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Thursday Finish – Best January Of the Century

JJC WEEKLY Wheeeee, what a ride!

We expected to flatline this week with my Monday outlook for our Members being: "Very tight ranges – possibly setting up to flatline into month's end. Which will make for a boring few days ahead."  Amazingly, even a nasty headline number on the GDP yesterday couldn't take us down (and the numbers were actually fine – see yesterday's post for commentary as well as Dave Fry's telling copper chart) nor could the Fed following it up by sitting on their hands do any real damage.  

We did get a dip in the Russell below 900 and that did trigger the TZA hedges we discussed last Friday but they are backed with the so far, so great DBA longs and we'll be happy to take a quick loss if the RUT recovers – but not until after the weekend.  In Friday's post, the trade idea was to sell the DBA Jan 2014 $26 puts for $1 (now .75) and buy the TZA March $10 calls for $1.40 (now $1.50) so that net .40 trade can already be cashed for net .75, which is a nice 87.5% gain on a 1% drop in the Russell and that's how our option hedges are supposed to work – you can commit a very small amount of capital to hedge protection and get a huge payback to mitigate your losses when and if the market turns. 

iWatch concept 4Even better, we only need these hedges to cover our assets while we dump our positions and scramble back to cash IF our levels break down.  As I mentioned at the top of last Tuesday's post, these are silly gains for a month and, when you make 1/2 of your investing gains in the first month of the year – it's more than prudent to get back to cash – because, statistically, it is far more likely that the next 6 months will disappoint you.  

Fortunately, we only set stops and our stops have not been breached but we're also raising those stops and adding some hedges – happy to give up a little of the additional, future, POTENTIAL gains in exchange for locking in what we already have.  We're also getting an opportunity to pick up some new entries in stocks that are taking a dip.  Even in "the stock we no longer talk about" because the low VIX is giving us such great opportunities to go long on stocks that have taken a beating (as well as inflation-protection ETFs like DBA and GDX).  

iWatch concept 3Just this morning I pointed out that we have another opportunity on ALU as they have pulled back from $1.79 on Monday to $1.56 as investors take profits ahead of earnings.  We've been in ALU since $1 and it's in our Income Portfolio but, we're very excited about their new 100G fiber cables that are already up and running in Moscow and now ALU is working a 17,500 km contract with AMX that will ad almost 20% to ALU's existing network.  And, don't forget, ALU gets to maintain those lines as well!

iWatch concept 6Like the stock we no longer talk about, ALU is a long-range growth story and the scope of their projected are beyond both the patience and imagination of most analysts and investors, so they don't get the props they deserve.  They also have some pretty good options premiums so a new entry we like on ALU would be buying the 2015 $1/2 bull call spread for .40 and selling the Jan $1.50 puts for .35, which puts you in the $1 spread for .05, with a .95 (1,900%) upside on net cash if ALU makes it to $2 in Jan 2015 against no more than .75 in margin that only lasts this year if ALU holds $1.50 with the break-even way down at $1.30 (down 16%) so we have a built-in hedge and a huge upside AND it's margin-efficient.  

iWatch concept 7That's how we like to set up long-term trades at PSW but we're also having a great time amusing ourselves with short-term trades while we wait – especially around these earnings reports. And we've had great fun sharing our trade ideas in the morning posts – as we do each quarter during the first month.  Tomorrow, we go back to our regularly scheduled programming, with more focus on the global fundamentals in the morning posts

In yesterday's post, we discussed shorting oil and now we're ranging from $98 to $97.50 in the Futures (/CL) but still a good chance to pick up SCO or the USO puts we had talked about until we finally break below the $97.50 line (about $35.30 on USO and $36 on SCO and a great place to go short again on /CL if you missed $98).  Yesterday's inventory report was no reason for $100 oil and the Fed was no help and we THINK the Dollar is finding a floor at 79.20 and should be back over 79.40 today, maybe even 79.50 (dare we dream?).  

iWatch concept 5I mentioned our NFLX bear put spread in Tuesday's post and that actually gave a cheap entry once again yesterday as NFLX poked back up over $170 but now it's calming down again and hopefully we'll collect the full 66% on that one.  

In yesterday's Member Chat we took the opportunity to grab GLD as it retested $160 (we already had long positions in our Income Portfolio) but, around lunch-time, we found 3 earnings plays we liked, which were:

Earnings trade/StJ:  Here's a fun way to play FB on earnings:  

  • Buy the April $31/35 bull call spread for $1.50
  • Buy the April $31/27 bear put spread for $1.25
  • Sell the weekly $31 puts and calls for $3.35

That's a net .60 credit on the spread and FB would have to move more than 10% to put you in trouble but it's still rollable and you also should be able to recover some of the losing side on the April verticals.  Seems like a fun play to do 5 of in the $25KPA to see how it plays out.  

On this trade we're taking advantage of pumped up earnings premiums AND the low-VIX longer premiums.  

JDSU/StJ – Lack of faith makes March $12/13 bull call spread just .53 with almost 100% upside and no premium.  All they have to do is show well and this will be the last time we see $13 on this stock and, if they miss – it can be converted by selling puts into the sell-off.  The Jan $12 puts, for example, are currently $1.70 so net $1.20 even if you do lose the entire spread and, if you lose the spread, then you'll get more than $1.70 for the short puts. 

LVS can be played to go up but not too far up by taking the June $52.25/60 bull call spread for $2.45 and selling the Feb $52.50s for $1.75 for net .70 on the $7.75 spread.  Would take a 15% (2x normal) move in LVS to blow you out and plenty of time to roll.  

Looks like we'll be 3 for 3 this morning as FB is down to $29.20 pre-market and that means we'll owe back (if we don't roll) the weekly $31 putter $1.80 back ($900 in our virtual $25,000 Aggressive Portfolio) but our $31/27 bear put spread will be worth at least $2 ($1,000 for 5 contracts) so that's another net $100 on top of the $300 credit we got for setting up the spread AND we are likely to have at least $250 more Dollars left on the bull call spread, free and clear now.  Not bad for a day's work!

JDSU hit it out of the park and we can look forward to the full 88.6% gain now, as long as they don't fall over $1 from their pre-market $14.20 and LVS did, indeed go up, but not too far at $54.50 pre-market so potentially giving $2 back to the short caller but the spread is well on track for a nice gain and, of course, we don't give our callers nothin' unless we have to and we have plenty of room to roll this one…  

We also added spreads on GMCR and GLW to our Income Portfolio, which I imagine will close out the month with ridiculous gains as it was already up a virtual 19.7% on our Jan 21st review and we had decided to stay bullish what is now 400 Dow points ago.  So busy, busy to close out the month and hopefully this is a pause that refreshes this week and not a move that pushes us back to cash but NO WAY do we let these gains slip through our fingers – we can always find something to trade tomorrow if we find ourselves in cash!  

In the meantime, we'll watch our levels closely as it's been a great year already.  


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  1. stjeanluc

    Oil Lines

    R3 – 99.19
    R2 – 98.71
    R1 – 98.28
    PP – 97.81
    S1 – 97.38
    S2 – 96.91
    S3 – 96.48

    Yesterday's high and low – 98.24 / 97.34

  2. newt

    Green text/ Zero: do you have a Mac?

  3. dplatt

    Phil/Yodi/PSW members
     
    The link for those who are interested in having a live trade room to supplement the chat feed here. This is a configuring and introduction to how to use G+ Hangout. Just like Skype or Facebook you must first make/have an account with G+ it is free. Follow the link below to set up an account. I believe it must be a google email account.
     
    https://plus.google.com/u/0/
     
    Once you have set up your account post your email here or email me at dplatt0056@gmail.com or search my email on G+ to add me to your circle. I highly recommend creating a new circle for PSW members.
     
    From there we can start a hangout with the click of a button! BAM! Live screen share, typing or talking and teaching without having to refresh the page! They also have a poker add on where we could all play some poker together! Virtual LV/AC Conference! Without the $400 price tag + flight + food. This is of course if Phil likes the idea…..?

  4. 1020

    Good Morning!

  5. Pharmboy

  6. dplatt

    Good morning 1020 :)

  7. 1020

    Who wears a wrist watch anymore?
    http://www.cultofmac.com/189414/will-apple-save-the-wristwatch/

  8. 1020

    Good Morning dplatt!  :)

  9. dplatt

    Actually I just tried it with Yodi and it seems all i need is an email to send an invitation to for the Hangout. Anyone else willing to try it out so we can figure this out? 1020?

  10. sgh225

    Wombat
    yesterday you told me "I posted a cheat sheet for beginners a few days back on spreads that may help, and the guys are generally pretty helpful."
    I searched the archives and couldn't find it. What day did you post it.? Or could you copy it again.
    Thanks 

  11. stjeanluc

  12. stjeanluc

  13. wombat

    morning guys //
    $DBA – popped back up this morning = still think we should hold over the weekend ? Actually, I wouldn't mind owning this baby – might sell some lower puts if theres any premium around 

  14. jabobeast

    pcln downgraded?

  15. 1020

    dplatt – Let me check with the wife…. ;)
     
    Sounds good – Let me finish my first cup 'o coffee and we'll see what Mr. Davis has to say…..

  16. stjeanluc

  17. dplatt

    1020/Yodi/PSW
     
    I'll open up another G+Hang if we can't get this one going before 10 am. I have an interview at 11 that I need to leave soon for. I'll be back around 12:30 to 1 PM EST. I'll post when I'm back on here. 

  18. stjeanluc

  19. Pharmboy

    WCRX…..nice.

  20. newt

    FB/ Phil: Thanks!

  21. 1020

    dplatt/G+Hang  I would need to get up to speed….the only "camera" I have, takes pictures and the only "mic" I speak to, lives next door…. :)
     
    Sounds like a great idea – Especially for the dyslexics (like me) in the room…..

  22. stjeanluc

    Starting to be a bit heavy to update…

  23. Pharmboy

    StJ – THAT portfolio is ridiculous….

  24. sgh225

    #next_pages_container { width: 5px; hight: 5px; position: absolute; top: -100px; left: -100px; z-index: 2147483647 !important; } Apple wrist watch:
    Remember Dick Tracy talking into his wrist watch. Or was that before your time?

