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Try and Try Again Tuesday – 3 More Trade Ideas That Make 300% if the Market Pops

Here we go again (again)!

Yep, that's what I said last Tuesday and the Tuesday before that because Tuesday is a day they push the Futures higher and ditch the Dollar and tell you that this time it's different because of the same rumors they had the Tuesday before only this week – the data is getting worse and worse, as we know is better, right?  

Last Tuesday we set levels to capitulate and go fully bullish at Dow 13,464, S&P 1,428, Nasdaq 3,060, NYSE 8,160 and Russell 816 and, as of yesterday's close we had the Nasdaq and the Russell over their marks needing just one confirmation to make it 3 of 5 and begin to flip our short-term portfolios (the $25KPs) bullish.  We are soooo close but, so far – no cigar.  

While we waited, we looked at some upside hedges that would do well if the market continued higher.  Just as we get downside protection when we're bullish – we use upside protection when we're bearish and I suggested taking 5% or 10% positions in aggressive upside plays to help balance a bearish portfolio against – well against exactly what happened in the past 7 days.  Our trade ideas were:  

  • 2 FAS Oct $105/115 bull call spread at $2, selling 1 BBY 2014 $18 puts for $3.25 for net .75, now $1.15 – up 53%
  • 2014 SHLD $32.50 puts sold for $7.50, now $6.40 – up 15% 
  • 6 EWJ Jan $9 calls at .53, selling 1 BBY 2014 $18 put at $3.25 for a net .07 credit, still net .07 credit – even 
  • TNA Oct $55/61 bull call spread at $2.50, selling Oct $42 puts for $1.90 for net .60, now $1.80 – up 200%

The BBY puts jumped over 20% yesterday, from below $3 to $3.75 and that killed two of our trades (and worse today after earnings!), that were up significantly in Friday's update (which is why we take quick gains like that off the table).  The good news is the EWJ play gives us a nice, new entry at the same net price so that one is still good and, of course, we are done with TNA after making 200% in a week and we'll find a fresh horse for that money.

Speaking of fresh horses – for our offsetting short puts today – let's take a look at our Twice in a Lifetime List, which were 16 blue-chip stocks we picked into the May market collapse that were approaching their 2009 panic lows.  

BAC, for example, was $6.97 at the time and our trade idea was to sell the 2014 $7 puts for $1.75 each for a net $5.25 entry.  BAC is now trading back at $8.15 and the 2014 $7 puts have dropped to $1.05 – up 40%.  CCJ 2014 $17 puts were sold for $3.30 and are already down to $1.75 for a nice 47% gain, CHK is no surprise to people who heard me banging the table on them and, at the time, they were trading at a ridiculous $13.83 and we were able to aggressively sell the 2014 $13 puts for a whopping $5 (isn't panic great?) and those puts are already down to $2.15 with the stock back at $19.40 (up 57%).  FTR is another one Members got sick of hearing me make bullish calls on and they were still $3.20 at the time (now $4.65) and the 2014 $3.50 puts (very aggressive sale) that sold for $1.30 are now .55 (up 54%).  

While the list was generally like shooting fish in a barrel for our Members – the above trades are what we call "tired horses" that have already had a good run.  We can ride them the next 17 months to the finish but, when you make 50% in 3 months and then have to wait 17 months for the next 50% – the thrill is kind of gone – don't you think?  

Fortunately, we did have a few stocks on our list that are still pretty cheap but, the big question is – do we still believe in them?  

  • The ALU ($1.20) 2014 $2 puts are still $1 and we do like ALU long-term and this is a net $1 entry on the stock.
  • BTU ($22.82) 2014 $20 puts are now $3.60 (up just 12% from our $4.10 entry) and, if you believe in China (or the Koch brothers), then coal still has a future.  
  • HPQ ($20.10) is down about 10% from our original pick ($22.04, now $20.20) and the 2014 $23 puts are one of two losers on our list as they have gone up from $5 to $5.65 (down 13%).  While I still like that target for HPQ, now you can sell the 2014 $20 puts for $3.80 and that's net $16.20 vs net $17.35 on the other sale so it depends what you think you will be comfortable with as an entry if things go downhill.  
  • SVU ($2.30) is our other loser and our biggest with the 2014 $5 puts jumping from $1.85 to $3.10 (down 40%).  Our play was to roll them down to 2x the $3 puts at $1.50 for a net $2.12 entry on 2x with SVU now at $2.30 so no real tragedy and we do still like selling the 2014 $2.50 puts for $1.10 as that's a net $1.40 entry, which is a 39% discount to the current stock price.  
  • X ($22.66) 2014 $20 puts are up 20% from our $5 entry at $4 but gosh, I still like them!  Even better are the 2014 $18 puts at $3.10 for a net $14.90 entry if put to you, which is 34% below the current price.  

As we like to teach our Members, if you take your initial entries into stocks at 34% below the current price – you stand an excellent chance of staying ahead of the market AND you have a built-in cushion to fend off all but the worst market corrections.

BEFORE we talk about making money in a breakout rally – it's important to make it clear that I still do not believe in this rally at all.  IF we get stimulus, THEN I will believe for the 6-12 months it will last us but, until there is actual money on the table from the EU and the Fed – this "rally" is nothing but a house of cards that a breeze (or a negative statement) can blow right over.  In fact, this morning I sent out a special pre-market Alert to Members at 5:46 am where we decided to short the Futures on Oil (/CL) at $97, Gold (/YG) at $1,627 and the Nasdaq (/NQ) at 2,786 so those are aggressively short day-trades as we're not buying the morning pump job.  We got a quick dip but now we're waiting to see if those levels cross again (note Dave Fry's chart) – and we'd like to see the Dollar get back over 82.20 (now 82.10). 

SPY 5 MINUTEOur short-term portfolios are still very bearish and down 6% for the week as we hang on until that 3rd level finally breaks (and holds for a full day) while our long-term Income Portfolio remains very bullish.  Of course, to some extent, it's prudent to have a small, aggressive, short-term $25,000 Portfolio act more bearish when it's protecting a bullish $500,000 Portfolio that's poised bullish but most of our Income Portfolio positions are the same kind of long-term short puts as we had on our Twice in a Lifetime List and they don't need a whole lot of protection – just time to mature.  Now, for the upside trade ideas:  

  • FAS is still my favorite long.  Look how well our last FAS play did and all XLF did was move up .20.  We're looking for $16.50 on any kind of stimulus/bailout news and that's up 8.5% from here on XLF and that should pop FAS about 25%, from $96 to $120 and we can still pick up the Oct $107/117 bull call spread for $2.05 and offset 2 of those ($4.10) with the sale of one BBY 2014 $15 puts at $3.75 for a net .35 entry on $20 worth of spreads.  That's a potential upside of 5,614% if we hit our targets – that can certainly take the sting out of losing a few bearish bets!  
  • I said last week I did not like gold but silver had possibilities.  AGQ is is an ultra-ETF that tracks silver at 2x the move and silver may beak over $29 and has a clear shot to $31 if it does and that's going to be good enough to take AGQ up to $45 but we're betting on QE and a big rally so how about the Oct $38/45 bull call spread at $3.10, which can be nicely offset by another materials position in BTU, selling the 2014 $20 puts for $3.60, which is a net .50 credit on the $8 spread for a very nice 4,100% return if both sides hit their target and the worst case here is we end up owning BTU at net $19.50, which is another 14% off from here.  
  • If we are going to break up from here, the Dow has a bit of catching up to do.  DIA follows the Dow and is now $132.38 and the Oct $135 calls are just $1.35 and we can buy 3 of those for $4.05 and sell just one (per unit) HPQ (a Dow component) 2014 $20 put for $3.80 for a net .25 with no limit to the upside Dr. Bernanke and Mr. Draghi can give us in September.  Dow 13,600 is only 2% away and, while 13,600 seems ridiculously overvalued to us – that's just our brain talking and we'll have to stop listening to that long before we get that high….  A 5% move up in the Dow to 13,933 (so ridiculous to write that down!) would make those 3 calls worth about $12 on the net .25 investment so, if the HPQ puts also expire worthless, we're looking at a gain on cash of 4,800%.  

Don't forget, our goal on these trades is to make 300% and move on and if, like the last batch, we make over 100% in less than a week – that's also a good reason to take them off the table.  We are NOT bullish yet, these are hedges to our bearish positions but, like any good boy scouts – we do like to be prepared. 


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  1. jacalynm

    Congratulations to Virginia M. Rometty, chief executive of International Business Machines Corp., for shoving it to the Good Ole Boys of Augusta!
    Augusta National Golf Club to add first two female members
    Having been a vicim of the Good Ole Boys Club most of my career it warms my heart to see the Circle Jerk is over at least in this PRIVATE location!

  2. jacalynm

    Phil,
    Scottrade must suck for options  I am seeing a bid of $2.40 for BBY $15 puts in 2014

  3. kinkistyle

    Maybe time to add to BBY position?

  4. stjeanluc

    Oil Lines

    R3 – 98.41
    R2 – 97.62
    R1 – 96.9
    PP – 96.11
    S1 – 95.39
    S2 – 94.6
    S3 – 93.88

  5. jasu1

    Thanks Phil on the DMND, CAT kick in the head….Learning process continues

  6. stjeanluc

    Looks like another opportunity at a lower entry point for BBY when they open. You have to go back to 2003 to see a 16 handle! 

  7. stjeanluc

    And oil making a run at S2 now….

  8. Pharmboy

  9. Gingbaum

    Phil,
    I posted this yesterday but I think you might have just missed it.

    I'm thinking about selling a $26 or $27 call on Lowes (LOW), and or buying a $25 put – or a combination of both.  I think there might be some follow through selling on the bad guidance.  What is your thoughts?
    Thanks

  10. dclark41

    No help from Lockhart . Good read.
    http://www.frbatlanta.org/news/speeches/120821_lockhart.cfm?d=1&s=tw

  11. silentstorm44

    Are some of the Trade Bots turned off or on standby ,hence the low volume? (Maybe firms are reviewing their computer programs after the Knight Capital technology glitch 8/1.)

  12. stjeanluc

    AAPL is not the most valuable company ever:

    http://techcrunch.com/2012/08/20/apple-is-not-the-most-valuable-company-in-the-history-of-the-world-ibm-won-the-prize-in-1967-with-a-value-of-1-3-trillion/

    Apple’s $661 billion market share does not account for inflation.  With inflation in account, IBM remains the historic winner with a 1967 value of $1.3 trillion.

    That's a lot of money…. 

  13. Phil

    Good morning (not for the bears so far):  

    Dollar smashed down to 81.93 and I have to assume it's something Lockhart said (discussed in morning Alert) and now we're laying around at 81.95 trying to get back over 82.  Euro $1.245, Pound $1.577 with 79.47 Yen to the Dollar and, of course, EUR/CHF 1.2009.  

    Odd, Lockhart seems to have said monetary policy is not a cure-all for the economy.  Maybe that was just a blow-off spike, which would indicate the bulls are getting desperate – we'll only know when we see what sticks.  

    Good example of why stops are so critical in the Futures – we drifted over our lines for a while but then this pop (since there was no upside resistance) sent oil to $97.49 (and we know those .50 lines are the best spots to short) and gold to $1,641 good short below $1,640 and the Nas flew up to 2,793 with AAPL popping to $671 (maybe Lockhart said he was going out after his speech to buy a new IPad?).  

    If the coordination wasn't so perfect, I'd believe it but this is just crazy.  Can't short with the Dollar failing – now 81.93 but boy what a whipsaw if the Euro falls and the Dollar rises now….

    As usual, the Data sucks but who cares:  

    2:30 AM Asian stocks are mixed but are experiencing an "eerie calmness" that's a reflection of the markets waiting on the central banks. Japan -0.1%, Hong Kong -0.5%, China +0.2%, India +0.4%.

    3:46 AM EU shares open higher on low volumes after closing down yesterday as markets await the next bit of electric-shock therapy from a central banker. The global rally through the "summer doldrums" has "been greeted with understandable skepticism given the still miserable levels of trading volumes," says Peel Hunt's Ian Williams. EU Stoxx 50 +0.7%, London +0.6%, Paris +0.6%, Frankfurt +0.6%, Madrid +1.1%, Milan +1.9%.

