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Testy Tuesday – Do We Need More Stimulus Already?

SPY 5 MINUTEDo we need more cowbelll?

After 48 hours of market euphoria last week have the markets already sobered up over the weekend and need another fix?  We had a minor pullback (so far – see Dave Fry's chart) in the US and Europe but China's Shanghai Composite index has fallen 3% in the first two days of the week, giving up all of the gains of QE3 (not to mention China's own generous stimulus last week) and falling back to levels not seen since 2009.  

Our own data continues to come in terribly, with yesterday's Empire State Manufacturing Survey a disaster at -10.41, putting us steeply into contraction with another round of Global PMI reading coming later in the week to possibly confirm the Global Recession.  

Of course with no manufacturing activity it's the materials sector that's priced way too high.  Gold and oil were two of our remaining short positions in the $25,000 Portfolio (see Friday's Post) and yesterday morning I mentioned how excited we were to short oil at $100.  That worked out very well already as it plunged back to $95 yesterday afternoon – paying futures players (/CL contracts) $5,000 per contract in one fell swoop.  

At PSW, we find it very amusing that "Analysts scrambled to explain Monday's dramatic plunge" when this is exactly the plunge we've been waiting for based on our premise that the NYMEX traders are nothing more than con men running a shell game and faking demand for hundreds of millions of barrels contracts they have no intention of accepting delivery of in order to drive up prices and rob the American people of hundreds of Billions of Dollars each year.  In that context, yesterday's move was EXACTLY what we expected since last month.

For all those "confused" analysts, we are happy to point out the only chart that matters and that's how many open October contracts remain on the NYMEX, which expire on Friday – forcing traders to accept delivery of barrels (1,000 per contract) that they have no actual use for, no authorization to buy and no intention of owning.  

In fact, despite trading over 6Bn October contracts back and forth in the past month, in the end, traders will only accept delivery of about 30M barrels – reflecting the ACTUAL demand – the rest is just faked in order to drive up prices and the cost of each trade is, of course, passed on to the consumers and paid, as fees, to the NYMEX and their traders, who add a nickel here and a nickel there until they are rich and you are paying $60 for a fill-up.

Click for
Chart
Current Session Prior Day
Open High Low Time Set Chg Vol Set Op Int
Oct'12 96.71 97.23 95.81 08:29
Sep 18
 

-
-0.81 33672 96.62 98376
Nov'12 96.98 97.55 96.13 08:29
Sep 18
 

-
-0.82 25653 96.95 318770
Dec'12 97.27 97.84 96.46 08:29
Sep 18
 

-
-0.79 6396 97.25 203642
Jan'13 97.88 98.07 96.70 08:29
Sep 18
 

-
-0.89 1852 97.59 110732

In three days, 2/3 of the October contracts will be cancelled.  Forget the fact that these traders have firm orders for 98M barrels of crude that guarantee delivery in October and by cancelling those contracts they are jeopardizing America's energy security – that's a game they play with impunity every month.  As you can see, they also have no room to roll the contracts.  Usually, our front three months have 500-550,000 orders (90% fake) at the beginning of a cycle and the NYMEX crooks are very adept at rolling that fake demand along each month to keep you paying double the fair market rate for oil.

Their problem here is that they now have over 700,000 open contacts – about 20% too many – and not enough buyers, even in the future months, to allow them to dump their October contacts.  Any October contracts that are not rolled or cancelled by Friday, will be delivered next month and that would cause a huge glut in the US inventories (where a 5Mb build is considered a huge deal).  

President Obama (and thank you Mitt for assuring us he will remain President, you elitist tool!) – now would be THE BEST time to release some oil out of the SPR because the traders at the NYMEX will choke on these open contracts and oil will drop over $10 almost instantly as there will be nowhere for them to hide their contracts anymore.  Just a 15Mb release will do it, not even 2% of the total reserves.  PLEASE!!!

Even as I write this, CNBC has guests on who can't imagine what happened at the NYMEX yesterday when the contracts plunged on heavy volume into the close.  Was it a computer glitch?  Was it a trader with "fat fingers" (oh, that guy again)?  If so, wouldn't oil have gone right back to $99?  Of course it would – they are lying to you.  These are crooks who got caught trying desperately to come up with a cover story before their whole scam gets blown.  

As to the other scam that's running – QE3 should be good for a lot more than a 2-day pump job.  The real wild-card for the week is what will the BOJ decide to do tomorrow about the strong Yen/weak Dollar.  Should they approve another Yentervention (likely), the Dollar will pop back over 80 and materials will again plummet and we'll be testing a lot of significant lines on our Big Chart – which is good, as we do want to see what holds up under pressure.

Also, keep in mind that it's already September 18th and we're just 3 weeks away from the official start of Q3 earnings reports but already, today, we have early reports from FDX, MANU and SHF and tomorrow we get AZO,CBRL, GIS, AIR, ADBE, BBBY and MLHR so earnings season has begun, official or not

As you can see from the chart on the left, expectations for Q3 could not be much lower but, just like 2007, despite deteriorating earnings quality people are BUYBUYBUYing stocks at record-high prices because we have faith that our Government and the beloved Fed will fix everything – so we will continue to ignore all those nasty facts and continue to party like it's 1999 – or 2007.

After all, the past has nothing to teach us – this time it's different, right?


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  1. stjeanluc

    Here are the oil lines today:

    R3 – 104.56
    R2 – 102.04
    R1 – 99.69
    PP – 97.17
    S1 – 94.82
    S2 – 92.30
    S3 – 89.95

  2. amitshenoy174

    Good Morning everyone

  3. Pharmboy

  4. stjeanluc

    More evidence that these exchanges are crooks (from Barry):

    http://www.ritholtz.com/blog/2012/09/nanex-disturbing-liquidity/

     

    On September 13, 2012, at 12:25:27, the December 2012 eMini contract experienced an evaporation of liquidity at such an alarming rate that it produced one of the most disturbing charts on market stability we have ever seen.

    Basically, about 80% of the orders resting in the book vanished in a second. To be sure, liquidity before major news events always dries up beginning 1 to 2 minutes before the scheduled time, but always, at, a, gradual, rate. This event tells us that either one firm controls 80% of this contract, or that algorithms have become dangerously susceptible to herd behavior and can be triggered to stampede in a heartbeat.

  5. 1020

    Good Morning!

  6. 2can

    Good morning from Vietnam.  I missed Friday and Monday's fun.   I was in a boat with no internet.  Damn!  I've  been waiting for the crash in the price of oil for what seems  like months.  It's a long time since I've seen a $14 spread  from S3 to R3 on your oil lines STJ.  I'm just going to watch oil today (tonight for me)  and try to get a grip on what the price is doing.  Hanoi is an insane expression of free market capitalism at the street level.  Building everywhere, with no vacant commercial space I've seen in 8 hours of bus travel.  The place is alive with people buying and selling on the street.  I have no idea what the climate for any major commerce is here.  It's one of the only one party communist states left besides Cuba, so it's not all roses.  2 kids per family, with already a huge over abundance of males, due to the cultural preference for males,  like in China where it's only one child per couple.  That means that there are untold numbers of female babies killed each year.  This place is still totally third world, with no ultrasound sex analysis for 95% of the people, so they don't know if they have a boy or a girl until it's born.  Cold, cold cold.   This info is from my gung ho communist friend of the last few days.  He's actually proud of the situation???.    anyway, it's a different world here on the otherside of it from the states.  We live in Disneyland compared to here. 