  25. dplatt

    Hangout/1020
    You don't need a mic or camera to join though. You can type in chat here or in the chat box in the hangout and the goal would be to have Phil share his screen and talk to us about trades while we type things like questions and other trade ideas. Like the TOS Live Webinar stuff!

  26. mjjwo9b

    dplatt….  email sent.  I am on a short leash today and have to get out of here.  I think once you set up a Circle, it becomes easy to see who is on and what not…
    I really don't use the Google Exotica much.  Good learning experience.  

  27. dplatt

    Alright, gotta go to my interview… try again later. Think about it Phil!
     
    I got your email MJ, will add you when we try again later. 
     
    Last post explaining why I think this would be a great idea. 
     
     
    Phil/StJ/PSW
     
     
    We have been using google docs for quite some time now and I was hoping you would consider branching into some other google stuff. For instance google+ hangout. You can have a live trade room where we can share our screens live with at least 9 people (maybe more, not sure) at a time. I would do this sometimes with my investment club at college and it was really useful. Shoot me an email at dplatt0056@gmail.com if interested.
     
     
    this could be another way to share live trades and show live charts on TOS as you screenshare and teach us real time!!
     
     
    Please I hope you consider this! I have a lot of college friends I have talked you up to and they are interested in becoming members. This could help push them to take the plunge!
     
     
    It would also help those who aren't refreshing the page every minute to stay on top of the chats! 
     
    Looking at you Wombat/Pharmboy/Sgh!
     
     
    So what do you guys think?
     
     
     
    Peace! Be back around 12:30-1pm EST

  28. wombat

    StJ //Charts
    Perhaps so obvious I'm missing it. On all the charts that you so laboriously update,
    the orange is for spreads, but how do you tell if the positions have ben closed out ?

  29. wombat

    dplatt
    i have an auto-reloader thats actually pretty cool. You can set each tab individually.
    the issue for browsers is HTML anchors – already talked to PSW admin about that – being implemented shortly. 
    G+ may be cool for instruction and/or virtual conferencing, but I'm skeptical about using it as a daily. I like the go go girls.

  30. stjeanluc

    Portfolio / Wombat – Closed positions are moved to the top of the portfolio in the spreadsheet:

    https://docs.google.com/spreadsheet/ccc?key=0Anwf9je9MizqdGQzN2NZUjNfdjhrbjFwWlc1eDYtWnc

    It's the same for all the portfolio tabs.

  31. sgh225

    dplatt,
    G+ could help if it can get me the Mid Day report on time. Yesterday I received it at 5:02PM, that was the sent time too.

  32. Phil

    Good morning and Wheeeeeeeeee on oil already!  

    Nice plunge to $97 already and we didn't miss anything from staying out of the overnights as we had a nice, $97.85 entry at 8am.  .50 is great money, of course and very good for the USO and SCOs so no need to press our luck in the futures when we have longer-term short plays like those.  Hopefully, we get a silly run-up into nat gas inventories at 10:30 and then another sell-off when people realize it's not as cold this week. 

    There were about 3 pages of news and commentary in yesterday's chat this morning – certainly worth a look when you have time.  Note the strange pattern in the Big Chart, where the Dow and Nas are both below their 5% levels while the NYSE and Russell are over 10% – somethings going to give but we have not tolerance to wait to see if the next 5% lines fail as all the indexes are pretty much pressing on their next cross so our stops are going to be 3 of 5 failures of:

    • Dow 13,600 (now 13,920 – 2.2%)
    • S&P 1,480 (now 1,502 – 1.5%) 
    • Nasdaq 3,150 (now 3,153 – 0%)
    • NYSE 8,800 (now 8,900 – 1.1%)
    • Russell – 880 (now 896 – 1.7%)

    Hopefully, they won't come into play but really, these are ridiculous one-month gains so let's protect them.  You could say, to be fair, we should give the Nas 1.1% but, without AAPL down over 30%, the Nas would be 6% higher at about 3,350 so we shouldn't cut them a break because – if this rally is real – then AAPL must come off the bottom and the Nas should be the BEST performer of the next round – not the laggard. 

    We'll go over the earnings plays and portfolio moves later – after we get a chance to see how well we hold up this morning but hopefully we shake off yesterday's dip and move forward BUT, none of it matters until we see Non-Farm Payrolls at 8:30 tomorrow morning.

    Let's watch that Dollar – very low at 79.30 and the Euro is just saying no to $1.36 so far and the Pound is struggling to hold $1.58 but the Yen is making another run at $91.25, which is keeping the Nikkei happy at 11,145 and that makes an excellent short (/NKD) below the 11,150 line if our indexes begin to turn sour this morning.  

    At the open: Dow -0.11% to 13895. S&P -0.19% to 1499. Nasdaq -0.36% to 3142.

    Treasurys: 30-year +0.08%. 10-yr +0.03%. 5-yr +0.03%.

    Commodities: Crude -0.84% to $97.12. Gold -0.6% to $1671.45.

    Currencies: Euro +0.01% vs. dollar. Yen +0.02%. Pound -0.02%.

    10:00 AM On the hour: Dow +0.19%. 10-yr -0.08%. Euro +0.07%vs. dollar. Crude -0.81% to $97.15. Gold -1.07% to $1663.55.

    Market preview: Stock futures stay lower after worse-than-forecast weekly jobless claims and the largest rise in personal incomein eight years, with the S&P benchmark -0.1%. The main focus is the wave after wave of earnings reports. Facebook receives at least four downgrades and is -6.1% following its results, while AstraZeneca is-4.2% and Santander is -3.1%, although Qualcomm is +6.55%Later: Bloomberg Consumer Comfort Index, Chicago PMI, USDA Ag. Prices

    Up 5.31% so far this month, the S&P 500 is on track for its best January since 1997 – happy news for the "as January goes, so goes the year" crowd. Maybe of more interest: Apple – the S&P's highest-weighted member – is also the worst-performer, -14.3%. Has there ever been an instance when the index has done so well while its largest holding did so poorly?

    Bull market or prelude to a bust? (msn Money)

    Why Did Economists Get GDP Wrong? (Real Time Economics)

    Will the “Real” GDP Please Stand Up? (The Deflator Makes Big a Difference) (Advisor Perspectives)

    Growth Stall Obscures U.S. Consumer, Business Gains: Economy (Bloomberg)

    Their paychecks say "no, no, no" but their spending says "YES!" - The Bloomberg Consumer Comfort Index continues to deteriorate, sliding to -37.5 from -36.4 last week. Even those earning $100K or more – a segment that's been in positive territory for the last 3 months – turned negative at -1.3. The fall in Bloomberg's read is consistent with other measures of consumer attitudes amidst smaller paychecks this month.

    Dec. Personal Income and Outlays: Income +2.6% m/m vs. +0.7% expected, +1.0% prior (revised). Personal spending +0.2%m/m vs. 0.3% expected, +0.4% prior. PCE core price index flat% vs. 0.1% expected,  flat prior.  More on Personal Income and Outlays: December's special dividends were behind one of the largest income spikes in memory, with the BEA reporting a 34.3% jump in dividend income. The BEA also notes the effect of lump-sum SS benefits. Likely of more import is the miss on personal spending.

    Million-dollar home sales in California hit a 5-year high in 2012, rising 27% from 2011 to 27K homes, according to DataQuick. 7.8K of the sales were for cash, an all-time high. DataQuick's John Walsh notes buying activity at this price level is more influenced by a lack of other places for investment, rather than the strength of the economy.

    Credit in the U.S. ($56T and counting) is a supernova star, says Bill Gross – its expansion produces less and less heat and ultimately causes the star to consume itself. In the 1980's, it took $4 of new credit to create another $1 of GDP; over the last decade it's taken $10, and since 2006, $20. The comparison ends there, says Gross, as inflation rather than implosion lies ahead. Shorten duration, buy TIPs, look offshore for positive real rates of return.

    The average 30-year fixed mortgage rate had its largest weekly increase in 10 months, according to Bankrate, +11 bps to 3.77%. The 15-year rate rose 9 bps to 3.03%, the first time over 3% since September when the Fed launched its MBS purchases for the express purpose of bringing down mortgage rates.

    Initial Jobless Claims: +38K to 368K vs. 350K consensus, 330K prior (revised). Continuing claims +22K to 3.17M.

    Jan. Chicago PMI: 55.6 vs. 50.5 expected, 51.6 prior.   More on Chicago PMI: Employment 58.0 vs. 46.8 prior. New orders 58.2 vs. 50.4 prior. Prices paid 60.7 vs. 62.9 prior. Inventories 55.0 vs. 48.7 prior. 

    Canada's November GDP +0.3% M/M vs. expectations of +0.2%, and +0.1% in October; +1.3% Y/Y vs. expectations of 1.4%. Manufacturing output turned around, rising 0.7% in November following a 0.9% drop previously. The loonie is little-changed, right around parity with the greenback.

    Brazilian unemployment dropped to a record-low 4.6% in December from 4.9% previously. Still, the print missed expectations of 4.4% as the economy continues its sluggish growth. With inflation threatening to top the 6.5% target, don't look for the central bank to resume the recently-halted year-long series of rate cuts. After a tough 2012, Brazilian shares (EWZ) continue to lag.

    MasterCard (MA): Q4 EPS of $4.86 beats by $0.05. Revenue of $1.9B (+10% Y/Y) beats by $0.01B. (PR)

    Note my premise on Regional and Local banks is kicking in:  Regions Financial (RF) is downgraded to Hold at Baird which cites the stock's valuation. Bernstein joins the fun, downgrading to Sell. The bank beat expectations on earnings last week, but the shares have had a big run in comparison to most of the other regional lenders. Shares -2.7% premarket.

    Yay!!!!!  Annaly's (NLY) raised bid for CreXus has investors looking at what might be Annaly's next target – Chimera Investment (CIM+1.7%). Chimera fans expect an imminent release of audited financials (not doen since 2011), perhaps clearing the way for Annaly to submit an offer.