    6:00 AM Overseas: Japan -0.16%;. Hong Kong -0.02%. China+0.54%. India +1.06%. London +0.33%. Paris +073%. Frankfurt+0.46%.

    7:00 AM On the hour: S&P +0.21%. 10-yr -0.13%. Euro +0.62% vs. dollar. Crude +0.68% to $96.92. Gold +0.27% to $1625.25.

    9:00 AM On the hour: S&P +0.34%. 10-yr -0.17%. Euro +0.91% vs. dollar. Crude +1.11% to $97.33. Gold +0.95% to $1636.35.

    "Monetary policy is not a panacea," says Atlanta Fed President Lockhart, warning of the risks of the Fed addressing issues best solved by fiscal policy. Lockhart does have a vote on policy and tends to lean slightly dovish, so his comments suggest the FOMC center has yet to be convinced of the case for more ease.

    Prepare for a "risk off" phase to commence soon, writes Bob "The Bear" Janjuah, as Ben Bernanke and the ECB and EU politicians deliver bupkus in coming weeks. Along with a correction in stocks will come a reversal in the weak dollar and weak Treasury price trends.

    Velocity of Money Worse Than The 1930s. (graph)

    Big Business:  Redbook Chain Store Sales: +1.9% Y/Y vs. +1.8% last week. 

    Small Business:  ICSC Retail Store Sales: -1.5% W/W, vs. -0.3% last week.+3.1% Y/Y, vs. +3.6% last week.

    Euro Holds Gain Before Luxembourg’s Juncker Visits GreeceThe euro remained higher before Luxembourg Prime Minister Jean-Claude Juncker visits Greece tomorrow to discuss the country’s request for an extension to its fiscal adjustment program

    Greece Must Decide If Best in Euro, Merkel Ally Tells Rheinische

    Spain sells €4.515B of 12 and 18-month T-bills priced to yield 3.07%, both issues down about 80 bps in yield from July's auction. Longer maturities are also benefiting from the idea Draghi has the German nod to unleash the bazooka. Spain's 2-year yield of 3.48% is the lowest since May.

    When Japan Goes Japanese: Presenting The Terminal Keynesian Endgame In 14 Charts.

    Australia faces a growing risk of recession in 2013, thanks to a scaling back of the mining boom, says Deutsche Bank, warning of "dangerously complacent" policymakers (indeed, see theRBA minutes from last night). Look for the terms of trade – the difference between what the country pays for imports vs. what it receives for exports – to collapse 15% this year. The aussie, meanwhile, continues along near a 30-year high. 

    Australia’s Resource Boom Losing SteamAustralia’s multibillion-dollar spending boom on resources is losing momentum unexpectedly rapidly, with several projects on hold or cancelled as commodity prices fall and banks become less willing to lend. From copper mines in tropical Queensland state to the big iron-ore pits in the country’s arid west, mining companies are laying off workers and idling equipment until metal prices rise sufficiently. The cutbacks are largely in response to China, which needs vast amounts of coal for its power stations and iron ore for the steel frames in its high-rise buildings, but where demand for commodities has been slowing. Iron-ore prices, which hit a record last year, are now at a 2½-year low, and aluminum and nickel prices also are holding near multi-year lows.

    Big China news:  The PBOC increases reverse-repurchase operations toease a cash crunch by injecting 220B yuan ($34.6B) using seven and 14-day contracts, Bloomberg reports. Meanwhile, Xinhua Economic Information Daily carries another stimulus story, saying China will look to boost domestic consumption in H2, including by encouraging the use of credit.

    Cnooc (CEO): H1 net profit -19% to 31.87B yuan ($5.1B), below consensus of 35.92B yuan. Revenue -5% to 118.27B yuan. Earnings hurt by a production halt at the Penglai oil field following a a massive oil spill last year and higher taxes. Cnooc confident it will achieve its 2012 oil and gas production goals. Declares H1 dividend of HK$0.15 ($0.02), down from HK$0.25 last year. (PR)

    The China Banking Regulatory Commission asked domestic banks to pay attention to overseas risk exposure.

    Does Warren Buffett agree with Meredith Whitney about the prospect of municipal defaults, even if her timing was somewhat off? Some investors reckon that Berkshire Hathaway's (BRK.Arecent termination of CDSs that insure $8.25B of debt for 14 states is an indication of Buffett's doubts about the state of municipal finances. The move comes as money floods into muni bonds.

    U.S. muni market riled by Fed report on defaultsThe Federal Reserve Bank of New York has riled analysts and other participants in the U.S. municipal bond market with a report issued last week finding that defaults are more prevalent than credit rating agencies suggest. The report, which included non-rated debt, found that muni defaults "happen much more frequently than most casual observers are aware".

    Buffett's Move Raises a Red FlagA decision by Warren Buffett's Berkshire Hathaway Inc. to end a large wager on the municipal-bond market is deepening questions from some investors about the risks of buying debt issued by cities, states and other public entities. The Omaha, Neb., company recently terminated credit-default swaps insuring $8.25 billion of municipal debt. The termination, disclosed in a quarterly filing with regulators this month, ended five years early a bullish bet that Mr. Buffett made before the financial crisis that more than a dozen U.S. states would keep paying their bills on time, according to a person familiar with the transaction.

    When Kids Return Home. It's back-to-school time, but instead of sending their kids off to college, many parents are welcoming them home—particularly those in their 20s. The stagnant economy, slow hiring and college debt are some of the big factors driving people back home at a time when they used to strike out on their own. About 22% of 25- to 34-year-olds lived in multigenerational households in 2010, up from 11% in 1980, according to a Pew Research Center analysis of census data.

    Siemens (SI) is reportedly in talks about cutting thousands of jobs due to the weak economy, especially in Europe. The conglomerate, which recently warned that its FY goals will be difficult to achieve, will make any decisions in the autumn. Siemens has over the last 15 months been on a hiring spree, increasing employee numbers by 23,000.

    Nike (NKE) plans to raises prices on its shoes to account for higher labor and materials costs, especially in China where a third of its shoes are manufactured. The first test of consumer reaction to the hikes will come this fall when the Lebron X debuts on the market for around $315. - WHAT???  $315 for a sneaker?  Are they friggin' nuts???  When did this happen?  How old am I that I had no clue they were this expensive?

    Nike (NKE) looks like a strong sell to Eddy Elfenbein on his view that margins have been stretched to the max and consumers might not lap up the company's latest round of price hikes. To justify the gaudy $315 price tag on its new Lebron X line of basketball shoes, Nike says motion sensors will be placed inside the shoes to measure the vertical leap of consumers wearing the shoes. What exactly does it mean if the price of a laptop crosses the price of Nike's flagship line of basketball shoes?

    Kia (KIMTF.PK) could see workers strike again tomorrow as labor unions increase the pressure in an ongoing dispute with management over pay and working conditions. Both Kia and Hyundai (HYMLF.PK) have been besieged all summer with strikes, cutting production at both automakers and providing a competitive lift to rivals.

    Expedia(EXPE), Marriott(MAR), others face U.S. price-fixing lawsuitExpedia Inc, Hilton Worldwide Inc and other large hotel retailers and operators were accused in a federal lawsuit in California of conspiring to fix hotel room prices as they battled small online retailers who sold rooms more cheaply. Two consumers are seeking class action status for the suit filed on Monday in California federal court, which alleges the hotels teamed with online room sellers to set minimum rates on rooms and is seeking unspecified money damages.

    Best Buy (BBY): Q2 EPS of $0.20 misses by $0.11. Revenue of $10.5B (-3% Y/Y) misses by $150M. Shares -8.5%premarket. (PR)

    More on Best Buy (BBY): Comparable-store sales down 1.6% Y/Y, with international falling off 8.2%. Domestic market share maintained. Suspends it share buyback. Pulls specific earnings guidance for FY13, saying only that it has reduced its expectations. Conference call ongoing (webcast). Shares -8.1% premarket. (PR)

    Despite all the sound and fury with Best Buy's (BBYQ2 results and pulled guidance, analyst Rahul Sharma says there's no real news on a retailer everybody already knew was struggling. BBY-8.6% premarket to $16.56, perhaps making Richard Schulze's buyout offer of $24-$26 a bit more tempting to the company's board if it still stands. 

    Amazon (AMZNlaunches a new cloud storage system for data archiving. The Amazon Glacier service is designed to store critical data that may not be needed to be accessed frequently such as financial and healthcare records.

    chart of the market caps of Apple, Microsoft, IBM, and Google through the years shows Apple finally matching Mister Softee's 1999 valuation, but the comparison stops there. Microsoft's forward PE then was 67X vs. Apple today at a forward PE of 13.8X. Buffett says to think of stock as a stake in the business. On that score, Apple today should turn out a better investment than MSFT in 1999.

  14. Burrben

    Guys remember that Phil is a leading indicator.  I would say there at least 10 times where he was right, but not for 1 to 3 weeks out.  I always seemed to take my losses and then in a week or so, boom, tons of "thank you phil's" are posted and I feel like a sucker.
    This time I'm staying very C&C long, but adding to the long put list.  None of the "whales" are back from the hamptons yet, and the news is being manipulated that we hear almost nothing about Europe.  Wait until end of Sept comes around.  If we are at SP1450 at the end of sept, Phil will buy you all a drink in vegas!!

  15. Burrben

    Phil / USO Puts  -  Think we should hang on and roll up and out?  Might be a good time to do it into the morning pop.

  16. Phil

    Rometty/Jacalyn – Good for her.   More women should speak up about this nonsense.  

    BBY/Jacalyn – I don't think you'll see the options adjust until trading begins but figure whatever the $18 puts were ($3.75) at least.  

    BBY/Kinki – They are having CC now.  We'll see what they say about selling but should be a great time to add a bull call spread.  

    You're welcome Jasu – don't worry, just take lots of practice and learning by example.  

    Oil $97.70 – holy crap!  

    Gold $1,640, Dollar 81.97.  

    LOW/Ging – Wasn't much of a move to take advantage of but a good long-term company.  I would give it a few days and see if the market crashes and THEN you can sell some long puts like the 2014 $15 puts, now $2.45.  If you can get $3 for those, that's a very nice entry at net $12 and then you can look into a bull spread and maybe some call selling. 

    Lockhart/DC – Smart guy. 

    TradeBots/Silent – Volume really died down after Knight fiasco, perhaps they went with some less-aggressive algos?  

    IBM/StJ – Well, they have really sucked since then!  

    1,450/Burr – Drinks will certainly be on me.  Step one before capitulating is getting yourself neutral with the aggressive longs – then you can decide what to cash out and what to press without panicking.  Often we have blow-off spikes at the tops and bottoms and this sure feels like one but we'll have to respect our levels if they break over – although I'm tempted to adjust again for this BS 0.5% drop in the Dollar but, so far – we still haven't had one whole day of even holding 3 of 5.  

    USO/Burr – I'm for rolling out to next month rather than giving up.  Gas prices are at a record with Summer winding down in 2 weeks.  

  17. stjeanluc

  18. newt

    FLAN- that aapl spread… Wow! Please advise.

  19. yshenhar

    $315 Nike – Jimmy had those long ago

  20. Burrben

    GLW over 12!  Only took the most low volume irrational market ever..

  21. dclark41

    Phil:
    Roll the USO to Sept. 36 for .77?

  22. stjeanluc

  23. stjeanluc

  24. Burrben

    Markilus / TNA put
    Did it work out for you?  I bought a ATM put right at the open in my paper account, but it never spiked back higher.  Maybe I did it wrong or too late.  How about you?

  25. stjeanluc

  26. RealJLJ

    Did we lighten up on VXX at some point? I thought we had 40 and -20 in the 25KPA.

  27. stjeanluc

    VXX / Real – I checked and I see only 20 and -10 in past transactions. Let me know if I missed trades.

  28. Phil

    FAS Money – Need to add 5 more XLF 2014 $13 calls for $3 to cover – just in case.  

