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More Monday Morning Foolishness – Playing a Rigged Game

Click to ViewThink Mcfly, THINK!

Forget the rhetoric, forget what Cramer says – or any of the other idiots on what used to be accurately called "the idiot box."  Just look at this one, simple chart (thanks Doug Short) and tell me – why on earth would the Fed step in and take emergency action when the market is at a multi-year high?  

Have they EVER done this before?  EVER?  Has ANY Central Bank EVER taken emergency liquidity measures when their stock market was at or near their all-time highs?  And look at the interest rates (the red line) – there's nowhere to go folks – not unless the Fed is going to start PAYING US to borrow money.  In which case – sign me up for $10Bn…

This is the point that was made this week on the cover of Stock World Weekly, and my comments in "The Week Ahead" section were:

How the Hell can we expect the Fed (or the ECB) to “step in” to “save” the market when the S&P is up 110% off it’s 2009 lows (666) and only 10% below it’s all-time high of 1,561. 

Is it the Fed’s mandate to create unsustainable bubbles—to force a misallocation of financial resources into stocks and, even worse for our country, out of bonds?  Already this week we saw TLT drop from $132 to $123 (6.8%) and not one, not two – but 3 anemic bond auctions in a row.  What happens if the US can no longer fund it’s own $16Tn deficit?  Is this what the Fed’s new function is—protecting the investing class at all costs?

SPY WEEKLY Our conclusion was that, in this very low-volume environment, we can't take these breakouts seriously – especially with the Dollar down 2% since July 25th – that means our indexes should be 2% HIGHER than they were on the 25th, just to stay even.  We were at 1,340 on the S&P before the Dollar collapsed on Draghi's "we will fix everything" comments and now we are at 1,405 – up 4.8%.  

If we deduct 2% to adjust for the Dollar (and the market does tend to track the Dollar 2:1 anyway), then we can say 1,405 is more like 1,377 and to REALLY say our 1,400 line is broken – we'll need to see 2% over that at 1,428.  THEN we'll call it a rally.  

As you can see from Dave Fry's SPY chart, the volume has been PATHETIC.  In fact, last week was the lowest non-holiday volume in the past 10 years – INCLUDING 9/11 – and we were closed for 3 days that week!  Look at Thanksgiving – DOUBLE the volume of last week with 2 days closed (one half day).  Christmas, Easter, 4th of July and Last Week – those are our stock market holidays now.  

So let us do what TA people don't and adjust for the 2% drop in the Dollar since July 25th and we'll raise our breakout lines from 13,200 on the Dow to 13,464, 1,400 on the S&P to 1,428, 3,000 on the APPLDaq to 3,060 (and the new IPhone looks like a go for Sept 12th), 8,000 on the NYSE to 8,160 and 800 on the Russell to 816.  None of this should be too much to ask for, the highs for the year were (mostly mid-March): 13,338, 1,422, 3,134, 8,327 and 847 – so we're not even asking for new highs, except on the S&P.  

UUP WEEKLY The Dollar was down at 80.74 in mid-March, now 82.50 (up 2.1%) but, it also fell to 78.50 (-4.8%) at the end of April and, wouldn't you know it – back at the time I also warned people that it was a false rally propped up by a weakening Dollar and stimulus rumors while the internals were collapsing on low volume (but still stronger than this BS).  The S&P fell from 1,415 at the beginning of May to 1,291 on the 18th, so down 8.7% in 3 weeks and then down another 25 points (2%) into the end of the month, leading us to begin bottom-fishing with our "Twice in a Lifetime List" on May 15th, with our full list going out to Members in the Morning Alert of May 17th.  

I posted notes on some bullish plays we still like for our Members in last Thursday Morning's Alert but we're done with these already as we move on to fresh horses:  

  • BAC 2014 $7 puts sold for $1.75, now $1.24 – up 29%
  • CCJ 2014 $17 puts sold for $3.30, now $2.20 – up 33%
  • CHK 2014 $13 puts sold for $5, now 2.15 – up 57%
  • FTR 2014 $3.50 puts sold for $1.30, now .55 – up 57%
  • HMY 2014 $8 puts sold for $1.40, now $1 – up 28%
  • HOV 2014 $2 puts sold for $1, now .60 – up 40%
  • MT 2014 $15 puts sold for $5, now $3.50 – up 30%
  • JPM 2014 $30 puts sold for $5, now $3.25 – up 35%
  • OIH 2014 $30 puts sold for $4, now $2.40 – up 40%
  • X 2014 $20 puts sold for $5.10, now $3.80 – up 25%

As these were short sales of puts on stocks we REALLY wanted to own at the net strike in 2014, after 3 months (out of 20) since May, we only expect to be up 15%, so all of these are way ahead of schedule so we cash them in and look for similar plays on stocks that haven't moved yet, like HPQ and, of course, if any of the above get cheap again – we'll be interested again but, at the moment, we're still skeptical enough to want to cash out our winning bull trades and get back to "Cashy and Cautious" – concentrating more on our Long Put List, which has already yielded some nice winners – and those entries only get better and better as the market gets pumped back to the highs.  

It's not a complicated concept – we get more long at the bottom and more short at the top.  If that's flip-flopping then call us flip-floppers but, as you can see from that weekly SPY chart above – that's a pretty reliable channel with a very obvious break-out line and we'll be HAPPY to switch off our brains and BUYBUYBUY with the rest of the sheeple – AFTER we get something more than stimulus rumors and AFTER we have a proper breakout of our levels.  

Until then, let's be very careful out there.  


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  1. stjeanluc

    Oil Lines

    R3 – 95.65
    R2 – 94.52
    R1 – 93.95
    PP – 92.83
    S1 – 92.26
    S2 – 91.14
    S3 – 90.57

  2. stjeanluc

    I am not going to be around at the open so I will post the portfolios now based on Friday's close. Here is the Income portfolio:

    There was an issue with the TZA strike. Phil mentioned rolling the calls to 19, but the original calls were at 17 and the callers (short) at 21 so I am sure he meant roll the calls down to 15 as the prices matched and that made more sense!

  3. stjeanluc

  4. stjeanluc

  5. stjeanluc

  6. stjeanluc

    Peter – Let me know what prices you finally got on the Sept contracts and I'll update the spreadsheet.

  7. rustle123

    Joe Kernen was creaming in his pants talking about Paul Ryan this morning because Paul Ryan wrote a forward to his factual inaccurate book "My Teacher Said What?" which would be an answer in Jeopardy to the clue "Don't waste your time reading this fictional piece of S**T."

    After finally seeing the first 7 episodes of the HBO show "The Newsroom" this weekend, it's too bad there isn't a prosecutor like anchor who confronts politicians and others on the lies they are spreading and calls them out on it.

  8. Pharmboy

  9. jomptien

    The Newsroom/rustle – In Thailand and downloaded it, saw the 1st episode today. It would be nice.

  10. rustle123

    The Newsroom/jomptien
     
    It gets much better.

  11. 1020

    Good Morning!

  12. qcmike

    Canada Refuses to Allow Fox “news” A License – Lying to People is Illegal There
    http://roguemedia.org/canada-refuses-to-allow-fox-news-a-license/

  13. Pharmboy

    Here we go
    We're at it again
    We're moving up
    We're moving in
    Here we go
    We're at it again
    (together) We're moving up we're, moving in


    The prettiest girl
    I ever saw
    was sipping bourbon
    through a straw

    Went up to her
    And sat right down
    And ordered her
    Another round

    And now I have
    a mother-in-law
    and 14 kids
    who call me Pa

    The moral of
    The story is clear
    instead of bourbon
    stick to beer

     

    I am going on vacation…..this is just putrid.

  14. Pharmboy

    VIX is getting hammered.  TLT was up big, now just up.

  15. wavecounter

    Before the day gets going financially, what is the primary Vegas hotel of choice for the group in November?  Is it the Vdara or no place in particular?

  16. morxlntway

    Hi Pharm,
    are you still excited about PLX? I was thinking abt the Feb $6 put for 1.20ish.

  17. Pharmboy

    AVEO popping back up again. 

  18. Pharmboy

    Wave – used Expedia. No place in particular.  Vdara was nice, but not necessarily 'the' place.

     

    PLX/morx – yes, I continue to sell premium against my stock position.

  19. Pharmboy

    Wow, oh Wow….


  20. Phil

    Good morning!  

    As Bill Mahr says: New Rules – we have new lines for our breakouts, adjusted up 2% to account for the Dollar at 82.50 (now 82.425) and, if the Dollar goes lower, we'll adjust them again but, for now, let's say we're not capitulating from what I would say is a 66/34 bearish stance (near the max) until we see these levels break:  

    • Dow 13,464
    • S&P 1,428
    • Nasdaq 3,060 
    • NYSE 8,160 
    • Russell 816

    We're not going to keep adjusting the Big Chart – those are still the non-adjusted lines we've been using all year and note that we are using the +2.5% lines for the S&P and the -2.5% line for the Dow – as that's where they've drifted as our leader and laggard respectively.  

    Obviously, I have no respect for this "rally" and I think it's fake, Fake, FAKE!  I know it is very hard to read or listen to all the experts telling you that you are missing the investing opportunity of a lifetime and that the market is horribly undervalued, etc. and then you come here and I'm telling you they are all crazy and only I see it but – they are all crazy and only I see it.  

    Well, not only me but not too many people and there are fewer and fewer of us every day as more and more bears capitulate.  

    Don't get me wrong, I won't even consider it capitulating if we ACTUALLY get some QE/Stimulus and the markets start flying but don't insult our intelligence with more upgrades (today it's GOOG) and more rumors of QE so what they are telling us is that, on the one hand – business could not be better for these companies BUT, on the other hand – the economy is so bad that emergency measures are necessary right away.  

    Come on MSM – get your story straight!  

    For one thing, if the economy is so great and the S&P is back within 10% of it's all-time high – why are there still so many stocks on our Twice in a Lifetime list that are at or near their 2009 lows.  In March of 2009, people literally thought the World was going to end – there were runs on British banks, they banned short-selling in the US, TRILLIONS of Dollars were spent propping up the market and people were talking about stocks like X going bankrupt as demand fell completely off a cliff.  

