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Testy Tuesday – 1,360 or Bust – Bernanke Special Edition

This will be an easy one to call.

Other than our exciting spike up on Friday, we've been on a big downward spiral along the declining 50 dma lines and even our ill-gotten gains have only taken us to our expected resistance lines on the Big Chart.  As usual, we have a pre-market pump job sending us higher but what matters is what sticks in actual trading and, as you can see – the volume is simply too lame to get us over significant resistance points.  

Today is day one of Ben Bernanke's "Humphrey Hawkins" testimony on Capitol Hill where he will tell Congress the recovery is moving very slowly (but still recovering) and it's up to Congress, not the Fed, to step in and do something more.

Then the Congresspeople of each party will attempt to score political points for their respective parties and then the farce will end and we'll do it all again tomorrow – as if it matters.  What really matters is tomorrow afternoon's Beige Book from the Fed along with a lot of housing data to finish the week and, of course, earnings – which have been a fairly mixed bag so far.  

Goldman Sachs (GS) reported this morning with a substantial beat of .60, giving them $1.78 of earnings per $97.50 share – so a beat of low expectations buy 4x $1.78 is less than $8 and we've got a p/e of 12 for a company who's income has gyrated wildly – to say the least.  STT also beat by a bit with MTB putting in a win as well.  INTC is out later and that one will move the Nasdaq but expectations are a very low .52 per $25 share – about the same p/e as an investment bank. 

Earnings are nice but, as you can see from the chart on the left – it's ALL about the Fed.  As we discussed last week – pretty much the entirety of our "recovery" since the March, 2009 lows has been based on anticipation of Fed action – the rest is just noise.  This has been going on since the Fed went activist in 2001 and, as you can see – the effect has been magnifying since then as MORE FREE MONEY cures all ills – until it doesn't, of course.  

To sum it up, the S&P is now 50% fluff, propped up by promises and expectations of easy money and the last time the punch bowl got taken away was a summer day just like this one in an election year just like this one when it finally became clear to investors that the stimulus train was reaching the end of the tracks.  What a little temper-tantrum the markets had then!   

Of course oil was $145 in July of 2008 and the Freddie, Fannie crisis was just beginning but no one (not even us) was prepared for the length and depth of the crash that was to come over the next few months.  If I am too often "cashy and cautious" these days – it's because of the way I saw the markets act back in 2008 – there was no strategy to save bullish positions, other than taking a loss and waiting for them to drop another 30-40% and then HOPING that held.  

Hope is, of course, not a valid investing strategy and we have been patiently sitting our the first two weeks of earnings, waiting to see if some sort of pattern emerges and, so far, there is none.  

Last week's early reporters were a sea of red but this week is improving a bit (albeit against low expectations) while we wait for news from AIR, INTC, IBKR, MBFI, URI, WYNN and INTC tonight; BAC, BK, BLK, CHKP, FRC, HON, NTRS, PNC, BPOP, STJ, SWK, USB, GWW, AXP, CLB, EWBC, EBAY, IBM, KMP, NE, QCOM, SLM, and YUM tomorrow and another 100 on Thursday and over 1,000 more next week.  THEN we'll have a pretty good idea of what the markets are doing, right?  

So no need to rush into things today.  I'm just back from vacation and will be catching up on things but let's not kid ourselves – if Bernanke doesn't wave the money wand (and we have no reason to think he will) for Congress this week – I don't think we're going to see earnings strong enough to take our indices to the promised land.  


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  1. Pharmboy

  2. rookie

    Phil/Pharm/Alzheimers-I read an article in wsj last nite re. late stage trial results for new drugs. Pfizer, J&J, Elan expected to report first as early as next month. 
    Is there a trading opportunity here ?

  3. stjeanluc

    Oil Lines

    R3 – 91.81
    R2 – 90.28
    R3 – 89.47
    PP – 87.94
    S1 – 87.13
    S2 – 85.60
    S3 – 84.79

  4. revtodd64

    Gas drillers – watch the guar bean futures in India!  All fracking is dependent on this bean, which helps stiffen the mixture so water can flow horizontally.  Apparently it thickens ice cream too.  If the price goes up, short Halliburton.
    http://www.nytimes.com/2012/07/17/world/asia/fracking-in-us-lifts-guar-farmers-in-india.html?_r=1&emc=eta1
     
    Just something fun to read while waiting for Bernanke today.

  5. rkyroma

    Phil,
    ALU down to 1.12 on earnings warning.  Would you add some here, or wait and see?
    The company now sees a Q2 adjusted operating loss of around 40 million euros, with revenues above 3.5 billion.  Street consensus had been for 3.62 billion revenue and adjusted operating profit of 52.5 million euros.

  6. stjeanluc

  7. Birdman

    VVUS?

  8. Pharmboy

    PFE/JNJ/Elan – I would by Elan, but LLY already said their drug does not work….and PFE's drug is the same thing except PFE's drug crosses into the brain, LLY's did not.  All the companies are focused on beta amyloid, and  have been for years.  beta amyloid is cleaved in cells by gamma secretase, and drug companies worked on inhibiting this enzyme, put the drugs in clinical trials….and all failed.  I think some companies are trying again (BMY).

    While the protein may be involved….it is not the culprit IMHO….there is something else.  I think it fails.  PFE has the mAb (like a cancer drug), but JNJ bought into Elan to claim a stake if it works, thus they get 1/2 the sales if memory serves me correctly.

  9. Phil

    Good morning!  

    Got off to a bit of a late start but the markets are hot right out of the gate.  We need that 1,360 line or this is all just silliness, of course.  I think this move up is BS – volume is nearly zero and it looks like a bear flush to me.  

    Rumors of China stimulus as well as the usual expectations from Bernanke are keeping things going.  TLT fell hard back to $129 with the VIX down to 16.65 so a lot of people believe more QE is right around the corner and maybe it is but, if so – we have months to get bullish and, if not, we have hours to get bearish so – what do you think the safer stance is?  

  10. rkyroma

    VVUS –  Spiking lower on "Possible Bear Raid"

  11. Pharmboy

    I hope some puts were sold on that fall….I missed it writing the above…..damn.

     

    Varian….sell 1/2 for a profit…NOW!

  12. stjeanluc

    On JRCC, you could leg in at the prices that I indicate in the portfolio. But low volumes so if you tried to trade as a spread you might have trouble filling it.

  13. Pharmboy

    VVUS that is…..

  14. Burrben

    Fyi, Lightspeed is having a 50% off sale.  I use them as my backup broker to IB.  It's more just execution software, nothing else.  Pales in comparison to TOS, but cheap and fast.
     
    Save 50% on your equities and options commissions for 60 days*
    $.00225 per share or $2.25 per trade for stocks
    30 cents per contract for options
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    Use promo code HALFOFF

  15. shadowfax

    Phil
    So right you are, so glad I sold into the initial excitement out a nickle from the top and all down since!

  16. stjeanluc

  17. neetcorp

    Pharmboy,
    VVUS, Bear Raid? Leak?

  18. Birdman

    VVUS / Stop Hunt?

  19. Gingbaum

    Does anyone know if  DMND stated a date for their financials to be released?  I thought it was sometime in July.

  20. stjeanluc

    Finally some information on CMG post-earning moves. They move about 6% on average and that's what the weekly strangle currently predicts so that makes for a tough earning play.

  21. jasu1

    What the hell just happened?

  22. Phil

    Alzheimers/Rookie – The problem is, by the time you read it in the WSJ it's a well-known fact and you don't have any kind of jump on the drug introduction.  It may be a factor in leaning you towards an investment in JNJ or PFE but can hardly be the sole factor as they are so big and, with ELN, we have to assume it's somewhat baked in to the 100% run in the last 18 months.  

    Oops, Benrnanke's speech released ahead of testimony and no QE3.  Tomorrow's speech is the same but the Bulls are already feeling reality breathing down their necks!  

  23. stjeanluc

    There are some very volatile names reporting this week – average post-earning moves:

    SWKS – 8.61%
    SCSS – 11.68%
    FFIV – 12.05%
    ALGN – 13.35%
    ISRG – 6.10%
    CY – 6.20%
    GOOG – 7.51%
    CY – 6.20%

    Unfortunately, options seem to currently prices these moves somewhat correctly.

    On the other hand, YUM usually moves about 2.37% but options are pricing a move over 6%! 

  24. Amalfi

    Pharm/VVUS – Many thanks.

  25. dpastramas

    Come VVUS..make my day!!  Pharm is there a certain time we are expecting the announcement?

  26. Birdman

    VVUS just like craps – fun. I don't indulge myself very often, but it is entertaining (in very small amounts).

  27. Amalfi

    Anyone here familiar with MORT? It's trading at the 52 week high. Has been moving up steadily for the last 6 months. Pays a 7% dividend yield.

  28. Birdman

    Phil – Does this look like an inflection point?

  29. Amalfi

    Bernanke: Fed has 'made clear' it is ready to act
    http://www.marketwatch.com/story/bernanke-fed-has-made-clear-it-is-ready-to-act-2012-07-17-1091012

  30. xray1960

    cnbc blurb: Soc Gen guy says S&P nearing 200mo vs 50 mo "Death Cross"?  Or just a lot of hooey? Any ideas?

  31. Phil

    Guar beans/Rev – If guar can be grown in those areas, it's only a matter of time before they are planted in bulk somewhere and oversupplied so I wouldn't get too excited about it.  Fun trade though if you can isolate a couple of companies.  