  7. Opesbridge

    Morning Everyone

  8. 2can

    Very very friendly people here by the way

  9. stjeanluc

    Oil / 2can – Yesterday was a huge more that probably wrecked the lines somewhat… $14 is certainly not a normal spread for the these S/R lines. I also track some daily Fib lines and it looks like $96.50 and $95.80 are in play now. Under that you have $94.65 and I said that $94.50 looks strong already. While above, you have a line at $97.08. Once again, not the standard lines but something in between that might help.

  10. stjeanluc

    Irony / 1020 – Irony lost on most I am afraid!

  11. 1020

    2can/female babies   Seriously?
     
    If that sh*t goes on, it would be hard to even imagine those people as part of our human race….. :(

  12. stjeanluc

    Romney's economic plan finally explained in details:

    ‘They’ll probably be looking at what the polls are saying. If it looks like I’m going to win, the markets will be happy. If it looks like the president’s going to win, the markets should not be terribly happy. It depends of course which markets you’re talking about, which types of commodities and so forth, but my own view is that if we win on November 6th, there will be a great deal of optimism about the future of this country. We’ll see capital come back and we’ll see—without actually doing anything—we’ll actually get a boost in the economy.

    Reaction from Todd Kelly:

    But if this is really all he has – if this is the secret plan he’s been keeping from us all since he began this campaign – then I was very, very wrong.  If this is the plan, than Mitt Romney has no business being anywhere near the White House, and he should never, ever be allowed to be Commander-In-Chief.

  13. nicha

    1020, 2can/ female babies – unfortunately very common in India. A recent report about aborting or killing female babies has raised new awareness on this issue. 

  14. 1020

    nicha – That's Sad…… I mean, where do they think little boys come from?…..sigh…. :(

  15. villashaka

    Phil- Call the Prez and have him do the SPR ! He will listen to you ( or at least comp him a subscription) and the American people might give you a medal of honor.

  16. 1020

    ….and yes, I'm Pro-Choice, but within reason…..

  17. millcreek

    zz
    props on your objective analysis from yesterday.
     
    i agree with you that there are a number of wild cards and many events (world and u.s.) seem to be at inflection points which will make the next 50 or so days critical to both candidates and the election.

    contrary to media opinion, this is anything but a slam dunk………

  18. lflantheman

    Good Morning!  

  19. lionel

    TZA sep 14 calls at .27c
    Bet that we follow Europe 1% down move

  20. stjeanluc

  21. jacalynm

    Before my father passed away Easter Sunday he was so fed up with politics he decided to run for President.  He put together his doctrine which mirrored a lot of Ron Paul's.  Since I can't write in my father's name because he can no longer serve if he won, I will stick with Ron Paul.  I'm not among the 47% who expect things for FREE and we have to pay the price eventually right??  Just glad my kid is 14 and not looking for a job here or in Europe. 

  22. morxlntway

    2can – my wife and i spend much of our time being friends to Montagnard people. They tell us many horror stories from family members still in Vietnam. It sounds like they are still very much a persecuted people being harrassed, jailed, robbed, beaten and even killed by the police because of their support of America during the war.
    Hopefully it isn't as bad as they say it is, but anything is not good.

  23. stjeanluc

  24. stjeanluc

  25. terrapin22

    2can – thanks for the report.  where else are u going?  I'm looking to go to Vietnam, Cambodia and Indonesia in January.  

  26. samz3700

    Phil -
    What are your favorite shorts right now – I had to close my positions in the face of QE3.
    Would you still wait until next week to initiate new short positions?

  27. stjeanluc

    Sorry, I was looking at the NFLX puts. Corrected spreadsheet now:

  28. dclark41

    1020/CHOICE
    Most of us are like you, but I find it hard to believe that anyone is "for" the act of abortion.

  29. 1020

    dclark – Yes, that would be hard to believe….

  30. dclark41

    Phil
    Would you consider covering the long XLF positions in the FAS money port.?

  31. lflantheman

    Virtual MoMo portfolio trade:   BTC  10 this weekly AAPL 705 calls for 5.10

  32. Phil

    Good morning!

    Nasdaq popped up quickly despite AAPL pulling back – that's worth watching but S&P (/ES) futures are much more important to watch at the 1,450 line to give us an idea of market direction and they are about 6 points behind the index.  

    Gold is popping back up as Evans says QE3 is just the beginning of all the crap the Fed is willing to do to prop up this economy:

    Chicago Fed's Charles Evans, a big backer of central bank stimulus, issues a full-throated defense of the Fed’s latest efforts and paints a bleak picture of the global economy: “[T]here’s a significant risk the global recovery might weaken further… If we continue to take only modest, cautious, safe policy actions, we risk suffering a lost decade similar to that which Japan experienced in the 1990s.”

    Dallas Fed's Richard Fisher offers a counterpoint - sort of – from Charles Evans' dovish view that still more could be done to stimulate the economy. The costs of QE outweigh the benefits, Fisher maintains, but at least the Fed is fulfilling its mandate, more than can be said of D.C. policy makers: "Instead of hammering the Federal Reserve, point your fingers at Congress."

    Don't forget, we expected a bit of a pullback this week and, so far, we're still looking very bullish.  I may point out things that are wrong with the economy in my morning post but we're not going to be fighting the Fed until China finally blows up.  Data still not too good but no one really pays attention to that anymore. 

    Shares of UPS fall 1.4% premarket after FedEx's weak outlook for FY13 disappoints. There's no getting around that the same "weak economic conditions" FedEx says it faces, will be a drag on UPS. 

     Redbook Chain Store Sales: +2.4% Y/Y vs. +2.7% last week. The decline in sales was due to weakness in apparel and back to school season. The report expects store sales gain of 1.9% M/M.

     ICSC Retail Store Sales: -2.5% W/W, vs. +1.0% last week+2.1% Y/Y, vs. +3.4% last week. Weather led to decrease in sales. The report expects store sales gain of 3-4% y/y. 

    The European Automobile Manufacturers Associationreports that new passenger car registrations fell 8.9% Y/Y in August as the sluggish trend in the industry shows no signs of abating. Key market Germany saw demand contract by 4.7%, while in France and Italy double-digit declines don't paint a pretty picture. 

    Ford (F) saw sales fall 29% Y/Y in Europe as the automaker decided against matching the discounts of rivals. The company appears to be waiting for Q4 when new models launch to try to stem its losses on the continent.

