd replace 4 of it's board members – 3 selected by Southeastern and 1 by Icahn

  3. Pharmboy

  4. jomptien

    CHK/Greenwoods, I was wondering about the spike up in them, must be it

  5. Burrben

    Oh RSS Feed, please come back!  Autorefresh is a pain.

  6. grenowoods

    CHK – it spiked right after the announcement

  7. stjeanluc

    CHk / Greno – This is not surprising given the recent turmoil. I think that it's a first step in a change of management there that is badly needed.

  8. 1020

    An interesting conversation on CNBC with Larry Summers.
     
    The idea of spending $$$ on long term projects while long term interest rates are low (infrastucture) or wait until the smoke clears and interest rates are much higher.
     
    That question left Kernan and Santelli speechless, though they both tried to spin and make the idea political.
     
    Long term projects should not be politicized, it benefits us all, now and into the future…….

  9. stjeanluc

    Economic Numbers:

    China Non-Manufacturing PMI / 55.2 (down from previous 56.1)
    Euro-Zone Sentix Investor Confidence / -28.9 (-30 expected)
    Euro-Zone PPI (YoY) / 2.6% (2.7% expected)
    Euro-Zone PPI (MoM) / 0.0% (0.2% expected)

    Inflation, not a problem in Europe, just yet!

    At 9:45 AM EST we have the ISM New York numbers and at 10:00 AM EST we have the US Factory Orders (0.2% expected).

  10. stjeanluc

    CNBC / 1020 – I guess Kernen and Santelli would rather spend that money invading other countries!

  11. 1020

    I thought Bill Maher's last segment of "new rules" from May 25 was a classic…..
     
    http://www.youtube.com/watch?v=w2oRGQ0Jh5I&feature=relmfu

  12. dpastramas

    RSS / Phil – Echoing Burr's comment, any clue when the new RSS server will be up and running?  Thanks! 

  13. 1020

    stjeanluc – The military was brought up…..Unfortunately, they did not take the bate…… :)

  14. Pharmboy

    1020 – Obama said he was going to do just that (infrastructure)…and now they bring it up again. He should have rammed this threw Congress in 2009…then taken on healthcare.  That is my biggest beef with Obama.  Otherwise, I would not want to be Pres. in this time of chaos.

  15. stjeanluc

    You'll see 1020, if Romney is elected suddenly the deficit won't matter anymore!

  16. Phil

    Good morning!  

    Not much to do but see how things go this morning.  My favorite bull play is, of course XLF at our $13.50 target and TNA June $41/47 bull call spread at $3 can end up at $6 with TNA now $3.70 almost all in the money and, if TNA dips further – THEN you can stop out at $1.50 and sell some puts for $1.50 (currently the $39 puts are $1.30) and work into it that way.  

  17. Burrben

    I've been watching these daily videos for the last week, and I like some of the analysis they are providing.  Very tech analysis heavy.  
    http://www.t3live.com/articles/market-analysis/3087-market-looks-to-bounce-back-from-fridays-heavy-sell-off.html
    Just a FYI.  

  18. stjeanluc

  19. exec

    You called it Phil…..rumors of QE3…..imagine that.

  20. stjeanluc

  21. 1020

    Pharm – I agree!   That whole healthcare debacle did so much damage and helped the teabaggers to have greater voice.
     
    It was all downhill from there……

  22. dclark41

    Pharm:
    You hit it out of the park with that comment.

  23. stjeanluc

    This is our QE3 portfolio – locked and loaded!

  24. Phil

    AAPL up to $563 already and Nas is loving it with almost a 1% gain.  

    Congrats to oil and Dow players this morning as we got great gains there but the big money comes if we can convert all this into a better than 2% gain today, which will whipsaw Asia (closed) and the UK (closed) and force them to catch up tomorrow and give us fuel for another leg up tomorrow and suddenly we'll be back at 1,325 (up 3.5% from today's open) with a 50% retrace off the drop from 1,375.  

    Obviously we stop out of our bear hedges (most) – especially the just in case ones we took on Friday as we didn't need them now as the worst case isn't happening and we can always buy new ones today if we go red again.  On the other hand, if you were too bullish and freaking out – now would be a good time to add a hedge or two!  

    The volume is not excitng at all and 1,284 may be hard to take back, as will be 2,758 on the Nas (already back).  Once we're over those – THEN we can get enthusiastic but, for now – just a little squeeze to frighten the bears maybe…

    Sorry it's so had to get a handle on the market but, then again – I do have a handle on the market since I say over and over again that it's simply too annoying to play at the moment and CASH IS KING!!!   We don't NEED to play every day – sometimes it's fun to just watch and, when something obvious comes along – THEN we can bet…

  25. stjeanluc

  26. Phil

    Oh well, so much for the morning enthusiasm:  

    May ISM New York Report on Business: 49.9 down from 61.2 in April. Future optimism grinded down to a seven-month low, but remained in expansion territory suggesting any slowdown might be temporary.

  27. stjeanluc

  28. stjeanluc

    US Factory Orders in 5 minutes or so… Another shoe?

  29. Phil

    VIX flying back to $27 but TLT not following yet – interesting.  

    Still it already looks like a bullish head-fake and now we're selling again but it could just be one fund taking advantage to sell what they decided to sell on Friday but didn't have time to liquidate.  Volume is so low that it's hard to draw any conclusions but the Nas lost their 200 dma and the S&P couldn't take theirs back and that's technically bearish and we have to respect it.  

  30. rainman

    Anyone tell me where I can find a chart of the price of iron ore and met coal?

  31. msf65

    Why AAPL sell off?

  32. Burrben

    Phil – Prob a dumb question.  If I have the premise that the SPX will hit 1250 before hitting 1300, would it make more sense to sell Aug SPX 1300 calls, rather than buying puts and paying the piper?  

  33. Phil

    Long-term/1020 – Isn't that pretty much the entire purpose of Government – to pool resources and look at the big picture?  I'm pretty sure it's right in the 5,000 year-old old testament, where Joseph explains it to Pharaoh

    AAPL fails $555, XLF fails $13.50 – not good!  

    Friday's bear hedges (in case you need ideas):  

     

    KO Aug $65 puts at .50 are a nice hedge – kind of like a long put as KO is still very high but depends on China and other emerging markets for a lot of sales.  Also, NY Big Gulp ban is silly but can impact sales.  Idea of long put is that shouldn't lose too much if market pops back.  $62.50 puts are .35 so .15 on an unlikely $2.50 pop in KO is not a bad penalty against a good triple if KO drops 10%.  

    T is s a flight to safety at the moment but there is no safety if we crash and the Oct $28 puts are .45 while the Oct $31 puts are .91 so a double on a 10% drop there.  

    V also getting interesting with the Sept $90 puts at $2.15.  The $100 puts are $4.10 so another one that can double on a 10% drop.  

    SDOW is 3x Ultra-Short on Dow.  July $23/28 bull call spread is $1.30 with SDOW at $23.95 so a nice way to play a further move down in the Dow with a $3.70 upside potential (284%) with no margin requirement so, even in an IRA, you could put $2,600 into 20 of the spreads, put a stop at $1,600 (.80) and risk $1,000 to make $7,400 on a further downturn. 

    SDS July $17/21 bull call spread at $1, selling Jan $15 puts for $1.15 is a bet that SDS doesn't fall 16%, which is an 8% drop on the S&P to 1,182 – otherwise it's a free look at a potential net $4.15 gain (if the S&P goes 8% the other way back to 1,387 by July) against $1.50 in margin.  

    I am NOT in favor of chasing this crap around.  I like having a hedge or two and using that as a safety net for making a few bullish bets of our TWIL List or like the FAS play above, which is more aggressive since it's time-sensitive.  The conservative play is CASH – there is nothing wrong with CASH.

    Have I mentioned how nice CASH is lately?  

  34. stjeanluc

    US Factory Order / -0.6% (0.2% expected)

    Another shoe indeed….

  35. stjeanluc

    Oh no…. FB below $27!

  36. angelcur

     with the euro holding gains and bonds down..that we hold in the 1260 support area..i am going to add there

  37. stjeanluc

    And FAS is below 69 now – no panic into TLT just yet, but its not pretty out there!

  38. l4real

    Pharm/1020 
    I too am disappointed with the final outcome of the healthcare bill although it could be worse, but I don't lay the blame entirely on Obama.
    The problem I see is the entire lobbying process! Single Payer and a Public Option were trumped by nearly $440,000,00 from Big Pharma and the Insurance lobby. How else do you think we wound up with a mandatory participation clause that is now being challenged by the Supreme Court?
    We continue to be the ONLY developed nation in the world who spends nearly 17% GDP on healthcare , 110% more on medications and whose citizens go bankrupt over medical expenses!
    Wonderful numbers for a FREE Country considered a democracy!
    A Single Payer or Public Option should have been the main choices for a National Healthcare plan, but as long as companies can throw obscene amounts of money at our lawmakers, we will continue to be at their mercy with stupid legislation as a result!
    The next step is to go with Public Financing of all elections to keep the obscene amounts of money from distorting the process and unduly influencing lawmakers to produce laws that work against the good of the nation!

  39. 1020

    Phil/J&P    Donnie Osmond?!!!
     
    Time for someone to update their YouTube clips…….. ;)

  40. Savi

    Good Morning—--wow what is going on with AAPL—talk about turmoil!!!!

  41. terrapin22

    The May 2012 US light vehicle SAAR (seasonally adjusted annual rate) was 13.8 million units, well below consensus expectations of 14.4 million, but well above the 11.7 million reported in May 2011. Sequentially the SAAR was below the 14.4 million reported in April 2012.

  42. yodi

    Phil I do think you still have a hangover from the wedding seeing bulls in the morning where there are all sheep horns running for the exit again!!!

  43. Phil

    Maher/1020 – I love that show.  He just bough a piece of the Mets.  

    RSS – Sorry, no news yet but the site is behaving so I'm happy about that.  Hopefully Matt will give us an update.  

    Rumors/Exec – Rumors not enough to do it anymore – as today's action is indicating.   Need an actual announcement.  

    Factory Orders not good either:

    Apr. Factory Orders: -0.6% vs. consensus of +0.1%, -1.5% prior.

    May Employment Trends Index+0.29% Y/Y to 108.34, vs. 108.03 in April. (revised). The report cites cautious hiring by U.S. employers that is "just strong enough" to require a modestly growing workforce.

    More and more I feel that the US has a confidence crisis with the underlying economy improving slowly but steadily.  It will not take much to turn the markets around – just the removal of the fear of an EU collapse or at least another week or two until it becomes boring (baked in) and then we can go back to watching Q2 earnings reports come in, which now have a good chance of upside surprising.  

    AAPL June $590 calls at $3.  Stop if they can't take $555 back on this run and then if they don't hold it.  This is essentially a day trade, looking for a quick buck. 

  44. 1020

    l4real – And you wonder why so many are willing to vote against their best interests…..
     
    These are tough times to be a leader…… :(

  45. smala766

    Iflan, Friday did you buy June or July 210 put  ? Thanks

  46. 1020

    Phil/Mets   I guess I'll have to start rooting for the Mets…..
     
    But, Earvin Johnson bought a piece of the Dodgers and I am a homie for So.Cal…..
     
    and, the Padres suck…..
     
    …..Bill Maher wants the legalization of pot…..
     
    GO METS!!!  :)

  47. aaronc

    Phil, thanks for reposting the Bear hedges.

  48. edro00

    TNA
     
    REMINDER

  49. l4real

    Good point 1020! Tough times indeed!
    I am happy with the clause that allows my daughter to stay on our health plan until age 26! 

  50. roberthjrfl

    Phil or anyone.  How do you get TOS to graph the S&P 500 keeping dollars (/dx) constant?  TIA.

  51. rpme

    Phil, what did you want to do with TNA in the 25kp?

  52. jabobeast

    FU FCX!!!
    FU BBY!!!
    FU GLW!!!
    FU FB!!!
    FU PCLN ;-)
    FU CMG  ;-)
    FU AMZN!!!
    FU FAS!!!
    FU JPM!!!!!!!!!!!
     
    now I feel a bit better ;-)

  53. partha

    jabo – thanks for updating the jabometer.  Managing emotions is key part of trading … and you are helping … :-)

  54. Phil

    Iron/Rain – Try the CME site, they trade most stuff and have charts.  

    AAPL/Msf – Because they wanted to yank the markets back down at the open and dumping AAPL is the best way to slam the Nas and the S&P at the same time.  

    SPX/Burr – Depends how closely you can watch them because a QE announcement at any time can gap your face off if you take an open position so buying a put at least limits your loss to the price of the put while selling calls has no limit to how much you can lose.  

