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Thrilling Thursday – Tweeting our Way to Oil Profits!

Isn't oil trading fun?

Just this morning I was able to tweet out a trade idea from early morning Member Chat at 4:47 to remind our followers that oil Futures (/CL) were a nice short idea at the $93 mark.  Less than two hours later, at 7:26, we decided to take the money and run at $92.15 – which was good for an $850 per contract gain – enough to buy about 300 Egg McMuffins!  

We were long on oil Tuesday Morning at $92 and our target for shorting was $93 but, as I said in the morning post: "hopefully, they'll go a little higher than that and we can add short positions using SCO or USO in Member Chat as things can turn very ugly next week as the thieves try to wriggle out of the contracts they signed today."  We got a $1,000 upside trade followed by the $1,000 per contract drop from $93.47 (right on schedule, after inventories) back to just below $92.50 and then we got a run back to $93 again on Wednesday ($500 per contract profit), where I again laid out our reasons for shorting them again at $93, which was good for another $1,000 per contract gain and then this morning's $850, which was good for $4,350 PER CONTRACT's worth of gains in just two days.  

Now, I'm not telling you this to point out how great I am at calling Futures trades – I'm telling you this to point out what a MASSIVE SCAM energy trading is and how something should be done to stop this farce, which is ROBBING the World's citizens of over $850Bn a year! 

I often say to our Members: "We don't care IF a market is fixed as long as we can understand HOW it is fixed and place our bets accordingly," but that's not really true with oil trading, as this criminal enterprise (which I have written about for years) is more harmful to our everyday life than every hurricane, earthquake or terrorist act that has ever been committed on this planet – and they do it to us EVERY DAY OF EVERY YEAR!  

I'm not able to go 5 for 5 on oil calls in two days because it's "fair" (and it's not a fluke, we do this all the time), I can do this because it's very, very UNFAIR and I just so happen to understand the criminal network that trades oil well enough to be able to tell you what they are going to do – much as any good cop can tell you what the local drug dealers are doing on a Saturday night.  

I had hoped things would be different under Obama but, rather than trying to reign in the speculation that Bush unleashed back in 2001, he's inviting Rex Tillerson (CEO of XOM) and Jamie Dimon over to the White House to ask for their advice!  

Don't just take my word for it, listen to Dave Dayen, who wrote "Out of Control – New Report Exposes JPMorgan Chase as Mostly a Criminal Enterprise" in which he notes:  

As an excellent preview for the Friday fireworks, I urge you to read an astonishing new report, which I’ve embedded below, from analyst Josh Rosner of Graham-Fisher and Co. The best way to describe the report, “JPM – Out of Control,” is that it reads like a rap sheet. Notably, Rosner takes mortgage abuses almost entirely out of the equation, and yet still manages to fill a 45-page report with documented case after documented case of serious fraud and abuse, most of which JPM has already admitted to (at least in the sense of reaching a settlement; given out captured regulatory structure the end result is invariably a settlement with the “neither admit nor deny wrongdoing” boilerplate appended). Rosner writes, “we could not find another ‘systemically important’ domestic bank that has recently been subject to as many public, non-mortgage related, regulatory actions or consent orders.”

The sheer litany of illegal activities just overwhelms you. And these are only the ones where the company has entered into settlements or been sanctioned; it doesn’t even include ongoing investigations into things like Libor, illegally concealing inclusions of mortgage-backed securities in employer funds (another ERISA violation), the Fail Whale trades, and especially putback suits for mortgages, where a recent ruling by Judge Jed Rakoff has seriously increased exposure. While the risks are still very much alive and will continue to weigh on the firm, ultimately shareholders will pay, certainly not executives as long as the no-prosecutions standard holds.

The report is an amazing read, stunning in it's scope – and that's JUST JPM and they are just one of the many manipulators who have their hands in the energy market, as well as other commodity markets and, of course, the biggest scam of all – the Stock Market, which is a mechanism who's primary function is to transfer money from the bottom 90% to the top 1% while keeping the rest of the top 10% distracted enough to not notice they are getting screwed too.  

In "The Looting of America," Les Leopold does a good job of pulling back the curtain on what caused the recent Financial Crisis and, as America (the victim) finally begins to get back on it's feet after that last mugging – already the crooks are circling again and we're looking to repeat all the same mistakes we made that let the Banks crash the economy in the first place (third place, actually as we already had the Great Depression and Bush the 1st's S&L crisis before Bush the 2nd showed Daddy how to REALLY wreck an economy good and proper).  

There's a reason that, at Philstockworld, we teach our Members how to "Be the Bank" – this game is rigged so that the bankers almost always win (unless, like BSC, they are beaten by other bankers) and options trading allows us to step over to the other side of the table and take the suckers' bets – just like your broker does to you and, just like your broker – we collect our fees and we don't really give a damn whether you win or lose – as long as we collect our vig.  

Unfortunately, we still have to pay our own fees up to our own brokers, but it's better to be the middle men than to be the suckers pouring into the Wall Street casino every day with dreams of making 100%.  Much easier to make 0.5% a day in fees and KNOWING you can make 100% a year, right?  


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  1. 1020

    Good Morning!

  2. stjeanluc

    Oil Lines

    R3 – 94.66
    R2 – 94.03
    R1 – 93.17
    PP – 92.54
    S1 – 91.68
    S2 – 91.05
    S3 – 90.19

    Yesterday's high and  low – 93.4 / 91.91

  3. newt

    Cancer: great article about the kid who found an early detection to cancer.

  4. dawnr

    Speaking of rigged…the CFTC woke up this morning and is now looking at the rigging of gold and silver…very similar shenanigans to what happened with LIBOR. 

  5. dawnr

    Phil--any USO trades you like for today…trying to learn oil here…thanks

  6. jomptien

    Phil/BMY,  I bought 100 shares at 36.40 almost a year ago and sold the 2014 32 puts and calls for 7.17 (I think it was Pharms trade). Let it expire or roll to 2005 later? Thanks

  7. jomptien

    BMY, My mistake I bought for 33.94, now 38.49

  8. albo

     

    SD – SandRidge Energy reaches settlement agreement with TPG-Axon Capital; to expand Board of Directors by four.
     
     
    http://seekingalpha.com/article/1272571-sandridge-agreement-with-activist-tpg-puts-the-company-fully-in-play?source=email_rt_article_readmore

     

  9. stjeanluc

    Looks like we are going to try another run at $435 with AAPL this morning! 7th time is the charm!

  10. Savi

    Phil--I caught the /RB trade you had this morning—thx—-is it still  in play for a week end run up?

  11. Savi

    AAPL upgraded buy BTIG from neutral to buy —pt 540

  12. stjeanluc

    Looks like we'll be rollin', rollin' tomorrow!

  13. stjeanluc

  14. stjeanluc

  15. Pharmboy

    Rolling Mar $6 Ps (BTC) to Aug $6 Ps (STO) on PLX for net 40-45c.  We made a whopping nickel on those March ones.

  16. stjeanluc

  17. Pharmboy

    Jompt – let it go.  BMY will come back, as will everything else. 

  18. Phil

    Good morning!  

    Huge amounts of news were posted in morning chat (end of yesterday's chat).  All of a sudden, things are happening again. 

    By the way, for those who use Twitter, I find Twitter is much more useful if you only follow a few people who actually have good information.  Some even have good information but "over-tweet" and that's no good either.  I recently added about 20 people from a list of 50 best financial tweeters to try them out but some, like Clusterstock and Info Terroism – while good, simply tweet too much each day.  ZH is bad too, they seem to think every post they write must be tweeted.  If I want to read every single article in ZH, then I'd go to the ZH site, not look on my Twitter feed.  

    So it's time to purge again and I really don't get someone like Bill Gross, who follows 631 people – how can you possibly read what 631 people tweet about?  

    Anyway, looks like we've got the Dollar at 83.28 (over 83.25 not good) but the Euro is bouncy at $1.2945 so over $1.295 could push the Dollar below 83.25 and then we can get back to our usual rally.  Pound also trying to get back over $1.50 ($1.496) and 96.44 Yen to the Dollar is keeping Japan happy with the Nikkei testing 12,500 (and /NKD is a very good short to grab if we start to turn lower as 12,500 is very hard for them to cross, so an easy stop).  

    Copper topped out at $3.55 at 4am and back to $3.534 now.  Silver $28.63 with $28.50 holding well and gold is $1,580 after holding $1,575 and maybe $1,600 by the month's end.  Oil is back at $92.52 and no play on this line until we see nat gas (now way up at $3.735) at 10:30.  Not that nat gas inventories really affect oil but it makes the NYMEX traders braver as the think they can smell demand or something – there's no real logic to it, so no point pretending there is.  Gasoline (/RB) fell all the way to $3.10, crossed our $3.11 entry and hit $3.14 but now $3.1265.  It's rough to play gasoline but $3.12 (and certainly $3.10) should hold and then we have all that lovely weekend pumping ahead of us so always worth taking a chance on gasoline (with tight stops) on a Thus or Friday low. 

    Warming/1020 – That's why we should enjoy the planet while we can.  

    Cancer/Newt – I love that story.  

    CTFC/Dawn – Well, last time they "looked into things", they found nothing wrong.  Hopefully we have some new blood with new instructions this time.  

    USO/Dawn – Just the trades we already have in the $25KP, hopefully we get a nice dip after 10:30, maybe test $93 again first.  

    BMY/Jomp – We're nowhere near Jan, are we?  Worst case to the upside is you make all the money you expected on that trade (plus the dividends).  On the other hand, if the market drops 20%, you're still OK.  Why trade that in for more risk now?  It's just 100 shares so maybe you want to accumulate more but, if so, then the Jan $32 puts are .88 and you can roll those to the 2015 $37 puts at $4.50 for $3.70 and that's 10% of the stock's price in your pocket and now you're more likely to be assigned but, so what if you were willing to run your risk up by throwing away your "bird in the hand" anyway?  Keep in mind you didn't buy BMY for $33.94, you bought the spread for net $26.77 and, if you get called away at $32, you make $5.23 (almost 20%) and you are left with an obligation to buy BMY at net $32 in January.  If you are still bullish on BMY, why would that bother you?    Meanwhile, you have $1.40 in dividends coming as well.  

    APPL/StJ – Touched it again for a few seconds – that line is toxic for poor AAPL.  

    /RB/Savi – As noted above, still playable but watch oil.  If it fails, don't count on gas to hold up and we DO expect oil to fail so a dangerous week to trade gasoline for more than a penny or two here and there.  

  19. Pharmboy

    CLDX – getting ready to pull the profits off on this one.  The chart reminds me of DCTH a few years ago, where we got in, made a bundle on the ramp, and then lost it all on the negative trajectory that pursued right after ASCO (Cancer meeting).  Put a stop on the Aug $8/12 spread, or watch it closely.  Buying back the Apr 9 Ps for 5c.

  20. jabobeast

    FU CLF!!!!!
     
    What a POS!

  21. Phil

    FAS Money – D'oh!  Big spike in XLF to $18.43 so, as StJ notes, it looks like we'll be doing the old Rawhide move tomorrow.  

    AAPL Money – D'oh!  AAPL is still our main stock.  8) 

    $25KPM – What happened there?  Oh, friggin IBM with a $3 move since yesterday.  March $200 short calls ($14) need to be rolled to April $205 calls at $10.50 for $3.50 out of pocket.  At this point, we'll take some strategic losses (and we sold puts to cover) to improve our position.  QQQ at $68.92 so that's another one we'll have to roll if not pullback (and not likely we don't finish the week at highs now).  

    $25KPA – Same move on IBM as above.  FB up a bit but not enough but we'll roll those tomorrow.  EXPE $66.23 so we'll wait for tomorrow there too. 

     

  22. stjeanluc

    VMW coming back to us… Nice turnaround.

  23. 1020

    Phil/enjoy  One reason to take the family on a DIS cruise to Alaska…. to see what's left….

  24. dawnr

    on CLF http://seekingalpha.com/article/1273171-5-commodity-stocks-moving-on-news
     
    I saw it earlier and looked at the portfolio but did not see it in there so I did not post it

  25. stjeanluc

    AAPL 435 / Phil – Look at the chart I posted yesterday – they have not been able to to go over that 435 line since 3/1 and on an hourly chart you see 6 attempts (7 with today). That is some resistance… Since then we have been in a slowly rising channel between 420 and 435. Actually, more like an ascending triangle.

  26. Phil

    CLF/Jabob, Dawn – Don't forget that China is artificially suppressing building and causing an iron and rebar glut.  If you are a long-term investor (I know, "what's that?"), it's just an opportunity to buy them cheap.  CLF isn't losing money, they are MAKING $1.75 this year and that's 1/2 of what they made last year but that was baked in ages ago and the stock is now $22, down from $70 this time last year and $95 the year before when CLEARLY the economy in the US is improving.  

    Damn, NFLX falls again before hitting our target!  

    VMW/StJ – Fundamentals and Patience are a great combination.  

    Alaska/1020 – I think we're going to do that next.  Let me know how the web access is.  

    Oil $93.90 – almost there.  These traders are so funny – no matter how dumb it is, they have to make those lines (instructions from the main office).  

  27. dawnr

    USO—I just put an order in for the April 34 at $.80 see if I get filled…more conservative but I like that technical level for my style. delta .62 v .51 for 33.50's…Phil, thoughts (be nice now ;-)   )

  28. jabobeast

    very good points Phil—Thanks!!!

  29. Gingbaum

    Hi Pharmboy,

    Thoughts on MRK?
    Thanks

  30. rustle123

    Cramer has his touch back.  Today he was touting NFLX (down almost 3) and coming down on AAPL(up 5).  Then he was saying how Apple is stupid not to buy NFLX.  Apple, a conservative company when it comes to their cash should spend it on a bloated company trading at over 650x p/e and has little free cash flow.  Brilliant!

