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Which Way Wednesday – Sequestration Dead Ahead

openingimageThat was a fun dip, wasn't it?

Did you know that yesterday there were a record number of VIX options purchased and that 28% were bought at the bid (indicating panic buying)?  People sure are getting nervous ahead of the Sequestration which clearly, if you watch Fox or CNBC, marks the beginning of the END OF THE WOLRD.   

Aren't these the same people who screamed for the past 4 years that we MUST cut the budget or we're doomed?  Now the budget is being cut by about 8% and they are FREAKING OUT.  So, were they wrong before or are they wrong now or are they just generally idiots we should ignore at all times?  

I'm pretty sure it's the third one but the herd doesn't need a good reason to stampede – just a few of the nervous ones need to start running away and others will simply follow rather than waiting to find out what horrible thing the others are running away from.  When that horrible thing is the MSM screaming about how HORRIBLE this new, artificial crisis will be – it does make it a lot harder for the average sheeple to ignore.  

It's fun to panic.  We're designed to panic – we're not carnivores, we are omnivores who only developed sharp teeth pretty recently.  Man, as an animal, has a highly developed flight reflex and that can influence our trading and it does as predators (ie. Cramer and his buddies) know that they can force you to abandon your positions if they simply make a lot of noise with threatening gestures (or charts).  

This is why it's so dangerous to take positions in stocks you don't actually believe in.  It makes you and easy target for predators because you'd rather abandon your position (which you have no real vested interest in keeping) rather than risk a loss.  It's one thing to plant a tree but quite another thing to nurture it and fend off predators until it is strong enough to take root.  We were discussing scaling in and sticking with positions in Member Chat this morning and it's well worth a read.  

As predicted in yesterday's post, we held our 50 dmas on our first crash test but we are certainly not out of the woods as we have something called strong and weak bounce levels that we turn our attention to, now that we have established our drop zones.  According to our 5% rule – this is exactly the retrace we expected but, now that we have it – the question becomes:  Do we bounce right back and move on to new highs or are we simply consolidating for a move lower?

The Dow, for example, topped out at 14,060 (non-spike) and fell to 13,785 in about 24 hours so a weak bounce (in 24 hours from yesterday morning) would be 20% of the 275-point drop or 55 points or 13,840 and another 55 points is a 40% strong bounce back to (and now we round to the whole number) 13,900.  

Where did the Dow finish yesterday?  13,900!  See how easy the 5% rule is?  Without so much fuss, let's go through the others and see how they performed:  

  • S&P 1,524 to 1,488 is 36 points so 1,495.20 is weak and 1,502.40 is strong so just over weak so far (and no, it's not that exact and I'll round off the rest).  
  • Nasdaq fell from 3,183 to 3,110 for 73 points and that makes the weak bounce 3,125 and strong 3,140 and they finished just over weak at 3,130.  
  • NYSE dropped form 8,940 to 8,715 for 225 and that makes our bounces 8,760 and 8,805 and they finished at 8,766 – just over weak.  
  • The Russell was rejected at 919 and fell to 895 for a 24-point drop and we'll call it 900 and 905 for our bounced and the RUT hit 900 on the nose and that is – just over weak (if we didn't round).  

SPY 5 MINUTE Well, I guess you don't need me to tell you that we'd better watch those weak bounce lines today, right?  Keep in mind those are just short-term lines and they expire at the end of the day but it shows you a very quick and easy way to determine which way momentum is heading and, so far, that's kept us from panicking with the herd but we're more than happy to slap on some bearish plays (like we did on Monday) if our levels don't hold and you should be too

As Dave Fry notes on his Dow chart, Bern Bernanke stuck to the Hippocratic Oath "Primum non nocere" (First, do no harm) by reiterating his QE – not forever, but for a very long time – stance.  Also the Dollar, as we expected, did not break over 82 and that was very helpful as well as expected as my Morning Alert to Members called to make aggressive moves with our FAS and AAPL positions and we ditched copper (/HG Futures) at $3.5655, which was up .02 from our morning entry ($500 per contract) while we rode silver (/SI) to $29.40 from $28.85 for a huge .55 gain at $500 per penny per contract! 

I was, of course, up at 3am today as well, but there was nothing obvious to trade in the Futures so I went back to bed.  This is the hardest trick for people to learn when playing the Futures – most of the time – you should not be playing!  

We added 4 positions already to our brand new Income Portfolio after retiring our old one with a 20%+ gain in just 8 months (see yesterday's post).  With $500K of virtual cash to play with, there are many, many temptations but, ahead of the Sequester, we're taking things slowly – just in case.  AAPL has their big investor conference today so we'll be watching them closely (hopefully everyone there will boo David Einhorn) but it's too bad AAPL doesn't sell more durable goods, as those things are FLYING out the doors with flying being ironic as it's ex-transport due to BA's delivery halt – get it?  

Another thing we'll be getting today is huge gains on COH, which we just added 2 days ago per my comment in Member Chat (we had intended to grab them on the dip):

COH/Jophil – Thanks for reminding me.  I think they hold $45 and the 2015 $40 puts can be sold for $5.50 for a net $34.50 entry, which is double the dividend so a good solo play.  If you want to goose the potential upside – the $50/60 bull call spread is just $3 so net $2.50 credit still gives you worst-case entry at net $37.50 (19% off) and, of course, you can then do some call selling, like the April $49s at $1.05, which is as much as the dividend ($1.20) in just two months. 

Not only did they hold $45 but they are back to $48.40 pre-market on StreetInsider rumors they might be for sale.  That's what happens when things get too cheap in an M&A-frenzied environment – it makes it very hard to stay short on stocks and it's great for brave little options players like us – who take advantage of the panic of the beautiful sheeple.


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  1. stjeanluc

    Oil Lines

    R3 – 94.74
    R2 – 94.09
    R1 – 93.37
    PP – 92.72
    S1 – 92
    S2 – 91.35
    S3 – 90.63

    Yesterday's high and low – 93.44 / 92.07

  2. Turning1

    Hi Phil,
     
    For those who missed your sale order  for  PCLN , what's your recommendation for today?
     
    Thanks

  3. newt

    AAPL/ long 460 wk2: depending where this goes after the call -I am preparing for SHTF- should we look at using remaining value in long 460 wk2 to sell a 455 (or lower)wk2 against it—- then using the prem collected to buy a wk3 BCS?

  4. 1020

    Good Morning!

  5. samz3700

    Anyone have suggestions for good FX news / research sites ?
    Thanks

  6. Opesbridge

    samz/fx – dailyfx.com has some informative articles

  7. dawnr

    Samz3700 try ForexFactory and FX Street

  8. 1020

    Phil – I do appreciate the Haiku lesson from this morning!  :)

  9. jabobeast

    Phil— your PCLN trade would have worked nicely even with the stock up 28+…  wow--great call

  10. stjeanluc

  11. stjeanluc

  12. stjeanluc

  13. stjeanluc

  14. Pharmboy

    Buying a few more June 30 SGEN Calls for 1.30.  No cover.

  15. yodi

    Turning1
    PCLN first never panic wait till the excitment is over and cash in you short c on the end of the week that is my plan at least  by the way they just at 700 so I am waiting for a full return as per Phil's original plan!!!!

  16. Phil

    Good morning!  

    Good God, does Cramer ever shut up?  Now he's rambling on about how scary copper is when the story is very simply China and China is artificially depressing the market and it's really only a matter of when they take their foot off the brake.  Copper is back down to $3.75 (/HG) and it's tricky today with the Dollar at 81.73 (could go .25 either way) but long FCX is still a good idea if the Futures are too scary.  

    More Bernanke today but don't forget it's a big POMO day ($5Bn of free money) so no reason for the Dollar to pop unless Europe does something dumb (OK, that's actually pretty likely) but, at the moment, the Euro is $1.308 and the Pound is $1.5157 and there are only 91.23 Yen to each Dollar (stronger Yen), which has totally bummed out the /NKD – all the way back to 11,250 and THAT is my long of the day in the futures – using that line as a stop.

  17. Pharmboy

    AAPL ain't got no MoJo.  Needs a little booster shot.

  18. stjeanluc

  19. jerconn

    Phil – maybe PCLN is a good short here, after their earnings boost?  Market seems a bit weak, could be PCLN is a good long put candidate?

  20. jabobeast

    phil--isn't there a day lag with Pomo? I can't remember?

  21. angelcur

    UPDATE: With Apple once again in the red Tuesday afternoon, hedge fund manager Doug Kass tweeted that he was "mucho long" the stock. Seven minutes later he floated a rumor that Apple would announce a spit at today's meeting. After 30 minutes, with Apple trading nearly than $12 higher, he tweeted that he was selling off his Apple holdings because there was less to the rumor than met the eye. Not sure that's cricket, but there you have it. - 

  22. stjeanluc

    Kass / Angel – Time to start our own rumor… Gosh, this is almost as bad a Cramer!

  23. stjeanluc

    And I guess as long as the rumor was not anonymous, it's legal….

  24. Pharmboy

    GLD….nice headfake yesterday.  1525, then long the bejeezers out of it.

  25. angelcur

    KASS/CRAMER= BROS

  26. Pharmboy

    Now Kass is back in on twitter….."445 and scaling"

  27. Phil

    So, where was I?  

    Oh yes, quick news then questions (and don't panic on PCLN Turning).  

    3:59 AM Ben Bernanke's pledge to continue QE until there are substantial labor market gains helps buoy Asian and European shares, although a strengthening yen causes Japan to suffer its biggest two-day drop since November 2011. Japan -1.3%, Hong Kong +0.3%, China +0.9%, India +0.8%. EU Stoxx 50 +0.3%, London+0.5%, Paris +0.4%, Frankfurt +0.3%, Milan +0.2%, Madrid +0.75%.

    At the open: Dow -0.06% to 13892. S&P -0.07% to 1496. Nasdaq -0.05% to 3128.

    Treasurys: 30-year +0.52%. 10-yr +0.25%. 5-yr +0.13%.

    Commodities: Crude -0.32% to $92.33. Gold -0.58% to $1606.2.

    Currencies: Euro +0.13% vs. dollar. Yen -0.69%. Pound -0.21%.

    Market preview: U.S. stock futures inch higher ahead of Ben Bernanke's second day of testimony to Congress and as Europe recovers from the panic attack induced by Italy's election. The S&P Mini is +0.1%. "Since last Wednesday, the markets are in the process of a slow transition from an overtly bullish phase to a more questionable phase,” says Sarhan Capital's Adam Sarhan. Later: Pending Home Sales, Fed's Fisher

    10:00 AM On the hour: Dow +0.22%. 10-yr +0.19%. Euro +0.24%vs. dollar. Crude -0.14% to $92.5. Gold -0.78% to $1602.9. 

    Notable earnings after Wednesday’s close: AGOAHT,ANWARICBICDXSCECOCLRDARDPMDVRGRPN,HNSNIOCITCJCPLTD

    MBIMMLPMNSTMWEMYLPANL,PLLRGRUANWESWLL 

    Dec. Durable Goods: -5.2% vs. -4.0% expected, +3.7% prior (revised). Ex-transport +1.9% vs. +0.2% expected, +1.3% prior .

    More on MBA Mortgage Applications: The Refinance Index falls to 4105, the lowest level since last spring (it's been declining since the Fed's Sept. QE announcement). The Purchase Index fell 5% on the week, but is 14% higher than a year ago.