    More on PulteGroup (PHMQ4: net profit quadruples to $58.7M as revenue jumps 25% amid a recovery in the real-estate market. Net new orders +27% to 3,926 homes, backlog +82% to $1.9B. Expects continued rebound in housing market in 2013, "driven by record low interest rates, higher rent vs own costs, rising home prices and sharply lower overall housing inventory." Increases investment in land spend and development by $250M/year for 2013-2014 to $1.2B. Shares -2.6%. (PR) 

    Shell's (RDS.ARDS.B) Peter Voser tells CNBC he doesn't expect a major recovery in U.S.  natural gas prices, as prices rebound 24% Y/Y to $3.23/Mbtu: "It'll take a little bit longer until it comes back to a range that we think should be around $3-$5 or $4-$6, where most projects would make sense." Voser says Shell is on track in its four-year journey to deliver 30%-50% cash flow growth (Q4).

    More on Potash's (POTQ4 results: Sales volumes fell 17% to 1.3M metric tons; North American potash sales rose 39% to 600K tons, offset by a 37% drop in offshore sales volumes. Average realized potash price was $387/ton vs. $431 a year ago. Issues downside guidance for Q1, seeing EPS of $0.50-$0.65 vs. $0.68 consensus. Issues in-line 2013 guidance, seeing EPS of $2.75-$3.25.

    AutoNation (AN): Q4 EPS of $0.67 beats by $0.03. Revenue of $4.2B (+13% Y/Y) beats by $0.26B. (PR)

    UPS (UPS): Q4 EPS of $1.32 misses by $0.05. Revenue of $14.57B beats by $0.13B. (PR)  More on UPS' (UPS) Q4: Superstorm Sandy had a bigger impact than forecast, cutting into profits by a nickel per share. Average package volume per day rose in the U.S. 3% Y/Y to 16.2M and by 3.8% internationally. The company says it plans $4B in buybacks in 2013, a clear byproduct of losing out on TNT Express. Sees FY2013 EPS of $4.80-$5.06 vs $5.13 consensus. UPS -2.1%premarket. (PR) 

    Dow Chemical (DOW): Q4 EPS of $0.33 misses by $0.03. Revenue of $13.9B (-1% Y/Y) beats by $0.2B. (PR)  More on Dow Chemical (DOW) Q4 earnings: Sales volume flat for quarter, with 5% decline in Europe offsetting 5% growth in Asia. Ag Sciences sales +17%, Electronic and Functional Materials +3%, Performance Plastics +1%, Coatings and Infrastructure Solutions +1%, Feedstocks and Energy -9%, Performance Materials -5%. Shares -1.9% premarket. (PR)

    More on Pitney Bowes (PBIQ4: net profit more than halves to $110.34M, with last year's Q4 benefiting from a favorable tax settlement. Income from continuing operations almost doubles to $103.54M. Management-services business generates Y/Y revenue growth for the first time since 2008, rising 5%. However, revenues at N. American mailing segment -6%. Forecasts 2013 EPS of $1.85-$2 vs consensus of $1.91, revenue to rise 3%. Pitney Bowes (PBI +18%) races higher after reporting Q4 results. On a conference call (webcast), execs drop hints that a strategic review could be in place. In a nutshell: While an "ephiphany" won't be announced, key changes appear to be on tap for the company this spring.

  33. Phil


    The downside of Biotech investing:
      Celsion (CLSN-78.1% premarket on news that ThermoDox in combination with radiofrequency ablation did not meet the primary endpoint of the Phase III HEAT Study in patients with primary liver cancer. The study was designed to show a 33% improvement in progression-free survival. CLSN is conducting additional analyses of data from the trial to assess the future strategic value of ThermoDox.

    Harman (HAR): FQ2 EPS of $0.59 misses by $0.33. Revenue of $1.06B (-6% Y/Y) in-line. (PR)

    BlackBerry (RIMM) is cut to Sell at Credit Suisse, which sees neither a buyout (at these prices) nor a break-up of the company as likely. The analyst team sees BlackBerry's value at about $3.1B, or a 40% discount to the current price. Shares -4.4% premarket. 

    It's apparently time to take profits in Facebook (FB) following its big run as BMO, CIti, and Sifel all downgrade the stock following the earnings beat. BMO's move is notable as it comes one month (and more than 20% higher) since the firm tossed its bearish stance and upgraded to Buy from Sell. A nice trade. Shares -6.6%premarket.

    Today’s tech boom is just the beginning (TechBiz)

    Three breakfast reads:

    1) Reality Bites: Economy Begins To Shrink As Fed Goes Broke 

    2) Amazon's Circus: Good, Bad, And Ugly 

    3) SPY Turns 20, But Is It Still Relevant?

  34. Phil

    Bye-bye NFLX – thanks for playing!  

    Oil getting no bounce traction at $97.17.  

    Google thing/DPlatt – Remind me on the weekend or I'll forget.  

    Watches/1020 – I never wear them but if they were more useful I might.  Better than Google goggles and, as I said long ago – I think the next big thing is really going to be a phone that is only the thing in your ear, run by Siri.  Think of Star Trek – they don't walk around with goggles on all day, they just ask the computer whatever they need and it answers them – you don't need to look 90% of the time if you have competent AI.  From my CEO days, I think of it like having people report up to me – most of the time, I just need the verbal summary and not the report itself.  

    Draw on nat gas not enough and /NG drops 2% – oil still $97.25 but I doubt they hold it: 

     EIA Natural Gas Inventory:  -194bcf.

  35. rperi

    Phil or anyone, what symbol do you use for the Yen on TOS? Thx

  36. Pharmboy

    Good bye CLSN……

  37. yodi

    Just one interesting fact on Hotel costs N. Orleans superball average cost 249.00 per night still can not digest AC 279.00???

  38. dclark41

    Phil:
    What's up with the dollar drop?

  39. Phil

    FB coming back to pin the tail on our range – oh boy is this great!  

    FAS Money – Very nice with XLF at $17.35 and FAS at $141.76.  

    AAPL Money – Whittling away at the losses.  Still not willing to quit on SQQQ longs (now $36.50) until next week.  

    $25KPM – No way on AAPL but ultra-slim chance of a $20 pop is better than cashing in $360 remaining on calls. That trade is 1/2 the net loss of the portfolio but was worth a shot.  

    $25KPA – VMW coming back, FB threading the needle (sorry for the pain in the ass spread, StJ), all good otherwise.  

  40. scottmi

    YEN/jperi -  /6J

  41. yodi

    GOOG weekly will not die rolled for 16.60 now 16.55 as Phil will say we will see tomorrow right Phil?

  42. scottmi

    rperi that is.. !

  43. Pharmboy

    Bah humbug….inflation.  Gold says no….treasuries say no…..Japan is our guide.

  44. Phil

    Dollar down as Euro pops back to $1.3588.  Dollar now 79.17 and oil back to $97.50 for yet another shorting opportunity (/CL). I suppose bad unemployment number means maybe more Fed and a weaker Dollar is the logic they're pursing today but why would that be good for oil?  

    Nat gas seems to have found bottom at $3.25.  Gasoline tested $3 but recovered.  

  45. stjeanluc

    I'll recap the earning plays this weekend when I update the Income portfolio as well as the Strangles portfolio (that is doing well, thanks to the AAPL recovery now).

  46. wombat

    StJ // Trifecta
    Wow. LVS / JDSU

    Question – How do you handle an earnings spread win like these ?
    Do you close them right away or do you let them run ?
    For example
    JDSU popped +19%, I'm up +0.30
    LVS popped +5%, I'm up +2.70   ( because I sold the Puts as well )

    I'm not sure how the greeks would effect the spread / 

  47. samz3700

    Yen is usually usd.jpy  - 
    Yen etf is fxy 

  48. stjeanluc

    Them old oil lines doing pretty well today – hit S2 almost on the nose. 

  49. scottmi

    CL – colgate quite a drop

  50. scottmi

    SODA finally giving it up?

  51. rperi

    How does /6J relate to the Yen price Phil quotes, i.e. 91.25?

  52. samz3700

    NYT announces months of Chinese Military Hacking of Newspaper after reports by paper about wealth accumulated by 
    members of Wen Jiabao's family 
    These guys are so bad and so petty as well

  53. Jbur

    Phil: thanks for the heads up on CHK yesterday. Cashed my putters yesterday pocketing 50% in 60 days: which is great considering I would have had to wait almost another year to get the 2nd 50%. No worries here.

  54. Phil

    DBA/Wombat – That's a long-term inflation hedge that's good to own.  Still very cheap.  

    PCLN/Jabob – Airline reports not so strong so far.  Shatner-mania wore off again. 

    You're welcome Newt.  

    $25KPA/StJ – I'll try not to add new ones until we close out currents.  

    Tracy/Sgh – Yep, I remember.  

    G+/Dplatt – If it's a 9-person limit, that would be a huge problem.  You may need to find something that a lot more people can do.  And I'm not even considering doing it during the day – would be way too distracting but after hours or on weekends once in a while might work.  

    SODA finally getting realistic.  

    Mid-Day Report/Sgh – The 6pm EST PSW Report Email that goes out every day at the same time INCLUDES the post TITLED "Mid-Day Report" that was originally published at 1:40 PM under the "All About Trends" tab on our site.  We can't send out a new Email every time a new post goes up on our site – you'd get 50 a day!   That particular report pretty much comes out at exactly 1:40 every day while the "Option Review" is a bit more random but usually between 1 and 2.  

    Yen/Rperi – Well the contacts are USD/JPY and FXY is the ETF.  

    $279/Yodi – Try $500 a night at Caesar's, LV.  I wouldn't stay there if I had to pay it!  Anyway, you thought it was 2x $279 so consider it a bargain.  

    GOOG/$25KP, Yodi – Yes, we'll just have to roll it again. The $740s are currently $14.50 and, if we go out 2 weeks, the Feb $745s are $15 so drop .50 in our pockets and gain $5 in strike and we're well covered with a few months to work it out – no biggie…

    CHK/Jbur – You're welcome, good timing as it was a nice pop.  

  55. 1020

    Yodi!  What's 3 grrr to spend a Spring weekend in Atlantic City , hours in a conference room with Phil and other people you have never met…. What's not to like?….. ;)

  56. yodi

    Phil I am not sure if I should say suckers or monkeys " $279/Yodi – Try $500 a night at Caesar's, LV." but my wife asks me how many times do they change the sheets during the night? I am not surprised thinks are going out of control. I watched the other night on D. Welle how the poor people are living in the canals of LV, quite a price difference.!