  31. jabobeast

    PCLN?

  32. dawnr

    CLF—I dont see the trade in the portfolio…can someone let me know as I like it at these levels

  33. dclark41

    dawnr
    I think you need to look at the Income Portfolio sold puts.

  34. dclark41

    dawnr
    Look in Monday's post. 10 Jan $23 puts sold @ $3.40.

  35. stjeanluc

    CLF / Dawn – In the Income Portfolio we have 1/2 a position with 10 short Jan 14 23 puts (down 50% now) with a view on rolling to Jan 15 eventually.

  36. Phil

    LOL – $92.95 and then down again – these guys are too funny!  

    Don't blame the Dollar for that, they're down to 83.17, which is boosting other stuff – even poor gold ($1,585).  

    AM At the open: Dow +0.22% to 14487. S&P +0.26% to 1559. Nasdaq +0.27% to 3254.
    Treasurys: 30-year -0.41%. 10-yr -0.2%. 5-yr -0.1%.
    Commodities: Crude +0.04% to $92.56. Gold -0.51% to $1580.3.
    Currencies: Euro -0.18% vs. dollar. Yen +0.36%. Pound -0.24%.

    Market preview: U.S. stock futures are higher and setting the S&P 500 up to make a fresh challenge on its all-time highest close of 1,565.15, and for the Dow Jones to continue its record run. The S&P Mini is +0.3% at 1,560. Helping the mood is better-than expected weekly jobless claims. Later: Bloomberg Consumer Comfort Index

    Initial Jobless Claims: -10K to 332K vs. 350K consensus, 342K prior (revised). Continuing claims -89K to 3.02M  More on jobless claims: The four-week moving average drops to 346.8K, another post-recession low for the key labor indicator. The last time at this level was March 2008. S&P futures gain a bit, now +0.3%. Nasdaq 100 +0.4%.

    Feb. Producer Price Index: +0.7% vs. +0.6% expected and +0.2% prior. Core PPI +0.2% vs. +0.2% expected and +0.2% prior.

    EIA Natural Gas Inventory:  -145bcf. Futures +1.62% to $3.74. - Strong demand, helps oil a bit but now we can go short.  

    The Bloomberg Consumer Comfort Index improves to -31.6 from -32.4 last week, the 6th straight week of gains. The index is on the verge of breaking out to new bullish territory, but for the moment remains in the -30 to -50 "trouble zone" it's been in for the last 5 years. As has been the case for most of the year, the biggest gains are coming from those making less than $15K/year. - Here's another indicator that shows you how much more we can go before we're "too bullish" again.  

    Home repossessions hit the lowest level since 2007 after a 29% Y/Y plunge in February, according to RealtyTrac. The "foreclosure inferno" has been contained, says RealtyTrac, but look for occasional "flare-ups" in states where the lengthy court process has gummed up the pipeline.

    OK FX people, they are TELLING you where to bet – what more can you ask for?  The Swiss Franc (FXF) is little-changed vs. the greenback and the euro after the SNB reiterates the currency remains too strong and it will enforce the 1.20 floor against the euro with "utmost determination."  The debt crisis no longer on the front pages, the euro has been trading above the floor for some time, and currently buys 1.2340 francs. The Swiss ETF (EWL+19.3% Y/Y.

    A Dallas Fed plan to cap assets at FDIC-insured banks at $250B would force most of the TBTFs to more than halve their consumer and business-lending units. Such a limit, says Dallas Fed EVP Rosenblum, is required to allow the FDIC to shut them down without using taxpayer funds. The Dallas proposal isn't becoming law anytime soon, but it is driving the debate in D.C.

    E*Trade (ETFC) is downgraded to Sell at KBW following the announcement of Citadel exiting its remaining 9.6% stake in the company. Ken Griffen is getting out after a 32% rise in the stock YTD. Shares -5.3% premarket.  More on E*Trade (ETFC -5.8%): Not only is 10% of the float a lot to throw on the market, but Citadel's exit from the remainder of its stake means the chance for a sale of the company has likely disappeared. Ken Griffin cut his stake to below 10% 2 years ago just to he could actively agitate for a sale.

    Spain is the latest European nation to move to anorganized effort to install electric charging points for vehicles. Previously, the government in the U.K. said it would subsidize a broad program to install charging stations in train stations and in other commons areas while Norway is ahead of the pack in the EV game.

    Clean Energy Fuels (CLNE+2% premarket on the heels of a Reuters article discussing news that China's ENN Group will establish natural gas fueling stations in the U.S. The Chinese company wants to start with 50 stations this year, about equal to the 50-60 CLNE is planning; Shell has said it plans to build ~100 LNG fueling stations in the U.S. but has not given a timeline.

    Ballard Power Systems (BLDP+3.3% premarket after reaching agreement with Van Hool, Europe's fourth largest bus manufacturer, and Aberdeen, Scotland's transit authority for delivery of 10 buses to be powered by BLDP's fuel cell module. BLDP says the Aberdeen fleet will be Europe's largest hydrogen fuel cell bus fleet.

    Suntech (STP -31%won't be bailed out by a Chinese government that wants to make good on its promise to let individual firms sink or swim, claim two advisers to national agencies. The NYTreported yesterday the Wuxi municipal government had reached a deal with Suntech. Maxim Group thinks a default could arrive tomorrow, and that most of fraud-wracked GSF Capital's 141MW project pipeline can't be sold; many on the Street seem to believe them.

    Steelmaker ArcelorMittal (MT +1.9%) is upgraded to Buy from Neutral at Citi, which believes MT will carry out a strategic overhaul which may help support its troubled European business. The firm favors separation of European assets from the rest of the group, which would give investors exposure to strong Americas and mining units.

    Good news for Chipotle (CMG)? Though producer pricesrose 0.7% in February, fresh and dry vegetables were a notable decliner for the month. Commodity costs have been a bit of a concern for the restaurant operator heading into the year, so any relief – even if temporary – will be welcomed. 

    Shares of Royal Caribbean (RCL -0.1%) and Norwegian Cruise Line Holdings (NCLH -0.8%) are taking on a little water after peer Carnival (CCL -0.5%) finds itself with another cruise liner with engine problems. Carnival is out with a Facebook post on the mishap, saying it's working on the "technical issue" and that although the ship lost service for elevators and toilets for a few hours – it never lost power.

    Advanced Cell Technology (ACTC.OB) receives approval from an independent Data & Safety Monitoring Board to proceed with the next stage of three stem cell studies in the U.S. and Europe in people with the vision disorders Stargardts Macular Dystrophy and dry age-related macular degeneration. The two trials in the U.S. can include patients with better vision than previously allowed. (PR)

    Bill Ackman's Pershing Square fires it latest salvo at Herbalife (HLF -1.05%), comparing the nutrition company to Fortune Hi-Tech Marketing, which was charged in January with operating an illegal pyramid scheme and making false earnings claims.

    A lot has to go right to justify the current share price of Netflix (NFLX -0.7%), argues Barron's. Analysts see only a modest 13% revenue growth rate between now and 2017, but forecast operating margins to quadruple over the same time period. Expensive content deals and heightened streaming competition from Amazon, Redbox, and others could get in the way of those lush margins.

    JPMorgan downgrades Amazon (AMZN) to a Neutral rating from Overweight and lowers its price target to $300. The firm drops its estimates for 2013-2014 revenue and gross profit projections by 1% and 3%, respectively.   More on JPMorgan's downgrade of Amazon (AMZN): The firm says its bottom-up analysis on Amazon suggests decelerating gross profit growth in 2013. In addition, 2014 EPS is taken down to $2.83/share from $3.01/share. AMZN -1.7% premarket. 

  37. Phil

    Telecom equipment and component makers trade higher after China Mobile (the world's largest carrier) forecasts a 49% Y/Y increase in capex in 2013 to a hefty RMB190.2B ($30.6B). Vodafone and France Telecom's plans to build a fiber network in recession-hit Spain might not be hurting either. FNSR +6.6%ALU +2.9%JNPR+2%OCLR +4.8%CIEN +1.5%JDSU +1.5%ALLT +3.3%ERIC+1.2%.

    BlackBerry (BBRY +2.7%plans to offer its Secure Work Space software for Android (GOOG) and Apple's (AAPL) iOS in June, thereby enabling users to split and secure their work and personal data on non-BlackBerry devices. The move comes as corporate and government clients increase their use of iPhones and Android devices, and as Samsung (SSNLF.PKmakes its own play for larger customers who are worried about security. (PR) 

    "Andy [Rubin] is more like Steve Jobs in his leadership style — top down … Sundar [Pichai] is more of a collaborative and low key leader, but very effective," says former Google (GOOG) exec Keval Desai about the company's Android leadership change. Given whom Rubin is compared to, that's not exactly a ringing endorsement. Meanwhile, former Google Reader chief Brian Shih thinks Google might be killing off the product to focus resources on Google+; he notes the Reader team had already been directed to other projects 3 times. "The Reader team actually understood social."

    Apple (AAPL) is upgraded to Buy by BTIG's Walter Piecyk, who makes the move acknowledging the company is set to report an ugly Q1 miss and soft guidance. Piecyk notes he made his April 2012 downgrade ahead of what was surely going to be (and was) a blowout quarter. Shares +1.1% premarket.


  38. Phil

    Euro ($1.2967) and Pound ($1.5017) shoot up and Dollar dives back down to 83, Yen down a bit so they are probably buying Dollars and EUR/CHF went down hard (1.239) so it's probably them buying Euros and Pounds.  Either way – rally fuel but still not helping oil get over $93.  

  39. dawnr

    Thanks all.  I am looking at Jan 15 $20's for about $4.30 now.  $15.70 all in.

  40. jomptien

    BMY, Thanks Pharm & Phil

  41. Phil

    USO/Dawn – Nothing wrong with that trade if you get filled – we wanted to make sure we caught it at the time – in case oil fell faster than we thought.  

    You're welcome Jabob.  

    Cramer/Rustle – Not only out of control again but thumping his chest with that "I make the markets" attitude.  Somehow, he is replaying the clips of him saying the Fed knows nothing to prove he was right when the Fed obviously did know something as they have engineered the greatest market rally in history.   At some point, you have to give them some credit.  

    CLF/Income Portfolio, Dawn – We were too early in the Income Portfolio but just 10 short Jan $23 puts at $3.10 lets me know I fully expected to have to roll down to 2015 and DD.  Those puts are now $4.70 and the 2015 $20 puts are $4.30 so I'd say that would be my target as a new trade as well as the roll.  There's no urgency though as a roll and a DD would put us in 2x at net $3.50 for a net $16.50 entry and $7,000 to be made in 2015 if they hold but, if we leave the short $23s as is and CLF recovers, then we can make $3,100 in just 10 months.  So, no reason at all to rush it as we're fine with this trade whichever way CLF goes.  

    You're welcome Jomp.  

  42. Gingbaum

    Phil,
    Do you think COH is a good long term hold. I'm think selling a vertical 48/46 put for April for 50cents?
    Thanks

  43. 1020

    Phil/web   It's terrible on Holland America's own internet when busy, so off hours would help. My understanding is the location is the issue – the signal gets worse the further north you go.
    Carlsbad's own VSAT may help in the future…
    http://finance.yahoo.com/news/viasat-sets-guinness-world-records-130000569.html
     
    BTW – We've been to all three of the glaciers cruiselines cruise – Hubbard, Tracy Arm and Glacier Bay. Glacier Bay is a family favorite, though it appears Disney only cruises Tracy Arm. Still, a great trip.

  44. 1020

    Phil/cruise   Check out this guy….
    http://www.hillmanwonders.com/alaska_cruise/best_glaciers_alaska_cruise.htm

  45. Savi

    after hours is fine—anyone live or been to Honduras and / or Belize—going there next month—if so any thoughts of "must do" items

  46. terrapin22

    anybody live in Rio De Janeiro or plan to be there next weekend?  I will also be in Florianopolis.  

  47. palotay

    IBM/Phil – can you comment on why you are choosing to do that roll instead of rolling to double the calls and buying a call spread to cover the upside?  Just want to understand your reasoning. Thx. 

  48. button

    Phil,
    Can you post the link for the oil futures contracts by month?
    Thanks

  49. ccsincsd

    dawnr / MrM / NFLX
    Just closed yesterday afternoons 200/205 Bear Call Spread (credit of 0.66) at 0.07
    Yes, it might expire worthless tomorrow, but like you said, will sleep better tonight.
    A Bear Put Spread would have worked too !!

  50. stjeanluc

    Good article on Barry's site:

    http://www.ritholtz.com/blog/2013/03/want-to-cut-the-debt-try-cutting-off-the-corporate-welfare-queens/

    Liberals and conservatives agree that we should stop subsidizing the fatcats. For example, the conservative Cato Institute points out that corporate welfare amounts to almost $100 billion per year

  51. scottmi

    AMX/yodi – any idea what's going on with your local telco?

  52. yodi

    scottmi
    AMX You ask me anything of MX they all crooks. Due to some Gov. changes to let outside tel companies come in to MX AMX getting their Ball cut so they can not anymore rip off locals to such a great extend. Why do I always say C. Slim is a crook the US does only not know it.