    ALU/Rkyro – That was a nasty dip but doesn't change their long-term prospects.  They spent a lot on R&D and ramping up production of new products and, of course, Europe does suck so no real surprise there.  This is a good entry opportunity or one of those times when it does make sense to DD.  

    ALU at $1.12.  Selling 2014 $1 calls for .50 and $1 puts for .35 is net .27/64 so let's say we're willing to own $12,800 in the Income Portfolio and that means we start with 10,000 at net $2,700 cash, which can make $7,300 at $1 in 2014. 

    Damn, F just dropped .15 on Bernanke's notes.  The Sept $10s are .15 (+.08) so it's not a big deal to wait.  The Sept $9s are .55 and I'd rather roll to those for .40 or less on a bigger drop than the $10s and, if there's a bigger drop, then we can sell some puts too so, on the whole, waiting is the correct move.  

    Notice how the more conservative $25KP is catching up to the $25KPA – that's the nature of playing aggressively, more ups and downs while slow and steady sometimes wins the race.  

    Lightspeed/Burr – That's a great deal, thanks!  

    Good job Shadow.  

    Bernanke sounds like he's going to cry – should we be worried?  

  32. angelcur

    PHIL// i am with you i think we need to get to 1270 before a meaningful rally into the election can be sustained..i am more inclined to sell rallies than to buy weakness at this point

  33. Jbur

    AGNC: I came across this article last night, and while I don't have any positions, I know many of you do.  Also has some interesting data on NLY and some of the other mREITs.
    http://seekingalpha.com/article/724811-plump-14-40-dividend-yielding-stock-for-retirees

  34. rkyroma

    Phil / Bernanke  - Don't worry, be Cashy.  (whistles…)
    http://www.youtube.com/watch?v=d-diB65scQU

  35. rainman

    Phil / Ben — Ben often sounds like he's going to cry.  There a certain nervous vibrato to his voice that I believe is caused by either trying to believe his own lies or he is frightened that the truth might slip out.

  36. Phil

    DMND/Ging – Back to $19.50 already.  I don't see a filing date but DMND applied for, and got, a stay of delisting until July 26th so I'd call that the deadline for restated financials.  I'd take $20 and run before that on our old plays and then make new, smaller trades when and if they get over the $20 line.  

    Inflection/Bird – Sure, I said about a week ago that we hit a major inflection point about this Friday as those 200 dma's move up to cross the 50 dmas and the Dow and RUT are right on schedule with the NYSE jumping the gun slightly but, if the other indices only get the lame reaction to hitting the 200 dma that the NYSE got this past week- it's time to get more bearish for sure!  

    Bernanke's actual testimony:  

    The U.S. economy has continued to recover, but economic activity appears to have decelerated somewhat during the first half of this year. After rising at an annual rate of 2-1/2 percent in the second half of 2011, real gross domestic product (GDP) increased at a 2 percent pace in the first quarter of 2012, and available indicators point to a still-smaller gain in the second quarter…

    …after running at nearly 200,000 per month during the fourth and first quarters, the average increase in payroll employment shrank to 75,000 per month during the second quarter… 

    …On the demand side, many would-be buyers are deterred by worries about their own finances or about the economy more generally. Other prospective homebuyers cannot obtain mortgages due to tight lending standards, impaired creditworthiness, or because their current mortgages are underwater--that is, they owe more than their homes are worth. On the supply side, the large number of vacant homes, boosted by the ongoing inflow of foreclosed properties, continues to divert demand from new construction…

    …After posting strong gains over the second half of 2011 and into the first quarter of 2012, manufacturing production has slowed in recent months. Similarly, the rise in real business spending on equipment and software appears to have decelerated from the double-digit pace seen over the second half of 2011 to a more moderate rate of growth over the first part of this year. Forward-looking indicators of investment demand--such as surveys of business conditions and capital spending plans--suggest further weakness ahead. In part, slowing growth in production and capital investment appears to reflect economic stresses in Europe, which, together with some cooling in the economies of other trading partners, is restraining the demand for U.S. exports…

    …The most effective way that the Congress could help to support the economy right now would be to work to address the nation's fiscal challenges in a way that takes into account both the need for long-run sustainability and the fragility of the recovery. Doing so earlier rather than later would help reduce uncertainty and boost household and business confidence…

    …In view of the weaker economic outlook, subdued projected path for inflation, and significant downside risks to economic growth, the FOMC decided to ease monetary policy at its June meeting by continuing its maturity extension program (or MEP) through the end of this year. The MEP combines sales of short-term Treasury securities with an equivalent amount of purchases of longer-term Treasury securities. As a result, it decreases the supply of longer-term Treasury securities available to the public, putting upward pressure on the prices of those securities and downward pressure on their yields, without affecting the overall size of the Federal Reserve's balance sheet. By removing additional longer-term Treasury securities from the market, the Fed's asset purchases also induce private investors to acquire other longer-term assets, such as corporate bonds and mortgage backed-securities, helping to raise their prices and lower their yields and thereby making broader financial conditions more accommodative.

    There is nothing here that really should lead one to conclude the Fed is interested in more easing.  He's flat-out saying they just did ease more so what more can be expected just a month later?  What silliness!  

    Also very important to read is the new Monetary Policy Report (55 Pages) – which is what Bernanke is delivering to Congress today.  

    Overall, this is not a good picture at all.  Now it's going to be about seeing whether those 200 dmas can hold up at 12,474, 1,309, 2,814, 7,696 and 770 with the NYSE right on that line now so watch it carefully!  

  37. rexx

    Bernanke crying/ Maybe he just heard about the Goldman hiring freeze…

  38. sagemm1

    Phil/ USO
     
    Do you see an opportunity here with the recent run up followed by no more QE?

  39. Phil

    Have I said how good it is to be back at my desk?  If I could take my computers with me, I could stay on vacation for months but I always feel so out of synch when I don't have all my screens.  That's the downside to having a big trading set-up – you get used to it and don't feel good about what can realistically come with you on vacation which, in my case, is two laptops plus on LCD screen and two IPads so 5 screens (normal sized) not nearly enough when I'm traveling.   

    Death cross/XRay – I would actually take that very seriously.  That's a major long-term technical and again, why I am dumbfounded that the G20 haven't already taken major action because letting this pattern continue has a pretty good chance of dooming us all.  

    1,270/Angel – I hope not that low.  Once those 200 dmas fail, we are in deep doo-doo (to use the technical term).  

    AGNC/JBur – Two things you have to watch out for are changes in the tax code and, of course, liquidity issues if Europe gets worse (or we realize China is as bad as Europe).  

    Ben/Rain – You would think the man would take some public speaking or, at least, acting classes after all these years.

    USO/Sage – I was going to say something earlier this morning at $89 but tomorrow is inventory and we're close to contract expiration so I am too worried about a mega-pump to $90 into inventories, which I would love to short.   Now that the Fed is off the table (to any rational observer, anyway) I'm a little more confident but we just dropped $1 so I'm disinclined to chase and back to hoping for a rally into inventories tomorrow to short into.  

    Since Bernanke is all bad news and we're down half a point – I think we now get a relief rally when he stops talking and the MSM can gear up their spin machine this afternoon.  

  40. Burrben

    Can anyone spell out the ALU trade (shares / contracts) in detail?  The numbers I'm running aren't adding up to Phil's.  I'm probably not reading between the lines right.

  41. Phil

    Colbert did a nice job last night summarizing Romney/Bain:

  42. Phil

    ALU/Burr – Buying 10,000 shares of ALU at $1.12 and selling 100 2014 $1 calls for .50 and 100 2014 $1 puts for .35 for net .27 x 10,000 = $2,700 cash.  

  43. kinkistyle

    ALU/Burr: 10,000 shares of ALU at 1.12 selling 2014 $1 put/calls for total $0.85.  Unfortunately I couldn't get the fills on Fidelity :(

  44. Burrben

    I'm kinda bored.  I think we should ask Jackie for a 2nd Qtr trade idea :)  
    DIS as been a star performer in my portfolio, just holding the stock.  Chart

  45. Burrben

    ALU – Why own the stock at all?  It doesn't pay a div.  Wouldn't it make more sense to just sell the straddle, or create a synthetic using short put, long call?

  46. jacalynm

    ALU / Phil stupid question but to own 10k shares wouldn't we have to sell 100 contracts with strike at $1? One contract is 100 shares right? Thanks and welcome back …

  47. stjeanluc

    Someone back in 2009 back-tested the Death Cross and Golden Cross scenarii:

    http://ibankcoin.com/woodshedderblog/2009/06/23/spx-golden-cross-confirmed/

    The Golden Cross seems to be a better indicator overall but the Death Cross is also profitable.

  48. kinkistyle

    Burr: I think once a stock gets that low a stock essentially becomes like a call option with voting rights and no expiration date.

  49. Phil

    ALU fills/Kinki – I see .52 and .31 filling so not too far off.  .05 more makes it .32/.58 – still a nice profit at $1 but, of course, when you are making an 18-month trade, rushing a fill in the first two hours is not always the way to go.  

    Jackie/Burr – After getting dragged to a couple of meetings with me while out west, she has expressed a renewed interest in getting into the business.  I made sure she saw all the bills from the trip – I wanted to emphasize to the kids that vacations like that don't come cheap and there's a reason we work really hard – so we can afford to play really hard too.  

    ALU/JBur – That's a matter of preference but owning the stock makes it easier to roll the caller for a long-term hold if things go well.  Depends on your long-term outlook, time-frame etc.  I think the $1/2 spread, selling $1 puts was our original trade on them but, with the stock down to $1.12 – it's a lot more attractive than it was at $1.40.  