  57. stjeanluc

    Earning plays / Wombat – It depends on how greedy you are. You are talking about returns in one day that beat what you get in one year with your savings account! Do that 250 days and you are doing well… Earnings plays come back 4 times a year in any case.

  58. yodi

    1020
    THE PRICE SEE MY NOTE ABOVE!!!!

  59. wombat

    Phil // 
    LVS / JDSU – both hit on earnings – not sure how to handle the spread ( can you look at above post to StJ ? )
    DBA / I agree, selling 2015 $26 puts at $1.55

  60. Phil

    JDSU/Wombat – That was simply the March $12/13 bull call spread at .53 and now it's .90 so you can just close it out now for a .37 gain (70% in a day) or wait until March for the other dime (11% more than the .90 you could cash now).  That's the downside of spreads – you won't get paid in full unless you are patient.  

    LVS/Wombat – That one was the June $52.25/60 bull call spread at $2.45 (now $3.25) and short the Feb $52.50s at $1.75 (now $2.50) and, if you sold the puts, that's a bonus.  With LVS at $54.26, the $52.50s are only worth $1.75 but again, IF YOU ARE PATIENT.  If you feel you must constantly act on every position – then not so good.  This was not a day trade, or we wouldn't have gone with a June spread.  That spread is now $2 in the money and we only paid net .70 for the spread so very good so far and, obviously I would hope, the goal is to roll the Feb short calls to March whatevers (the $55s are $2), once the premium wears off.  

    11:00 AM On the hour: Dow -0.01%. 10-yr -0.06%. Euro +0.06% vs. dollar. Crude -0.6% to $97.35. Gold -1.04% to $1664.15.

    Freddie Mac's latest weekly survey shows mortgage rates continuing to tick higher. The 30-year fixed-rate averaged 3.53%, up from last week's 3.42%; it's the first week the 30-year fixed has averaged above 3.5% since Sept. 13. The 15-year fixed averaged 2.81% vs. 2.71% a week ago. Last year at this time, the rates were 3.87% and 3.14%, respectively.

    Pension issue solved. The struggling Hellenic Pension Mutual Fund sees a 75% gain in assets in six months thanks to a big mid-summer bet on Greek government debt. "It was clear to us the country would stay in the euro," says the managing director.

    "When private equity works, it really works," says Stephen Schwarzman on the Blackstone (BX +7.2%earnings call. Indeed. Once high-water marks are hit, carried interest goes right to the bottom line … and they're getting hit. For Q4, RCI in P-E was $45.5M vs. -$28.4M a year ago, in Real Estate, $91.1M vs. $3.5M, in Hedge-fund solutions, $76.3M vs. $4.1M.

    Brave or foolhardy? Francisco Blanch, BofA's head of commodities research, reckons West Texas crude could temporarily fall to $50/bbl in the next two years, as the U.S. and Canada between them are set to increase output by more than 800K bbl/day thanks to surging shale oil production, and the global demand picture also doesn't look rosy. 

    Oh look – more oil:  Statoil (STO) reportedly is in talks with Azerbaijan’s state oil company Socar to take a major role in developing a cluster of fields centered on the Umid gas discovery, based on a similar model to the BP-operated Azer-Chirag-Gunashli project in which STO is a partner. Umid may be similar in size to ACG, one of the world’s largest oil and gas fields with remaining recoverable reserves of up to 6B barrels.

    ConocoPhillips (COP -4.7%) stumbles nearly 5% a day after issuing a disappointing 2013 production forecast of 1.475M-1.525M boe/day, with a significant Q2-Q3 dip due to seasonality, planned maintenance and project tie-ins. “Production will decline in ’13, and [COP] will need to show as we move forward that they can grow off that 2013 base," according to one analyst.

    Priceline (PCLN -2.4%) and Expedia (EXPE -1.6%) slide after Morgan Stanley's Scott Devitt downgrades Priceline to Equalweight. Devitt sees Priceline posting a bookings CAGR of 19% over the next 3 years (down from 46% over the last 3) and also expects EBITDA margin to fall by 220 bps over this time. Tougher European competition from Expedia, Google's (GOOG) online travel efforts, rising travel search ad costs (good for Google), and a shift to mobile bookings (Priceline is better at monetizing PC activity)  are also concerns.

    Wal-Mart (WMT +0.5%) says it's working with suppliers as increased demand for gun ammunition has shelves nearly empty in its gun sections. The company will ration ammunition sales to three boxes per customer for the short term until supplies catch back up. Analysts think the gun demand rush has brought a marginal benefit to Wal-Mart's store sales with buyers presumably picking up incidental items along the way to checkout.

    Holy over-reaction Budman!  Beer shakeup: Constellation Brands (STZ -24.2%) dives after the DOJ files suit against Anheuser-Busch InBev (BUD -5.1%) to block its takeover of Grupo Modelo. A no-go on the A-B deal is bad for Constellation Brands because it was all set to export Modelo to the U.S. so that the deal might be more palatable to regulators. According to the Nasdaq website, STZ is currently halted for hitting a volatility level. 

    Core Labs (CLB +8%) is upgraded to Outperform with a $150 target price, up from $110, at FBR Capital after a "very strong"Q4 and outlook. The firm thinks CLB should benefit from continued beat-and-raise quarters and upward Street earnings revisions in 2013. Given CLB's attractive niche, "investors looking for a pullback before getting more involved in the stock could miss the boat all together."

    Just about anyone competing with JDS Uniphase (JDSU+17.7%) in a major way is higher after the optical component/test equipment firm beat FQ2 estimates and issued healthy FQ3 guidanceFNSR +10.8%OCLR +10.5%NPTN +4.3%OPLK+4.7%EXFO +6.6%XXIA +1.9%. Telecom equipment makers are also up, lifted by both JDS and Ericsson's results: INFN +4.4%CIEN+6.4%ADTN +2.7%JNPR +2.6%PKT +3.6%ALLT +3.2%. JDS mentioned on its earnings call "recent announcements and customer dialogue" bode well for 2013 telecom capex. - This is the problem with earnings though.  Now it will be harder to bargain-hunt in this area.  

    M&A action also killing all the bargains: International Game Technology (IGT +2.1%) and SHFL Entertainment (SHFL +3.7%) get a boost after Scientific Games pulls off of a blockbuster deal in the gaming sector. Wells Fargo's Cameron McKnight says a wave of consolidation in the industry has been discussed for years, but until today M&A activity had been light.

    Ericsson (ERIC +9.9%) has surged to new 52-week highs after trouncing Q4 estimates thanks to very strong North American demand (fueled by LTE buildouts from U.S. carriers). The mobile infrastructure leader also saw healthy Japanese demand and 19 new contracts for its Smart Services Routers, which handle both mobile and wireline traffic. China (declining 2G orders) and India (low investment activity) were relatively soft. Alcatel-Lucent (ALU +5.8%) is up in sympathy. (PR - .pdf) 

  61. biodieselchris

    PCLN might be setting up for another way-out-of-the-money put play for earnings (Feb 25). Tat's far away of course, but keep it on the radar. Sometimes these things turn $20 into $3000.

  62. rperi

    Thanks Phil and everyone.

  63. wombat

    StJ //
    Noted, but I'm trying to figure out the mechanics a bit. For example – would you let the puts on LVS expire and close the spread? If the stock keeps rising in the next week, would the spread change that much ?
    Would you break the spreads and just ride the longs for a few days ? or would you just simply close them down, take profit and move on //
    sounds like the latter
    ( perhaps thats why I have $37 in my savings account ; > )
    thanks // not trying to be greedy, just understand how these are affected by time. 

  64. wombat

    StJ //
    Phil //
    Thank you thank you thank you !!!!  This is exactly what I was looking for //

  65. biodieselchris

    I predicted bitcoin would be the best performing currency of 2013, but I didn't think it would be up 57% in one month.

  66. 1020

    BDC – Hope you bought some…. ;)

  67. 1020

    Good call btw….

  68. yodi

    Let me see who gets it
    New long play on MT stock has come close to 17 again
    Jan15 bull call debit spread 15/20 @ 2.25
    Jan15 sell 15p @ 2.53
    4 off them
    Max profit 2072.00 at 20
    lower protection 14.82
    profit at todays stk price 985.00
    Cost of the trade 92.00 credit
    PM margin 266.00
    and for good measure you can start selling 1/2 Feb13 for .18 or better more than 1% in 15 days

  69. jasu1

    Phil/ Pharmboy…
    Any interest in TEVA   Sell the $32.5 P for $2.6…Thanks in advance

  70. rpme

    Phil, what is your position on Regional Banks?

  71. ed3524

    Phil,
    Wynn earnings report is due today AH. any suggestion?

  72. sgh225

    My quotes say I can buy TZA Jan14 12/16 for .63 and sell.
    I think we bought them at .75 earlier.
    That looks good to me if it bottomed 2 days ago.
    What do you think? Double up?

  73. zeroxzero

    Phil:  I would mirror rpme's regional bank question, and extend it to real estate, which is now one of the least favored sectors.  I never entered the homebuilder/HOV stuff you posted last year, but [per that Merrill Lynch piece, among other info] methinks that setting up some U.S. real estate plays may make sense right now.  ????

  74. wombat

    Phil // LVS
    Thanks again. I was wondering why you had a June spread on it if it was 'wham bam thank you ma'am '.
    My net for the spread was the same but the Feb puts I got for $2.60
    "the goal is to roll the Feb short calls to March whatevers (the $55s are $2), once the premium wears off."
    Here you're talking about repeatedly rolling the Feb PUTS once they hit Theta-land, right ?
    What is theory or thinking behind what strike you roll to ? 
    Did you get my 'confession' letter on CVLT ?

  75. zeroxzero

    Pharm:  Are we out of Celsion, I assume? I got lucky and took profits awhile ago, thank you, I've only $155 of it now — any reason to buy?

  76. wombat

    LNKD reports 2/4
    thoughts ? P/E 826

  77. dplatt

    Back! Interview went great but I think they think I am over qualified. (Just passed my CFA level 1 exam this past December) 
     
    i'll be posting the link to the ghang as soon as i finish lunch. 10-15 min.