  53. ariveraA

    Chart Game/ Phil:  Thanks for the chartgame link yesterday.  Great (cheap) fun.   Excelllent practice at playing day charts for all of us still obsessing over 3min charts.  Just made 40% in appl in '94!!!  let's hope we can do the same in 2013. 
    Also, just got a new iphone 5. Cool but they do need to make the screen bigger…

  54. Phil

    COH/Ging – I don't love luxury brands but I do like brands and COH is a pretty good one.  I think they are beat up on Europe and China cut-backs that will pass and they are fairly priced at $50 given 10% growth ahead and a 13 p/e.  The only thing I don't like is being so specific with your target.  If you want to play them bullish, you can take advantage of earnings on the 24th (April) and sell some April puts ahead of that, like the April $49 puts for $1.15 and let's say buy the Aug $48/45 bear put spread for $1.15 so an even cost and, if all goes well, the April $49 puts expire worthless and then you can get another $1 or so for the short may puts (all profit) or, if COH goes down, then easy to roll the April puts as you still have earnings for the May contracts.  We should do 20 of those in the $25KP and we can take the VMW April $72.50 calls ($11.50 and the short $75 puts (.60) to make room (but leave the $105 calls – just in case.  

    Internet/1020 – Now how am I supposed to go somewhere that has no Internet?  That's crazy talk!  

    Belize/Savi – Never made it there, on my list.  Hitting Caymans on this trip but that's as close as I'll get.  

    Rio/Terra – Wow, everyone is out having fun.  

    IBM/Palotay – I don't like the way they shot up.  A little scary for a DD on the short calls but now, from the $205s, I'd be more confident.  Look at this market – everything that isn't AAPL is going up every day.  We don't want to be too short on things if we don't have to as we may never get a correction and a bull call spread is never an urgent cover as the net doesn't change much. 

    Oil futures/Button – Sure:

     

    Click for
    Chart
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Apr'13 92.51 93.02 92.01 92.65 11:48
    Mar 14

    -

    0.13 88746 92.52 112228 Call Put
    May'13 92.84 93.38 92.37 93.00 11:48
    Mar 14

    -

    0.12 39367 92.88 273047 Call Put
    Jun'13 93.07 93.61 92.63 93.22 11:48
    Mar 14

    -

    0.09 18275 93.13 168701 Call Put
    Jul'13 93.08 93.67 92.80 93.36 11:48
    Mar 14

    -

    0.10 9117 93.26 121335 Call Put

    They had 133,000 open Aprils yesterday so not doing a good job knocking them off so far.  May was 263K and went up and June was 175K and went down a bit but you can see what a painful process it is for them with 5 trading days to go.  

    Corporate Welfare Queens/StJ – I love using the GOP talking point against them.  

    Slim/Yodi – Because we have plenty of our own crooks to worry about.  

  55. wombat

    Morning Guys // Tons to read this morning.

    Phil // PSW
    Really nice post this morning. If you're ever second guessing about 'rambling' historically – don't. It makes the list. I have learned more on this list about macro econ than I did in college. Oh, wait a minute – I was an architect, well, anyway.
    Phil // TZA
    Two quick follow ups on the hedge. Double checking my understanding – Jul13 10-14 BLCS ( don't know net yet b/c of damn Fidelity )
    WARNING :: // EVERYONE – IF YOU CHANGE BROKERAGES – PRINT OUT ALL YOUR STATEMENTS WITH COST BASIS AND LOT INFO – THEY HAVE NO IDEA WHAT THEY"RE DOING AND ARE NOT OBLIGATED TO TRANSFER THIS INFO FOR YOU
    Theory – if the long 10's exceed the price of the roll – roll out. Let the 14 callers whither and roll them later to complete the new spread, ideally with a credit and more time. Correct ?
    My questions are

    does the split effect this in any way ? Since these are June, and the split is April1, should I proceed differently ?
    would it be prudent to wait for our possible 3.5% drop so the long 10's pop, and then roll ?

    Thanks !!
    ( and what jabo said )

  56. Phil

    Chart game/Arivera – From my point of view – the lesson should be that you would do just as well flipping a coin as you would playing stocks on TA alone.  And yes, a bigger screen would be very nice – I really can't believe AAPL didn't go that way.  

    Architect/Wombat – LOL.  Ironically, I minored in Advertising.  Worked less than 3 months in NYC before deciding advertising sucked as a profession (especially when you are at the bottom of it).  On TZA, if you paid $1 for the spread, around the time the July $10s dip below $1 is when you want to consider "salvaging" the caller's remaining value and going for something lower in strike, longer in time, or both.   In the case of TZA though, with the April split coming, it's best to just cash out on 3/29 and make a new spread the next week.  

    EU closing up about half a point so I guess we'll do that with new S&P highs tomorrow.

  57. mrmocha

    ccsincsd - just noted your long reply to me from last night, thanks!

  58. Phil

    Dollar 82.89!  Oil still just 92.77 so no reason to stop out on the shorts at all.  With luck (for the oil shorts) the Dollar will bounce now that Europe has closed and oil will leg down for the next hour.  Watch $92.60 to break – it's been tough to cross.  

    Gasoline just got rejected at $3.14 so no bites on petroleum today.  

  59. Burrben

    Pharm
    What did you do with those Mar22 QQQ 70 Calls you had?  I bought them for 0.15, but they are trading for 0.08 right now.  I'm thinking of closing or rolling.

  60. yodi

    scottmi
    Belize The same in blue. I was there two times by car. In general it is a very poor country but a tax heaven. If you just land up at one of the ocean site hotels you will do OK. Just depends on your take on adventure. Belize city has more potholes than in Bosnia after the war. All is in a poor state of afair. When you cross from Belize to Mexico you think you entered heaven and even this place here looks like hell when I compare it with Germany.

  61. Savi

    did we close our 10 june DIA 135 puts? thanks

  62. 8800

    Phil,
    I wanted to get your thgts, time permitting, on selling OTM puts on SPY vs IWM. Funda  would seem to favor shtg the IWM puts (US eq vs SPY being more intl). Very conservative strikes – 33%ish dn to 10/11 lows is 105 on SPY (1/15 – 2.77) vs 60 on IWM (1/15-1.75); OI is higher on IWMs. Given the low Vix present 11 handle, I would scale in, thinking odds increase daily of a sell-off. Cmts re strikes,timing,etc.
    Thanks

  63. Pharmboy

    QQQ/burr – Still have them.  I am in at 8-15c as well.  Not sure how many you have, but you can always dd.  My actual net is 23c, due to my rolls.

  64. yodi

    sorry this message re Belize was for Savi

  65. Savi

    Yodi—thanks for the info—does not sound that exciting—will be there just for a couple of days--I guess I will be just sitting on the beach 

  66. jerconn

    Lflan – still holding by the GOOG April 830 calls?  GOOG is slipping, down to $819

  67. yodi

    Savi as I say it is in the eye of the behloder

  68. Pharmboy

    Still selling the Muni and High Yield funds.  NAV of some was a bit high, but now some are below book…..I still think they are setting this up for a fall….say wave b down of c up for the grand finale of wave 5 up……..

  69. Pharmboy

    Oh, and gold and the miners are starting the move up….

  70. Burrben

    Pharm / SRPT
    Guys on another board I follow are buying the Apr 34/40 call vertical for 2.20 today.  They think there will be a big approval.
    Here's a SA article about it.  What say you?
    http://seekingalpha.com/article/1274001-big-move-to-occur-in-sarepta-therapeutics?source=yahoo

  71. Phil

    DIA/Savi – I guess we did, I don't remember.  I still like them as a hedge.  

    Dollar down 1% and markets not up 1% – that's not very good. 

    SPY/8800 – The problem with IWM (for shorting) is the macro issue that the US is doing better than the rest of the World and S&P revenues are over 50% foreign vs. maybe 15% on the RUT so there's a reason it seems more exciting to play RUT puts, because no one is making bets the RUT will fall like they are on SPX.  I still prefer TZA as a speculative way to play the RUT short as a 30% drop on IWM is a 100% gain on TZA and you can pick up TZA Jan $8/15 bull call spreads for $1.40 that are $1.33 in the money with $5.60 (400%) of potential upside if TZA just goes up 66%, which would be a 22% drop in the RUT, not 33%.  

    Not good:  1:05 PM The Treasury sells $13B in 30-year bonds at 3.25%, the third straight month the government is paying more than 3% to borrow money for 3 decades. Bid-to-cover ratio of 2.43, vs. a recent 2.74; indirect bidders take 42%, vs. a recent 36.4%. Direct bidders take just 4.9%, vs. a recent 14.5%. 

    The weak 30-year auction snuffs out an attempted rally in Treasurys, with the long bond falling about a quarter-point in price, the yield now up 3 bps to 3.26%. Direct bidders forgot to show up – participation was the lowest in more than 3 years – leaving primary dealers with more than half of the sale. TLT -0.3%. 

    The VIX is low, but it's not at an all-time low. Small cap volatility, however, hits what looks like a record low with the Russell 2000 (IWMIJR) VIX declining to 13.97, says Stifel's Dave Lutz. For the year, the IWM is up 12%, outpacing the SPY by more than 200 basis points.

    Insiders sell stock for any number of reasons; they buy for just one. It's probably the reason tracking insider buys tends to be a more profitable endeavour than following sales. From MicroFundy is a graph of the last few years' bull market marked with insider selling headlines along the way.

    A look at all 31 nine-day DJIA winning streaks since 1900 from Ryan Detrick shows the index more than 1% higher 2 months later 18 out of 30 times (#31 to be decided), and about flat in 3 instances. 

    The Market Is Running on Fumes (Barron’s)

    7 ways to bet against the rally (msn money)

    A couple of iShares (BLK) ETFs hauled in a large amounts of assets yesterday. The High Dividend Equity Fund (HDV) saw an inflow of $281M, boosting AUM by nearly 11%, while the Core MSCI Emerging Markets Fund (IEMG) brought in $102M, boosting AUM by 15%.

    Average U.S. fixed mortgage rates rose over the past week amid signs of improving jobs growth and consumer spending, with 30-year rates reaching the highest in more than six months, according to Freddie Mac's latest survey. The 30-year fixed averaged 3.63%, up from the prior week's 3.52%; the 15-year fixed averaged 2.79%, up from 2.76%. A year ago, the respective rates were 3.92% and 3.16%.

    Britain’s austerity is indefensible (FT.com)

    Rising natural gas prices and lower inventories boost shares of gas-focused firms, including WPX Energy (WPX +5.2%), the S&P's top performer. But Susquehanna warns of unwarranted optimism in WPX, seeing "weak execution going forward reflecting a lower than peer average capacity to reinvest and lack of visible scale of reinvention target." Also: CHK +2.8%NBL +3.2%COG +2.6%.

    No mercy is shown to LDK Solar (LDK -12.2%) asexpectations grow a Suntech default and/or bankruptcy filing is on tap. Shares are now down 23% over the last 2 days. LDK had $3.1B in debt on its balance sheet as of Sep. 30, has been steadily bleeding cash, and ended Q3 with just $442M in cash/equivalents and short-term pledged bank deposits. The company has been scrambling to shore up its finances.

    Things are starting to get interesting in China's automobile market. Ford (F) and General Motors (GM) hope to continue to benefit from the falloff of Japanese automakers (HMCTMNSANY.OB) through their local joint ventures, but domestic firms are starting to understand the need to ramp up quality and innovation in order to compete. As it stands now, domestic brands only account for a third of all sales – short of the Beijing's target for 40% share. Volkswagen (VLKAY.PK) appears to be all-in with 70% of its new plants slated for China, while even Tesla Motors (TSLA) thinks it can make a splash in the region. 

    United Technologies (UTX +0.3%) reaffirms its outlook for 2013, expecting an EPS of between $5.85 to $6.15, on sales of $64B to $65B. The company also continues to anticipate cash flow from operations less capital expenditures will be equal to or in excess of net income attributable to common shareowners.

    The Senate Judiciary Committee approves a ban on assault weapons and high-capacity ammunition clips with the votes coming down the party line 10 to 8. Shares of Sturm Ruger (RGR-1.9%) and Smith & Wesson (SWHC -1.4%) both trade lower for the day.

    An upgrade to Outerpform from RBC helps VMware (VMW+3%) add to the big gains it saw yesterday thanks to its strong growth outlook and the Pivotal announcement. "A path to accelerating revenues and margin expansion was outlined [at EMC/VMware's investor day], something we had wanted to see before becoming more aggressive on the stock.," writes analyst Matthew Hedberg. Parent EMC (EMC +2%) is also trekking higher.

    Sell-side commentary on PCs remains gloomy. Longbow's supply-chain contacts think desktop shipments will fall 5%-10% this year, worse than the 4% drop the firm predicts for Intel's (INTC) desktop business. It expects a slow Haswell ramp as high inventories and soft demand lead OEMs to stick with Ivy Bridge. It also sees integrated graphics taking more share from AMD and Nvidia's (NVDA) GPUs. Nomura notes Windows 8 (MSFT) demand remains muted, but holds out hope for a 2H pickup thanks to pricing, battery life, form factor, and app ecosystem improvements.

    More on Evercore's upgrade of eBay (EBAY +3.4%): Analyst Ken Sena forecasts 2013 revenue of $16.6B and EPS of $2.88, above a consensus of $16.35B and $2.75. He downplays comments made yesterday by MasterCard exec Chris McWilton about fee increases for PayPal, which took a toll on eBay shares yesterday. Sena thinks even a 50% fee increase will yield less than a 50 bps margin impact. Separately, PayPal has rolled out an iPad register app to take on the increasingly popular Square Register; it's the online payments giant's first native iPad app.

    Google's (GOOG) management shakeup continues: Local/commerce chief Jeff Huber is stepping down and Google is splitting up his unit, which covers Maps. Huber has held the job since 2011; his position took on greater significance last year after Marissa Mayer, who was in charge of local services, left for Yahoo. Huber's departure follows the very successful launch of a Maps iPhone app. (Andy Rubin) 

    More on Google's shakeup (part deux): the WSJ reportsJeff Huber will move to Google X, which is responsible for Glass, self-driving cars, and other cutting-edge projects. Search chief Alan Eustace will take control of Maps, and ad chief Susan Wojcicki will assume responsibility for commerce. There's a pattern to the moves of the last 2 days: Google (GOOG) is putting complementary products – Android and Chrome OS, Maps and search, ads and commerce – under common leadership, apparently with the goal of fostering greater integration. Apple recently did something similar. 