    And what Kinki said.  

    ALU/Jacalyn – Yes, 100 shares.  Sorry, I take it as a given that people know how many shares they need to cover.  

    Crosses/StJ – I find them reliable enough to use caution around them.  

  50. Phil

     

    Investors’ 10 Most Common Behavioral Biases

    Barry Ritholz (of The Big Picture and a Sunday Business columnist at The Washington Post) recently contributed Investors’ 10 most common mistakes to The Washington Post Business Section quarterly investing section. It’s a commentary that he has been working on for a while — the ten topics are listed with links to longer discussions of each common mistake here. I created my own investing “checklist” (here) in response to Barry’s original list. For yet one more iteration of the theme, I offer my list of Investors’ 10 Most Common Behavioral Biases.  There are a number of others, of course, and more will continue to be uncovered.  But I think that these are the key ones.  Your suggestions of important ones I have missed are welcome.

    1. Confirmation Bias. We like to think that we carefully gather and evaluate facts and data before coming to a conclusion.  But we don’t. Instead, we tend to suffer from confirmation bias and thus reach a conclusion first.  Only thereafter do we gather facts and see those facts in such a way as to support our pre-conceived conclusions.  When a conclusion fits with our desired narrative, so much the better, because narratives are crucial to how we make sense of reality.
    2. Optimism Bias.  This is a well-established bias in which someone’s subjective confidence in their judgments is reliably greater than their objective accuracy. Indeed, we live in an overconfident, Lake Wobegon world (“where all the women are strong, all the men are good-looking, and all the children are above average”).  We are only correct about 80% of the time when we are “99% sure.” Fully 94% of college professors believe they have above-average teaching skills (anyone who has gone to college will no doubt disagree with that). Since80% of drivers  say that their driving skills are above average, I guess none of them drive on the freeway when I do.  While 70% of high school students claim to have above-average leadership skills, only 2% say they are below average, no doubt taught by above average math teachers. In a truly terrifying survey result, 92% students said they were of good character and 79% said that their character was better than most people even though 27% of those same students admitted stealing from a store within the prior year and 60% said they had cheated on an exam. Venture capitalists are wildly overconfident in their estimations of how likely their potential ventures are either to succeed or fail. In a finding that pretty well sums things up, 85-90% of people think that the future will be more pleasant and less painful for them than for the average person.
    3. Loss Aversion. We are highly loss averse.  Empirical estimates find that losses are felt between two and two-and-a-half as strongly as gains.  Thus the disutility of losing $100 is at least twice the utility of gaining $100. Loss aversion favors inaction over action and the status quo over any alternatives. Therefore, when it comes time for us to act upon the facts and data we have gathered and the analysis we have undertaken about them, biases 2 and 3 – unjustified optimism and unreasonable risk aversion – conflict. As a consequence, we tend to make bold forecasts but timid choices. 
    4. Self-Serving Bias. Our self-serving bias is related to confirmation bias and optimism bias. Self-serving bias pushes us to see the world such that the good stuff that happens is my doing (“we had a great week of practice, worked hard and executed on Sunday”) while the bad stuff is always someone else’s fault (“It just wasn’t our night” or “we simply couldn’t catch a break” or “we would have won if the refereeing hadn’t been so awful”).
    5. The Planning Fallacy.  In his terrific book, Thinking, Fast and Slow, Nobel laureate Dan Kahneman outlines what he calls the “planning fallacy.” It’s a corollary to optimism bias and self-serving bias. Most of us overrate our own capacities and exaggerate our abilities to shape the future.  The planning fallacy is our tendency to underestimate the time, costs, and risks of future actions and at the same time overestimate the benefits thereof.  It’s at least partly why we underestimate bad results. It’s why we think it won’t take us as long to accomplish something as it does. It’s why projects tend to cost more than we expect.  It’s why the results we achieve aren’t as good as we expect. 
    6. Choice Paralysis. Intuitively, the more choices we have the better.  However, the sad truth is that too many choices can lead to decision paralysis due to information overload.  For example, participation in 401(k) plans among employees decreases as the number of investable funds offered increases. We are readily paralyzed by too many choices.
    7. Herding. We all run in herds — large or small, bullish or bearish.  Institutions herd even more than individuals in that investments chosen by one institution predict the investment choices of other institutions by a remarkable degree.  Even hedge funds seem to buy and sell the same stocks, at the same time, and track each other’s investment strategies. That affinity fraud  (e.g., Bernie Madoff fleeced the Jewish community to which he belonged) is so common is definitive evidence of herding.
    8. We Prefer Stories to Analysis.  As noted above, narratives are crucial to how we make sense of reality.  They help us to explain, understand and interpret the world around us.  They also give us a frame of reference we can use to remember the concepts we take them to represent.  Perhaps most significantly, we inherently prefer narrative to data — often to the detriment of our understanding.  Keeping one’s analysis and interpretation of the data reasonably objective – since analysis and interpretation are required for data to be actionable – is really, really hard even in the best of circumstances. A corollary to this problem and to confirmation bias is what Nassim Taleb calls the “narrative fallacy” — looking backward and creating a pattern to fit events and constructing a story that explains what happened along with what caused it to happen.
    9. Recency Bias. We are all prone to recency bias, meaning that we tend to extrapolate recent events into the future indefinitely. As reported by Bespoke, Bloomberg surveys market strategists on a weekly basis and asks for their recommended portfolio weightings of stocks, bonds and cash.  The peak recommended stock weighting came just after the peak of the internet bubble in early 2001 while the lowest recommended weighting came just after the lows of the financial crisis. That’s recency bias.
    10. The Bias Blind-Spot. I have written many times about the cognitive biases which plague us and make it difficult for us to make good choices, including (obviously) here.  Knowing about them is imperative if we are going to deal with them.  We would always be wise to factor in these biases when performing analysis and making decisions. Unfortunately, we all tend to share a “bias blind spot” — the inability to recognize that we suffer from the same cognitive distortions that plague other people. Here is a wonderful (both hysterically funny and achingly sad) example.
  51. stjeanluc

    And some more statistics on the Death Cross:

  52. Burrben

    GLW – What to do?  
    I got into the following GLW trade:  Long Jan13 12 Calls, Short Jan14 12 Puts for net 0.00.  It's now trading at a credit of $1.27, so both option positions are showing losses.  GLW is trading at  $12.15 and earning is scheduled for 7/25/2012.
     
    I don't mind holding the Jan14 puts, but I'm wondering if I have enough time to make back the loss on the Jan13 Calls which are now down 50%.  Advice is appreciated.  

  53. Phil

     

    Defective Government by Design

    Email this post Print this post
    By Barry Ritholtz – July 17th, 2012, 7:24AM

    We live in an era of defective government.

    This corruption is not an accident. It is the product of years of very patient work. It has been brought about through expensive lobbying, relentless propaganda, agnotology. You can see it in this election cycle, where 196 Americans — 0.000063% of the population — have given more than 80% of Super PAC dollars.

    Is it democracy or plutocracy when less than 200 people drive election spending in a nation of 300 million?

    Previously, we have pointed out how brazen the lobbying has been to actually cut the SEC enforcement budget. This has created an agency that is defective by design. Take a guess who loses in the battle between you, the individual taxpayer versus the corporation.

    Wall Street has taken advantage of the crisis and morphed into a cartel. The tragedy is the only entity that is large and powerful enough to offset their wealth and power are national governments. Yet where ever we look, we see that government has been corrupted and rendered neutered by corporations:

    -The Federal Reserve Zero Interest Rate policy is a balm to banks whose balance sheets still have so much bad real estate exposure that higher rates will cause corporate bankruptcy;

    -The SEC brings minor insider trading cases while enormous financial crimes go unpunished;

    -The Supreme Court has granted natural rights to corporations — rights previously reserved for living and breathing Human Beings;

    -The CFTC no longer does the sort of daily audits that can prevent fraud like MF Global and PeregrineFG;-The US Attorney’s office has been captured by the Treasury department, which in turn was captured by large Banks long ago;

    -Laws that used to be written by Congressional staffers and academics are now drafted by the regulated industry itself;

    -The Attorneys General offices of the states are too timid to sue these same banks for obvious perjury;-Tax loopholes allow wealthy companies to pay very little taxes relative to profits;

    -Copyrights that should be in the public domain are retained by companies who have changed intellectual property laws by corrupting legislators.

    -The Minerals Management Service (MMS) gives away oil leases and mineral rights for pennies on the dollar.-Money has somehow been equated to speech, turning the idea of “One Person, One vote” on its head.

    To function properly, all of these agencies need budgets, a career path for a motivated staff. Yet most of that has been gutted.

    Take a look at Neil Barofsky’s book Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street. He describes a Federal prosecutorial system that has been systematically disassembled. There are few career lawyers with the know how, budget and balls to go after the big fish. There is little institutional memory.

    We see  this throughout government, a product of even a debate that has been corrupted. The framework is not “How can me make government more effective, efficient responsive?“  Instead, the debate has degenerated into “How can we get government out of the way? How can we make taxes lower?

    Its not that I want big government, I want effective regulations. Its not that I want to pay higher taxes, I want efficient government that can accomplish things. I don’t want to live in a corporatocracy, I want to live in a nation where there is a Rule of Law.

    The only way to make this happen is to change the campaign finance laws. Without that, we are a plutocracy governed by lobbyists.

    Hence:  Its the bankers world, we just live in it . . .