  78. stjeanluc

    Earnings today (average move / priced into options):

    MTW – 6.5% / 8.5% (no whisper) – maybe these guys benefit from housing / long-term play?
    WYNN – 5.8% / 4.3% (no whisper)

  79. snow

    CHK/all – I'm holding some CHK still, happily selling calls against it whenever it acts like it's going to sit still or even drop for a time. It seems to be settling after the CEO leaving pop, but Motley Fool's putting out speculation that CHK's a takeover target, with Chevron the most likely consumer. Anyone have thoughts on the credibility of this, or can I go sell call again?

  80. Phil

    Changing sheets/Yodi -  I don't know why poor people would live in a canal in Las Vegas with the deals I'm still seeing on real estate down there – there was something like a 50% vacancy on apartments for a while.  My pet peeve at the Mandarin Oriental is how many times they do come in and clean up your room.  Every time I step out for more than 15 mins, I come back to a clean room – it's kind of annoying!  Since I work during the day when I'm there – it must be once an hour that someone comes to the room to do something with the bathroom, the sheets, the mini-bar, the coffee/tea area….  Oh well, noblesse oblige, I guess.  I never like being served but I do like people cleaning up after me so I take the good with the bad. 

    PCLN/BDC – Yep, that's the way to play them, like our Long Puts from last year.  

    You're welcome RPeri. 

    You're welcome Wombat.  

    Great call on Bitcoin BDC.  Maybe AAPL should print their own money….

    MT/Yodi – Very nice but they do pay a .64 dividend, which may shift the scales towards ownership as you can buy for $17.11, sell the 2015 $15 puts and calls for $6.75 for a net $10.36/12.68 buy/write and you collect another $1.28 in dividends (6.7% annualized) and that drops the net/net to $9.08/12.04 with a 65% total profit if called away at $15 (12% lower than current price).  It's about the same as our Income Portfolio play but we had a $16.78 entry and we sold the $17 puts with the $15 calls.  

    TEVA/Jasu – I like them long-term at this price but they just guided 2013 down and one of their big drugs is going off patent in 2015 and that's another 20% of their revenues to make up between now and then so quite the handicap they run under. Of course, then they will hopefully get more drugs but they operate more like PFE and MRK now and less like a pirate that swoops in and picks off the spoils so it's not like their multiple should be too much higher (and their dividend is much lower).  So, I would just sell 2015 $32.50 puts for $2.40 to net $30 and, if you want to be more bullish, you could do a bull call spread, like the 2015 $37.50/42.50 bull call spread for $2 and then you have a .40 credit with a net $32.10 entry (16% off) and a $4.60 upside but I'm not thrilled by the whole thing.  

    Regional Banks/Rpme – I think it's hard to make money in a slow economy with super-low rates and regulators breathing down your neck and no way to reach out of the country to widen the spreads so no, not liking the regional banks so much until we're adding 300,000 jobs a month.

    WYNN/Ed – Tricky to call but should do well.  Like LVS I think they have a rough time getting over $130 and you can sell next week $130s for $1.65 and pick up the June $130/135 bull call spread for $1.70 – just playing for the volatility crush.  

  81. ed3524

    thank you very much,Phil  (WYNN)

  82. dplatt

    Link to join the hangout!!!!
     
    Not sure about the capacity, and it is only a first time trial run but I will be sharing my screen to go over some charts in TOS that I am watching for potential plays.
     
    https://plus.google.com/hangouts/_/9056b6375cc7e60a74c0bfb71c2c58df8f21df4e?authuser=0&hl=en
     
    Not sure if you will need to create an account or login first but it is free and relatively fast to create an account.

  83. Pharmboy

    Zero – we were out a long time ago…and I was not into playing them. 

  84. qcmike

    Phil 
     
     
    WFR what is the current trade, I do not see it in the Income Portfolio 2013
     
    Thanks 

  85. qcmike

    Phil




    Thanks for FB

  86. stjeanluc

    QCOM / Scott – Continuing yesterday's conversation. I am glad I sold my weekly 67.5 yesterday. Looks good now. Might collect another $2 just playing the earnings over the next 2 years.

    Right now, selling long dated calls against the longs doesn't look very good – the Apr 70 are only $0.95 and I don't like the 67.5 for 3 months. I'll see what the market does tomorrow after the job numbers but I am tempted to roll to next week 67.5 and collect another 0.30 for the week. That 2x what I need to pay off the longs. And we'll see if volatility comes back and get paid better on longer dated calls.

  87. palotay

    Phil,
     
    Back in 2011 I got aggressively short NFLX around $250 due to numerous articles I read about how unsustainable their financial position was.  I purchased a Bear Put spread on leaps a year out, and sold calls a year out to pay for the spread.  The position went against me hard, as NFLX went all the way up to $300ish and the increased margin requirements (duh) wreaked havoc in my account.  I was fortunately able to stay in position, and enjoyed the epic fall for a massive gain.  Now NFLX is up to its old tricks, they have very low amounts of cash on hand, and have billions in content acquisition payments due in the coming years.  ($1.6 billion due within the year).  I'm trying to formulate a less risky strategy to play NFLX short.  Any suggestions?
     
    Thanks.

  88. dplatt

    Phil/ Hangout
     
    I'll remind you after close friday and saturday if you don't reply. I see your point of it being a distraction from market hours for yourself but I am not nearly as busy as you are I believe so this could help keep me in the loop. It's too bad we can't have just one link to go to all the time like the Portfolio Gdoc link. As far as getting more people in I think in order to set that up it would require us to use a different paid for service. Like WebEx or Gotomeeting. or something.. Checking on the capacity for G+ now..

  89. dplatt

    Yep.. only 10 total allowed at any one time.. bogus..
     
    http://support.google.com/plus/bin/answer.py?hl=en&answer=1215839

  90. Pharmboy

    Biotech Portfolio is up to date, here.  You must have the link to see it….so bookmark it if you wish.  I added INO, and updated the SGEN position, as I have been reducing the March $30s and moving out to the June 30/35 BCS.

  91. yodi

    Phil next time you are in LV just have a look in to one of the canals there. They made up walls with cardboard boxes. Even if the houses were down 80% they could not effort them.
    MT Yes in deed I do have stock plays  on them as well. I take it in both ways. However the interesting part is you do not have to do much on my long play above only watch the roses, but the short monthly plays still bring in more than 1%.
    You do not find this normally on stk's having a yield of more than 3.70% so for me I have to pay tax on the 3.7%.
    Wynn expensive to stay I think but great to play with. Have been selling naked puts against this stock for month now.
    My latest play I have shown on this site with a March13 back/ratio entered 18th Dec obviously to late to play now, but holding up well!
    One needs to wait on this one till the heat is over or possible try your poker hand shown above.

  92. dplatt

    Again, Hangout is open! Here is the link! Looking forward to meeting you all. 
     
    https://plus.google.com/hangouts/_/9056b6375cc7e60a74c0bfb71c2c58df8f21df4e?authuser=0&hl=en

  93. yodi

    Phil I do have really a hand full of long AAPL calls. They are going no where should we not try some weeklies even possible tomorrow. ???

  94. zeroxzero

    dplatt:  I think it's a cool idea for specific situations that we might want to discuss.  But I have multiple firehose of data reaching my eyes for many hours a day — in terms of bandwidth, speech is very slow.  My two cents.

  95. dplatt

    G+Hangout/ PSW
     
    I believe the plan is to work on the idea for doing the hangouts on the weekend or after hours to review some trades and show new ones. It takes up a lot of bandwidth and computing power to be very useful during trading hours unfortunately. 
     
    Looking forward to implementing this into PSW virtual conferences! lol we'll have to wait and see i suppose.

  96. dplatt

    Thanks to everyone who jumped in and tried it though! Hopefully we can organize it a little better this weekend or something.

  97. Phil

    TZA/SGH – Jan is far off and those spreads won't pay too well unless the RUT sustains a drop all year.  We generally stay 3-4 months out on ultras.  

    Real estate/ZZ – Long-term, I really like it due to inflation expectations but short-term (2 years or less), who knows?  Rising rates can hit the market hard at any point.  I've been waiting to see who gets cheaper.   A few builders have disappointed so far and we should get a few more reports and see what happens.  

    IYR WEEKLY

    LVS/Wombat – Yep, roll 'em until they expire worthless if possible.  Always try to roll to a strike you don't have to pay for and hopefully one that's higher than the one you have now (for short calls) – unless you fear a pullback, of course.  No idea what you mean on CVLT. 

    LNKD/Wombat – Too high in the range to like but too good to short so a no-play on them – especially with low VIX giving you little buffer.  

    Good luck on job Dplatt.  Next time, maybe dumb it down a little?  

    MTW/StJ – Not in a good place.  

    CHK/Snow – At $13Bn, they can get gobbled up by any of the majors and could easily be justified at $26 and it is possible that Aubrey was holding back a sale as potential buyers didn't want to be in bed with him (and, if you are too sleazy for the oil majors – THAT'S SLEAZY!).  So I would take the possibility seriously and, if you want to stay in the stock and sell premium, how about selling the stock ($20.19) and buying the 2015 $13/20 bull call spread for $4.30 and selling the 2015 $18 puts for $3.30 so you are in the $7 spread for net .70 with a 900% upside if they stay flat and your worst case is you're back in them for $1.89 less than you're in them for now and you have 2 years to do something else with the extra cash.  Also, if they do get bought – you cash out early and pocket a very quick 35% premium to the current price. 

    You're welcome Ed.  

    WFR/QC – We missed the run-up and then it was too late.  Like now, it's too late – although I wouldn't be surprised to see them at $7 again.  You can sell the 2015 $3 puts for $1.15 for a net $1.85 entry and I think that's fine for an entry.  No need to be greedy but the 2014 $3/4 bull call spread is just .55 and, if you stopped it at .30, you'd still have the short puts at net .85 for a $2.15 entry so that's how I'd be more aggressive.

    You're welcome QC.  

    NFLX/Palotay – The problem is we're in the same conditions that burned you last time with the same irrational enthusiasm that drives people into stocks like NFLX at nose-bleed levels.  You barely survived shorting them at $250 and now we're at $165 so 50% more dangerous?  I suppose you could pick up the 2015 $200/150 bear put spread at $30 and sell the 2014 $240 calls for $10.50 for net $19.50 and then you can sell short puts while you wait like the March $145 puts for $5.50 so now net $14.50 on a spread that's $35 in the money to start but you have to be ready for pain – just in case!  