    It's just very hard to believe any of these moves in such a low-volume market and nothing matters until the BOJ does or does not do something about the Dollar (79.225) tomorrow morning.  

     Tuesday's economic calendar:
    7:45 ICSC Retail Store Sales
    8:00 Fed's Evans: 'Perspectives on Current Economic Issues'
    8:30 Current Account
    8:55 Redbook Chain Store Sales
    9:00 Treasury International Capital
    10:00 NAHB Housing Market Index
    11:30 Fed's Dudley: 'Regional and National economic conditions'
    6:15 PM Fed's Lacker: U.S. Economy and Monetary Policy

    At the open: Dow -0.2% to 13526. S&P -0.17% to 1459. Nasdaq -0.18% to 3173.

    Treasurys: 30-year +0.52%. 10-yr +0.32%. 5-yr +0.15%.

    Commodities: Crude -0.49% to $96.47. Gold -0.36% to $1761.65.

    Currencies: Euro -0.45% vs. dollar. Yen -0.14%. Pound +0.07%.

    10:00 AM On the hour: Dow -0.06%. 10-yr +0.3%. Euro -0.42% vs. dollar. Crude -0.57% to $96.39. Gold +0.03% to $1768.45.

    Market preview: Stock futures follow European markets lower amid concerns Spain will not seek assistance from the ECB's bond-buying program and FedEx reported quarterly resultsthat beat estimates but slashed its full-year earnings outlook amid rising costs and lower volumes. Spain's 10-year yield flirted with 6% but eased off after a strong debt auctionLater: NAHB housing market index.

    NAHB Housing Market Index: 40 vs. 38 expected, 37 previous.

    Wall Street analysts are anticipating a big jump in corporate profits going into next year, despite expectations for a dismal Q3.  It's all about multiple expansion, says BTIG's Dan Greenhaus. "Earnings estimates are coming down but the stock market is going up because people are becoming enthusiastic about likely central bank accommodation in Europe and the United States," Greenhaus says. "We've seen this movie several times before, and each time we've seen the market multiple expand. That's exactly what's happening now."

    What the Fed did last week has altered the way investors will need to look at the economy going forward, says Goldman's Jim O'Neill. The Fed has always had a measured approach to its dual mandate for both price stability and full employment, but its apparent now that's all changed. The focus now is far heavier on jobs than it is worrying about the inflation that critics worry QE will cause, O'Neill says. "QE infinity," as he calls it, is a sort of "shock-and-awe" move that's changed the balance of everything.

    Stock sectors that could do well if Democrats win in November are outpacing those that favor Republicans if they get control of the White House and Senate, according to an index created by LPL Financial. The move towards Democrats started back in April and May,” says LPL's Jeff Kleintop. But since the Supreme Court upheld health care legislation in June, it's been more dramatic.

    The Office of National Statistics says inflation in the U.K.fell to 2.5% in August from a reading of 2.6% in July. The slight drop was partially due to smaller furniture and gas prices. If the trend holds the Bank of England might have the momentum it needs for a fresh round of stimulus later this year with the central bank's target inflation rate of 2% in sight. 

    Cheniere Energy (LNG+4.7% premarket following a Reuters report that Tokyo Electric is in advanced talks to secure supplies of liquefied natural gas from North America as Japan seeks to cut reliance on nuclear power. Plentiful supplies have depressed North American gas prices to slightly over $3/mmBtu, while spot prices for Asian LNG are ~$13/mmBtu. 

    Brazil's petroleum regulator appeals an injunctionbanning Transocean (RIG) and Chevron (CVX) from operating in Brazil on the grounds the ban would harm oil exploration in the country. Among the repercussions of a ban would be preventing state-run Petrobras (PBR) from drilling eight new wells in its massive Marlim field northeast of Rio de Janeiro. 

    Norway's Petroleum Safety Authority says it is investigating a "substantial" oil leak at the BP-operated Ula oil field in the North Sea. Production is still suspended after the leak, which occurred Sept. 12. Ula's peak production was 52.4M barrels in 1993, or 143.6K bbl/day on average, but by 2011, production had fallen to 4.8M barrels, or 13.2K bbl/day on average.

     A plan by General Electric (GE) to put 85K workers on a high-deductible health care plan in order to lowers its mult-billion dollar health costs falls in line with the trend of other major corporations, but not without a painful side effect. The company's heath-care business has fallen off sharply as the use of advanced imaging including MRIs and CT scans slows down. By at least one estimate, spending on advanced imaging fell 28% over the last five years as more families are forced to cover the costs of the expensive service.

    RBC's Doug Freedman has downgraded the chip sector to Market Weight from Overweight, citing inventory issues, poor PC and telecom equipment demand, and a softening Chinese market. "The current cycle is unique in that semis have contracted three quarters only to exhibit one-quarter of recovery," says Freedman. INTCADITXN, and NVDA are receiving downgrades, though BRCM is getting an upgrade on expectations of rising chip content within the platforms it's a supplier for. 

    As Amazon (AMZNstarts collecting sales taxes on California purchases, Wells Fargo claims a September survey of 1,000 Texans indicates the respondents' Amazon shopping habits have barely changed since sales taxes began to be tacked onto their orders in July. 33% of respondents to a broader survey say they would shop less if they had to pay sales taxes, but Wells points out consumers often overstate their intentions. 

  33. gandhjo

    Hi lflan
    Regarding your AAPL OCT call trade, I was hoping for a little pullback in AAPL but looks like there is just too much momentum behind it.So, is it still a good idea to pick up APPL Oct calls right here or should I wait for a pullback?  TIA
    gandhjo

  34. flipspiceland

    @Felipe
     
    Once again, that li'l darling TASR is on the move.  Up into the $6.00 + range this a.m.
    Sell more 5.00  puts ???

  35. rustle123

    I might be premature but covered my shorts at a small profit from yesterday and if we pull back harder, will play for the stick.  Rather go with the flow right now than against it as insane as the market looks.

  36. dclark41

    rustle
    It's hard to be short ….after the last time we went short (last month)! Just trying to stay relatively balanced until BOJ results tomorrow.

  37. lflantheman

    gandhjo…I will be scaling more into AAPL longs on any pullback.  If you have no longs you scale in starting now.  I got rid of the covers awhile ago as I sense more strength in the stock.  

  38. rustle123

    In the last 2 weeks, Cramer has stated the following to look like the everyman:
     
    1. He had to go to 8 different banks to get approved for a mortgage (unless he was buying a huge building in NY, find that hard to believe considering he's worth 100 million)
    2. He bought a pair of khaki's from JC Penny's
    3. He goes to Bed Bath and Beyond and was lucky the woman behind him let him use her coupon.
    4. And he used to live in a car so he knows how tough things are.
     
    Please Jim Cramer, if you are reading this somehow, drink your Sodastream beverage.  Did wonders for Mark Haines.

  39. lflantheman

    AAPL hesitating at the psychological '700' mark, but if it gets to 705 we may get another leg up. 