  54. Phil

    Death cross stats/StJ – I don't think they happen often enough to use statistics since the underlying market conditions can vary so much from year to year (or decade to decade for some of these).  

    GLW/Burr – Very disappointing so far but we're talking about a $1 range so not much to work with.   I assume you don't have the stock so it's the $12.50 (there are no $12) calls at .88 and the short 2014 $12 puts that are $2.15 that represent your "loss".  But it's only a loss if you are unwilling to buy GLW for $12 in 2014 because the entire rest of the $2.15 PRICE (not value) of the short puts is just premium.  On the 5th those calls were $1.45 after being down at $1.12 in late June so it looks like you took a huge loss, saw it recover but then held on for a much bigger loss later so why change your mind now?  If you have faith in GLW's earnings – then it's a hold but, if you don't – you should take .88 and run on the calls before they lose their premium and just keep that .88 and hope the short puts ultimately expire worthless and at least you pick up a clean .88 over time.  

  55. Burrben

    Phil / GLW
    Yes, it's the Jan13 12.5C.  I paid $1.82 for them, and the premise of the trade was that GLW would experiece a spike when Iphone5 was released, and would also pop into earnings.  I was watching when the calls hit $1.40, but I still thought I could break even on them, so my GTC sell order, at 1.70 never hit.  Do you think they will pop, or just take the hit?
     
    I'm fine with the 2014 12 puts, I understand this is a "paper" loss, it's the calls that I'm worried about.

  56. angelcur

    weekly retail sales +2.0%, lowest since april 5 wk…the qe3 crowd must be saddened by the market's lack of temper tantrum.
    TRADING BIASES I LOOK AT ALL THAT AND IT JUST AFFIRMS THERE IS NO OBJECTIVITY WHEN TRADING..EITHER KNOW YOURSELF OR ASSUME FAILURE

  57. angelcur

    (NO TRASH TALK ABOUT THE FONTS IN THE OLD DAYS THE BOX UNIFORMLY CONVERTED ALL THE TEXT TO( I THINK……)
     
    SCREENS PHIL WHAT DO YOU WATCH DURING THE DAY?

  58. 8800

    Phil,
    Your current posture/thgts on AONE. Fundamentally, things seemed mired in bal sht issues; just not sure of how good technology is. I'm sht 1 /13 2.50 puts @1.71 and in assignability range. My concern is not assignment here but down .50 betw now and 1/13.
    Thanks

  59. angelcur

    Sotheby's Says Rich French Are Moving Abroad. Rich French families are leaving the country because of fiscal measures being put in place by Francois Hollande's government, citing Sotheby's International Realty France.
     

  60. angelcur

    NOW YOU KNOW WHY ELLISON BOUGHT THAT ISLAND

  61. BertII

    Why the big flip to positive this seems to be a big bounce not a little bounce and it looks like from were the dollar is sitting it could continue up for awhile

  62. zeroxzero

    Birdman / Comfy Congress:  I'm in NYC, and the NY Post [the best thing about Murdoch] has a headline about Anthony Weiner, who resigned from Congress in the "sexting"scancal. is trying to make a comeback – "Weiner's Second Coming.."  The interesting part was the interview with his wife:  "Anthony has been trying to get a job for six months, in political consulting, public relations, and other postions. No one will hire him. He want to run for Congress against because he can't find other work, and he doesn't know how to do anything else.
     
    And we wonder why Congress is bought and paid for.  It's not that their "comfy", Bird, they're just desperate — apparently our system has evolved into one in which companies support shills who "don't know how to do anything else" and are therefore, by every definition, captive to their paymasters — the 0.000063% who feed them in exchange for increasing the number of zeros in that fraction.

  63. rkyroma

    Pharm / TEVA – when do you think we make adjustments?  Stock is looking pretty strong right now.

  64. Birdman

    zeroxzero – I had to let someone go from my company a few years ago for cause. His next move? He ran for congress. Lost anyway. Point well taken.

  65. stjeanluc

    Speaking if a roller-coaster:

    http://www.businessinsider.com/united-airlines-flight-plunges-20000-feet-over-atlantic-before-turning-around-2012-7

    I am not sure how I would have felt!

  66. kinkistyle

    Rumors rumors:
     
    C&S eyeing Supervalu distribution business: report

     
    "(Reuters) – C&S Wholesale Grocers would be interested in buying the distribution business of grocer Supervalu Inc (SVU.N), which last week said it was exploring a sale of all or part of the company, the Wall Street Journal reported on Monday citing people familiar with the matter."

  67. sagemm1

    Phil  Kinki/SVU rumor
     
    What would a partial sale do to options if they were to proceed?

  68. Maya1

    Savi/Vegas
    I am SO BADLY trying to give some money to Savi for vegas, but dont know how to go about it.
    someone please help.
    I have the email address, but is that the one to send to?
    Never done this paypal stuff before

  69. Birdman

    This trading range and mostly sitting in cash is boring. I want a setup! (but I will wait…)
     
    I know that AI is getting pretty advanced, but  do computers vacation in the Hamptons too?

  70. Pharmboy

    VVUS – rumors…rumors….spiking rumors….

     

    TEVA – tomorrow.  Otherwise we will make it a BCS.

  71. jabobeast

    kinki—it sure isn't helping the stock…
     
    FU SVU!!!

  72. Pharmboy

    Maya – post is here on Vegas.

  73. kinkistyle

    SVU/sage: I don't know but I assume if they get a good price for it, it will be be good for the stock.

  74. Pharmboy

    SVU is going to $1 IMHO.  Look at Rite Aid, then draw ur conclusions.

  75. Phil

    Wow, what a fun swing! 

    That's why I say "whatever" when people ask if I'm bullish or bearish – depends on the last 15 minutes, I guess…

    GLW/Burr – But your premise was shot at $1.12.  You either needed to DD there to lower your basis to about $1.50 (still would have been hard to get out at $1.45 again since it would have been a "miss") or, if you didn't have the conviction to DD at $1.12 – then why wouldn't you get out and be happy at $1.45?  The price you enter a trade is arbitrary – especially when you are the sucker who paid a premium.  Getting back to basics – there is no IPhone 5 nor do we know what the IPad mini is yet so you still have announcements to go but do you believe enough to DD at .88 or at least spend a buck to roll down to the Jan $11s ($1.80) so you are not burning premium every day?  If you don't like GLW enough to put $1 into them – then you should be thrilled to rescue the $1 you have in them but that's a decision you should have been making every step along the way – not only after you have a 50% loss on one leg.  

    Biases/Angel - Trading Psychology is so important for beginning traders to understand.  I think we mention Dr. Brett in the Beginner's Guide but always good to remind people to STUDY UP ON TRADING PSYCHOLOGY!  Here's a good one  - "Trading as Mental Warfare."  

    Watching/Angel – By the way, do you have a little icon with a "W" on it at the top of your comment box?  That box should let you past things in without dragging they fonts and styles from wherever you got them.  As to screens, I have a 30" Mac Screen in front of me flanked on each side by 2 21" dells.  On my far left (it's a corner desk set-up) I have a 27" Imac that runs Power Etrade Pro all the time (I like the charts and the new hi/low ticker) and on my right is a 27" HP TouchSmart that runs TOS all the time with 3 sets of 12 charts I flip from.  I'm left-handed so I have a track-ball for my main 3 monitors and, just to the left of that, I have an AAPL magic pad to control the IMac, which is nice as I don't get confused.  With my right hand – I can just jab at the HPQ screen and flip my chart tabs on TOS and, with 36 running charts – I rarely have occasion to change them (HPQs pop-up touch keyboard does not work on the TOS program).  

    On my left Dell is another TOS – the one I use more actively to check quotes and change charts.  That alternates with StockCharts and other reference material behind the TOS session that I flip back to front when I want to dig into something. On my Right Dell is usually news I want to read full-screen (usually about 5 tabs open) and on my center AAPL monitor, I run 3 window in full-page mode with 5-10 tabs each of various things I'm reading and, of course the window I'm typing in now and another PSW window for reading (so I read a comment stream in one window while answering in another).  

    The tabs on my left center are currently Yahoo Finance, Reuters, the WSJ, SA Market Currents (always there), NYMEX live sessions, Fed site, BLS site, FT.  The middle is pretty much exclusively PSW plus anything I want to read right in front of me – like the Fed Report from this morning and the Right set is PSW, Econoday, Briefing.com, Investools, Barry's Big Pictures, Between the Hedges, Market Oracle and the NY Times.  

    That's all.

    AONE/8800 – I think they are speculative but a fun hold.  I'd roll the $2 $2.50 puts (not likely to be assigned with .27 premium) to 2x the 2014 $1.50 puts at $1.20 (or you can do 1.7x about even) because it's hardly any difference in the dollar cost of the assignment but twice as many share.  TSLA is doing well and validating the space and the majors need to keep up and they need AONE.  GE just invested a lot of cash ($170M) into their own battery plant and AONE is trading at $113M so a very cheap take-over target for someone who doesn't want to start from scratch.  

    Rich/Angel – The rich are always the first rats to abandon a sinking ship and, as we learned from the Titanic, they are happy to use up all the lifeboats to do it.  A bit premature I think but a great excuse for one of my favorite videos:  

  76. Maya1

    Pharmboy
    Do i email savi at that email address?
    Or do I go to paypal and pay to that address? There were two amounts per one of Savi's posts $200 or $212?

  77. rainman

    Little early for the stick, no?