    Our TWIL List is not a radical group:  AA, ABX, ALU, CSCO, GLW, GNW, HPQ, SVU and WFR are still as low or lower than they were back in the total collapse of the market.  If you need to be bullish – those are great places to start.  As to bear plays – well AAPL is flying up to $628 this morning on the IPhone 5 release rumors (9/12) so we'll see how high they can climb but, so far, only keeping the Nas barely from going red. 

    Dollar below 82.50 (now 82.38) continues to be bullish but oil only $93.50 and gold still having trouble at $1,624 and copper – so, so sad at $3.35.  These are not really mixed signals anymore – these are across the board bearish signals EXCEPT for the indexes – how long can that last?  

    I'll be going over the Long Put List in Member Chat this morning but we're still pretty much watching and waiting for real signs.  Obviously "THEY" are trying real hard to get the BullBots to start buying but it still takes a human being to hit the "on" switch and that means Fund managers are sitting around tables today and looking over ALL the data – not just the charts (guys who only look at charts let the bots do everything so they either trigger or they don't) and deciding if they want to bring cash off the sidelines.  

    My decision is to buy more shorts while they're cheap – maybe I'll be alone in this or maybe it will become the popular play but we have such close and clear stop lines (3 of 5 of our levels) that it just seems silly not to give it a try.  

    At the open: Dow -0.19% to 13184. S&P -0.19% to 1403. Nasdaq -0.01% to 3021.

    Treasurys: 30-year +0.24%. 10-yr +0.07%. 5-yr +0.02%.

    Commodities: Crude +0.76% to $93.58. Gold -0.05% to $1619.85.

    Currencies: Euro +0.44% vs. dollar. Yen +0.07%. Pound -0.04%.

    10:00 AM On the hour: Dow -0.11%. 10-yr +0.08%. Euro +0.63%vs. dollar. Crude +0.76% to $93.58. Gold +0.15% to $1623.15.

    Market preview: U.S. stock futures are flat to lower following the sharp slowdown in Japan's growth, with the S&P benchmark -0.1%. Oil futures are higher on heightened concerns about Iran, and Brent reached a 3-month high of $114.48 a barrel. Sears surges 7% on plans to spin off its Hometown and Outlet stores.

    Ben Bernanke's 2010 Jackson Hole speech – at which he suggested QE2 – set off a major stock rally, but with shares already near YTD highs and commodities perky, one wonders if markets haven't already front-run the Chairman. Also speaking this year, the ECB's Mario Draghi.

    SA author Christian Magoon reckons Mitt Romney's choice of uber-conservative Paul Ryan as his VP running mate will "beat up the dollar" in the short term and so help gold prices to rally. That's because the choice will prompt "a national debate in the Fall highlighting the poor fiscal state of the United States."

    chart of yields across a number of fixed income sectors (via David Schawel). High yield bonds may be pricey on an absolute basis, but the spread to Treasurys remains a relatively large one. As for Treasurys themselves, they're long on duration, short on yield: return-free risk.

    A sub-15 VIX (Friday close 14.7) is rare, says Goldman Sachs, and it doesn't stay below that level for long (true post-2007, pre-crisis not so much). It's not just the U.S., but implied volatilities have dropped across every global index followed by the Goldman team. Another sign: The put/call ratio has declined to its lowest level in more than 3 years, as players pull off hedges.

    Volatile markets and political uncertainty led the amount raised in privatizations to more than halve to $94.4B in 2011 from a record $213.6B in 2010, with $34.6B worth of divestitures canceled. The largest deal was the U.S.'s sale of a $6.1B stake in AIG, while the leading seller was China with 19 deals worth $14.2B. [

    Much can be learned from Iceland about how to survive a financial crisis, says the IMF's Daria Zakharova, particularly the country's decision to push losses onto bondholders rather than taxpayers. While the rest of the West awaits Jackson Hole in hope of more stimulus, Iceland's central bank is in tightening mode. 

    Even if Chinese consumer prices remain flat throughout the remainer of the year, past increases and the laws of calculating moving averages will still push the CPI higher than year-ago comparison. It suggests, says Kevin Depew, a narrow window for policy ease

    Highlighting China's economic weakness are metals – of 22 at Changjiang's Nonferrous Metals Market, just 2 are higher in price this year. (chart via Bloomberg's Michael McDonough)

    Bank of America joins the group cutting Chinese growth forecasts, slashing its own 2012 estimate to 7.7% from 8%. Shanghai stocks tumbled (-1.5%), led by steep declines in the brokerages, property, and construction material stocks. Apparentlly, Beijing may not be as quick as hoped with easier monetary policy

    China Gerui Advanced Materials (CHOP -6.1%lowers its FY2012 guidance, saying the move reflects the industry-wide reduction in steel prices which has led to a decrease in its average selling price "primarily due to slowing macroeconomic conditions in China.”

    A Citic Securities – China's largest brokerage -  spokesperson takes to CNBC to deny rumors of a $460 loss on overseas trading as well as the arrest of the Chairman. Citic plunged 9.1% overnight, taking other brokerage firms along for the ride. An analyst suggests at 21X earnings, it could just be the stock was too expensive. 

    While markets have been anticipating more easing from the PBOC to boost Chinese growth, some observers, including those with links to top decision makers, believe the central bank is holding off on major measures in order to give previous action more time to work. Moreover, UBS economist Wang Tao points out that open-market operations in July injected 800B yuan ($130B) into the banking system.

    "There are huge benefits to size," says Jamie Dimon (JPM), trying to wrap up in a ball and toss out arguments to break up the TBTFs. "We bank CAT in 40 countries. We can do a $20B bridge loan overnight … invest billions in ATMs and apps … (the benefits) accrue to the customer. That's what capitalism is."

    The Office of the Comptroller of the Currency is investigating JPMorgan (JPM) after Linda Almonte, a former assistant VP at the bank, said almost 23,000 delinquent accounts had incorrect balances, the NYT reports. Almonte made her claim in a whistle-blower complaint that she was allegedly fired for telling her managers to problems with the bank's records. 

    Chevron's (CVXfire-damaged Richmond crude oil refinerycould be shut for at least four to six months, twice as long as previously believed, industry intelligence group IIR Energy says. Investigators have found serious damage in the cooling towards, pipe racks and heater tower, the group's report claims.

    Sears Holdings (SHLD) plans to spin off its Hometown and Outlet stores along with some select hardware stores into a new public company. The new entity will trade under the SHOS ticker symbol on the Nasdaq. SHLD +7.5% premarket. (Previous: SHLD could double to $100 on a sum-of-the-parts-valuation)

    Longbow Research defends Green Mountain Coffee Roasters (GMCR) in a note to clients, saying it remains confident the company can grow both its top and bottom lines in the future. Helping the cause will be a strong promotional push by big-name retailers such as Wal-Mart, Target, and Costco to back Keurig. Shares of GMCR +3.5% premarket.

    Groupon (GRPN +5.2%) is rallying ahead of this afternoon's Q2 report. With shares down ~30% since late June, some of the shorts accounting for 26.6% of Groupon's float (as of July 31) are likely taking profits. The company has seen a raft of negative sell-side reports in recent weeks; one of the most recent came from Sterne Agee, which downgraded Groupon last week on concerns about European demand and competition from LivingSocial.

    Google (GOOG) is upgraded to overweight at Morgan Stanley (MS), the note saying the stock trades at a 25% discount to the online ad sector. Carl Quintanilla provides a little more color, saying it's the same analyst who cut Facebook numbers ahead of the IPO. Of Google, he says "social competiton is less than feared." Shares +1.4% premarket.

  21. rustle123

    I like the start to this week much better so far.

  22. lolobear

    phil/lflan – what are your thoughts on GRPN?

  23. jomptien

    Most important lawsuit no one is talking about:
    http://libertyblitzkrieg.com/2012/08/10/ndaa-the-most-important-lawsuit-in-american-history-that-no-one-is-talking-about/

    "Despite a mainstream media blackout on the topic, the alternative media is abuzz with this week’s hearing on the constitutionality of the clearly unconstitutional NDAA.  In case you don’t remember, section 1021 of the NDAA, which Obama signed into law on December 31 of last year, allows the government to lock up U.S. citizens indefinitely without a trial.  At the time of signing, Obama penned a pathetic letter to many of his outraged supporters where he basically said he signed it but he won’t use it.  Thanks pal!"

  24. randers1

    Phil-
     
    How do you feel about refiners now? I remember trading TSO, looks like they and PSX have had nice runs recently, probably not a great time on valuation, but they are interesting to me on a pullback.

  25. jerconn

    Market is tanking, AAPL is trucking…

  26. Phil

    Nice little dip from that silly open to keep us on our toes.  Don't blame the Dollar – still 82.37.  Oil touched our shorting line at $94 at 9am and dropped like a rock back to $92.20 – I have no idea what that was about.  

    Canada/QC – That's been going on for years.  Good for Canada!  Fox has been relentless, even buying the last election to get a guy who "sees things their way" in office.  

    Putrid/Pharm – It is frustrating but, like poker, you just have to be patient until you get your cards.  

    Vegas/Wave – Nobu is Caesar's (assuming it's ready and, if not, the Hard Rock) but Cafe Moda is a $20 cab ride north into town no matter where you are so it's not too important where people stay.  I'll be in the 4 Seasons that week until Friday night – then I will either go to Caesar's or the Venetian but probably Caesar's.  There are always specials in Vegas though so it's worth doing some research as you can spend $49-499 for the same room.  

    GRPN/Lol – I loved shorting them when they were in the $20s – at $8 I have no interest either way.  

    NDAA/Jomp – That is a terrible law, I hope they do take it back before Paul Ryan becomes President!  

    Refiners/Randers – They do best when gasoline is going up (check) and oil is going down (check) – so this is probably the top of the cycle unless you think people in CA will pay $6 for gas without changing their habits.  

    RUT with a big 10-point drop already.  

  27. jomptien

    Phil/ EXC, What are your thoughts on taking a position here? Thanks

  28. kinkistyle

    Got stopped out of my 2014 $20 X putters at $4.00

  29. Phil

    FAS Money – I guess we should have sold those calls at $15!  Actually I'm very pleased as we sold our 5 extra 2014s right at the top and we covered the 10 we had left so we look forward to a chance to sell puts, roll down the 2014 calls, buy back the callers and go naked long again – maybe at $14.  