  40. rustle123

    It's amazing, we were not down that much yesterday and the McClellan Oscillator dropped 100 points to a neutral +93.  I don't think I'm going short till I see a reading of over 200 on it.

  41. jyoti

    Phil / EWJ 
    What effect is Yentervention having on EWJ. I have begun to build a small position in the Jan 9 calls

  42. nicha

    Iflan/AAPL – 700 mark is big. I am waiting for it to at least close above it. 

  43. rainman

    DJI vol 35M

  44. 1020

    Phil – Keeping you informed while in L.A…… :)
    http://www.youtube.com/watch?v=1xzA-Op1soo

  45. Phil

    HFT/StJ – That is an amazing chart.

    Vietnam/2Can – I didn't know they has that problem there (or India).  Perhaps we need to contemplate business that will cater to the World's huge surplus of men in Asia.  

    Irony/1020 – Yes, very.

    SPR/Villa – It's not about the oil itself so much as making speculation too dangerous.  The more confident traders get that Obama won't release, the higher they can jack up oil.  That's why he needs to do it sooner than later.

    FAS Money – That dropped $400 very fast!   Still not confident selling calls.

    $25KPs – We're pretty neutral and waiting for direction

    Ron Paul/Jacalyn – Unfortunately, he has as little chance as your Father.  We need a viable alternate candidate – even Jessie Ventura was sounding good in an interview the other day compared to what is being offered to us.

    Shorts/Samz – I think TZA from yesterday (Jan $10/14 bull call spread) with an offset from the TWIL list and still AMZN but it may take a while to pay off.  I would want to have something now – not be 100% bullish.

    XLF/DC – I'm still nervous about selling short calls just yet.  Let;s see what the BOJ does tomorrow.

    TASR/Flips – It's my stock of the decade, I think $5 is safe now.

    Insanity/Rustle – I think if we get a good run today, that a short into the close may be a good idea.  LOL on Cramer. 

    Oil testing $97.

    McClellen/Rustle -

    NYMO

    NYSI

    EWJ/Jyoti – No effect yet, as they haven't done anything but, in theory, it should pop the Nikkei but it will be a "take the money and run" move.

    LOL 1020!

  46. lionel

    Always impressive to see algo bots in action
    Oil touched 95.4 and then drifted to 96.5
    Stj, your Fib lines worked perfectly today.

  47. jacalynm

    Phil I hear the kind of biz that caters to men in Asia is illegal here in the US!

  48. 2can

    STJ / Thanks for the detail on oil lines for today.  Truth is I'm hammered by a 5 hr. bus ride today.  I thought I'd be in the mood to trade tonight, and every nite while I'm here, but I think I'll go to cash and just wait till I'm in the right hemisphere to trade again.
    TERRA / Next stop is Hoi An, then the mekong, up by boat to Phnom Phen, Siem Reap, Bankok, Sukathai, and Chang Mai, then home to Texas.   Lots of travel  in planes, boats and trains in the next 3 weeks.  Thank God no more long bus rides.  
    My draft number in 1967 or 68 or whatever the year was, was 16.  I could very easily have been one of those names on the Vietnam memorial in DC, but thankfully God had other plans for me.  Now I'm here in person, where I was in spirit with my buddies who went to war that year.  Really is a memory trigger being here.  Floods of memories from the late 60's.  Thank you for your service Jrom and all you vets.   Have fun today guys, and make some money.  I'm signing off.

  49. rainman

    And around and around we go…
     
    Appeals court says tax-exempt groups can keep political donors secret
     
    (Reuters) – A federal appeals court ruled on Tuesday that tax-exempt organizations do not need to release the names of those who pay for political ads leading up to the November 6 election, turning aside an attempt by a Democratic congressman to force disclosure.
    The decision reverses a ruling by a lower court in March, and it came four days after a three-judge panel heard oral arguments in the matter.
     
    (Reporting by David Ingram; Editing by David Brunnstrom)

  50. rdn4evr

    Business taking advantage of a huge surplus of men in Asia – Wouldn't that be a War?

  51. rdn4evr

    2can – When in doubt, order Spring Rolls, and whatever you do, don't look at the food preparation area.

  52. amitshenoy174

    Any thoughts on AZO to do a earnings play . I am thinking it retest 365. thoughts..

  53. stjeanluc

    People actually do pay taxes:

    Taxes_Age

    At least the ones below the age of 60…. But lets not get facts in the way of a good myth!

  54. biodieselchris

    Phil – goo call on oil. For the rest of my life I'll listen to anything you say regarding the direction of oil. As far as articles that may shock the rest of the world but falls into the OBVIOUS category here's one on taxes looking at the last 65 years worth of data:
     
    "Well into the 1950s, the top marginal tax rate was above 90 percent. Today it's 35 percent. But both real GDP and real per capita GDP were growing more than twice as fast in the 1950s as in the 2000s."

  55. biodieselchris

    so, base don the yentervention idea, FXY calls are practically a guarantee right?

  56. Phil

    Europe closing down half a point + with Italy and Portugal down 2% , not good.

    Now we'll see if they've been keeping us down (doubtful) or if money coming back out of Europe has been holding us up as it moves to US equities (under the illusion that we're somehow safer).

    Asia/Jacalyn – We don't have to start it here….  Anyway, I'm thinking just a dating service or something – with that many single men, usually you either find them brides or there's a war in the near future.  Or maybe it's just time to promote "alternative lifestyles" for young Asian men.  

    And what RDN said.

    Sounds like a cool trip 2Can.  

    Donors/Rain – Oh when will those silly Democrats learn?  That fight is over, Democracy lost – deal with it…

    AZO/Amit – Boy, you like those expensive stocks, don't you?  Earnings should be good but guidance should be lowered so be careful with them.

    Good chart, StJ.

    Thanks BDC:

  57. Amalfi

    mrmocha / I believe it was you who talked about the SLW trade. I bought some weekly puts at 39.50 this morning and the stock has been moving down ever since. Is it a coincidence that the stock started to sell off when the European markets closed?

  58. dflam

    Phil: I like WIN for the dividend in my ROTH,but the stock had a good run up.Account is mostly cash. Hold off for a while? Any other recommendations? Thank you.

  59. amitshenoy174

    sold some BA-- jan 2014 60 puts from the TWIL list.

  60. rainman

    DJI vol 43.8M

  61. newt

    AMIT- Nice!

  62. zeroxzero

    Bio:  Careful linking causality to a single datum.  In the 1950s the import tariff structures were different, there was no tax-free "offshoring" of U.S. production [through transfer pricing], the saving rates were higher, averaging @ 8% 1960-1990, then falling to less than half of that 1990-2010 [both cause and effect], government spending as a percentage of GDP rose while tax revenues as a percentage of GDP remained stable BUT its corporate tax percentage plunged while it's social security component soared.   Frankly, I think the top marginal tax rate probably has had the least impact among the foregoing data mentioned. 