  78. Pharmboy

    TEVA/ryk – did you do this yesterday upon my recommendation…?  You should be out or have more 1.5:1 Aug:July calls which puts you about even now.  The stock is at OH resistance now, as well as just peaking above the 200d MA.

  79. exec

    Hi Phil,
     
    I've been wanting to get into Verizon (VZ) for some time.  Unfortunately the stock won't even think of taking a breather. 
     
    What's your advice for getting in?  I was thinking about selling the $40 2014 puts for around $3

  80. Pharmboy

    Go to paypal and pay that email address.  200. Non-refundable.

  81. stjeanluc

    MoMo Portfolio – The PCLN puts are up over 66% now!

  82. Pharmboy

    What a joke.

  83. Pharmboy

    Good bye VVUS.

  84. exec

    Has anyone noticed an interesting phenomenon with DMND.  See's like when the market is strong it's weak and when the markets weak it's strong.  Strange.

  85. cdel360

    VVUS -  falling again, I don't see any news…anyone?

  86. stjeanluc

    Fascinating…

    http://www.numbersleuth.org/universe/

  87. kinkistyle

    SVU/Pharm:  With all due respect, RAD has a $1.177B market cap with 899M shares outstanding, SVU only has has 212M shares outstanding, so at RAD's valuation they would be at $5.55 — which is fine by me.   Thats not to say RAD won't go to $0.00.

  88. Phil

    Bounce/Bert – Like I said earlier, Bernanke was a doom bomb and there's a relief rally now that he's gone but it's all the same low-volume BS as we wait for another day of testimony and the BBook tomorrow (and housing numbers).

    11:47 AM European shares can't hold onto solid early gains asBernanke testifies, closing mixed. Stoxx 50 flat, Germany +0.1%, France -0.1%, Italy -1%, Spain +0.3%, U.K. -0.6%. The euro -0.4% to $1.2226. 

    Stocks reverse significant early losses spurred by disappointment with Bernanke's prepared testimony. Nothing in the subsequent Q&A appears to have triggered the change, and the committee has wrapped up the hearing. S&P 500 +0.4%, Nasdaq+0.3%.

    Bernanke Q&A: "The Fed official did not know what Libor was, or how to pull it up on Bloomberg," says The Chairman, speaking of the employee whose job it was to get "market color" by talking to banks. (h/t Kevin Ferry)

    European shares are at their lowest valuation relative to the U.S. in 40 years, says BCA Research, which advises not pulling the trigger until a "market riot" finally forces the ECB to become more like the Fed. Ideas: Total (TOT) and Shell (RDS.A) sell at far lower multiples and higher yields than XOM. Sanofi (SNY) and Siemens (SI) – stunningly cheap. 

    20,000 feet/StJ – That's nasty. 

    Partial sale/Sage – Depends what they sell and on what terms.  Very complex.  Maybe they dump something unprofitable to them and valuable to others and that's good or maybe they give up significant profit center for pennies on the dollar in order to keep cash-bleeding remainder alive…  That's how much it matters what they sell and under what conditions.  

    Paypal/Maya – I'm sure you guys will work it out but consider it an important step in joining the 21st century to master PayPal.  

    Vacations/Bird – The bots haven't started renting beach houses yet but they still need a finger on the button and those fingers still take their holidays as usual.  

    Stick/Rain – It's never too early for a stick!  61M on the Dow at 1:30 means it doesn't take much to pop us.  We took back 1,363 on the S&P and 800 on the RUT and 12,800 on the Dow so now it's just about holding those lines.  NYSE held our critical 7,700 line and tat was what the bulls needed to confirm that there was still hope.  Nas 2,900 also taken back so a very good showing for the bulls and very strange with Transports down 0.9% and SOX down 0.5% – makes it seem even more fake than usual.  

    VZExec – Not one I would chase. I love VZ but we were playing in the low $30s – $46 is where we take money and run, especially ahead of earnings with high expectations.  I'd stay out and hope for a miss as they can correct back to $40 very easily and, if they beat, then I'd look hard at S or FTR as laggards that are worth a look.  

    COST making new highs.  SPG too – that's interesting.  

    DMND/Exec – I guess it's being used as someone's speculative piggy-bank.  

    That thing is very cool StJ!  

  89. nicha

    Why is AAPL lagging?

  90. angelcur

    The NAHB/Wells Fargo Housing Market Index surged six points in July, the most since September 2002, to 35,
    the highest level since March 2007 (E0238D) (E0238). Economists expected a much smaller reading of 30. All three
    components increased sharply, led by an 11-point gain in expected sales over the next six months, the most since
    November 1988. Builder sentiment strengthened across the country (E0238C).
    This very positive report suggests the housing market is well on its way to recovery. Amid some reports of
    softer economic activity this spring and early summer, a sustained recovery in the housing market should
    provide an impetus to growth. NDR

  91. Phil

    Well, if you wish you would have shorted this morning – now is your chance again.  Same BS from Bernanke tomorrow means shorting the S&P Futures (/ES) here at 1,359 is not bad with a stop at 1,361.   SPY Friday $136 puts at .60 were $1.70 this morning but you should be thrilled to get .90 so call it a stop at .50 (or a DD there and hope again for a pullback) against a hoped-for .30 gain.  

  92. angelcur

    after the close//i think intc will lower guidance, hard to know if priced in…have to assume it isn't…

  93. angelcur

    i tried the W

  94. Savi

    Good Afternoon
    Phil—welcome back—hope you are well rested —waiting for you to give us some of your right on the money  /cl trades--oil is over 89.1—-what do you think?
     
    Maya—--go to pay pal site and they it will walk you thru—all you need is my e-mail—if you pick "issue refund" option I think the charge is $6.10—so $206.10

  95. shadowfax

    rainman
    Today with this rebound and the smae reason we went down 15 minutes on the most no trade open of all time say, no stick for you. Better chance of big sell off to close, still eary for that, maybe, but no stick, hold and gap down tomorrow?
    Another version of Phil but different as I think we need one more fake up!

  96. mjjwo9b

    Phil,
    Asking this is like going to confession:  I already know the answer, I just don't know how many Hail Mary's I will repeat…I have 300 KMB shares purchased at $64 on which I sold (3) Jan 13 $72.50 Calls at $4 in January.  Should I stand through expiration or is there something I am missing?  Thanks, as always.

  97. shadowfax

    Hope all of you cheched Ilene's mob theory market this morning, man, no woman is she right on that today!!

  98. angelcur

    ANYONE SEE STEVE 'IVE BEEN PREDICTING QE3 FOR OVER A YEAR NOW' LEISMAN JUMP INSANE WHEN THE JPM CHIEF STRATEGIST SUGGESTED FIRMING RATES WOULD IMPROVE THE ECONOMY?

  99. Phil

    Sorry, did not mean DD at .50 on the SPY puts!  I meant if they got blown out in the morning you could DD and hope for a pullback.  

    AAPL/Nicha – Trading toy.  

    Steel/Angel – It's funny how reality is completely ignored but more so when you hear the MSM punditocracy spouting off on whatever while ignoring all the actual facts.  

    We'll have to see if tomorrow's housing numbers can match the NAHB report.  

    Thanks for trying Angel.  

    Oil/Savi – Thanks.  Same script as always, expect a run-up into inventories tomorrow.  Could have taken a pole on this spike but I think they test $90 after all this work so that's where I'd like to step in short.  

    Dollar back at 83.20 and we need to get below 83 again to be more bullish.  Euro at $1.227 so it needs to be over $1.23 with the Dollar below 83 – that's pretty simple.  

    KMB/Mjj – It is no sin to make money, my son…  So you netted in at $60 and now the stock is at $86 and you are only committing the venial sin of envy in that you wish you had not agreed to be called away at $72.50.  The Jan $72.50 calls are $13.70 so subtract that from $86 you collect for selling the stock here and that's net $72.30 so no point in not cashing out here rather than waiting until January to see if you can make .20 more.  If you BELIEVE in KMB and want to hold it unto the rapture – then you can roll that Jan $72.50 caller to the 2014 $80 caller at $8.50 and you can sell the 2014 $70 puts for $3 (because I bet you wish you had $300 more at net $67 that weren't covered) and that changes your net $60 entry with a call away at $72.50 to a net $62.20/66.10 buy/write with a call away at $80 but you'll pick up another $4.50 in dividends along the way and that brings you down to net net $57.70/63.85 and a $22.50 profit (50%) if called away at $80 vs the $12.30 if you kill the trade now so, the real question is – do you have something better to do with the $72.30 you can cash today than roll it up into a trade that can make you another $10 in 18 months?  

    Greed is a bottomless pit which exhausts the person in an endless effort to satisfy the need without ever reaching satisfaction. – Erich Fromm

    Speaking of TSLA – this is about what we had expected, sell on the news but, so far, no disasters:

    Shares of Tesla Motors (TSLA -6.5%) let off a little steam after making a nice run following the launch of the Model S. Short interest remains a hot topic on TSLA, with close to 27M shares at bay with an average of 15 days to cover. 

  100. scottmi

    KMB at new highs. been on a real tear.

  101. Inkarri19

    WSJ posted an article indicating that Japan is just shy of overtaking China as the largest holder of US Treasuries.  How does a country with 200%+ of debt/GDP do this?  Things must be that bad that they have to sacrifice the well being of their citizens and instead help prop up the US.   

  102. angelcur

    THE AMOUNT OF TIME CNBC HAS WASTED COVERING AN IRRELEVANT COMPANY LIKE YHOO IS MIND BOGGLING..BUTI GUESS NOT IF YOU ARE A CNBC PRODUCER

  103. rkyroma

    SVU – Even though it's still selling off, the daily volume is steadily decreasing.  Maybe we are almost at a short term bottom.