    Houses/Yodi – I was, of course, joking re. the poor speculating in real estate but the city could have certainly converted a few building into shelters and cut down on the housing glut – that's what we used to do in the good old days, when we took responsibility for those who were less fortunate.  I agree on MT, good trading stock.  

    AAPL/Yodi – We're too close to the index tops – we could snap up at any moment.  Not a good time to sell calls.  Better to sell QQQs like we are in $25KPM – less chance of a blow-out.  

  98. Phil

    We are very quickly working off short-term overbought – a very bullish sign: 

    NYMO

    Tim Campbell - Indianapolis - Hillary's Last Day - English - Hillary Clinton, Secretary Of State, 2nd Term, Bill Clinton, Obama Cabinet,

    Andy Singer - Politicalcartoons.com - Amend the Second Amendment - English - second,amend,amending,amendment,arm,arms,gun,guns,firearm,firearms,National,Rifle,Association,assault,rifles,weapons,weapon,murder,murders,murderers,accident,accidents,crime,death,deaths,injuries,injury,Alexander,Hamilton,Aaron,Burr,constitution

  99. dplatt

    Regarding that last comic- we could solve this by instituting a tax for whoever owns a gun if they don't have gun insurance. Bam! Obamacare for gun ownership!

  100. Pharmboy

  101. Pharmboy

  102. Pharmboy

    Now WCRX is printing a gravestone doji, which could turn into a shooting star.  Might have to go longer on the March plays.

  103. Laddoo

    cheat sheet/sgh225
     
    Not sure if anyone answered your question from earlier, but wombat's "cheat sheet" can be found under last Friday's chat.  Here is a copy of the comment:
     
    wombat 
    January 27th, 2013 at 12:30 pm 

    Yodi // Since its Sunday and I see you're online, thought I would hit you with this. If you don't have the time, I'll post again tomorrow for the whole group.
     
    Phil // Terminology
     
    So I made a mistake on Friday, and if I hadn't caught it today it could have been bad. The reason I believe was language and I also rushed, Bad. II've noticed traders use different names for the same thing. Yes, I know, Phil, this is part of the 10,000 hours ; > 
     
    So, can I run this back at you guys, and whoever has time please tell me if i have something incorrect.
    These, in my mind are everything I will ever use. And, who knows, this may be useful to some of the other folks on the board as a quick ref.
     
    BULL PUT SPREAD  / BULL CREDIT SPREAD
    SELL HIGH PUTS ( CASH +++ ) OTM ( higher strike )
    BUY LOW PUTS ( CASH — ) ITM ( lower strikes ) 
     
    BULL CALL SPREAD / BULL DEBIT SPREAD
    SELL HIGH CALLS ( CASH +++ ) OTM ( higher strike )
    BUY LOW CALLS ( CASH — ) ITM ( lower strikes ) 
     
    BEAR PUT SPREAD / BEAR DEBIT SPREAD 
    BUY HIGH PUTS ( CASH — )   ITM  ( higher strike )
    SELL LOW PUTS ( CASH +++)   OTM ( lower strikes ) 
     
    BEAR CALL SPREAD / BEAR CREDIT SPREAD 
    SELL LOW CALLS ( CASH +++ )   ITM   ( lower strike )
    BUY HIGH CALLS  ( CASH —    )   OTM  ( higher strike ) 
     
    VERTICAL SPREADS – same everything, just different strike prices.
    HORIZONTAL / CALENDAR SPREAD – same everything, including strike, but different expirations
    DIAGONAL SPREADS - different strikes, different expirations 
     
    So, heres an example that Yodi was helping me on //
    NFLX Vertical sell Feb 185/190c for 1.10 sell vertical Feb 150/145p for 1.07 
    Vertical simply signals same everything, just a spread ( different strikes ), and the 'c' indicates it's a call spread. 'Sell', would indicate it's a credit spread, but how is one to know whether it's Bull or Bear ?
    Apologies ahead of time, as Fidelity simply does what you tell it to do, whereas in TOS, when you put in the strikes it will tell you whether its bear/bull by the background color ( green/red ) – very cool.
    So, being the magnanimous person he is, Yodi expands with 
    NFLX Buy  1x bear put spread Jan5 +175/-170 for 3.04  sell 2 x (2 off) Feb bull credit spread -180/+185 call for 1.40 each (my close) x 2 = 2.80 . 3.04 cost – 2.80 credit = .24 net cost
    Buy 1x Jan15 +175 put, Sell-170 put ( net $3.04 ) 
    // ( Bear Put Spread, Buy High Sell Low ) got it – I assumed he meant 2015 BTW
    Sell 2x Feb13 Buy +185 Calls, Sell -180 Calls
    // ( Bull Credit Spread, Sell High, Buy Low ?? )
    Did I mix something up ? If its +185/-180 calls, thats not a bull credit spread - 
    Do I have my terminology wrong ? '+' means buy, and '-' means sell, yes ?
    Trust me, this is helping me much more than you : >
     
    btw, wombat, I find it helpful…thanks!
     

  104. rexx

    CHK – somebody likes them and bought 2000 of the 2015 15 Calls.

  105. Burrben

    AAPL 90ish% return if they hold 455 by Jan14
    AAPL 420-455 Bull Call Spread trading at 17.90.  Max value of spread, 35.
     
    Just fooling around on spread trader…

  106. jophil

    Hi Phil, what's your opinion in SLW? thanks

  107. Phil

    TUMI has earnings next Monday after the close and they just IPO'd last April so no history and a lot of volatility in front-month options we can play off.  I think a good set-up for them would be buying the August $20/25 bull call spread for $2.30 and selling the $20 puts for $2.20 for net .10 on the $5 spread with a 4,900% upside potential on the cash commitment.  As Tumi is a nice long-term hold for the Income Portfolio, let's play 10 contracts there and also sell 10 of the Feb $22.50 calls for $1 as I don't think they'll go over $25 very quickly and we're well covered in the long-run AND we wouldn't mind doubling down on the long position if either TUMI goes up fast OR if it gets cheaper – almost no way to lose! 

    Another fun trade for overnight is a do or die on the GLD Feb $161.50 calls at .35.  It's a craps roll as it can easily vaporize but worth a toss as gold could pop back to $1,685 on a poor jobs report (more Fed easing expected) or on a good jobs report (more demand) so could easily double or triple if things go well. 

    Dollar still very low at $79.25, it won't be good for GLD if it moves higher, of course.  Oil at $97.50 so that's a bullish sign for GLD, as is gasoline at $3.03 again.  

  108. qcmike

    Phil
     
    After hours
     
    WFR puts Jan 2015    Bid .72 ASK 2.33 from TOS
     
    When you see this difference in the bid /ask what does that normally mean?
     
    Best way to handle makes an offer in the middle?
     
    Thanks

  109. sgh225

    Laddoo,
    thx

  110. yodi

    Womb over the week end Si ja yes

  111. palotay

           Wynn Resorts, Limited (NASDAQ: WYNN) reports Q4 EPS of $1.17 versus the estimated $1.25, missing by $0.08. EPS were Down 25% from the same quarter last year. Revenue came in at $1.29B
     
    Wynn play from earlier looks good.  

  112. Phil

    PIIGS/Pharm – They are falling like Dominoes – it's just so slow (3 years since identified) that people seem to forget that we're still in a crisis.   

    Cheat Sheet/Laddoo – Please put it in the Wiki if you can.

    AAPL/Burr – So many ways to play it down here.  

    SLW/Jophil – They are a fine and dandy proxy for silver but I don't like silver as much as gold for a long-term inflation hedge.  On the other hand, in the short run – retailers are scooping up silver coins and people aren't looking for silver like they are for gold as, obviously, now that both are getting harder to mine – you may as well go for the gold.   So, I prefer GLD, GDX or ABX but SLW can be played by selling the 2015 $28 puts for $3.75 and buying the $35/45 bull call spread for $3.20 for a net .55 credit on the $10 spread and you can sell 1/2 the March $36 calls for .97 and, if you can pull that off just 4 times – you can buy back the puts and just have the free bull spread.  

    WFR/QC – When a spread is that wide, it means it's very thinly traded.  In WFR's case, the 2015s are new but the last sale on the $3 puts was $1.14 and the 2014 puts are .49/.53 and the $2.50 puts last is .90 and the 2014 $2.50 puts are .34 so expecting to get $1.15 for the puts is very reasonable in this case but you may have to be patient to fill it.  

    Also, keep in mind, that if you are filling a bull call spread and some short puts and the bull call spread fills but not the short puts – then that means your bull call spread is doing well and you don't NEED to sell the short puts – SO DON'T WORRY ABOUT IT!  Worst comes to worst it never fills and you make less money but use no margin.  

    Was that the bell already?  Having too much fun to quit now…

    Great finish to the month – didn't give up much ground.  Now we'll see if we were held up or held back…

  113. stjeanluc

    Looks like the start of a breather but obviously the job numbers tomorrow could change that quickly – either give some people an excuse to take some profits and prompt a bigger correction or confirm the fact that the economy is getting better and push the market higher. 

  114. wombat

    Phil //
    Like the TUMI call a lot. Yahoo shows earnings Feb25 / ?

  115. zeroxzero

    And now for something really different.  http://ftalphaville.ft.com/2013/01/31/1361462/the-perpetualisation-of-debt/

  116. zeroxzero

    An excerpt: "Admati’s major point:  Bank resolution is fundamentally about transferring bank responsibility (and risk) away from the public sector and back to the private sector. It’s about making the banks responsible for themselves again by weaning them off state-aid."
     
    "Even though government loans have on the surface been repaid, the central bank put and the understanding that these institutions are now too big to fail, implicitly continues to provide an equity backstop. The equity risk has thus not yet really been transferred to the private sector at all."
     
    "This is an important given that by this point in the cycle QE has turned into a stealth transfer of risk away from the fiscal authority over to the monetary authority. It’s true that in its initial phase QE provided genuinely needed liquidity and a dealer of last resort function for securities that no-one else was willing to take. Thereafter, however, QE has really been about propping up the system with an overpriced bid (Bernanke’s put option) — a fact that has led to too much liquidity in some quarters and not enough in others (the shortage of safe assets phenomenon).
     