    Donnie/1020 – He was kick-ass in that show.  

    SAAR/Terra – I know, expectations were a bit high – especially as last year we had cash for clunkers etc to boost demand so tough comps.  As above, I see many constructive things in the broad economy – mostly it's sentiment killing us now.  

    Sheep/Yodi – Yes, it is sheep running for the exits – that doesn't mean we should follow them.  

    Legalization/1020 – You need to be high to enjoy a Mets game these days.  I think that's a good combo!  

    You're welcome Aaron – I just hope we don't need them.  

    GRPN making new lows.  SCHN too.  

    X at $19 with is $2.75Bn for US Steel, which has $19Bn in sales but no profits – so it depends what you think a brand is worth but they did make $2Bn in 2008 on $24Bn in sales and $1.4Bn in 2006 on $16Bn in sales and they "only" lost $53M last year after losing $450M in 2010.  Q2 is usually their best but we won't get results until 2/22 but I do like them for a long gamble (they are a TWIL play).  Look at those auto numbers!  

    TNA/Edro – That's nice but I forgot what the reminder is for…  I assume we need to adjust $25KP and we do but I'd like to see Europe close first. 

    TOS/Robert – That's StockCharts, not TOS and it's not "constant" but priced in Euros so I put $SPX:$XEU, for example, in the box and that's the S&P not really priced in Euros but divided by the Euro Index so effectively priced in Euros if you multiply the result by 100.  You can use that to price the S&P (or anything) in anything – oil, gold, yen, AAPL – doesn't matter and it's a very interesting way to look at things.  

    TNA/Rp – I want to press it but I want to see Europe hold.  

    And good morning Jabob….

  55. jerconn

    Phil, good AAPL call!  (so far…)

     

  56. exec

    Beast

     
    I've notice a repeating acronym that you frequently use in your postings.  I'm assuming Future Use since I can't imagine what else it could mean.

  57. newbie

    WFR / PHIL / ANY OTHER INFORMED  WFR WATCHERS
    BUY SHARES HERE?
     
    PHIL, I'M GOING TO DO 15-30 MINUTES READING THEN PROBABLY BUY 100 TO 200 SHARES OF WAFER AT MARKET.
     
    THEY SEEM TO HAVE HELD STRONG THROUGH THE LAST WEEK WHEN EVERYTHING ELSE WAS CRASHING. I KNOW IT WOULD BE A HIGH SPEC, BUT COULD BE A 2 OR 3 BAGGER ALSO.  LOOK AT WHAT HAPPENED WITH SIRI WHEN IT WAS 50 CENTS (WHICH I CONSIDERED BUT DID NOT HAVE THE KNOBS FOR).
     
    AND IF WFR GETS A DELISTING WARNING, DON'T THEY HAVE LIKE THREE MONTHS TO GET IT BACK ABOVE A DOLLAR BEFORE THEY ACTUALLY GET KICKED OF? WHERE DO THE TRADE IF THEY GO TO 70 CENTS?
     
    SO GRANDMASTER, ADVISE ME PLEASE ON SPENDING  $150-$300 TODAY OR THIS WEEK ON THE SHARES (NOT OPTIONS).
    WHAT DO YOU THINK THEIR CHANCES ARE, HOW MUCH CHANCE THEY GO TO ZERO OR CLOSE TO IT, AND HOW MANY YEARS TO DOUBLE OR TRIPLE?
     
    THANK YOU

  58. newbie

    fu = "eff u" (insert ticker symbol of choice)
     
    Jabo keeps us amused with this, and we miss it when he is not here. 

  59. jerconn

    Newbie/Jabo – that says something about our sense of humor…

  60. Pharmboy

    Adam F….agrees with me…took him long enough:  CLDX: Remember, CDX-011 is an antibody-drug conjugate, just like T-DM1 (IMGN).

  61. Lincoln

    Phil: adjusting short calls
    In the case where I intend to keep margin employed playing a range with a stock like LOW should I be rolling out further in time while VIX is decent, and lower the margin required to allow for scaling back in as needed if it runs up.  Have 50 LOW Jul 28C's @ .53 roll to 15 Jan 13 28C's for roughly even?  or keep waiting for Jul premium, to hopefully burn up, ( $2,600 of premium would be a 6% return on margin for about 6 weeks) the later is what I think I should do but always appreciate your thoughts.  TIA

  62. 1020

    Phil – I was just kidding with Donnie Osmond.
     
    He is sooo much better than that Donny Osmond from the seventies….. ;)
     
    http://www.youtube.com/watch?v=JMrcnqKSbw8

  63. Phil

    At the open: Dow +0.08% to 12129. S&P +0.13% to 1280. Nasdaq +0.41% to 2759.
    Treasurys: 30-year -0.62%. 10-yr -0.39%. 5-yr -0.16%.
    Commodities: Crude +0.11% to $83.33. Gold -0.08% to $1620.75.
    Currencies: Euro +0.31% vs. dollar. Yen +0.21%. Pound -0.23%.

    10:00 AM On the hour: Dow -0.15%. 10-yr -0.37%. Euro +0.43% vs. dollar. Crude -0.17% to $83.08. Gold -0.05% to $1621.35

    10:06 AM Stocks move to session lows after big misses on factory orders and the New York ISM ("Screeching Halt"). S&P 500 -0.5%, Nasdaq -0.5%Citigroup's Economic Surprise Index continues to dive from its January peak.

    11:00 AM On the hour: Dow -0.07%. 10-yr -0.35%. Euro +0.49% vs. dollar. Crude -0.34% to $82.94. Gold -0.49% to $1614.15.

    Eighteen out of 21 economic indicators released last week came in weaker than expected, notes Bespoke (searching its memory for a worse week). Toss in today and it's up to 20 out of 23. Have we hit an inflection point where the U.S starts to underperform the rest of the world? S&P vs. Europe, China, Brazil over the last year.

    More on New York ISM miss: "Screeching Halt" is the title of the report. Interestingly, the section of the survey on Business Impediments reveals skilled and unskilled labor shortages as the two largest hindrances, and working capital shortage as among the smallest (and down sharply from 2 months ago). (full report, .pdf)

    In contrast to a year ago, emerging market central banks have been selling euros of late. Troubles in the eurozone are obviously a factor, but the key difference may be that a year ago, emerging market governments were trying to weaken their currencies, now they're trying to prop them up. (see also)

    "You have the 10-year note at less than 1.5% and you have stocks like JNJ yielding almost 4%," says Marc Faber, making the case for stocks over bonds. "If you have a time horizon of 10 years, I believe you're going to make more money in JNJ than you will in (Treasurys)."

    Germany indicates that it could drop its opposition to eurozone bonds, a banking union and other ideas if EU governments agree to give up more sovereignty to Europe, the WSJ reports. Germany is "willing to play ball" in a grand design, an official says; however, Angela Merkel is still publicly objecting to eurobonds.

    A milestone in the eurozone crisis is reached as Wolfgang Munchau finds himself more optimistic about its resolution than the markets are. He thinks there's a small chance the June 28 summit will bring agreement on an adequate banking union. As this would be a key cog to fiscal union, the eurozone might just be saved.

    Spanish unemployment fell 0.6% in May M/M, but is up 12.5% Y/Y. Eurostat figures released last week showed Spanish unemployment at 24.3% for April, the highest in the eurozone.

    Cement demand falls off a cliff in Spain. A chart of Western Europe vs the U.S. (via)

    vscs.png

    Portugal's €78B ($97B) rescue program is on course and the country's target of cutting its deficit to 4.5% of GDP in 2012 remains within reach, Troika inspectors say after their latest review. Portugal is now due to receive the next €4B tranche of the rescue. (Earlier: bank injection)

    More on Portugal/banks: The government is injecting €1.65B into state-controlled Caixa Geral de Depositos, up to €3.5B into Banco Comercial Portugues SA, and €1.5B into Banco BPI (BBSPY.PK). The state will receive convertible bonds from BCP and BPI in return. The money is coming from a bank bailout fund created as part of Portugal's €78B rescue.

    China's big 5 banks submit the results of a self-examination in which they were ordered to check the classification of the loans on their books, apparently to make sure those not performing well are categorized as such. The exercise looks to have already raised some flags at Industrial Bank.

    Chesapeake's (CHK) decision last October to sell its hedges against low gas prices has exacerbated the company's cash crunch, left it largely unprotected against low gas prices this year andWSJ calculates losses of around $750M-900M on the positions. Chesapeake has generally been successful with these kinds of levered bets, but acting more like a hedge fund than an exploration company can clearly backfire.

    Shares of AutoNation (AN) roar to a 5.7% gain premarket after the company sees strong sales growth in May.

    Shanghai GM reports that it set a record for sales during the period of January to May after it moved just over 110K vehicles last month alone. The joint venture between GM and China's SAIC saw its biggest sales growth with Chevrolet models. GM +0.4% premarket.

    Airline stocks show notable weakness in early trading despite oil prices moving in the right direction. Traders lament the possibility that a slumping global economy could thwart growth in business travel. Decliners: DAL -6.3%UAL -4.1%LCC -4.1%JBLU-2.4%. - But no affect on PCLN???

    Maybe this is why:  Hotel rates for business travelers rose 9.3% Y/Y in April to approach pre-recession levels in North America, while rates for leisure travelers also recorded a respectable 7.3% gain. Industry research suggests that the rate increases haven't run their course yet, tipping off that hotel players such as MARWYNHIHGCHH, andHOT could see revenue upside.

    Boeing (BA +0.4% to $67.51) is the subject of a couple positive analyst reports that say the stock should be bought on its recent weakness. Stifel Nicolaus upgrades the stock to "buy" from "hold," with a price target of $80. Sterne Agee maintains a "Buy" rating, saying it believes 787 deliveries are on plan. At last, one might add. 

    Adam Feuerstein details 12 winners and losers from the ASCO oncology conference: The winners include Bristol-Myers (BMY) for its anti-PD-1 immunotherapy, which "has blockbuster potential across several solid tumors." Onyx (ONXX) is both, as Carfilzomib is a "real multiple myeloma drug" but investors are pessimistic about its FDA chances.

    Dendreon (DNDN-8.6% premarket after data from Johnson & Johnson (JNJ) and Medivation (MDVN) at the ASCO conferenceincreases competitive pressure for DNDN's Provenge cancer drug. Patients taking JNJ's Zytiga in a late-stage pre-chemo prostate cancer study lived 27.2 months vs. 21.7 months for Provenge.

    Shares of Yum Brands (YUM -2.3%) slip after the companyis cut to Market Perform from Outperform at Raymond James. Analyst with the firm see middle-class spending in China as a random variable in the revenue equation for YUM and see valuation getting a bit stretched.

    What inflation?   Disney (DISraises prices for a single day visit to an Orlando-area theme park up 4.7% to $89 a pop. Park hoppers will also pay more, with ticket prices now 3.6% higher for the packaged deal. DIS +0.5% premarket. 

    Come on Yodi – call off the dogs!  PepsiCo (PEP) faces a unique challenge in Mexico where fire-bomb attacks tied to drug cartels seem to be targeting the firm's Mexican subsidiary in what could be a high-profile case of extortion. Though analysts won't go as far as to say Mexican cartels are now moving their targets of intimidation to multinational companies, the five PepsiCo properties burnt down and 40 delivery vehicles that have been recently attacked have been raising eyebrows.

    MagicJack (CALL +7.4%) jumps after stating its Q2 revenue should exceed $36M - the consensus currently stands at $35.9M. The company, which partly attributes its performance to strong demand for its magicJack Plus product, also says it expects GAAP EPS to exceed $0.43, though this isn't comparable with a non-GAAP consensus of $0.29. MagicJack adds its put sales, recently the subject of a WSJ column, will have a minimal financial impact.

    Corning (GLW) introduces Willow Glass, a thin, bendable glass product that the company boasts could eventually enable displays that are "wrapped around a device or structure." If Willow Glass is widely adopted, it could provide a pricing and margin boost for Corning's display glass business, which is expected to see minimal growth going forward. Samsung, LG, and others are workingon flexible LCD and OLED displays that could conceivably leverage Willow Glass.

    After visiting Silicon Valley chipmakers, Canaccord'sBobby Burleson believes the recent selloff in chip stocks is overdone. While admitting demand is soft for the PC and wireline telecom markets, total orders, buoyed by healthy smartphone/tablet demand, are said to be in-line with expectations. Burleson's top picks are AMD,BRCMIDTI, and MRVL.