    $25KPs – Wheeeee!  

    • EDZ – should be fun tomorrow and Sept is 39 days so I would have DD'd at $1.40 but already back to $1.15.  
    • SVU – Long-Term
    • JRCC – If we get into day 2 of selling tomorrow, this one will worry me.  
    • AMZN – Still $3 – let's DD on those in both $25KPs.  
    • SQQQ – Fine 
    • VXX – Fine 
    • BBY – Fine (I hope) 
    • SDS – Fine 
    • SCO – Yay!
    • V – Yay!  

    Well, looks good to me! 

  30. rdn4evr

    Vegas hotels – I'm still undecided about hotels, but the nice thing about the Vdara was that since it doesn't have a casino, the air was noticeably better there due to lack of cigarette smoke, and it made a nice change from everywhere else on the strip.

  31. Pharmboy

    Another Taibbi Classic…Tax Cuts for the Rich, Ryan Has Balls.

  32. Birdman

    This market is like an episode of The Twilight Zone (yeah, I'm that old). VIX down over 2%? WTF? Took a 10% position and going to go play golf. I'm with Pharmboy.

  33. Phil

    X/Income Portfolio, Kinki – Thanks, that was our stop out on X – $4.  I'm tempted to take BTU off the table but $17 is so ridiculously low – it's hard to worry. 

    EXC/Jomp – I don't think it's a good time to be establishing bullish positions and the VIX is too low to do even a good buy/write. 

    Dow volume just 24M at 11:30 UK closing and we've learned our lesson – right?  Let's grab 10 DIA Aug (Friday) $129 calls at $2.35 with a stop at $2.20 in both $25KPs.

  34. lolobear

    St.Jean Luc – i think its you who usually posts this.  What is the implied move for GRPN after earnings tonight based on options?  Thx a bunch.

  35. Phil

    Taibbi/Pharm – Wow, I love that guy!  

    Paul Ryan, the Republican Party’s latest entrant in the seemingly endless series of young, prickish, over-coiffed, anal-retentive deficit Robespierres they’ve sent to the political center stage in the last decade or so, has come out with his new budget plan. All of these smug little jerks look alike to me – from Ralph Reed to Eric Cantor to Jeb Hensarling to Rand Paul and now to Ryan, they all look like overgrown kids who got nipple-twisted in the halls in high school, worked as Applebee’s shift managers in college, and are now taking revenge on the world as grownups by defunding hospice care and student loans and Sesame Street. They all look like they sleep with their ties on, and keep their feet in dress socks when doing their bi-monthly duty with their wives.

    VIX/Bird – 14.27, that's amazing!  Bounced off 14.20 because, of course, this is not volatile.  

    VIX

    Dollar 82.45 off the low at 82.25.   Euro topped out at $1.237 (now $1.234), Pound at the top at $1.569 with 78.31 Yen to the Dollar.

    Oil back to $92.50, gold back at $1,620, silver $27.84, copper $3.345, nat gas $2.74, gasoline briefly failed to hold $3, now $3.007.  

    GRPN/Lol – They haven't even been public for a year – if there was a number, the sample is too small.  

    $25KP – Not getting a pop from EU close so out of DIA calls even at $2.35 – sorry. 

  36. Phil

    GRPN/Lol – I would think it's not too unsafe to sell the Aug $6 puts for .35 – that's a long way ($2) to fall before you get burned.  If you can to consider that free money, then you can pick up the Sept $6/7 bull call spread for .55 and then you are essentially in at net .20 on the $1 spread with a 400% upside if GRPN simply holds $7 (not falling 10%).  

  37. angelcur

    LAW SUIT COULD DELAY GERMAN COURT DECISION ON ESM WELL BEYOND SEPT 12 HANDLESBLATT
    http://www.spiegel.de/international/business/investors-preparting-for-collapse-of-the-euro-a-849747.html

  38. terrapin22

    Atlantic City casino revenue fell 9.5% in July, to $308.2 million. Revel is not doing well.  Revel's revenue was about $17.5 million in July, which ranks eighth among Atlantic City’s 12 casinos during the month, according to the New Jersey Division of Gaming Enforcement.  Revel's term loan now trading 78.5/79.5, down from 98.5 at issuance in Feb. 2011.  

  39. Phil

    11:00 AM On the hour: Dow -0.53%. 10-yr +0.1%. Euro +0.50% vs. dollar. Crude -0.7% to $92.22. Gold -0.28% to $1616.15

    11:42 AM European shares close marginally lower in nearly news-free trade (though Angela Merkel returns from holiday this week). Stoxx 50-0.5%, Germany -0.5%, France -0.4%, Italy +0.2%, Spain -0.1%. The euro +0.4% to $1.2340 - They closed down Friday too and we certainly did not so we went the wrong way by about 2% since Friday – that's a lot of ground to make up.  

    12:00 PM On the hour: Dow -0.59%. 10-yr +0.12%. Euro +0.40%vs. dollar. Crude -0.46% to $92.44. Gold -0.23% to $1616.95.

    Hedge funds capitulate, with data suggesting they are covering shorts on European stocks at the fastest rate since the epic bottom of early 2009. Likely priced in on the bear side are faltering economies and shrinking corporate profits. Maybe priced in on the bull side are further supportive official actions.

    Long-term Treasury prices – off to a rough start this month – have history on their side as they try to mount a comback, TLT is higher in August 10 of 10 times since the ETF's inception. The yield on the 10-year – which hit 1.73 last week – has retreated to 1.62%. TLT-2.7% thus far in August.

    70.2% of cash on the balance sheets of selected big caps is held abroad, suggesting a good reason for their "cheap" valuations. Of interest is Apple way down the list despite its well-publicized 12-figure stash. It turns out most is held in securites of longer than 12-month duration, suggesting the company is trying to eke out more return, but taking on more risk.

    Just as with the U.S., dividends on emerging market stocks are the largest contributors to returns over time, and one popular EM dividend fund (DEM) has comfortably outpaced (with lower volatility as well) the MSCI Emerging Markets Fund (EEM) in the 5 years since its incpetion.

    A surge in U.S. natural gas development has spurred $226B in spending plans on pipelines, storage, processing facilities and power plants, most slated for the next five years, according to Industrial Info Resources. The report sees signs the economic gains have begun to expand beyond the oil and gas fields to give a competitive edge to industries from steel and aluminum to fertilizers and chemicals.

    recall of apples sold in 36 states by Ready Pac Foods hits McDonald's (MCD -0.4%) and Burger King (BKW -1.5%). The recall is due to possible listeria contamination. 

    Salesforce.com (CRM +2.2%) is trading higher after Piper reports the company has scored the largest deal in its history, one that surpasses a $140M contract with State Farm. The firm thinks other huge deals could be on the way. Salesforce, which talked up the size of its deal pipeline 3 months ago, delivers its FQ2 report on Aug. 23.

  40. rustle123

    Taibbi/Pharmboy
     
    Matt Taibbi is one of the few and probably the best true journalists out there.  Great article.

  41. Phil

    CNBC making sure their viewers understand that the sell-off in the market can't possibly be because Mitt's VP selection has virtually guaranteed another 4 years of Obama. 

    Germans/Angel – How many ways do they have to say no anyway?   

    Revel/Terra – They put a lot of people off with their elitist BS.  Opening weekend was by invitation only but the people who did go said it was half-finished – you can't do that to the kind of people you invite to these things!  So the people inside got a bad impression and the regular folks (and it's in the marina so regular there is the upper end of the scale anyway) were totally insulted that they couldn't check it out and it's going to take longer than a few months for them to get over it.  Discounting by the other hotels has been huge and the overall market is week because AC is about 50 miles back and forth off the Parkway – AFTER you get to the exit so it costs most people a tank of gas just to get there and the slots, where they make most of their money, are driven by people who come to lose $20 or $50.  If that money gets sucked up on gas just getting there, they are in trouble.  This hotel went from 3,800 rooms in two towers with 150,000 feet of gaming space to 1,090 rooms in one tower with 130,000 feet of gaming space (14 restaurants).  What kind of idiots went ahead with a project of that scale with 1/4 the intended amount of rooms?  

     

    The Disappearing Market

     
    By Barry Ritholtz – August 13th, 2012, 6:49AM

    Dick Arms has what may be the most challenging technical charts I have seen in a while for the bulls:

    “There are times when the market gives the impression it is fading into nothingness. Volume becomes very low, trading ranges become very small, volatility becomes very low. Also, there is very little change in market levels and day-to-day fluctuations are minimal. Looking back at history, when that happens it is almost always a sign of a market high point.”

    The chart — the VIX is inverted – below is a warning:

     

    Complacency? Dow vs. VIX

    click for ginormous chart  

     

  42. jabobeast

    great chart Phil/Barry ..
    Wondering who Dick Arms is married to? Vagina Legs ;-)

  43. terrapin22

    Phil / TZA – i was on vaca and left a spread outstanding longer than ideal.  Aug 17/21 bull call spread expiring this week.  it's about breakeven.  what is a good roll?  The calls are up a lot today. 

  44. sagemm1

    HFT's and the 0+ trading strategy, whilst reading the book Dark Pools I cam across this chapter, what I want to know is why everyone knows front running is illegal, why and how aren't law firms across the country lining up for the largets ever class action lawsuit from me and everyone else here to giant mutual fund companies as plaintiffs??
     
    I asked a question a while back asking why in TOS I out in an order in a low volume option say a bid .05 higher than the bid had been for 2 days up pops up a number 5-10 times greater than my quantity and then to test this I pull my bid and it drops right to where it was prior….because they are now using my order as the 0+ hedge they will buy before me and sell it to me if the matket is not moving getting either a credit for the trade or the spread + movement if the stock is actually moving. It is criminal and I am trying to figure out who is going to bring charges first and why they have not already. Every 401 k plan participant is a plaintiff and the money is huge so I put it to this board why isn't this being persued yet??