  104. rainman

    angelcur / YHOO — Undisclosed interest.

  105. rainman

    Whoosh!

  106. angelcur

    RAINY…DEFINITELY DEFINITELY AHHHH RECENTLY DISCLOSED DISINTEREST

  107. dpastramas

    VVUS/ Pharm – I was out most of the day. Did they announce anything? I see the Aug puts have dropped significantly in value. I suppose they got approved with limitations. Right?

  108. mrmocha

    How do you spell 'monster'?  S-G-E-N, wahoo!

  109. Phil

    Japan/Ink – What's the difference.  We all exchange worthless bits of paper for other worthless bits of paper and everyone pretends everyone else's paper is an asset and we all agree to pretend that each other's currencies are worth the paper they are written on – even though the main asset of the country whose notes we are accepting is our own debt paper.  What can possibly go wrong?  

    YHOO/Angel – It's widely held and their test groups show that people move the little needles when they mention Yahoo – what else matters?  Compared to the time they give FaceBook, Yahoo is getting the shaft.  

    SVU/Rkyro – At some point, all the people who want to get out finally do.  

    $89 looking hard to crack for oil but NYMEX closed 30 minutes ago so no volume now.  

    VIX down 4% to 16.43 because today wasn't volatile at all, was it?  

    Michael Dell adds to mounting worries about Chinese tech demand, stating Dell (DELL -0.4%) is experiencing a slowdown in the country, its #2 market after the U.S. Of course, Dell is also facingtough competition in China from Lenovo (PCs) and Huawei (IT gear). Yesterday, Chinese telecom equipment giant ZTE warned of slowing orders from local carriers. Separately, Dell is announcing a $60M VC fund aimed at storage investments. (earlier

    Projections of corn crop yields are still too high, according to a report from AccuWeather's Alex Sosnowski. The Accu crew expects a fall yield of 138 bushels/acre, lower than the latest USDA projection based on its forecast of ongoing heat and drought conditions. "Eventually, these costs will be passed along to the consumer in the form of higher food prices." (earlier)

    Estimates for The Dark Knight Rises keep getting pushed higher by both Wall Street analysts and industry watchers. While IMAXand Time Warner (TWX +0.5%) are the two obvious beneficiaries, theater operators such as CNKCKECRGC, and MCS may also see strong results this summer as hot weather outside helps keep box office sales inside churning.

    Jumping the shark:  Starbucks (SBUX +1.5%) starts to fall out of favor in the Big Apple as a host of new mini-chains start to chip away at the company's 200-store stable in the city, according to Slate. At issue: The backlash of finicky NYC consumers as Starbucks implements minor changes – such as limiting laptop use and removing cushy chairs – to keep traffic moving along at high-rent stores. - Also dead in LA!  

    Facebook (FB -2.9%) and Zynga (ZNGA -7%) dive following a Capstone Investments report claiming Facebook's U.S. users fell 1.1% over the last 6 months. Capstone adds Facebook's growth was minimal or negative in 14 of the 23 countries in which its penetration rate is above 50%. The report backs up recent data suggesting U.S. saturation, and drives home Facebook's dependence on less profitable emerging markets to drive user growth. (previous)

    Ahead of Amazon's (AMZN) July 23 Q2 report, Cowen is cutting its estimates due to a weak euro and soft Kindle sales. The firm now expects revenue of $61.1B in 2012 and $75.6B in 2013, down from a prior $62.4B and $78.1B. 2012 Kindle Fire sales are now expected to total 12M, and e-ink Kindle sales 16.3M. IDC has forecast e-reader shipments will drop this year due to tablet competition, and the Fire has its hands full competing with the Nexus 7and likely soon an iPad Mini. (Pac Crest)

    Three lunchtime reads:

    1) Expect another smackdown in gold and equities in response to Bernanke's testimony

    2) Idle corporate cash piles up

    3) Kass: Rest in peace, Barton Biggs 

  110. flipspiceland

    @Felipe
    Once the network and the cable news providers found out that people 'can't stand the truth', it was only a matter of time till even their 'news' programs fell under the bailiwick of the fiction department.
    This has been going on a very, very long time, hence the reason that the right has correctly labeled the media "Main Stream Media", and have accused it of being in the pockets of the democrats and the left for decades. This in no way means that the right does not also use their media outlets for propaganda that suits their purposes.
     
    …more so when you hear the MSM punditocracy spouting off on whatever while ignoring all the actual facts."

  111. bobhu

    angelcur/YHOO, they were covering the "young female future 5000 CEO".

  112. kinkistyle

    Japan/Ink: Everyone's gonna print money.  Japan, EU, the U.S., China.   The difference is, Japan is really a beautiful, modern, clean, rich country with a great culture and people.  If the whole world is turning into a hyperinflationary stagnant mess, theres no place I'd rather rough it out than in a nice tea house in Kyoto watching the wind blow through the bamboo.

  113. randers1

    Check out IMAX today, one volatile stock. Earnings due out the 26th.. 

  114. angelcur

    PHIL YOU RIG UP THOSE NEEDLE METERS AND YELL YHOO!! AND I GUARANTEE THE NEEDLES WILL MOVE..TRY FIRE OR LOOK AT THOSE…. REACTIONS SOMEWHAT PREDICTABLE 
    ON A SERIOUS NOTE THANKS VERY MUCH FOR SHARING YOUR COMMAND CENTER SET UP..IT WAS VERY HELPFUL AND GENEROUS OF YOU TO TAKE THE..A PHOTO WOULD BE NICE LOL!!…THANK YOU PHIL!!

  115. angelcur

    BOBHU..WAT CHU MEAN COVERING?

  116. Phil

    MSM/Flips – It's not a left/right thing in the MSM – that's just the game they play to keep you distracted from the real Us and Them theme where the Top 1% buys up all the media and feeds the masses whatever keeps them complacent.  If you think you are getting good info from the "right" then they are thrilled and if you think you are getting it from the "left" – they are thrilled too as long as you buy the crap they sell and, more importantly, as long as you sit on your ass and feel like there's nothing you can do to change things – then they have won.

    Tea house in Kyoto/Kinki – Sounds good to me!  

    IMAX/Randers – We expected Batman to be the "sell on the news" event for them – time to take the money and run on them.  Maybe they test $30 but not worth pushing it too hard if you are risking profits.  What a joke they fell to $18.29 in June. 

    You're welcome Angel.  I do have to learn how to post photos – at least to Facebook as I had many things I would have liked to have shared on my vacation.  When I get my IPhone 5 (there is something wrong with photo storage on my 3G), I will make sure I have an app to post photos and notes as I see things all the time I'd like to comment on, like empty sores or odd pricings for things or people who tell me good stories about local economics, etc.  

    TSLA really getting whacked now – below $32.50. 

  117. angelcur

    I KNOW YOU MEANT ( I HOPE I HOPE) STORES!

  118. qcmike

    Phil
    XLF is this a good time to add to XLF?
     I have call spreads Jan 11/15 and Jan 13 13 /16
    Should I roll to jan 14 ?
    Thanks

  119. Phil

    Well, was a good close but INTC blew it already – a beat but a weak one.  

    XLF/QC – I'd wait until we get a few more reports – maybe a nice miss will knock them down again but $14 is a good line to buy at and $13.50 is the lowest I expect.  On the Jan spread, I'd roll the calls you own and let the Jans expire and then you can sell more (or not, if things are going well).  I don't see anything likely to send XLF flying up outside of more QE and that just doesn't seem likely either.  

    We certainly survived day one of Bernanke and the S&P is over 1,360 but, unfortunately, the RUT failed to hold 800 so a mixed message at the end.  

    YHOO with a beat!  

  120. Pharmboy

    INTC…what a crock.  blowing through the stops and making it rise ….

  121. bobhu

    INTC is moving up… :-)

  122. angelcur

    HOW DID CSX DO INTC LOWERED

  123. crussell14

    Phil
    could you let me know what you think best spread  roll would be on Sept TLT $121/120 put spread (down 45%). Thanks much

  124. jerconn

    So what's the story with VVUS?  Noone know?

  125. stjeanluc

  126. stjeanluc

    All the indices are still in that higher low / higher high channel… Although some (NYSE and NASDAQ) will have to get through some tough lines to make new highs now.

  127. flipspiceland

    @Felipe
    Last I looked, they have not only won, they own the refs,the stadia, the players,the opponents, the uniforms, the equipment,the rule book, the future, the past,the present……
    I understand your total frustration and denial of the reality, but  if it cannot be changed, the system, from the inside as you have repeated time and again, and ramparts are not even being approached let alone stormed, from the outside just what is it that you think, even if you were made king for a day, that you could do about any of it?
    Protestng, complaining,voting for lesser evildoers——aside from some venting, where on earth do you think that's going to lead?
    As for sitting on my ass and doing nothing about it, the only solutions that will work would get me 25 to life and the death penalty in Texas.

  128. Pharmboy

    Nothing from VVUS thus far.  From my experiences, FDA sends these things during business hours, so 5 pm EST.   Very, very interesting…….They must be stewing over there….

  129. Birdman

    flip / frustration – I share your frustration.  As a child of the 60's, I've always wanted to be part of the solution and not part of the problem.  My solution is to accept my limited role and try to be a positive factor inside my tiny little sphere of influence – mainly as patriarch of my family. But you really have to be on guard constantly if you approach life with kindness as it's viewed as a weakness by many and they exploit it – kind of like using turn signals in NYC. It's not easy being a muppet.