    Indeed QE’s purpose is no longer really about liquidity provision, but rather taking the interest-rate risk out of the public market while providing a supportive bid for securities still perceived to be risky (such as MBS)."…But even with that level of de-risking by the monetary authority, bank equity continues to underperform….The fact that borrowing short and lending long is seen as the key problem in banking, is perhaps the oxymoron of our age. What is really being inferred, after all, is that the banking model itself is dead. If it wasn’t there shouldn’t be any problem in raising equity."
     
    "…In the current environment, the only risk-free banking model is one in which banks are incentivised to destroy capital. That is not a product of the crisis, but a product of our times. There are ever fewer opportunities for real investment return because of a growing lack of scarcity in the western world….In an equity financed model, banks would either turn into venture capitalists — lending high risk at the right price — or remain extremely cautious, opting not to lend at all if productive loans cannot be found."
     
    "Which leaves us with three important conclusions:

    The banking industry as it stands represents “government lending” in everything but name.
    Even in its implicitly state-supported form the industry is struggling to find productive loans.
    It’s unsurprising the industry is unattractive to equity investors.

     
    "Any lending forced upon banks under government duress would likely be directed towards unproductive loans, thus the equivalent of uncollateralised money-printing….
     

    "If banking remains in the private sector it should be equity funded. But if there aren’t enough productive loans to be had, equity funding will simply encourage cashpiles to accumulate contracting money supply.
     
    In that scenario the government/monetary authority would have to compensate either with uncollateralised money-printing or debt-financed government spending and sterilisation through taxes, when needed."
     

    "Final thought:  Perhaps we’re all government employees already, we just don’t realise it?  Second final thought:  What is equity if not perpetual debt? And what is money if not national equity? Is there really any differentiation at this point?"

  117. jfawcett

    Phil / ABX – I have owned, in concert with the income port (25% and out, was holding 1/4 of the income port investment), so, made a great return.  Scaled back in by buying 300 shares and selling front month calls to reduce the cost basis.  Current cost basis: 33.57.  Earnings are 2/14.  I am sure you are already looking at this since ABX is currently in a 27% retrace.  I have room for more ABX in the plan so what do you think about Selling the JAN15 30 Puts (4.80) and buying the JAN15 30/40 BCS (3.15) for a net 1.65.  Net entry if Put to you is 28.35.  BCS max profit is 685.00 per contract. I thinks all the math is correct.  TIA

  118. rj_jarboe

    Yodi/MT
    I read awhile back that at the shareholders meeting this spring they will vote on whether or not to eliminate the dividend. Have you been following this at all?

  119. Burrben

    Buying a rental property
     
    OT, but I have the opportunity to buy a beach front rental property in central FL near New Smyrna Beach.  It's one 3br 2ba house,one br apt and one studio.  If they were all rented long term it would bring in about 4500/mo.  If rented weekly, the main house could bring 2000/wk during high season.  The owner will finance the 50% of the purchase price for 1% over bank rates for 7years.  It seems cash flow positive to me.  To make it look really nice, I'd guess 10K would need to be invested.  Anyone with experience buying these, please contact me at skdoyle1@gmail.com.  

  120. stjeanluc

    It has been a good month overall except for the yen, pound and treasuries:

    http://www.bespokeinvest.com/thinkbig/2013/1/31/asset-class-performance-in-january.html

  121. rexx

    Phil/SVU – Cerberus led re-fi has happened.  So Cerberus will almost certainly pay $4 for 20%.  Question is – will they pay for more than 20%.  Supposedly C wants control and will likely buy more than 20%.  In which case don't the $4 2015 Puts at $1.40 seem well hedged?

  122. Phil

    How Amazon Trained it's Investors to Behave (HBR):

    So when Amazon reports below-consensus earnings, as it did Tuesday, and the share price jumps, as it did after-hours Tuesday and again Wednesday morning, the reaction isn't quite the puzzle it seems. Slate's Matthew Yglesias cracked that "Amazon, as best I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers." But what's really going on is that Jeff Bezos has trained elements of the investment community to expect that low profits (or big losses) now represent investments that will eventually pay off, not signs of trouble.

    How has Bezos done this? Well, he's a hedge fund veteran who has always taken a skeptical view of Wall Street, treating it more as a loopy rich uncle than the efficient information processor of standard finance theory. When Uncle Wall Street (also known as Mr. Market) is in a generous mood, Bezos is always ready to take advantage by putting investment ahead of profitability. But he's also always been ready to shift gears when the mood turns stingy…

     

    PMI SCORECARD (All Time ET)

     

    At the beginning of each month, Markit, HSBC, RBC, JP Morgan and several other major data gathering institutions publish the latest local readings of the manufacturing purchasing managers index (PMI) for countries around the world.

    Each reading is based on surveys of hundreds of companies. Read more about it at Markit.

    These are not the most closely followed data points.  However, the power of the insights is unparalleled. Jim O'Neill, Chairman of Goldman Sachs Asset Management, believes the PMI numbers are among the most reliable economic indicators in the world.  BlackRock's Russ Koesterich thinks it's one of the most underrated indicators.

    • 7:00 PM South Korea: HSBC Manufacturing PMI — 49.9, down from 50.1 in Dec.
    • 7:30 PM Australia: AIG Manufacturing PMI — 40.2, down from 44.3
    • 8:00 PM China: NBS Official PMI —50.4, down from 50.6
    • 8:00 PM Netherlands: NEVI Manufacturing PMI — 50.2, up from 49.6
    • 8:45 PM China: HSBC Manufacturing PMI —52.3, up from 51.5
    • 9:00 PM Taiwan: HSBC Manufacturing PMI — 51.5, up from 50.6
    • 9:00 PM Vietnam: HSBC Manufacturing PMI — 50.1, up from 49.3
    • 10:00 PM Indonesia: HSBC Manufacturing PMI — 49.7, down from 50.7
    • 12:00 AM India: HSBC Manufacturing PMI — 53.2, down from 54.7  
    • 12:00 AM Russia: HSBC Manufacturing PMI — 52.0, up from 50.0
    • 2:00 AM Ireland: NCB Manufacturing PMI — 50.3, down from 51.4
    • 3:00 AM Turkey: HSBC Manufacturing PMI
    • 3:15 AM Spain: Markit Manufacturing PMI 
    • 3:45 AM Italy: Markit/ADACI Manufacturing PMI 
    • 3:50 AM France: Markit Manufacturing PMI 
    • 3:55 AM Germany: Markit/BME Manufacturing PMI 
    • 4:00 AM Eurozone Manufacturing PMI 
    • 4:00 AM Greece: Markit Manufacturing PMI
    • 4:30 AM UK: Markit / CIPS Manufacturing PMI
    • 5:00 AM Australia: AiG Manufacturing PMI
    • 7:00 AM Brazil: HSBC Manufacturing PMI 
    • 9:00 AM US: Markit Manufacturing PMI 
    • 9:30 AM Canada: RBC Manufacturing PMI
    • 10:30 AM Mexico: HSBC Manufacturing PMI
    • 11:00 PM Global: JPMorgan Manufacturing PMI


  123. Phil

    Hang Seng Flat but Shanghai up 1.4% after mixed PMI releases.

    Very important thing to understand about China PMI's:  Here's Why The Two Chinese PMI Reports Went In Opposite Directions

    Great analyst note on China PMI:  First, most data points, especially the industrial earnings, have been pointing to an impressive recovery. Second, the private HSBC PMI, which is a better proxy for smaller enterprises, rose to 51.9 in Jan from 51.5 in Dec. Third, PMI data are heavily seasonally adjusted, especially during the year ends and beginnings. As there is big room of freedom regarding seasonal adjustment during the CNY holiday, it’s likely that the NBS statisticians intentionally reported a conservative estimate within the allowable range to save better data for rainy days. Finally, new orders rose to 51.6 in Jan from 51.2 in Dec despite new export orders falling to 48.5 in Jan from 50.0 in Dec, suggesting domestic orders jumped in Jan. - Compare that to the useless noise on CNBC

    German PMI Great; France Lousy.  

    image

    French Retail Sales Drop 10th Month Accompanied by Sharper Drop in Employment

    A study in England found that the big drop in business investment – 16% lower than its pre-recession peak – also has an impact on productivity. "If workers have less good capital to work with they will produce less," the IRS said. "Misallocation of capital is also likely to be reducing productivity."

    The Vulnerability of the Elites:  Whether one looks at the dismal approval ratings of the U.S. Congress or the impact that more open flows of information is having on the Chinese ruling elite, it is clear that people are becoming more and more uninspired by their governments. When it comes to unemployment, the widening disparity of wealth, or environmental degradation, highly complex or even intractable issues set politicians up for failure in the eyes of their constituents. Underperformance erodes elites’ legitimacy, making it that much harder for them to lead effectively. Against this backdrop, a host of key 2013 risks and opportunities takes shape.

    Long-winded way of arriving at my conclusion that we need to rethink society because it simply isn't necessary for 60% of the people to work anymore and soon it will be 70%, then 80%…

    The Prison Industry in the United States: Big Business or a New Form of Slavery?   Human rights organizations, as well as political and social ones, are condemning what they are calling a new form of inhumane exploitation in the United States, where they say a prison population of up to 2 million – mostly Black and Hispanic – are working for various industries for a pittance. For the tycoons who have invested in the prison industry, it has been like finding a pot of gold. They don’t have to worry about strikes or paying unemployment insurance, vacations or comp time. All of their workers are full-time, and never arrive late or are absent because of family problems; moreover, if they don’t like the pay of 25 cents an hour and refuse to work, they are locked up in isolation cells.

    8 Retailers That Will Shut Down The Most Stores This Year

    Good read on "How the Stock Market Became "Food Stamps" for the 1%":  More than any other group, the 1% has been convinced that the stock market represents some sort of leading indicator of wealth and prosperity.  Nothing could be further from the truth.  Sure, the stock market can function as such an indicator.  It is such an indicator when the rising stock market reflects a dynamic, capitalist economy where new industries and companies are rising to the top and improving standards of living for the populace.  It represents the opposite indicator when it merely reflects the ownership interests of the oligarchs in a crony-capitalist, fascist economy that is picking away at the dying carcass of what little economic freedom still remains. 