    What Do You Do With the World’s Fastest Internet Service? (Slate)

    A fresh set of leaked images and videos have taken most of the remaining mystery of out of tonight's 7PM ET Samsung (SSNLF.PK) Galaxy S IV event. The leaks indicate the S IV will be just 7.7mm thick and weigh 138g (the iPhone 5 is at 7.6mm and 112g), and will support touch-free browser navigation. Samsung is counting on such software features (together with its brand and design skill) to stay ahead of SonyHTC, and a slew of hungry Chinese rivals who aremoving upmarket while continuing to price their hardware aggressively. (more on the S IV)

    "The Street went from thinking Tim Cook has to provide some revolutionary product to now thinking he won’t even do the obvious things. I think it’s logical they will," asserts Walter Piecyk on CNBC (video), defending his upgrade of Apple (AAPL +1.1%). One of those "logical" things is a cheaper iPhone, which he expects will add $11B to FY14 revenue while lowering Apple's gross margin by 200 bps. He sees total FY14 iPhone revenue growth of 15%, with units growing over 30% to 190M (152M high-end iPhones + 38M cheaper ones) and ASP falling below $550 from FQ1's $641.

    Lunchtime reads:

    1) Crocs: Growth at a value price

    2) 5 ways Warren Buffett invests that you don't

    3) U.S. households regain 92% of wealth lost since 2007

  72. Burrben

    Phil / VIX backspread
    Wondering what you think of this strategy?  It's from a newsletter I tried out.
     
     
    Lately I have been flagging a VIX call backspread as an inexpensive way for investors to have long volatility 
    exposure. Last week I talked about selling one “unit” of the May 25 VIX calls for 0.65 each and using the 
    proceeds to buy two “units” of the May 30 calls at 0.35 each. This week the May 25 calls can be sold for 0.55, 
    while the May 30s are priced at 0.325. This means that at a 2:3 ratio, the May 25/30 call spread is still a credit 
    spread, which is always attractive for these types of trades. In terms of profit potential, the position will expire 
    worthless if the VIX is below 25 at expiration (with the net premium being the profit) and has the potential to 
    reap much larger profits if the VIX closes above 30 at expiration. This is a disaster hedge that pays off if there 
    is no disaster (VIX less than 25), but will be unprofitable with a VIX between 25 and 30, and has an unlimited 
    upside should the VIX move over 30.

  73. terrapin22

    PSW Investment Conference at Harrah's Resort Atlantic City April 27-29 – I’ve been getting a lot of emails re the Value Investing Congress in Las Vegas which is about a week after the PSW event in AC.  The regular price to attend is $4,695, but discounted now to "just" $3,295.  The PSW conference fee is $300.  Now it’s hard to compare AC to Vegas, but do you think their conference will be 11x better?  I think Phil can hold his own with most of the guys who will be presenting there.  And we will be trading live with the markets one day and learning a bit about futures.  And with some poker thrown in for good measure on Sat. night.  Total cost for a room (both nights) is between $300- $360 depending on which type.  Email me with any questions: thegeneral91@gmail.com.  

  74. lflantheman

    jerconn…Yes, still holding GOOG April 830 calls.  All of us are about trying to improve our trading success.  One of the things I've noticed about my trading style is that I have a tendency to exit trades too early.  It's my take that GOOG is an excellent long in a bull market right now.  These calls are 38 days out, so plenty of time to come in.  So I'll be holding onto this position. 

  75. button

    Phil / Rolling Calls,
    I have heard you say in the past that calls should generally be rolled before the caller is 20% in the money. First is that accurate?  Next assuming I sold a $10 call would the time to roll be when the stock is at $12?? I know time remaining is also a factor but I am trying to establish some general guidelines to improve my "roll timing" especially on covered calls.  Thanks as always.

  76. yodi

    terrapin22
    You still have not included the 40$ free hamburgers Phil is buying !!!!

  77. Savi

    Phil—I have the DIA June 135 puts @ 1.90 now 1.20—should I roll -if so to June139 or 140 maybe—
    also have TZA July 10/14 bcs—from your comments close before  3/29 and and re do spreads after the split
    thanks

  78. Pharmboy

    SRPT – not interested.  12 patients?  Come on…..Premiums are juicy, I would short.

  79. Pharmboy

    Las Vegas PSW is about 600 if you don't include Nabu.  And that is fancy food at Cafe Moda….love that place, as do all the belll men at the local hotels!!!

  80. jerconn

    Lflan – thanks for that.  At what point, if any would you double down?  I'd be thinking perhaps at 815…(~$15 on the calls) also thinking that the upcoming Galaxy S4 release could be a positive catalyst for GOOG as well…

  81. Opesbridge

    Phil/FAS – In anticipation of tomorrow and margin considerations, which roll are you considering for our FAS short calls? Thanks.

  82. 8800

    Phil,
    Actually, I was asking (below) about selling the IWM vsSPY puts for income – or as a low entry point long after a sell-off as opposed to profiting from a sell-off. Looking at risk/reward. Thanks in advance
    Phil,
    I wanted to get your thgts, time permitting, on selling OTM puts on SPY vs IWM. Funda  would seem to favor shtg the IWM puts (US eq vs SPY being more intl). Very conservative strikes – 33%ish dn to 10/11 lows is 105 on SPY (1/15 – 2.77) vs 60 on IWM (1/15-1.75); OI is higher on IWMs. Given the low Vix present 11 handle, I would scale in, thinking odds increase daily of a sell-off. Cmts re strikes,timing,etc.
    Thanks

  83. jerconn

    PHil – I like the idea of FAS puts as a hedge at this point, since FAS has had such an impressive runup…what do you think of that in comparison to TZA as a hedge?  Or the financials just will not go down as much as the RUT?

  84. Pharmboy

    8800 – why not use PeterDs strangles…..lower margin, and easier to babysit.

  85. zeroxzero

    Yodi / Belize City:  Very funny.  A yachtie once wrote an article about Belize City, which concluded "It is the most beautiful city in the world, when seen astern your boat, sailing away at flank speed, never to return….."

  86. Burrben

    Phil / Oil 2.35 close?
    How does the 2.35pm EST NYMEX close figure into you're oil trading?  I'm short at 92.85 and wondering if I should close for about nil, or hold open?

  87. zeroxzero

    Phil: I suppose I should have asked before the fact, but you have to kick yourself out of the nest sometime.  Did selling CLF Jan 2015 $20 puts against Jan 15 $30 calls net credit $ 1.96 make any sense?  Critique welcome; China will launch infrastructure projects,  I have little doubt.

  88. 8800

    Pharm,
    Thanks for the reminder- Peter D strangles

  89. stjeanluc

    Great premium burning day on AAPL today… Just going nowhere. I guess it beats going down!

  90. yodi

    zeroxzero
    Belize City That about rounds it up.

  91. Jordan

    /CL sneaking up on $93 again ($92.91). Tempting to reload shorts at $93, tight stops, but somehow may not reach 93 by Nymex close…

  92. jromeha

    Pharm- you're not selling me on Lvmoda's cafe! Bellmen? No thx…. Not that there's anything wrong with bellmen

  93. lflantheman

    jerconn/GOOG….I agree….I would DD rather than exit…..815 or less sounds reasonable.   But if I DD I would do so at-the-money.   We'll see how it plays out. 

  94. Pharmboy

    jro – I will take a local place over tourist traps almost any day.  Don't get me wrong, there are some very good places to eat in LV, but there are also a bunch of overpriced places that disappoint.

  95. Savi

    Burrben—normally runs up into NYMEX close

  96. Jordan

    /CL nudging above $93 at the close… oh yeah!

  97. Jordan

    Burrben, keep ticht stops, but you should see a dip by market open tomorrow.  it may run up overnight, though, so careful, stops!

  98. Burrben

    I closed it out at 92.95 with a .10 stop.  I have USO Puts as well but I was just playing for fun.  Oh well….

  99. Phil

    Oil with a big spike into the NYMEX close – back over $93 with Dollar 82.77.

    VIX/Burr – It's dangerous as in a disaster can spike the VIX very quickly, cost you the short money, and then go back down and not pay you on the back but, that's no more likely than a short strangle blowing you out on the whole.  You can do spreads like that with all sorts of things – it's just the math that it's unlikely to burn you – but that doesn't mean it can't.  Note that giant spikes are EXACTLY how the VIX does move when there's a crisis.  There have been 5 in the past 5 years that would have burned you so, basically, you are just hoping you win a few before you lose two in a row. 

    PSW Investment Conference/Terra – And who at the Value Investing Congress ever gave people a trade that paid for the whole conference in advance?  You can still sell 10 CZR April $12.50 puts for .40 for a net $12.10 entry to collect your $400 conference fee from CZR and CZR is now passing APOL in market cap, which means it may end up in the S&P if they hold up – and that would be very exciting and a GAMBLER could sell the Jan $12.50 puts for $2.35 and use that to pay for the $10/15 bull call spread at $2.80 for net .25 on the $5 spread that's 100% in the money to start and worst case is you end up owning CZR at net $12.50.  Let's put 20 of those in the Income Portfolio and I'll bet that one is up more than $400 by April as well!

    By the way, I was invited to a Value Investing Congress a few years ago – no way I would have paid $3,295 for that!  Also, check out my picks from my own Value Investing Post of Sept, 2011.  Not a bad set. 

    GOOG/Lflan – A bit stretchy here to me.  Of course I am baffled by the buzz GOOG gets for Android, which generates about 1/4 the APP revenue for GOOG vs. the way AAPL is dissed for their system, which is a cash machine for them, generating $4Bn a year at the current run rate.  AAPL essentially makes 4x more per phone sold in ad/app/subscription revenues than GOOG does (pretty much all App revenues) and they sell about the same number of phones (in the major markets, where the App revenues come from). At some point, these things will balance out.  

    Rolling/Button – Yes, it's a good rule of thumb, more like 25%.  No, it's not about the price of the stock, it's that the caller still has 25% premium in it's price – regardless of the price of the stock.  

    Hamburgers/Terra – Oops, that's right – People should not forget 1 extra share for my Kobe Burger!  

    Oil back at $93 (/CL) for those who missed shorting it here the other 5 times this week!  

    DIA/Savi – I'd wait for tomorrow as we're almost certain to pop the new S&P high.  Volume is crap and, with thing like IBM flying for no reason, I assume this is a faked top to print a good number.  It may last into the end of month, of course, but bottom line is I think it's better to wait for tomorrow to roll up and then DD into the month's end if they super-spike us.  

    $600/Pharm – I'll announce a trade to pay for Vegas at the AC conference.  8) 

    FAS/Opes – Just an even roll I think, we'll have to see if tomorrow is an up day or not but, as noted above – now things are starting to look a little painted at these levels.  

    IWM/8800 – Oh I get it.  That makes sense then as they do move in tandem (more or less) so an interesting experiment doing it that way.  Of course, you never know if it's right until we have a 30% drop and really test the theory….

    FAS/Jerconn – I think all those things are rebalancing on the 1st so none very good for new positions at the moment and we won't know what looks good until after the split and we have the new prices.  Also, in general, we don't think the Financials are weak in particular – just a bit overbought at the moment.  

    Oil/Burr – The close is when the volume dies down and the traders usually try to paint a good close by pumping it up.  Also, since the volume dries up after 2:35 – it becomes harder for them to pop significant resistance in the Futures.  Notice how we came right back below $93 after that manic run into the close – that happens a lot.  

    CLF/ZZ – I wouldn't pay money for the calls, nor would I sell them.  With CLF, they pay so much for the short puts, that's the only play I like, with a cheap long-term entry as a fallback position.  

    Good call Jordan.  

  100. jasu1

    Is today's AAPL movement for real? 

  101. Pharmboy

    jasu – is the past few months in the market for real?  Oh, yeah, it is, if you play monopoly.

  102. Phil

    IBM $215.63 – crazy.  Up $4 adds 35 Dow points or more than 1/2 the day's total.  That's a sign of a manipulation day, when "THEY" pick key index stocks and pump them up on low volume days.  

    TSLA with a big give-back.  Again, this is why we have no reason to roll short callers early (we're short April $36 calls in Income Portfolio and TSLA was $40 for a while but never held it for more than a day on 3 spikes).  

  103. jasu1

    Pharmboy,
    Drink the Bernank CoolAid…..and repeat Yes it is….Yes it is!! 

  104. Pharmboy

    XCO…someone gave it an injection of a PDE5 inhibitor….I kid you not!

  105. jophil

    Phil, what's your thought on APA?

  106. Phil

    Rolling/Button – Ah, that TSLA comment reminds me to add that that rule of thumb is for naked short puts or calls, not covered ones.  With covered ones, you have to decide the risk/reward of sticking with the position.  When everyone was freaking out about TSLA and those short April $36 calls (an 8 of 10 cover) were $5 (sold for $1.10) – the bottom line for me was that I wouldn't pay $41 for TSLA at the time, no matter what it was PRICED at.  In the end, it always goes back to fundamental valuations and you need to have faith that value will be discovered over time.  It isn't always, but it happens often enough to keep us in the premium selling business.

    Real/Jasu – We have to consider that AAPL may be being used to pump up the Nasdaq too.  Especially tomorrow, I would not take a move up very seriously until it's confirmed all the way into the first week of April.

    Like IBM, AAPL is up over 1% and it's 20% of the Nasdaq so adding 0.2% and the Nas is up 0.34% for the day so AAPL is accounting for more than half of the Nasdaq's gains on the day. 