    $25KPs:

    • EDZ – $13 puts have us at net $11.85 and EDZ is at $12.57 so no reason to pay $1.15 to get out of them, is there?  Of course they are always rollable.
    • SVU – Should be good in a mega rally.
    • JRCC – Also good.  
    • AMZN – Son of a bitch!  $3.15 is not all that bad with AMZN at $242.50.  At this point, if margin were not an issue, I'd sell 5 Jan $180 puts for $3.20 ($1,600) because, if they don't get down to $220 by Oct, these short puts will give us some spending money.  Still, not appropriate for a $25KP so the correct move is to sell 10 Sept $220 puts for $1.10 and spending $2.20 to roll up to the Oct $230 puts (now $5.30).  That's the move in the $25KPA as we have margin but, without margin, we'll have to take the loss on 1/2 (5) in the $25KPM and offer to make that same roll on the remaining 5 for $2 – so we'll put another $1,000 in to see if maybe this does finally reverse.  $246.71 was the top of AMZN last Sept.  
    • SQQQ – Sept $38s are still $1.60 and we have to DD on those as SQQQ is at $37.37 and can come back fast and 2,800 should hang tough on the Nas futures (about 3,100 on the Nas).  
    • VXX – Fine with those with VIX still at 14
    • BBY – We paid $1.31 for the spread and we can salvage .90 off the Sept $17s but I'd be too scared to leave the short $19 calls naked (still might get bought).  So, I'd rather spend .90 to roll to the Oct $16 calls and buy back the Sept $19 caller for .30 – maybe we get lucky….
    • SCO – Nice gift as we can buy back the $44 calls for .50 already and that leaves us in the Oct $37 calls at net about $3 and they are now $3.20 so what's to complain about?  
    • V – Barely moving today so I still like those. 
    • DIA – Also not moving much, still .85 (down .10) – that actually seems very suspicious giving this "rally", doesn't it?  
    • USO – Those are shot.  We're lucky they are still .27 but it's just 5 so let's give it to inventories tomorrow and risk losing another $125 rather than taking the $250 loss here.  

    One day we'll press our bear bets at the top of the channel and they'll work and we'll get a double and that will make up for a few times we lose 10% but this is looking like one of those times we lose the 10%!  

  29. Pharmboy

    They must have turned the bots back on……

  30. Burrben

    Anybody taking a shot at a poor HPQ earnings report?  I might buy some ATM Sept puts for a roll of the dice.  

  31. Phil

    PCLN back to $600!   That's 10% in two weeks.  

    Dollar 81.87 is now down 0.8% and the markets are up less than 0.5% so far.  

    I want to take bullish bets in the $25KP but I just can't bring myself to do it yet!  

    Wow, volume just 17M at 10 on the Dow.  

    Income Portfolio – Let's take out the $20 caller for $2.  No other changes, makes us net $5 on the 2014 $15s (now $4.40) and a bit behind on the short $15 puts but BBY just had TERRIBLE earnings and held $16 and now back to $17 so I'm pretty happy with our target ($20) in 2014.  

     

  32. Phil

    BBY/Kinki – The adjustments to the $25KP make a nice, new entry.  Oops – that was a roll to the Oct $16 calls (now $2), not Sept in the $25KPs!  Good news is that roll is less than $1 now (.85). 

  33. Phil

    Good call sticking with BBY, StJ – Really, what changed?  We still think they may get bought and we know they are in turn-around mode and, hopefully, underpriced.  

    FAS Money – Now I feel better about selling 2 weekly $99 calls for $1.90 and putting a stop on the short $98s (now $2.50) at $3 so it's kind of a roll but only if we have to.  

  34. edro00

    25KPs
    short OCT SCO 44 Calls are 1.22, not 0.50 – stll take 'em out?

  35. Phil

    Jimmy/Yshen – I like the little robot jingle at the end of that clip.  

    GLW/Burr – LOL!  With AAPL up 10% and using only GLW glass for their devices, you would think someone would eventually put 2 and 2 together on that one.  

    USO/DC – Sometimes, you can't be more screwed so the best thing to do is wait.  Better to NOT put more money in, get burned tomorrow and THEN use the money we didn't waste to take a longer-term position.  Anyway, we expected a sell-off into the rollover and we didn't get it so our premise is blown – gotta wait a month to try again BUT, $98 oil is probably more than the economy can bear without stimulus so will be interesting to see which breaks first.  

    PCLN weekly $580 put at $1.45 is a fun play with a stop at $1 (probably $605), could double quickly in a $5 move the other way.  Actually you can just stop out at $601 with a small loss so it's almost like playing a line in the Futures.  

  36. RealJLJ

    I think we started with 20/-10 in the 25KPA and 10/-5 in the 25KP and doubled down in both on 8/7.

  37. aussie260

    FAS Money / Phil – We are short the $96 Calls, not the $98s – what is the stop on the $96s please?

  38. edro00

    25KPs
    FAS Money – we have the short AUG4 96 CALLS now 4.02

  39. Phil

    SCO $25KP/Edro – Ah, I must have been looking at Sept but yes, either way we think $98.50 should be the top and, if it isn't, we'll have to sell tighter calls and roll down so let's buy back the $44s regardless. 

  40. stjeanluc

    FAS Money / Phil – We are short the weekly $96s and they are over $4.00 now!

  41. stjeanluc

    Maybe the fact that BBY is suspending share repurchase is a good sign in a perverse way!

    http://www.bespokeinvest.com/thinkbig/2012/8/21/best-buys-bad-buys.html

     

    Shares of Best Buy (BBY) are trading down 10% this morning after the company reported weaker than expected earnings and suspending guidance.  In spite of the poor operating performance, the company must have had some confidence since they managed to spend $112 million buying back 6.3 million shares of stock.  That confidence appears to have evaporated now, though, as the company also announced that it will suspend all future share repurchases indefinitely.

    Looking back at BBY's history of repurchases since the start of 2010 shows that the company has not been a very good judge of its stock price.  The chart below shows the historical price performance of BBY going back to 2010, with each red dot representing quarters where the company repurchased shares.  Since the start of 2010, BBY has spent $2.9 billion buying back stock on the open market at an overall average price of just under $30 per share.  Put another way, with a current market cap of $5.6 billion, BBY has spent more than half of its current market cap since 2010 buying back stock.  Over that same period, the stock has dropped close to 60%!

  42. Amalfi

    Phil / Sell more BBY puts? If so, what looks good to you? 

  43. 1020

    It's really great that Billy-Bob, Hootie and all the Blowfish RedNecks are feeling reeel goood about letting them thar Women-folk into their racist frathouse……
     
    I'm with this lady:
    http://msn.foxsports.com/golf/story/augusta-national-women-members-condoleezza-rice-darla-moore-not-a-major-victory-for-females-082012

  44. Phil

    Oh no, Nas 2,800.10 in Futures (/NQ)!  

    S&P proper almost at our 1,428 level.  NYSE almost at 8,160 – which one of those will give us our 3rd cross (RUT and Nas already over).  

    VXX/Real – I think you're thinking of the Income Portfolio, where we do have 40.  

    HPQ/Burr – All depends on their services revenues and that's very hard to call.  I do like them long-term to get their act together.  

    Wow, BBY suddenly flying!  

    VXX/Real – Well if we missed a DD 2 weeks ago, I'd say that ship has sailed because not having it reflected since that time alters many decisions we would have made along the way.  If you do catch a mistake in the $25KP, please let us know right away because I just go by what I see currently in the Portfolios each morning and it does make a very big difference in the decision-making process.  

    FAS Money/Aussie, Edro – We sold the $96 calls for $2 and they are now $4.30 so already a tough loss.  At $5 I want to roll them up 2 the $100s, which should be $2 and we'll work with the $3 loss with the 4 open short calls (2 $98s and 2 $100s) – if we have to.

    If this rally were not LESS than the drop in the Dollar, I would not still be bearish but I thin we just need to see it through and demand our levels be properly broken (NYSE at 8,156 – just 4 points away, S&P 1,426 – 2 points away) before capitulating.  Dollar currently 81.895, Euro still $1.247, Pound $1.577. 

  45. scottmi

    Seems like this market sure has a bit too much mojo for just rumor and dollar down. wtf.

  46. Phil

    BBY/Amalfi – As I said above, I'm happy with the short 2014 $15 puts, now $2.85.  

    AAPL just quietly dropped $8 off it's high of $674.88 – almost flat for the day at $666 (sign of the Lloyd!) 

    Nas futures topped at 2,802.5 and now down to 2,796.  

    What a painful blow-off top this was!  

  47. RealJLJ

    Phil, does that change your thoughts currently on VXX at double the position?

  48. jr_mints

    stjeanluc,  so in the FAS money are we 2 short 96's and 2 short 98's while waiting for the 96's to get to a $5 loss then roll them to 2 short 100's?  Thanks for the clarification…I too really appreciate all that you do to maintain these virtual portfolios for all of us.

  49. button

    AMZN off its highs as well.  Would really like to see that one turn negative into the close!!

  50. Phil

    No bounce in the Dollar with 40 mins to EU close.  

    BIDU getting clobbered.  

    NOC making new highs – no fear of austerity there….

    VXX/Real – Yes, at double I would have stopped out at least half ages ago as that's a full position.  With 20 ($1.400), we can still afford to DD and roll so TOTALLY different.  

    10:00 AM On the hour: Dow +0.19%. 10-yr -0.13%. Euro +1.02%vs. dollar. Crude +1.38% to $97.59. Gold +1.21% to $1640.55.

    11:00 AM On the hour: Dow +0.36%. 10-yr -0.17%. Euro +1.10%vs. dollar. Crude +1.34% to $97.55. Gold +1.11% to $1638.95.

    Market preview: Stock futures are green and EU shares are mostly green – it must mean that markets continue to dream about further stimulus. A well-received Spanish bond auction is also helping. The S&P benchmark is +0.2%. However, Best Buy continues to be a Bad Buy, with shares tumbling 9.7% following its earnings, although Urban Outfitters is outperforming (+16.85%) after its results. 

    The euro perversely soars - up 1% vs. the dollar to $1.2465 – as rumors the ECB is set to print gargantuan amounts to prop up peripheral bond markets gain traction. Go figure.

    The Treasury announces the commencement today of public offerings of preferred stock it holds (courtesy of TARP) in 5 banks - BNCNFCCO, FXNC, GFED, and MFNC. The auction just started and will close Thursday. The issue warrants study as past history suggests an investment could work out well. (PR)

    His tail between his legs at the moment, Jamie Dimon is no longer the banker who can stand up (remember this tantrum) against the regulatory onslaught faced by the industry. "The government is piling on the banks," says a fund manager. "Somebody has to fight the damn thing." 

    Daniel Loeb may chastise Pres. Obama, says Andrew Ross Sorkin, but look at Loeb's recent investments: Aetna (AET), Cigna (CI), Humana (HUM), UnitedHealth (UNH) and WellPoint (WLP) stand to benefit if Obamacare remains in force, while a repeal could send shares diving. Like others, Sorkin reckons industry consolidation represents multi-billion dollar bets that the Health Act is here to stay.

    At a U.S. average $3.72/gallon, think gas prices are high now? Aside from gasoline futures which have climbed 19% in two months, higher crude oil prices, disruptions to U.S. output and an uptick in demand both at home and overseas mean gasoline prices could continue climbing for a while. The U.S. fuel market "already is tight, and it'll continue to remain tight," a top trader says. 

    Is Chesapeake (CHK +3.5%) enjoying something of arenaissance? Shares have quietly advanced 34% in the past three months, natural gas prices have climbed 45% from the April low, and CHK may be getting its house in order. Canaccord reiterates its Buy rating, noting that CHK's net debt should end $1B less than the year-end 2012 target of $9.5B.

    Whole Foods Market (WFM +1.1%) begins to pick up the pace of its expansion into urban areas and smaller markets as part of its overall strategy to triple to a thousand stores. The upscale grocer – derisively called Whole Paycheck by some – will hit underserved areas without other close-by fresh food outlets. Potential targets: Chicago, Newark, and Detroit.

    With all the cutting at Best Buy (BBY -6.2%), a decent amount of free cash flow looks to have helped the company's dividend survive the chopping block for the time being. But even with an offer on the table at $24-$26 and a nice little 4% yield as a kicker, investors are shying away and betting against a turnaround. Wedbush Securities analyst Michael Pachter cuts to the chase: "This is a herculean task even for an accomplished retail executive…Mr. Joly's complete lack of retail experience will be an impediment to his success."

    Quick hits from Best Buy's (BBY) CC: Backs new CEO Hubert Joly as the turnaround specialist the company needs. Remains optimistic on margins as a greater mix of smartphones is introduced. Execs paint an ugly picture for international sales growth, particularly China. Sees different strategic plan and new products helping to boost earnings in H2.