    Sony (SNEdropped below ¥1,000/share in Tokyo trading for the first time since 1980, falling as much as 2.3% to ¥990 before recovering slightly. Sony has posted four consecutive annual losses and "investors’ concern about Sony’s poor earnings seems to be turning into conviction," says Goldman analyst Takashi Watanabe. Currently: -1.7% in Tokyo. 

  64. Phil


    Samsung (
    SSNLF.PK) will begin selling its flagship Galaxy S III to all four nationwide U.S. carriers this month, along with U.S. Cellular (USM), at prices that start at $199. The S III has received largely positive reviews, and its Euro launch has been met with strong early demand. Qualcomm (QCOM), Broadcom (BRCM), Skyworks (SWKS), and Maxim (MXIM) are among the chipmakers that willbenefit from the U.S. launch.

    The next iPhone will likely be launched in September, says Topeka's Brian White after checking with Taiwanese sources, and so will a 7.85" iPad Mini. White, who maintains an $1,111 PT on Apple (AAPL), also believes the next iPhone will feature a unibody aluminum case. Samsung's (SSNLF.PK) Galaxy S III is hitting the U.S. this month.

  65. newbie

    Coke
     
    Stupid question probably:
     
    2 actually……………
     
     
    a. Why is a REPUBLICAN governor doing this (even though I perceive him as moderate), I mean every Repup wants the "free market" to do all this, right?
     
    If somebody is really fat, tweaking around the edges with french fries and Coke is not going to change it. They need ….1-a new relationship to food, and 2-to learn how to eat moderate amounts of very healthy foods-grains-fruits-vegies-vitamins-etc, cutting out sugar, most dairy, most wheat, most fat, etc.
     
    I went on a "macrobiotic diet" (which is a grains and vegetables centric diet, no dairy or sugar or meat allowed) for two months during my bicycle racing days, and I lost 20 pounds in 2 months. I had to FORCE myself to eat more, to keep my weight up. How often does THAT happen these days?
     
    and
    b, isn't the restaraunt industry going to be happy if I order TWO Cokes on my table in fron tof me instead of one? Aren't they happy about this because they will "waste" less and sell way more Cokes?
    and isn't the customer the one who is ultimately hurt because he is still going to drink just as much but it will cost him double (or more)?
    Happy to know though that I can still go into My convenience store/gas station at 3pm on a 95 degree day and fill my 44 ounce glass to the top with ice and then smother it with Coke, drink it outside in the parking lot, then go back in and fill it up again for free (that's how it is here anyway), after I've been trimming trees and running the chain saw for the last 7 hours in the heat.
     
    Am I missing something?

  66. Pharmboy

    OK, buying more CLDX in here.  I have the stock, June 4 calls (own), and the August 3/4 BCS.  Will sell some Aug 4 calls if we get a pop.  SO, I am accumulating them and YMI.

  67. sparky123

    Pharm,
    What about IBIO at   $.90?

  68. lflantheman

    Smala…..stj……10  AMZN June  210 puts at 7.30 were purchased on Friday  for MoMo (posted then, but inadvertently as July….should read June)

  69. Phil

    WFR/Newbie – Very speculative.  I like them but I'd be shocked if they do well this year and next may be a stretch and you don't strike me as a patient money kind of guy.  HOV has a better chance of popping 20% on good housing data or stimulus if you want to cheap stock to play with but I live XLF at this level and AA too.  With XLF, for example, you can buy 5 FAS July $65/66 bull call spread at .65 for $325 with FAS now at $69.90 and, if they hold $66, you make $175 (53%) and it's not likely that WFR would do well if the financials are failing and, should XLF not hold $13.50 (under now at $13.43) you have a nice early indicator of trouble and you can get out with perhaps $250 and just wait for the dust to settle and try again when things look better. 

    LOW/Lincoln – You ?SOLD? the July $28s for .53?  Were they naked?  That's very dangerous so I guess you're roll makes sense from a margin perspective but you are giving LOW 6 more months to burn you to the upside so I wouldn't call it a free roll.   If you REALLY like the stock, then just buy it IFF LOW goes over $27.50 and stop out if below and then you get called away at $28 by the callers and you STILL get to keep their money and they give you another $28 for the stock – how about that?  

    Donny/1020 – I used to watch Donny and Marie all the time.  This is super-cute of him and Michael Jackson at the Grammys.  

    Coke/Newbie – Bloomberg is a NY Republican and that's a Texas Communist in the grand scheme of things.  He was a big factor in banning public smoking and I bless him for that so if he wants to ban soda – more power to him but it seems a bit silly since I assume big diet sodas aren't on his list so will we have soda inspectors checking for sugar content?  Maybe there's money to be made in some sort of screening technology that can measure sugar from a distance.   If he doesn't stop people from having those big SBUX frozen things – it's a joke anyway.  I was just in an ice cream shop and they had a 24-ounce milkshake and I was thinking that's a pint and a half of ice cream, so that's about 2,000 calories right there.  Also, as pointed out by Jon Stewart, Bloomberg is about 5 foot tall and weighs maybe 120 soaking wet so sure, a 16 ounce soda may seem satisfying to him but it's really not going to cut it for big guys.  

    Breakdown/Burr – Nasty!  

  70. 1020

    newbie – I think Mayor Bloomberg had just fired his first shot in the war against obesity. If we are to have lower health care costs going forward, it will have to start somewhere and it will seem strange at times.
     
    Kind of like the war on tobacco, and that used to be cool…..
     
    http://www.youtube.com/watch?v=N0nlRuIIzgI

  71. Gingbaum

    Does anyone know what the S&P hit over night or how much it was down?  Did it hit the 1264 technical support?

  72. Burrben

    Woo-Hoo, I'm published!  

  73. Pharmboy

    IBIO – speculative, fine.  I like PLX better…or YMI.

  74. Phil

    11:35 AM Europe closes mixed, with the core down and the periphery taking a breather from a string of steep declines. Stoxx 50 +0.5%, Germany -1.2%, France +0.2%, Italy +1.1%, Spain +2.9%. U.K. closed. Off about 1K pips in a month, the euro gets a rare respite,+0.5% to $1.2496

    Nutting: Investments in the future have dried up (Market Watch)

    Growth Slowdown Seen for Third Year in U.S. Dodging a Recession (Bloomberg)

    They hated them at 2.3%, loved them at 1.45%. Bank of America says 10-year Treasury yields have further room to fall, perhaps to 1.3%. The firm also lowers its year-end forecast from 2.3% to 1.9%.

    A central-bank failure of epic proportions (Economist)

    The Real Bond King Says “Buy” (Barron’s)

    How corporate socialism destroys (Reuters)

    Investors took advantage of the recent horrid tape in the energy sector to pour money into its SPDR (XLE) last week, the fund taking in more than a $1B – nearly 16% of AUM. The top 3 holdings – Exxon (XOM), Chevron (CVX), and Schlumberger (SLB) – account for 40% of the fund. 

    Oil Output Soars as Iraq Retools, Easing Shaky Markets (NYT)

    Verizon (VZ) is looking to slash 1,700 jobs by offering buyouts to technicians and call-center workers. The company, which has a total of ~192K employees, has been talking with unions regarding new contracts for 45K wireline employees. (previous

    America’s jobs crisis (Reuters)

    U.S. broadband continues to get more expensive. Backing up prior comments, Verizon (VZ) is raising the price of its base FiOS broadband plan (15 Mbps downlink/5 Mbps uplink) by $10 to $65/month, The Verge reports, and is also now insisting on a 2-year contract. The second-cheapest plan (50 Mbps down/25 Mbps up) goes for $75/month, and the costliest plan (300 Mbps down/65 Mbps) sells for $205/month. TWC is also eying broadband price hikes.

    Shares of SodaStream (SODA +4.4%) trade higher as banter goes back and forth on the merits of the stock. What is one analyst's latest fad is another analyst's trendsetting industry changer. Also entering into the equation is the sudden focus on high-sugar drinks, with a report out highlighting that the SodaStream home-brewed cola comes in with only a third of the calories and sugar than offerings from beverage giants Coca-Cola and PepsiCo.

    Income inequality, as seen from space (Per Square Mile)

    The Curtain Opens on 401(k) Fees (NYT)

  75. Phil

    Jeff Saut channels Justin Mamis via When to Sell:

    “Stocks are bought not in fear but in hope. No matter what the stock did in the past it assumes a new life once a purchaser owns it, and he looks forward to a rosy future – after all, that’s why he singled it out in the first place. But these simple expectations become complicated by what actually happens. The stock acquires a new past, beginning from the moment of purchase, and with that past comes new doubts, new concerns, and conflicts. The purchaser’s stock portfolio quickly becomes a portfolio of psychic dilemmas, with ego, id, superego, and reality in a state of constant battle.”

    “The public is most comfortable when they are sitting with losses. Because if their stocks are down from where they bought them, they don’t have to worry about them. Once he’s got a loss, the typical investor is sure he isn’t going to sell. He bears the lower price because in his mind it is temporary and ridiculous; it’ll eventually go away if he doesn’t worry about it. So selling at a loss becomes absolutely out of the question. And since it is out of the question, and his mind is made up for him, the struggle of any potential decision vanishes and he is able to sit comfortably with the loss.”

    “To the public mind, selling is never sound. It always conveys the possibility of being wrong twice: first, admitting that they’ve made a buying error; second, admitting that they might be wrong in selling out. And if the stock has actually gone up, they are tormented; should they take a profit or hold for a bigger one? That creates anxiety, and anxiety breeds mistakes. But as long as they’ve got losses, and never have to decide, they can sit back comfortably and dream instead.”

    “Through the entire market cycle lurks the fear of finalizing the deed, of taking it from dream to reality by selling. By not selling, by tightly holding on to his stocks, the investor never has to face reality.”

    Its an overlooked key to managing downside risk — knowing when to ride it out and when to hit the eject button.

  76. rainman

    Coke — Didn't they already try that with salt?  Completely silly distraction IMO.  "The only real difference between medicine and poison is the dose….and intent" — Oscar G. Hernandez, MD   Too much water (water intoxication) would likely kill you faster than too much soda.

  77. 1020

    Phil – Good article (I like the author) "How corporate socialism destroys"
     
    I get so irritated when sport ownerships threaten to move a team unless a new arena or stadium is built and always with taxpayers chipping in.  Field a better team, and fans will fill the stands. It's as simple as that…..

  78. rainman

    1020 / sports — I get irriated when I have to pay taxes for ANY sports realated reason.

  79. Phil

    From Matt regarding RSS

    People can do RSS on comments right now, but they need to be logged in and have the proper membership level. No need to worry about it soaking up too many resources. I am pretty sure we have identified the problem and it had to do with atom feeds (which are a lot like rss feeds). I have fixed something there that has made the demands on the server much lower. The last few days we haven't had the spike in usage from atom feeders that was causing the site to grind to a halt.
         FYI, I am in dialogue with the webair guys about getting all four of our servers in use. This way as the number of subscribers grows we will be in a position to handle it better. Hopefully this new setup will get initialized at the end of the week.

  80. kurtww

    RSS – still not working for me, maybe I'm doing something wrong. I tried both the RSS link posted in the article as well as the usual atom feed, and neither is working… Anybody else have it working, ideally with RSSowl?

  81. jabobeast

    this is one ugly market…

  82. Burrben

    RSS –  If anyone can get RSSOwl working, please post how to.  The ATOM feeds were the only thing that worked.  I tried to deal with Matt in the past on RSS, and let's just say I remember why I never called IT support.

  83. stjeanluc

    At Mid-day, the big chart is not improving… These Down 10% lines are getting closer.

  84. l4real

    Market not looking good!  
    Almost like a junkie going through withdrawls!  (No QE!)

  85. stjeanluc

    And TLT is above 130 again!

  86. lolobear

    lflan – is it time to go long on aapl?

  87. lflantheman

    lolo…yes.  I think Phil and I agree on below 555 you should be going long.   We are, of course.  

  88. Phil

    Transports down 2%, taking everything else with them.  

    42M shares traded at 12:30 on the Dow is slow but normally slow.  

    VIX $27.50, TLT $130.12, Dollar 82.68, oil $83, gold $1,614 – this is a scared and confused market.  

    AAPL $549 is down 2% for the day so hitting the Nas for -0.4%ish is most of their losses by itself.   That means people are buying – just not AAPL.  QQQ testing $60 and we got a good bounce off $62 and a not very good bounce off $61 but it was still $61.32 after touching $68.90 so don't knock a .30 gain if we can pick it up by selling weekly $62 puts for $2.05, which have very little premium at $60.10 and the whole point is to make a quick .20 and get the hell out on a bounce but also to be aware that we may drop .30 more so maybe offer to sell 1x at $2.10 and 1x at $2.20 and 2x at $2.30 for a $2.225 average entry with a stop around $2.40 for a risk of 4x .18.  