  45. jromeha

    Jabo – lol

  46. Phil

    RYAN FAMILY FINANCIALLY BENEFITS FROM THE HEALTH INSURANCE INDUSTRY | Vice presidential candidate Paul Ryan’s wife, Janna, has previously worked as a lobbyist for a “roster of clients [that] included pharmaceutical and insurance clients such as Novartis, Cigna and Blue Cross/Blue Shield,” a Reuters profile reveals. Janna isn’t the only member of the family who has profited from the private health insurance industry. Campaign finance records show that Ryan has received significant funds during the 2011-2012 cycle, raking in $81,850 from pharmaceuticals and $37,468 from HMOs — $65,650 of which came from healthcare-affiliated PACs. Ryan touts a Medicare plan that would expand the role of private insurers by replacing the traditional Medicare plan with a voucher program that seniors could use to purchase private health plans.

    Dr. Copper’s Head & Shoulders

    Shilling: Only Time Can Heal the Economy, Global Recession

    Fear Is What Bull Markets Are All About:

     

    One of the things that all investors and traders who have ever been on Wall Street learn is that bull markets climb a wall of worry. There’s a good reason for this. When everything looks crappy and there are millions of things to worry about economically, financially, and politically, is when central bankers are at  their easiest. Fedheads like John Williams of San Francisco, who should stick to music, and Eric Rosengren of Boston, are so spooked by 2% economic growth–1% higher than US population growth–they are running around screaming, “MORE QE. MORE QE!” after almost 4 years of the easiest money in the history of the world. Apparently, $1.6 trillion in idle but incendiary bankreserves aren’t enough for these crybabies.

    So under that purely emotional pressure, the Fed pumps money into Primary Dealer accounts, and the dealers –actually the casino owners, the “houses” –do what they always do when flush with cash. They buy stuff and they give their whales and whale customers bigger piles of chips to play with. And everybody else follows their lead and gets skin in the game.

    It’s called manipulation, and it’s how the market, not just the US marketbut all markets,  have always worked.  Bad conditions prompt easy credit, and easy credit allows and motivates the house, the casino owners, to manipulate the markets higher.

  47. Phil

    TZA/Terra – Looks like we're heading up so maybe buy back caller and set a tight stop on your calls?

    Speaking of TNA – NOW we are getting a move up and the TNA Aug $51s are a reasonable $2.20 (.50 premium) and were $4.76 this morning so very nice risk/reward on possible stick action so, same as this morning – 10 in the $25KPs with a stop at $1.95 (risking $250 to make $2,000).  

  48. Burrben

    Long Put List
    Does anyone have the link for the latest long put list?  I have the old one, but I think there is a newer one.

  49. Phil

    Essentially, the stop on that is if the RUT fails to hold 790 in the Futures.  We also have 1,395 to watch on the S&P (1,400 in the index) and 8,000 in the NYSE and 3,000 on the Nas so plenty of signals if it looks weak.  

    LOL – Guy on CNBC says Central Bank action not priced into the market.  

    Why Sage – Because the Supreme Court says $1 = 1 vote and whoever has the most votes decides policy.  This county isn't fair – it hasn't been fair for many, many years and it gets worse every year.  Look at Canada – they have been trying to keep Fox news out for a decade but every year they buy more politicians and more votes and they come back and, since Corporations are immortal and politicians are not – they will keep coming year after year after year until they get their victory – they only need one victory and then, forever more – they can like to the Canadian people and it's going to be very effective in Canada because they've never been lied to by a TV "news" station before.  We're lied to all the time and we got used to it so the Media moguls take over the Newpapers and the Magazines and the TV Shows and the Movies and they cut our education budgets so – even if you do kind of remember how to question authority – your children never will.  They've taken over the media, they've taken over the Government and they've taken over the courts – for God's sake they are running a hedge fund manager for President!  That's why…

    Not that it really matters who's elected:  

    See – just like the Omen – they are already doing polls showing 48% of the people think he'd be a fine President should anything happen to Romney.  

    Long Put List/Burr – It's linked in the above post.  Make sure you read that day's post (where I discuss it) and not just the comments.  

    $25KPs – now we raise our stop to $2.15 (now $2.30) on the TNAs.  Once they get to $2.50, then $2.25 and a trailing .25 after that.  

  50. escohen5

    There is so much drooling on CNBC over Ryan, I have to put a towel under my flat screen…..

  51. Phil

    $25KP  - Damn, Dollar broke $82.50 so bull premise is blown – out of TNA at $2.35 – better than nothing.  

  52. rdn4evr

    Wow, VIX is at 14.05.  Things are great!!!

  53. rustle123

    Looking at the IMAX schedule, you have the new Bond movie "Skyfall" coming out in November which I don't think will be a huge hit on IMAX and then the Hobbit on 12/14 which should do very well.  So not much of a play on IMAX till mid to late November.

  54. angelcur

    JABO//VAGE CHANGED HER NAME TO VAGINNIA GAMBIT

  55. Pharmboy

    VIX under $14.  There's a shocker.  When Bots trade with Bots, there ain't no idi'ots to connect them dots!

  56. Burrben

    Long Put List / TWIL List Snapshot
     
    Phil, I don't think the KO Put is listed correctly in your latest Long Put list post.  What should it be?  There isn't a Jan 67.50 put on them.  KO is only $39.  Were you thinking of another put or another stock?
    http://www.philstockworld.com/2012/07/30/monday-market-movement-more-mario-momentum/#comment-2239531

  57. Birdman

    JABO / LOL – That's the best laugh I've had in a week! Are you going to be in Vegas?

  58. sagemm1

    Phil/why?
     
    I get bought and paid for but their are a lot of scumbag lawyers who might even don a halo to take down this scam, just saying

  59. jabobeast

    Birdman—no Vegas for me  ;-(
    http://www.youtube.com/watch?v=dV1HSscPYSY

  60. Birdman

    Since we have recently digressed here to chatting about religion, and we frequently chat about politics, I thought it appropriate to chat about – you guessed it – sex. So back to my recommendation of La Valencia Hotel in La Jolla. I mentioned that the two rooms on top are like a crow's nest. What I failed to mention is that crow's nest sex is right up there with train sex and castle sex. Not sure why, but you can trust me on this one.

  61. Burrben

    Ten reasons Winners keep winning

  62. Maya1

    Long put list/AMZN
    oct $205's down to $2.71 on the bid

  63. Birdman

    It strikes me that the hundred dollar bill that the Street is passing around every few nano-seconds must be getting a little frayed. They really need some fresh meat.

  64. txchili

    KO stock split 2/1 on July 27, so the put strikes need to be halved

  65. Pharmboy

    CELG – for the Aug/Oct calendar spread, it is up $35/contract.  Either close it out, or get ready to roll it to the Sept $72.5.  Don't let it get away.  Right now it is an even roll. 

  66. willsons

    Savi – Are there any slots left for Vegas?

  67. Pharmboy

    “The Fed and other central banks are doing everything in their power to convince investors to play the speculative game in rigged stock markets,” said Charles Biderman, CEO of TrimTabs.  “But investors aren’t taking the bait.  The most popular destination for investor cash is the mattress.”

    In a research note, TrimTabs explained that checking and savings accounts attracted a combined $356 billion in the first half of 2012, nearly double the inflow of $188 billion into bond mutual funds and exchange-traded funds.

    Equity mutual funds and ETFs were the flow laggards, taking in only $6 billion, as a $26 billion outflow from U.S. funds offset nearly all of the $32 billion inflow into global funds.

    “Inflows into savings accounts were consistently heavy—the flows weren’t just happening in one or two months,” noted Biderman.  “Savings account inflows ranged from $30 billion to $90 billion in each of the first six months of this year.”

    TrimTabs attributes the flood of money into savings vehicles and bonds funds to a variety of factors: poor stock market returns in the past 15 years, a weak economy, an aging population, stock market trading glitches, and increasingly aggressive central bank market manipulation.

    “I don’t expect mom and pop investors to pile into equities anytime soon,” said Biderman.  “The typical American household isn’t doing well financially, and retiring Baby Boomers are seeking safety rather than growth.  Also, I think investors are wary of a market dominated by high-frequency trading and central bankers who are trying to take advantage of the trading robots by jawboning all the time about bailouts and money printing.”

  68. qcmike

    Savi – 
    Vegas


     yes for dinner, no for poker

  69. Birdman

    Fresh Meat / Pharmboy – Thank you. A far more intelligent comment about the need for fresh meat than mine. The Street desperately needs a new "product" (as those of us here know, when an "investment" is referred to as a "product" it's time to lock the doors and hide the children). Going to be interesting to see what they come up with.
     
    If not a product, a stimulus. Unfortunately, the most effective stimulus is war:
     
    http://en.wikipedia.org/wiki/The_Report_from_Iron_Mountain
     
    WWII got us out the the Depression. Vietnam stimulated the economy. Iraq got us out of the deflationary pressures following the dot com bubble burst. I'm praying that the next one won't be Iran.
     
    OK, I'll shut up now – just bored today until my tee time.

  70. Phil

    IMax/Rustle – Consumers under a lot of pressure too, not sure how good overall box office will be this year.  $21 not a bad price but fall not too strong for IMAX usually.  

    VXX/$25KPs – Rolling Sept $11 puts (.90) to Oct $12 puts ($2) and (+$1.10) and spending .50 to roll Sept $16 calls (.25) to Oct $14 calls (.75).  

    Damn, those TNAs popped to $2.80 – should have been more patient….

    Thanks Burr.  KO split, that's why such funny strikes – $67.50 puts became $33.75s (now .32 but the base is now 1/2 at .42).  Also, it should be noted that we're done with the TWIL's I mentioned in this morning's post.  Maybe leave them as re-entry targets?

    Lawyers/Sage – ROFL!!!  Oh, were you serious?  

    AMZN/Maya – All the better to DD with….

    Money Flow/Pharm – Seems about right per what we're seeing.  This is why they are so desperate to create a rally and pull that sidelined money in but regular people are simply disgusted with the markets and these daily up and down gyrations aren't really fooling anyone.  

    Funny while the market goes up, oil goes down – that's a new trick.  

  71. rustle123

    IMAX/Phil
     
    With a weak market, I was thinking it can go back down to $16 again.

  72. mjjwo9b

    Phil / FAS –  No short Calls this week?  Sorry for being a bit a prude on FAS.  It is my latest obsession.  I am using it as a learning tool, both for theory and to decipher the trade suggestions via chat.  Thanks.

  73. stjeanluc

    Back for some air….