    A bill floating around Congress could raise the music royalties that terrestrial radio stations pay and level the playing field with cable, satellite and Internet radio. Wanting the bill to pass: PSIRI. In line for higher fees: CBS, Clear Channel, EMMMS, CMLS.

    Groupon (GRPN-4.3% to $4.45 after Barclays gives up, downgrading shares to Underperform. Evercore did the same on Friday. Separately, Groupon bear Rocky Agrawal observes an increase in reports of Groupon threatening to sue small businesses who want to end their daily deals offers after not being paid on time. A former Groupon sales rep blames the finance department, and adds, "This ship is sinking faster than I thought it would."

    Not dead yet:  Nokia (NOK) now has a 59% share of the global Windows Phone user base, per app analytics firm Localytics. This compares with 21% for HTC, and 13% for Android giant Samsung. However, IDC recently estimated WP only had a 3.5% share of global smartphone sales in Q2. comScore just pegged WP's share of the Japanese smartphone base at 3%, compared with 64% for Android (GOOG) and (impressively, given top carrier DCM still doesn't sell it) 32% for the iPhone (AAPL).

    Apple (AAPL) news roundup: 1) Digitimes' sources claim iPad Mini production will reach 4M units/month in September, and that the device will launch in October. 2) On Judge Koh's instructions, Apple and Samsung's CEOs talked again, and to no one's surprise, they failed to reach a patent resolution. 3) Topeka's Brian White uses Apple's latest milestones (III) to argue shares are still cheap, given a 10.7x P/E (exc. cash) and the relatively low penetration rates of Apple's hardware.

  51. Phil

    PCLN $580 puts $2.22 and that's 50% so stop at $2 (about 35%) is appropriate.  

  52. RealJLJ

    I keep trying to post the link to the portfolios from the entry on 8/13 but it won't let me. It reflected 40/-20 and must have got mixed up when we rolled to Oct.

  53. Amalfi

    TOS won't let me sell my FAS Calls with a 35% gain. Strange indeed.

  54. RealJLJ

    VXX/Are you suggesting we should stop out  50% now? Unless I'm the only one following along we have 40 Oct 14 calls and -20 Oct 12 puts since the roll last Monday, 8/13.

  55. Savi

    Good Morning—wow what a turnaround in AAPL

  56. Gingbaum

    Any idea why AAPL sold off so hard?

  57. Phil

    Wow, Dollar being driven even lower to stop sell-off.  81.80 now.  This is just nuts at this point.   Dow volume up to 30M at 11:09 

    VXX/Real – Well 40 is still too many to risk so I would take the .05 loss on 20 and adjust the position to what's on the portfolio now.  This would have been a much better adjustment yesterday, when they were .85 or last week at $1 but, since you are bringing it up today – I'm comfortable with the current sizing and NOT with 40.  You do understand that the reason we DD is to take the first opportunity to get 1/2 back out even.  If you doubled won on the 13th then you needed to get 1/2 out on the move up over $1 the later in the week.  That's the whole point to it and it's more important you learn these things than just follow whatever goes on in a sample portfolio – which is what I don't like about having them in the first place – people don't learn when they follow.  

    PCLN still going down, AAPL now red – will the Nas survive?  I'd take the $1 profit and run on half those puts and set a stop at $2.25 on the rest. 

    BIDU down 5%!  Something may be rotten in China…

  58. edro00

    FAS Money – where did the short 98's come from?  I'm sticking with my 96's till $5

  59. Gingbaum

    Phil,
    as per your comment below:
    "LOW/Ging – Wasn't much of a move to take advantage of but a good long-term company.  I would give it a few days and see if the market crashes and THEN you can sell some long puts like the 2014 $15 puts, now $2.45.  If you can get $3 for those, that's a very nice entry at net $12 and then you can look into a bull spread and maybe some call selling. "
    When I look up the options – the 2014 15 put is worth $0.73?  Did you mean another strike price?
    Thanks

  60. angelcur

    JACLYN // condi rice and darla moore are in rometty isn't

  61. emunster

    PHIl thanks for PCLN trade I was in at 1.50 and out at 2.10 Didnt want to be greedy. Thanks again!

  62. RealJLJ

    VXX/Understood, but by the same token we should've lightened up in the ordinary 25KP, no? The 20/-10 there was also the result of a DD.

  63. stjeanluc

    FAS Money / Edro00 – We are all confused now I think. We should have the short $96s and short $99s now. The plan is to roll the $96s to the 100s if they get to $5.00. That's how I read it.

  64. shadowfax

    Phil
    I will remine you that I have found China unwilling to rev up and build to my specifications, they are into selling what they have. Inventory of unsold must be extreme!
     
    How will stimulus make $98 oil more affordable excluding the banksters?

  65. Burrben

    Phil / BBY puts  - add more?
    I'm short 13 BBY Jan14 18put at 2.53.  They are priced at 4.38 now.  I'm back and forth about adding another group here.  Even though BBY is down today, I'm concerned that if we fall, they could really take a hard hit.
     
    Would you just hold for now, or add more here?  

  66. Dennis

    PCLN just stopped out at $2.25 – thanks so much Phil!  

  67. shadowfax

    Looking more like a short squeeze now, don't capitulate. The tick is so slow it put me to sleep after 1 hour, get up and no surprise market turns down before the dollar turs the corner. Can we all yell FAKE!

  68. Amalfi

    Phil / PCLN! Muchos Gracias Mi Amigo!

  69. rustle123

    The RUT has been extremely strong over the last couple weeks regardless of the other indices.

  70. shadowfax

    Excuse my typing, extreme shaking and loss of feeling takes it's toll.

  71. button

    Phil,
     
    The way I read this intraday sell off in AAPL is a 20% weak bounce off the low at $661.18 and a 40% strong bounce at $664.60. Right now AAPL never made it to the strong bounce and appears to be struggling to hold the weak bounce level.  It appears very weak at this point and as AAPL goes, so goes this market

  72. Phil

    AAPL/Ging – I think the proper question is "any idea why AAPL went up so much"?  See, makes more sense that way…

    FAS Money/Edro – Was my mistake from earlier, I meant the $96 calls (weekly) we already sold, either way I think selling the $99 calls as well was BRILLIANT!  

    LOW/Ging – Yes, I said IF the market crashes THEN you can sell the $15 puts for $2.45 (price of the $23 puts so a 20% drop apx with a higher VIX has a chance of getting you there) – that doesn't mean you get to pay that price without waiting, you know…  Do me a favor – remind me at the conference if you are going to go over this trade idea and I'll either go over why it was good to wait or what went wrong as we never hit the target.  I think everyone could use a good lesson in WAITING FOR GOOD PRICES.  

    You're welcome EM!  

    $25KP/Real – Ah but I didn't think we doubled down to get that net.  Next time we hit $1, I sure will take some off the table as it's so volatile.  Notice I said to you FULL position, $1,500 is not a full position, $2,500 is – when you get to a full position you should be desperate to take any kind of profit off the table.  

    FAS Money/StJ – Yep, that's the plan but hopefully that was it for the run-up.  

    Inventory/Shadow – That is interesting.  Are you hearing this from other people?  Stimulus doesn't make $98 oil affordable for consumers but it does for the speculators while they bleed the consumers dry.  It's a fun game.

    BBY/Burr – I wouldn't be so eager to DD if it's significant.  I think it's a good target (only .75 in the money) and, when 2015 comes out, you should be able to roll to 2x the $15 puts about even and that might be worthwhile or you can just pocket another $1.50 for a roll straight across and drop your net to about $14.  In potential buy-outs – you want to just sell as much premium as you can be comfortable with and hope it expires early.  

    You're welcome Dennis, Amalfi!  

    FAKE!  

    11:42 AM European indices post solid gains amidst word from one Bundesbank member that he could see going along with ECB sovereign bond purchases. Stoxx 50 +0.9%, Germany +0.8%, France+1%, Italy +2.1%, Spain +1%, U.K. +0.6%. The euro +1% to $1.2469.

    What crisis? The German 2-year Schatz yield climbs to 0.01%, the first time in positive territory since early July. The 10-year Bund yield, which threatened double-digits a few weeks back, rises to 1.57%.

    National home prices rose for the 8th consecutive month in July, reports Zillow, with 62% of the metro areas covered showing increases. Rents also continue strong, with markets like Chicago – still showing house price declines – recording double digit percentage rent increases. Full report (with loads of great information).

    What fuel prices?  It's only 30% of their cost:  Airline stocks trade higher again, even with crude oil prices showing resiliency lately. Analysts are divided if a fare hike by legacy carriers or a more broad warming up to the sector from investors on consolidation and labor progress is behind the resurgence. Leading the pack: LCC +6.4%DAL +3.7%UAL +1.3%ALK +1.2%.

    Goldman reiterates its Conviction Buy on SunCoke Energy (SXC) and raises its price target to $21 from $18, while maintaining Buy ratings for Peabody (BTU) and Consol (CNX). The firm says its attractive view on the U.S. coal sector is "tactical," driven by its positive outlook for SXC, BTU and CNX: "While they are not necessarily met-coal focused, higher long-term met coal prices benefit all three."

    Yingli Green Energy (YGE +8.7%) says its multicrystalline PV modules successfully passed the Potential Induced Degradation test conducted by Intertek Group. The tests were designed to assess power output under severe conditions of high voltage, high temperature and high humidity. According to the results, YGE modules ranked at the top of the class.

    The derailment of a CSX freight train near Baltimore has led to two fatalities and created a massive pile of coal and crushed automobiles, according to local reports. The NTSB will investigate the crash to determine the cause

    When the going gets tough, the rich go shopping:  Shares of Nordson (NDSN +12.5%) jump after its FQ3 results easily beat across the board late yesterday. Net earnings rose 18% Y/Y, on strength in its organic volume and rising backlog. The company also ups its current quarter forecast, now expecting FQ4 sales to rise 23% to 27% over year-ago levels. Earnings are seen in a range of $0.96 to $1.04 a share. Street estimates are for 19.2% year-over-year sales growth and a $0.95 a share profit.

    LinkedIn (LNKD +3%) rallies on a bullish note from ITG Research. The firm thinks Q3 revenue will come in at $253.8M, soundly above a $242.9M consensus that itself rose following LinkedIn's strong Q2 report. ITG believes higher order volumes and revenue/customer will produce a beat.

    Groupon (GRPN +1.7%) has more than recouped the early losses it saw thanks to Barclays' downgrade, as shorts cover and perhaps some bargain hunters swoop in. Barclays is worriedGroupon's e-commerce sales, which are keeping its revenue and billings from plunging, have 1/3 the gross margin of daily deals sales. It also thinks marketing spending, which has been dialed backconsiderably in recent quarters, may go back up in response to slowing customer growth.

    GOOG picking up one of my issues:  As Android OEMs deal with a barrage of Apple and Microsoft suits related to software patents, Google's (GOOG) public policy director has joined a chorus of names questioning whether the patents are doing more to harm innovation than protect it. Judge Richard Posner has raised the issue after throwing out a pair of Apple and Motorola suits, and Henry Blodget and Mark Cuban have voiced similar opinions. Google (via Motorola) just counter-sued Apple using 7 software patents.

    Dow volume coming into noon – 39M.

  73. button

    AMZN turned RED!

  74. shadowfax

    rustle123
    RUT has been extremely strong. What goes up must come down and down is always more violet as gravity accelerates instead of decelerates the action. Phil is on the edge of change another sign that this is the end of the run. Then there is sell in May go away can still be right or is this time different? Couple weeks will show the rest of the story.
     
    Phil's comment on oil makes me want to break my rule and buy USO puts, when I went back in time lows are usually in October rather than September. FWIW

  75. angelcur

     cnbc has terrible producers…how many peter theil selling facebook commentaries do we really need in one day…wow

  76. Phil

    AAPL/Button (5% Rule) – I like to zoom back when I can to see what kind of major trends we have.  If you go back to May (post those earnings) It looks like $580 was the critical support and we went from there to $600 then $620 was resistance and then we took off from there but $660 would seem to be the proper move up and that means we want to see $648 tested (20% pullback of $60 move) and a 40% retrace would be $636.  Shorter-term, we had a little consolidation at $620, then $630 (5%) and then right up for the 10% move in just 3 sessions and we hit $660 so fast we overshot it by 20% (of the move) to $672 (don't forget, not an exact science).  Since the spike didn't last, we throw it away and now we're looking at $660, $648 and $636 as our critical AAPL supports.  Keep in mind we are just having a very bullish consolidation as long as AAPL holds $648.  