  89. Phil

    CHK power moving now.  

    Just noticed weekly FAS calls don't even go below $69 with FAS at $68 so indicates very few people believe this will stick (or they would create more strikes). We looked at TNA earlier but FAS June $69/74 bull call spread is just $2 and if you set a stop at $1.75 you risk .25 to make up to $4 – you don't have to be right too often to do well on trades like that!  

    And speaking of FAS in the $25KP – the Oct $94 calls are $5.10 and we can sell them to another sucker and roll our calls down to the the $68 calls at $14 for net $3.90 (plus the $5.10) and why would we not want to roll down $26 for net $4?  

  90. newbie

    PHIL / HOV  WFR  
    asking for more clarification
     
    Yes, usually I do not buy something as a long term hold. Usually all I do is buy and sell TNA/TZA and USUALLY TRY VERY HARD to hold them no more than a month, although that has not worked as well lately.
    So buying a small amount of long term equities (long term to me means 1 – 2 – 3 years) would be veering from my normal pattern. Being open to new ideas and all that. I could buy 100 shares of each of these and still have enough capital for doing the other things I usually do.
    WFR is solar panels and HOV is houses. I can see that houses will *eventually* come back (WHEN is the huge question, obviously). I don't know if WFR is a good company, and from just a few minutes reading this morning it sounds like they may run short on money at some point. Solar panels in general should do extremely well over the very long term, but I'm not sure that this is one of the companies that can hang on long enough to "make it". Short reading today makes it wound like it might be the worst dog in the pound. Last 12 months; Rev 2.5 Billion, Income MINUS 1.62 Billion. Definitely not a company that is printing profits (guess that's why it's a penny stock).
     
    I think it was either Barry or Josh (might have been somebody else) who said never buy anything at a long term low, in one of the "Rules" postings that was quoted here a couple days back. Or maybe it said something like "never buy anything under $3". Something like that.
    So IF I go in with my eyes wide open, realizing that it could take 2 to 3 years for either of these to "double", do you think that's worth doing? What's your opinion about either one of them running out of money and becoming worthless? No balls, no glory, right?
     
    Thanks for your observations. I'm going to make a decision today based largely on what you say. I'm considering both of them now.

  91. daveo

    Does anyone know why IMAX is getting slaughtered?  7% today, At least that last week.

  92. Lincoln

    Phil: LOW calls 
    Yes I am naked 50 JUL 28 calls but only after much scaling and rolling so my adjusted net selling price is $2.00, currently $ .55.  I re-wrote a very long question that got wiped out when I lost the site, but just the act of writing it helped me decide what to do.  :)

  93. Phil

    Please keep in mind that with ALL of our small portfolios – the Conservative thing to do was to cash out a month ago and we've been playing since to specifically demonstrate how we ride out a downturn with aggressively bullish portfolios.  No surprise then, that our most aggressive $25KP is getting killed but this happens to be right about the point at which is would have been best to start last time we were this far down.  

    There is nothing wrong with taking $25K of a $500K conservative portfolio and taking a stab at a big gain as long as you curb your loss at $12,500 and you are sincerely conservative with the $500K. 

    IWM Money – Looks good to me.   TNA at $42 and we sold $47 puts but the July $43 puts are the same price and there's still $1 of premium.  If we can roll them down even for $5 every month, we're only 10 months away from zero so we have an excellent chance of getting those short puts to expire worthless.  No need to roll the long calls yet – they are just there to buffer our call sales (if we ever get a chance to make them again).  

    FAS Money – XLF $12s can be rolled to the $10s for $1.35 and that's an easy call.  I'm not worried about the June $75 puts for the same reason I'm not worried about the TNA short puts but I am glad we sold those calls.

    $5KP – Would have DD'd on CHK but back to $1.75 now.  TLT we're fine with and TQQQ is at $41.42 so let's not roll (no point) the now .15 calls, let's buy 15 more for $225 for 20 at .35 and then look to get 1/2 out on a bounce to even or better.  We still have two weeks so worth a chance.  

    $25KP – Are we there yet? 

    • DMND – Down 5% today really sucks but we'll sell July calls and roll back when June expires.  
    • BBY – Back to $18 is getting tedious. 
    • FAS – Adjusted above.  
    • CHK – Looks good.
    • TNA – $52 looking far away now and let's sell 10 June  $47 calls for $1 (more than we'd collect cashing out our long calls) and buy 10 July $42/49 bull call spreads for $2.90 and hopefully we recover one day. 
    • TLT – Love that play!  
  94. yodi

    Come on Yodi – call off the dogs! 
    Sorry was out for a while checking on my dogs! Pepsi. It is not only the extortion of the criminals there is also a price war between Coke and Pepsi here in Mexico.
    Regret to say it is in deed to a great extend a lawless situation. This is also fired on by the forthcoming election, where anything goes dead or alive. I explained it to my visiting son the other day as follows. The scenery is like a lawn you stick out your head to far it gets cut off by the lawn-mower. Sorry I do not have any good words for the place.

  95. newbie

    rainman and 1020  /  stadiums
     
    About two weeks ago (give or take) I made a post here about the fact that the Minnesota legislature just passed a law, after a full TEN years of argument, to allow and fund a new stadium for the MN Vikings football team. MANY of the early proposals involved a LOT of public money. Made my blood boil.Never been to a Vikings game, never will. Tickets start at $100. I despise football. I wouldn't go if tickets were $2.
    We now have a brand new stadium for the MN Twins. We have a brand new stadium for the University of MN football team. We have a NEW stadium for the MN basketball team. And now were going to get another football stadium. That FOUR New stadiums in ten years in ONE city.
    Civil priorities so out of whack.
    The only redeeming feature, which I pointed out in my earlier post, is that most of the money is going to come from lottery tickets and "electronic pull tabs", and related things. Unfortunately, it is almost exclusively lower class blue collar workers who buy those things (I sure as hell don't, I'd rather loose my money trading stocks).
    The owner of the Vikings is one "Ziggy" Wolf, whom some of you new york guys probably know of. Worth way north of a Billion. Nearly all the players are multimillionaires, if not more. So the rhetoric has been "paying for stadiums for Billionaires and Millionaires". These are PRIVATELY HELD privately owned profit making capitalist (VERY high profit making) BUSINESSES.
    But they insist they "can't make it" without public subsidy. "F" THEM!!!!!!!!!!!!!!!!!!
    Like you say, let them run like any other business. Invest their own money, take in revenues from tickets, snacks, tv rights, t-shirts, and anything else they can. Charge whatever ticket prices it takes to make a profit. They probably would not have season tickets 100% sold out for years ahead like they do now. Let the people who want to go to football games pay for doing so.
     
    I have to wonder what the archaeologists are going to think when they dig up Minneapolis 300 years from now (not that there will be any people on earth at that point).  "Boy, I wonder what these people used all these stadiums for"?  Maybe they had Lions trying to eat people".
    Loosely paraphrasing what Phil said on the subject below my posting:  "making poor people pay for a stadium where people go  who have $100 for a ticket and buy $8 beers is disgusting".   Well said.

  96. i zega

    Hi Phil,
    If somebody is long Gold (the actual metal) with the intention of keeping it long term (3 yr. +), what hedge would you recommend to protect against a short term 15%+ drop in price?
    Thanks in advance

  97. newbie

    burben
     
    published?
     
    details?

  98. l4real

    Newbie/ 1020
    Nice articulated points about public financing of sports stadiums!

  99. jerconn

    Phil – interesting how AAPL is fighting the down trend.  The NAS and SPY are down but AAPL wants to go up, I am guessing that by the end of the day AAPL "wins"

  100. jerconn

    Huh?  Did I just mention the stick?

  101. newbie

    PHIL
     
    Just bought 100 shares HOV and 100 shares WFR.

  102. l4real

    Phil/ Iflan
    What are your thoughts on a June AAPL 550/570 BCS @ 9.50 or better?

  103. lolobear

    jerconn – can you please give me an email to get in touch with Andy or admin from his forum?  All of their emails admin@bullishcross.com and remarks@bullishcross.com are both failing. 

  104. rainman

    FU stadiums!  8)

  105. Phil

    $555/Lflan – Yes, I am like Herman Cain there – 5 – 5 – 5 – that is our AAPL plan!  Those $590 puts bottomed out at $2.10 after opening the day at $4 and now back to $2.50 and I still like them but it's a volatile position.  I think Samsung announcing a ship date is going to prod AAPL to make an IPhone announcement to stop switching (Jobs might not have done it but this team is more Corporate and defensive) and that can give AAPL a nice pop.  

    TNA/Newbie – A month?  Those are usually day trades unless you are spreading them.  On WFR, they took huge write-offs to re-tool production.  I don't mind that as much as short-term investors do.  I think you are looking at weak stocks over long time-frames in an uncertain environment so it goes back to what are you really trying to accomplish.  Don't forget with FTR, for example, you can buy the stock for $3.52 and sell the 2014 $2.50 puts and calls for $2 and net in at $1.52/2.26 and that makes their .40 dividend 26% per year while you wait to see if you make another 65% on the stock as long as it doesn't fall more than 28% between now and then.  If you are playing with money that matters – that's a lot more sensible than playing with WFR or HOV.  

    IMAX/Dave – Sorry, we talked about that ages ago – you have to sell them after the Avengers is released.  They just go up and down with the box office and no movie lasts more than a month.  Men in Black wasn't so exciting and now we have to wait for Spider-Man and Batman – which are back to back in July and then I'd really bail again as there's nothing else very exciting coming up.  So, I suppose selling the July $19 puts for $2 is not a bad way to play them for an entry.  

    FB $26.50!  

    LOW/Lincoln – Always good to write down your thoughts.  

    Mexico/Yodi – Such a shame because the country has so much potential to grow their economy if businesses weren't scared to invest down there.  

    Stadiums/Newbie – What kills me is there's no rationale for it.  Why can't they just build one and make at least the Twins share with the Vikings and the Timberwolves with the Wild (are they still a team?).  That's the craziest thing about it – not only do they make you buy them stadiums but they won't share with the other teams AND when they sell their team for $3Bn, like the Dodgers – you don't get a cut – even though the stadium becomes a part of the deal.  Stuff like that is simply baffling, the way the rich take advantage of the poor in this country.  

    You know how to fund a stadium?  You have 50,000 seats and you sell season ticket rights for $20,000 each (average as you'd have to have a formula for good and bad seats) that are owned by the fan and transferable forever in the form of a 40-year $500 payment due and THAT can be backed by the city, who would own all defaulted ticket rights.  That way, the actual fans pay ($1Bn) for and benefit from the stadium over it's expected lifetime with a very minor addition to the price of the tickets and all the city has to do is float a bond without racking up debt.  Very simply, if you can't find 50,000 people in your community who WANT to commit to season tickets – maybe building a $1Bn stadium is a STUPID IDEA!

    Gold/IZega – How about a GLD Jan $165/145 bear put spread for $10.25.  That gives you a double (almost) if gold falls back to about $1,500 (GLD currently $156.65 with gold at $1,615).  It also gives you back your $10.25 (mostly) UNLESS gold does go up.  So, let's say you have $100,000 worth of gold and you want to protect against 1/2 the potential loss of a 10% drop to $1,500.  That's going to cost you $10K so you can play $5,000 of the spread (5 contracts) and now you get $10,000 back if GLD is at $145 or lower and, if gold goes higher, you lose up to $5,000 on a move up to GLD $165 (up 5% – assuming you don't stop out) but then capture all of the gains again over $1,695.   You could also play the more volatile GLL Jan $17/20 bull call spread at $1.20 so $6,000 of those (50) pays $15,000 (+$9K) on a 5% drop in GLD and the same situation if it goes the other way – even a little in your favor so this way you are giving up $6,000 when you make your first $3,000 on the bull side but once you get past a 6% move up in gold – it's all profit again – even if you don't stop out the hedge.  

    AAPL/Jerconn – As I said earlier, they can shove it around within it's range but breaking it's range is very hard.  Too many people are buying at $555 since it's very easy to make a case for $700+.  Also you have the eventual IPhone 5 announcement.

    Wow, oil snuck up to $83.82 – that's a bullish sign if they can hold it up there because that Energy Sector is a drag on the Dow and S&P in a big way.  

  106. sank1

    FAS / Phil,
    Not sure I follow your recommendation on the 25KP – "And speaking of FAS in the $25KP – the Oct $94 calls are $5.10 and we can sell them to another sucker and roll our calls down to the the $68 calls at $14 for net $3.90 (plus the $5.10) and why would we not want to roll down $26 for net $4? "
    Sell the Oct $94 calls at $5.10 and buy the Oct $68 calls at $14.00 would have us rolling down $26 for $9.00, correct? and not $4? Not sure what I'm missing here.
    Thanks.