    Dow volume just 53M at 3:18.

  107. stjeanluc

    AAPL just giving up on ever crossing 435 again… 

  108. Pharmboy

    StJ – if you look at the QQQ chart, is in an island formation and will break up….when?  AAPL will be the cause which is why I like those 70 calls.

  109. jerconn

    Phil, Lflan – what do you think of LNKD for a Momo short?  Very extended at this point and lots of insider selling…

  110. stjeanluc

    AAPL / Pharm – As I was saying yesterday, what is the catalyst for an AAPL breakout now. Yes, valuation is attractive, but it has been that way for 3 months now… You would think that value investor would have been jumping in at these levels. We need some news I fear in this environment! 

  111. Pharmboy

    LKND/jer – would not try to short until it turns….so far, up up and away.

  112. yodi

    LA conference 3295.00 against PSW AC. I look it from this angle. The LA conference is set to pull money out of dumb people's pocket. The PSW conference is a meeting between members and friends to get to know each other and it has nothing to do with the money sucking sound as I would feel obout LA

  113. chasw

    Phil,
    TZA  ETF – I have 400 as a hedge and am wondering if you think the split will negatively affect the ETF. Should I sell before month close?

  114. stjeanluc

    AAPL / Pharm – On the hourly chart I posted yesterday you see a rising wedge forming – somewhat confirmed by today's action. What is the usual outcome? 

  115. jabobeast

    Phil--I was wondering--should the low VIX help with B/C spreads of companies that you like?

  116. Pharmboy

    "they" can't let the tech get away from them again, thus holding AAPL back due to its sheer weight is one reason….I think they unleash the beast and the shorts will be buying in droves.  That should be the final pop they need to move this god forsaken market up across the board. 

  117. Pharmboy

    Well, rising wedges are wedgies…..most likely….

  118. Jordan

    Good call/Phil – I was just following you!

  119. jerconn

    Pharm – which QQQ 70's are you looking at?  What month?

  120. Pharmboy

    March 22s…5bid 6c ask

  121. 490union

    Phil…BX…Your thoughts please for ira,div income,real estate

  122. Pharmboy

    What BS.  Here we go, low volume pump.  I swear this is gonna end in a heart attack….

  123. Pharmboy

    ….for me. 

  124. Pharmboy

    Two of the key characteristics of an empire in terminal decline are complacency and intellectual sclerosis, what I have termed a failure of imagination. (The others are military over-reach, chronic deficits, a parasitic Elite that is immune to what's left of the rule of law, weak leadership, mass dependence on the Central State and excessive consumption.)

    - CHS

  125. Phil

    By the way, if you want to see textbook consolidation patterns, check out CIM testing $3.20 this week.  They worked off an overbought rush to $3.10, came back to the 50 dma (where we made new plays), bounced back up, through $3.10 and now pausing at $3.20 to give the 50 dma time to catch up with the bonus benefit of causing the 200 dma to curve up now – giving them even more upward pressure to any volume wave that comes in.  If they come back to $3 and hold it – they'll be a great stock to momentum trade bullish.  

    APA/Jophil – It's a good choice as they are beat to hell with low nat gas prices but not a bad company overall.  I doubt they go far this year but, over two years, I think inflation will be your friend and half the company's market cap is oil reserves anyway (if oil were $100).  I think it's worth taking a poke by selling the 2015 $70 puts for $8.35 for a net $61.65 entry, which gives you a 20% downside cushion and is pretty margin-efficient at net $9.75.  I'd start with something like that and, if they hold $75 and break back over the 200 dma at $80 (by the time they get there, now $82.50), THEN you can add a bull call spread – there's no hurry, the 2015 $70/80 bull call spread is $5 with a net delta of .07 so maybe $5.35 if you wait to make sure they can really go higher.  

    AAPL/StJ – Someone has a massive sell order there.  

    QQQ/Pharm – That's the beauty of keeping AAPL down like this.  At any time someone wants, they can bid AAPL up $20 (5%) and send the Nas up 1% at will. 

    LNKD/Jerconn – I don't know why people think they are a MoMo – they are a real company in early stage growth that's very impressive.  I think they are ahead of themselves at $180 but there's no massive up and down moves to their pattern like a MoMo – just a company that has been growing and growing and growing for a couple of years.  Last year they made .89, on track for $1.34 this year (50% growth) and $2.09 next year (56%) and say $3 the next year is a forward p/e of 50 which, of course, I would not be interested in but plenty of people are and the cap is only $20Bn and they have no debt and a huge moat to the business so nothing in particular to derail them so no, I don't like them as a short compared to many other stocks that make better candidates.  

    AAPL/StJ – Catalysts are many.  Poor reviews of Samsung, poor sales of Samsung (or BBRY or NOK). good sales of iPhones or iPads, a new product announcement, a dividend distribution, raising guidance, not lowering guidance, not lowering guidance the 10% that's expected, hitting their earnings numbers, beating them, not missing by much – it wouldn't take much of anything at this point to make people realize a p/e of 8 is a bit cheap for AAPL.  As I said 3 months ago – this trough can last for 6 months (July earnings) as this is a bad Q for them and no products are on the horizon and, historically, they held $85 for 6 months before moving up 100% over the next 6 months (and another 100% a year later). 

    AMZN going down the tubes – now that's a good short!  

    TZA/Chas – Wow, that's a lot.  Yes, I would not want to be holding those after the split.  You want to go cash and buy the new ones (spread, I hope) when they are issued.  If you don't want to go unhedged (Easter weekend), then just pick something that isn't reverse-splitting to move to. 

    AAPL/StJ – Rising squeezy triangle thingies tend to be bullish when they pop.

    VIX/Jabob – Actually now because, in the bull call spread, we tend to buy in the money calls to take advantage of the premium we can sell to the caller.  Lower VIX is less premium to sell but, so far, the long VIX hasn't been too affected by the short-term VIX dip.  

    LOL Pharm.

    Thanks Jordan. 

    Big finish and everything today.  Been a while since I've been pissed about fake bullish closes….

  126. Jordan

    GOOG somehow does not participate in today's pump..

  127. Jordan

    Remember the fake push up a couple of weeks ago?  Need to look up the date after hours.  Feels very similar today.  I remember then, we opened next day a little below, as if market ignored the fake push in the last 10 minutes.  But then we continued up.

  128. Phil

    BX/490 – I like them but not on a run like this.  A lot of things are starting to get irrational and now we're pricing BX like an internet company when they are really closer to a Financial or a REIT.  Dividend is nice and I would have loved them if you asked me in November ($14) but $20.50 is getting ahead of themselves (not that I would short them because they are good).  Stocks like this are good to watch and then, when they make a mistake (and they often do) you can swoop in and buy. 

    61M at 3:51 – pathetic.   "What if you thew a rally and nobody came?" 

    Great quote Pharm, sounds like my state for sure! 

    Jackie just won a school contest by memorizing Pi to 51 decimal places!

  129. dawnr

    On AAPL-a wedge is usually a retrace (a bearish sign) for another leg down.  I don't like what I am seeing price action and gonna dump my trading account position when it closes the gap (which is also the daily 20ema and the weekly 5ma).  My school (and its students) are just waiting to press the sell button. yes, it is cheap but the next leg lower looks more attractive and I don't want to ride this one out. Still have some in Roth will leave, for now.
    VIX- very speculative play but today I did April $18 at $.40 x 30. These levels are just getting plain stupid now. Gonna take a quick pop and get out too much decay to hold for more than that.
    Phil—I am gonna start betting you a nice bottle of something…those tech geeks hit it right on DXY hitting 83.20-83.40 and turning south. 

  130. dawnr

    a GREAT site on technical patterns and such is babypips.com.  I am Enchanted Trader on there…

  131. Jordan

    Wow, AMZN sticks out like a sore thumb on any TOS heat map today.

  132. rperi

    Nice work Jackie!  AAPL doesn't fall far from the tree.

  133. stjeanluc

    Catalysts / Phil – Mostly related to earnings though so another month of waiting. I don't see a dividend now and no new products announcements planned. 

  134. dawnr

    just remembered tomorrow is expiry day…somebody wants to print 1560 tomorrow…

  135. Pharmboy

    Let's Dance!

  136. stjeanluc

    Wedge / Dawn – I was actually playing with Pharm because I have read just about every book from Kirkpatrick in TA and in his observation, rising wedges that follow a long downward price trend usually break on the downside. 

    Of course, not an exact science and with AAPL there are just too many factors in play for a "safe" prediction now.

  137. Phil

    Dow is now up 5% (700 points) since the 26th (12 sessions).  

    Volume on close looks like 107M but turned pretty negative at the end.  Doesn't matter as they slap those MOC orders into the Mutual funds that are forced to buy at any price so only the bottom 90% get screwed – nothing for us to worry about…

    Bets/Dawn – I like Chateau Lafite (most) or a Taylor '66, '77 or '85 Port or Onikoroshi Sake – take your pick.

    Tree/Rperi – Are you kidding, I could never do that.  Apparently they had a science assembly and they gave the kids Pi with 100 places on it to look at for 5 minutes and called up kids who thought they could do more than 10 – 2nd place was 26.  I doubt I could do 12 – not one of my talents.  

    Waiting/StJ – As I said, more like July earnings is my expectation, not even April.  

    Print/Dawn – Yes, I think I was pointing that out all week (but I forgot, you don't actually read the posts, do you?).  At least I would think you would read the titles like: Monday Market Movement: Expiration Week Begins - I do try to help keep Members aware of these important events…

  138. stjeanluc

    And at 7:00 Pm we have that little Samsung shindig about the new Galaxy S4 – taking a page from the AAPL book there. 

  139. zeroxzero

    Alan Blinder closes his op-ed in today’s Wall Street Journal, for those watching real estate:
     
    "Is there a way out? Here’s one thing that could help. As I have argued for some time, the Fed should reduce the interest rate it pays on the roughly $1.7 trillion of banks’ excess reserves. If it did so, banks would keep less cash on deposit at the Fed. The liberated funds would probably flow mainly into the money markets, but some would probably find their way into increased lending—which would give the economy a little boost."

  140. dawnr

    Phil—yes I did read the print but I AM the one that forgot…It was more a joke that the bots want to print 1560…touchy, touchy today

  141. rperi

    Tree/Phil – I'm surprised.  You just inherently seem like a numbers guy.  I owe you a big thanks.  The CZR play will expire worthless tomorrow netting me $675 to go towards the conference.  I set a stop at $.05 and went ahead and put an order in to sell the Apr $12.50's for another $.40.  I asked and you delivered, so thanks ~  

  142. dawnr

    sorry, stj just trying to be helpful but you prob have more hours under your belt than me.  well for anyone else the site i mentioned is a worthwhile visit. and it is free.

  143. Phil

    Wedge/Pharm – I'm not going to argue with all you chart geniuses because the whole point of what they are doing is to entice people into shorting AAPL so they can squeeze the living crap out of them on some news.  Yep, the chart patterns are just so obvious, right:  

    Blinder/ZZ – I wish but the Fed doesn't do anything the Banks don't like.  

    Touch/Dawn – Nope, just having fun.  

    Numbers/Rperi – I have a very bad memory as far as remembering numbers (other than earnings) or spelling or names or faces (but I can replicate almost anything I ate, no matter how long ago).  You're very welcome on CZR.  

    At the close: Dow +0.53% to 14532. S&P +0.51% to 1563. Nasdaq +0.38% to 3257.

    Treasurys: 30-year -0.19%. 10-yr +0.02%. 5-yr 0%.

    Commodities: Crude +0.62% to $93.09. Gold -0.01% to $1588.2.

    Currencies: Euro +0.32% vs. dollar. Yen -0.04%. Pound -1.04%.

    Market recap: Stocks continued their inexplicable marchhigher, with the Dow posting its first 10-day winning streak since 1996 and the S&P closing within two points of its 2007 high, as a rally in natural gas prices buoyed energy firms and weekly jobless claimsunexpectedly fell. But as stocks extend gains, volume is thinning: Average trading volume this month is down ~12% Y/Y. 

  144. zeroxzero

     While we're "turning environmental" today, Jeremey Grantham:   http://www.macrobusiness.com.au/2013/03/grantham-on-cooking-the-planet/

  145. jerconn

    Pharm – actually I'm of the opinion that "they're" holding AAPL until the markets correct, then they'll unleash the beast…and maybe that time's coming soon…

  146. dawnr

    Phil-In all seriousness, I DO read your stuff AND just about everything else on this site--even late into the night. I am really trying to learn and it does prick me a bit that you imply that I am not paying attention. 
    Separately, I do not want to appear here that I know it all, because I have ALOT to learn.  I am only sharing resources that have helped me and I do not know how many hours all of you have.  One thing I do miss from my prior career is mentoring others and sharing ideas in the spirit of improving all. I hope my posts are received as intended.
    Ok, I am done for the week.  Too much risk on and not gonna play the Friday expiry shenanigans.

  147. stjeanluc

    Chart / Phil – I like drawing squiggly lines…. Reminds me of my youth with the crayolas!

  148. Pharmboy

    Yeah, and that fall from 700 to 430 on AAPL was predicted as well.  TA does better than going alone….more here.

     

    Based on a study of more than 10,000 actively managed equity and balanced funds, including about one-third of which employ technical analysis, the authors compared the investment performance of funds that use technical analysis versus those that do not using five metrics. They found that funds using technical analysis provided a meaningful advantage to their investors.

  149. Jordan

    Samsung Galaxy announcement – yeah, I saw them setting up in Times Square on my way to work.  I hope we get an AAPL dip tomorrow, people freaking out over the new AAPL-killer.