    Fitch says the sequestration would not prompt a rating cut, but would "erode confidence" necessary measures will be taken to secure the U.S. AAA rating. "A failure to raise the debt ceiling in a timely fashion would prompt a review and likely downgrade of the U.S. credit rating." 

    Increasing factory orders help eurozone business confidence rise for the fourth consecutive month, increasing a better-than-expected 1.6 points to 91.1 vs forecasts of 89.8. However, it's worth pointing out that the survey predates the Italian election. Consumer confidence +0.3 point to -23.6. (PR)

    Blackstone (BX) is busy in Europe, but France not so much. "It's very difficult to be excited on France these days," says European P-E head Lionel Assant. "The country is effectively denying the inevitable." At a meeting with other P-E honchos last week, he reports them being "incredibly optimistic" about Ireland, "starting to be optimistic about Spain, "absolutely negative about France." French stocks (EWQ) vs. the rest of Europe.

    U.K. Q4 GDP -0.3% Q/Q vs +1% in Q3 and as initially estimated, while on year, GDP revised up to +0.3% from flat. Sterling was higher vs the dollar but takes a bit of a dive after the data is released and is now -0.1% at $1.5108. The FTSE also loses its gains and is flat. (PR) 

    "Fifty-seven percent of the Italian vote went to parties that have vowed to tear up the EU austerity script," writes Ambrose Evans-Pritchard. It's of "seismic importance," says RBS' Andrew Roberts. "The ECB rescue depends on countries doing what they are told." Roll that line around in your mind for a bit.

    Yields rise in the second Italian bond auction since the country's election, although the government achieves the top end of its sales target range. The Treasury sells €4B of 10-year bonds at a yield of 4.83% vs 4.17% last month, and €2.5B of five-year notes at 3.59% vs 2.94%. In the secondary market, the 10-year yield is -4 bps at 4.87%.

    Japan's government has upgraded its economic assessment for the second month in a row, saying that industrial production has bottomed out and that the business mood is improving because of the declining yen and increasing share prices. However, the government warned that "some weak areas remain."

    A milestone is hit in Miami where the city sees its first construction loan for a new condo project since the property crash. A group led by Regions Financial (RF) will lend $160M to The Trump Group (no relation to The Donald) for The Mansions at Acqualina. Terms were tight – $320M in pre-sales with 50% down payments were required as a condition of the loan. - How's that for proof of demand?

    Company-specific risk for tech stocks is at its highest level in 5 years, claims Morgan Stanley's Adam Parker. He thinks this "typically this bodes well for alpha generation in the technology sector," and suggests investors focus on individual equities rather than sector/thematic plays. Meanwhile, Bespoke observes 28 out of 70 S&P 500 tech stocks (40%) now yield more than 2%, giving them a payout above that of 10-year Treasurys. STX tops the list at 4.9%, followed by INTC at 4.35%.

    First Solar (FSLR) is now off 14% premarket following last night's earnings. "It appears that the company is more willing to be aggressive on pricing than we thought … there's a possibility that H2 financial performance is weaker than the first," says BAML, downgrading the stock to Sell.

    More on Joy Global (JOY -0.8%FQ1: Net profit slips slightlyto $142.14M. Operating profit +3%, operating margin 19.2% vs 18.8% a year earlier. Bookings -29% to $1B. Backlog slips to $2.4B from $2.6B at start of Q1. Sales: original equipment +3%, aftermarket -1%, helped by forex fluctuations. Underground mining machinery -8%, surface mining equipment +14%. Reiterates 2013 guidance. "While some regions have underperformed, we are seeing encouraging signs from the U.S. coal market," Joy says.  

    Christopher Bogdan, the Pentagon's program chief for the F-35, slams Lockheed Martin (LMT) and Pratt & Whitney (UTX) for trying to "squeeze every nickel" out of the government. Bogdan wants the companies to "take on some of the risk…invest in cost reductions…do the things that will build a better relationship," he says. "I'm not getting all that love yet." You might remember that in the summer, Bogdan described the government's relationship with LMT as the worst he'd ever seen.

    Tesla Motors (TSLA) CEO Elon Musk tells Bloomberg TV (video) that the automaker will start shipping in mass to Europe in the June and July time frame. Norway will be a target market initially, but a strong presence in Germany is the long-term plan.

    Sharpen your pencils Tesla Motors (TSLA) traders: In his interview with Bloomberg TV (previous) Elon Musk gives some off-the-cuff sales guidance, saying he sees an environment where the EV firm sells 10K-12K units per year in Europe and Asia on top of 10K-15K units in North America. (video)

    Asia gambling bellwether: SJM Holdings (SJMHF.PK) says it grew its full-year profit by 27% Y/Y to $870M to beat the estimates of analysts. The company saw 8X more growth in its mass market category than VIP. The solid report from Asia's largest casino company could boost enthusiasm for Las Vegas Sands (LVS), MGM Resorts (MGM), Wynn Resorts (WYNN), and Melco Crown (MPEL).

    Retail analysts stand slightly confounded by Target's (TGT) earning report (III) in which it didn't warn over the impact of delayed tax return processing like AutoZone and Wal-Mart did, but set rosy guidance and seems to be indicating its firing on all cylinders. Was it the impact in Canada, growth in the food category, or just solid execution across the board? An earnings conference call at 10:30 AM EST will help peel the onion. (webcast)

    More on Target's (TGT) Q4: Comparable-store sales rose only 0.4% as a higher average transaction price was offset by fewer total transactions compared to a year ago. Gross margin declined 60 bps to 27.8% during the period. The penetration rate for usage of the company's REDCards increased to 15.5% from 10.8% a year ago. The retailer expects full-year 2013 EPS of $4.85-$5.05 and Q1 EPS of $1.10-$1.20 vs $1.03 consensus. TGT +1.6% premarket. (PR)

    Shares of Coach (COH) jump 5.5% higher premarket withrumors flying the retailer may be up for sale. The jump could be short-lived though, as the rally appears to be tied to a dealReporter headline which suggests more than what the underlying story does. 

    Anheuser-Busch InBev (BUD): Q4 Normalized profit -8.5% to $1.79B; EBITDA +9.9% to $4.39B vs consensus of $4.36B; EPS -9% to $1.12. Organic revenue +8.8% to $10.29B vs consensus for 6.2% growth. Total volumes -0.1%. Forecasts that Q1 volume in U.S. will be hit by pressure on consumer disposable income and a harsher winter; in Brazil, volume will be hurt by wet weather and an early Carnival period; expects 2013 beer sales to grow in the country by low to mid-single digits. (PR)

  28. Savi

    Kass—what a snake  ;-0

  29. wombat

    jjennings // evernote
    thats a really cool idea. i use evernote for practically everything. i'll try to work that in over time
    phil // happy to be your scapegoat if it helps, but thats not what i said at all.
    "In the beginner's mind there are many possibilities, but in the expert's there are few."
    -Suzuki Roshi

  30. Phil


    SodaStream (
    SODAannounces a deal with Ocean Spray Cranberries to license juice blend products for its home beverage system. The products will hit the U.S. and Canada market in the second half of 2013.

    LinkedIn (LNKD +3.1%) and OpenTable (OPEN +3.8%) jump out of the gate after Wunderlich starts coverage with Buy ratings. Also, Evercore's Ken Sena has raised his PT for LinkedIn to $200 from $160, arguing it should trade at multiples comparable to those of cloud software plays Workday and ServiceNow, and that of Salesforce shortly after its IPO (ed: the valuations of those firms have been criticized). Sena' reasoning: LinkedIn's subscription streams, addressable markets, and margin leverage "renders traditional earnings valuation metrics less meaningful." 

     Instagram's (FB) registered base has topped 100M just a month after passing 90M. The growth comes even as TwitterYahoo, and others launch apps with photo filters – Instagram's mindshare and network effects are proving hard to overcome, even as monetization remains a question mark. Separately, AOL's Advertising.com unit says it will buy ads for clients via Facebook's FBX Exchange, which delivers ads based on browsing activity on 3rd-party sites. AOL: "We know that advertisers want to include Facebook inventory in their buys — we’re seeing it on RFPs," 

    Zynga (ZNGA+3% AH and Boyd (BYD+3.5% after NJ Gov. Chris Christie does the expected and signs an online gambling bill approved by the state legislature. The law only allows Atlantic City casinos to handle online bets within the state, but casino operators are expected to form partnerships with online gambling firms. Both NJ and Nevada are looking to sign deals that would allow local players to take bets from outside the state, but those agreements could take time to hammer out.

    Groupon's (GRPN) Q4 earnings are due out after the bell, with analysts estimating that the company swung to an EPS of $0.03 from a loss per share of $0.06 as revenues climbed 26% to $638.41M. Piper Jaffray's Gene Munster, who last week upgraded Groupon to "Overweight" from "Neutral," expects Groupon's results and guidance to reflect continued strength in North America and a recovery internationally following two quarters of declines.

     

    Apple (AAPL) is due to hold its annual investor meeting today, when Tim Cook is expected to discuss what the company might do with its $137.1B cash mountain as pressure increases to return more money to shareholders. There have even been whispers that Apple will announce a stock split. However, the company doesn't usually use these events to announce new products or changes in strategy.

    Three breakfast reads: 
    1) Investing In 2013: Remember 1977
    2) SodaStream Is Here To Stay 
    3) Making Sense Of 3D Systems' 2012 Results

  31. 1020

    Apple falls from tree/cramer and kass are brothers/don't bite the maggot…..:)

  32. Pharmboy

  33. ccsincsd

    wombat/TOS
    I'm watching for your email.  I'll send you my workspace.
    Only issue is, I've got (proprietary, paid for) 3rd party studies on each of my 5 charts in the workspace.
    They work in conjunction with regular studies.  I know these studies won't transfer to you, so thus my TA system won't work for you.  But, happy to share the workspace.
    (Ref:  I'm a very active trader using 1D/1M, 2D/5M, 20D/1Hr, 1Y/1D charts with very fast short term signals.  Might not be for your style ?)

  34. ban2

    WFR in the Income Port – stjean

    good morning stjean

    in reviewing your finale post last eve of the income port I noticed the WFR Jan15 $3.5/$7 bull call spread had trades of $1/$2
    The trades looked  reversed.
    when you get a chance can you confirm those are the trades?
    tia

  35. samz3700

    Thanks Obesbridge and Dawnr – will take a look

  36. samz3700

    opesbridge – sorry

  37. stjeanluc

    WFR / Ban – These trades are just placeholders as I have not gotten any reliable fills on all the positions so I can't really add that trade in the portfolio.

  38. ban2

    got it thanks

  39. Phil

    11,280 on /NKD – so far, so good.  11,300 is real test (assuming we hold the floor).  

    PCLN/Turning – Well, all good now so the plan is to not panic and let the premium die on the short caller.  You should be much better off than our cautious exit yesterday.  At the moment, the weekly $700s are $7 and they can (not should) be rolled to the March $720s (also $7) while the April $710/750 bull call spread is $12 so net $5 if you cashed now ($2,500 on 5 contracts) but the short puts expire on Friday and the spread won't change much so may as well hope for the $700 pin and you can then cash $6,000 out.

    And what Yodi said! 

    AAPL/Newt – It's a Que Sera play at this point.  Hopefully the meeting goes well and AAPL jumps up to $460 and, if not – then we have much bigger problems to deal with than losing a weekly call.  Our $25KP position is in the next week $460s at about $5.80 net (with the carried loss) and I wouldn't want to put more into it at the moment. 

    Forex/Samz – Try http://www.forexnews.com/blog/category/forex-news/  Daily FX good too.  