  107. yodi

    Phil Mexico you can change the country but not the mentality of the people. I have given this up many moons ago.

  108. stjeanluc

    FAS / Sank – We sell our current position and collect $5.10. Then we sell another set for $5.10 and we are short the Oct 94 Calls. That's $10.20. You had another $3.80 and you buy the 68 Calls!

  109. jromeha

    I like football and am glad we built a stadium for my Seahawks! What I am pissed about is the friggin PODUNK OKC STOLE OUR TEAM! That is why I will never go to Starbucks, that POS owner sold the Sonics to a podunk midwestern group determined to steal our team…Right when we got Durant too!
    Anyways Phil, do you like longs here in anticipation of the Bernanke saying something dovish later this week and *maybe* some good news out of Europe?

  110. terrapin22

    Phil / TLT – Sept 110 puts.  did we roll this higher? 

  111. jerconn

    Lolo – I'll get on it.  I was sure you were taken care of already but if nothing else I'll post a comment – Andy says he reads all the comments…

  112. jerconn

    Lolo – maybe give me an email to post so they can send you something as well…

  113. rpme

    Phil, I thought your comments to your brother about the market dropping 20% were interesting. The FED cannot continue to come to the rescue everytime the market starts to drop. If the market stabilizes, on its own, at 8000 (choose a number), won't we be better off in the long run. 20% from the top only takes us to 1136 on the S&P.

  114. rustle123

    IMAX/Phil
     
    Actually MIB 3 did extremely well for them, set a record in revenue for Memorial Day Weekend and still did well this week.  Coming up you Prometheus which I think will do well and around the corner is Spider-Man 3.  I actually picked up some shares today, very low RSI also.
     
    It also looks like the market is going to get squeezed.  If Europe does use funds to bailout banks ala the US, we could have a big gap up coming from oversold conditions.  That's IMO.

  115. yshenhar

    CHK – what is the target for the June 15 calls? CHK has been very volatile and only 11 days to expiration.
    TIA

  116. nicha

    rustle/IMAX – thanks.

  117. lolobear

    jerconn – jdalima@bildgta.ca
    please and thanks.

  118. japarikh

    Did anyone see that that new Samsung Galaxy comes w/ 50GB of cloud space on DropBox? That's phenomenal! 10x more space than iCloud!

  119. Phil

    FAS/$25KP, Sank – I'm saying sell the 20 Oct $94 calls we have for $5 plus another 20 Oct $94 calls we don't have and use the proceeds ($5) to pay for the purchase of 20 Oct $68 calls at $14 so we take a net of $4 of new money out of our pocket and end up in a 20/20 Oct $68/94 bull call spread for a net of $15 (since we paid $11 for our original calls).  

    And what StJ said! 

    Longs/Jrom – Yes, I very much like longs as I think the bad news is baked in so limited surprise downside but possible very sharp move up on a positive announcement.  

    TLT/Terra – Yes, we rolled them to the $115 puts last week. 

    Better off/Rpme – You could argue that, of course but that's essentially a deflationary solution as you permanently destroy $30Bn worth of paper wealth, which is 20% of our GDP for 10 years – not something you're going to bounce back from (ask Japan).  A "soft landing" won't erase our existing debts nor will it impact our deficits – only GROWTH will accomplish that and if we can grow – we will die.  At the moment, can kicking buys a year at a time but, eventually, math will catch up with that too and we'll get less and less return on our investment but we'll see that coming for miles.  At the moment, we play the hand we're dealt and that's another year of can kicking this month is most likely. 

    MIB/Rustle – Yes but it was expected to do well.  Avengers blew away expectations and that's when you have to take things off the table.  Now we'll probably bounce back on Spiderman/Batman expectations but then it's back to the normal BS and they gyrate again.  It's that gap up I"m expecting with these bullish pokes but painful when it doesn't happen!  

    CHK/$5KP, Yshen – They are in the money and CHK just fell $1 so we'd like to get back to about $2.50 and get the hell out.  

    10x/Japar – Now we know what one of AAPL's announcements will be!  

  120. jromeha

    Very disconcerting to see TLT down by $1.10 and our 115 puts also down! WTF!?

  121. japarikh

    Phil,
      Any FB play on potential tie up with APPL being announced during the developer's conference? Cook had nice things to say about FB and their partnership at All Things Digital last week.
    (your site wouldn't let me post a link to the article)

  122. lflantheman

    MoMo…sold the AMZN June 210 puts, 10 for 4.40.  So stj….for calculations that's a $2900 loss for that trade.  For anyone interested, I'm out because I see a strong move UPWARD in this stock today.  Cut your losers quickly!  

  123. zeroxzero

    jap:  We don't allow positive comments about FB on this site to avoid anyone making a mistake and actually buying any.

  124. Phil

    Income Portfolio – First picks.

    OK, we identified our probably trades last week and I have no reason to change them other than taking advantage of the additional drops:  

     

    • 10 CHK July $17 puts sold for $2.10 ($2,100) 
    • 10 BBY July $18 puts sold for $1.12 ($1,200) 
    • 10 BA July $65 puts sold for $2.02 ($2,020)
    • 10 DMND July $19 puts sold for $2.15 ($2,150) 
    • 20 AA Oct $8 puts sold for .75 ($1,500)

    That's a quick $8,970 collected and, if all goes well, we can go to sleep for two months and be on track!  

  125. jerconn

    Yah, I like this!  Mr. Stick in the afternoon…thanks Phil for those AAPL 590's!

  126. dflam

    PHIL/TKR;
    I bought 5 Sept. $42.50 C  at $8.25 and sold 5 Sept. $47.50 c at $5.15 an sold 5 Sept. $45 P at $$2.55 ( now $ $5.00) for net $.55 on $5 spread.Would it make sense to you to close out the calls for the $175 loss and roll the puts to Dec.$42.50 for 5.50?

  127. japarikh

    Zero,
      Money is money and if there is an opportunity to make it I don't care which company it is. Personally, I don't care for FB at all but an endorsement from APPL can be huge (momentum trade only of course). Phil, what's your take?

  128. jabobeast

    japarikh--when is the conference?

  129. zeroxzero

    jap:  Agreed, of course.  I actually own one share, and have high hopes for it.

  130. Phil

    2nd time was a charm on the AAPL $590s, now goal at $4.25! 

    TLT/Jrom – Because the VIX fell 2.5% and the premium fell.  You can drive yourself nuts watching intra-day moves on long options.  

    FB/Japar – I don't know why you couldn't post a link – anyone else getting that?  

    From Matt re. RSS feeds:  

    Things have changed with the atom feed. I discovered that wordpress in some recent version had released atom feeds for comments. The rss comments feed was already locked down; the atom feed was locked down just recently. I'm not familiar with owlrss, but if it has a way of letting you log in and then access comments, then they can still get it if they are basic or premium. Sorry for the confusion.

    If anyone needs help with this, please contact Greg (admin at ….  ) and we'll try to work out a how-to so others can benefit.  

    TKR/Dflam – Why?  That's a Sept play and it's June and they're just testing the 200 dma at $44.50.  Your .55 spread is $2.50 in the money for a $1,000 gain if they flatline at $45 and you want to take a loss?  I guess if your plan was to lose money when you started then you nailed it but, otherwise, unless there is some reason you no longer like them – why not see if they hold the 200 dma at least before retreating?  

    FB/Japar – Money is money and there are 9,000 stocks out there and about 2,500 of them worth investing in and FB is simply not one of them.  

  131. sagemm1

    Phil/CHK
     
    I had a CHK 15/17 BCS  which is slightly a loser of about .25 per contract are you then taking off the longs in the 5kp and leaving the short 17 calls? the jun 15 calls are now 2.72 ish

  132. sank1

    FAS / stj, Phil,
    Thanks for the clarification.

  133. zeroxzero

    "An intensifying financial crisis in Spain or elsewhere in Europe has the potential to drive American stocks into a bear market, Goldman Sachs Group Inc. (GS)’s chief U.S. equity strategist said."  http://www.bloomberg.com/news/2012-06-04/goldman-sachs-sees-potential-for-s-p-500-bear-market-on-europe.html   I particularly like the "or elsewhere" part —  wonderfully incisive commentary on a market that's been tanking since April Fool's Day.

  134. japarikh

    Jabo,

     June 11-15

  135. jabobeast

    thanks japarikh!

  136. japarikh

    Phil,
     Good point…..as always

  137. Phil

    We went up on word G7 (who's missing?) would issue a statement tomorrow but now pulling back again in the confusion. 

    Have I mentioned how much I love cash lately?  

    Oil $84.15, Dollar 82.65.  

    12:00 PM On the hour: Dow -0.28%. 10-yr -0.36%. Euro +0.49% vs. dollar. Crude +0.02% to $83.25. Gold -0.36% to $1616.25.

    1:00 PM On the hour: Dow -0.55%. 10-yr -0.41%. Euro +0.35% vs. dollar. Crude -0.02% to $83.22. Gold -0.59% to $1612.45. 

    2:00 PM On the hour: Dow -0.45%. 10-yr -0.5%. Euro +0.41% vs. dollar. Crude +0.84% to $83.92. Gold -0.4% to $1615.55

    3:00 PM On the hour: Dow -0.2%. 10-yr -0.53%. Euro +0.46% vs. dollar. Crude +1.14% to $84.17. Gold -0.18% to $1619.15.

    BIS data for Q4 2011 provides more evidence of tightening credit, with cross-border claims of banks – generally loans – falling by $799B from Q3, or by around 2.5% of lending. Driven by the eurozone debt crisis, it's the biggest fall in foreign lending since the collapse of Lehman, with the sharpest drop coming from inter-bank lending. (PR)

    Not a great news for the U.S. economy, writes Sober Look, is the continued shrinkage in dealer corporate bond inventories as regulatory pressure forces banks to cut their balance sheets. Liquidity for medium and smaller-sized issuers is bound to suffer, with some shut out of the market altogether.

    "Treasury bonds are essentially a speculative asset here," writes John Hussman, cutting the duration of his fund's bond holdings to less than a year. While the plunge in yields confirms his view of "a dire economic picture," 1.5% "leaves little on the table but speculative merit."

    More from Hussman: While the sell-off in stocks gives the S&P a bit more value in his models – a 5.5% annual return over the next decade – bear markets usually don't end until the market offers 10%, and secular bears don't end until prospective returns hit 20%!. Just getting to 10% would require an S&P in the mid-800s.

    The eurozone needs "more Europe, not less," says Angela Merkel ahead of talks with EC President Barroso regarding bank supervision. Barroso says he plans to push for "banking union" at the June 28 summit. The press conference ends with no questions after the brief statements from the two. Stocks hit session lows, the S&P-0.9%.

    Banks must be allowed direct access to the EU rescue funds, says the ECB's Benoit Coeure, as reported by Dow Jones. Current policy allows for funds to only be disbursed to governments. A change as Coeure suggests would allow the banks to be rescued without the nations having to submit to a bailout.

    Beijing appears to be fast-tracking infrastructure projects in an effort to support the economy, with approvals doubling Y/Y through the end of April, and government spending up 27%. Steel plants are a big favorite – the only trouble is the country is awash in overcapacity. "(It) will make things worse in the long term," says a trader of the metal.

    Don't expect a stimulus plan like 2008, says a top official as Beijing draws up plans to deal with the consequences of a Greek exit from EMU. One key concern is continuing weakness in the euro, which hurts not only the country's export industry, but accounts for 20% of China's foreign exchange reserves.

    LDK Solar (LDK -0.8%) fails to hold early gains sparked by news it landed three contracts for solar projects in China, each with at least 600 MW of capacity. LDK says the contracts indicate resilient demand for solar projects in China, where the economy is slowing.

    Choke – 1/3 of mark – choke, choke!!!  Lloyd's (LYG) unloads for $621M a portfolio of troubled Australian property loans to a group led by Blackstone and Morgan Stanley. The face value of the paper is $1.8B. The move is part of a continuing process aimed at shoring up the bank's balance sheet.

    Airline stocks are hit by a wave of selling as Delta (DAL-8.7%) reports passenger unit revenue rose less than expected in May and as the sector has enjoyed a big run-up this year on weakening crude oil prices. Delta, United Continental (UAL -6.2%) and US Airways (LCC -8.1%) are among the day's biggest decliners.

    Chesapeake (CHK +4.6%) tops the S&P leader board after its decision to replace four directors, as investors agree with a Robert W. Baird analysis that the move "will go a long way in addressing the market's lack of confidence around Chesapeake's corporate governance and likely usher in a new culture of increased conservatism."