    More violet?/Rustle – On oil, I agree with October – I already said this was not the big sell-off we counted on – it's next month when they hit rollover issues on the contracts but that means you can't really count on Oct puts as it's cutting it very close.  USO does have Nov puts and the $33.50 puts are $1.10 and were over $2 at the beginning of the month so I wouldn't mind being in them and rolling them up if oil challenges $100 but, as I said before, I would rather see inventories tomorrow before making a commitment.  

    CNBC/Angel – Maybe it's the big flush out of FB before the funds get in for the longer haul.  I don't like them too much but, around $15 they do get interesting. 

    FB 2014 $20/30 bull call spread is $2.70 and you can sell the Sept $21 calls for .70 – 4 sales like that and you have a free spread and you have $10 of coverage should your caller go in the money.  Not a bad way to trade it if you are willing to take a chance on FB. 

  77. rustle123

    oil/Phil
     
    that was shadowfax's comment, I currently have no position on oil and am patiently waiting to see if we hit the $100 mark on any stimulus.

  78. button

    Phil / AAPL Bullish consolidation above $648
    OK Thanks I am still looking for the big sell off in this market.  

  79. shadowfax

    Phil
    I have noticed sales are below likely costs and the level of solititation inbox.
    I have a new problem, pain control is like oil to the bottom 20%. I have hit the donut hole in drug d plan and have to stop. Like oil that should be fun for the few. The tremmor gets worse, can't concetrate, and chances of disaster increases. FUN FUN FUN!

  80. rj_jarboe

    Phil,
    I have a 1x entry on Sep TLT $128 Calls @  $0.50. Would it be smarter to roll down to maybe the $125's rather than double here?

  81. jr_mints

    Phil, I never got out of the FAS 96's so what do you suggest I do from here.  I also have V Sept120 puts bought at 1.02 now .56, I still like them short but probably need to adjust. 

  82. zipla

    LLY/Pharm
    Are you still liking the LLY Sept 41 puts? I'm still in them but might have missed a message to get out.
    Thanks

  83. diamond

    Hyaenas attack:
     
    BTW … who the "F" is Oracle Investment Research and who is paying for this rare intra-day downgrade of AAPL???
     
    Oracle Investment Research Downgrades Apple (AAPL) to Hold

  84. zeroxzero

    Apple anecdotal:  I mentioned scrapping my iPhone for a Samsung Galaxy Note.  After a week's use, my comments are:  1/ Big is definitely better — screen is awesome; 2/ switch to Andoid painless — great apps, near-zero learning curve; 3/ I usually carry iPhone, iPad and small Vaio laptop, and the iPad is looking redundant all of a sudden
     
    The Galaxy screen is large enough for all my needs, but for a real keyboard [the Vaio], since I type fast and need one.  In fact, I think I'll switch to an even smaller Vaio, because I keep high-res. screens and hard drives stashed in my usual venues [plus Dropbox to synch 'em] and plug the screens into the Vaio.  Lastly, the Galaxy Note has a micro SD slot, in which I've lodged a 32mb card, so I can get stuff in and out of the phone, something I found very problematic with the iPhone, being a Windows guy with no Apple computer.  Did I mention that Android music downloads are free?
     
    Downside?  Yup — battery life.  It seems there is a linear relationship between screen size and battery life.  The iPhone would run for days, the Galaxy can be sucked dry inside of 8 hours of hard use. Hard cheese, it's worth it to have a phone screen that I can read and write on effortlessly.  The iPhone 5 better be a killer, or Apple may be peaking out. 

  85. shadowfax

    Nice drop! Blow off top at 11?

  86. Savi

    jr—the way i understand it we roll fas 96s to 100s only if 96 hits 5 now at 3.65

  87. Phil

    Wheeeeeee! 

    Imagine how bad today would be if the Dollar wasn't down 1%…

    LOL – Republicans take approval of Congress to all-time low (12%).  Remember when they said that proved Dems weren't fit to govern at 18%?  

    Oil/Rustle – Still damned good advice!  

    Donuts/Shadow – Vote Obama, the Reps will make that hole so wide you can drive a truck through it. 

    TLT/RJ – I don't think TLT calls are smart in any situation!  HOWEVER, assuming we do have a nice sell-off by next Wednesday (and if we don't, your premise is blown), if you DD at .33 you effectively give yourself a .14 delta (2x) with an average entry of .42 so you need a (because the delta is .07) about a $1.20 move up to get to .42 so you can get 1/2 out even.   If, however, you spend .42 to roll down to the $125 calls – you are in those for .92 at .75 and down .17, and that's the delta so you need a $1 move to get 1/2 out even.  I think the $1.20 move is pretty doable and I bet you won't be happy to take 1/2 of 1x back off the table so you may be better off with the DD.  If you do have the discipline to lighten up on the $125s when they hit .92 – then that's a better overall roll because, if TLT fails to hold $121, you can sell the $123 puts ($1.70) and use that money to roll out to the Oct $122s ($2.40) and then you have a reasonable spread you paid about $1 for with a 1-month time advantage.  

    Goldman/1020 – They said that yesterday – no one cared.  

    FAS/JR – We weren't supposed to get out.  We're hoping for a pullback with a stop at $5.  V we rolled up to the $125 puts in the $25KPs – I still believe in those.  

    AAPL/Diamond – ROFL!  Isn't that just great?  ""That'll do," the firm said."  - that sounds like it's a joke.  

    Keep screens/ZZ – Do you mean you link up to your home PCs from anywhere?  That may be something I want to do when I'm traveling.  Then I don't have to bring around a laptop just to look at TOS and Power ETrade.  When you have time, I'd appreciate a primer for dummies on what you use.  It's one of those things I know can be done but I have never looked into it.  Thanks.  

  88. terrapin22

    ZZ/ Note – I switched from the Iphone to the Note back in Feb when it first came out.  I love it.  People still ask me today in the subway, elevator etc…in NYC what the heck I'm holding in my hand.  I guess most of the 10 million units sold to date have been in Europe and Asia.  The Note Tablet just came out this week.  I have not seen it but want to check it out just for comparison sake.    

  89. jr_mints

    Thanks Savi and thanks Phil.

  90. scottmi

    MO – for those not morally offended by cancer sticks, the Jan 14 $25 puts can be sold for $1.08. Possibly more if we get a market sag, but i would not count on MO giving up too much and certainly not if we get more QE. Astonishing how well it has done in the last few years… I thought everyone knew they were bad for your health?

  91. Savi

    Aiken going to stay in the race—-good for Dems

  92. wappler

    Phil/Keep screens,
    Not exactly sure if that's what you are looking for, but during my stay in Europe I've been using Logmein extensively to get access to my trading computers in the US and it has worked without a hitch (except once I made a mistake and shut down on of the remote computers – had to call the neighbor to turn it back on!).
    Let me know if you're interested in more details.

  93. flipspiceland

    @Felipe
    Careful on logging in to your home pcs from the road, fraught with inconsistencies.
    Power outages, updates, many other random events can shut down your home pcs and then who you gonna call to log back in to your servers?
    You will need redundant systems at home that need to be installaed by pros who do this for a living.  I've been stuck more than once on the road with failed servers at home.  Not saying don't do it, but this needs careful consideration for a multimillion dollar business.
     
    Oh, and I'm not voting for Obama as he's one of the worst POTUSes in modern times, an amateur ({per Clinton)  And I'm not voting for The Mittster either because he's one of the .0009%.  and have about as much empathy for the middle classes that pay nearly all the invoices of government as a cactus.

  94. shadowfax

    Phil
    Always took pride in voting either side but this time it's all dem. WY is a red state and take your pick the goal for repos are follow Idaho or Wyoming except Teton County WY the blue smudge, kind of funny that is were 90% or more of money is!
    Now I am going to our electrical coop party, filing all your propane tanks for $5, free light bulbs, and food, maybe donut holes for desert. Next week we will get a rate increase for sure just in time for the heating season. Never raise rates in the summer, only the rich and I have AC. Don't tell, my local MC Mansion doesn't!

  95. shadowfax

    Flip you going back to the old flip?

  96. 1020

    Phil/yesterday    That's what I get when passing on news from CNBS….
     
    When will I ever learn?  :)

  97. BruceE

    Phil, is it wrong that I still have half my PCLN puts?  They just hit $4 and made up all my AMZN losses, thanks.  

  98. scottmi

    VPHM/Pharm – do you keep up with these guys?

  99. 1020

    ….and besides Flip, you'd need some form of identification…. ;)

  100. Phil

    Aiken/Savi – That is good news but how can they (Reps) allow such a thing.  He's poison for the whole party now.  It's like campaigning with Strom Thurmond in the inner cities, except those damned women are EVERYWHERE!  

    Thanks Diamond, Flips Wappler!  My main interest is not to have to bring 2 laptops and 2 LCDs when I go away during the week.  I absolutely need one because I simply can't do daily chat without a 2-screen system (well I could but it would suck) but, for most other stuff, I would be fine with a couple of IPads if I could just get what I wanted on screen.  

    Not voting/Flips – Then you will get the Democracy you deserve.  

    Co-op/Shadow – That seems like a good idea.  

    News/1020 – It's interesting how they try to time certain stories to get a market effect.  The WSJ does that to, moving a story to page 1 on-line right when one of the Global markets opens up.  

    PCLN/Bruce – Nothing wrong with that, just a more aggressive stance – congrats!  

    $25KP – Speaking of getting 1/2 out – the SQQQ Sept $38s are $2.10 and that's half out even here (after doubling down this morning).  

  101. rpme

    When was the last time we had a day like this, dollar way down and market following?

  102. stjeanluc

    Remote / Diamond, Phil – I use TeamViewer a lot and they have apps for just about every platform! The problem with all these apps is with the screen resolution. Might need to do some scrolling to see that 30" on your iPad!

  103. 1020

    "This is the platform of the Republican Party; it's not the platform of Mitt Romney."  – Reince Priebus - RNC Chair.
     
    Looks like a hot time in Tampa!
    http://firstread.nbcnews.com/_news/2012/08/21/13395825-priebus-gop-platform-not-the-platform-of-mitt-romney?lite

  104. Phil

    There is very little premium in the QQQ $67 call at $1.07 – about .08.  I'm keeping my eye on them as I think AAPL is holding $650 and should hold $648 regardless and that should pop the Nas and, of course, it's almost 2:15 and the Dow volume is just 54M so very stickable.  

    We can use those and put a tight stop at $1 to ride out the bounce (assuming there is one), rather than stopping out bearish bets.   

  105. scottmi

    EMN floating up to new highs wtih fairly low volume.. just following the market..index fund buys?

  106. Phil

    Day like this/Rpme – It has been ages and ages since the market followed the Dollar down.  I do maintain that we should be down another point but for the Dollar forcing prices higher.  

    TeamViewer/StJ – I don't need my main system actually.  I keep Etrade on my left monitor and TOS on my right and my 3 middle screens are for reading and writing, which I can do just fine on my 2-screen laptop.  The problem is, I can't run TOS or Etrade on my IPad so I end up taking another machine with me.  

  107. kinkistyle

    Son of a gun, BBY is green.

  108. Savi

    Phil—--I think the Reps have one more chance to push Aiken  out  in about 4 weeks  but I am thinking of Sen. Claire Mccaskill --will be good for her and maybe Dems get to keep a senate seat

  109. zeroxzero

    Flip/Phil/ Stone Axe Approach:  Agree Flip — I only meant that I carry a small [and I'm moving smaller] laptop around in my carryon, plus iPad and iPhone, which will now become Galaxy Note and NO iPad.
     
     What I have in my various outposts are simply big, hi-res. screens and stand-alone hard drives, which I plug into the laptop I carry, and I synch my scattered hard drives with Dropbox.  I would never trust "remote computing", as per Flip's comments.  I need to work on airplanes, where I spend altogether too much time, which only occasionally have WiFi, so having a small laptop with a keyboard is essential, and the Galaxy takes care of pulling up airline reservations and checking email while stripping down in security lines.  In short, I store everything locally, in my various venues, since even internet access is not 100% reliable, especially outside of the U.S./Europe.

  110. Phil

    AAPL not getting over $660 not a good sign.  