    Haiku/1020 – I was into poetry when I was young and stupid but I still enjoy Haiku as it's poetry without the BS.  

    Thanks Jabob.  Unfortunately, it would have been an unjustified risk to stick with PCLN and we're behind in the $25KP, so we err on the side of caution. 

    11,305!  Aren't futures fun?  S&P is flying too 1,505 is already over the strong bounce.  

    Transports are rockin' up 2.3%.  

    PCLN/Jerconn – They had great numbers – let them go.

    POMO/Jabob – Yes there is but I think the Fed is sending a clear signal and want tomorrow (end of month) to end with a bang, not a whimper so people are going to front-run that anyway.  

    Kass/Angel – Shows you what a joke the SEC is if he can get away with that.  

    What you said/Wombat – Don't worry, we'll get used to each other.   I used to "yell" at Yodi…

    Maggot/1020 – OK, now you're just ripping off Stones' lyrics…  8) 

    11,315 – for those of you playing along at home, now 11,300 can be the stop with a 15-point trail. 

  40. 1020

    Phil – :)

  41. wombat

    ccsincsd // TOS share 
    thanks man. i thought it would be interesting if people could share workspaces, if just to get an idea of how people work. Apparently, on a MAC  you just drop the .xml into the tda app folder and it shows up
    I agree with you on the third party stuff. I'll send you mine as well if you wish.
    jjresponder@me.com
    speaking of which, I'm trying to find the $OEXA200R / TDA said they didn't have it. Anyone use it on TOS ?

  42. yodi

    What you said/Wombat – Don't worry, we'll get used to each other. I used to "yell" at Yodi…
    What do you mean? have you given up yelling looks like I am winning BUT Do not how ever invite me for poker!!!

  43. terrapin22

    HOV – presented yesterday at JPM HY conf in South Beach.  I usually attend it but not this year.   the slides are on their website – a couple of good industry ones for you Phil.  earnings call March 6th.  

  44. BertII

    what happened with oil inventories

  45. Pharmboy

    From BotMuncher…and Gold chart is from SHJ (forgot to give him credit).

  46. scottmi

    /NKD/phil – sweet call this morning!

  47. Phil

    Poker/Yodi – Are you kidding, I'm counting on you in AC!  

    FAS Money (…get it from the candyman…) – Testing $17.50 on XLF and a bit too dangerous to sell here but we'll keep an eye on the March $150s, now $2.70, but they were $8.90 last week so not worth the risk but $5 would be nice to sell 4 ($2K) as we're very well covered to the upside now.  

    AAPL Money – Hopefully today we get a mood change.  

    $25KPM – Sitting on a small profit, I'm really more into waiting PATIENTLY for an obvious play.  

    $25KPA – No change from yesterday but I need to lay out GOOG and make sure we have a proper goal at some point.  The rest all fine so far.  

    HOV/Terra – Thanks, you know I love my local boys whenever they are down around $5 (like yesterday).  Good slide show - I like the title "US Housing Market is Recovering" – that's nice and simple.  

    And my favorite chart:

    Oil inventories/Bert – Forgot about those.  Wasn't expecting any action and there wasn't any:

    EIA Petroleum Inventories: Crude +1.1M barrels. Gasoline -1.9M barrels. Distillates +0.6M barrels.

    Small net draw not enough to goose oil but about as bad as we thought and already at $92.50 so not enough to do anything with for bulls or bears and early in the contract cycle so a big no-play at the moment.  

    Gold/Pharm – Holding $1,600 so far is a good sign.

    Dollar at 81.70 – also nice and calm.  

    11,325 raises stop on /NKD to 11,310.  

  48. Phil

    Thanks Scott.  

    HOV is a stock that can double and we can buy the 2015 $5/10 bull call spread at $1.45 and sell the $5 puts for $1.35 for net .10 on the $5 spread that's $1 in the money to start.  This is aggressive with not much discount so we want an entry we'd be THRILLED to DD on if the market crashes so $500K in Income Portfolio means 1/20 allocation of $25K to a position and 1/4 entry would be $6K which means we take 15 of the spreads ('cause I really like them) for net $150 and risk assignment of 1,500 shares at net $5.10 ($7,650) with a plan to DD at about $3 for 3,000 at $4 average ($12,000 would be right on track for 2x position) or, we may roll down the 1x position at $5 or less as well.  It's good to have a plan but not good to over-plan as it never works out anyway.  

    "No battle plan ever survives the first encounter with the enemy" - Helmuth von Moltke the Elder

    11,345 so 11,330 now BUT – an here's a good futures trick – of course we'll be rejected at 11,350 on first try so we cash out here and get back in IF we break over 11,350.  So rather than stopping out .15 down, we'll just spend .05 or .10 more AFTER we're sure things are going well.  

  49. yodi

    Phil poker I had to sell 35 CZR just to cover my travel and DINNER from Cancun to AC
    I still have some Zambien Dollars to play (8

  50. Phil

    I will amend that /NKD not to say that we EXPECT to have at least a 15-point retrace at this point and, if we pop over 11,350 without a retrace – then we're impressively strong and happy to buy again at 11,355 with a stop at 11,340 so it's the same 15-point risk we would have taken had we held at 11,345 and gotten stopped out at 11,330.  Clear?  

  51. angelcur

     ITALY'S GRILLO CALLS BERSANI 'DEAD MAN TALKING'…HA

  52. Phil

    Zambien Dollars/Yodi – LOL – I'll take 'em!  I love those old games where people would throw in whatever they had on them.  

  53. Pharmboy

    Darn….SGEN moved a bit too fast.  Not gonna chase, but the spreads from yesterday are now up.

  54. angelcur

    Whom do I make arrangements with re AC?
    thanks

  55. wombat

    jfawcett // TOS
    I was just re-reading through yesterdays thread and found your response. jjresponder@me.com 
    Also, thanks for the explanation of the side comments // 
    burr // 200%
    can't imagine
    so, my takeaway from your earlier fill question was to basically place a GTC and let it sit. If it doesnt fill in a week, don't chase  ( one of my bad habits ) just move on. Is that what you got ?

  56. Phil

    Wow – I think we have a winner in our Republican Schmuck of the Week – this will be REALLY hard to top:

  57. yodi

    angelcur
    Send the money to me as a poor Mexican I need it
    Man do you ever read our chat room?

  58. yodi

    Phil is it wise to sell still some AAPL weeklies at the top of the day they go up and down like a yoyo 

  59. palotay

    EXPE/Phil – Any adjustment to EXPE now that PCLN beat?  We sold the long calls that were covering our short call positions, leaving us naked.

  60. angelcur

    chat room//nope tell me where to access the chat room

  61. Phil

    CZR/Yodi – Keep in mind these are ill-gotten gains so far on the very well-timed gambling bill moving through NJ.  I think CZR is now over-reacting to the upside but hopefully $10 stays safe.  

    LOL Angel.  AC Contact info is:  For guests that will be calling in their reservations, they may call our Reservation Center at  1-888-516-2215. Currently, the name of the group is listed as Phil’s Stock World and the code to identify the group is SH04PS3.

    10:10 AM Bernanke Semiannual Monetary Policy Report: Day 2 of testimony kicks off, this time before the House Financial Services Committee. Bernanke's prepared testimony is identical to yesterday's. Watch live here. 

    11:40 AM Europe rebounds from yesterday's big losses following 57% of the Italian vote going to those threatening a return to the lira, and the EU's man – Mario Monti – was more or less shunted out of the picture. Has a single election in recent years shown voter approval for the EU status quo? Yet the ball keeps rolling. Stoxx 50 (FEZ+1.6%, with Italy (EWI+1.7%.

    Jan. Pending Home Sales: +4.5% vs. +3.0% expected, -4.3% prior (revised). 

    Leading off his latest outlook with Alan Greenspan's "irrational exuberance" line, Bill Gross (BOND) ponders its application to credit markets (LQDHYGJNK) today. Conclusion: Not yet. Labeling credit irrationality a 6 on a scale of 1-10, Gross suggests not selling, but instead lowering expectations.

    Bernanke Resuscitates QE, Downplays Risk and Cost (Bloomberg)

    Bernanke Defends Asset Buying as Benefits Outweigh Risks (Bloomberg)

    Major Correction or Bear Trap? (Advisor Perspectives)

    Sheila Bair: Grand Old Parity (NYT)

    More on Fortress Investment (FIG) Q4 earnings: Buy low – the company in 2012 repurchased 10% of its shares at $3.50 each vs. current price of $6.40. New commitments of $1.6B in 2013 thus far vs. $6.7B for all 2012. "Dry powder" of $6.2B vs. total AUM of $53.4B. "The credit environment worldwide stinks right now," says management on the conference call (company hiked dividend today). Shares +2.4% today, +45% YTD.

    Vornado Realty Trust files a 10-K with the SEC in which it indicates it took a $225M impairment loss on its position in J.C. Penney (JCP -3.3%). Though the action could be shrugged off as largely an accounting measure, it raises the question of what JCP board member and Vornado Chairman Steve Roth has in mind to turn around his investment.

    Gold miners (GDXGDXJ) have actually tracked the rise in the price of gold pretty closely if you look at market caps, according to Samuel Lee. Miner stock prices are a different story as "empire-building" managements have diluted the heck out of the equity.

    More on the gold miners (GDX): Admitting you have a problem is the first step. Barrick Gold (ABX) and Goldcorp (G) havebegun reporting "all-in sustaining costs" for the first time, with the result averaging $941/oz. from $626 previously. "Miserable capital allocators," writes Liezel Hill, the managements' moves show an effort to focus on margins and costs, rather than boosting output. (previous)

    Unsurprisingly, solar stocks are giving back some of their big 2013 gains (TAN -3.7%) in response to First Solar's (FSLR-16.1%Q4 results and guidance. LDK -9.6%SCTY -7.7%SPWR-6.2%YGE -6%TSL -4.5%JASO -4.4%GTAT -2.9%. Piper and Baird have joined BofA in downgrading FSLR. On the earnings call, management said it's targeting a 2013 book-to-bill of at least 1 (it was 0.8 in 2012), but cautioned it expects 2H results to be weaker than 1H results due to upcoming project completions and a greater mix of module sales.

    Railroad stocks move higher after a report on durable goods comes in better than expected with Kansas City Southern (KSU +6.4%) leading the pack. Advancers: UNP +2.0%GWR +2.2%,CNI +1.6%UNP +2.1%.

    Heard on Target's (TGT) earnings call: 1) The first 24 stores in Canada will open in April and 128 stores will be opened before Christmas. 2) Execs say they have a "tempered" view on near-term consumer spending with the U.S. growing "painfully slow," but think the company is well-positioned with stores remodels in place to highlight food assortment and online channels performing well. 3) On Q4 sales: Home and apparel categories held up, while digital channels saw strong sales. Electronics continues to be a challenge due to the "irrational behavior" of rivals. 4) Mobile purchases make up 7% of digital sales with participation in Apple's Passbook app contributing to the surge. (webcast)

    The longer execs with Target (TGT -0.8%) talk at their earnings call (webcast) the more the theme shifts toward a picture of an U.S. consumer under pressure. Reading between the lines, retail analysts think Target is betting even heavier on Canada than expected, as well as lowering the Q1 and long-term sales guidance for its U.S. business.

    Target's test of embedding Best Buy's (BBY +0.3%) Geek Squad technicians inside of stores has expanded into Kansas City, according to the retailer. A broader Geek Squad rollout is hinted at, but not promised.