  130. mrmocha

    Pharm / VVUS - Did you see this article about USA Today posting an approval article in error?  ROFL.

  131. exec

    Phil/VZ
     
    Thanks. I like that advice. 

  132. Birdman

    VVUS / FDA approval

  133. Pharmboy

    VVUS is approved…BUT it cannot be used in females of child bearing age and if they do use it they must be on contraception AND have pregnancy tests EVERY month.  People on Qsymis cannot be used in patients with Glaucoma, hyperthyroidism, or patients with heart issues in the past 6 mos.  Regular heart checkups is highly recommended.  Basically, they have a very strict REMS strategy, which will limit the use of the drug.  The drug will be dispensed through ONLY specially certified pharmacies.  VVUS has to do 10 post marketing trials including long term cardio outcome trials……

    This is going to be a tough one to swallow….ARNA is already taking it on the chin, but sellingn puts in them at the $5 level would be a good deal, as I think this is not at all what VVUS is going to need for survival.  I still am very surprised that they OK'd it, but the strong REMS should be good enough.  We shall see….

  134. mrmocha

    Pharm, bummer, hope you didn't get spanked too hard.  I lightened up on my original position so this won't hurt as bad as it could have, I was deep into VVUS last week…

  135. Pharmboy

    mrm – I don't think it will hurt too much.  I sold some on the spikes down so I made some.  We will see the reaction to the REMS.  I will be flabbergasted if it goes up b'c the marketing is going to be very difficult.  Again, we shall see.

  136. Pharmboy

    How much do you want to be there is an investigation into that USA today leak.  Feuerstein put up their article verbadum…and did not take it down…4 hours ago!!!  Hummm….

  137. BertII

    Has any one booked a room in Vegas was looking at VDARA package through Airline about $ 450.00 with airline ticket

  138. jfawcett

    Phil / Monetary Policy – As I am reading today's posting I saw your comment on the FED delivering their monetary policy report to congress.  Doubt many of our elected officials can stay focused to read a 55 page report!

  139. Maya1

    Pharm/Savi
    Ok- will do it and let you know.
    Phil/21st C
    its called a credit card! lol!

  140. jfawcett

    Phil / X – Income portfolio.  X looks like it is on track to move down to 18.75 by earnings on 7/31.  DD before, Hold, Other into earnings?  I am in the trade, short puts at the 2014 20 strike at 4.96.  Currently at 5.50 (-11%).  BTW – Since joining PSW 4 months ago, I have learned patience and I am not concerned about this or the other 2014 positions.  They are good long term holds in my IRA's.  Just looking to see what your thought process is for these 2014 holdings as we go into earnings and no QE3 on the horizon.  I did fill on the TZA hedges as suggested (10), I am not in all of the trades. TIA and welcome back home.

  141. rkyroma

    VVUS
    Here's the Prescribing Information for both.  Compare away.
    Qsymia:  http://qsymiarems.com/full-prescribing-information.pdf
    Belviq:  http://us.eisai.com/package_inserts/BelviqPI.pdf

  142. dclark41

    Phil:
    How much of the current run-up in oil prices is due to the escalating situation in Syria and the ever-increasing potential of an event involving Iran? This reminds me of earlier in the year when geopolitical risks trumped economic reality.  There certainly isn't any economic reason for oil to be this high……right?

  143. rkyroma

    For the record, I have a problem believing that all the gains in the markets are due to the run-ups in anticipation of QE.  That just happens to be what everyone reacts to, but if it was never there, the market would have chosen something else to focus on.  If Mr. Market wasn't hooked on the drugs in the first place, it would be different.  That why the drug dealer always says the first one is free.  My point is that QE may be the driver now, but we wouldn't necessarily be XX points lower if we didn't start using in the first place.  And as much of the current discussion indicates, we seem to have developed a pretty big tolerance.  Time for a new drug.

  144. jomptien

    Flip and Phil – the best presentation I've heard yet on our system: you may both agree:
    The political system has gone too far for any change within the system – great video
     

    http://therealnews.com/t2/component/hwdvideoshare/?task=viewvideo&video_id=74124

     

  145. jerconn

    Time to short the mother of all momo's?  Article in Phil's favorites says insiders are selling at CMG, maybe time for some puts..together with puts in AMZN and PHil's V puts (which should be cheaper now, since V just keeps rising…).  Any comments from the Momo board? 

  146. Phil

    Finally back to a normal schedule.  

    I stayed up until about 2 and woke up at 6:30 – hopefully tonight I'll be tired by 11 and will be up by 4 tomorrow – which is normal for me, anyway….

    Futures off a bit but nothing drastic.  Asia gave back yesterday's gains but Europe up slightly.

    6:00 AM Overseas: Japan -0.32%. Hong Kong -1.11%. China+0.37%. India +0.47%. London +0.23%. Paris +0.78%. Frankfurt+0.26%.

    Euro $1.224 – so what can we possibly be happy about?   More and more notes from various nations are slipping into negative territory and that's leaving people with no choice but equities and this is all equities can do while competing with negative yields?  Pound $1.561, 78.96 Yen to the Buck and EUR/CHF is, of course, 1.2009 but had two fun spikes to 1.2014 in the past day, which is more Francs per Euro, which is stronger Franc, which is what the SNB is fighting against having so it looks to me like the Euro is prone to more weakness.  

    Dollar at 83.33, failing 83.50 as the Euro tested $1.22.  Oil $89.22 is a hopeful short for us at $90 (/CL), gold is $1,576, silver $27.08, copper $3.45, nat gas $2.79 and gasoline $2.84.  

    Notable earnings before Wednesday’s open: ABTAPH,ASMLBACBKBLKBPOPCHKPDOVERICGWWHONKCG

    NTRSPNCSTJSWKUSB

    Notable earnings after Wednesday's close: AXPCYS,EBAYEWBCFFIVIBMKMPLHONEQCOMSCSSSLMSWKS

    SYK,XLNXYUM

    Lots of G20 stimulus talk today so why aren't we up more?  Because fundies are pretty bad…

    MBA Mortgage Applications: +16.9% vs. -2.1% last week. Thirty-year fixed mortgage rate with conforming loan balances ($417,500 or less) decreased to 3.74% from 3.79%.

    ZIRP Strikes Again: Pension Under-Funding For S&P 500 Companies Hits Record.

    Europe Profit Estimates Cut Most Since ’09 as Crisis Hits DanoneAnalysts are cutting European profit forecasts at the fastest rate since 2009 as the region heads for a recession and growth in China slows for a sixth quarter. Euro Stoxx 50 Index (SX5E) companies will earn 240 euros a share in 2012, 6.8 percent more than in 2011, according to more than 12,000 estimates compiled by Bloomberg. That compares with a 19 percent gain predicted at the start of the year. The reduction is the biggest since 2009, when analysts trimmed by 42 percentage points. ASML Holding NV (ASML) starts the European earnings season with its results today. While Bloomberg data show analysts lowered projections for 32 members of the Euro Stoxx 50 this month, there may be more cuts to come. Corporations from French dairy producer Danone SA (BN) to SKF (SKFB) AB, the world’s largest maker of ball bearings, have reduced their forecasts and strategists at Macquarie Group Ltd. and Morgan Stanley, who base their predictions on the economy rather than individual companies, say earnings will drop as much as 10 percent this year.

    Eurozone construction output (May) comes in at +0.1% M/M and -8.4% Y/Y vs. last month's figures of -3.7% M/M and -6.9% Y/Y. (PR .pdf)

    The Bank of Japan scraps a 0.1% yield floor for government bond purchases, opening the door to the possibility of buying debt with negative returns. Beyond any practical impact, "this is probably a message from the BOJ that it’s ready to cope with any market turmoil stemming from the European crisis," says UBS strategist Atsushi Ito.

    The Bank of England voted 7-2 in July to boost asset purchases; Dale and Broadbent were against the increase. It was a unanimous 9-0 vote to leave the lending rate at 0.5%. (BOE minutes)

    U.K. unemployment falls to a 9-month low of 8.1% in 3 months to May from 8.2% previously, or -65K to 2.58M, as the Olympics help to create jobs. Number of people in work +181K to 29.4M, the highest since Sep.-Nov. 2008. Unemployment benefit claims +6,100 in June vs. consensus of 5,000, boosted by a benefit rule change. FTSE +0.4%, up from +0.1% earlier. (PR

    China's labor situation will become "more severe," said Chinese Premier Wen Jiabao, so the government will continue to implement a more "proactive" labor policy. The comments build on Wen's remarks earlier this week that the economy hasn't yet established a solid rebound.

    Here's All You Need To Know About China's Fragile $2.2 Trillion Shadow Banking System.

    Luxury Loses as China Slowdown Reinforces Regime ChangeRolex watches and bars of gold are often handed out by those seeking favors from business associates in China. Now the gift-givers are cutting back, and the luxury industry is holding its breath. Vivian So, a 38-year-old owner of beauty salons in Shanghai, said she had been giving Rolex watches to business contacts and is shifting to wallets. William Li, manager at Hong Kong’s King’s Watch Co., who used to see mainland customers buy HK$100,000 ($12,900) watches for official gifts, said many are picking brands that cost 40 percent less.

    Air China says H1 net profit to more than halveAir China, the country's flagship air carrier, expects first-half net profit to more than halve due to a slowdown in airline industry growth and high prices for jet fuel, it said on Tuesday. Air China's announcement came days after Chinese airlines such as China Eastern Airlines and China Southern Airlines Co Ltd issued similar profit warnings.