    Told you so!  Cheniere Energy (LNG -8.3%) may be the company of the future but it's falling quickly in the present, according to an analysis by David White. The company's shares reflect the promise of its planned liquefied natural gas export terminals, but it's taking on huge debts at a time when most peers are cutting back; shares could "easily fall to $5 or below." CQP -13.5%.

    Magazines in Italy have begun to advertise the impending arrival of Starbucks (SBUX -0.3%) to the country with cities including Rome, Milan, Venice, and Naples all slated to see store openings as early as later this month. Though the company will probably cling to tourist attractions and airports with its early batch of stores, eventually it will venture out to compete with Italy's entrenched cafe culture with an air conditioned climate and free wi-fi as two possible weapons in its arsenal.

    Baird says Dendreon's (DNDN -8.5%) Provenge may have a difficult road to commercial acceptance especially after this weekend's ASCO meeting in which both Bristol Myers (BMY flat) andMedivation (MDVN -2%) published impressive trial results for their prostate drugs. The firm loweres its 2014 and 2015 estimates for Provenge and said the drug may have trouble remaining relevant.

    DRAM contract prices for the first half of May, which were only recently settled, rose 5% sequentially, according to DRAMeXchange. However, the increase was smaller than suppliers were hoping, as softening PC demand gave OEMs negotiating power. Micron (MU -1.1%), which is looking to buy bankrupt rival Elpida, rallied earlier this year on optimism regarding stabilizing DRAM prices, but has since given back its gains. 

    As PayPal (EBAY), Verifone (PAY), and perhaps now Groupon (GRPN) dream of challenging (IIIIII) Square's dominance of the mobile credit-card reader market, the startup's phenomenal growth and massive distribution network is making the challenge more and more daunting. Following new distribution deals with Walgreens, Staples, and FedEx, Square boasts its readers are now available in 20K U.S. outlets, up from 10K at the beginning of the year. 

    Samsung's acquisition of Wi-Fi chipmaker Nanoradio isn't a near-term issue for mobile Wi-Fi giant Broadcom (BRCM), says Nomura's Romit Shah. Though Nanoradio's chips boast low power consumption, they currently don't support other radio technologies such as Bluetooth and FM, unlike Broadcom's combo chips. In addition, Broadcom has a lead in supporting new technologies such as 802.11ac and Wi-Fi Direct. Samsung's Galaxy S III features a Broadcom combo chip.

    Microsoft (MSFT) packs a lot of Xbox-related news into its presentation (live blog) at the E3 convention, as it tries to bolster the console's position as a home entertainment hub. Some highlights: an Xbox-optimized version of Internet Explorer; the Smart Glass tablet app, which allows users to view material related to the Xbox video and gaming content they're seeing; and the Xbox Music service, which will also run on Windows 8 and Windows Phone (but which faces plenty of competition).

    YouTube's (GOOGbig investments in third-party professional content are paying off. Not only is monthly usage soaring, the improved reach of content developers, along with their ability to offer higher-quality content, is drawing the attention of top advertisers. In addition, content developers are being lured by the chance to new revenue streams such as product placements and cross-promotions.

    Google (GOOG) is set to launch a new small business marketing solution that leverages Google+OffersWallet, and other products. By doing so, Google hopes to grow its share of the $21B+ market for local digital ad spending, and better monetize the 20% of searches that are for local info. Google's efforts represent fresh competition for Yelp (YELP -8%), Groupon (GRPN -8.3%), and Facebook (FB -3.4%), and perhaps also social media marketing firms such as BV and CTCT. (earlier)

  138. Phil


    Facebook (
    FB -3.6%) has fallen below $27 in the wake of Bernstein's critical report and news of a new Google local ad sales push. Other volatile Internet and social media names are unsurprisingly also diving: ZNGA -4.2%GRPN -7.9%YELP -6.8%.RENN -5.1%Z -5.9%. Henry Blodget, who previously set a $16-$24 PT range for Facebook, discusses how multiple compression appears inevitable for the company as growth slows, judging by the histories of tech giants.

    Matt Taibbi weighs in on the Facebook (FB) IPO fiasco, saying that this and other stories suggest Wall St is increasingly turning into a place "where the big banks and broker-dealers that channel vast streams of crucial non-public information…are also trading for their own accounts, and sharing information with a select group of 'preferred investors.'"

    Undeterred by Facebook and the market's recent selloff, power management chipmaker iWatt is filing for a $75M IPO under the ticker IWAT. Apple is a buyer of iWatt's chips, which enable AC/DC power conversion, LED display backlighting, and LED solid-state lighting, as are Cree, Konka, and Philips. According to its S-1, iWatt posted revenue of $16.1M (+80% Y/Y) in Q1, and a net loss of $8.2M.

    Nokia's (NOK +0.4%) Lumia phones continue to sell well, says Pac Crest's James Faucette after conducting checks. Faucette believes both the Lumia 900 and 600 are faring well in the U.S., and that Euro sales rose M/M in May. On the other hand, he thinks Research In Motion (RIMM -4%) saw another month of sales declines, leading the company's channel inventory to rise to 6-8 weeks. That could be contributing to today's selloff to the single-digit range. (previous)

    Apple's (AAPL) Siri - loved by some, loathed by others – will be making its way to the iPad with the release of iOS 6, 9to5 Mac reports. It's added Apple is beta-testing Siri on both the latest iPad and the iPad 2, though it will likely only be available on the former. Nuance (NUAN) and Yelp (YELP) would benefit (III) from Siri's iPad debut.

    Three lunchtime reads:

    1) Investors brace for slowdown

    2) The joy of falling stock prices for income investors

    3) Overprepared for the next storm 

  139. 1020

    A couple months ago, I saw the preview on the latest Batman.  It. Looked. Awesome.  Possibly better than the last…..

  140. sagemm1

    Phil CHK my 15/17 BCS is actually July, do you feel this is more risky to hold now, like I said earlier I can get out for .25 per contract now but I was still looking for a 17 handle on CHK prior to mid-July, unrealistic??

  141. jerconn

    Lolo – here's what's going on:
    Andy Zaky | June 4, 2012 at 2:59 pm | Reply

    It’s because i get like 20 e-mails a day from people wanting to join. We’re currently not accepting new subscribers yet. We will soon. But not yet.

  142. Phil

    CHK/Sage – CHK is at $16.50 so those contacts are worth $1.50 out of a possible $2.  What did you buy them for that you are losing .25 per contract and feel the need to bail on the position and take a loss wit two weeks left to go?   Why do you feel CHK will go down and why are you sure they won't go over $17.65 and begin to cost you money?  

    You're welcome Sank! 

    GS/ZZ – Now that one is a BS statement that you can play contrary.    I love how they talk out both sides on the same day.  

    Batman/1020 – Doesn't matter, I'll see it anyway…  One thing I do love is superhero movies.  Brings back my old comic book days.  The two best Batmans were the two with the Joker (1st and last) because the villain didn't have any silly powers or crazy inventions – that was classic Batman, who used to be featured in DETECTIVE comics, with the accent on detecting, not fighting superhumans.   In fact, in the comics, Batman has no respect for Superman because he solves all his problems with his fists. 

    CHK/Sage – I'm very confident CHK is worth more than $17 and they just popped 6% today in a terrible market.  If you don't like them anymore – take a .25 loss and quit worrying but the real question is – what the heck are you doing in this position in the first place if you don't believe CHK will be over $17 in July (earnings season)?

  143. scottmi

    Batman/Phil – LOL! and Batman only solves 80% of his problems with his fists.. ?

  144. dpastramas

    RSS / Burrben – Did you have any luck with RSSOwl Burr? Tried everything, cant get the feed to load…

  145. sagemm1

    Thanks Phil, I am confident in CHK, I just panicked when I saw you saying to get the heck out of 15 calls realized thery were JUne and I have July…so sorry for the dumb question

  146. l4real

    Batman/Phil
     
    Those were good comics! We still have an original X-men #1 and many others in pretty good condition!

  147. jabobeast

    FB under 27
    what a POS!

  148. zeroxzero

    Nice coda, Jabo!!

  149. Burrben

    FWIW – CHK triggers catch play
     
    CHK hit a 52-week low of $13.32 on May 17 before bouncing back a bit in the last three weeks of trading. After selling off with the market on Friday, the stock found support at its 21-day moving average this morning, signaling a “Catch Play” entry .  The 21-day MA is starting to flatten out after several months of a steady downtrend, another bullish sign for the stock. The next level to watch for momentum is Thursday’s pivot high at $17.13.
     
    http://www.t3live.com/articles/market-analysis/3090-chesapeake-chk-triggers-a-qcatch-playq-after-decision-to-replace-key-personnel.html

  150. Burrben

    dpas / RSS  - No, no luck.  I sent Greg a email asking for specific, step by step instructions on how to get RSSOwl to work.  Fingers crossed.

  151. zeroxzero

    And Tim Rice sounds like Phil talking about the market!!  http://news.bbc.co.uk/2/hi/programmes/hardtalk/9725469.stm

  152. Phil

    Batman/Scott – Oh come on, that's not Batman.  Comic people hated that show (but we still watched every one). 

    CHK/Sage – No problem.  Remember, there are no dumb questions but, unfortunately, there are plenty of dumb people who know how to talk… 8)  

    XMen#1/Lf – Wow, that's good!  Best I have is FF #3 and Spider Man #15.  Those things are going to pay for my kid's first cars.  I had originally thought they would pay for my first car but I miscalculated the appreciation by a bit but, on the whole, it was a sound plan!  

    FB/Jabob – Shocking!  

    Well, we survived Monday – congrats to all on that.  Dow volume just 125M so certainly doesn't prove anything.  

  153. Pharmboy

    Now that's a BS stick, but expected non-the-less.  ZLCS and CLDX were green…oh, and SGEN. 

  154. dpastramas

    RSS / Bur – ok, please if Greg comes back to you, forward me his instructions, you have my mail. Take care!

  155. kurtww

    Burr/RSS — please share with the board, I'd love to get mine working again also. I love RSSowl, but I'm willing to look at another client. I don't see any way to log in through the client, though. I assumed it worked through the browser login, but in hindsight that doesn't really make sense. I'm guessing that's the crux of the problem. Let me know if I can help in any way. 

  156. millcreek

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    Phil,
    I became a member a couple of weeks ago.  Followed you on SA and decided to sign up for the income portfolio etc.

    Now I would like to get your thoughts so I can reposition my portfolio properly and more importantly do some  “learnin”.  Some of the positions need to be repaired, removed or replaced.
    Been working to absorb the phil…osophy and I have added some of your hedges since i.e. edz, tza and sqqq along with the tlt trade.
    I will post my positions on the board over time and look for your thoughts/suggestions on what could be improved.
    Long Oxy @ 85 was selling front month 85 calls and at present do not have any.  Rig at 50 same for the 50s. concerned about selling calls down here as im not sure re the rolling methodology.
    Tks for your help.

  157. millcreek

    hey all
    sorry for the previous message.  figured it out and it wont happen again!

  158. terrapin22

    FTR - at least six different officers of the company bought shares in May. 

  159. boltdude

    Egan-Jones strikes again – just downgraded the UK from AA to AA-.

  160. scottmi

    Broken Butterfly/Silent & Phil – last week you commented that my BWB on AMZN might be buying too much premium (silent you specifically mentioned the $220 strike)..This got me exploring the setup, examining it if I had entered with the long July 220s and even with july 210s and 220s while keeping the short june 215s, and a flat out set with july expirations for the 210s, 215s and 220s.  Doing some good learning. To restate the initial entry: on 5/24 for net credit of $185, sold a June 1/3/2 BWB consisting of three AMZN June $215 calls @ 7.46 each, bot one AMZN June $210 call @ 10.49, bot two AMZN June $220 calls @ 5.02 each, with margin hit of $313.
    .
    Alternate 1: for net debit of $753, sell three AMZN June $215 calls @ 7.46 each, buy one AMZN June $210 call @ 10.49, buy two AMZN JULY $220 calls @ 9.69 each, with margin hit of $1263.  Also looked at an Alternate 2: for net debit of $1225, sold three June 215 calls, and sold one July 210 call and two July 220 calls, with net margin hit of $2225 and an Alternate 3 as if the whole thing was a July 1/3/2 BWB..
    for discussion here, will just work with the alternate 1 …
    At first glance, going with the july 220s gives a much more robust profit envelope.. but it is not the same trade and is at a cost.. specifically, 4x the margin requirement and is a net debit entry rather than net credit.  SO.. to try and make this a more apples to apples trade using margin requirement as the basis, quadrupling the flat June trade used the same margin ($1272 vs $1263 for the july 220 version) but rather than cost me $753, it put $728 cash in my pocket with downside protection to zero, and max win of $2681. However, the alternate 1 has absolutely generated a faster return, so far, and had more upside protection if I had got the direction wrong. 
    .
    I like both setups a lot. The same month BWB for credit is especially nice for it’s low margin and cash-in-pocket-up-front and super downside protection. The debit version with next month leg even better for any consolidating or channel-bound stock.. 
    Thanks, guys, for calling this out as something to look at. Would be interested if there are different strikes you would have chosen or any additional aspects you would call out. I’m still new at these and as always.. learning!