  111. jromeha

    Good news for the repubs in the house – our long lost member Gel finally emailed me back…Although he has misguided politics, he's a pretty good dude and said he may sign back up here after the elections…Was worried Phil would convince him to vote democrat. :)

  112. newt

    Phil/ AAPL: any shorting ideas here?

  113. bobhu

    Phil/link up to your home PCs from anywhere, I used(back 2000) PC anywhere for a while to connect our branch office over LA from NJ and on the road to my office.  It's easy,  this is the link for it:
    http://us.norton.com/symantec-pcanywhere/

  114. Phil

    11:56 AM Apple (AAPL -0.6%) has received a rare downgrade to Hold from Oracle Research. The company's recent run-up presumably has something to do with it. Apple's last downgrade came in April, courtesy of BTIG's Walter Piecyk. (earlier)

    12:00 PM On the hour: Dow +0.01%. 10-yr -0.21%. Euro +1.02%vs. dollar. Crude +1.06% to $97.28. Gold +1.04% to $1637.75.

    1:00 PM On the hour: Dow -0.01%. 10-yr -0.12%. Euro +1.07% vs. dollar. Crude +1.16% to $97.38. Gold +1.1% to $1638.75

    1:17 PM A more than 3% reversal in red-hot Apple (off 1.7%) has the Nasdaq in unfamiliar territory midday, -0.5%. The S&P and DJIA are about flat. 

    2:00 PM On the hour: Dow -0.21%. 10-yr -0.07%. Euro +1.08% vs. dollar. Crude +0.97% to $97.19. Gold +1.18% to $1639.95.

    The U.S. saw the birth rate fall to its lowest level since the depths of World War II, cutting into consumption numbers and spending totals. The population only increased by 0.92% over the most recent tracking period from the Census Bureau and the number of births actually declined last year. Though a growing percentage of career-focused working women factors in, a sluggish U.S. economy has been the biggest influence on the nation's birth rate. Feeling the baby blues: PGKMBJNJHAS

    Texas sells $9.8B of 1-year notes priced to yield a record-low 0.23%. The spread to the index of AAA 1-year munis was just 4 basis points (CA moved $10B at a spread of 17-27 bps last week). Texas sells paper every August to fund school districts and then banks tax revenue to repay it within 12 months.

    His growth fund underperforming the S&P 500 by about 2500 basis points YTD, John Hussman sounds frustrated, comparing today's investor confidence and enthusiasm to that of Nasdaq 2000 or housing/debt 2007 (perhaps he's not following the continuing flow of money out of equity funds and into fixed income).

    Doug Kass' outlook on stocks grows gloomier with each low volume, vanishing volatility, flat-uppish day. He cites research from Dick Arms showing these sorts of conditions are "almost always" signs of a market top. Are stocks about to have a Minsky ("stability begets instability") moment?

    Brick-and-mortar retail nightmare: A study from research firm GroupM Next indicates that 45% of shoppers at a physical store will walk out and complete their purchase online if they can find price savings of 2.5% or more. At 5% savings, the number jumps to 60% of shoppers. The Amazon (AMZN) Effect continues to rev up as the numbers of shoppers who check product pricing on-the-fly with their mobile devices now stands at a whopping 44%. Pass the aspirin:SPLSOMXODPRSHHGGCONNDKSTGTWMTGPS.

    Gold's move to $1,642/oz. – the highest price since early May – catches the eye of the technicians as what  was though to be a bearish triangle has been resolved … to the upside. GLD +1.2%.

    Coal producers (KOL +1.4%) show strength on news the U.S. Court of Appeals for the D.C. Circuit has put on hold an EPA ruleover limits on sulfur dioxide and nitrogen oxide emissions. The decision sends the rule back to the agency for revision. ANR +8%,JRCC +5.4%BTU +4.8%WLB +4.7%CNX +2.2%ACI +2%CLD+2%.

    Proving once again the Street's actual expectations for solar companies are often far worse than analyst forecasts, Trina Solar (TSL +5.2%) is now rallying after badly missing Q2 estimates,cutting its shipment guidance, and reporting a major increase in inventory. A Q2 gross margin of 8.4%, down from 17% in the year-ago period but up from Q1's 5.8% could be encouraging bulls. Solar peers are also rallying (TAN +2.6%). Some big winners: FSLR +9.1%YGE+5.1%SOL +6.9%JKS +4%.

    Best Buy (BBY) stat of the day (h/t Michael Comeau of Minyanville): The company has spent $7.6B on buybacks and dividends since 2008, a mark greater than its current market cap of $6.05B.

    Don't look now, but shares of Sirius XM Radio (SIRI +1.4%) just hit a 4-year high of $2.64 after naysayers carped earlier this summer that they wouldn't ever see $2 again. The company confirmed today that it will use new debt issuance to retire higher-paying notes, avisibility move that SA author Stephen Faulkner applauds as balance sheet-friendly.

    Netflix (NFLX +1.3%) edges higher after Caris' David Miller, who has been a vocal bear, upgrades shares to Average. With Netflix down 62% since his September downgrade, Miller thinks the company has bled enough. He also believes Netflix and EPIX recently altered a licensing deal to make it non-exclusive (something that should lower content costs), and that a 2013 consensus EPS estimate of $0.95 is "too draconian" (Miller forecasts $1.88). (Apple/EPIX rumors

    Looking to stem subscriber losses to bigger carriers, MetroPCS (PCS +1.7%) has cut the price of its unlimited 4G voice/text/data plan to $55/month from a prior $70/month. A $50/month plan offering 2.5GB/month of data remains unchanged. Sprint's (S) efforts to promote unlimited data have begun paying off a little, and AT&T (T) and Verizon's (VZ) embrace of expensive shared data plans could give rivals more room to attack on price. (PR

    Baidu (BIDU -4.9%) is diving on worries Qihoo 360's (QIHU+8.1%) new search engine, questionable links and all, is a potential threat. ThinkEquity recently noted some companies are already seeing more referral traffic from Qihoo's search engine, which is tied to its popular browser, than Sohu's (SOHU) Sogou, the #2 Chinese search engine. S&P's Scott Kessler is defending Baidu in response.

    More Google (GOOG) news: 1) Google is harshly criticizinga proposed German law that would require search engines to pay license fees to publishers for merely excerpting the headline and first paragraph of a news article. 2) Google is expanding an ad-supported free Wi-Fi trial, conducted in partnership with Boingo (WIFI), to cover 8 malls across the U.S. 3) Larry Page, Sergey Brin, Eric Schmidt, and several other execs and board members have sold shares in August. (earlier)

  115. Phil


    As Facebook (
    FB -3.4%) sells off on news director/seed investor Peter Thiel has cashed out in a big way, VC Fred Wilsondefends Thiel's actions by arguing investors are obligated to return capital to clients as quickly as possible. But as Dan Primack points out, most of Thiel's sales involved his personal stake in Facebook. VC Ann Winblad also defends Thiel, but thinks Facebook and other public companies are better off not having VCs such as Thiel serve as board members.

    Yelp (YELP -4.2%) is selling off for the second day in a row; shares are down 10% on the week thus far. An Aug. 29 lockup expiration could be weighing on investors, particularly given howFacebook and Angie's List traded following last week's expirations. Compared with other recent consumer Web IPOs, Yelp has held up fairly well.

    Three lunchtime reads:

    1) Don't rush to buy stocks at these levels

    2) Counterpoint: Don't rush to sell stocks at these levels

    3) MLPs roundtable: High-energy income

  116. 1020

    Phil – Those comics sure drive the points home….. :)

  117. angelcur

    ZERO/whats gonna happen when Google upgrades the Android O/S.. but you cant because Samsung wont let you?

  118. stjeanluc

    Gel / Jrom – We should give him a free membership just for the value of the debates between him and Phil!

  119. cdel360

    SQQQ – trying to understand this DD and out…
    I have in my records a cost basis on 10 SQQQ 38 Calls of $4.73 (give or take depending on your fill prices) including original call spread (short call covered) and subsequent rolls.  So doesn't the $.50 ($500 on 10 contracts) collected on the day trade lowers the original basis to $4.23.  So what is meant by 1/2 out even?
    Maybe I am answering my own question, but I suppose you have already figured in the realized loss from the original spread/roll and are using the cost basis of just the purchase price of the current SQQQ calls?

  120. 1020

    jrom – Tell Gel not to worry about us – just vote with the females in his household….. ;)

  121. stjeanluc

    Android update / Angel – It really has not been as much of a problem so far. People for whom it's a problem might just get a new phone. And most apps are backward compatible except for the tablet ones. Look at the Apple guys, they get a new phone every 12 months when Apple releases a new iPhone so they keep up to date!

  122. jelutuck

    JRCC  I am frustrated with this position and wonder if this is just an opportunity.  I sold the JRCC Jan 14 2.5 put for $1.45 back on July 10 when the stock was $2.16.  Now, with JRCC having moved up to $2.75 my short put has LOST money and is at $1.70.   It seems like a great chance to DD, but I'd like to better understand what is going on before I throw more margin at this.

  123. biodieselchris

    Damn these spreads on MUB puts. Bite people, c'mon!

  124. Inkarri19

    Hello All – Does anyone have a link to the Income Portoflio they can send me please?  Thank you.

  125. stjeanluc

    Here you go lnk: https://docs.google.com/spreadsheet/ccc?key=0Anwf9je9MizqdGQzN2NZUjNfdjhrbjFwWlc1eDYtWnc

    There is a tab for the Income portfolio.

  126. Inkarri19

    THank you sir!

  127. kinkistyle

    JRCC/jetuluck:  237 bids to 20 offers on the 2014 2.5 puts.  People are just real bearish on this thing regardless of price action.

  128. Phil

    Gel/Jrom – Tell him I said hi.

    AAPL/Newt – I wouldn't short them, I love that stock.  Worth every penny but – as I was saying yesterday – you can't run a $600Bn company up 10% on $39Bn in trades (20M a day at $650).  $39Bn sounds like it should cover it but MOST trades are evenly balanced buy and sell so your daily net inflow isn't even 10%.  That means in 3 days of AAPL trading, the most real money you can expect to flow in would be about $12Bn – which leaves very little support for a $60Bn run-up.  

    PC Anywhere/Bob – I used to use that, I would have thought there were better ones by now.  

    SQQQ/Cdel – Nothing so complex.  We had 12 this morning at $2.55 and we added 12 more at $1.60 for 24 at an average of $2.075.  It is not your new position's fault if you lose money on a previous position – your goal is to make money on THIS position and today we improved the basis of our current position by .50 x 12 ($600) and that's a good day's work.  In this style of spreadsheet – we are realizing all our losses, even when we roll so it doesn't pay to thing of "working" a single position.  I have $35,000, I'd like to make 10% this month so I want to close $3,500 worth of winners.  That one was 15% of my goal.  

    6 months/StJ – I wish.  I've been waiting for this IPhone 5 so long my contract expired.  

    JRCC/Jet – The stock has been extremely volatile since July (and was before it too) and it's internal VIX is high.  Also, lots of people were betting on them to fail, jacking up long put prices.  The real question is, do you want to own the stock for net .80.  If so, the only real question is – how many shares?  

    Dollar cannot get back over 82.  Yen down to 79.22 (strong) and that sent the Nikkei down 100 points today.  Will be interesting to see how this shakes out.  

  129. zeroxzero

    Angel:  Not much of an early adopter, I'll probably never notice, given the limited complexity of my operrations and apps use. When something I'm using starts to annoy me [i.e., iPhone, paying for poor quality 60kb MP3 files vs. 10MB from a CD] or I see something bigger and shinier, I buy it.  Stone Axe approach, as aforementioned.

  130. newt

    Phil- Thanks. Its amazing how you start jonesing for a big hit after the last few we have had….

  131. rj_jarboe

    Phil/TLT
    Thanks for the strategy lesson. As far as buying TLT Calls
     

    GS/Jacal – Oh I am sure they are preparing to flip this sucker down and I'm sure they have their own Long Put List lined up at this point to take advantage of the crash.  This sudden panic out of bonds smells like an end game to me so very possibly GS buying the bottom here.    TLT Sept $128 calls are just .50 so a fun gamble as TLT has been up to $132 less than a month ago.  

  132. Phil

    Oh my, look at the Dow fall, catching up to the Nas.  