  63. Phil

    FXY/BDC – No, the opposite!  BOJ wants the Yen weaker and they will buy Dollars to make it happen.

    SLW/Amalfi – Also a likely victim of Yentervention.

    WIN/DFlam – Does that count as a single family home when they sell one?  I think it's a good but not great stock and, while the 9% dividend is attractive – it's just $1 and you can sell 2014 $10 puts for $1.55 and have built-in protection rather than owning shares.

    BA/Amit  - Very hard to imagine them failing the net $55 there. 

    Dollar 79.265 so don't blame it for the sell-off.  RUT holding 850 so far and S&P futures right on that 1,450 line so, of course they are holding here as it's a tough cross.  If we go below – very bad….

    Oil holding $96 so far but DUG moving up past yesterday's high so sentiment is against oil – we'll see if they survive today's close over $95 (2:35).  I would think not with all those open contracts. 

  64. biodieselchris

    Phil – ado you have an FXY play for tomorrow's anticipated news?
     
    Even David Brooks has some choice words for Rmoney

  65. rj_jarboe

    amit
    BA may get cheaper in the near future if the Engineers walk out.

  66. biodieselchris

    FXY — sorry, I meant puts not calls of course!

  67. biodieselchris

    Rmoney – who exactly is he trying to insult here? – my wife and I both work for federally funded companies (mine is defense, my wife's is NIH). It's one thing to call 47% of the country freeloaders (a coded euphamism for black and brown people), but when you're attacking white collar engineers, that's a different story. These rich, silver-spoon, holier-than-thou A-holes are so self-entitled, it's sickening.

  68. shadowfax

    biodiesel Romney
    There are reasons why no one should trust the man, don't be surprised by anything. This may be a deversion from the tea party problem. Keep them in and Romney doesn't have to win.

  69. scottmi

    PCLN – even Cramer pumped it the other day. why the hell is it still up??

  70. Inkarri19

    Hello All – Has anyone viewed Ray Dalio's latest video from the CFR(I just did)?  Any thoughts?  Comments?  TIA

  71. villashaka

    Phil- Are you anticipating a smackdown on oil or do you think the traders are going to get out of it- I have our SCO but I am thinking of selling the DUG Oct 19 puts to fund the  Oct 20 calls also… feedback?

  72. Phil

    FXY/BDC – I think there's more bang for the buck shorting the Dow but, if you want to gamble, the FXY Oct $125 puts at $1.20 are very reasonable with FXY at $124.89.  Good Brooks comments.

    Freeloaders/BDC – What kills me is the way the lump in people collecting SS benefits as "freeloaders" after they put that money aside (forcibly) during 40 years of work, only to get so screwed on retirement by people just like Romney who mismanaged their money that the monthly income they collect is so low it's below the tax threshold (one half SS added to other income is your taxable base).  I'm sure the "freeloaders" would love to be collecting $50K and paying a Romney-like $8K in taxes than living tax-free on $27,000 a year.  

    PCLN/Scott – Probably have t wait for earnings.  

    Dialio/Ink – Do you have a link?

    Oil/Villa – I think we may get another nice dip today but we'll know in 30 mins or less.  I haven't yet decided on course of action for SCO but Oct expiration still pretty far away.

  73. newt

    Shadow/ BIoD…. the thing I keep chewing on is why the GOP is putting up such lame ducks.  I imagine that in the context of time -two terms isn't a biggie. So the GOP gets everyone disenchanted with the nominees then in the third or fourth electoral cycle they put a person that, although off plumb, seems normal compared to the previous nominees.

  74. Inkarri19

    Dalio/Phil – Here you go:
    http://youtu.be/SFaRazMpxcM

  75. scottmi

    VLO/phil – going to keep going down do you think or expecting QE to bouy it back up? can you talk through how VLO fits in with current oil price, QE etc? thx

  76. biodieselchris

    Phil I'm gambling on Sept for FXY, hoping to catch a spike down. If I don't get it, I might buy some Oct's on Friday. As for DIA's I have 10 Oct 131 puts.

  77. biodieselchris

    time for a very special FU to the following:
     
    AMZN — FU!
    AAPL — FU!
    PCLN — FU!
    CMG — FU!
     
    (yes, most of these are down but not down enough). -5% please!

  78. bdybdy2

    Dalio – there is also a PDF linked from here:
    http://www.zerohedge.com/news/ray-dalio-how-economic-machine-works

  79. jromeha

    I dont think the Yen falls too much tonight…It seems like everyone is counting on it to fall so naturally it probably wont. The Yentervention wont be enough and it will probably appreciate…

  80. Pharmboy

    Come on … Make my day!

  81. denlundy

    Saudis offer extra oil to control prices

    Saudi Arabia has offered its main customers in the US, Europe and Asia extra oil supplies through the end of the year, a sign the world’s largest exporter is worried about the impact of rising prices on the global economy
    http://link.ft.com/r/8P1R88/QN9S2V/CWF1P/97PRFY/87AIKO/CM/h?a1=2012&a2=9&a3=18

  82. Phil

    Dalio/Ink – Thanks but 1 hour?  I need a summary…..

    VLO/Scott – It's tricky while prices are in flux but, generally, VLO gets screwed when prices decline as they are sitting on maybe a 10-day supply but the pump prices drop the same day.  They are coming off an up cycle which strongly benefited them for the same reason.  I certainly don't like VLO this high.

    FXY/BDC – Some Yenervention may be baked in and Sept (Friday) may get crushed if no action tomorrow.

    Thanks Bdy!

    DUG still heading up despite oil at $96.94 again – very interesting.

  83. cdel360

    AAPL/Iflan – If AAPL rejects 700 this week, do you have a mental stop for the position once time decay increases of front month calls?  I know your cost basis is down a few dollars already, so keep working that too?  I am new to this type of trade, but looks ok so far…

  84. 1020

    BDC – Great "Rmoney" article!  Sometimes the comments can be as insightful as the article they're about….
     

    DavGreg
    Marion, AR

    In 1980, about 30 percent of Americans received some form of government benefits. Today, as Nicholas Eberstadt of the American Enterprise Institute has pointed out, about 49 percent do."

    No, 100% do.

    Public Roads, Air Traffic Control, NOAA Weather, Railroad land grant subsidies, Corps of Engineers navigation projects, universal telephone service, universal postal coverage and countless other things that subsidize commerce come via Government.

    Agribusiness gets price supports & often subsidized water. Mining & energy extraction get subsidized access to resources on public lands. Timber & paper products business get subsidies every time they cut a tree on public land as the fees they pay are far below the costs.

    Wages earned today by many were possible by an education funded by Federal Grants, Loans or VA benefits. Even tuition paid at state schools is subsidized and all Land Grant schools are the recipients of a massive federal grant.

    Children watching Sesame Street benefitted from CPB funds. Food & medicine you consumed today has been tested under USDA & FDA programs designed to keep you from being made sick by them. And don't forget the cleaner water & air we have because of the Clean Air Act & Clean Water Acts.