    Zogenix (ZGNX +44%) continues to surge higher this morning on the news of the FDA decision to push back its PDUFA date for Zohydro. Analysts see the delay as a potential positive, as it's likely to be short-lived and the odds for eventual approval are still high. Wells Fargo's Michael Tong sees just 20% downside on a negative FDA decision but potentially 100%+ upside for the stock if given the green light.

    Is Twitter Really Worth $10 Billion? (WSJ)

    Though H-P (HPQ -0.3%won't sell or spin off major business units (as some want it to), the company is open to shedding "small businesses" and tech projects, says Meg Whitman – H-P's videoconferencing hardware sale to Polycom is cited as an example.Whitman adds H-P has about 15K job cuts remaining in its restructuring (expected to feature 29K cuts), but that the company has under-invested in its IT infrastructure. She admits the Palm acquisition was "a detour to nowhere" (is history repeating?).

    The business versions of Office 365 (MSFT) are officially out. Prices range from $20/user/month for Enterprise & Government version to $12.50/user/month for the Small Business Premium version. An InfoWorld review praises 365's feature set, admin tools, and ease of use, while granting "there's still plenty of room for improvement." With its latest Office refresh, Microsoft has gone out of its way to encourage a mass migration to subscription services, as it tries to keep Google Apps at bay. (previous: III)

    Following Nokia's (NOK +3.9%) Mobile World CongressLumia and feature phone launches, Argus is now more optimistic about the company's low-end and mid-range prospects, and hasupgraded shares to Buy. That's leading Nokia to rally after closing yesterday near its 2013 lows.

    When All You Have Is an ‘Apple Is Doomed Without Steve Jobs’ Hammer, Everything Looks Like a Nail (Daring Fireball)

    This is how Apple rolls (Macworld)

    Chinese Junk Patents Flood Into Australia, Allowing Chinese Companies To Strategically Block Innovation (techdirt)

    Online Broker Review 2013 (StockBrokers.com)

  62. stjeanluc

    AC / Angel – Contact Terrapin at thegeneral91@gmail.com

    It would be good to see you there. Although going to Canada again in June so maybe I'll stop for lunch on the way back!

  63. Phil

    /NKD did move up and over and now 11,375 but, with the new entry, it should be back to tight stops as if it were a new trade as this is just bonus money now although now we can take our chances at 11,400 as it is just bonus money.  

    AAPL/Yodi – Too dangerous to sell calls at the moment (I hope).  If we're selling calls at $447 then we've given up on AAPL. 

    EXPE/Palotay – They have a very different model than PCLN but they would have followed them down – so we dumped the calls but no need to worry about the short calls as we're just betting they aren't over $65 by March expiration (two weeks) or over $69.48 by July and that's almost 10% away.  

  64. wombat

    Burr // BTU
    What are your thoughts on BTU calls. I saw your post from earlier on the $1.40 April calls. I'm looking at a 3mo chart and it looks like it may bump into those pretty quickly – what was the thinking ?
    I scaled in more $23 puts for $5.75

  65. terrapin22

    angelcur – email me re AC.  PSW Investment Conference at Harrah’s April 27-29.  With Rexx on board we now have 11 members signed up.  The conference link is in Phil’s main post yesterday.  Email me with any questions: thegeneral91@gmail.com.  Thanks.  

  66. Pharmboy

    BP Mar $40 Ps STO for 63c.  Nice dividend, but be ready to roll.  The legal action is pressing the stock, but well worth the ride.  Weeklies are even more fun.

  67. jabobeast

    FU AAPL!!!!
     
    they are really starting to piss me off!

  68. wombat

    jabo / AAPL
    ahahahaahhaahahahahahaaaaaa.. any news > ?

  69. dclark41

    Apple shareholder: Live Blog
    http://www.cnbc.com/id/100501280?__source=yahoo|headline|quote|text|&par=yahoo

  70. jabobeast

    now that's better ;-)

  71. Phil

    Oh no, Lindsay Graham won't give up the title of Republican Schmuck of the week without a fight:

  72. rdn4evr

    Schmuck of the Week – It's only Wednesday…

  73. qcmike

     
    Phil
     
    First Solar FSLR  any trade  ?
    Thanks

  74. bai2r

    Phil / Yodi -  for AH :
    Your thoughts on the options premium on STX (as I learn to plant seeds)
    Price $31.90
    Jan 2015 $32 call $7.25 (bid)
    Jan 2015 $32 put $4.70 (bid)
    Pays $1.52 div/yr (4.75% yld)
    Aren't the premia on these rather high?

  75. jr_mints

    Lindsey Graham………..what  a dick!!!

  76. stjeanluc

    Did Tim Cook just say they were going to give away the cash to charity? I mean down $10 in 10 minutes…. Great company, broken stock. And it's not mutually exclusive as we have seen in the past.

  77. Phil

    BP/Yodi – Good call.  

    11,405!  It's like a little energizer bunny (but so is the S&P, now 1,513).  

    Metals selling off and gasoline flopped to $3.16 and nat gas barely holding $3.50 (but a good gain to there) and TLT 118.72 and VIX down to 14.66 already so I guess money is stampeding back to equities after the 1-day break.  

    Supreme Court Refuses To Make It Easier For The SEC To Sue People For Fraud 

    MORGAN STANLEY: China's New Highways Are Sending Tons Of People To Macau's Casinos 

    "The European-American Dream"

    17 Major US Bridges That Need To Be Fixed Right Away

     

    House appears confused by the Criss Angel school of wealth effect levitation

     

     

    His answers there are pretty sensible. Except for the fact that he thinks QE is solving the worlds problems….

    Brad Sherman evokes an image of America "somewhere between Greece and the Thunderdome"

     

    I am long the  $450 calls next week vs the weekly (this week) $460 calls into today's shareholder meeting

    Hey – that's our move!  

     

    APPLE CEO COOK GETS 99.1 PERCENT APPROVAL FROM INVESTORS

     

    AAPL's Cook: "I don't like falling stock either"

    The Republican Sequestration Plan 

    Wednesday/Rdn – I know, and it's always a tough battle right to the end with so many schmucks to choose from but Sacia put in such a strong performance – I don't think it can be topped – even by 20-time champion Lindsey Graham…

    FSLR/QC – I never liked them.  We used to short the crap out of them when it was worth it.  Better to play the other guys they are dragging down for no reason (because they, unlike FSLR, do not suck).  

    LDK is one of those low-cost Chinese providers that are squeezing everyone else's margins.  They are not a great business but they are a real business and not bad for a long-term play at $1.67.  You can sell 2015 $1.50 puts for .90 for a net .60 entry and leave it at that or add the $1.50 calls for .70 and you have a net $1.30 entry and if they pop you can sell calls but, otherwise, just hope they don't go BK and you're fine.  

  78. stjeanluc

    And now AAPL up $5… Hang on for the ride!

  79. Gingbaum

    Hi Phil,
    can you explain why you are buying CLF for the income portfolio – the chart looks pretty ugly with no real technical bottom.  What factors will propel this stock up?
    Thanks

  80. yodi

    New Play
    Back ratio on LVS
    May13 buy 4 48c sell 4 55c cost 1.29
    May13 sell 3 47p @ 1.92
    Max profit 2848.00 at 55c
    down protection 46.84
    upper protection 62
    PM margin 230.00
    cost of play credit aprox 72.00

  81. yodi

    Sorry on LVS you need to sell 8x May 55c

  82. jabobeast

    PCLN;
    Cantor Fitzgerald raises target price to $800 from $750; rating buy
    Credit Suisse raises price target to $895 from $847; rating outperform
    Macquarie raises target price to $820 from $790; rating outperform
    Jefferies raises target price to $820 from $780; rating buy
     
    All these clowns love PCLN and hate AAPL???!!!
     
    FU analysts!!!

  83. samz3700

    guess all those people who bought aapl on Doug Kass's rumor that they would do a stock split are now selling.
    I wonder how much money that guy and his cronies made on that one?

  84. mjjwo9b

    Schmuck of the Week:   Hey, that's my police chief B-Slapping the Gentleman from South Carolina.  He and the Mayor are taking a pretty good smack from Gov Walker and Milwaukee's Sheriff… http://www.youtube.com/watch?v=-8TCx-sM1vw   No gun bans or mag restrictions in this part of the country…
    Oh, yeah, and the good sheriff is a Democrat.  Go figure.

  85. samz3700

    Buying puts every time Tim Cook opens his mouth seems like a prudent move. 

  86. mjjwo9b

    Phil/ HOV – Nice play.  Thanks for calling it out.  

  87. rperi

    http://www.stockbrokers.com/2013-online-broker-review.html#section-overall
    One of many online brokerage reviews for 2013, but a decent one.  TD Ameritrade really taking a stronghold.  If not for a low score on commissions and fees, they would have run away from the pack, though our fee structure is much smaller than their standard.

  88. Phil

     

    Memo to : Thinking of ending my retirement from crime. Would you recommend basing a criminal enterprise in China?

    Billionaire Bill Ackman’s Ill-Fated Bike Ride: “His Mind Wrote a Check That His Body Couldn’t Cash” 

    Apple sales in China: $24B: "This is larger than any technology company in the United States

    Some excellent live updates from the  Annual Shareholders Meeting on the Stream  

    STX/Bai – I just don't see what they intend to do with themselves going forward.  It's a shrinking market with shrinking margins and they are still a nice, profitable company and will remain so for quite some time but that doesn't make them a good stock (unfortunately because I object to that about the market, but it's the way it is).  I was liking them when they were under $10 as that was just silly but $32 is just not that exciting to me as it's $11.5Bn for their $2Bn in profits – which is great but may dip 10% or more this year and suddenly the p/e of 5.75 you are salivating over jumps to 8 and people run out, etc…  I'd keep them on a watch list and look to sell puts when there's bad news and they dip back to the low $20s but giving them 2 years to screw you is not a good plan.  

    LOL Rustle – I love that show.  

    Charity/StJ – Good!  Better than giving another $10 a share to shareholders who don't need it.  

     

    CUPERTINO, California (Reuters) – Apple Inc CEO Tim Cook acknowledged on Wednesday that his shareholders were disappointed with a five-month slide of more than 30 percent in the company's share price but urged a focus on the longer term.

    "I don't like it either. The board doesn't like it. The management team doesn't like it," Cook told investors at an annual shareholders' meeting at the company's headquarters in Cupertino.

    But by focusing on the long term, revenue and profit will follow, he said. Cook added that the company was working on new product categories, but, as usual, would not elaborate.

    CLF/Ging – They produce the iron to make the steel to build the cars and buildings.  A little CRE rebound, a few Durable Goods out the door, some auto sales and a little infrastructure spending and this stock can double up fast.  Even with the recession, they made $1Bn in 2010 and $1.6Bn in 2011 and last year lost $900M but it was a one-time charge of $1.2Bn that did it and that sets them up with a carry-forward tax loss of $500M to start 2013 and, by the time they report a $250M profit in Q1 – it will be way too late to buy back in for $3.7Bn ($26). The recent sell-off was because they cut their dividend to a sensible 2.3% (from 9%) and they are also issuing stock to pay off debt.  Some people hate that but I love it when I own a company and I can just sell some stock to pay off my debts instead of using, oh I don't know – cash!  

    LVS/Yodi – Crazy stock, be careful.  

    Police chief/Mjj – I like that guy, not taking any crap.

    LOL Samz – you're right, he's the George Bush of AAPL. 

    You're welcome Mjj. 

    TDA/Rperi – All thanks to buying TOS.  Before that their platform sucked.  