    Looking for short squeeze action:

    http://www.bespokeinvest.com/thinkbig/2012/8/13/sp-1500-most-heavily-shorted-stocks.html

  74. stjeanluc

    Talking about health care, there seems to be some inequality in the spending as well:

    I wonder how the costs are distributed to the society in general or do the bottom 50% pay higher premiums because the top 5% get a lot of care!

  75. sagemm1

    Lawyers, Seems a halo with billions of dollars…

  76. cdel360

    Any moves with Sept  SDS 15 Calls? down almost 20%

  77. sagemm1

    Phil/class action
     
    sounds like you think I am being verrry naive

  78. Phil

    Dow 37M at 2:30 – can we make an even lower low than last week's 84M for the day?   At 11:30 it was 24M so, in the last 3 hours, about 4M per hour to rally us back (and yes, it is still a sure thing to bet the EU close is the bottom).  

    1:00 PM On the hour: Dow -0.5%. 10-yr +0.14%. Euro +0.41% vs. dollar. Crude +0.57% to $93.4. Gold -0.11% to $1618.95.

    2:00 PM On the hour: Dow -0.47%. 10-yr +0.13%. Euro +0.37% vs. dollar. Crude +0.1% to $92.96. Gold -0.6% to $1611.05.

    Five years on, the Great Recession is turning into a life sentence (Telegraph)

    "Bull markets typically end when valuations are extreme, the Fed is tightening monetary policy, and investors are over-enthusiastic about (stocks)," writes Richard Bernstein, explaining why he remains bullish. (full note here)

    A Market Rebound That’s Defying Old Rules (NYT)

    Why High-Frequency Trading Doesn’t Compute (Barron’s)

    Holding Italian and Spanish governmment debt just got more expensive as LCH.Clearnet raises the margin requirements on certain maturities of each country's sovereign paper. (PR)

    Debt crisis: ECB buying Spanish and Italian debt ‘makes no sense’ says Belgian bank governor (Telegraph)

    Double Bottom Signals Nikkei 225 May Advance (Bloomberg)

    In China, New Cause for Worry on Growth (WSJ)

    Emerging debt remains remains frothy despite growing economic headwinds, writes Mike Riddell, noting an issue of long-term Peruvian debt last week hit a yield spread to Treasurys of just 109 bps. Given the bid-ask on this illiquid paper is 100 bps, it is pricing in almost no credit risk. It's pre-2008 territory. "Bubbletastic."

    Banks Face Derivatives Margin Losses As Too-Big-To-Fail Ends (Bloomberg)

    Chevron's (CVX -0.5%) Richmond refinery didn’t replace an eight-inch pipe during an inspection shutdown late last year that failed and led to last weekend's fire, the U.S. Chemical Safety Board says. The eight-inch pipe is original to the unit and probably was constructed in the 1970s.

    Tesoro's (TSO +9.2%$2.5B purchase of BP's California refinery looks cheap: at ~15% of its replacement value vs. the industry norm of 25%-30% after factoring in plans to sell certain assets in the deal to its MLP (TLLP), a consultant tells Bloomberg. Analysts say refiners like TSO have more upside given the discount available to buyers of U.S. crude, which still trades well below Brent crude.

    James River Coal (JRCC -0.7%) is reaffirmed as a Buy at Sterne Agee in the wake of pleasantly surprising Q2 results, but the firm says the coal miner's shipments guidance is too high. EPS estimates for 2012-13 are cut, but the firm believes current liquidity access should allow time for market dynamics to take hold.

    Solar stocks are weak today (TAN -2.8%), possibly due to aguidance cut from SolarWorld (SRWRF.PK): the troubled German module vendor, whose shares fell 12.2% in Frankfurt, now expects 1H sales to be down 36% Y/Y. Bucking the trend is Canadian Solar (CSIQ +1.3%), which just received a $94M loan from China Development Bank. That won't do anything to soothe U.S. and E.U.concerns about Chinese government support for local manufacturers.

    This is nice and inflationary:  Packaging companies trade strong as Credit Suisse upgrades the sector after price hikes on containerboard appears to be going over more smoothly than anticipated with customers. International Paper (IP +3.5%), Rock-Tenn (RKT +2.5%), and Packaging Corp. of America (PKG +1.9%) were all lifted to Outperform from Neutral. 

    More details emerge from the Macau investigation of Las Vegas Sands (LVS -1.5%): At the center of the controversy is businessman Yang Saizin and the tens of millions of dollars that flowed through him to mainland China. Interspliced into the story is missing money and accusations of an overly cozy relationship with organized crime. Though the "business as usual" argument is being thrown around by Las Vegas Sands defenders, personal animosity toward CEO Sandy Adelson from Macau government officials could be stoking the fire.

    Alexza Pharmaceuticals (ALXA +41%) is soaring today on no specific news. One possible lead could come from the company's earnings call transcript, released late Friday, which provided further color on recent inspections by both the EMA and FDA on its Mountain View facility, and an update on the anticipated approval of its schizophrenia and bipolar disorder drug Adsuasive, which is expected to get clearance in both Europe and the U.S. later this year. (Transcript

    Ascent Solar (ASTI +18%) soars after announcing a solar-powered charger for Samsung's hot-selling Galaxy S III. The charger, which will be added to Ascent's EnerPlex consumer products line, will be built into a protective case that also features a battery. Ascentalready offers an EnerPlex charger/case for the iPhone 4S.

    Shares of eBay (EBAY ) jump +3.1% higher after ChannelAdvisor tips off that July same-store sales growth came in at 28.2%. The solid gain was led by strong growth in the the company's fixed-price format, while eBay Motors also performed well for the month.

    Google (GOOG) is buying travel guide publisher Frommer's from John Wiley & Sons for an undisclosed sum. Google hasn't decided whether to continue publishing Frommer's titles in print. Together with its purchases of ITA Software and Zagat, the deal underscores Google's ambitions to be a major player in online travel content/services, with the help of Google Maps and other local offerings. Frommer's and Zagat also lend themselves well to Google'sefforts to improve mobile monetization via local ads. (TRIP/OWW impact)

    Also falling (previous) on news of Google's (GOOG)purchase of Frommer's: YELP -6.7%EXPE -1.9%. A Google spokesperson says the company "can’t wait to start working with [Frommer's] on our goal to provide a review for every relevant place in the world."

    Google (GOOG) receives some more regulatory scrutiny.The Independent reports Google execs could be brought before the U.K.'s House of Commons to explain why the company paid only £6M in British taxes last year, in spite of generating £395M in local revenue. Meanwhile, India has become the latest country to have its antitrust authorities investigate Google for anti-competitive behavior.

     

    AT&T (T) will begin selling the next-gen iPhone in the 3rd or 4th week of September, a "trusted" source tells BGR. That's in-line with prior rumors that claimed the next iPhone will be announced on Sep. 12, and go on sale 9 days later. Could a week or two of September iPhone sales help Apple (AAPL) beat lowered FQ4 estimates?

    Apple's (AAPL) 2010 licensing offer to Samsung (SSNLF.PKdidn't include certain "unique user interface" patents the company views as "untouchables." Nonetheless, Apple was demanding a smartphone royalty roughly 3x as high as what Samsung is paying to Microsoft, which also has a valuable software patent portfolio. It was also above what Samsung is paying Qualcomm, the biggest holder of 3G/4G patents. The takeaway: Apple's offer probably wasn't expected to be taken seriously, much like an even harsher 2012 offer.

    Some Microsoft (MSFT) mobile news: 1) Apple (AAPL) says its cross-licensing deal with Microsoft covers design patents, but has an "anti-cloning agreement." Apple and Microsoft have plenty of ammo to sue each other with, thus each company has an incentive to play nice. 2) Lenovo, Samsung, Dell, and Asus have been named as Windows RT tablet partners. Early tests demonstrate 8-13 hours ofbattery life, a useful selling point given RT's software shortcomings relative to Intel-based systems.

    Three lunchtime reads:

    1) Why investors are wary of the stock rally

    2) Troubles abroad keep cash flowing to U.S.

    3) IMF says bailouts Iceland-style hold lessons in crisis times

    Who are the real suckers paying ridiculous health-care costs – SURPRISE – it's us!  

    http://theincidentaleconomist.com/wordpress/wp-content/uploads/2012/07/DB3-Figure1.png

  79. millcreek

    phil,
     
    fwiw, i think we already rolled the 16 to the sep 15 ……..at least i did and believe it was a post……..onto 14

  80. nicha

    Any opinion on Bally's in Vegas? It is conveniently located on the strip. 

  81. Burrben

    Very good article around the low VIX.  
    Is Oversold VIX a sell signal?

  82. Maya1

    Phil/amzn
    DD sounds good.
    what do we do when they are down to 2.20?
    My first entry was at $3 this morning…but the portfolio has already done the DD. So, will watch with you for now but this market is powering higher and looks like it wants to reach your dollar adjusted level of 1428 on the S&P

  83. jromeha

    Nicha, it's OK but definitely one of the lower class hotels. MGM is better for probably only 30-50 more a night. Treasure Island is also decent and usually pretty cheap (but it appeals to a younger crowd, not sure your age demographic). Id go with a mid-tier hotel ie Treasure or MGM as opposed to trying to save a few bucks with Ballys, Luxor, Hard Rock, Stratosphere, etc.

  84. angelcur

    SOMEHTING GOING ON AT TEXAS AM POLICE HAVE BEEN SHOT

  85. angelcur

    2 OFFICERS ONE CIVILIAN SHOT..SHOOTER MAYBE IN CUSTODY

  86. Burrben

    Angelcur – Do you have to type all in caps?  
    FYI :  http://kathrynvercillo.hubpages.com/hub/What-People-Think-When-You-Type-in-All-Caps

  87. Phil

    LOL Bird!  

    IMAX/Rustle – Yes, I'd be patient.  

    FAS/Mjj – See earlier this morning.  We did major covering of XLF (in the FAS Money) last week and that's bearish enough for now.  As you can see from this afternoon's action, I was not thinking the morning sell-off would necessarily last so I'd rather wait and see what's real and what's not as we hover around resistance.  

    SDS/Cdel – 39 days to go – it's a bit early to take action.  