  161. rpme

    Phil, any thoughts on WPRT.  I have been watching for some time, its volatile, but seems like a good time to start building a position.

  162. Burrben

    I'm not sure if anyone lives in the Bay Area, but this is like a kick in da balls to all of us who loved an independent coffee shop/ bakery.  I ate here at least 4 times a week.  When they opened it was true artisian baking….
     
     
    Starbucks buys La Boulange bakery chain for $100 million
    http://www.usatoday.com/money/industries/food/story/2012-06-03/starbucks-bakery/55382660/1

  163. stjeanluc

    We seem to be consolidating, but we said the same thing around the Down 5% lines…

  164. morxlntway

     "Two words."
     "And, sir, what are they?"
     "Good decisions."
     "And how do you make good decisions?"
     "One word."
     "And sir, what is that?"
     "Experience."
     "And how do you get Experience?"
     "Two words."
     "And, sir, what are they?"
     "Bad decisions."

  165. morxlntway

    oops. bad decision. supposed to start with what is your secret of success.

  166. morxlntway

    Stjean – consolidating – i've seen more bottoms in the last 2 weeks than a month at the beach!

  167. stjeanluc

    Mu point exactly Morx…  Looking at the charts, it looks like we paused at the Must Hold (?),  2.5% lines, 5% lines and now getting close to the 10% lines.

  168. jfawcett

    Phil / Income Portfolio – Based on 1M (500K actual).  Trades adjusted to reflect a different portfolio amount and margin requirements.  If I understand the entries correctly, we need to be sure there are sufficient funds in your virtual portfolio to double down and roll.  Thanks for the entries.

  169. lotter

    RSS feed,
    Not sure if this helps, but I clicked on the RSS 2.0 link on top of the comments section (also can't get RSSOwl to work any more), and that worked fine so I set up the RSS feed in Internet Explorer.  I later went back to it, and I now got the message:
    "Internet Explorer is unable to update this password-protected feed. Authentication forbidden" although the feed was set up with my user name and password.
     
    Opening the Philstockworld web site in a second Explorer window now gave me a 'Guest View' with Phil's morning post but no comments, only a message saying that I had to upgrade to Premium Membership (I am a basic member) to see comments.  I was still logged in and I could go and see my account details, but not the comments.  Closing both Explorer windows (RSS feed and web site) and opening the Philstockworld web site again restored comments in the web site window.
     
    Earlier in the day I played around with the IE RSS, including trying the /feed/atom/ (as compared to the default /feed/ that I got from the RSS 2.0 link) and got a message that 'this service is only available to Premium Members' or something to that effect.

  170. Phil

    Welcome Millcreek!    Happy to help but need good info to do so.  So you are long OXY at $85 and now they are $80 and you say you don't want to sell calls.  Problem number one is that you didn't sell calls in the first place.  If you go back about a week, we had some pretty good discussions of building wealth by just making sure you make 10% a year consistently.  Nothing fancy, just set yourself up to make 10% on a regular basis and you'll be quite rich in 20 years.  Very few people do this because 10% of what you have now never seems like a lot but it really adds up if you keep at it.  

    So OXY, for example, now at $80.16 is a good but not great entry as they were $65 last fall and $55 in 2009 so they could go much lower in a panic, which means it's not a stock I'd tie money up in in the first place.  Now, if you must own OXY, why buy them for $80.15 (or $85) when you can sell the 2014 $77.50 puts for $15.40?  That gives you a net entry of $61.10 – a much more reasonable entry point and it only ties up $13 of ordinary margin so your ROI is over 100% in 18 months and even if you allocate $61.10 to buy the stock – then you have a return on allocation of about 25% – still very nice and now you have a 25% margin of safety built into the trade.  If you want to be more aggressive, you can add the 2014 $50/75 bull call spread at $16, which makes another $9 if OXY is over $75 and then you are in the $25 spread for net 0.40 combined with the put sale and you've laid out $16 in cash and $13 in margin or $29 to make $24.40 (84%) in 18 months as long as OXY holds $75.  How does that compare to buying the stock for $85 and crossing your fingers?  

    This is what we teach here – how to use options to take control of your investments and to MANAGE your risk – not increase it.  Your RIG I like better at this price but same mistake buying them at $50 with no hedges (now $40.17) but it's fixable if you are willing to DD as you can sell the 2014 $40 calls for $8.60 and the $40 puts for $9.20 and that drops your basis to net $32.20/36.10 or net $32.20 ($50 less the sold calls and puts) and, if another round is put to you at $40, your average on 2x would be $36.10, which is not a bad break-even considering it's 30% below your original entry and you didn't even hedge to start.  If you are called away at $40, you make $7.80, which is 24% of the $32.20 you would be leaving on the table and that ain't bad as a turn-around from your current 20% loss.

    See how easy this stuff is!  

    Egan/Bold – Didn't stop the Euro from popping $1.25.  Pound not over $1.54 yet.  

    Oil testing $85! 

    AMZN/Scott – Well there are hundreds of ways to do these things but none of them are the way I pick trades.  First of all, maximizing your margin buying is nice until the whole thing moves against you and all that leverage blows up in your face – I just want to make the most possible profit with the least possible risk and if I have to trade $3,000 instead of $6,000 because of margin – then I must need the money anyway and I'd rather build my portfolio up slowly than leverage my risk when my back is already against the wall.  Anyway, back to AMZN – I am amazed you can write 4 paragraphs on a trade without even mentioning your goal/target for the trade.  Long July $220, short June $215, long at $210 means you want what exactly to happen over the next 45 days?  I see AMZN having fallen from $233 (on earnings excitement) back to test the 50 dma at $208 in a very bad market so they look strong to me and will probably smoke the top of your range if we get any QE action.  The 200 dma is $200 and if they couldn't fail the 50 dma in this crappy month, I very much doubt they'll fail $200 without news so I feel comfortable selling July $190 puts for $3.85 and I expect them to have a run-up into earnings so I can buy the July $230s for $4.80 sell the June $220s for $3.20 as they can be rolled to the July $235s (now $3.50) and then I'd be in a $5 vertical for a net credit of $2.25 and then I can just watch the trade develop and, if AMZN zips higher – THEN I can get fancy and add another long or, if they fail to hold $208, then I can sell another call to protect the put.  These trades are much easier to adjust and manage and, if all goes well, the June caller expires worthless and I'll have a chance to cash out the puts and calls on a move back to test $230 or at least $225.  That's a trading plan – I know exactly what I want to do when AMZN moves up or down and, if it flatlines, that's fine too as I sold more premium than I bought.  

    WPRT/Rpme – They SOUND good but they don't make any money and don't plan to make any money this year or next.  Clearly the investors RAN (not walked) to the exits when CMI announced they were getting into this business.  CMI is a 10x bigger company that does make money ($1.8Bn last year, more than WPRT is worth!) with a current p/e of 9 and a forward p/e of 9 reflecting their expected 10% growth and I still wouldn't buy them for $90 because it's 200% above where they bottomed in 2009 ($29.44) so CMI is not for me and WPRT is so massively outclassed by this one competitor that I can understand why they dropped over 50% in a month on the mere announcement that CMI would be entering their space.

    When your home team is in the Superbowl and your QB breaks his leg and the odds go from 3:2 to 5:1 – it doesn't mean taking your team became a better deal – it just means your team is now VERY likely to get their asses kicked – that's what WPRT's stock price is telling you….

    SBUX/Burr – Why is that a bad thing?  Better SBUX than MCD – I'll bet SBUX does their best to keep the breads and pastries the same but I'm sure their coffee will be replaced by tomorrow morning – that might be annoying if you liked their kind better than SBUX.  I'm kind of glad if SBUX can figure out how to do a good job with bread on a consistent national level but I don't think it can be done – seems to be the water in NY and SF that makes for better baking.  

    Big Chart looks a tiny bit encouraging but we didn't take back any 200s but the Nas – and only barely. 

    LOL Morx! 

    Income Portfolio/Jfaw – Not sure I get the question but we're starting with $500K, $1M margin buying power and, unlike aggressive portfolios, we're not very likely to use too much of it – especially in the early months.  

    RSS/Lotter – I passed that along to Greg and Matt.  Matt says try again as he tweaked something. 

  171. jfawcett

    Phil / TNA BCS – From your morning post:  A question for my continuing education.
    Not much to do but see how things go this morning.  My favorite bull play is, of course XLF at our $13.50 target and TNA June $41/47 bull call spread at $3 can end up at $6 with TNA now $3.70 almost all in the money and, if TNA dips further – THEN you can stop out at $1.50 and sell some puts for $1.50 (currently the $39 puts are $1.30) and work into it that way.
    I suspect front month vs. July due to the 3x ETF decay.  Correct?  TIA

  172. jabobeast

    is this supposed to be funny? ;-)
     
    http://www.philstockworld.com/2012/06/04/and-then-there-were-three/

  173. jfawcett

    Phil / Income – Basically I need to adjust recommended trades to the size of a smaller portfolio.  Sorry for the confusion.

  174. Burrben

    Phil / La Boulange
    It's a bad thing only if you've actually been there and enjoyed you're coffee and pastry on the sidewalk, watching the ppl go by.  It's a bad thing if you've ordered a french baguette toasted with butter, and you put 1 on of the 3 jams on it and drank you're capp overlooking the bay.    I can't imagine that they will keep the same quality of bread / coffee / butter / jams and nutella that they had in the past.  I can't imagine that they will employ the 28yr old latte maker that knows you and puts a shamrock each morning on your drink.  Etc.  
     
    Another example of a big corp taking over a "mom and pop" type shop.  It's another example of why I don't live in the USA.  When you find those La Boulange's in the US, you cling to them like a baby's blanket.  When they are taken over,  I can't imagine they will ever be the same.  Fast forward 50yrs….will there be any mom and pop's left?  If not, that would be very sad…

  175. Phil

    Good morning!

    Futures were up but now flat.  Europe has traded straight down since the open with Germany now down almost 1% but CAC still up half a point.  News is all over the place.  (Asia was up but not too much).

    Dollar 82.91, oil $84, gold $1,620, Euro $1.2427 (down 1% from last night), Pound $1.5351, 78.24 Yen to the Dollar, silver $28.22, copper $3.30 ($3.85 is "healthy"), nat gas $2.41, gasoline $2.65.  

    10-year 1.517% so under 1.5% did not last so far. 

    Tuesday's economic calendar:

    7:45 ICSC Retail Store Sales

    8:55 Redbook Chain Store Sales

    10:00 ISM Non-Manufacturing Index

    2:15 PM Fed's Bullard: ' The Aftermath of the Housing Bubble'

    7:00 PM Fed's Fisher: 'The Limits of the Powers of Central Banks'

    7:30 PM Fed's Evans speaks to the NYU Money Marketeers

    10:36 PM Risk markets get a little bit of their footing back in overnight trade. S&P futures +0.5%, the euro +0.3% to $1.2530. Sydney +1.2%, Hong Kong +1%, Shanghai +0.4%, Tokyo +0.6%

    6:00 AM Overseas: Japan +1.0%. Hong Kong +0.4%. China +0.1%. India +0.2%. London Closed. Paris +0.4%. Frankfurt -0.9%.

    6:27 AM U.S. stock futures stand nearly flat ahead of economic releases on retail store sales and the ISM non-manufacturing index. S&P -0.1%, Dow unchanged.

    S&P 500 Valuation Slips Below ’11  (Bloomberg)

    Faith in markets remains high. Why? They spare us from the unpleasant work of thinking and arguing about the meaning of goods (Guardian)

    The strong correlation between Treasury yields and European stock prices tells Scott Grannis the 1.5% 10-year rate is more a function of foreign demand for safe paper than an indicator of imminent U.S. recession. Every post-war recession has been preceded by a sharp rise in the real Fed Funds rate and a flat or inverted yield curve, neither of which is occurring now.

    Despite the worrisome decline in the stock market over recent weeks to near-correction levels, the selling has lacked one key ingredient – panic. Although an orderly selloff is generally looked upon as a sign of a healthy market where investors are merely cashing in profits, without any signs of real capitulation the risk to the markets at present is just a continuing grind lower and lower. 