    Many medicines saving lives this day were developed by tax funded research that was given to big Pharma. Sometimes the very Doctor treating you is put there due to a program to extend care to the under served.

    The list goes on, we just sometimes forget.

  85. jasu1

    Wow, /clv2 still climbing? 96.65

  86. craigzooka

    IRA Portfolio update!!

    The incredibly boring covered call IRA portfolio has finally ticked green again!  But enough of that, its that time of the month ro roll all of our positions from SEP to OCT and collect our rent (as Phil likes to say).

    +4 CHK SEP 18 CALL $2.23

    -4 CHK OCT 18 CALL $2.43 (Collect $80)

     

    +5 ACI SEP 06 CALL $1.34

    -5 ACI  OCT 06 CALL $1.49 (Collect $75)

     

    +2 MT SEP 15 CALL $1.41

    -2 MT OCT 15 CALL $1.73 (Collect $64)

     

    +1 RIG SEP 48 CALL $.08

    -1 RIG OCT 46 CALL $1.35 (Collect $123)

     

    +1 CLF SEP 41 CALL $1.71

    -1 CLF OCT 42 CALL $2.81 (Collect $110)

     

    +2 BTU SEP 22 CALL $2.89

    -2 BTU OCT 22 CALL $3.32 (Collect $86)

     

    For a grand total of $538 in rent on $30,860 deployed.  In other words for the month of SEP we collected 1.7% on our deployed cash.  Some other highlights, by selling premium only we have managed to reduce our cost basis on MT from 19.24 per share down to 13.90 (in 9 months) and our cost basis on CLF has gone from $53.30 to 45.00 (in 4 months).   

  87. Phil

    Looks like no big drop in oil today but Dollar at 79.34 is creeping up and NYMEX volume much lower than yesterday.   We'll need to watch the barrel count very closely.   

  88. jasu1

    Phil,
    if you are looking at /CL….TOS has the Nov futures rolled. October is /CLV2

  89. angelcur

    a Pakistani protester died yesterday after inhaling smoke from a burning American flag during an anti-US rally …. probably made in China..will it incite further violence that will be seen to have been brought about by 
    this protester's death by conFLAGration…

  90. jromeha

    ANgle lol!!!

  91. Jbur

    Afternoon All:   Ultra Easy Monetary Policy and the Law of Unintended Consequences
    While we have discussed most if not all of the issues addressed in this paper, I found it to be a good read. Several takeaways:
    1.  "Finally, there is the issue of serial bubbles. Mention was made above of the successively more
    aggressive efforts made by central banks, since the middle 1980’s, either to preempt
    downturns (eg: after the stock market crash of 1987) or to respond to downturns (eg; 1991,
    2001 and 2008). What cannot be ignored is the possibility that each of those actions simply set
    the stage for the next “boom and bust” cycle, fuelled by ever declining credit standards and
    ever expanding debt accumulation.
    2. "The case for ultra easy monetary policies has been well enough made to convince the central
    banks of most AMEs to follow such polices. They have succeeded thus far in avoiding a collapse
    of both the global economy and the financial system that supports it. Nevertheless, it is argued
    in this paper, that the capacity of such policies to stimulate “strong, sustainable and balanced
    growth” in the global economy is limited. Moreover, ultra easy monetary policies have a wide
    variety of undesirable medium term effects ? the unintended consequences. They create
    malinvestments in the real economy, threaten the health of financial institutions and the
    functioning of financial markets, constrain the “independent “ pursuit of price stability by
    central banks, encourage governments to refrain from confronting sovereign debt problems in
    a timely way, and redistribute income and wealth in a highly regressive fashion. While each
    medium term effect on its own might be questioned, considered all together they support
    strongly the proposition that aggressive monetary easing in economic downturns is not “a free
    lunch”.
    http://dallasfed.org/assets/documents/institute/wpapers/2012/0126.pdf

  92. jromeha

    Phil- may not have got a big crash but anyone who listened to your call earlier still wouldve made 80 cents… Thanks for the call which will be paying for my egg mcmuffins…Or in my case some Afghani scarves!

  93. mrmocha

    Amalfi / SLW – my original posting months ago was an SLW vertical spread for SEP, that one should expire at full value Friday.  More recently (pre-QE) I picked up some DEC spreads and sold puts, can't recall if I posted that one here, but those are doing fine too.  Thanks to Ben I am inclined to think that SLW continues to grind upwards until it nears its prior 52 week high, that is a common resistance point so watch 42.  Until then I will keep playing bullish on dips.

  94. zeroxzero

    I've come to understand that my inability to understand markets is not an intellectual problem, but merely a physical one; I feel much better already:  "The current theory holds that 73% of the Universe is dark energy, 23% is dark matter, and just 4% the kind of matter we know well."  http://www.bbc.co.uk/news/science-environment-19634700

  95. hoss18

    Understanding markets…ahhh, the illusion of control…ZxZ very interesting stuff, thx.

  96. mrmocha

    SLW – FYI to protect SLW gains when you don't want to directly cover it with short calls, you can use DOTM AGQ put or ZSL call spreads as disaster insurance; get them a few months out so you don't get too much rapid decay.

  97. 8800

    Inflan:
    Re risk in the MoMo arena: do you have a default percentage risk stop for option positions or is it strictly ad hoc?
    Noticed that the short NFLX calls rose to 1.81 after your 1.47 recorded entry, (20+% adverse move). At what level would you close the position at a loss?
    Thanks

  98. Pharmboy

    CLDX….nice.

  99. qcmike

    Pharmboy
    what do you the top for CLDX is  in the 3 months  7.5   ?
     
    Thanks

  100. Pharmboy

    SGEN – adding to the March 30/35 BCS @ 1.20.

  101. lionel

    Phil/ Roll VXX calls 14 ino calls 12 for 10c?

  102. 8800

    Phil,
    Your thgts on a sht term bearish play like  Sep (or Oct) TZA bcs,  14/18 on possible Yen interv this week?
    Thanks

  103. millcreek

    phil,
     
    tks for the rehab of the short fas 97/103 calls.  i now have the oct 108-111 bcs.  would it be good to hedge by selling some fas puts
    i.e. oct 104-105…tks

  104. pstas

    Craigzooka- is there a link to a write up on that strategy/method? I was looking for something a few weeks back but could not locate anything?

  105. nicha

    Pharm/SGEN – sell puts to finance those later?

  106. rustle123

    Will the ever reliable stick disappoint?

  107. Amalfi

    Thx MrMocha.

  108. stjeanluc

    Just read that Obama is practicing for his debate with Romney with John Kerry. Almost as stiff and richer than Romney… A natural I guess.

    Biden on the other hand is practicing with Pinocchio.

  109. snow

    Hmm. AAPL spike, guys. Interesting. NAS is a little slow noticing it.