  89. yodi

    On BP Pharm gets the credit!!! for me some what high in margin on weeklies even that it could be a 10% return in 8 days!!

  90. angelcur

    AAPL should be done going down for today
      meeting over fast money that takes advice from gnomes likely gone

  91. rperi

    TDA – Sometimes one smart move is all it takes.  I'm sure many of us members would agree.

  92. rperi

    Phil/Filling Strategies – as an aside, you wanted someone to remind you to talk about filling strategies today.

  93. yodi

    Thinking of Shadow today hope he is doing well!!

  94. Phil

    This is not good:

    Maybe all that PCLN money is coming from people fleeing Europe?

    DRAGHI SAYS ECB IS 'FAR' FROM EXITING STIMULUS MEASURES

    AAPL/Angel – I've owned stocks like IBM, T, DIS… my whole life and my Grandfather did before me since the 1930s and how many times did key people die or leave or did they have dividend cuts or distributions or good or bad years in between?  In the end – you KNOW it's not going to matter.  I don't know why people obsess over this minutia on a long-term hold of one of the World's largest companies.  What you need to worry about is Global Recessions or Asteroids hitting the Earth or things like that – not whether or not AAPL uses 10% of it's cash to return another $10 to their $440 per shareholders in 2013….

  95. samz3700

    Here is a summary of Doug kass manipulating AAPL's share price - 
    http://complaintsoffice.com/doug-jack-kass-drops-road-aapl-on-wall-st/
    I don't know how he gets away with this.

  96. wombat

    Samz // Cook
    I think you're on to something. Jezus. Here comes your 420 Phil.

  97. ariveraA

    KASS/ Phil: The part I find interesting of the twitter story is that there are a fairly large number of hackers out there that could access Kass or Cramer's twitter accounts and make a nice profit publishing rumors.  I'm amazed it doesn't happen more often.

  98. yodi

    I am just curious to know if any one followed my WYNN play of 2/25 today up 136$

  99. Phil

    `Filling a spread/Rperi – Yes, thanks for reminding me.  

    So, when we come up with a trade idea for the Income Portfolio like selling CLF Jan $23 puts for $3.20, the best thing to do is just put in an offer to sell and see if you get a nibble.  This morning they filled for $3.10 and, in the grand scheme of things – .10 out of $3.20 is not much (3%) so no reason not to take that but you could also just offer $3.10 for 1/2 and then PATIENTLY see how it goes.  If CLF never goes down, then you win anyway and you move on with less of a margin obligation than you would have had.  If CLF goes down, you will be thrilled to DD at $3.30+ to get the $3.20 you originally wanted.  There's no pressure here – you don't HAVE to buy CLF at all.

    If, on the other hand, we were doing a bull call spread with the short puts, you can play it differently because you KNOW that CLF will eventually go up or down so, if we were pairing the short puts with the 2015 $23/30 bull call spread at $3, then any combination that yields a net .20 credit is fine.  So, you can put in an offer to buy 1/2x at the net .20 credit or you can offer to sell (all 1/2x) the puts for $3.25 and buy the calls for $5.50 or sell the puts for $2.70 so, no matter what triggers first, you have a good price and then you can adjust the rest to fill it in.  Once you do get one fill – THEN you have an urgency to complete the spread (if you are worried it may get away from you) but, if the stock is bopping up and down in a range and you don't mind taking a chance – then maybe you eventually fill each leg at a good price (net .45 credit in this example).  

    Another fun thing to do is time the trades – as if momentum plays.  So, if CLF is having a good day and is heading higher, you can first buy the $23s and then sell the $30s at the top of the channel (or when it loses momentum).  Same goes for the puts – just wait for them to have a bad day and then sell the puts (see Buffett quote in today's post).  

    Just keep in mind, it's never urgent.  If the stock really gets away from you then maybe move to the next year or maybe higher strikes or maybe change strategies or maybe walk away but there is never a reason to overpay to get a position – clearly if the position is so great that you'll never see that strike again then you can wait for them to establish a higher channel and trade that.  

    Kass/Sams – I'm disgusted by that one.  So blatant and no reaction from SEC at all.  I just said to Sam, why go to China when you can get away with this kind of crap in the US?

    Hackers/Arivera – That doesn't work because they are relatively poor and would be immediately caught and punished.  Apparently Kass falls under the brand new "too big to jail" category that seems to be becoming official.

    Speaking of crooks – here comes Bill Gross on CNBC.  

  100. Jordan

    AAPL is the only stock on my watchlist now that is negative today.  This has happened several days in the last few: everything up, AAPL down, the only down stock on my watchlist.

  101. ban2

    Kass/AApl
    FYI
    Just in — Kass going to donate 20% of his profit to the Swiss Gnome Protection League.
    Swiss terrified that a group of vigilante APPL investors are planning a Gnome extermination expedition.
    Kass stating he still has 1% of his portfolio in AAPL longs and needs gnomes to keep info lines open.

  102. ariveraA

    Austerity/ PMI:  In Puerto Rico, our previous republicanish (we can't vote) governor pushed austerity and fired 30,000 people at the start of his government.  Last year he was used as an example of austerity by Romney.  Now we know that our 6+ uear recession is alive and well and the finances are worst than ever… we just "sold" for 40 years our national airport to a mexican company!  Anyone who thinks austerity works is living in Fantasy Land!
    http://www.youtube.com/watch?v=YlVDGmjz7eM&feature=player_detailpage

  103. yodi

    Phil you might laugh about this one I am still having the XRT play on my neck and can not get rid of it asking myself, will this stock ever drop? At present I have rolled up to Jun13 5 X 65 callers to 2.86 now 3.92 against me but I have never paid any money against all these rolls as evertime I roll and costing me money on the roll, I have sold putters against this sucker and at the present roll I sold  5X Jun13 62 putters for 1.84 now down to 1.29. Every time the putters run worthless and I am stuck with a higher caller. I refuse to take a loss on this one. Any idea when this stock stops climbing?

  104. Phil

    Gasoline $3.11 – now that's a drop! 

    12:11 PM Stocks are at session highs midday with the S&P 500 (SPY +0.9%) – for the moment –  just shy of getting back to its Friday close. The Nasdaq 100 (QQQ +1.1%) is green for the week.

    The rush to buy casino stocks (BJK) due to the potential oflegalized online gambling in Nevada and New Jersey may be a bit premature, according to analysts. Until state politicians works out deals one state at a time, projecting future revenue for individual companies is a bit futile. A more sure-fire play may be to load up on equipment makers looking to get into the action. Online gaming bets: International Game Technology (IGT +0.4%), Bally Technologies (BYI+0.3%), SHFL entertainment (SHFL +0.1%), Multimedia Games (MGAM +2.2%), and WMS Industries (WMS +0.6%). 

    Starwood Property Trust (STWD +4.2%) following its big earnings beat. The company put another $1B to work in Q4, bringing 2012's total to $2.6B. Assets held for investment sum to $3.4B with annualized levered return of 11.7%-12.2% expected over their life. "CMBS originators appear to be in a sweet spot," says Dynex (DX) CEO Tom Akin, looking forward to Walker & Dunlop's (WD) report next week.

    It's a rare that a retailer openly tells investors that its doesn't see any upside for profit margins over the next several years, but that was the message from management at Nordstrom (JWN +1.8%) last week during the firm's earnings call (transcript). Though the bout of honesty is appreciated, Retail Geeks notes the appraisal leaves Nordstrom almost no margin for error to keep up with analyst estimates.

    KPN has hired Alcatel-Lucent (ALU +2.6%) to manage its Dutch wireline network for the next 5 years. Alcatel will also migrate KPN's backbone network from legacy circuit-switched SDH tech to VoIP, and provide lightRadio Wi-Fi systems. News of the deal comes as Bloomberg observes Alcatel and Huawei are emphasizing managed services in an attempt to win deals at the expense of Ericsson and Nokia Siemens. Alcatel's services revenue grew 1.8% in 2012, while service provider hardware sales fell 8.6%. (Ericsson forecast)

    Qualcomm (QCOM) and Nvidia (NVDA) are in the midst of a trash-talking battle that would make Intel and AMD proud. Nvidia boasts its Tegra 4i baseband/app processor will undercut Qualcomm's Snapdragon parts thanks to a smaller die size, and isshowing off benchmarks for its Tegra 4 app processor that suggest it outperforms the Snapdragon 600 line. Qualcomm counters by arguing its Snapdragon 800 chips will beat the Tegra 4, and have scored over 50 design wins. The chipmaker also promises the Snapdragon 200line will enable sub-$100 smartphones.

    A change at the top did little to stop the ratings slump at CNN with the network losing 5% M/M and 10% Y/Y of its daytime viewers in February as well as 1% M/M and 18% Y/Y of its primetime viewership. Parent company Time Warner (TWX +1.6%) has increasingly relied on its cable TV business to make up for the flattish growth with its movie studio and struggles at its publishing arm – but for the most part its been HBO, TNT, and TBS doing the heavy lifting instead of CNN.

    A market rally and a BofA/Merrill upgrade to Buy help send Google (GOOG +1.7%) back above $800. Joining a crowdedbandwagon, BofA says it's now "less concerned" about the mobile shift, and points out tablet ad prices will soon match PC ad prices (buttraffic acquisition costs are much higher). The firm also thinks a recentmobile-centric overhaul of AdWords will boost mobile ad prices, and believes eBay's 2012 multiple expansion "sets a positive precedent". Merrill downgraded Google in October, when shares were 16% lower.

    Though it pulled Prop. 2 after David Einhorn scored an injunction, Apple (AAPL -0.5%) is still committed to requiring shareholder approval for issuing preferred stock, the company states at its shareholder meeting. Also, CalPERS says it would have voted for Prop. 2 if it had the chance. A proposal granting shareholders an advisory vote on exec. compensation has been approved, while one requiring execs to keep 33% of their stock until retirement has been shot down. Doug Kass might be disappointed to learn no stock split has been announced (or perhaps not). (live blog) [Tech]

    More on Apple's (AAPL -1.3%shareholder meeting: With rumors of iWatches and new set-tops swirling around, Tim Cook hints at new products. "Obviously we're looking at new categories — we don't talk about them, but we're looking at them." Cook on Android's share gains: "There's a button or two we could press to make the most [devices] …. That would not be good for Apple." He boasts over half of Chinese/Brazilian iPad buyers are new Apple customers, and still thinks David Einhorn's suit is "silly." No word of a dividend or buyback hike. (live blog) 

  105. Opesbridge

    Phil/FAS – Those March 150 calls are getting closer to $5.00 (around $4.40 now)

  106. Pharmboy

    From TraderPaul

  107. stjeanluc

    AAPL / Jordan – Another typical day – Dow Jones up 160 points and AAPL down $5.00. Doesn't make sense anymore!

  108. yodi

    ariveraA
     
    Puerto Rico Airport. Well that shows you how clever the Mexican Drug dealers work

  109. Jordan

    AAPL/stjeanluc – now THAT's probably why AAPL is not in the DJIA.
    AAPL/ban2 – that's hilarious!

  110. ban2

    all AAPL suppliers up nicely today — w/o AAPL — wtf!
    TQNT  +7.2%
    SWKS  +4.2%
    RFMD  +3.6%
    AVGO   +2.7%
    CRUS  +1.3%
    BRCM  +1.1%
    QCOM  +.9%

  111. jr_mints

    Opesbridge, I have an order in for 1/2 @5.00 and then I'll just wait and see what happens. 