  150. rj_jarboe

    We are setting up nicely for the annual sell in May festival.

  151. dclark41

    dawnr
    Really, Phil is just having fun with you.  The squiggly lines is just not his thing!

  152. jerconn

    Dawn, I like your posts, keep it up!  Phil just likes giving a little dig here and there…he calls it "having fun"

  153. wombat

    dawnr /
    dont worry about it, let phil be phil. trust me on this because a few months ago i was in your position as the guys can attest and wasn't sleeping because phil would flame me every time i would post AND you're payin for it ! ( kinda like those restaurants in chicago where all the waiters heckle you and dump soup in your lap ) 
    I got the some advice from some righteous folks on the list ( you know who you are ) and their secret was
    relax.

    don't try to jump in too quickly, learn the personalities, the crazy flow as well as the methods, be patient and watch/learn the big picture. you're way more advanced than i am so take it with a grain. I have been studying T/A for 10 years and I know crap. Phils method is almost, shall we say, scarily holistically intuitive.
    once you go all zen, things will become more manageable, I promise. You may even learn to like Phil – he kinda grows on ya ; >

  154. zeroxzero

    The Jeremy Grantham video, supra.  — I've now watched it more than once, and it is astonishing both its simplicity and clarity of exposition and in it's not-very-long-term implications. And, no, it's not principally about "the environment", although that's where it ends up.  
     
    I've never posted anything twice before, but I'll make an exception today:  
    http://www.macrobusiness.com.au/2013/03/grantham-on-cooking-the-planet/

  155. stjeanluc

    Grantham / Zero – This guy has really be on a tear lately. Last year he has that big thing warning against income inequality, saying that it was actually destructive in the long run. And not a bad investor either.

  156. dawnr

    AAPL—Just listened to one of my classes and here is the latest thoughts from the tech geeks…
    (1) the selling pressure is losing momentum as can be seen by the positive divergence in RSI.  and its chopping around now.
    (2) they think the bots do one more shakeout by possibly hitting up to supply one more time (around that $440-$450 area I mentioned) then it goes to about $400 scare the longs out then reverses.
    Teacher says the $400 range could be the long trade of the year…almost there. Phil did call out $400 previously.
    thanks all for the kind words. 

  157. jerconn

    Dawn – got all of the above on AAPL just hanging around this site for awhile, plus other sources and my own instincts, good to get some confirmation/corroboration from other sources tho…

  158. dclark41

    dawnr
    Been waiting for that $450 area for two weeks now. I too believe we will get a small run up before earnings and then more of the same until late summer. I agree with stjean, we need news, but without it the premiums will continue to burn.
    I appreciate your technical knowledge and insight. Thank you for your contributions.

  159. dclark41

    Phil/AKAM
    CEO buying shares. Perhaps the bleeding is over?
     
    http://www.insidercow.com/history/company.jsp?company=AKAM

  160. wombat

    Dont know if you guys saw this 
    <http://googleblog.blogspot.com/2013/03/update-from-ceo.html>

  161. wombat

    Phil // Stewart
    Forgot to post this yesterday in response the Colbert clip
     
    http://www.thedailyshow.com/watch/mon-march-4-2013/sequest-out—sci-fi-sacrilege


    BTW – I'm certain people have it wrong about Obama's fuck up. Listen to it again. There's a pause, like he caught himself in mid-sentence. He was about to use a phrase I've used a million times


    "Jedi mind fuck"
     
    Look here, that phrase is even in the Urban Dictionary.
     
    But just before the f-bomb, he catches himself and his brain is searching for a word. "Mind meld" is an obvious pairing.
     
     
    Everyone making fun of Obama's un-nerdliness and getting his geeky facts wrong, they've missed two things.

    The President nearly said fuck
    The speaker of the house doesn't understand the Constitution, or prefers to deceive the voters

  162. stjeanluc

    For people interested in that little Samsung deal:

    http://www.engadget.com/2013/03/14/samsung-unpacked-2013-liveblog-galaxy-s-4/

  163. albo

    wombat – You speak of Phil as if he's not here.  Phil's always here, he never sleeps ! ! !   I have learned more from Phil about options than I can ever thank him for.  He is one of the most intelligent, level headed, hard working people I have encountered in my 25 + year investing experience.  That said, I think he has a blind spot when it comes to selling puts on expensive stocks. The risk is huge !   Had he not dug his heels in and insisted that AAPL was undervalued some 100 or 200 points ago, you wouldn't be sitting with a 70% loss on your AAPL short put position.  JMHO, but don't don't ever let a position go that much against you.  Get out and live to trade another day.  Just because most of us think that AAPL is quite a bit undervalued, doesn't make it so.  Times change, especially in high tech.  Hopefully AAPL will recover and you'll get whole, but please, please never let a position go 70% against you under the guise that you'll end up coming out OK because the underlying stock will recover. Think of the aggravation and the opportunity cost.   It's fine to say that we'll make it back by selling short term naked calls against the position, but as you've seen, it's easier said than done.  Good luck to all of us as I'm in the AAPL trade also, but just not the short puts. 
    PS   I love you Phil ! ! !

  164. rj_jarboe

    dawnr
    Sorry if you already answered this in chat, but what is the school to which you are referring? Are you taking a T/A class or do you participate in a class teaching others or neither?

  165. scottmi

    CSCO/Phil – taking a long view on these guys, and in light of the new world of 'software' in this space, do they still have a future of growth or are they now the mature company that is going to be surpassed and just hold around $15-$20 for the next dozen years (ala Microsoft)? 

  166. dawnr

    Albo-agree with you and that is why I am paying to learn from Phil…just getting used to the personality.  There are alot of trade ideas posted but I will only take them if they meet my own rules and if they make sense to me.  What I appreciate here is Phil will call bullshit on my reasoning.  this helps me re look at it to see what i am missing!
    RJ: the school is Online Trading Academy http://www.tradingacademy.com.&nbsp; All technical.  As a matter of fact their religion is 'everything you need to know is already in the charts'. 
    Expensive but they do have much free information and if you like technicals at all I recommend you subscribe to the weekly 'letter from the pros', there is an 'hour with the pros' class weekly i believe and some free videos and much archived available.  Sam Seiden (also a former pit trader) also runs webinars on FXStreet.com …
    Often people will say those who can't trade, teach…however many of the teachers come from the trading pits and are career traders who are 'just paying it forward' to mentor others (and because after 10k hours trading is a bore)…can't wait to get bored!  Highly recommend them but as an addition to what Phil is doing here, not a replacement!

  167. albo

    dawnr – What I like the most about Phil's approach is that he always talks about selling premium instead of buying it.  Let's face it.  In the short term, the stock market is a casino.   Anything can happen.  But by selling premium you are able to place the odds more in your favor.  Casinos know that anything can happen in the short run – 00 can come up quite a few times in a row, but over the longer term the odds will hold true.

  168. stjeanluc

    These lines on the Russell and NYSE are getting a little meaningless now – approaching the 20% line on the Russell  now and the 15% line on the NYSE! NASDAQ is still held by AAPL and the Dow is a joke. Although, since the lows of November, the Dow is up 17% while the Russell is up 23% so not as bad as our lines would indicate.

  169. hemas03

    Pharm, interesting captions in Dutch on the Mumford and Sons video.  M&S quoting Shakespeare, Dust Bowl dance from Grapes of Wrath and the kicker that now pastors and priests are quoting M&S lyrics in their sermons!

  170. ldm18

    Phil (or anyone else who can offer some advice) – I'm having some trouble with the XLF/FAS trades.  It was all going well until FAS started its run.  I missedthe drop 3 weeks ago since I got called, panicked when I saw the premarket run-up, bought to cover, and then didnt re-sell the calls until later in the day.  (That resulted in an almost $4k loss).  These 10+ point runs each week were freaking me out so I started selling spreads instead of naked calls to avoid margin problems / unlimited losses.  I've also been selling put spreads as a way to increase my premium sold each week.
    I currently have 5 XLF Jan14 14/18 spreads @ net (1.96), short 4 FAS 157/162 weekly Calls @ net 2.94 and short 4 FAS 157/155 weekly Puts @ net .50.
    Can you please offer a suggestion as to how to salvage this.  I've been waiting for a pull back but understand that we're generally bullish so really just hoping to stop the bleeding now and maybe, over time, recapture some of that huge loss.
    Thank you for your time and expertise.

  171. dclark41

    In the article posted by stjean earlier and the one below I found very few positive comments (on the bottom of each article) about the Samsung S4 presentation. Many said that the S4 was just a slightly updated Galaxy S3 and not very innovative.  It's bigger, but I am not sure bigger is better as much as cheaper was better for the S3 and since they are probably going to charge more for the S4 I can't see it as being better.
    I'm not sure AAPL can do that much to improve the Iphone 5 to meet the enormous expectations.  What other things do we want our phones to do?
    "There is no any outstanding new features….90% of it has old S3 features which are considered out of date! I wouldn’t buy it, would you? Try Htc New One!!!that would be much better than this crap!"
    "Why didn't they just call this the Galaxy S IIIS?  Because that's all it amounts to.  It looks the same as the older model but with updated innards.  That's hardly much in the way of innovation."
    I http://blogs.wsj.com/digits/2013/03/14/how-samsungs-galaxy-s-4-compares-with-iphone-5/

  172. Phil

    Good morning!

    Samsung nice but not thrilling, very good for our BRCM position using new 802.11ac Wi-Fi by them.  Let's face it, phones are phones now and some people will like AAPL's format and some people Samsung or others.  For me, I care about speakerphone quality more than almost any other feature and no one seems to address that.  I mostly make phone calls, text, use the gps and take pictures/movies and, while I'd like a bigger phone, the reality is it would annoy me in my pocket so I'd rather have a lighter phone.   Here's my cool idea for a phone, a nano-sized phone (or watch) that's all speaker and screen mainly for talking to that is capable of synching with TVs or monitors around you (including a monitor in your car) and displaying a full-sized picture.  Also, I've been thinking for the iWatch, that the battery can be in the strap – that's probably as much battery space as a current iPhone has.  

    Grantham/ZZ – Oh come on, it's too early to be depressed by that stuff. 

    Seriousness/Dawn – I'm sorry, I took you to be a thick-skinned, hard-core trader type so I've been treating you the same as I treat most of my NY buddies, where conversations are more like brawls but no one takes it seriously.  I certainly don't want to hurt your feelings – it's just my annoying style of conversation.  We all appreciate your ideas – you seem like a smart cookie but ideas are challenged here – mine as well as others.  It doesn't mean we don't appreciate them but we run a more Socratic type of learning center here where no ideas are respected, rather than all ideas, because no one and nothing is above question – especially when it comes to the markets or politics.  

    My Father, who was a genius to the point of having a hard time functioning in the real world, used to say that the truth is a diminishing commodity.  There is too much of a trend these days towards the idea that everyone is entitled to their own opinion when what is more accurate is the concept that "you are entitled to your own opinion, but not your own facts."  People whose opinions are wrong (yes, you Fox) tend to dismiss facts as not being as important as beliefs and that's fine for religious dogma, but really not fine at all for politics, because politics leads to running the country – and running the country based on the wrong "facts" leads to all sorts of problems – as does investing under false premises.  

    So I tend to push pretty hard for the things I believe in (like Fundamentals) and push against the things I don't (like TA) although I am always open to discussing alternatives because it helps test my theory of what is true and, frankly, if I'm not willing to test my theory of what is true – then all I have is a belief, not a fact.  Of course, I use TA all the time (but don't confuse the 5% rule with TA, it's only recently that StJ began charting it but it's just math meant to be on a spreadsheet based on OBSERVATIONS I made when my Father and I helped design some of the original trading systems that are used on Wall Street to this day) – because so many people do rely on it and use it that it becomes a self-fulfilling prophesy.  That doesn't make it true – only useful, the same way it is "true" that I can be fairly sure to find people in a church on Sundays.  I could easily fool myself into making all sorts of "very accurate" conclusions about human migratory and social behavior by observing a Church – only to have my mind blown if I then go observe a synagogue or a mosque, right?  

    So my primary goal is to teach people to think and trade for themselves.  There's no "right" way to trade as different people have different personalities and are more comfortable with different sorts of trades.  Note Albo mentions the AAPL trade has gone "70% against" us, even though we just went over it and I noted that 80% of that 70% is a paper premium loss that is not reflected by the actual price position of AAPL.  

    So he is simply not comfortable with that kind of trading and needs to learn to avoid it, which is why I repeatedly warned people in January, when the $25KPA and AAPL Money portfolios were back to positive, that people who were uncomfortable riding AAPL down to $400 to roll and DD should "GET THE F*CK OUT!" of the position.  It's a hard-core position, it's why we split the $25KPs, to make it very clear that it's a very aggressive trade that requires a lot of margin and is not for most people.  The idea of following it over the course of two years (and it's been two months so far and I don't know if I can take two years of people whining about it, frankly) is to LEARN how to PATIENTLY wait out a downturn on a fundamentally solid position – clearly it's a lesson that's lost on many people and what I have learned from that is not to bother teaching this anymore and just keep it for HNW investors who specifically want to do it. 

    So I learn and you learn and that's what I like about doing this.  We have a lot of very smart people here who have a lot to contribute – but it only works if you all are willing to accept that there are other points of view that are just as valid as yours and that learning what is true takes a lot of hard work – it's not something that can be handed to you.