  110. craigzooka

    Hi Pstas,  the method and strategy are quite simple and not interesting enough for a write up.  But to summarize, the method is Covered Calls selling at least one month out.  The strategy is to pick stocks which meet the following criteria, dividend paying, no bigger than .05 spread in the options, at least twice the volatility of the SPY, wouldn't mind owning them for 10 years should they drop.  That is the whole thing.  As far as the portfolio goes, we would be doing much better but we never got a big enough drop to get more than 30k of the 100k invested.  I will be updating the spreadsheet with the prices I quoted earlier.   

  111. Pharmboy

    Nicha – Oct 25s to finance.  That pays for 1/2.

  112. dflam

    Hi Phil: I bought AA at $10.22 and sold Jan $7.50 C at $3.55 for net $6.18. do u recommend any changes to this position?

  113. pstas

    Craig-thx- can you elaborate on the volatility i.e. 2x the SPY?

  114. diamond

    PhilA sneak peek at the iPhone 20. :-)

  115. 1020

    stjean/pinocchio   Thanks for the laugh!  :)

  116. Phil

    IRA/Craig – Good things come to those who wait – thanks….

    /CLV2/Jasu – Thanks, that makes a bit more sense at $95.41.  

    LOL Angel.

    TANSTAAFL/JBur – You would think this does not need to be explained to people.

    CNBC's attempt to spin Romney positive really sickening…

    Oil/Jrom – Congrats.  It remains to be seen how well they are doing getting rid of Oct contracts.  I'm still seeing a whopping 83,374 open – down just 15K from the open if true and that would be a catastrophe waiting to happen if that's the final number for today.   I believe they have just tomorrow and Thursday left to bring that down below 40,000 contracts (the most Cushing can possibly handle but that would then cause builds next month).

    SLW/MrM – Logically, gold and silver should climb.  I'd be more interested once we see what the BOJ does tomorrow.

    Matter/ZZ – And so you are finally ready to embrace the Tao of Tripper.

    VXX/Lionel – No thanks, if we don't get a Yentervention drop tomorrow, I want out of that dog.

    TZA/8800 – I think just buying calls (Oct $ 14 calls @ .80) as the BOJ not likely to have a lasting effect and the spread will make it hard to sell into the initial excitement.

    FAS/Mill – I'd be careful selling FAS puts until we know things are steady – hopefully at the week's end.

  117. lflantheman

    MoMo virtual portfolio trade:   BTC  the NFLX puts!

  118. lflantheman

    The trade:  NFLX puts Sept 57.5  bought to close 20 for .68

  119. shadowfax

    Volume red after the bell

  120. rustle123

    CNBC/Phil
     
    They can spin Romney any way they want.  Most people don't watch CNBC because they don't have money to trade so they don't know what CNBC is saying anyway, and the ones that do watch are Fox Republicans who are going to vote Romney anyway and also CNBC doesn't have that many viewers left to even spin things too.  John Hein on the Destination America channel which is only on FIOS I think got more viewers for his show Fast Food America than CNBC has at any point in the day.  I think an infomercial for the magic bullet doubles CNBC.

  121. millcreek

    phil,
     
    tks i will wait to see what changes etc you suggest for the portfolios……

  122. lflantheman

    That's for + 50% gain on those NFLX puts.  Sorry for the late post, but yesterday I suggested that I might take profits on this trade at + 50%.   If you still have them, that's fine.  You'll likely make even more $ within the next day or two.  But +50% on a 2 day trade is OK with me!
    8800/ your question about getting out of a losing sale of puts or calls.  Depends on the situation, but generally I will get out when I've made enough profit ( I like 50% plus) , or on friday I will plan to roll the position.    I don't buy these back just because they seem to be going the wrong way.  Usually I've thought through the trade enough to know which way it's going when I get in.  You can't get scared too early and get out.  That will lead to losses.  On these call and put sales, think ROLL, not exit.   And roll on Fridays.!

  123. rainman

    DJI vol 120M

  124. lflantheman

    cdel 360  2:04 post.   If AAPL rejects 700 this week…..I buy more calls.  

  125. Phil

    AA/Dflam – Too bad you didn't sell puts as well.  Jan $7.50s ($2.10) can be rolled out to the 2014 $8s ($2.25) which can put .65 in your pocket after a year (10%) so fine if you have nothing better to do.  You can be more aggressive and sell the $8 puts as well for .90 and now we're up to 25% total and that's worth keeping – which is why you are better off playing with less positions and playing both sides in the first place.  Even if you let 1/2 get called away at $7.50 and play the other half like that, you'll be collecting $1.05 against the net $8 put strike so your DD point is net $6.95 – still lower than your current net.

    Ipone 20/Diamond – Actually, I would buy one!

    CNBC/Rustle – True, they have become nothing more than a footnote.

    Chchchanges/Mill – I can't wait to see either.  8-)

    Great play on NFLX Lflan.

    Thanks Rain.

    Well, I'm off to meet with the Opesbridge boys – later all!

  126. lflantheman

    I'm going out to dinner with some investors.   See you tomorrow!  

  127. lflantheman

    I just noticed a TYPO.  Those were NFLX calls, not puts.  We sold calls on this ignoramus company on Monday and bought them back today.  And we aren't done with this mutt yet.  It's going down and we're going up with it.    :)

  128. newt

    FLAN- Thanks.

  129. craigzooka

    @Pstas,  If you load up TOS and look at the options chain for the SPY (S&P 500), it shows the implied volatility in OCT as 14.16%.  So if we are thinking about a potential addition to the portfolio, AFL for example, using the same procedure as for SPY, we can see that it has an implied volatility of 26%.  So, its pretty close to double the S&P volatility.  Why do we care about implied volatility you might ask?  If we assume that we are investing 100k in a property(stock) to rent,  the Implied Volatility lets us know how much we can charge for rent.  Using SPY as an example, if we buy the stock at 146.62 and sell the 147 OCT CALL for 1.51 we are using $14,511 in capital and hope to get called away resulting in $14,700 in cash being deposited in our account in exchange for the shares.  This gives us a profit of $189 or 1.302%.  The same calculation for AFL gives us a profit of 3.01%.  So the higher the implied volatility the harder our money is working for us.

  130. nicha

    Iflan – gotta remember to roll, not exit! Too often I exit only to regret. 

  131. newt

    Craig- Thanks

  132. pstas

    Craig- Thx, never thought of it that way- very good point. I just transferred a sizable IRA into TOS and looking at some methods to goose returns without taking on too much risk. Now I can sell covered calls and cash covered puts in TOS where I could not under the previous arrangement.

  133. Savi

    STJ—Obama Biden lol—will send it to my daughter

  134. craigzooka

    @Pstas,  I am going to write up and give a presentation on all the lessons I learned while managing the portfolio at the PSW meetup.  There are definately ways to goose the returns a little bit better which I might implement after the meeting.  I just wanted to prove that with time is your best friend and show the power of options decay.  Who knows, by the meeting in november every position might turn out to be a winner!