  112. zeroxzero

    Yodi:  You're right on it.  Transhipped from the Dominican Republic, whose military establishment is now a branch of the Mexican cartels.  You would think that the U.S. might re-think its criminalization of drug use and treat it as the public health problem is truly is.

  113. ariveraA

    airport / yodi: No worries.  We just have direct connections to all major US metro areas!

  114. zeroxzero

    And has anyone noticed that Bill Gross appears to be shape-shifting into an iguana with encephalitis? http://online.wsj.com/public/page/news-financial-markets-stock.html?mod=WSJ_topnav_markets_main

  115. newt

    Wynn/ Yodi- I did!

  116. Opesbridge

    lol @ zero

  117. Phil

    Ramming speed!  Markets getting stronger as the day goes on.  XLF $17.63, /NKD just rejected at 11,450 but choppy now.  

    AAPL/Jordan – Imagine what will happen to the indexes if it does pop up.  It's like a Jack in the Box that you think is broken because you turn it a few times an nothing happens but then, suddenly – POP!  

    KASS/Ban – He'd better have some friends in Switzerland if the SEC ever wakes up.  

    LOL Arrivera – I feel your pain.  Good clip selection.  I had similar problems in school as I had actual business experience, which really tends to hamper your ability to "learn" from the geniuses who teach business.  

    XRT/Yodi – The thing that would not die!  Unfortunately, NFLX is their largest holding as well as our beloved SVU and the recovering BBY – also in the top 5.  Still, as you can see from the pullback yesterday, the 50 dma, which is right at $65, wants to be tested and I'd just keep rolling against the eventual stumble.  I'd sell 5 more of the $65 short calls ($4) and buy 10 of the 2015 $66/72 bull call spreads for $2.25 for net about $250 out of pocket and then you are covered for $6 of upside (10%) from here without much fuss.  Hopefully, between now and $70, they have a nice pullback close enough to expirations to help you out. 

    FAS/Opes – Stay on target!  

    AAPL/Pharm – Oh no, you mean they might only earn $50 per $440 share this year???  Sell, Wilson, SELL!!!! 

    That's my pet peeve about the market – it's unacceptable for a company to run a perfectly good business that makes 10% a year without growing.  That forces people to expand into things they don't know about or don't have good synergies with and forces them to compete for market share with other companies, who otherwise would be perfectly comfortable staying put and making a nice little profit each year.  It forces companies to outsource labor and skimp on quality – all for the sake of pleasing Wall Street.  Capitalism is a great idea for a growing local or global economy but it really is a problem in a static environment.  

    AAPL/Ban – First the tugboats – then the mothership.  

    Drugs/ZZ – I wish.   LOL on Gross – you're right.  

  118. yodi

    ariveraA
    All my connection open to all US airports makes me feel better one day will go public (8

  119. yodi

    Phil thanks on XRT will look what to do

  120. ban2

    "AAPL/Ban – First the tugboats – then the mothership."

    sonofagun your right — 2:30pm blast off!  gotta break thru 450 though

  121. 8800

    Tim Cook – 99% approval?
    Seriously?  Probably is a nice guy, but diametrically opposed – as he has demonstrated repeatedly – to what AAPL needs in a CEO. TC is an operations guy (supposedly) probably a get-along-with-everybody administrator, but clearly not a visionary or inspirational take-the-bit-in-the mouth competitive leader. Not a criticism but it is difficult to accept that the majority of AAPL owners (like us on PSW) let alone 99% think he is doing a good job. Where are Elon Musk, Mark Cuban or Richard Branson when we need them? My rant for the day.

  122. newt

    GMCR/ Phil et al: Another leftover from earnings- long Mar 5o calls and thinking I can use the remaining prem to get a position down the road.  Looking at 2 yr chart I see the price spiked in late summer / early fall 2011- how do i read this to roll to to pick a good strike for the sale of an additional call to put some beer money in my pocket?

  123. ariveraA

    Yodi/ , But drugs and corruption are well under control in Mexico :-)
    Elba Esther Gordillo Morales arrested.  Nothing to see here, move on.
    http://www.elnuevodia.com/caelamujermaspoderosademexico-1458133.html

  124. yodi

    newt
    WYNN good man
    here an other one
    Apr13 LEN  buy 3 x 36c  ans sell 6 x 41c for 1.52
    May13 sell 36p 3 x for 1.40

  125. Jordan

    8800/Tim Cook – I think he's doing a good job of being a CEO because he's staying true to the spirit of Steve Jobs in tems of what his focus was as a CEO.  When you listen to him it comes through how he's thinking about "what woud Steve do?"

  126. yodi

    Something wrong with my TOS trading platform showing AAPL +.06 !!!!

  127. newt

    Yodi- Thanks.

  128. deano

    21 stocks in the S&P 500 in the red – make that 20

  129. diamond

    8800 – I back Tim Cook 100%!  I seriously doubt that you know very much about TC or his abilities, competitive spirit, visionary skills, etc. Obviously Steve Jobs knew him a lot better than most people, and he hand chose him as his successor (first temporarily then permanently) at Apple. So I am going with the late great Steve Jobs on this one and will give Tim plenty of time to make his mark. If you are so unhappy with him, just close your position(s) in AAPL and get a job reporting for the MSM on how you know so much more than any of the people running the company. Sheesh …

  130. newt

    LEN/ Yodi: Looks good if I am using/ reading the TOS Analyzer right….
    read the lines today
    money trouble is coming
    edmond fitzgerald

  131. jerconn

    Phil – market getting stronger and stronger – but is is overbought?  Hard to believe that the last selloff (Monday) was enough to alleviate overbought conditions of several weeks…do you see another near-term selloff?

  132. hemas03

    StJ/Phil, was able to buy TASR stock (the last June 2012 IncPort reco) @ 7.02 this morning.  Now trying to catch my $2 for the Sep 7.50 P and C.  I noticed TASR is not in your last copy of the spreadsheet, or I am mistaken?

  133. yodi

    ariveraA
    Carlos Salinas de Gortari you got the most honest man in Mexico Why do you think Carlos Slim is the richest man in the world just for other readers he is the strawman of the honest ex president (crook)

  134. stjeanluc

    TOS fixed now Yodi!

  135. stjeanluc

    TASR / Hemas – It will be in the new Income portfolio. Thanks for update. But I also need these options filled before we make it official.

  136. 8800

    Diamond,
    Just expressing an opinion which was not meant as a character assassination, only as a tongue-in-cheek thought as to who might be a more appropriate leader for AAPl and what qualities are needed in this environment. No offense intended. One guy's opinion. If bank robbery ceases to be profitable I might try MSM reporting.

  137. yodi

    newt
    LEN still waiting to fill the putter but remember this is only a two month run!!! and the market is very high today possible there will be a dip tomorrow

  138. jabobeast

    Maybe AAPL will go up when the dow hits 15k?
     
    Or is NFLX going to buy them?
     
    Do you think Dougie Kass will teach me how to Dougie???
    http://www.youtube.com/watch?v=pBD0093jEvI

  139. zeroxzero

    Jabp:  NFLX would plunge if they bought Apple.  I'm pretty sure the Fed would go bankrupt if they bought Apple.  It's not a company anymore, it's a cosmic portal to Uranus.

  140. Phil

    AAPL – Still strong selling at the $350 line but once we get rid of that guy (Einhorn?) we'll be in good shape.  

    Cook/8800 – I approve of him.  You don't need a gung-ho risk-taker to run a successful company.  Sometimes it can be detrimental.  AAPL has a culture of excellence and great employee retention and the best thing Cook can do is let them do their thing and he seems to get that.  The pace of innovation may slow down because Jobs would push and push but he also stressed everyone out but, of course, he was driven to accomplish things before he died.  Cook doesn't have that urgency and neither does the company now and long-range investors will reap rewards – as soon as we get rid of the dead-weight impatient investors like Einhorn, who thinks he can raid AAPL like some it's some wounded behemoth.  Al Gore owns almost as much AAPL stock ($28M) as Einhorn ($41M) does  - he's just a blowhard looking for attention.  

    And what Jordan said.  

    GMCR/Newt – Another one I'm not a fan of.  Not likely to have much support above $30 if anything bad happens so I'd just cut and run.  They fell from $50 to $25 last April and I couldn't tell you what would stop them from doing it again but they also are capable of massive short squeezes so it's just a stock to stay away from in general.  

    AAPL/Yodi – Don't panic, all fixed now.  

    Red/Deano – Wow, almost 5%.  Maybe the bears have a point. 

    Overbought/Jerconn – Good question.  And the answer is – not in the least on the short-term BUT, long-term we're still toppy and in need of a long consolidation to work it off.  

    NYMO

     

    NYSI

    TASR/Hemas – We did do that one already.  

    LOL StJ – That's what I said.  

    We're past 1.25% on all of our indexes, very strong into the close.  

    Dow volume super-low though at just 72M with 12 mins to go – that's a serious concern as we had good volume going down.  

    SQQQ April $36/40 bull call spreads are $1 and make a nice little hedge – 20 in both $25KPs and AAPL Money lays the groundwork for adding longs if we keep moving up tomorrow.  

  141. ariveraA

    yodi/
    Hear you.  Frankly, I thought it shameful that many US magazines featured Carlos Slim when he became the richest man in the world.  It's like all the russian, chinese, brazilian etc. billionaires that climbed the corruption ladder to riches…  They should be persecuted and not celebrated.  Hell,  the guy is against charities!
    http://observer.com/2010/10/carlos-slim-is-not-into-charity/
    Phil/  Last comment on the subject, I promise…

  142. Phil

    SDS April $47/51 bull call spreads  are also $1 and also work as essentially the same concept but SQQQ protects us better from an AAPL dip but, for a general portfolio, SDS is very good. 

  143. 1020

    Diamond – Geez, either you own alot of AAPL or you really Really REALLY like the product.
     
    Tim Cook was not chosen to replace Steve Jobs because he had his vision and conviction, but because he was an excellent right hand man and was the logical choice when Steve stepped down. This could mean that AAPL will do fine, but never as well as with Mr. Jobs himself. Like the others 8800 mentioned; He is not easily duplicated…..

  144. rpme

    Not much volume, 75mm.

  145. 1020

    Phil – You can move mountains when you know your time is limited….

  146. checho

    AAPL is preparing for the final bull flush, won't be surprised to see a pre-market lower open and a swift dip to 420-425 and a sharp intra-day spike

  147. Phil

    Kass/Jabob – I find it hard to buy the story that he got into AAPL at $445 and then bailed at $450 because he made a lot of money on the spike (that he started with a BS rumor).  If it were a $44.50 stock that went to $45 – he'd be considered a fool.  Or even a $4.45 stock that "jumped" to $4.50.  That's why this whole thing is so stupid.  Yet no arrests will ever be made.  

    Slim/Arivera – As long as the guy is rich, people will kiss his ass regardless.  

    Very true 1020.  

    Flush/Checho – I wish they'd get it over with but I see a lot of interest around $440 so I don't think that's going to happen. 

    Well, that was a hell of a day.  Dow volume a pathetic 95M so no dancing for those numbers but all technical damage was undone and bears once again spanked for daring to come out of their caves so a good day for the bulls, nonetheless.  

  148. dawnr

    Interesting day on the technicals…SPY and Futures don't know if they want to make a higher high above 2/25 high or start to fall back.  I am in Online Trading Academy and futures stopped dead right in the called out zone 1514-1519.25…tomorrow do or die!
    In and out of the April FCX one day 25%—thank you!!