    China 3Q Export, Import Growth May Be 'Low'. China's export situation is not "optimistic" for the second half of this year, Xiao Xinyan and Liu Jianying, researchers at a research institute under the Ministry of Commerce, wrote in an article.

    Dell(DELL) CEO Sees Slowing Growth in China, Establishes FundDell Inc. (DELL) Chief Executive Officer Michael Dell said the computer maker is seeing a slowdown in China, adding to the list of companies dealing with slackening growth in the world’s most populous country. “There are some challenges in China right now,” Dell said today at a conference in Aspen, Colorado. He and the company’s board plan to visit the country in early September. Asked whether sales were slowing there, Dell said, “that would be an accurate statement.”

    Intel(INTC) forecast portends weak PC sales. Top chipmaker Intel Corp (INTC.O) reduced its growth forecast, reinforcing fears that a wavering global economy and a lack of consumer interest are dampening personal computer sales. Shaky economies in Europe and the United States and a growing consumer preference for Apple Inc's iPad tablets have been taking a toll on the PC industry. The world's leading chipmaker on Tuesday cut its 2012 revenue growth forecast to between 3 and 5 percent, down from a prior forecast of "high single-digit growth."

    The ECB's Mario Draghi uses the word "evolving" to describe the region's approach to forcing losses on senior bondholders of troubled eurozone banks. (previously)

    The euro graph of doom. Graphics can often tell a story better than words. For those who think the euro already doomed, the following graphic, drawn from the International Monetary Fund's latest Global Financial Stability Report, tells it all.

    Generali Among Italy Insurers Downgraded by Moody’sAssicurazioni Generali SpA (G) was among three Italian insurers downgraded by Moody’s Investors Service, which cited the nation’s “weakening” creditworthiness

    CONFIRMED: The Spanish Are Leaving Their Country In Droves.

    "They just feel nice to hold again," says a teacher about deutsche marks, 13.2B ($8.3B) of which remain in circulation and continue to be legal tender in Germany. Germans are apparently not ready to give up on the euro just yet, but the WSJ finds a nostalgia for "die gute alte D-mark."

    Fund managers expect more trouble in Germany. Fund managers from across the world have begun to doubt Germany’s ability to withstand further shocks from the region’s debt crisis, registering a stark change in view since the late spring.

    The finances of states and their ability to supply basic services face six major threats, a report from the State Budget Crisis Task Force shows. The threats include Medicaid costs, underfunded pension promises, and unreliable tax revenues. The Task Force, which is co-chaired by Paul Volcker, didn't propose solutions, saying that's for policy makers to decide. 

    Compton could soon become the fourth Californian city to file for bankruptcy in recent months, as it is due to run out of money to fund its payroll on September 1. Compton has an accumulated deficit of $43M and depleted reserves. On Friday, S&P warned it may cut the city's ratings following the resignation of its independent auditors.

    Letting the Bush-era tax cuts lapse at the end of the year would lead to the loss of 710K jobs and cause a 1.3% fall in economic output worth $200B, an Ernst & Young report for the Chamber of Commerce and other tax-break supporters shows. The study didn't give a time frame but said much of the impact would be felt within a decade. - A decade?  $20Bn a year and 70,000 jobs a year is the best they could come up with to scare people off?  And it costs us what?  $100Bn a year to leave them on (for the top 5% alone) - how many jobs does that cost when you deprive the Government of revenue and increase our national debt and devalue the Dollar?  

    Senator Carl Levin calls for regulators to block JPMorgan's (JPM) plans for an ETF backed by physical copper, warning the move would disrupt supply and inflate prices by removing a significant quantity of copper from the market. (previously)

    Hendry – 'Bad Things are Going to Happen'. Hugh Hendry is lying low. The Glaswegian founder of $800m hedge fund Eclectica stepped out of the limelight last year after a series of feisty television appearances made him Britain’s best-known hedge fund manager.

    Credit Suisse (CS+5.7% premarket after announcing plans to further cut costs and boost capital. The SNB, which recently warnedabout Credit Suisse's capital position, weighs in: "In an environment that remains particularly challenging for the international banking system, these measures substantially increase the resilience of Credit Suisse Group." 

    Credit Suisse (CS): Q2 EPS of $0.46 may not be comparable to consensus of $0.64. Shares +3.9% premarket. (PR)

    Bank of America (BAC): FQ1 EPS of $0.19 beats by $0.05. Revenue of $21.97B  misses by $900M. Shares +0.8%premarket. (PR)

    More on BofA (BAC): Net interest income -14.9% Y/Y as net interest margin declines 30 bps to just 2.21%. Cost-cutting: Non-interest expenses -11% sequentially, and -25.8% Y/Y. Reserve release accounted for $0.11 of $0.19 earnings for the quarter. Tier 1 capital ratio under Basel III of 8.1%. Shares +2% premarket. (PR)

  147. Phil


    BlackRock (BLK):
     Q2 EPS of $3.10 beats by $0.07. Revenue of $2.22B (-5% Y/Y) misses by $50M. (PR)

    More on BlackRock (BLK): Earnings fell 5.8% Y/Y, along with a 3% decline in AUM. Inflows into fixed income ($5.6B) and multi-class products ($4.3B) were offset by a $6.2B outflow from equities and alternatives. iShares generated $6.1B of inflows, offset by $32.8B in market-related declines. ETF AUM now stands 20% of the firm's total and 31% of fees. (PR)

    Check Point Software (CHKP): Q2 EPS of $0.77 beats by $0.02. Revenue of $328.6M (+9.3% Y/Y) misses by $3M. (PR)

    CSX(CSX) profit up as autos, intermodal offset coalCSX Corp reported higher quarterly profit and said revenue and volume were little changed from a year ago as increases in consumer goods segments helped offset a drop in utility coal shipping. Higher automobile, export coal and intermodal shipments partially made up for the dip in domestic coal shipments.

    Stanley Works (SWK): Q2 EPS of $1.32 misses by $0.21. Revenue of $2.81B (+8.1% Y/Y) misses by $90M. (PR)

    Williams Capital downgrades Whole Foods (WFM) to Hold from Buy on a valuation call with a price target of $88. Shares have gone on a front-loaded 34.8% YTD run in the midst of a meltdown in shares of traditional grocery store chains this year.

    Wynn Misses Est.on Weaker Macau, NevadaWynn Resorts Ltd. (WYNN), the casino company run by billionaire Steve Wynn, reported second-quarter results that missed analysts’ estimates because of lower winnings in Macau and Nevada. Excluding items, profit totaled $1.38 a share, Las Vegas- based Wynn said today in a statement. That missed the $1.50 a share average of 23 analysts’ estimates compiled by Bloomberg. Revenue fell 8.3 percent to $1.25 billion, shy of estimates of $1.33 billion.

    Longtime Vegas insider Steve Wynn says on an earnings CC that the baccarat tables turned cold for the house in Q2 for Wynn Resorts (WYNN), with the negative take in April the first he has seen in 45 years of running casinos. On Macau: Business flat for first six months of the year. Wynn notes the game in the region is preserving margin amid greater competition. Shares +0.7% premarket. (transcript)

    NSA Whistleblower Says The Feds Are Gathering Data On Nearly Every US CitizenThe U.S. government has been collecting data on nearly every U.S. citizen and assembling webs of their relationships, National Security Agency whistleblower William Binney told the Hackers On Planet Earth (HOPE) conference last week.

  148. Phil

    LOL Angel!  

    TLT/Crussell – That's a long way off – I would have bought out the short put at $131 but now back to $128, I'd just sit tight or DD and look to get half back out even.  

    Big Chart clearly showing the Bots are running things.  

    Profit cycle/Ink – That pretty much shows it all. 

    Fed report/Jfaw – That's why they make them so long.  Don't want anyone actually reading it.  

    Credit card/Maya – Is that Diner's Club?  

    X/Jfaw – If you are already in it, I'd just wait for facts of earnings before acting.  Overall market still to shaky to want to commit more cash without good reason.  Your attitude is right, you bought X at net $15 so patience is the best play.  

    Syria/DC – It's always something.  That's how they ratchet up the price when they need to but it's not sustainable.  Current NYMEX chart with rollover on Monday (so all barrels have to be out of Aug by then):  

     

    Click for
    Chart
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Aug'12 89.13 89.23 88.59 88.96 07:32
    Jul 18

    -

    -0.26 23546 89.22 85858 Call Put
    Sep'12 89.49 89.57 88.91 89.29 07:32
    Jul 18

    -

    -0.25 18051 89.54 289008 Call Put
    Oct'12 89.73 89.87 89.24 89.60 07:32
    Jul 18

    -

    -0.27 3720 89.87 88502 Call Put
    Nov'12 89.87 90.22 89.59 89.75 07:32
    Jul 18

    -

    -0.50 2974 90.25 70116 Call Put

    Generally, over 500,000 contracts (500Mb) in the front three months indicates strong selling pressure and, when you get close to the end of the month (22nd), you need to look at the front 4.  Figure, at most, the NYMEX crew really wants 20Mb and the other 65MB in the front-month need to be dumped in 4 trading days – that's a good amount.  That makes today a good day to short as there should be at least one big dump BUT – maybe a big spike up first so tricky.  

    OK, time to work! 

  149. jabobeast

    jerconn—CMG is way overvalued and will eventually get Netflixed… but I think you know this is not a good time to be taking big risks ;-)

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