  135. 8800

    Iflan,
    'Thanks

  136. stjeanluc

    Glad to help Savi!

  137. stjeanluc

  138. Pharmboy

    From a Feb NYT article, but just showing that….um, the upper payscales are becoming more dependent upon gov't than the lower ones…. yes, yes, the lower ones do take more, but that is not the point….if you have lots of moola, you should need much, much less.

  139. Pharmboy

  140. 8800

    Phil,
    Thanks for the thgts on TZA and Yen interv

  141. diamond

    "Despite being light weight, it doesn't feel cheap like Android phones, say all the reviewers."
     
    iPhone 5 Reviews – Business Insider

  142. dclark41

    Phil:
    I loved your rant (one of your top 10) on oil today. I was listening to some "expert" on Sirius Radio today and she just couldn't explain why the price of oil dropped three dollars yesterday and another one today. Never once did she mention the lack of demand or the numerous barrels that have to be rolled at NYMEX. Just some kind of unexplainable event that no one can explain. AMAZING HOW THEY KEEP THIS BS GOING! BUT WE HAVE YOU THE MASTER OF CRUDE. Great write-up!
    How long will you sit on your short positions in the 25k portfolios?  If we do ever go down, it will probably only be a day-trade because of all the "QE dope" that is keeping this market from falling too far.

  143. dclark41

    (Reuters) – The Bank of Japan eased monetary policy on Wednesday by boosting asset purchases, as slowing global demand and heightening tensions with China hurt chances of a near-term recovery in the export-reliant economy.
    The central bank expanded its asset buying and loan programme, currently its key monetary easing tool, by 10 trillion yen ($127 billion) to 80 trillion yen, with the increase to be for purchases of government bonds and treasury discount bills.
     
    The race to debase is on!

  144. jromeha

    So Japan eases and the dollar falls!? Little frustrated I decided to short oil again! . Phil, do you have any 3AM plays to make money off these shenanigans?

  145. lionel

    Good call jromeha!

  146. jromeha

    Lionel- even a clock is right 2x a day.

  147. jfawcett

    Phil / WTI – Is there a chart that plots the Open Interest?  I noticed the October open contracts dropped (closed) tremendously yesterday.  Would be interesting to see visually the contracts dropping from one expiration and rolled elsewhere or closed.

  148. jromeha

    lol, should be BROKEN clock but Im sure you knew htat… I get 4-5 hours sleep max a day here so I make quite a few typos now.

  149. lionel

    Jromeha – Broken clock
    In our fast moving digital world, this expression will soon become totally obsolete :)

  150. lionel

    Jromeha/ Almost time to go long on 94.50 to play a weak bounce to 95.xx

  151. Phil

    Good morning!

    We got Yentervention but, on the whole, it was merely an extension of the existing program so little effect on the Dollar (bullish).  Asia loved it and popped about a point (and our plan was to take Nikkei/EWJ profits and run) but Europe is flat and our Futures are up only slightly.

    The BOJ joins the Fed, ECB and other central banks in announcing further easing, unexpectedly saying it will increase its asset-purchase program to ¥80T ($1.01T) from ¥70T, and lengthen the program by six months to the end of 2013. The BOJ also keeps its key interest rate unchanged at 0.0%-0.1%, and downgrades its economic assessment, saying "the pick-up in economic activity has come to a pause." (PR)

    3:10 AM Asian shares are broadly higher, given a shot in the arm by the BOJ's announcement of more money printing, with the Nikkei reaching its highest level in over four months. The move also weakened the yen, which is -0.4% vs. the dollar. Japanese  stocks+1.2%, Hong Kong +1.2%, China +0.4%, India -0.3%. 

    3:51 AM European shares track Asian stocks higher in early trading following news of the BOJ's plan to increase its asset-purchase program, although fears that Spain won't ask for a bailout are weighing on sentiment. What an upside down world we live in. Euro Stoxx 50 +0.65%, London +0.3%, Paris +0.7%, Frankfurt +0.5%, Madrid +1%, Milan +0.9%.

    5:13 AM The BOE's Monetary Policy Committee voted 9-0 to keep the bank's key lending rate at 0.5% and to leave the size of its bond-buying program at £375B, minutes of the MPC's meeting earlier this month show. While the decision on the asset purchases was "relatively straightforward," some MPC members felt that more stimulus will probably needed in "due course." 

    6:00 AM Overseas: Japan +1.19%;. Hong Kong +1.16%. China+0.40%. India closed. London +0.17%. Paris -0.04%. Frankfurt -0.02%.

    6:49 AM The dollar +0.2% vs. the yen following the BOJ unexpectedly increasing the size of its QE program. The Nikkei rises 1.2% to its highest level since early May. Key commodity prices are subdued at the moment. Can someone find an important central bank somewhere in the world that doesn't have a heavy foot on the gas?

    October oil is below $95 so it will be an interesting day there but, overall, it's doubtful we'll get a big correction off this news, which means we're going to be looking for more bullish opportunities overall.

  152. Phil

    3 am/Jrom – Sorry but that's when I was going to bed in LA.  I'll be home Friday (but still not likely to be up at 3 after landing at 12:15).  If the barrel count we saw was accurate – we still have a nice dip ahead on /CLV2 before it closes.  

     

    ck for
    Chart
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Oct'12
    -
    -
    -
    99.03 18:37
    Sep 18
    95.29
    -1.33 181913 96.62 83374 Call Put
    Nov'12
    -
    -
    -
    96.70 18:37
    Sep 18
    95.62
    -1.33 165161 96.95 317514 Call Put
    Dec'12
    -
    -
    -
    88.94 18:40
    Sep 18
    95.92
    -1.33 58606 97.25 203426 Call Put
    Jan'13
    -
    -
    -
    89.25 18:39
    Sep 18
    96.25
    -1.34 16894 97.59 109675 Call 

    Chart/Jfaw – The above chart comes from here.   I do remember seeing an open interest chart but don't know where.

  153. Phil

    Great graphic from the NYT about who pays how much in what taxes:

     

    click for ginormous graphic


    Source: NYT

  154. pstas

    Need some tech help if anyone can shed some light on this problem- I rebooted my PC running Windows 7 this morning and it came back up using a temporary profile which does not include any of my previous set ups, programs, etc. The message said to try rebooting to change this which I tried but no luck- same temporary profile. This never happened before so I am at a loss to figure out what to try to get it back where it was.

  155. lionel

    Thanks Phil for posting this graphic.
    Now tough job for Romney to try to re-explain why he really meant …

  156. rj_jarboe

    pstas
    Have you tried going back a week or so to the last restore point?

  157. pstas

    RJ- tried two different restore points – no luck but thanks for the suggestion.

  158. lionel

    And out before the housing data for 51c

  159. angelcur

    PHIL//LOL I am sorry I didn't have a chance to acknowledge you new moniker "THE MASTER OF CRUDE"…lots of guys are called you have been chosen!  TIme for new business cards!

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