  149. yodi

    Phil Slim/Arivera you just kissing the wrong crooks ass the crook behind the fasade is Salinas Gortari

  150. Burrben

    Yodi / LVS play
    Just got back to take a look at this.   Interesting, just wondering how you found it, or why you think it's a good play to the upside?  I re-wrote the trade and mid prices just to work it out.
    Back ratio on LVS:
    May13 buy 4x48c for $19.92
    May13 sell 8x55c for cost 14.64
    May13 sell 3x47p for 5.85
    Total Cost : -0.57 (a credit)
     
    It does look like May ImpliedVol's are higher than Apr and Jun, which is good.  The IV30 and IV60 have been rising, so good to sell premium.  
    Graph of IV60 vs HV60

  151. jabobeast

    Phil what do you think about this article that you posted? pretty crazy.
     
    http://blogs.barrons.com/focusonfunds/2013/02/27/yes-gold-mining-stocks-have-tracked-the-price-of-gold/?mod=yahoobarrons

  152. wombat

    Phil / SDS
    Still holding SDS March16 $48/$51 BLCS – how do you recommend rolling out. ? My net is basically $1.07. My callers are up 78% and the longs down 68% – so $500 underwater.
    I need to take care of this tomorrow as all my accounts will be inaccessible until next Wed.

    P.s. thanks for the NYMO and NYSI – very cool – never seen those before. For bein a non-squiggly line guy, you can pull out the stops.

  153. wombat

    Phil / SDS
    or of course, there is always the option of doing nothing until I return ; >

  154. Burrben

    New Income Port Trades
    Did I miss anything listed here?
    CLF Jan17'14 23 PUT
    CZR Sep20'13 10 PUT
    FCX Jan16'15 25 PUT
    HOV Jan16'15 5 PUT 5-10 BULL CALL
    RRD Jan17'14 10 PUT
    TASR Stock

  155. denlundy

    Craigzooka/FCX   Great call on selling puts for IRA accounts.  Recommended price of $1.21 for April  $31 puts swelled yesterday to $1.35 in the morning sell off.  Closed today at $1.01.  Congrats

  156. Burrben

    Maybe we should put a Guns and Ammo play in the Income Port?  It's such irony that the whole gun debate has actually made more people buy guns….
    Ruger blows away earnings
    http://247wallst.com/2013/02/27/sturm-ruger-blows-away-earnings/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+247wallst%2Ftweets+%2824%2F7+Wall+St.+%28Tweets%29%29

  157. Peter D

    Greetings – I'm in meetings again for the whole week, but what a ride!  It's a good thing that I don't have a chance to make adjustments.  Do nothing is best sometimes.  Actually, I had some orders to sell OTM put spreads at a high price and they got filled during the downdraft on Monday and those have gained quickly in the past couple of days. Well, it's good to have margin available as they did show some paper loss at the close on Monday.  Passive trading does have benefits.  Back to meetings!

  158. stjeanluc

    AAPL / Phil – Here is the volume by price for AAPL for the last 6 months. Clearly in a range between 440 and 460 with big air pockets up to 500. And then some heavy volume between 500 and 540 which would be resistance. But the heaviest volume has been on down days (the red part of the left bars). Not very bullish right now. In addition, I have also charted the On Balance Volume and that has been making lower lows and lower highs for the last 6 months. Not a good trend. We are clearly in need of a catalyst to push higher – new products, newer numbers, who knows.

  159. stjeanluc

    Healthy bounce for the Dow which is over its previous highest close. Not quite over the 10% line for the S&P and we need to make to regain the highs in all these indices.

  160. stjeanluc

    Not a bad start of the year for most countries. But the BRIC are having trouble keeping up:

    http://www.bespokeinvest.com/thinkbig/2013/2/27/2013-global-stock-market-performance.html

    And what's up with Nigeria. Clearly all these guys are reinvesting the money they get from these scam letters in the stock market there! Or maybe they had an IPO of the company behind the scam letters. 

  161. stjeanluc

    Looks like there was a Groupon issued on GRPN shares with a 25% discount!

  162. stjeanluc

    And JCP shares are on sale as well… Not a good night for earnings!

  163. jelutuck

    This is weird…ALL of Phil's posts from today are gone from the site!  Anyone else seeing this? Did my subscription check bounce?

  164. yodi

    Burrden
    LVS you said you just came back, hope you left a couple of bottles of wine for the rest of the population!!!
    I have been trading this stock since Sep 10 and in my normally small way of trading I worked up a credit of over 12,000.00 just 300 stk and option trading. I generally follow the patten of a stock and find after analysing the same when we have a good time to make a trade. Obviously no play will be a 100% winner. See PCLN from Phil most sold the short weekly call yesterday but feeling the water I thought the up or down turn would not be that great this time as they did have already their glory an would not go over 718, having 18$ in my pocket I was greedy not to give it back. We will see what the end of the week will bring. Clear as PCLN was a winner there would be excitement but always wait till this calms down. And even after a healthy run up of today the running sheep have cooled down at 695. So I ask myself will they go up to 718 by Friday very doughtfull.
    The same with LVS it is a casino stock and you hope it will not go up to fast. Same with WYNN a winner every time. So you can not only make your analyses on graphs and paper most often you need to test the water first.
    I hate to tell you of one of my most profitable stocks, as possible Phil will throw me of the board, IOC having a range from 40 to 85 in no time, premium, the sky is the limit. I have made a packet on these plays, but do not mention it on this board as some members might follow it and could lose a good deal of their money, that is way I show mostly conservative plays in small numbers. Hope this explains.

  165. yodi

    I trust our friend Shadow has woken up by now and if by only remote chance he is looking at our chat, I wish him a speedy recovery.

  166. Burrben

    American Capital Agency (AGNC) announces a 50M share secondary offering. The company expects to use net proceeds from the offering to acquire additional agency securities as market conditions warrant and for general corporate purposes. BAML, Citigroup, Credit Suisse, Goldman, Sachs, JPMorgan and Morgan Stanley are all joint book-running managers. Shares -3% AH.

  167. Phil

    Someone please tell Jet he may have ignored me by accident. 

  168. stjeanluc

    Jelutuck – Did you hit Ignore this user by accident! If that is the case, just look under the Edit box and uncheck Phil to see his posts again.

  169. button

    Jet / Phils Comments
     
    Phil just said to tell you that you may have pushed the ignore this user button by accident.

  170. jfawcett

    Losses / Phil – And thanks for that tutorial.  I will also post that thread on the WIKI.

  171. jelutuck

    Thanks, I did hit ignore for Phil. That was very strange, suddenly being in a world without Phil…a dark place indeed!

  172. Phil

    Very nice Dawn!  Not sure if tomorrow is do or die – judging from $NYSI chart above, we could do with a bit more consolidation before the big mover up (if ever).  

    Gortari/Yodi – He's an interesting guy.  Reminds me of Abner Doon from Orson Scott Card's books (many who pulls all the strings behind the throne).  

    Miners/Jabob – It's the same thing I always say, miners are undervalued measured against proven reserves but, as you can see from recent reports – costs do keep climbing and it now costs $900 to produce an ounce of gold so you have to take that into account and it's a big negative when gold prices drop off.  BUT – still, a $700 spread between extraction and sale is more than the ENTIRE price of gold 6 years ago so certainly there is great value to be unlocked in miners.  That's why I only like the best ones – ABX, HMY and the more speculative NAK (very long-term) but GDX just got so cheap it was worth a toss too.  If you have to pick one, I think ABX hands down.  

    SDS/Wombat – Hedges like that are (or at least should be) insurance that you EXPECT to lose.  Generally, we roll the spreads along if we don't need them so, for example, the March $48s are still .80 so you can protect that balance by spending $1.80 to roll them along to the June $48s ($2.60) and then, when your caller evaporates or sooner if you'd like, you can get most of that $1.80 back by selling June calls to cover (the $52 are $1.73) and then you're back in the same protective spread with more time for little more money – very simple.  Once you get used to doing this then you would know to take an opportunity like this week's dip, when the $48s shot up over $2, to make your roll then and take advantage of your relative win (vs. the longer calls you roll to).  

    Nothing/Wombat – When you are the sucker paying the premium, doing nothing is a terrible idea.  In a very un-Jagger way, tiiiiime is NOT on your side!  

    Income Portfolio/Burr – Looks right to me but TASR was a buy/write, of course.  Guns are too uncertain over time to bet on.

    Passive Trading/Peter – The best kind. 

    AAPL/StJ – Chart after chart could not look worse. 

    Big Chart – Well, we're back to 4 red (from 3) and, of course, the Dow has the most ground to make up if we're going to go all green so not surprising it leads in a new bull leg.  We'll look for that to keep up. 

    Which reminds me – AA and CSCO need to be bought in Income Portfolio tomorrow.  

    Nigeria looking good!  Notice Iceland too – default is definitely the way to go.  

    GRPN no big surprise – Kwan and I came up with a better App than they have ages ago but GRPN's IPO killed our chance of getting funded.  I still think it would work but now GRPN gives the whole space a bad name.  

    JCP getting shredded – down 14%.  So much for easy turn-arounds. 

    IOC/Yodi – You are right!  Maybe I can set you up with Sam Antar and he can convince you to get away from them as they are a total scam.  That doesn't mean they aren't fun for MoMo plays but not as a long-term investment.  

    AGNC/Burr – I like it when people trade stock for cash.  Maybe a good time to get in if they fall hard.  

    Welcome back Jet.  Thanks StJ and Button for bravely diving in to rescue our lost soul! 

    Thanks Jfaw! 

  173. Phil

    At the close: Dow +1.26% to 14076. S&P +1.3% to 1516. Nasdaq +0.65% to 3182.

    Treasurys: 30-year -0.15%. 10-yr 0%. 5-yr +0.05%.

    Commodities: Crude +0.23% to $92.84. Gold -1.18% to $1596.4.

    Currencies: Euro +0.57% vs. dollar. Yen +0.24%. Pound -0.22%.

    8:40 PM Japanese stocks move higher in early trading, boosted by a Wall Street rally overnight. The Nikkei Average rose 1.5% to 11,419, with exporters and financials among the leaders: Toshiba (TOSYY.PK+2.7%), Canon (CAJ +2.2%), Advantest (ATE +3.1%), Toyota (TM+1.6%), Komatsu (KMTUY.PK +4.3%, and Fuji Heavy Industries (FUJHY.PK +2.8%)

    The Fed's asset purchases are not working, are benefitting the wrong people, and potentially counterproductive, says the Dallas Fed's Richard Fisher. His comments put him directly at odds with the last 2 days of Congressional testimony from The Chairman. Fisher calls it a Buzz Lightyear monetary policy, "pledging to hold the federal funds rate at zero seemingly to infinity and beyond."

    Markets Saved by the Kid From South Carolina, Again (MarketBeat)

    Lazy Portfolios at war with Wall Street casinos (MarketWatch)

    The (Really) High Price Of Active Management (The Capital Spectator)

    Why It’s Smart to Be Reckless on Wall Street (Scientific American)

    Japan's industrial production grew 1% during January – its second-straight monthly increase – but missed forecasts for a 1.5% rise. Transport equipment, including cars, was the top contributor. Despite the less-than-expected reading, the average forecast of manufacturers surveyed showed industrial output was projected to surge 5.3% for February, up from a forecast 2.3% gain in the January survey. The yen's response was muted, with the dollar slipping from 92.34 to 92.31.