    Naive/Sage – No, I'm just super-jaded.  I've seen people who tried to fight this thing chewed up and spat out over and over again.  They tolerate a few angry words from people like me but any actual attempt to fix the system is dealt with brutally and effectively.  Mel Carnahan and Paul Wellstone come to mind.  The fact that Carnahan died in a plane crash (with his son, who could have stood in his stead) in October didn't stop people in Missouri from voting for him over John Ashcroft anyway but his wife (who served in his stead) was then defeated later that year (barely) in a special election.  Wellstone, I'm sure you know about – was killed in a plane crash 11 days before the 2002 election – he was the most vocal critic of the Iraq war and was pushing for an amendment to McCain-Feingold which was supposed to ban non-profits like the NRA from running election ads.  Interesting book called "American Assassination" on the subject.    

    Rolling/Mill – Well maybe but I have to go by what's on the sheet today.  I was wondering why we'd let them get so far off the mark.  

    Bally's/Nicha – Yuch.  The best low-cost hotel is Luxor.  MGM not too bad (same owners).  Treasure Island is in a good spot and cheap.   

    VIX/Burr – It SHOULD be a sell signal but we're back to pre-2008 VIX levels now – as if there is not and never was anything to worry about.  In fact, the last time the VIX was this low (and it's not a decay thing as it's a measurement) was June of 2007.  There's no logic to this at all other than it's being artificially pounded down to allow funds to load up on puts before they pull the rug out and collapse the market.  By Aug 2007, the VIX hit 30 and by Oct 2008, it was at 80 – you just have to be patient (hence the roll back)…  

    AMZN/Maya – The next move would probably be to roll out another month and to a higher strike if we can afford it.  I think time will heal all AMZN wounds in this case.  

     

    (Reuters) – Multiple people, including law enforcement officers, were shot on Monday when a gunman opened fire near Texas A&M University, police in College Station, Texas, said.

    "We have multiple people who have been shot," police spokeswoman Rhonda Seaton told CNN, adding that law enforcement officers were among those.

    Police had the shooting suspect in custody, according to the university's website. The extent of victims' injuries was not immediately clear.

    The university issued a "code maroon" shortly after noon, warning students and employees that an "active shooter" was in the area west of campus and asking them to stay away.

    The gunman fired shots from inside a home about two blocks from the campus, according to the university's alert.

  88. Pharmboy

    Yep….we definitely need MORE guns in this country.

  89. Phil

    Useful:  

    • March 2nd 2011, AAPL at $545 but down from $550 the week before but that was the bottom and then $640 a month later. 
    • June 7th, 2010, $332 and DOWN from $403 two weeks before.  Went LOWER, to $315 on the 20th but then to $400 a month later.  Head fake?  Pretty big one…
    • Jan 27th, 2010, $207 and DOWN from $215 the week before.  Went LOWER to $190 in a few days but was a good bottom and $225 in March and $275 in April.  
    • 2008 was a down-trend all the way from May high at $185 to $155 in July, back to $180 in Aug and then $85 in Oct but hard to draw conclusions there other than why didn't we sell everything we owned and buy AAPL for $85?  

    So, what do we conclude from this?  Not a very good idea to play AAPL up into a major announcement but, if they do disappoint and pull back after – could be a great buying opportunity.  

    Dow at 45M at 3:40 – could be a record low!  

  90. Phil

  91. Pharmboy

    TSRX – Mar 13 7.5 Cs, buy stock.  $4.75 net cost/share.  Also selling the Mar 13 $5 Ps.

  92. mjjwo9b

    Phil / FAS – Thank you for the reply.

  93. sagemm1

    3:46 PM Scartching your head about a lower VIX (VXX -2.4%) even with stocks down? Don't forget the roll, writes Bill Luby. Today is the day SPX options contracts roll forward one month. A particularly large difference between near-term and further out term volatilities causes the VIX to be substantially depressed, though this should diminsh over time
     
    …either that or it is just a flat out scam

  94. Burrben

    Phil / VIX –  I agree, but it's the front month that's really low.  As you look out further in time, the VIX futures are pricing in higher vol, so when we are buying back month puts, we are paying for time and a higher vol…that's what I found interesting.  It might be even a good idea to look into front month puts which we roll, or a directional calendar with a bearish lean..it can capitalize on vol expansion and positive theta.

  95. Phil

    You know what this reminds me of – it's like a cheap haunted house ride where all the thing pop out at you and say boo! or whatever but then, at the end, they all have to be put back in their boxes and covered back up for the next group.  That's what it's like when we're back to S&P 1,400 and Dollar 82.50 and oil $92.50 and XLF $14.95 and RUT 800 – all reset for the next customers tomorrow…..

    You're welcome Mjj.  

    Good note on VIX, Sage.  I would feel better if it popped back up because this is ridiculous.   

    Standard & Poor's downgrades Molycorp (MCP -4.9%) two notches further into junk territory, to CCC+ from B, and places its ratings on watch with "developing implications," noting the rare-earth miner's cash flow likely will be less than it expected this year due to lower prices and customer destocking

     Up nearly 8% earlier, Groupon (GRPN -1.2%) turns lower on sharply higher volume, suggesting, says John Melloy, a big buyer wants out ahead of this afternoon's earnings.

  96. rpme

    Vxx has dropped 51% since June 1.

  97. Pharmboy

    Go BMRN…..

  98. Phil

    49M with 5 mins to go! 

  99. Pharmboy

    Well, I will never get that time back.  Later.

  100. mrmocha

    VIX - for some decent cheap protection, the VXX OCT 15/19 BCS can be had for 30 cents…

  101. sagemm1

    wow almost 10% of the days volume in about 30 seconds

  102. rustle123

    Looks like the last time we had 5 or 6 days of volume this low was between Christmas and New Years

  103. Phil

    On July 3rd, Dow volume was 60M – that's the only day I see that comes close to today.  I think we'll be right about there at the close.  Should be noted that July 5th was a top and we fell 400 points in the next two weeks…

    Well, Nas closed green on AAPL pump to $630 so all must be right in the World.  

    Trading seems to have stopped at 67.5M – a bit more than July 3rd (but we closed at 1 that day).  

    VIX 13.74 because this is not at all volatile.  

    GOOG with a nice 3% pop on the day thanks to the upgrade.  

    Oh no – GRPN down but seems to be holding $7 for the moment.  Doesn't seem to be bothering the Nas futures that a stock that IPO'd at $25 can't justify $7.50 less than a year later. 

    VIX/Burr – I rarely play it because it's so silly but, under $16 became interesting and I'm willing to stick this out until/unless we get real QE just in case it has a huge pop but that's all.  

  104. Phil

    Groupon (GRPN): Q2 EPS of $0.08 beats by $0.05. Revenue of $568.3M (+45% Y/Y) misses by $4.8M. Expects Q3 revenue of $580M-$620M, in-line with $604.5M consensus. Expects Q3 operating income of $15M-$35, below Q2's $46.5M. Shares-7.5% AH. (PR)

  105. jromeha

    10/11 VXX bull call spread for .80…. Seems safe to me…

  106. Phil

    Those TNA $51 puts finished at $2.90 so it was the right play (up form $2.20) but we bailed too early.  Next time we'll start with less and be a little more brave but that's how you learn – gotta test positions and see how they perform.  

    VXX/Jrom – You would think so!  

  107. stjeanluc

    The mystery of the disappearing volume! On the Dow, it's almost 1/3 of what it was mid-July. On the NYSE, 1/2. Even the NASDAQ is getting hit now. Not bullish…

  108. stjeanluc

    Sounds like a good idea…. as long as we live in a bubble!

    http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/13/what-did-ayn-rand-teach-paul-ryan-about-monetary-policy/

    As an alternative approach, Ryan has suggested that the United States should return to “sound money” by anchoring the value of the dollar to, say, the price of a basket of commodities. This isn’t quite a return to the long-abandoned gold standard, but it’s a roughly similar concept. It would prevent the Federal Reserve from boosting the money supply in times of crisis, as the Fed did in 2008. And Ryan’s approach could have other downsides as well. As economist David Beckworth explained here, if the dollar was pegged to commodities like metals or soybeans, it would be greatly affected by outside forces, such as swings in Chinese demand. “For better or for worse,” he told FrumForum’s Noah Kristula-Green, “the political process can’t allow big swings in the monetary policy by outside forces.”

    Do these people actually live in the same world we do?

  109. Lincoln

    Savi: Vegas
    2 For dinner, probably 0 for poker

  110. iTrade

    As I plan to press my bet with VXX… the last split the index had was back in 2010.  Anyone hear about potential splits with the VXX ???
    Sub-$11 seems CRAZY!

  111. iTrade

    Phil with BBBW starting on Sept 3rd… any plans to restart the 25k or income portfolio.   

  112. stjeanluc

    VXX / iTrade – Actually, last time they did a reverse-split in November 2010 it was trading higher than today (close at 11.38 on 11/8/2010). See also - http://www.benzinga.com/trading-ideas/long-ideas/12/07/2762690/4-etfs-possibly-headed-for-reverse-splits-nugt-vxx

    I would not be surprised is something was in the works now!

  113. BertII

    Savi / Vegas
    0 for dinner, 1for poker

  114. Maya1

    PSW Vegas Meet 11/10-12
    Via American Express Services:
    Bellagio: $269 first night, $197 second night, 12 noon check in, 4 pm check out, free breakfast x 2 both days, $100 spa certificate OR $85 lunch certificate.
    Venetian: $209/night, plus free breakfasts 2, free dinner x 1, late check out
    i did not enquiry about Mandalay Bay- too far

  115. jfawcett

    Phil SWW – Thanks for the educational articles that have been running – "The Salvage Play – Learning to Scale In".  When this series is finished and you are thinking about a future topic, detailing the FAS Money portfolio concepts would be a good addition to the education section of SWW.

  116. stjeanluc

    Love them or hate them:

    http://www.bespokeinvest.com/thinkbig/2012/8/13/the-most-loved-and-hated-sp-500-stocks.html

    These charts actually tell you that this system is a fraud…. The worst stock in the loved list has an 83% buy rating and a 0% sell rating. The worst one in the hated list has a 18.2% sell rating and a 13.6% buy rating! A total joke.

  117. stjeanluc

    Man, what happened at 9:00 PM… S&P futures up 4 points in 1 swoop! Japan has been open for a while already and there are no numbers released!