    "There are only two mistakes one can make along the road to truth; not going all the way, and not starting." – Buddha

    "Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth." – Marcus Aurelius 

    "In a time of universal deceit – telling the truth is a revolutionary act." – Orwell

  173. Phil

    Study/Pharm – So many variables there I have a hard time believing it was all solved in a term paper!  For one thing, they make absolutely no quality distinction in reviewing 14,000 portfolios.  I think we're all aware that there are more bad funds than good ones and most bad funds are going to be "Fundamental" as there's no point in faking a TA Strategy if you're only there to take people's money anyway.  Also, of course, time-frames are key.  They studied 14,973 portfolios, 7,295 of which are currently active.  How can this even be a valid study if they don't study fund performances only during the same time-frames?  Also, I couldn't even read past the BAR not taking tracking error into account – you KNOW that's critical in any large-scale study like this, especially considering the raw median performance AND standard deviation were the OPPOSITE of the BAR they are relying on to make their point!  Also, look at the kurtosis number on TA funds using BAR – how can you possibly trust the returns with a variable that high?  And, of course, comparing funds that think TA is "very important" vs. Funds where it's not utilized at all is also silly as people who don't use TA at all are just as dumb as people who use it exclusively.  Nice, balanced, critique of TA here if you are interested.  

    Times Square/Jordan – Good way to get attention.  By the way, I thought Schiller's point on Androids being "free phones" was a very good one as people have to WANT an IPhone and be willing to pay up for it – so they become real users and consumers of content while Android is just what comes with the free phones you get when you sign up with any plan – so of course they have more market share.  While that may sound like sour grapes – this chart published by GOOG really makes that case as more than half the people using Android are using 2-year old versions of it and so, obviously have no interest in all those cool features of Jelly Bean:

     

    What Schiller is likely referring to is the Android version distribution stats that Google posts for developers.

    Version

    Code Name

    Distribution

    2.2 and older

    Donut, Eclair, Froyo

    9.6%

    2.3.x

    Gingerbread

    44.1%

    3.1-3.2

    Honeycomb

    1.2%

    4.0.x

    Ice Cream Sandwich

    28.6%

    4.1-4.2

    Jelly Bean

    16.5%

    Source: Google. Data collected during a 14-day period ending March 4, 2013.

  174. Phil

    Thanks Wombat, you're growing on me too – almost 60% less annoying now than when you started!  ;) 

    Inequality/StJ – I always find it interesting that people who respect my opinion on stocks and the economy reject my conclusions regarding politics and income inequality.  To me, they are all part of the same data set and my long-term view of where we end up economically, in the long run, under one set of politicians or another is WHY I favor the Dems and the oft-proven principles of income equality vs. the well-established nightmare that is the GOP's dominant strategy.  

    Uh-oh, Cramer is telling people to get out of bonds and into stocks – I guess it's time for us to go short!  

    AKAM/DC – Always a good sign when CEO is buying but sometimes it's a fake good sign to boost the stock. I like AKAM anyway but, to be critical, Thompson is rich enough not to draw a salary at AKAM (he's the founder) and he's a very rich man that left the company to go back to teaching at MIT but stepped back in when the CEO stepped down last year although he has mentioned that he has some new ideas to "make the internet instant" and I wouldn't discount them because he's brilliant and has a pool of student "interns" he keeps at the school working on this stuff all the time.  Anyway, so he's bought 80,000 shares at about $35 for about $3M – kind of a drop in the bucket and, from a strategic standpoint, if he holds about 3M shares "worth" $105M and spending $3M pops the price of the stock $1 because people think something is going up, then the transaction pays for itself.  Of course, just creating a floor is worth it to him as he already lost $21M on the recent drop so what's his financial adviser going to say?  Go buy some stock – it will instill confidence in the market.  

    Interesting note Wombat, thanks.  I'll have to review the Obama clip to see which way his lips were going…  OK, his pause was suspicious but I disagree, I think he meant to say mind-meld, because, in context, that's what he was saying, there's a huge difference between the Vulcan Mind Meld and the Jedi Mind Trick as he then says "to convince them to do what's right".  Perhaps he started to say Jedi Mind Trick but then decided "trick" was a bad word so he switched to Mind Meld as that's more like the sharing your ideas thing he was going for.  So, in conclusion, I think Obama's "slip-up" actually demonstrates that he totally knows the difference between the two things and, that just because he's black – doesn't mean the F-word is the first thing that comes to his mind when having a press conference (although, dealing with the speaker of the House – I'm pretty sure it's the only word I'd be able to think of).  

    Samsung/StJ – Did you read the comments on that link?  Pretty rough for Samsung.

    Always here/Albo – Hey, I sleep!  I slept at least 4 hours after dinner but then I woke up and the World is so exciting – how could I stay in bed?   My daughter asked me what's the worst thing about dying and I thought about it and said – "not getting to see what happens next."  Anyway, thanks for kind words and see above for my reply on AAPL but yes, you are right – we do need to differentiate the getting out concept more, which we do in the Income Portfolio, of course but I suppose it's not really clear to people that different portfolios employ different strategies.  Perhaps something we should make a big point of in the book and then, hopefully, we can get newbies to actually read it so we don't have to repeat it 5 times a day.   Also, you say never let a position go 70% against you but if you are 1x in your scale and go to 2x, then it's only 35% against you and, if AAPL then drops 20% more (down 55%) and you move to 4x – then it's only 27% against you, even though it's 90% down from your entry and now you own 4x for what 2x would have cost you when you started and that's EXACTLY what we are trying to teach people to do in building long-term positions but, unfortunately, it's a lesson that can only be demonstrate over LONG-TERM cycles and, as I noted above, this is month 3 of a 25-month trade – it's like giving up on a horse because he's behind at the first turn on the track or deciding who won or lost the Indy 500 after 60 laps – that would be ridiculous, right?  But declaring AAPL a failure in the same amount of time is not?  

    You mention aggravation and opportunity cost but, if you BELIEVE in the trade and you REALLY want to own AAPL for the next 20 years then this may be the last opportunity to own it at $400 (just like the last time I was this crazy about AAPL was the last opportunity to buy it at $85) and the only aggravation you have is that you don't believe in the stock, which is fine – just don't play it.  There are many, many fine stocks out there and you don't have to play AAPL but I think I have a better chance of being up 100% with AAPL than the "opportunity" to pick 8,999 other stocks over the course of the next two years so it becomes my favorite.  

    No one liked BAC when I picked it as my stock of the year last year either (in fact, as my BNN interview ended, the audio was still on and the guy who was a guest said during the commercial that I was crazy) and BAC plunged from $10 in April (where we had exited early) all the way back to $7 again in May and I picked it again and it was a dog until late July – but then I was right after all.  Was there a better "opportunity" than BAC?  Actually, there wasn't, it was the year's best performing stock in the end – but only for those who had faith in the Fundamentals and ignored the noise.  

    Samsung down 2.6%, by the way.  

    CSCO/Scott – I think CSCO is a fantastic long-term growth play.  There will be no limit to the need for more bandwidth until we are able to teleport people and create anything we buy on home digital printers and then, maybe, we'll pause in bandwidth growth.  As I noted earlier this year, you have to realize that our robots will need phones too and our homes will want their own phone and our cars may want to talk to us when we're not in them (maybe you don't park your car anymore and it goes home when you're not using it and comes back to pick you up), etc.  So, we're probably in the hand-crank telephone days of the Internet at this point in time, not at the apex.  

    I don't expect CSCO to have spectacular growth but they pay a nice .56 dividend at $21.59 and you can sell the 2015 $20 puts and calls for $5.65 for a net $15.94/17.97 entry which gives you a 20% cushion and makes the dividend 3.5% while you wait to see if you get called away for 25% (but, of course, we roll the puts and calls to 2017 more likely) so it's a nice little utility play and you can sell some front-month calls to goose the income as it's not likely CSCO jumps too much in a short period nor are they likely to get bought out.  

    Big Chart – Volume doesn't look so terrible on chart but it's the WAY we're getting the volume I don't like.  50% of today's volume was MOC at the end of the day, AFTER we were pumped up.  It did the trick and it goosed the Futures and the Nikkei added 1.4% and China was mixed (better than down again) and Korea got taken down 0.6% by Samsung, who are 15% of the entire market there.  Europe didn't like that and they're a little red at the open and our Futures are back to flat after a quarter-point pop.  

    Anyway, it's not the kind of quality I'd look for on a breakout and that makes me cautious so I guess we'll see about adjusting our DIA hedges and make sure we're comfortable into the weekend but, from a manipulation standpoint – I'd be surprised if "THEY" put all this work in and then don't close the quarter on a high note.  Don't forget, EOQ1 is how they make all those pretty brochures and tout their performance when they go out calling on potential clients to give them more money and the Banksters REALLY need more money to play with as investment accounts are very, very low – too low to support another $1Tn added to market caps at this point. 

    Future/ZZ – I like that one a lot better than that global warming thing!  

    FAS/Ldm – Well, 5 XLF spreads do nothing to cover 4 FAS spreads as FAS is not only 3x more volatile than XLF but 10x more pricey so the ratios are terrible.  Also, think about what you are doing – you are collecting $3.44 betting FAS won't move up $5 in a week when it can easily move $5 in a day.  Weeklies don't give you time to be right but, dealing with what you have, the $157/162 bull spread is likely to end up at $5 but the last on the $157s was $10.52 and the last on the $162s was $6.03 with FAS at $167.74 so you had negative .22 premium (which can't last) and your caller had .30 of positive premium so you're .50 better off than your account says anyway (and hopefully you KNOW this or you shouldn't be trading these in the first place).  

    The bottom line on this one is you lost $1.56 x 4 ($624) and there's no "saving" it – all a roll is is taking this loss and establishing a new position but Einstein says that insanity is repeating the same action over and over again and expecting different results – therein lies the crux of your problem.  If you can't sell naked calls, you shouldn't be in this trade in the first place.  We take FAS BECAUSE it has massive premiums but, if we go and buy the premium underneath the calls we sell, we completely negate the advantage we have in selling FAS calls in the first place, don't we?  

    So I'd say get out of FAS and find another place to make $4,000 (especially with the 4/1 split looming) – you can sell 15 CLF Jan $20 puts for $3.10 and collect $4,650 against $4K of net margin and stop staring at FAS all day or you can go with the CZR trade from yesterday (above) or you can stick with the Financials and grab 20 BAC 2015 $10/15 bull call spread for $2.15 ($4,300) and those make $5,700 back if BAC is over $15 in Jan 2015.  It's a 132% gain on cash without all the weekly hassle – no reason to be greedy.  

    Samsung/DC – It seems to me these motion and eye-tracking things will eat up a lot of battery – would be really clever if it didn't.  As to what AAPL could do – just making a 5" phone would "blow people's minds" I guess.  Samsung is now open to every criticism that was hurled at AAPL as the new phone is essentially the same as the old phone and again, my pet peeve here is that all these guys roll out "features" but the only feature I want is better audio quality, better signal quality, faster internet, etc – you know, the stuff we buy smart-phones for in the first place.  

    Frankly, if AAPL put phone functions on an iPad Mini – I'd be thrilled.  I'd even get a man-purse to carry it in (or cargo pants).  It's not so much about the size but why do I need two devices to carry around.  Samsung is nice with the big screen but I'm still going to switch to a pad or a computer as soon as I'm back inside.  If AAPL made an iPad Mini-phone, I wouldn't let it go from the minute I left the house until I got back to my main computer (and if there was a slot on my desk to make it another monitor, I'd still be using it all day).  Isn't that their proper goal – to make a completely indispensable device?  

  175. Phil

    Oil (/CL) $93.25, by the way, good for a short with the Dollar testing 82.50 but not if the Dollar breaks below.  Just another manipulation lever (drop the Dollar to goose the market) that I see being pulled into expirations – not a good sign.  

  176. Burrben

    Phil
    I'm up trying to get a trade on this "oil thingy" again….
    Anyway, you had a post this week (I think it was in response to DawnR) that I can't find.  It listed all the stuff you should be watching. Could you repost it?
    Right now I just have the chart of the dollar /DX overlayed with the chart of /CL.  Looks to me like /DX is breaking down here, so I'm a little reluctant to short off 93.15 (since I missed 93.30)

  177. Burrben

    Phil
    Ok, /DX at 82.465 caused a spike in /CL to 93.21.  I'm guessing wait until /DX crosses above 82.500 for another chance to short /CL… right?
    (no trade for me yet)

  178. Burrben

    Sell, Sell, Sell!!!
    ""I've just started investing in stocks, which is new for me," Mila Kunis [who typically prefers cash] tells @CNBC"

  179. kinkistyle

    Samsung DOWN 2.63% in the Korean market.  Looks like the new Galaxy is a little disappointing.  Oh wow, you mean its not just AAPL that gets their expectations set so high? LOL.

  180. dawnr

    Thank you Phil for the thoughtful response…yes, I do have a thick skin but a tender spot when you hit on my work ethic!  I very much appreciate your tireless efforts here, your wisdom and experience and look forward to learning more from you.  enough on that stuff…
    Was reviewing the posts from yesterday and think the COH trade idea is interesting (sell april 49 puts, buy aug 48 puts/sell 45).  This seems like a low risk way to get into an investment you like as your initial risk is $1 ($49 v $48) and as you roll the aprils each month you clip premium.  If I am understanding this correctly, do you do this strategy often here?  If not, why…what am i missing.
    separately, do you do iron condors here?  I ask as your oil commentary makes me feel like oil is in a range that an iron condor may be useful?  or is clipping quick premium better?

  181. Burrben

    Dollar climbing over 82.52, but oil hanging tough at 93.37.  PnL = -$2.00.  
    So far, lowest per hour rate in my life :)

  182. Phil

    Watching/Burr – Well, it's what affects or or may react to oil-type news so the Dollar, the Euro, the Yen, Gold, Copper, Nat gas, gasoline, XOM, XLE, OIH, XOM, VLO and USO are a good start.  You may think copper is odd but oil and copper moving up together indicate some overall positive industrial news and gold going up with oil but no corresponding copper move (or contrary Dollar move) would indicate fear is increasing somewhere.  VIX and TLT are also useful to keep an eye on for that reason.  On my two monitors that run TOS, I usually have 24 charts up at a time.  XOM, XLE, OIH, XOM, VLO and CVX are all on my watch list, not charts, but right next to them so I can quickly check direction but the others are always up on my charts along with the indexes, of course, 

    $93.25 coming around again with Dollar at 82.50 ($93.37 at the moment after a nice dip to $93.05 from last entry).  