    G-7 finance minsters and central bank governors have a conference call set for Tuesday to discuss "the situation in Europe," says Canadian finmin Jim Flaherty. The G-20 has a summit scheduled for next week.

    "If it comes to worst, before the eurozone collapses,everything will be done to bail (it) out," says former Deutsche Bank CEO Josef Ackermann, adding he has "no doubt" the German people would support it. "Destruction is much more expensive than further construction." 

    Eurozone PMI hits near a three-year low in May, with the final composite index at 46.0 (vs. 45.9 flash and 46.7 prior). The "sector has fallen into a steepening downturn" with "further signs of weakness spreading from the non-core to core nations, with even Germany slipping back into contraction." Based on these numbers, "it would not be surprising to see GDP for the region contract by 0.5%" in Q2.

    Eurozone April retail sales come in at -1% M/M and -2.5% Y/Y, much worse than expectations of -0.1% M/M and -1.1% Y/Y. March's figures were +0.3% M/M and -0.2% Y/Y. (PR)

    German final non-manufacturing PMI comes in at 51.8 in May vs. 52.2 prior. Increased levels of business activity were seen across all six broad areas of the service economy.

    The ECB has room to further cut interest rates to spur growth, says the IMF's Christine Lagarde. As for Spain, the IMF is "absolutely not" in talks with the country.

    The U.K. is downgraded to AA- from AA by Egan-Jones. "The overriding concern is whether the country will be able to continue to cut its deficit in the face of weaker economic conditions and a possible deterioration in the country's financial sector." U.K. 10-year Gilt yields currently reside at a record-low 1.52%. 

    Spanish Treasury Minister Cristobal Montoro sends out a mayday, saying that because of the risk premium, Spain is shut out of the markets. Montoro adds that the EU should help capitalize the country's banks, departing from PM Mariano Rajoy's line that it doesn't need external help. A big test will come tomorrow, when Spain will try to sell €1B-€2B in bonds

    Italy has largely avoided the kind of bearish scrutiny recently directed at Spain, partly because of the assumption that Italian banks had loaded up on enough LTRO cash to coast by for awhile. Hedge fund giant Bridgewater destroys that fantasy, calculating the 'dry powder' number at negative €48B in residual LTRO cash.

    China HSBC May Services PMI 54.7 vs. 54.1 in April. This is the gauge's fastest expansion in 19 months, driven by new business and improvements in confidence about the future. The long-run trend is 56.7.

    Chinese officials are drafting a response plan to a possible "worst-case scenario" of Greece leaving the eurozone "later this year," according to state-run newspaper China Daily. According to several sources, the plan aims to cushion the possible impact on China's exchange rate, capital flows and trade.

    In what may have been a bizarre coincidence, Monday's daily loss for China's benchmark Shanghai Composite Index spelled out the date of the crackdown on pro-democracy protesters in Beijing's Tiananmen Square – on the 23rd anniversary of the incident. The index fell by 64.89 points, matching the 6/4/89 date of the event, which is known in China as the "6-4 Incident."

    The Reserve Bank of Australia cuts its benchmark rate 25 bps to 3.50%, as was widely expected. Growth concerns were piqued by further weakening in Europe, growth moderation in China, a slow U.S. recovery and a deterioration in financial market sentiment. Aussie households and businesses continue to act with caution. S&P/ASX 200 extended its gain, closing +1.5% on the rate cut. (RBA statement

    Goldman Sachs (GS)fired around 50 people last week, according to sources who spoke to the NYT, looking to trim costs as its revenue prospects worsen. Fifty is hardly a bloodbath, but the layoffs included several managing directors on the higher-end of Goldman's pay scale, a sign that Goldman is looking to cut some senior players after laying off 8.5% of its work force in the last year.

    JPMorgan (JPM) may report a $4.2B trading loss in its chief investment office, according to an estimate by International Strategy & Investment Group Inc. A pretax loss of that size would help cut Q2 EPS to $0.65, off 30% from an earlier estimate of $0.93.

    Morgan Stanley (MS -2.9%) sinks to its lowest price since December 2008, trading at 45% of tangible book value as it remains – among the major U.S. banks – the favored proxy for EU difficulties. Coming up could be a Moody's rating cut of as much as 3 notches, but Morgan's bonds and credit derivatives have been trading at junk levelsfor nearly a year. 

    Pick up Bank of America before it gets hot again, says Evercore's Andrew Marquardt, raising the lender to Overweight and lifting his price target to $10. Among his reasons is BAC's relative lack of exposure to international markets. By Marquardt's math, the bank is trading at just 4X normalized earnings and 0.5X BV.

     FBR downgrades seven regional banking lenders, pointing to the dismal outlook for interest rates and a "lack of material positive catalysts." Huntington Bancshares (HBAN -4.3%) and Boston Private Financial (BPFH -9.3%) are reduced to Underperform; ZION -3.5%,WAFD -1.4%NYB -2%NPBC -3.9% and FULT -2.9% are cut to Market Perform. 

    Rising production from North Dakota's Bakken play iscompeting directly with Canadian oil sands and adding downward pressure on crude prices, likely causing delays in future oil sands projects and phases, a new Wood Mackenzie report says. Oil sands output will rise by 1M bbl/day by 2015, but will compete with 1.2M bbl/day of new Bakken output for limited space on congested pipelines. 

    While Caterpillar's (CAT) 20% stock jump in January helped lift the Dow to a strong 2012 start, its big slide is now dragging down the index. Indications of slowing dealer sales put a big dent in CAT shares in March, and they’ve continued to slide; CAT shed another 2.6% today and is off 29% from its Feb. 24 high, contributing ~28% of the Dow's 900-point drop since then. 

    Wynn Resorts' (WYNN) latest Macau casino resort will cost $4B, says CEO Steve Wynn. "Growth of the market has been so spectacular, the expansion so dramatic, it is unrealistic for it to continue at that rate," he says, but Macau doesn't need to sustain that blistering growth for it to remain a profitable play.

    Once Deemed Evil, Google Now Embraces “Paid Inclusion” (Marketing Land)

    Google Readies New Local-Ad Assault (WSJ)

    Less than 300K U.S. consumers turned in their feature phones for smartphones each week in May, estimates Horace Deidu after analyzing comScore's latest data. That's down sharply from the 1.5M/week added in November, and, along with disappointing Q1 smartphone sales, suggests U.S. demand for smartphones (and their costly service plans) is finally cooling off. Also of note: Android's (GOOG) smartphone share fell 20 bps M/M to 50.8%, after months of torrid growth.

    Number of the Week: Half of U.S. Lives in Household Getting Benefits (WSJ)

  176. kinkistyle

    Nice infographic of where China's Elite are sending their children to study: http://awesome.good.is/transparency/web/1205/export-of-students/flat.html
     
    85% of China's rich are sending their children abroad.  Of that about 65% are sending them to either to North America or England. Throw in Australia and N.Z. and 75% are going to Anglo-nations. 
     
    So it seems to me that the "rats in-the-know" jumping ship first and the "Americas" are the juiciest destination and also the future of China will be closely tied with the future of the U.S. and U.K.

  177. Phil

    TNA/Jfaw – The front month was due to A) A high degree of confidence that we'd hit target but June's end (so why wait) and B) Confidence that we can always roll the $41s we own back a month and pay for it with the sale of the July whatevers IF WE HAVE TO – along with the overall plan of the play, which is to use a further dip to take a $1.50 July put to cover any loss – again reflecting confidence that we're bottoming out on XLF.   If you expect a run in two weeks, you don't pick a 6-week vertical because you won't make any money on the short-term run (very little).  

    I think it's good to note, but hard to explain, that I look at hundreds and hundreds of trade ideas every day but sometimes the time-frame is just wrong – in other words, I don't have a good feeling about where the stock or ETF will be on the expiration date so there's no point in betting on something I don't know since I'm wrong 40% of the time at the best of times anyway.  Sometimes the premiums don't justify my uncertainty – in other words, I'm not being paid enough to take that 40% risk that I'm wrong.  Sometimes the strikes are too wide and I don't see one I feel strongly about.  

    So I start my trades with news or seeing a stock that I think is overbought or oversold.  Step 2 is I look at how much I can get paid to risk a bet on that stock.  Step 3 is I look at the charts and think about what I think the stock is likely to do over the next few weeks, few month and year(s).  Step 4 is I check over the news and fundamentals to make sure I'm not missing anything.  Step 5 is I look along the curves of the line I have drawn for where I expect my stock to be between now and 2014 (the end of the current option cycle) and I look for the best premiums I can sell along that line along with, of course, my level of certainty at those strikes and times.  THEN, if I feel satisfied with all that, I put it up as a trade idea but, overall, 19 out of 20 times I'll find a flaw along the way and just walk away from the stock because I KNOW there are 8,999 other stocks to look at and I KNOW 1/20 of those are good so why waste my time with stocks I don't REALLY like when there are over 400 much better opportunites left to identify?

    Adjust/Jfaw – Well, mostly we do 10s so easy to scale and, of course, if you aren't comfortable with a scaled-down entry – DON'T PLAY THAT ONE!  Simple enough?  

    Mom and Pops/Burr – On the way back from the wedding this weekend we drove down by West Point and had lunch in Cold Spring, NY – which is a very nice little town on the bank of the Hudson next to West Point.  What I really love about Cold Spring is there is not a single franchise in the town – not one, not even the banks.  It's a wonderful thing and I was actually pointing out to my kids as we walked up and down the street how there wasn't a single store or restaurant that they'd heard of and I told them that was pretty much what the World was like when I was young – every new town held new discoveries of stores and restaurants.  We used to go to Boston to get hot fudge and sundaes from Herrell's because it was the best by a mile and worth a drive from NY for a weekend.  My parents used to drive to Sarasota and load up the trunk with spring water and you could only get good taffy if you actually went to Atlantic City so it was cool and special.  I think frachises are a blight on the 
    World aside from homogenizing the planet so you almost can't tell if you are in Cleveland or Berlin from the stores on the street they also suck the money (and jobs) out of the local communities and funnel them to national or, even worse, International holding companies – further depleting the ability of small business people to be able to succeed and grow something locally.  

    But that's a post for another day…

    China/Kinki – Notice 22% UK.  That has always been the tradition – the Oxford education…  I think it's more a commentary on China's inability to develop World-class colleges (maybe that's unfair as I should say World-recognized) that people from other nations want to send their kids to.  What would a chart of the ultra-rich from any country look like?  Oxford, Cambridge, Harvard, Stanford, MIT, Yale, Princeton, Imperial College, Columbia, Johns Hopkins, McGill, ETH in Zurich, ENS & EPFL in Paris U of Edinburgh.  Other than the University of Hong Kong (British built) and University of Tokyo and Kyoto and maybe Singapore's National University – I can't think of any other schools in Asia that would even rank in the World's top 20 so, to me, the map doesn't prove anything other than rich people in China send their kids to the same best schools in the World as rich people in Europe and America do – likely for the same reasons – notice "Greater Creativity" and "Open-Mindidness" rank very far below Quality and Well-Rounded Development – the same reasons anyone in a "free" country wants their kids in the Ivys.  

  178. Phil

    Also, it's possible that schools in China have greater integrity and you can't get kids into the best schools by making a donation or pulling political strings.  Maybe China only admits based on actual merit and that would send the average trust-fund kid flying overseas on a heartbeat.  Heck GWB would have had to be shipped off to China if Yale actually needed you to be smart to attend!  

    Notice he didn't actually finish college properly, he was excused out in year 4 to be in the National Guard (which he never showed up for).  From Bush's 2001 Yale Commencement Speech: 

     

    Most important, congratulations to the class of 2001. To those of you who received honors, awards, and distinctions, I say, well done. And to the C students I say, you, too, can be President of the United States. A Yale degree is worth a lot, as I often remind Dick Cheney, who studied here but left a little early. So now know: If you graduate from Yale, you become President; if you drop out, you get to be Vice President.
     
    This is my first time back here in quite a while. I'm sure that each of you will make your own journey back at least a few times in your life. If you're like me, you won't remember everything you did here.
     
    I did take English here, and I took a class called "The History and Practice of American Oratory," taught by Rollin G. Osterwies. And President Levin, I want to give credit where credit is due . I want the entire world to know this: Everything I know about the spoken word, I learned right here at Yale.  [Laughter]
     
     
     
     

  179. angelcur

    he did have a sense of humor about being a c student..what is little known is that John Kerry and the Pres were both  Skull and Bones  or that  GWB had a HIGHER grade point than John Kerry…

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