    TLT moving up nicely, VIX up 10% at 15.39, Dollar 81.96.  

    3:00 PM On the hour: Dow -0.38%. 10-yr +0.05%. Euro +0.98% vs. dollar. Crude +0.68% to $96.91. Gold +1.06% to $1638.05.

    "For the first time in this rally, there is a feel of commercial panic," says a broker after a 2nd day of the Pro Farmer crop tour adds to worries over the security of physical grain supplies (day 1 report here). "You cannot load soybean futures in a ship and send to China (or) feed to chickens and hogs … panic is in the physical ownership." Price records are falling everywhere. JJG +2.2%.

    Concerned about low yields/high prices, Pimco's Mark Kiesel began slashing exposure to the white-hot junk bond market several weeks ago. With the cash, he's finding value in paper poised to benefit from a housing recovery such as the debt of building material suppliers and MBS (which also might benefit from QE3)

    Something for bond bears to consider: It took just the slightest of wobbles in stocks (DJIA on a 100 point reversal today) to send buyers flying into Treasurys. The long bond has rallied more than a full point since just before noon, bringing the yield back to flat on the day at 2.91%. TBT -0.3%.

     Iran will be forced to find another registry for its 2M bbl/day crude oil tankers after Tanzania and Tuvalu say they will de-register the Iranian vessels. Iran’s problem is that without a flag the carrier cannot be insured, and without insurance the carrier cannot sail, which jeopardizes its crude contracts with Asian oil clients. 

     Australia now has the 2nd largest banking industry in the world by market cap, though the move up the rankings is mostly to do with the incredible shrinking values of EU, U.K, Japanese, and Swiss lenders (#1 U.S. has also withered). For those who consider the financial sector too big an influence on the S&P, consider banks in Oz make up 48% of that stock market.

    Skechers (SKX +9.9%) goes on a roller coaster ride after a SEC filing (13D) reveals a distribution of a large block of shares from investor Gil Schwartzberg that appears to be tied to estate planning. The price action may be a speculative read by investors that the shares – repping over 9% of the company – are now freed up for a buyout play.

  133. Phil

    QQQ holding $68 – watch that line.  We made those $67 calls more popular, .10 premium now.  

    66M shares on Dow at 3:25.

    FAS Money – We dodged a bullet so let's not stand around waiting for another one.  We can buy back the $99 calls fro .53 and leave the $96 calls ($1.80) and hopefully they expire worthless but now we have a little cushion at least.  

  134. mjjwo9b

    Phil – FAS :  I was a bit late in reading the various adjustments.  I picked up the additional XLF Calls; stopped out on the FAS $96 calls at $3;  missed the window on the $99 Calls..  :(  Should I do anything further at this point?  Thanks.

  135. mjjwo9b

    Phil   Never mind.  I see your 3:23 post.  Should have refreshed.

  136. Pharmboy

    VPHM – I do, and we sold puts on them a while back.  Not many, but made a little.

     

    Well, I get busy, and so do they…who turned to the lady in red?

  137. wappler

    Phil/Remote access,
    Based on your requirements (access to eTrade & TOS) Logmein should work for you.  Check it out – it's pretty easy to set up (browser extension only) and you'll only need to free version of the PC side.  I've been using it for over a year now, it's extremely reliable.
    However, you will need to buy the app for the iPad, but it's a one time fee of $30 or so.

  138. Pharmboy

    V decided to do an about face.  Must be linking up with BBY….

  139. Phil

    Jonesing/Newt – Happens to everyone, just takes practice to step back and look at the big picture.  

    TLT/RJ – Ah, I forgot they dropped so hard last week that the $128s looked attractive.  A trade like that though – a FUN trade – means a small amount with a tight stop, usually they're not going to be something you want to be building up with conviction and, if you were, then why didn't you DD at .30 last week?  When an initial position drops 20% on you, that is the point at which you decide if you are going to scale in or quit.  If you decided to scale in at .40 (down 20%) then you wanted to set a buy point to DD.  Doubling down at .40 is silly as it reduces to .45 so .30 was the logical spot (down 40%) which leaves you in at 2x down 25% and then, if they dropped to .20, another DD would give you 4x at .30 and still a reasonable chance of getting even (or you could have rolled first).  Although, of course, when your option is down 60% from where you entered it – you do have to seriously consider that your premise may have been wrong….  ;)  

    FAS/MJJ – Wow, what a mess!  Nothing really to do now.  Maybe we'll be up again tomorrow but I wouldn't chase this huge sell-off and sell calls.  It's OK to have the extra 5 longs, they'll come in handy and you'll be all caught up as soon as we either roll our $96s or sell new calls.  Keep in mind, the idea of following these trades is to learn how we respond to these situations so you will reflexively make these moves yourself.  Like anything else, practice, practice, practice until it's second nature.  I know it's very counter-intuitive what we did this morning – we got hit with a 100% loss on the $96s so, what did we do – we sold more calls!  But what did we really do – we sold more premium.   Premium is always good to sell and we sold $2 of premium and set a stop with a $3 loss on the original $96s and our worst case there is we would have lost $600 but we now had 15 longs to gain on and our new $400 of sold premium to burn out by Friday.  By the way, we did that because the rally looked fake – if Uncle Ben had just dropped $500Bn on us – we would NOT be pressing shorts on FAS!  

    72M on the Dow at 3:48. 

    Logmein/Wappler – Thanks, as long as it works my needs are fairly simple.  

  140. Joel

    I am loving today Phil, it's like an options school.  Thank you for taking the time to expand on your reasons for making the trades, I really appreciate it and things are starting to click.  

  141. drmtv10

    Hi,
    Taking a small-ish position in TLT, credit spread Sept 120/115P for $1.05.  More as a hedge, in case the drop continues. Thoughts on using TLT in this manner?

  142. Pharmboy

    drmtv – ur taking the spread to make a dollar or a $4 loss.  Very risky and hard to roll.    Why not go out and do a call calendar spread.  Nov 125 buy, sell the Sept 125.  Plenty of time, and gives you a chance to roll. 

     

    I still have my Sept 130s.  Will hold to OPEX.

  143. Phil

    Looks like Dow volume finished at 117M, nice move in last few minutes.  Intra-day fall from 13,330 to 13,190 is 140 points and 28 point retrace takes us back to 13,218 and we didn't make that at the close – so not even a weak bounce….

    Same on Nas – 3,100 to 3,060 is 40 down and 3,078 would be the weak bounce and we're at 3,067 – see, not a complicated rules.  

    You're welcome Joel – you just have to catch me when I'm in the mood to pontificate.  8)  

    TLT/DrM – Sounds good to me but you know I hate risking $4 to make $1.  Why not risk $1 by buying 2x Sept $125 calls for .95 and selling the $128 calls for .40 for net .55 and, if one hits $1.10 – cash it and you have a free shot at $3, which is 3x more than you can possibly make on the short put spread (and no margin) so, if you were trying to make $1,000 by selling 10 of the put spreads, it would take $4K in margin and you don't make a penny unless TLT is over $120 and risk losing the $4K.  Instead you could simply buy 8 of the spreads for $440 which can return up to $2,400 if TLT shoots up to $128 (and holds it to expiration of course) and has a really good chance of letting you pocket $500 to $1,000 on any good run in-between.  

    Or what Pharm said works too.  

  144. ccsincsd

    Oracle Investment / Diamond
    Apple Downgrade.  I second your WTF !!  This is a one man show that issues a official downgrade that gets MSM attention.  Amazing.  He works out of his house up on one of the islands outside of Tacoma, WA  Looks like he mostly peddles Fidelity Mutual Funds.  Wish I could find out if he had a short position before he did that downgrade !!

  145. shadowfax

    jromeha
    Tell gel I miss him too and I most likely will give him shit like Phil, but he still owes me a ride on his boat and last summer I was 80 miles from Boston. November 7 is a good daye to come back!. 

  146. jerconn

    ccs – it wasn't that downgrade that pulled AAPL down, it was coming anyway.  AAPL was just up too much too fast to last more than another day or so, but anyway it's likely to zoom back up again to test those highs and soon to 700…

  147. rj_jarboe

    Phil/TLT
    Thanks again for the strategy lesson.

  148. angelcur

    SAINTLY JEAN/ OK BUT NOT REALLY ON THE BEAM WHEN AAPL UPDATES ITS O/S ALL THE UPDATE IS AVAILABLE TO EVERYONE…BUT ZO IS HAPPY SO FUCK IT
     
     
     
     

  149. shadowfax

    Phil
    The coop event was anti disabled, didn't get out of the car, I left without food and have to return to get my propane tank. The good thing that happened is I had no idea about the primary election today. To try to rid of WY bad guys and girl I registered republican and voted against Christensen, a neighbor, Loomis, and Brasso. Those are American sell outs esp. Dr Brasso, a sell out doctor that should go to Jail with Romney and the Banksters. Don't worry I think a lot of democrates need to visit the gray bar hotel and check out the food!
    Hope flip flips out when he sees what can be done while he doesn't vote.

  150. angelcur

    ZO/STONEAX TOO FUNNY!

  151. drmtv10

    TLT/ Pharm and Phil – thanks for your responses.  I gotta stop taking 'risky' trades where I risk $4 to make $1!!  
    I may simply wind down my credit spread early or keep very tight stops as I do not have a feel anymore about TLT trades and hedges do not seem to be working in current environment.  (Though I plan to strongly consider recommended trades and may enter one in next few days / week) 

  152. shadowfax

    At least a few are seeing the rotten Apple!. For those who believe they can fly get ready for a hard landing! One bad apple spoils the whole barrel. They may surprise me but the next thing they need to do is adapt to the rest of the world. If they do that sign me back up. Maybe I should try contacting Victor, he was a friend of Steve so he is most likely out now.

  153. zipla

    Pharmboy
    You may have missed earlier 1.01 pm post about LLY puts.
    "Are you still liking the LLY Sept 41 puts?"
    Haven't seen you mention  them in a while.
    Thanks

  154. shadowfax

    Have an hour with the doctor tomorrow AM. Hope he understands this time he can help me or get sued for malpractice. Maybe next year his plan is to become a politician? 18 hours notice doesn't help him after waiting for months to negotiate when the hospital aready admitted fault and offered a small amount.
    Flip everyone is no good but no vote assures this will continue. We voters don't deserve that so please vote.

  155. Phil

    Holy cow, BBY back to $17.91!   Now I'm feeling REALLY good about our position, both in the Income Portfolio and $25KP.  Good example of why we don't get panicked out of positions.  Oct $16s are back to $2.50 and we're in for about $2.50 with no cover now.  It was originally a $17/19 vertical for $1.30 but now we can sell the Oct $19s for $1.05 (but no hurry) and that would give us a $3 spread from a lower strike at net $1.45 so a very good adjustment.

    Oracle/CCS – I was just saying yesterday that a lot of analysts watch those technicals and time their comments to make it look like they moved the market.  AAPL was up over 10% in 3 days and only needed a nudge to sell off.  Now, next time that guy says something about AAPL, everyone will think he's like the Apple Whisperer.  

    You're welcome RJ.  

    Good job exercising your constitutional rights, Shadow.  I imagine in Wyoming that each vote does count a lot.  

    TLT/DrM – It's a panic play but, on the whole, I'd rather short the Nas or go long on the VIX.  The one I do like is shorting TLT when it gets to $132 – as that's around where people have to pay the Government to hold their money.  That simply can't last for too long unless the world is ending, in which case, the SQQQs or VXX work just as well.  

    Bad Apples/Shadow – This one's for you:  

  156. stjeanluc

    So much for the death cross on the NYSE! And now we are having a golden cross as the 50 DMA is crossing over the 200 DMA. Maybe they are reversed this year!

  157. Pharmboy

    LLY/zip – apologies, things have been crazy at work.  I like the Sept $41s, but they have been up and down. Take profits where you can, and put tight stops on those that move against you.  These have been in a range.  I am really liking the Oct/Sept $41 calendar spread for a whopping 30c debit.  I still think we get a sell off, but the push up may also be strong, so these will lose little as the front premium erodes (hence the tight stops).  So, in essence, do the latter rather than the former…hows that for decisiveness?

  158. Pharmboy

    Vegas – If that calendar comes in that I note above, you buy me a drink, if not, I will have drinks in my room again for all to celebrate my loss together.  Of course, I have to announce the in and out of the trade…so tomorrow, I will put my order "in".  By coming in, it needs to make money…how much…well, if it pays for commissions (say $1/option), then we are good to go. 