    Correct on DX, Burr – you don't want to fight the Dollar while it's moving but, once it settles down, then oil (or whatever) becomes it's own boss again.  

    LOL on Kunis – Remember that model who only wanted to be paid in Euros back when the Euro was $1.60?  When I used to go clubbing I used to always know to get our of a trade when girls would start talking about it (club girls, not you educated ladies on this site!) as they'd clearly heard too many guys talking about it already. 

    13Bn pints of Guiness will be sold this Weekend (St Patrick's).  That's pretty amazing – 2 for everyone on the planet (or just enough for Ireland alone).  

    Samsung/Kinki – Just a sell on the news kind of thing.  They've had a huge run but still small enough for AAPL to buy with cash on hand.  

    AAPL earnings date now says 4/23, by the way.  That's the Tuesday after April expiration so selling April calls will be interesting.  

  183. Burrben

    Dawn, 
    Phil doesn't really like credit spreads / iron condors.  I think to sum up his view, he doesn't like getting a negative risk/reward ratio, even though probabilities may be high.  It's also a short vega trade, and with this very low vol environment, vol expansion will really hurt that trade.  At least that's what I've heard…

  184. Phil

    COH/Dawn – I love that strategy around earnings when the volatility we're selling seems a lot higher than what we're buying.  Of course, it has to be the right stock with the right premise and, when you say "do you do this strategy often" – the answer is, other than buy/writes and short puts, for conservative entries to long-term positions, I don't tend to do anything "often" as I like to do many things and it's like having a big box of tools – there's a right one for each situation.  For most investment gurus – they tend to be like the old adage: "When all you have is a hammer, every problem looks like a nail" – that's a box I don't want our people getting trapped in.  I don't like Iron Condors because they are generally dull and we use them for very flat markets, when there's nothing better to do, but not so much when we have such fun range trading to play.  I wouldn't use it for USO or anything that is volatile as the risk outweighs the rewards and condors peg a narrow trading range – not something you can count on for oil.

    And what Burr said!  

  185. jromeha

    Buben- I'm following Mila. Most beautiful actress out there! 

  186. albo

    Phil -Thanks for your thoughtful answer and for not taking me to the woodshed.  I still disagree with your premise on averaging down.  If a position goes against you and you average down, and it goes down some more and you average down again your percentage loss is less.  However, the point I think you are overlooking is that your absolute risk is much, much, more.  The analogy that I would use is the one of doubling your bet in blackjack.  If you double your bet everytime you lose and keep doubling everytime you lose, it only takes one win to get it back.  However, that's the reason the house puts limits how much you can bet.  That's the killer.  Here if you keep doubling down and incurring more risk, the "choke" factor comes into play, or a huge margin call gets you.  And what if you're wrong ?   I guess we'll never agree on that point, but thanks for letting me offer my 2 cents.

  187. yodi

    Lots of soap-operas today at the site. just remember some of the traders I think are women and they just have a softer feeling. What can I say, Phil is a funny guy mostly calling a spate a spate.
    Now to /CL hitting a 93.66 just bought myself some puts, guess this is right ???

  188. Phil

    Yet another CCL ship with engine trouble!  NOT the same one as yesterday. 

    Carnival (CCL) says the 4K passengers on its stricken Dream ship are in the process of being flown back to Florida. In yet another mishap, another ship at sea is having technical problems which are having an impact on sailing speed. CCL -0.6% premarket.

    2:47 AM The Nikkei is +1.3% after the upper house of Japan's parliament approved the appointment of Haruhiko Kuroda as the Governor of the Bank of Japan, as well as Hiroshi Nakaso and past BOJ critic Kikuo Iwata as his deputies. Kuroda's first major task is to persuade the bank's nine-member board to back his plans for further easing, while he also may call an emergency policy meeting before the next scheduled gathering on April 3-4.

    5:10 AM Asian shares are mixed, with shares in Japan boosted by the parliamentary confirmation of the Bank of Japan's new leadership and those in China benefiting from the orderly transfer of power. However, a 2.2% fall in Samsung's shares dragged down Korean shares. Japan +1.4%, Hong Kong -0.4%, China +0.4%, India -0.5%, Korea -0.6%

    5:12 AM European shares are mostly flat-to-lower as EU leaders meet for a second day; stocks may be affected by the expiration of futures and options contracts. EU Stoxx 50 -0.2%, London flat, Paris-0.3%. Frankfurt flat, Milan +0.2%, Madrid -0.3%

    6:00 AM Overseas: Japan +1.45%. Hong Kong -0.38%. China+0.36%. India -0.78%. London -0.13%. Paris -0.48%. Frankfurt-0.12%.

    7:00 AM On the hour: S&P -0.05%. 10-yr -0.03%. Euro +0.44% vs. dollar. Crude +0.24% to $93.25. Gold 0% to $1590.7.

    Friday's economic calendar:

    8:30 Consumer Price Index

    8:30 Empire State Mfg Survey

    9:00 Treasury International Capital

    9:15 Industrial Production

    9:55 Reuters/UofM Consumer Sentiment

    EU leaders yesterday indicated that some countries couldget more time to fulfill their deficit targets and more leeway for government stimulus. At its summit in Brussels, the EU also set aside €6B for to help tackle the exceptionally high youth unemployment in many parts of the union – or about €100 for every young person who's not in work.

    Eurozone CPI +0.4% in February M/M, as expected, vs -1% in January. On year, CPI +1.8%, also in line, vs +2%. Core CPI stays at +1.3%. Inflation is now below the ECB's target of just under 2% and could give it more scope to further ease monetary policy. (PR)

    China further continues the internationalization of the yuan by setting up three pilot schemes that ease strict cross-border currency regulations for 13 multi-national corporations, including Caterpillar (CAT), Shell (RDS.Y), Intel (INTC) and Samsung (SSNLF.PK), which estimates the scheme will save it $10M a year. 

    Not helping JPMorgan (JPM) is the rehashing of the London Whale saga, with a just-released Senate report claiming Jamie Dimonwithheld critical data from regulators. A hearing is set for tomorrow (Dimon will not testify), and it's possible the DOJ will be called upon to investigate further. It's hard to believe the Fed request for JPM to "address weaknesses" and the London Whale incident aren't linked. Shares -2.1% AH. 

    After hours movers in the banks: JPM -2.5% and GS -2.1%after the two had their capital proposals approved but were asked to submit new plans "to address weakness in their capital planning processes." WFC +0.4%BAC +3.8% after no dividend hike, but a whopping $10.5B in share repurchases and redemption of high-yielding preferreds. Morgan Stanley +0.9%. The XLF +0.1%.

    After hours movers in the regional banks: COF +0.6%FITB+0.9%KEY - which just announced an increase in the dividend to $0.055 from $0.05 and $426M in share repurchases - up 1%PNC+0.4%RF +1.6%STI -0.3%USB +0.2%BBT - whose plan was rejected - off 2.8%.

    Good old Republican logic – force them to provide a service but then criticize them for being over budget:  ongress is increasing its efforts to force the Postal Service to maintain Saturday deliveries, with the Senate considering a provision about the issue in a budget resolution after the House passed similar legislation last week. There are also dark mutterings that the decision, which would save $2B a year, would make it more difficult for Congress to make other changes the Postal Service wants.

    More Republican trickery:  Canadian messengers are promoting the Keystone pipeline as in the U.S. national interest and an essential part of moving toward energy independence, but the argument is undercut if most of the oil flowing through the line would end up being exported, as seems likely. Adding to the controversy is Pres. Obama's reported remarks that the number of jobs supporters claim the pipeline will generate is exaggerated.

    BP's oil trading division, which once generated a tenth of overall profits, is under close scrutiny after becoming a weak link in the company's pledge to improve performance at its refining division. Although BP has denied that big changes are planned, industry sources tell Reuters there's a growing internal debate about the unit, once the industry's most powerful oil trading desk.

    Goldman Sachs upgrades Freeport McMoran (FCX) to a Buy rating and raises its price target to $42. The firm stands more positive on copper and sees the M&A overhang on Freeport diminishing. FCX +1.1% premarket.

    Porsche plans to expand its global network of dealers by 33% as it brings new models to the market. The automaker will invest €200M ($260M) a year to grow its footprint. China will be a focus for Porsche, falling in line with a broad goal by parent company Volkswagen (VLKAY.PK).

    Boeing's (BA) 787 could restart flights "in weeks, not in months," the company says after detailing a "permanent fix" for its lithium-ion battery problems that "addresses all (the) causal factors" which led to two burn-outs. Boeing will put the batteries in stainless steel cases, and add extra insulation, spacers and heat-resistant sleeving. Boeing has also asked suppliers Yuasa and Thales to improve production standards. 

    Redbox Instant (CSTRVZ) has finally launched. The service,initially slated to go live in Q4 '12, offers access to 4.6K titles and 4 Redbox DVD rentals for $8/month. Another 4K movies are available for renting/purchasing. Original programming might be offered at some point, but CEO Shawn Strickland considers speculation on this front "really premature." For the time being, Instant's content library is much smaller than Netflix's (NFLX), and so is the breadth of its hardware ecosystem  – will the Redbox DVDs be enough to get Netflix subs to defect?

    VentureBeat provides some additional detail on the Redbox Instant (CSTRVZlaunch. Standalone access to Instant's streaming will cost just $6/month ($2/month cheaper than Netflix, but for a much smaller library), and credits good for 4 Redbox rentals/month can be tacked on for an extra $2/month – provided the credits are used, that's a 58% discount from Redbox's normal $1.20/title.  "Hundreds of thousands" of people are said to have signed up during a 3-month testing period.

    AT&T (T) is indeed thinking of selling cell towers (among other assets), a company spokesman tells Bloomberg. However, the evaluation process is said to be in its early stages. Bloomberg points out some other reasons why AT&T may want to raise cash: growing capex, huge stock buybacks, and a hefty dividend (4.9% yield). AT&T had $69.8B in debt on its balance sheet as of Dec. 30. (RBC report)

    ~1.5M Surface tablets have been sold since Microsoft (MSFT) launched its tablet line in late October, sources tell Bloomberg- sales of the Nvidia-powered (NVDA) Surface RT (cheaper and launched earlier) are said to be a little over 1M, and those of the Intel-powered Surface Pro around 400K. The sources add ~3M Surface RT tablets were initially ordered, a figure that suggests inventories are high. For reference, Apple sold 22.9M iPads in Q4, and IDC estimates Samsung and Amazon's Q4 tablet shipments respectively totaled 7.9M and 6M.

  189. Phil


    Three of the first reviews for Samsung's (
    SSNLF.PK) new Galaxy S IV flagship smartphone range from the mixed to the effusive. The Daily Telegraph describes the device as "evolutionary genius" and the "first of a new generation of smartphones." The WSJ says the S IV has "impressive but less-than-perfect performance," with some of the features not seeming to be "ready for prime time." CNET calls the device an "appealing smartphone," but says it has few "killer" features.

    I was way low App estimate for AAPL:  Mobile app stores will generate $25B in revenue this year and 35% of this total ($8.8B) will involve tablet apps, predicts ABI. iOS (AAPL), whose monetization edge over Android (GOOG) is well-documented, is expected to account for 65% of sales - assuming  a 30% cut, that translates into $4.88B in revenue for Apple. Android is seen accounting for 27% of revenue ($2B for Google), and all other platforms 8%. ABI predicts iOS will make up 33% of smartphone downloads and 75% of tablet downloads, and Android 58% and 17%.

    Three breakfast reads: 

    1) Who Is Amazon's Next Victim? Not Who You Think 

    2) The Short Side Of Hewlett-Packard 

    3) Critical Analysis Of Dell Buyout Plan Shows High-Yield Opportunity In Bonds

  190. Burrben

    Yodi / Oil Puts
    Are you trading futures options?  I'm assuming since equity markets aren't open yet.
    Why not just short the future?

  191. Phil

    Quick answer Albo – the difference is, if I have 20 and I lose in blackjack and I DD and get 18 and lose and DD and get 16 – I have nothing.  If I have 100 shares of AAPL stock at $450 and it drops to $300 and I DD, I have 200 shares at $375 and if it drops to $200 and I DD again, I have 400 shares at net $288 and, obviously, if at any point in the process that I don't REALLY want to own AAPL at $288, I shouldn't have Doubled Down but DO NOT mistake having 400 shares of AAPL at $288 for being the same thing as losing your dumb-ass blackjack bets because 400 shares of AAPL is SOMETHING.  If you look at stocks and don't understand that they do, in fact, have real value – you will make many, many tragic investing mistakes.

  192. Burrben

    Phil, thoughts on oil here?  

  193. yodi

    Burr /CLK3 May13 93.5p

  194. albo

    Phil – Thanks.  That is true when you're buying the stock, but not the same when you're shorting puts.  That's enough of that;  thanks for your insights.  If AAPL goes up from here, all is well for everyone.

  195. yodi

    Burr Put /CL on the TOS chart and enjoy the ride and Phil's prophesy

  196. Burrben

    Yodi, right options on futures.  Looks like the last on that contract is 2.01, trading 1.63×1.82 now.  
    I was just shorting the future outright at the 50 cent lines.  
    So far I didn't make any $$ today…

  197. yodi

    Burr they fighting hard today up to 93.73

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