  118. stjeanluc

    A good racket for T and VZ:

    http://bits.blogs.nytimes.com/2012/08/02/prepaid-phone-plans/

     

    The iPhone with a two-year contract on AT&T, for example, costs $200 for the handset and then upward of $90 a month for the plan; over two years, including the cost of the phone, customers pay at least $2,360. With a prepaid plan on Virgin Mobile, which is owned by Sprint, the iPhone costs $650 for the handset, and then $30 a month, including unlimited data (the type of data plan that people are happier with, according to J.D. Power). Over two years, that would cost about $1,370.

    So why aren’t more people going prepaid?

    “Right now, consumers don’t do the math, and they have a lot of resistance to paying $500 to $600 upfront, and they’d rather pay $100 upfront and then overspend,” he said. “That psychology has worked for hundreds of years, and it’s still working.”

  119. rj_jarboe

    Stjean/charts
    Interesting charts! Look at the prices of those ATI Puts. Might be worth selling some if we ever break-out.

  120. nicha

    Vegas – Anybody interested in sharing?

  121. nicha

    Vegas Hotels - I should have been more clear this morning about hotels. I have a trip planned in October with 3 families. There are three kids, ages 3-8, three older folks with walking difficulties and five adults. We will be in Vegas for 3 nights and would like to stay within $100-$125 per night.
    It looks like Excalibur is an option in my price rate and if I add $25 more it would be Luxor. I know Phil said Luxor was ok. Any opinion on the Excalibur or one over the other?

  122. nicha

    Any recommendations for decently priced hotels in San Francisco and San Diego?
    I will be in SF for a day and want to see the Golden Gate bridge and ride in the cable cars. (I may skip SF if there is a lot to do in SD)
    I will be in SD for 3 days. Sea World, Balboa Park and the SD Zoo are planned in addition to beaches.I also plan to go to Santa Monica for a day.

  123. Burrben

    Good article, which explains things we tend to overlook….
     
    How Can the VIX Be 14 and Lower than VIN and VIF?
    http://communities.cboe.com/t5/What-s-On-Our-Minds/How-Can-the-VIX-Be-14-and-Lower-than-VIN-and-VIF-by-Bill-Luby/ba-p/3401

  124. diamond

    Is An Oversold VIX a Sell Signal?

  125. Phil

    Good morning!  

    Europe GDPs out today, weak but as expected in general.  Looks like a Recession to me and German go-forward confidence is down.  The Dollar was shoved down to 82.25 but bounced off it to 82.40 and Futures calming down a bit off so bad, it's good news from Europe.  

     

    German Economy Growing

    Germany's economy grew slightly more than expected in the second quarter compared with the previous quarter, driven by domestic demand and trade.

    RUT futures zoomed up to 802.5 (/TF) and makes a nice short if it crosses back below 802 – as long as the Dollar holds 82.40 (a bit below now).  Oil (/CL) $93 can also be shorted below the line with very tight stops (now $93.10)

    AAPL flew up overnight – now $634.36 and the Nas (/NQ) is at 2,732.5 and that's a tempting short as AAPL not too likely to crack $635 pre-market and we know what an AAPL pullback does to the Nas.  

    Tuesday's economic calendar:

    7:30 NFIB Small Business Optimism Index

    7:45 ICSC Retail Store Sales

    8:30 Retail Sales

    8:30 Producer Price Index

    8:55 Redbook Chain Store Sales

    10:00 Business Inventories

    2:52 AM Asian markets rose ahead of economic data out of Europe and the U.S., with Japan +0.5%, Hong Kong +0.5%, China +0.2% and India +0.5%.

    3:33 AM EU shares open higher following better-than-expectedFrench and German GDP, although it's all still pretty anaemic. EU Stoxx 50 +0.8%, London +0.6%, Paris +0.8%, Frankfurt +0.9%, Madrid +1.05%, Milan +0.9%

    6:00 AM Overseas: Japan +0.50%;. Hong Kong +1.05%. China+0.30%. India +0.55%. London +0.55%. Paris +0.54%. Frankfurt+0.84%.

    Finally someone says it:  MORGAN STANLEY(MS): The Odds Of A Surprise Fed Move Are Like The Odds Of NASA Finding Extraterrestrial Life.

    UBS: The Dollar Is Likely To Remain The World's Reserve Currency For The Next 50 Years.

    Why Global Macro Hedge Funds Are Getting Slammed These Days.

    Alan Simpson Confirms Reality: "All The Things You Love Will Not Come To Pass". (video) Conjuring images of Jack Nicholson in 'A Few Good Men', Alan Simpson laid out the sad and terrible truth that none of us or our politicians can handle in a very direct and sincere interview with Bloomberg TV's Deirdre Bolton. "Medicare costsstand to squeeze out the rest of domestic government spending," Simpson said, "it is on automatic pilot. It will use up every resource in the government." Simpson also said that the current path of debt, deficit and interest is “totally unsustainable” confirming once again the facade that his 18 years in Washington proved to him that he "never saw any projection of any economist ever come true."

    It turns out the U.S. is more like Japan and Scandinavia than realized, as its fertility rate has dropped to 1.9, below France and England. The U.S. has been considered one of the few rich Western countries with a total fertility rate above the replacement rate, but if the troubling new trend keeps on, the repercussions for America’s health and fiscal policies would be enormous.

    California’s Revenue Falls 10.1% Below Forecast, Chiang Says. California tax revenue trailed forecasts in July by $475 million, or 10.1 percent below assumptions in Governor Jerry Brown’s budget, the state controller’s office said. Controller John Chiang, in a monthly update, attributed most of the shortfall to lower-than-expected sales-tax receipts. 

    A Green Light for Car Loans. Banks, Finance Firms Boost Auto Lending; Fed Survey Finds Easier Standards.Banks and investors are still wary of lending to Americans purchasing houses and almost everything else, but they are lending people money to buy cars—even to borrowers who must stretch to make their payments.

    Enjoy the quiet before the storm while it lasts, Der Spiegel's Martin Hesse writes: Banks, investors and companies are bracing themselves for a breakup of the euro… and are thus increasing the likelihood that precisely this will happen. "They're sawing at the limb that they're sitting on."

    Time to stop the EU navel-gazing. Whilst the Coalition continues to maintain that its policies are sustaining the economy, but our GDP tumbles, this is the time to examine this inherent contradiction between claims and performance.

    Eurozone GDP -0.2% Q/Q, in line, vs. flat in Q1. On year, GDP -0.4%, also in line, vs. -0.1%. European shares continue their merry way higher, as does  the euro vs. the dollar. (PR) - It's technically not a recession because the previous Q was flat, not down so not 2 Qs in a row – getting worse, obviously – but not an official recession yet so BUYBUYBUY!!!  {end sarcasm font}

    German Q2 GDP +0.3% Q/Q vs. +0.5% in Q1 and consensus of +0.2%. On year, GDP +0.5% vs. +1.7% and +1%. "Exports grew slightly more than imports," says Germany's statistics office, while "private as well as public consumption was higher than in the previous quarter." However, there was a decrease in investments, particularly in equipment. (PR)

    Germany's ZEW indicator of investor sentiment, which measures expectations for the next six months, falls to -25.5 in August from -19.6 in July and consensus of -19.3. This month's reading is the lowest since December and represents the fourth decline in a row. The current-conditions index drops to 18.2 from 20.1 in July and vs. 17.5 consensus. (PR

    Germany's Bundesbank says there "are are signs of a certain decrease in growth" for H2 in comments that follow data showing that the country's GDP expansion slowed in Q2 to +0.3% Q/Q. The rate was in line with the Bundesbank's expectations and with Germany's growth potential.

    Germany's Wealth GrabThe impulse to soak the rich isn't exclusively French. François Hollande has earned his reputation as archenemy of Europe's wealthy, but don't imagine that the impulse to soak the rich is exclusively Gallic. Lawmakers in Germany's opposition parties are calling for a 1% tax on wealth and assets exceeding €2 million. The Social Democrat-Green proposal would add €11.5 billion to coffers annually, according to calculations by the influential German Institute for Economic Research, or DIW. If you think that's onerous, consider that last month the same think-tank published a report advocating a one-off levy of 10% on all wealth exceeding €250,000.

    World shipping crisis threatens German dominance as Greeks win long gameGermany’s shipping industry faces a wave of bankruptcies over coming months as funding dries up and deepening economic woes across the world cause a sharp contraction in container trade.

     U.K. July CPI +0.1% M/M vs. -0.4% in June and consensus of -0.1%. On year, CPI +2.6% vs. +2.4% and +2.3%. Core CPI +2.3% vs. +2.1% and +2.1%. Overall prices were boosted by increased costs for transport, especially airline tickets, clothing and footwear. (PR)

    French Q2 GDP unchanged Q/Q vs. -0.1% consensus. That's the third quarter in a row that France's economy fails to grow. Household consumption -0.2%, gross fixed-capital formation +0.6%. Domestic demand adds 0.1 point to growth. (PR)

    French CPI -0.4% M/M in July after being steady in June and vs. consensus of -0.2%. On year, CPI +1.9%. Seasonal discounts at retailers and cheaper food offset more expensive energy and services. (PR)

    The only way out for China: Andy XieProblems only going to get worse as long as government interferes. China’s business conditions continue to deteriorate. Cement, coal and steel prices are still fallingOvercapacity is severe in most industriesLocal governments pressure loss-making enterprises to continue production to sustain local gross domestic product. Hence, commodity prices are falling below total costs. Soon the prices may fall below variable costs.

    Deep Fried Black Swan Lands As China Admits It Has A Food Inflation Problem, Releases Corn, Rice From Reserves.

    China plans to release corn and rice from state reserves to cool inflation and ease import needs. The amount isn't yet known, but is estimated to be around 2M tons (the country consumes 10-15M tons monthly). The grains were sharply lower today as traders mostly sell Friday's news of a short crop. Corn -2.2%, Beans -3.1%, Wheat-3.2%.