    I will probably have drinks anyway, but it is the challenge.  Where's LV?  I need to heckle him for a few drinks when I speak!

     

    CRIS – buying more stock FWIW.  That is crazy low.

  159. zeroxzero

    It Don't Take a Weatherman to Know Which Way the Wind Blows Dept.:  94L last night,  TD 9 today,  is declared Tropical Storm Isaac.  "…[a] majority of the models bring TS Isaac into SE Florida; some have it coming east of south florida and some to the west but either way it looks like South Florida will receive very bad weather next week."  Tonight's projections show it crossing Port au Prince on Hispaniola, Cuba and onto South Florida, its condition depending on whether it gets tangled up in the Dominican Republic's high mountains on the way.  For those pulling for a Republican Convention wipeout in Tampa, it is tough to get a hurricane up that far.
     
    The weather has provoked economic discussion even on a hard-core weather blog, to wit, whether a direct hit could stimulate the Florida economy:  Krugman is quoted:  "…the broken windows fallacy ceases to be a fallacy: something that forces firms to replace capital, even if that something seemingly makes them poorer, can stimulate spending and raise employment. Indeed, in the absence of effective policy, that’s how recovery eventually happens: as Keynes put it, a slump goes on until “the shortage of capital through use, decay and obsolescence” gets firms spending again to replace their plant and equipment."
     
    Sounds like wishful thinking, But Isaac seems to be developing quickly tonight, Puerto Rico's Governor has already canceled schools tomorrow.  Here's a look from the GOES Floater, updated every half-hour:  http://www.ssd.noaa.gov/PS/TROP/floaters/09L/flash-ft-long.html

  160. zeroxzero

    Weather Follow up:  The best guess right now is that Isaac strengthens to a Cat 2 or 3 going up the Fla. coast towards Jacksonville, after running over Puerto Rico, Hispaniola and Cuba, with a possible landfall in Miami.  I'm in the path of it, but sheltered.

  161. villashaka

    Phil- What about selling CLF Jan14 40 puts  for 985- seems a good resource bet ?

  162. scottmi

    OLN – with all the ammo purchases the DHS, NOAA, and SSA are making, perhaps Olin should be on our buy list. of course, it would also be good to understand what do all these domestic agencies need with enough hollow point ammunition to shoot every american and then some? Or someone please tell me this is just "tea party paranoia."

  163. zipla

    Thanks Pharm. No apology required.
    Just thought the first note might have gone unnoticed amid the politics, the Apple downswing and waiting for QE 3 which is now beginning to sound like a Beckett play :)
    ESTRAGON: I can't go on like this.
    VLADIMIR: That's what you think.

  164. drmtv10

    Hi Phil,
    I have the following hedges (after a couple of rolls):
    QQQ Sept 30 (Quarterly) x15 67 puts (cost basis $2.67), down about $2600.  This is covered by Weekly $68P, by about $0.27.  I will be "happy" to roll 68P forward if they expire itm..
    TZA Sept 15C bought at x30 $1.67 (cost basis probably $3.27), down about $3000. No covers on this pos, looking to sell covers this week.
    In last month My portfolio's long(er) term long positions have done well as market went up but I am want to 'keep' the long term positions (hence need the hedge) but hedges are going to trigger short term realized loss.
    I will take some losses on the hedges. Is selling short term covers to reduce cost while retaining some coverage in case market drops strongly the correct strategy?  
    Thanks in advance.

  165. scottmi

    Short article on how Bain and the like 'add value.'
    http://www.inthesetimes.com/article/13704/how_to_succeed_in_business_without_adding_value

  166. deano

    Japan’s exports in July hit a six-month low on falling demand from
    Europe and China. Exports fell 8.1 per cent year-on-year, while
    economists had on average been expecting only a 2.9 per cent drop.
    (Reuters).

  167. deano

    Fed minutes today @ 2:00pm

  168. Phil

    Good morning!   

    Futures looking pretty flat despite Dollar still under 82 (81.94) and Euro has been dead flat at $1.2467 as if it was pinned there since yesterday and Pound trying to get over $1.58 without success.  79.27 Yen for a Dollar and Nikkei came in flat at 9,131 after bottoming at 9,050 so a fun session for them.  

    2:45 AM Asian shares follow Wall St. lower after Japan's wider-than-expected trade deficit and Dell's disappointing earnings report, and ahead of meetings between Greece and European leaders, and the FOMC minutes. Japan -0.3%, Hong Kong -0.9%, China -0.8%, India-0.3%.

    Hang Seng, Shanghai and India finished at their lows – markets getting harder to prop up and don't forget how crazy that China/US divergence is getting (chart above).  

    3:47 AM EU shares track Wall St. and Asia and open down, due to a technical sell-off. Analysts say hopes of more central bank easing are baked in, with investors waiting for a fresh catalyst to move higher again. Possible candidates are Greece's meetings with EU leaders this week and the FOMC minutes today. EU Stoxx 50 -0.9%, London-0.8%, Paris -1%, Frankfurt -0.8%, Madrid -1.3%, Milan -1%.

    6:00 AM Overseas: Japan -0.27%;. Hong Kong -1.06%. China-1.50%. India -0.21%. London -0.98%. Paris -0.37%. Frankfurt-0.67%.

    Oil holding $96.50 all night (now $96.67), gold $1,644, silver $29.47, copper $3.45, nat gas $2.82 and gasoline $3.05.  

    They are trying really hard to pull Europe back – we'll see…   Fed minutes today – maybe a little QE Fever to turn us around later!  Actually expectations for home sales are high (4.5M) and, if we hit that, people should get happy.  I'm more concerned with mortgage apps, which have been awful this summer.  

    Wednesday's economic calendar:

    7:00 MBA Mortgage Applications

    10:00 Existing Home Sales

    10:30 EIA Petroleum Inventories

    2:00 PM FOMC minutes

    Woops:  MBA Mortgage Applications: -7.4% vs. -4.5% last week.

    Nope, not fixed:   Speaking ahead of talks today with eurozone chief Jean-Claude Juncker, Greek PM Antonio Antonis Samaras tells De Bildthat his country needs "air to breathe" to spark the economy back into life. Samaras is looking for an extension to budget cuts, which, the FTreports, will be greater than expected due to falling tax revenues and increased social security contributions

    Japan posts a surprisingly large 8.1% Y/Y drop in exports (expectations were for a 2.9% fall), swinging its trade balance to a $6.5B deficit. Exports to the EU plunged 25.1%, to China down 11.9%. The yen briefly dropped on the news, but has since recovered to little changed vs. the greenback.

    BOJ deputy-governor Kiyohiko Nishimura may ruffle a few feathers in Beijing as he says "China is now entering the danger zone." Credit and housing booms don't have to end in an ugly bust, but toss in China's aging demographics (akin to Japan's), and "a financial crisis seems more likely." For its part, Beijing has made close study of Japan's Lost Decade(s) and is convinced it can avoid the same errors. 

    S&P says that while China could afford more stimulus to boost its faltering economy, "inefficient spending" could hurt growth and "deepen the damage of the last round of stimulus spending" in 2008-9 by further weakening government and bank balance sheets. S&P's comments follow speculation this week about massive spending plans by the cities of Tianjin and Chongqing.

    Fiscal stimulus (intentions) in China begin to pick up a head of steam, the city of Tianjin joining Chongqing in announcing plans to spend $236B on favored industries over the next 3-4 years. Neither city has yet said how it plans to raise the funds. Pesky details.

    When will China's big 4 banks begin to recognize what must surely be increasing levels of nonperforming loans? Essentially government arms, the lenders have been pushed to make loans to local governments for favored, but not necessarily economic projects. China Merchants Bank (the nation's 6th largest) reported an NPL ratio of 0.56%, unchanged from last year. "Hilarious," tweets Patrick Chovanec.

    "The Chinese economy is only at the beginning of a harsh winter," says Zhang Hongxia -  chairman of China's largest cotton-textile maker – estimating cotton usage could shrink 11% this year. Normally consuming 600K tons of cotton/year, Zhang's company used just 204K tons in H1. "We are in a worse situation now, (than) compared with 2008-09."

    Iron ore output in China dives 8.1% in July, the steepest July decline since 2008. Yes, the economy is slowing, but plunging shipping costs and iron ore prices make it cheaper to get the good stuff from Brazil rather than dig up lower-grade ore in China. VALE isn't complaining. 

    Prices of Chinese steel and its key ingredient – iron ore – continue to fall, now at their lowest levels since 2009. The combination of steel mills ramping up production in the face of a slowing economy is proving toxic. One report says the mills are beginning to default on supply contracts or have deferred shipment of up to 4M tons of iron ore this month. It's a start.

    China will have to spend 2.4T yuan ($373B) in order to meet its 5-year goal of cutting energy consumption per unit of GDP by 16% by 2015 and save an equivalent of 670M tons of coal, the State Council said yesterday. The problem is that there's no word on how the investment will be funded.

    China bows to pressure and increases this year's quota of rare earths, which are used in high-tech products, by 2.7% to 30,996 metric tons. It's the first raise since 2005 and follows a slashing of the allocation in 2009. However, it's all largely symbolic, as exporters only used up half of last year's quota, with foreign sales down this year as well.

    Bulls betting on a pop in oil prices outnumber bears five to one, but Cyrus Sanati believes the bulls will get burned, pointing to more signs oil prices will retreat than rise. Money managers may be looking for an October surprise from Iran or Israel, "but it is more likely to come from a bull-crushing release of oil from strategic reserves than from a long-shot bombing raid by Israeli F-16s."

    Barclays says recent rig orders and bullish outlooks reinforce its view of a structural shift towards deepwater drilling which will drive demand for oil service equipment suitable for these environments. The firm says the tightness in deepwater is a clear positive for DORIGESVSDRL and NBL, which enjoy continued dayrate improvements for almost all rig classes.

    Continued weakness in natural gas prices fuels a Sell downgrade of Encana (ECA -0.7%) by Société Générale, which says the gas producer destroyed capital and asset value by selling international assets prematurely and spinning off Cenovus, ECA's Canadian onshore oil business. The firm expects a swoon in prices in the fall months between air conditioning and heating season.

    As panic hits the pits, Wells Fargo's Sameer Samana makes a contrarian call, arguing it's a good time to cover bullish grain bets. The weather is improving, he says, and low yields are priced in. "There seem to be fewer catalysts for price appreciation." Yet as Commerzbank notes, it's too late in the season for better weather to help the corn crop.

    Best Buy (BBY) founder Richard Schulz hires proxy advisory firm D.F. King, in a move that edges him closer to hostile maneuvers without buying the company outright. Schulze, who holds close to 20% of outstanding BBY shares, could try to oust a few of the firm's directors, according to sources.

    We're stuck with this guy now:  "The hype concerns us, as it sounds vaguely familiar to another decade," says Oracle Research's Laurence Balter, explaining his downgrade of Apple (AAPL -1.4%). Balter is also worried about slowing sales growth, high expectations, and margin risks related to Apple's rumored entry into the TV and set-top box markets. 

  169. deano

    China's largest cotton-textile maker, Weiqiao Textile Cotton, has warned that consumption in the
    world's largest cotton user may shrink 11 per cent this year as a
    deteriorating economy hurts demand and causes a buildup in
    commodities. “China now is facing a situation where everything from
    coal to steel inventories are piling up,” said Zhang Hongxia the
    company's chairman. (Bloomberg).

  170. Phil

    Big Char – Yep, that's a big technical buy signal – good luck with it!   Actually, those candles with the big tail pointing down on rising volume are a pretty bad sign – especially if we form a lower candle today.  

    CLF/Vill – I don't think they are done going down yet, especially if the broad market heads lower.  See above China iron news before getting excited about these guys.  

    OLN/Scott – Yeah, I have yet to hear a reasonable explanation for this.  Perhaps they know a ban is coming and they are stocking up but very disturbing in general.  

    Hedges/DrM – Please bring forward to new post.  

    Good article Scott.  

  171. jacalynm

    I was wondering ? If LEGITIMATE rape does not result in pregnancy, does FAKE rape?????

  172. 1020

    jacalynm – The answer to that question is best provided by a woman and it's obvious to most….excluding most republican men of course…..
     
    :(

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