    The central planner’s policy tool formerly known as “the stock market” has experienced unprecedented levitation in the past two months on the heels of what, as shown previously, is some 38 countries concurrently pursuing negative interest rates and monetizing their debt, while flooding the market with record liquidity. Recall what we said on January 9it may not be a good idea to be short stocks on any of the [POMO] days listed below.”

     

    In brief: of the 15 POMO days since January 9, the market was up 13 of them, or an 87% hit rate. Those who did not short January POMO at least did not lose money.

    This is the future the NRA is fighting for:  Cary-Grove High School administrators simulated gunfire by shooting off blanks in the hallways while students locked their classroom doors, pulled the curtains, and hid.  Schools and parents have gone to exceedingly extreme lengths, in the wake of the horrific killing of 20 children and six adults at Sandy Hook Elementary School, to come up with ways to prepare for school gun violence. A school district in Texas is considering allowing teachers to carry concealed weapons; parents have been purchasing bulletproof backpacks for their kids to take to school; the South Carolina legislature is even considering making a gun training class for high schoolers; and some parents even packed a gun for their sixth-grader to bring to class.

    Super Bowl Fans to Face Mandatory TSA Pat Downs: Attendees to be “watched, sniffed and pawed."  The Super Bowl’s designation as a level one National Special Security Event (NSSE) means that the spectacle is now an annual showcase for America’s post-9/11 descent into a security-obsessed police state, despite the fact that statistically, Americans are more likely to be killed by peanut allergies, bee stings and bath tubs than they are by terrorists.

    As I have said for ages - Iran is not imminent nuclear threat:  According to a report in McClatchy, “Israeli intelligence officials now estimate that Iran won’t be able to build a nuclear weapon before 2015 or 2016.”  They say you can’t kill that which has never lived.  It’s useful advice when analyzing the persistence of the so-called “Iranian nuclear threat.”

    Another thing I predicted would happen one day (only not so soon) – they are selling people AIR!!!  Move over air filters and micro particle filtering masks. Beijing residents now have another option for fresh, clean air. All they need to do is unseal these cans, and a waft of unpolluted air will be instantly available. 

    There's an App for that:  Portfolio Armor let's you punch in your risk-tolerance level on a stock or ETF and shows you what put to buy to cover yourself "optimally".   Actually it's a very nice tool for beginners.  

    NAAIM (Money Managers) are now 100% bullish:  

     

  124. Phil

    Oil coming down from $97.50 finally.  Gold $1,666.  Neither is impressive with the Dollar at 79 as the Euro pops $1.365.  Pound still lounging at $1.583 but Yen also tumbling at 92.19 to the Dollar and the Nikkei ended at 11,215.  

    Big Chart:  S&P up 5.1% for Jan – that screams for a 1% pullback, right to our 1,480 line.  

    TUMI/Wombat – I got the date from Briefing but Yahoo is usually right.  Doesn't change trade premise.  

    Reality/ZZ – A lot of it is semantics.  We measure productivity in money.  Stiglitz postulated, just before the crash, that we should measure GDP in happiness and Governments should strive to improve their people's satisfaction with life in other categories than money.  As I noted above, we need to change the way we view economics because, in less than a century, it won't be necessary for 80% of us to work.  So – should the non-workers just be poor and the workers get slave wages while the top 1% get almost all the "profits"?  Or should, perhaps, we rethink the structure of the system and recognize some basic human needs – cover those – and then let those who wish to work fight over the rest.  

    ABX/Jfaw – I like the long-term play, of course, but the combination of the low VIX and earnings uncertainty makes me think you might be better off with just the bull call spread ahead of earnings and, if they go well, you don't need to sell a put or you can sell a higher put and, if they go poorly, you can sell a lower put for more money and use that money to roll down your initial spread.  

    Rental property/Burr – Nice area (did you know it's the leading place for shark bites?  Al Capone used to live there too), very historical with lots of old buildings.  Don't take their word for the revenues – it's a very small town.  Make sure you can verify (go on the web as a renter, looking for available space and note prices).  Also, hurricanes happen – would be good idea to get some sort of history of how many times homes in that area have been damaged and factor repairs in (and insurance, of course).  I'm a big fan of investing in rental properties – just make sure you talk to locals in case there are tax hikes coming or some reason the local economy sucks and you might have a hard time filling it.  Oh yes, and also – who's going to maintain it?  

    Yen/StJ – Well they did that one on purpose, so a good month for them too.  

    SVU/Rexx – They may decide to buy more and yes, I like the short puts but we had such better pricing before, it's hard for me to agree to even net $2.60 – we still have the Jan $1.50/2.50 bull call spread at .40 in the Income Portfolio – one of our first trades in that one.  Anyway, I like them long-term still but obviously not the bargain they were at $2.25, when we jumped in (and even then, they dipped to $1.68 and we bailed on our own short puts) and certainly prone to dips and also, they are probably up BECAUSE Cerberus is coming in at $4 but keep in mind it's "only" a $800M company and that means Cerberus is in for $160M and could pull the plug with a 20% loss without blinking.  

    By the way/StJ – It does look like we can get out of the SVU Jan $1.50 ($2.40)/$2.50 ($1.40) bull call spread for $1 on TOS.  Certainly no sense in keeping it open 12 more months.  

    NFLX/Diamond – I've been thinking that for a couple of years now.  Still waiting for it to happen. 

  125. Phil

    SVU:  Have to do an I told you so on that one as you know I don't often make big mentions in the morning post but here was my 10/18 note on SVU:

    Our friends at SVU put in a good report this morning and are up to $2.25 pre-market.  This is one of our favorite cheap stocks with a $415M market cap, which just happens to be the exact same as the amount of free cash flow they generated in the first 3 quarters of this year.  Although the headline number is a loss of .52 per share, it's pretty much all non-cash impairment charges and write-downs that don't stop cash from pouring to the bottom line.  They've refinanced $1.65Bn in debt and are reducing overall debt by $450M – all part of the reason we doubled down on their recent dip in our Income Portfolio, which only needs SVU to hit $2.50 to realize some very serious gains.  There's also rumors of a potential buy-out, maybe it will be discussed at the 10am CC.  

  126. pstas

    DEPO- Pharm- any info on this recent move- perhaps all related to speculation re: patent lawsuit? I don't see any other news of note?

  127. pstas

    ZXZ- "all government employess"- sure , the leftist wet-dream fantasy. Unfortunately, we are already way down that road to dependency.

  128. yodi

    Womb,
    I have all this explained in previous write ups.
    All your bulls and bear spreads you seem to have correct, but please do me a favor before you do any trades go to Google type in any one say bull credit spread and you find ALL spreads explained with examples 100x better than I could do.
    In the end you still mixing up my NFLX play Phil gave us a Debit spread with his put play costing some 3 odd $ I finally liked his play but did not want to pay 3 $ for it, so I set up the 180/185 CREDIT spread a credit on 2x, so I did only have to pay .24 cents on the complete play. Please not NO call was ITM at the time!!!
     Again if you put money in your pocket it is credit if you take money out of your pocket it is debit. It does not matter how you turn or twist the puts or calls  both parts in or both parts out of the money if i is green you get money back if it is red you have to pay. This is with TOS hoping you are not color blind.
    Jan15 is the year 2015 Jan5 is the weekly which expires today. When you look at these plays you need a bit of common sense I could not see myself buying a 2015 "Buy 1x Jan15 +175 put, Sell-170 put ( net $3.04 ) " Surely if you would even set up this play you would not pay 3.04. This was Phil's play and I am sure he mentioned weekly.
    Finally Phil's comment if you can not follow the play DO NOT ENTER THE GAME!!!! Like the other day one new member wants to jump in to the FAS plays. I have entered before but do not like them due to very high margin, same like the AC hotels!! You really have to be on your toes,  this is not a play for beginners. I think Pharm remaked on it as well. At one place you mentioned you handle a relative large account for your friends or family members.
    It is bade enough to lose your own money but telling your boher in law he just did lose his life savings is an other thing. I can understand you are keen to make money, but jumping in like that is a save way to lose it.
    Play the TOS paper game for two or three month and even if you win all the time thinks work out different wth real money. Hope this helps.
     

  129. yodi

    MT please note Phil's and my play of yesterday they well up this morning already!!!!

  130. Phil

  131. deano

    Rental /Burr – With weekly rentals you should budget in for cleaning in between tenants. Good sources for comparative rental rates can include craigslist, and rentometer.com.

  132. ariveraA

    Sell air in cans/ Phil:  Hardly a new idea.
    http://www.youtube.com/watch?feature=player_detailpage&v=lKVHBguZOBY

  133. Phil

  134. Phil

    Bitcoin has a handle on $20 for the first time since July 2011 on its way down from $33. This time around, however, it is on its way to who knows where after beginning to rally one year ago, consolidating from Spring through Fall, before picking up steam for a month in September, correcting from about $15 back down to below $10, and then continuing its rise to $21 as of this evening  on the sails of positive press for the digital currency. The digital currency has given central banks a cause for concern, causing government intelligence agencies, central banks and mainstream press outlets to write on the power of the payment processing solution. 

    With the Bitcoin Standard, you see that your holdings with automatically hold over time, and that holding the coins is similar to holding stake in the Internet itself. Once again Bitcoin has broken through $20, and it has done so with a graph that any economic analyst would say looks like is only building.

    All else being equal, the more people who use Bitcoin , the greater the demand for it — and the higher its price, because the supply is fixed. This means that in the long run, Bitcoin’s price will be positively correlated with its adoption.

  135. yodi

    rj_jarboe
    MT Taking the div away. Like to see where you have seen it. It is generally known that we do have not the greatest time in Europe. However I believe my log term synthetic play should hold resonable well. As all plays, none is 100% sure!!!
    Each person should make their own research and final decision before entering a play. Thank you for raising your concern.

  136. Greg

    Just a quick announcement… Our Twitter RT contest has a winner! Congrats, Jon (@JHANAJC)! And thanks to all our participants! Hope you enjoy your consolation prize!

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