    National gasoline prices – up $0.50 just in the last month -have hit the $3.75-$4.00 zone known in the past for being "problematic" for stocks, says BTIG's Dan Greenhaus. The most worrisome part, he says, is the increase has come before the demand of spring driving season arrives. Instead of worrying, why not go with the flow and buy the refiners?

    More on Chicago Bridge & Iron (CBI): Q4 beats across the board on a 30% jump in total sales Y/Y. Net earnings rose 27% on sales growth across all segments. Project engineering and construction, which represents more than half of the top line, saw revenue grow 30%. Its steel-plate structures business, which made up 35% of the top line in the latest period, saw revenue grow 14% while, Lummus-technology revenue was 18% higher. Gross margin widened to 12.9% from 11.7%. 

    More on J.C. Penney's (JCP) Q4: No sigh of relief for investors just yet as the firm reports comparable store sales fell 31.7%, below the consensus call of -26.9%. Customer are fleeing, but no give up from CEO Ron Johnson: "…we are energized by our shop roll out plans." Gross margin was crushed, falling to 23.8% of sales vs. 30.2% last year. Internet sales slumped again, losing 34.4% Y/Y just marginally better than last quarter's 37% nosedive. Cash position $930M at end of Q4. No guidance is issued, but the retailer says it will open 20 shops geared toward home products in 505 stores with brand partners. JCP -4.4% AH. (PR)

    "Simply stunning results" from J.C. Penney (JCP), says Tiburon Research's Rob Wilson, quickly reminding it's 2-month old data. "Frankly, what matters now is February. Did February materially improve vs. (the) Q4 disaster." Video conference call begins momentarily. Shares -9.3% AH. 

    IMAX (IMAX -0.6%) CEO Rich Gelfond says growth in China will get a boost from the extra 14 movies a year which will be allowed into the nation as a result of a WTO settlement. The company continues to be a major force in China as demonstrated last weekend when its 100 theaters raked in 12% of the entire box office tally withThe Hobbit: An Unexpected Journey opening. (Bloomberg interviewvideo)

    Corning (GLW) is buying Bargoa S.A., a Brazilian maker of telecom products that rely on thermo injection molding. The purchase complements Corning's optical fiber/telecom cable business. Terms are undisclosed. (PR)

    Citing royalty costs, Pandora (P) is reinstating a 40-hour listening cap for free users…. only this time, it applies to mobile listeners. The company insists the move should only affect 4% of mobile users. The timing of the announcement is noteworthy, given it comes: 1) 8 days before Pandora's FQ4 report. 2) 3 months after Pandora provided light FQ4 guidance and reported mobile ad ratesremain well below PC rates. 3) A day after founder Tim Westergrenmade a renewed call for passing the Internet Radio Fairness Act,introduced in Congress last November.

    More on the Groupon disaster: Europe is still weak – Q4 international revenue -16% Y/Y (was +3% in Q3), billings +6%. North America was better: revenue +109% (+81% in Q3), billings +51%. Direct revenue (e-commerce sales) rose to $225M, now 35% of revenue. But it produced just $6.6M in gross profit. This led gross margin to fall to 55.7% from 80.4% a year ago. Marketing spend -61% Y/Y to $60.9M, SG&A +20% to $307.6M. Capex $40M in Q4, $96M in 2012. Headcount fell by 472 to 11.4K. GRPN -19.9% AH. CC at 5PM ET (webcast). (PR) (slides)

    Groupon (GRPNlowered the cut it receives on daily deals to 35% from 40% in Q4, CFO Jason Child discloses. That's one reason (though not the only one) why daily deals revenue fell 14% Y/Y. On the earnings call, CFO Kal Raman suggested major international layoffs are on the way – 3/4 of sales personnel currently work in Groupon's international ops. CEO Andrew Mason, likely to face fresh calls for his removal (previous), promises operating margin will improve in 2013 in spite of a shift towards e-commerce sales. Shares-25.8% AH. (live blog) (Q4: III) 

    More on AOL: Kara Swisher reports the company is set to hire Sysan Lyne, formerly the CEO of Martha Stewart Living and popular apparel deals site Gilt Groupe, to be the CEO of its online content ops, save for the Huffington Post. Display ad sales for AOL-owned properties were flat Y/Y in Q4, making their performance weaker than that of the company's other ad-driven businesses.

    Leap Wireless (LEAP -2.3%) might end up with a lot of spare iPhones in its warehouses. The prepaid carrier disclosed in its2012 10-K it's on pace to buy only half the iPhones it has agreed  to purchase from Apple as part of its commitment. BTIG's Walter Piecyk thinks Leap, which sells the 16GB iPhone 5 for $500 without contract, could be on the hook for $100M worth of extra iPhone purchases in 2013, and $450 over the course of its 3-year deal.  (Muve spinoff)

    Apple Should Stay Prudent With Cash: Analyst (MarketBeat)

    Deficit hawks’ ‘generational theft’ argument is a sham (Los Angeles Times)

  174. Burrben

    A little more on AGNC and past stock issue performance
    Good time to get into AGNC

  175. Burrben

    Possibly a good way to be exposed to the SP500 with lower vol
    SPLV and other low vol ETP's
     
    We should have started a ETP instead of a hedge fund.  SPLV already as 3.4B of assets…  
    More SPLV info

  176. Burrben

    TASR
    Phil you're right, I missed "and the spread…"
     
    TASR/Scott – Expectations were clearly ahead of reality as they actually beat top and bottom but got slammed down 20% for their troubles.  That was a 51% increase in revenues so I  don't know what people were expecting but I think the real point is to focus on the .07 profit and assume it's .30 next year, which means $7 is still 23x earnings and not terribly cheap but I think, long-term, we're very lucky to see the 200 dma again so I'm all for very simply buying the stock for $7.05 and selling the Sept $7.50 puts and calls for $2 for a net $5.05/6.28 entry as a nice way to establish a long-term position in a stock I'm pretty sure will be more like $30 at the end of the decade (earning $1.50+ per share).  In fact, this is a good time to add 1,000 shares and the spread to the Income Portfolio.  

  177. revtodd64

     
    Parties Focus on the Positive as Budget Cuts Draw Near
     
    Well, that was easy.  Remember when liberals in Congress were considered brave or crazy for saying let's just go over the cliff?  It seems that government by poison pill is the only way to get anything done.  How about the next negotiation they all agree to resign if they can't come to agreement!
     
    The bipartisan talking point has held that the $1.2 trillion in cuts over a decade, established in the 2011 Budget Control Act, were intended to be so onerous to both sides that they would force Republicans and Democrats to unite around a bipartisan, comprehensive deficit package that raised taxes and slowed entitlement spending.
    In fact, almost the opposite has proved true. The sword of Damocles turns out to be made of Styrofoam.

  178. Phil

    Good morning!  

    Futures couldn't be flatter – we're just picking up where we left off.  

    End of the month flatlines are pretty normal and, technically, the Sequestration deadline is tomorrow anyway but, like all these nonsense budget things – it's only incremental by day so any solution they come to in March would undo the whole thing.  

    AGNC/Burr – Not much of a pullback so far but these are the entry opportunities we wait for.  50 dma is $31.31 and that will probably hold so today is probably the day to take a poke in the Income Portfolio – certainly for a short put at least.  

    SPLV is interesting but I'm not into playing ETFs with options that are too thin to trade.  While ETPs, etc are a great scam for untalented fund managers (essentially, they just make up a formula and market it), they net out less than 1% ($34M) while a hedge fund with $3.4Bn that returns 20% ($700M) gets 2% ($70M) and 20% of the profits ($140M) for $210M so I'd rather put in the actual work and reap the rewards, thanks. 

    Also, with SPLV, it hasn't really been stress-tested.  Note that back in Aug 2011, when the S&P dropped 20%, SPLV also dropped 20% and it just dropped 10% in November and 7% in December – also as much as the S&P so I'm not sure what "low volatility" actually means but I can guarantee you that you'd do better with SPY and options hedging over the long haul.  

    Cuts/Rev – The reality is the GOP could not cut a thing.  They make too many promises out both sides of their mouth to too many people so the only way they can "agree" to cuts is something like this – automatic cuts that are "out of their hands" so they can loudly take stands for their backers while letting the cuts happen anyway.  Doing nothing is actually a strategy here.  For the Dems, the cuts are fairly distributed and they're fine with them but it's good fun blaming the Republicans for the whole thing.

  179. yodi

    Phil I like you view on rolling a caller which is ITM and I am chosing my caller on GOOG which we have as well in one of our public port. even lower than mine. I know this is much to early to worry about this one and I am just playing with numbers.
    My normal move is to roll the caller up and sell a putter to compensate for the short fall. But I have seen you move a different path.
    Here we go
    I hold 1 GOOG Apr13 785caller nacket received 22.83 now 36.85 I now much to early to worry about
    but here my excercise.
    roll 1 april 785c to May 820c for cost of 13.00
    sell 1 May 830c for 19.50
    buy 2 vertical Jun 820/835 for 6.15
    to cover the 6 odd $ short fall I sell
    1 jun 700p for 9.90 well above the short fall
    the excercise cost about 1262.00 on margin PM
    your thoughts Thanks

  180. revtodd64

    Looks like the Voting Rights Act gets knocked down today…
    JUSTICE SCALIA: The Voting Rights Act Is A 'Racial Entitlement'

    Read more: http://www.businessinsider.com/scalia-voting-rights-act-racial-entitlement-supreme-court-vra-2013-2#ixzz2MCB0GCbM
    "I think it is attributable, very likely attributable, to a phenomenon that is called perpetuation of racial entitlement. It's been written about. Whenever a society adopts racial entitlements, it is very difficult to get out of them through the normal political processes."
     

     

    Chief Justice John Roberts Asks The DOJ If It Thinks Southerners Are Racist

    "Is it the government's submission that the citizens in the South are more racist than the citizens in the North?" Roberts asked the federal government's lawyer, according to USA Today.

    USA Today reported that Justice Clarence Thomas, a Georgia native and the court's only black justice, said nothing during arguments on Wednesday, as is his custom.

    Read more: http://www.businessinsider.com/what-will-happen-to-voting-rights-act-2013-2#ixzz2MCBoFBEB

  181. ariveraA

    Sequestration/ Phil: Doesn't sound too bad until you have a brother who is a civilian working for the army.  The end result (for now) is that he will have a 20% pay cut by means of 22 stragiht 4 day weks, during which he cannot even consult becase of his contract (communications specialist).
    Needless to say, he and the other civilians are extremely pissed off and trying to make do for 22 weeks while the US wastes billlions in war efforts in every major continent… All for the price of several F-35s? Fact: the estimated cost of flying an F-35 is $31,900 / hour.

  182. yodi

    Phil I posted this question early this morning and this is just a repeat of the same when you have the time thanks
    Phil I like you view on rolling a caller which is ITM and I am chosing my caller on GOOG which we have as well in one of our public port. even lower than mine. I know this is much to early to worry about this one and I am just playing with numbers.
    My normal move is to roll the caller up and sell a putter to compensate for the short fall. But I have seen you move a different path.
    Here we go
    I hold 1 GOOG Apr13 785caller nacket received 22.83 now 36.85 I now much to early to worry about
    but here my excercise.
    roll 1 april 785c to May 820c for cost of 13.00
    sell 1 May 830c for 19.50
    buy 2 vertical Jun 820/835 for 6.15
    to cover the 6 odd $ short fall I sell
    1 jun 700p for 9.90 well above the short fall
    the excercise cost about 1262.00 on margin PM
    your thoughts Thanks

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