    China Stocks Drop for Third Day on Profit Concerns; Citic Slides. China’s stocks fell, sending the benchmark index lower for a third day, on concern the nation’s slowing economy is hurting corporate earnings. Citic Securities Co., the nation’s biggest listed brokerage, dropped 3 percent, adding to yesterday’s 9.1 percent slide, after the Securities Times reported the company denied speculation that it had “huge” losses on its overseas investments. China Merchants Securities Co. slid to the lowest since January after reporting lower first-half profit.Suning Appliance Co., the biggest home appliance retailer by market value, tumbled 8.4 percent after its board approved a bond sale. “The first-half earnings reports are showing companies are in the process of clearing inventories, which is the worst thing for corporate earnings,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million. The Shanghai Composite Index (SHCOMP) dropped 0.6 percent to 2,122.80 at 10:44 a.m. local time, heading for the lowest level since Aug. 2.

    Currency Flows Reversing China to Colombia as Trade Slows. Just three months after the biggest developing economies sold dollars to support their currencies, policy makers from Colombia to China are moving to weaken exchange rates and revive exports as the International Monetary Fund forecasts the slowest trade growth in three years. Colombian Finance Minister Juan Carlos Echeverry urged the central bank on Aug. 3 to boost minimum dollar purchases from $20 million a day, saying the country needs “more ammunition” to drive down the peso in the global “currency war.” The Philippines banned foreign funds from deposit accounts and unexpectedly cut interest rates in July as the peso hit a four- year high. In China, authorities lowered the yuan reference rate to the weakest since November, which according to Citigroup Inc. will create “headwinds” for other Asian currencies.

     India is in a bind: growth is slowing, inflation is high and the government's large deficit gives it little room for stimulus. "Some sacrifice in growth is inevitable and an unavoidable cost in bringing inflation down," Reserve Bank of India Governor Duvvuri Subbarao said late yesterday. "There is just no space for a fiscal or monetary response."

    India's Inflation Likely Edged Higher in JulyIndia is expected to report on Tuesday that headline wholesale price index inflation edged higher in July to an annual 7.37 percent from 7.25 percent in June, according to a Reuters poll of economists.

    Australia's Sub Prime Mortgage Scandal GrowsClaims that Australia’s banking sector is conservative, safe and secure have taken a bath in recent days as evidence has emerged of Australia’s own sub-prime lending scandal.

    The Solar-Painted Desert. Interior gives an environmental pass to its business friends. Who says President One of my pet projects going forward!  Obama isn't pro-business? The trick is being a business he likes. Several weeks ago in a remarkable but little-noticed policy directive, the Interior Department announced that it will allow construction permitting on 285,000 acres of public land in Arizona, California, Colorado, Nevada, New Mexico and Utah for solar energy projects. Even more remarkable, Interior said that energy firms can petition Interior to build solar installations "on approximately 19 million acres"—a larger land mass than Connecticut, Massachusetts, New Hampshire and Vermont combined.

    Chinese antitrust regulators provide restricted approval for Wal-Mart (WMT) to increase its stake in e-commerce company Yihaodian to 51% from 18%. While the authorization took a while in coming, Wal-Mart will now be able to better exploit the booming Chinese consumer e-commerce maket, which is expected to grow fivefold to 665B yuan ($100B) over the next two years.

    Might not be so good to stay at the Venetian:  The Nevada Gaming Control Board jumps onto the Las Vegas Sands (LVS) investigation bandwagon, Reuters reports, with the regulator looking at whether the company broke bribery laws in its dealings in mainland China. Nevada, which joins the SEC and DOJ in probing LVS, could theoretically revoke the company's casino license, although matters rarely get that far.

    Groupon(GRPN) Sales Miss Estimates as Online Deal Demand DimsGroupon Inc. shares tumbled in late trading after the largest daily-deal website reported second- quarter revenue that missed estimates as economic weakness in Europe curbed international sales of online coupons. Groupon shares fell as much as 21 percent to $5.95 in extended trading following the report.

    Groupon's (GRPN) Q/Q revenue growth over the last 6 quarters, per Scott Austin: 72%, 97%, 10%, 14%, 14%, 2%. Y/Y billings growth, meanwhile, has fallen from 103% in Q1 to 39% in Q2, and active customer growth from 3.2M to 1.1M. Groupon blames the slowdown on European softness, which led international growth to fall by more than 2/3. Shares -18.2% AH and now 

  126. Phil


    Groupon's (
    GRPN) Q/Q revenue growth over the last 6 quarters, per Scott Austin: 72%, 97%, 10%, 14%, 14%, 2%. Y/Y billings growth, meanwhile, has fallen from 103% in Q1 to 39% in Q2, and active customer growth from 3.2M to 1.1M. Groupon blames the slowdown on European softness, which led international growth to fall by more than 2/3. Shares -18.2% AH and now down 69% from their IPO price. (CC webcast) (Q2 resultsUpdate: More details here. Groupon claims a greater dependence on high-price discretionary deals in Europe played a role. 

    Nokia's (NOK -5.4%) Symbian sales have been decimatedby Android, but its Asha feature phones have been selling well in emerging markets, notes Tero Kuittinen. A combo of low price points, good built-in apps, and smartphone-like features has allowed the Asha line to slow down Android's march for now. SA's brnichols recently discussed the continued strength of feature phones sales in India.

    UBS' Amitabh Passi has come up with a fairly novel bearish argument for Research In Motion (RIMM -2.7%): he thinks recentpatent sale activity (or lack thereof) suggests IP values are declining, and that RIM's portfolio, which many expect the company to monetize, is worth less than the Street thinks. GigaOm's Jeff John Roberts recently argued tech is in the midst of a patent bubble. It might have begun to burst.

    The most popular way for 13-17 year-olds to listen to music is via YouTube (GOOG), a Nielson survey shows, with 64% of respondents doing so. Next comes radio, iTunes (AAPL), CDs and Pandora (P). Among adults, radio wins out with 67%, followed by CDs, YouTube, Pandora and iTunes. The survey highlights the major problems music labels continue to face.

    Scratching your head about a lower VIX (VXX -2.4%) even with stocks down? Don't forget the roll, writes Bill Luby. Today is the day SPX options contracts roll forward one month. A particularly large difference between near-term and further out term volatilities causes the VIX to be substantially depressed, though this should diminsh over time. 

  127. knightpilot

    Nicha/ San Francisco,
    Parc 55 Union square is very reasonable and well located.  Make sure you get out to Muir Woods if your going to drive up to the bridge.  I personally enjoy walking from Union Square through the financial district to Peir 39.  Usually then find a tourist trap to eat at, watch "Bushman" for a few minutes then maybe top it off with a drink at the Red Room.  Of course you will be accosted by bums the whole time, but I have never had much trouble.  There are scads of UC officers in that area.

  128. Phil

    Good overview of the VIX, Rpme (and I love the Seinfeld "analysis") 

    Good points on the Fed, Rebel.  

    Ryan/StJ – Well, they live in the same World as we do – but so does dysentery and cancer….

    Splits/Itrade – Maybe a reverse-split of VXX.

    $25KP/Itrade – I don't think so.   New trades are new trades so what difference would it make?  

    Future Topics/Jfaw – These are mostly old articles from the Education Section (Salvage Play was in Strategy).  FAS Money is more of a learn by doing thing than something you can write down.  It's all about practicing rolling and practicing calling tops and bottoms (made much more difficult by having 500 kids in the back seat constantly asking if we're there yet).  

    SHLD/StJ – 85% sell ratings?  Maybe it is worth going long on.  People keep analyzing it as a Retail Stock but it's really a Real Estate play.  Eddie's just sitting on it until the market comes back (if ever).   Notice how fast the Sell List gets to 20%?  Only 21 out of 500 S&P companies have more than an 20% sell rating – that's f'd up!

    Not sure what was up with the Futures – just trying to impress Asia, I guess. "THEY" are desperately trying to pull investors off the sidelines and not just US investors.  This happened in 2008 as well and, once "THEY" finally gave up trying – the market dropped like a rock tied to a bigger rock.  

    Racket/StJ – That racket is the secret to American commerce so – shhhhhhhhh!  

    Vegas/Nicha – Excalibur is good for the kids but it connects to Luxor and I think Luxor is much nicer to stay at (very cool rooms inside the pyramid).  On the American Express Fine Hotels Program, I stayed at the 4 Seasons for $200 a night but that then included breakfast every day for 2 and dinner for two one time so if you figure the breakfasts are worth $50 a day and the dinner is $100 once, in 3 days it's not much more than $125 for just a room.  At the 4 seasons, you get to use the Mandalay Bay Pools, they have a private pool with FREE comfortable chairs (something you pay for at other hotels) and, it also connects to Luxor and Excalibur.  To me, you're going to Vegas, your'e going to spend a couple of thousand on the whole trip – isn't it worth $300 more to stay in a nice hotel?   As to SF and SD – decently priced hotels are not my specialty…  SF and SD are very far apart – if you are driving, I wouldn't do it in the same trip unless you have huge amounts of time.  

    VIX/Burr – Well it sounds like a bull bet at this point is not a bad idea.  

    Wheeeee – down we go – Future shorts all triggered!  

  129. Phil

    Calendar/Diamond – Well I wouldn't want to be short on Sept 11th!  Possible that German Court approves ESM on the 12th (although I hear delayed possibly) and Fed Meets on 13th so possibly coordinated massive action that day.  But first, they really have to dump the market to make it necessary.  If we go up another 1,000 points between now and then – who on Earth will be able to vote for more liquidity?  

    VIX/Diamond – In light of the rollover issue, I would not take the VIX too seriously at the moment.  

    That dip stopped real fast – be careful.  I have to go to work now…

  130. shadowfax

    I just went back to Sunday to hear what else and everyone I am sorry if I offended anyone. It was refreshing to hear some understood it is time to separate church and state. Since the beginning of man 1 thing has started every war and the last three wars show how much history keeps repeating itself. The O is too much. 1 month before my 49th birthday I stil did not understand hate or how evil religion was in politics. Bush smoothly started the wars and Romney would be smoother and not to foget that stupid drug war, religion would love to expand to booze. Now Guns are bad again inspite of lower crime rates because a couple of people want to steer up something. Everyone that second amendment was to prevent what has happened to this country and maybe these are crazy people but nobody does anything.
     
    I moved into a totally religious right controled place and nothing could be worse. This is not America and like a cancer spreading. So my main point was lets cut out the religious cancer not seed it everywhere.
     
    I would not vote for Romney if he switched parties, non disclosure at this level scares the crap out of me. No trust……….

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